There were three themes that emerged from the discussion:

• The complexity of ethical decision making when the demands of overseas markets conflict with the demands of domestic markets.
• Pro-poor business and how retailers’ attempts to manage supply chain ethics through setting demanding labour and environmental standards can inadvertently drive small-scale producers out of global supply chains.
• The challenges of learning from, and effectively governing, global supply chains.

Of particular interest were the papers given by Michael Blowfield and Bill Vorley. Martin Cooke’s presentation on a new agenda for the ETI was both fascinating and important.

Michael Blowfield’s paper discussed the circumstances under which businesses can play a positive role in development. He suggested that businesses are increasingly seen as agents of development, but the consequences of businesses playing this role were unknown. Bill Vorley reported on the Regoverning Markets project analysing growing concentration in the processing and retail sectors of national and regional agri-food systems and its impacts for rural livelihoods in developing countries. He argued that small-scale agriculture, which supports the livelihoods of the majority of rural poor, is poorly prepared for these changes.

Martin Cooke outlined a new agenda for the ETI and a fresh strategy for 2009-2011. The six new priorities for the ETI will be:

1. Better governance of the workforce (through promoting collective bargaining, as well as promoting better HR policies in the workplace).
2. Working towards a living wage
3. Integrating Purchasing Practices
4. Tackling discrimination in the workplace
5. Focussing improvements on the most vulnerable workers
6. Improving audit practice.

The conference was a great opportunity to step back from the day to day activity of advising businesses on their ethical trade strategies, to investigate the broader trends which influence our work. Impactt looks forward to seeing further outputs from this conference.

The code is the first of a series of reference tools that GSCP intend to develop with the aim to help companies work together to deliver a common message and reduce duplication and confusion.

The past ten years has seen the development of divergent approaches to upholding labour standards including the proliferation of codes and the duplication of many efforts. Progress has been slow. All those working in the field of labour standards would agree that efforts need to be harmonised and there needs to be more cross-industry collaboration. The new GSCP code promises to drive convergence and “deliver a shared, consistent and global approach for the continuous improvement of working conditions across all categories and sectors.”

 Clean Clothes Campaign (CCC) point out that there are already a number of multi-stakeholder initiatives operating in the field of labour standards including the Ethical Trading Initiative, Fair Wear Foundation, Fair Labor Association, Social Accountability International and the Workers Rights Consortium operating in the field of labour standards These existing initiatives are co-operating to harmonize their own standards through the JO-IN programme. CCC argues that there is no need for another code and the existence of the new code may even undermine existing efforts.

The GSCP, however, has garnered high-level support backing from the United Nations, the International Federation of Human Rights, the Global Union Network and CSR Asia. GSCP stresses its credentials as a tool for sharing best-practice and that it is not a monitoring scheme or a substitute for existing systems.

The partnership has the potential to create a sea change in how companies collaborate to ensure labour standards are upheld and for this reason alone it should be applauded.. As Terry Babbs, Director of International Trading Law and Technical at Tesco and the GSCP Chairman said “Our businesses together touch millions of people either directly through our customers and employees or indirectly through hundreds of millions of workers in our supply chain.” Impactt wish the partnership every success in their endeavours.

The issue driving the development of this work is that health and social care in the UK has the potential to damage the health of workers in poorer countries through the procurement of health supplies manufactured under poor labour standards, including child labour and inadequate wages.

Impactt was disappointed to read the Guardian report which focused more on the ‘exposure’ of labour standards issues than on the work of the NHS to develop innovative guidance on tackling those issues. We echo the support of Dr Mahmood Bhutta who revealed the presence of poor labour standards in surgical instrument manufacture in 2006.

Ethical Procurement for Health can be applied to a much broader range of products and services than just surgical instruments. The NHS spends more than £20 billion per annum on goods and services ranging from rubber gloves and surgical instruments to cleaning services and IT contracts. The EPH gives organisations within the NHS the opportunity to influence improvements in labour standards across all healthcare supply chains. As Health Minister Ben Bradshaw noted, Britain’s health service is “in a strong position to influence improvement in labour standards across health care supply chains.”

