Codes of practice
What is Ethical Trade?
What is a code of practice?
A code of practice – or code of conduct – is a set of standards or rules for ethical behaviour. In the context of ethical trade, this refers to a code adopted by a company which sets out minimum labour standards that they expect their suppliers and sub-contractors to comply with.
There are now hundreds of such codes in existence. These codes differ significantly in terms of what labour standards they contain, who is involved in developing and managing them, and how they are being monitored and implemented.
In particular, it is useful to distinguish between the following types of codes:
Company code
This refers to a code developed and adopted at the level of an individual company, with our without reference to an external set of standards. For example, many multinational garment companies and UK multiple retailers (supermarkets) now have their own company codes that include standards for supply chain labour practices. At present, there are no “laws” or universally accepted rules about what such company codes should contain, or how they should be implemented. In practice, therefore, they range from the partial and vague, to the detailed and comprehensive.
Industry code
This is a code developed by an industry, usually through an industry association, that refers specifically to companies within that particular industry. An example is the International Council of Toy Industries (ICTI) Code of Business Practice. As with company codes, there are no universally accepted standards governing the content or implementation of these codes.
Multi-stakeholder code
A multi-stakeholder code is one developed and approved by both corporate and “civil society” representatives. Typically, the “stakeholders” involved in such code initiatives are companies, trade union organisations, other workers’ organisations, labour and human rights NGOs, relevant government departments, and/or academics. Such “multistakeholder” codes have evolved in response to the regulatory vacuum in which corporate codes have developed. Stakeholders, in particular trade union organisations and NGOs, have sought to address this vacuum by setting certain minimum requirements, both in terms of what labour standards they believe a corporate code should contain, and in terms of how such a code should be monitored and implemented. The ETI Base Code, and the SA 8000 standard, are examples of multi-stakeholder codes.
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