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).

This year’s report focuses on retailers’ efforts on Living Wages. This is a crucial area for ethical trade and labour standards, particularly in the era of the credit crunch, rising oil prices and high rates of inflation. As the report states: “As economic storm clouds gather … those same storm clouds bring with them major food price inflation for garment workers, who deserve better from the retailers whose profits they sustain.” Retailers’ efforts on living wages are indicative of the sophistication of retailer’s broader approach to ethical trade.

The report is challenging and sets the bar high. LBL and their partners have been calling for urgent increases in wages. They note: “In 2008, companies seem to be hearing the argument, and have begun to experiment with projects that aim to increase wages, rather than getting hung up on definitions.”

LBL identify four pillars of an effective living wage project. These are:

• A collaborative multi-stakeholder approach
• The involvement of worker organising particularly through trade unions
• Examining commercial factors throughout the whole supply chain
• A clear route map for implementing living wages for all workers

The report notes that only the ETI’s Living Wage project fulfils all of these criteria, but progress has been slow, and the project is yet to get off the ground.  Other projects have focused on improving productivity to increase wages.  However, LBL thinks that these projects are not enough, for the following reasons:

• Productivity improvements put workers who work long hours in high pressure environments under even more pressure.
• There is no guarantee that the benefits of productivity improvements will be passed on to workers in the form of higher wages
• Increased productivity may well lead to fewer jobs, or to different jobs
• Productivity improvements set the bar too low and mean that retailers take the eye off the ball of living wages.

We at Impactt don’t entirely agree with Labour behind the Label about this, as we have commented before.

However, it is clear from the report that not enough is being done to make a positive difference to the wages in workers’ pockets.  In LBL’s view, the vast majority of high street retailers have not achieved much progress in working towards a living wage for workers in their supply chains.  LBL says ‘one cheer’ for Sainsbury’s,  Asda, Primark, Arcadia and Tesco, and ‘two cheers’ for M&S, Gap, Monsoon Accessorize, New Look and Next.  But no retailer gets the full complement of ‘three cheers’.

Reading through the report it is hard not to conclude that even those retailers that have been singled out for praise by LBL are finding it hard to deliver real pay increases in workers’ pockets.  The exception is New Look who, in the words of the report, is the furthest advanced in work to increase wages, with a project that appears to have genuinely improved wages and working conditions, involved worker organising, and encompassed a (limited) examination of purchasing practices, all along with a genuine plan to roll this learning out across its supply base.”  We say, three cheers for New Look.

Perhaps the most high profile Tesco critic of recent weeks is the US Democratic Party’s nominee for the presidential election – Barack Obama. Mr Obama recently wrote to Tesco Chief Executive Sir Terry Leahy encouraging the retailer to engage with Trade Unions, after the management of the company’s US operation – Fresh & Easy – refused to have discussions with UFCW, a grocery workers’ union.

At the same time, Tesco is also under pressure from War on Want and Labour Behind the Label who have undertaken research into the living standards of workers in some of Tesco’s Indian suppliers. The two organisations claim that workers earn an average of £38 a month – £14 below the estimated living wage of £52 per month, while working long hours and even having to do forced overtime shifts. The report also claims that workers are put under pressure to meet onerous targets, and are fired if they fail to do so.

Tesco has responded to the War on Want allegations saying they were ‘unsubstantiated’, they have criticised War on Want for declining to engage with the supermarkets. “Out of the blue they make these allegations without producing any evidence,” Tesco said.

In the UK, meanwhile, TV cook Hugh Fearnley-Whittingstall is encouraging Tesco to improve the welfare of the intensively reared chickens that it procures. Animal welfare campaign groups have also focussed on the sale of live turtles in Tesco stores in China

Labour standards are now an established issue at the Tesco AGM. Last year War on Want filed a shareholder resolution focused on living wages in Bangladesh. In 2006, Action Aid brought South African farm-worker Gertruida Baartman to address the shareholders. The debate around Primark shows that these issues are only growing in consumers’ awareness and we can expect more calls for retailers to respond.

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.