The Guardian article also suggests the guidelines are voluntary. In a sense they are, but as government agencies, NHS Trusts are obliged to meet all ILO conventions that have been ratified by the UK. The UK Government’s Global Health Strategy (September 2008) recognises a responsibility to harness the opportunities of globalisation to improve the health of people across the world. The EPH provides step by step practical guidance for procurers to meet these obligations.

It must be recognised that all organisations differ and no single approach will be right for all NHS Trusts. The guidance can be used as a tool to develop solutions for each individual organisation which meets their needs whilst working towards improved labour standards in the supply chain. Ethical procurement has to be supported and owned locally if it is to be effectively implemented at the level of individual organisations.

The Lancet stated that this ‘ground breaking’ work could create a model for other countries to follow in ensuring that public procurement was sensitive to labour standards issues. We congratulate NHS PASA and the ETI on the development of this guidance and hope that it will act as a spur for future developments in ethical procurement within the NHS.

The ETI has just produced two really useful new films that set out the business case for ethical trade, for suppliers and retailers.  We all know that pictures, preferably moving pictures, are crucial in getting people to relate to workers and their lives and we welcome these new films as a useful resource for communicating this vital message.

The retailer film aims to raise awareness of buyers, Board members and technologists to the issues of ethical trade. It sets out:

• What is ethical trade?
• Why consumers care?
• Other business benefits of ethical trade

The case is bolstered through insights from representatives from:

• Companies including: The Gap, Next Plc, and Tesco
• Trade Unions such as the TUC
• NGOs such as Women Working Worldwide and Labour behind the Label

The supplier film sets out the key business benefits for suppliers (i.e. owners and managers of factories and farms) of taking labour codes seriously and improving working conditions. It is based on interviews carried out earlier this year with seven garment and food suppliers in China, Kenya and the UK, as well as major global brands and retailers in the UK and US. The supplier film is subtitled in Spanish and Chinese as well as English.

Both films are stylish and professional, setting out their cases in a compelling and effective manner. Impactt would like to congratulate the ETI on producing two useful and informative resources.

Please call 0207 841 5182 or email eti@eti.org.uk if you would like to receive a copy (each DVD contains both films on the same disk).

In the afternoon, there were a series of practical, issue-based workshops covering topics such as communication strategies, migrant labour, industrial relations, purchasing practices and living wages. The workshops provided an opportunity for delegates to share best practice and discuss common challenges within each of these areas.

The final session of the day involved a panel discussion on the future of ethical trade. The panel consisted of Phil Wrigley (Executive Chairman of New Look), Frances O’Grady (Deputy General Secretary, TUC), Jane Nyambura (Regional Manager, Africa Now), Gareth Thomas MP (Minister of State for Trade and Development), Steve Homer (Bios Partners) and was chaired by James Harding, editor of The Times.

One of the themes explored by the panel was that ethical trade is not the ‘luxury’ of an economic boom, but indeed is an integral part of business strategy. Therefore, like everything else, ethical trade will be affected by the current financial crisis in some ways, but should certainly not lose its place on the economic agenda.

Some important questions were raised by the audience relating to whether the government was doing enough, whether countries investing in human rights improvements would be economically rewarded by the international community and how brands could be more transparent about the complex issues in their supply chains. Whilst questions like these evoked stimulating debate, the answers in some cases left something to be desired. It also made one wonder whether some workers should have indeed been sitting on the panel as well.

On the whole, the conference was the perfect opportunity to assess where we are and to reflect on the fact that a lot more has to be done, if we want to make a significant difference to the lives of millions of workers worldwide.

Impactt would like to sincerely congratulate the ETI on its journey so far and on hosting an excellent conference last week. However, the true success of the conference will of course be determined by how the attendees implement the learnings gained to drive more worker-centric change in their supply chains.

Following the Primark news stories and Panorama documentary a couple of weeks ago about the undeclared outsourcing and child labour in the Indian supply chains of Primark, we thought we would write a blog about homeworking and the challenges it represents, particularly in the Indian garment industry.

