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).

Following the news stories last week and speculation in the Ethical Trading community, the BBC is set to show its investigation into the ethical standards of Primark’s supply chain this Monday at 9pm. A potentially controversial trailer is available on YouTube:

The footage shows outsourced finishing in the backstreet slums of India and child labour in Tamil refugee camps usually closed to outsiders. The programme uncovers organised middlemen running off-the-record order books for a factory supplying Primark and distributing finishing work amongst slum-workers.

The documentary raises important questions about low-cost fashion and how it is produced; but we wonder whether it is just low-cost fashion retailers who are vulnerable to these practices. This depiction is reminiscent of the Gap exposé last October which revealed child labour in unknown subcontracted factories. As we commented last year, if Gap could be caught in a situation like that, after developing arguably one of the most comprehensive ethical trading programmes in the industry, any company sourcing from India could be caught out. Clearly controlling supply chains is well-nigh impossible.  We at Impactt think that it is time for another approach.  The need is to identify these informal supply chains, which after all provide some income for very poor people, to develop ways to keep adults in the supply chain, but working under better conditions and to support working children back to school, whilst maintaining the family’s income.

Primark’s response to the allegations has been to drop three suppliers for using undeclared subcontractors. Primark have a point here, since the suppliers are in breach of their agreement – however, walking away is never going to solve the problem.  This type of action will leave adults without jobs and the children caught in the media glare in an even more vulnerable position.  To be fair, Primark has announced its intention to establish the ‘Primark Better Lives Foundation’, which will provide financial assistance to organisations devoted to improving the lives of young people; whether or not this will address the needs of the children found in their subcontracted factories remains to be seen.

It appears that the labelling scheme may be based on the Rugmark model which monitors child labour in the carpet industry. The tracking may be similar to the Dutch initiative ‘Made-By’, who employ the use of distinctive blue buttons and an online tracking service to increase consumer visibility in retailers’ supply chains.  

We welcome both these initiatives, but would urge GAP to prioritise equally the rehabilitation and education of children involved in the garment industry. I would prefer to buy a garment which was labelled child labour free, if I was certain that any children who had previously worked in the supply chain were happily in school and improving their life chances.  Maybe GAP could consider sharing the grades and progress of former child workers to demonstrate a truly responsible approach to making the world a better place.

The report relates that because he is “an apprentice”, he is not paid. The conditions in which he works, and lives, are described as “smeared in filth” and “flowing with excrement”. Gap said they were unaware of the occurrence of outsourcing and the unit was not declared to them. However they have announced they are investigating the situation.

This illustrates a growing concern in the labour standards debate that the use of undeclared sub-contracting units is occurring under the radar of retailers. Gap is often viewed as a leading retailer on labour standards, and has done groundbreaking work on monitoring, remediation and purchasing practices. Their policy on child labour states: “If it is discovered children are being used by contractors, that contractor must remove the child from the workplace, provide it with access to schooling and a wage, and guarantee the opportunity of work on reaching a legal working age.” This is best practice when dealing with child labour.

The problem is that subcontracting is endemic in the Delhi garment industry. It is normal practice for registered factories to put out elements of production (embroidery, beading, embellishments and sometimes whole garments) to sub-contractors who run small domestic units, where conditions are always lower than in a registered factory and can sometimes be appalling. Other work goes out through a network of runners to individual homeworkers who are highly skilled at beading or embroidery.

One way of looking at this is to say that it pushes some of the income generated from global trade to desperately poor people who, being outside the formal economy, would normally not receive any of this money. Another way of looking at it is to say that it is a way of making more money by giving the work to people who are not protected by minimum wage or minimum age legislation and who have no job security. The challenge for Gap and others working in the field is to find a way to spread the income from global trade to poor people whilst also protecting their rights and improving their access to legal protection.

We hope that Gap will take up this challenge.

Watch this space to hear what the reaction is, first hand!

The report notes in its introduction the vast differences between the wages of company directors and executives and those of the workers at the other end of the supply chain. It states that two years ago Sir Phillip Green claimed a £1.2 billion dividend, enough to double the salaries of Cambodia’s entire garment workforce for 8 years.

Let’s Clean up Fashion 2007 analyses how many companies have been targetted for exposes in the last year. It argues convincingly that these exposes are not just troublesome cases, but are the result of endemic cases in the industry. It concludes that whilst some companies are now admitting there is a problem with wages in the sector, only a few have done anything about it and of those very few are engaging with the problems systematically.

Gap, New Look and Next however, comes out rather well. The report stated “Gap’s strength has been in building positive relationships with trade unions and NGOs, dealing quickly and effectively with problems in factories when they emerge, and taking a lead on building cross-sector work.” Labour behind the Label states that New Look are “one of the companies most open to our concerns.” They are encouraged by New Look’s work attempting to come to grips with a living wage in Bangladesh and their approach to using local groups for monitoring and verification. In Labour behind the Label’s view “Next seems to have started to take up our challenge of moving beyond pilot projects to a more systematic approach, at least in terms of the living wage.” Well done Gap, New Look and Next.