As we noted before homeworking is endemic in the Indian garment industry. It is a fallacy to believe that only Primark and low-cost garment retailers are vulnerable to the problems, such as child labour, associated with homeworking. The issues homeworking presents to retailers and brands are complex. All too often companies’ responses have been to ‘cut and run’, which has left workers in a more vulnerable position than they were in before. Retailers and brands should be responding to the issue in a progressive manner; improving working conditions for adults, whilst reducing the incidence of child labour in these relationships.

Homeworking in India exists for a number of reasons.  It is linked to old craft traditions, but increasingly it is being taken up due to declining opportunities for workers in the formal sector. It also relates directly to the growth in demand for hand-made and crafted items. It is characterised by women workers, young workers and low pay. As the Panorama documentary demonstrated middlemen organise the outsourcing to the homeworkers. The system is far from transparent and homeworkers often have irregular work and no contractual relationship with middlemen. Lack of rights, combined with limited transparency over working conditions means homeworkers are especially vulnerable and the incidence of child labour is high.

However, homeworking has a number of advantages to the workers themselves and to the factories with varied production schedules. In many cases homeworking is a key part of workers livelihoods and survival strategies. For many women, homework constitutes their employment of first choice as it can be combined with domestic work. In cultures where women’s mobility is restricted homeworking is the only employment option. There is some evidence to suggest that homeworkers’ working conditions can be better than some factory workers. Homeworkers can plan when they work and how they work. For the factories, homeworkers provide a pool of skilled workers, doing jobs such as embellishments that are difficult to mechanise. Homeworkers can be relied upon when a factory needs to increase production quickly.

So what can retailers or brands do to improve terms and working conditions for homeworkers? The ETI have produced the ETI homeworker guidelines: recommendations for working with homeworkers, which is an excellent first step. It has a number of recommendations which are particularly pertinent to homeworking on the Indian subcontinent. Another great resource is the HomeWorkers Worldwide website, which has a number of interesting research reports and resources for understanding the issue.

The first step should be to map supply chains to understand where outsourcing to homeworkers is occurring and identify where an intervention by a retailer/brand could have maximum impact. The ETI guidelines suggest that many efforts to improve conditions for homeworkers have been counter-productive because there was no initial effort to get a full understanding of the complex supply chains before embarking on a remediation programme.

Once the supply chains are understood, brands should work to ensure that the homeworking relationships become visible and the working conditions for homeworkers can be monitored and improved. Some brands and retailers have had success through the establishment of community centres where homeworkers can come together to work. The best of these are run and operated by an independent NGO or homeworkers’ organisation; are located close to workers homes, and are run as a central distribution centre. They have flexible opening hours; and are used as a focal point for introducing other schemes to benefit workers, such as training and social security schemes.

Other retailers and brands have helped the support of microcredit schemes and collective social insurance. Perhaps one of the most high profile of these schemes is Benetton’s partnership with Birima micro-credit programme in Senegal. It is not clear to what extent Benetton is sourcing from the recipients of this scheme, but it shows the potential of what a retailer or brand could do.

There remains much scope for companies and their suppliers to innovate in this area, to create new ways of working with homeworkers and create better conditions for these workers.

This latest news only adds to the pressure on the company’s ethical standards following recent unwanted attention after the cancellation of Alexa Chung’s sweatshop experiment in Covent Garden entitled ‘The Devil Wears Primark’. The programme was cancelled by Channel 4 at very short notice at the beginning of June, leaving many viewers disappointed that a seemingly promising exposé of the garment industry was instead replaced by Without a Paddle – a film about a camping trip.

The child labour issue and the focus of the television documentary coincide with the release of a Primark video on its specially created ethics website ‘Ethical Primark’, which aims to dispel some of the assumptions about the company’s purchasing practices and how it manages to keep its prices so low. Entitled ‘How Do They Do It’ the video talks about the company’s business model – claiming that low margins, no advertising expenditure and economies of scale, rather than compromising on product quality or working conditions, help to keep prices down.