Events for ETI Members
ETI Members' Roundtable
Purchasing Practices: ‘marrying the commercial with the ethical’
London
7th July 2004
- Background and purpose of this event
- Who participated?
- Key points from presentations
- Key discussion points
- Putting it into Practice
- Further information
Download
this report as a PDF [PDF, 100kb]


1. Background and purpose of this event
Many of us are aware that some buying practices can undermine the effects
of ethical trade programmes, by inadvertently restricting suppliers’ ability
to uphold international labour standards. A recent study conducted by Insight
and Acona indicates that many of the commercial pressures placed on suppliers
are in fact doubly undesirable: not only are they potentially damaging for
workers, they are also costing companies money. The implication is that there
may well be concrete commercial, as well as ethical, reasons for reviewing
current purchasing practices.
This roundtable, attended by both ethical trade
staff and buyers from our member companies, highlighted some of the key
impacts that retailers’ purchasing
practices can have on workers. It explored possible approaches to ensuring
that buying strategies integrate commercial and ethical considerations. It
takes forward thinking on this issue by building on recent discussions and
previous work carried out by ETI (see Further information) as well as recent
reports by Oxfam and Acona/Insight, which are highlighted below.


2. Who participated?
Approximately 70 participants attended this roundtable, comprising over
40 from ETI member companies including staff from buying departments,
a few non-member companies, NGOs,
trade unions, consultants and ETI secretariat staff. This large
turnout is testament to its importance to the ethical trade agenda.


3. Key points from presentations
3.1 Overview
Simon Steyne,TUC International Officer, UK worker
member, ILO Governing Body, TUC
3.1.1 How some purchasing practices can cause or contribute to worsening
labour conditions
A growing number of companies have begun to recognise that a global market
governed by global rules for decent work are essential to long term business
success. These companies have adopted ethical trading policies and have
supported more coherent global governance. However, it is also obvious to
us all that some companies have adopted pricing policies which contribute
to the continuing exploitation of workers because they make short-term commercial
sense. This is a key reason why some multi-national enterprises increasingly
source from China and export-processing zones (EPZs) worldwide.
This trend leads to an artificial suppression of wage costs, causing a worsening
in labour conditions and systematic denial of workers’ fundamental
rights.
In recent years
many brands have adopted codes of labour practice, placing demands on suppliers
to adhere to ethical trade policies. But these codes
often directly conflict with the schedules and prices dictated by these
same companies, which hinder and prevent real progress.
Although retailers
have information about factors like unit prices (determined by material
and labour costs) and production time, often little or no consideration
is given to the capacity of the supplier to achieve the demands placed
upon them. Many suppliers have little or no negotiating power when agreeing
to
these demands as few can match the bargaining power of the brands. When
suppliers are under pressure – for example, to reduce their prices,
be flexible, make last-minute changes to orders - it is likely that there
will be negative
consequences for workers. In the short term these might include compulsory
and/or excessive overtime, employment of child labour, or use of subcontracted
workers. They may also include denial of workers’ rights to organise
and bargain and discriminatory employment practices which affect women
disproportionately.
Is
there a business case for these practices? It is well documented
and widely known that abuse of workers leads to more mistakes, more mistakes
means
lower productivity and quality.
What about government responsibility for protecting
their citizens and upholding international law? In the face of competition
for foreign domestic
investment
and market share, some will collude in artificially suppressing wage
costs by denying workers their basic rights.
But some brands are demanding ever
lower costs and shorter lead times, the results of which are low wages,
meaning less taxes for good governments to
enforce the rule of law, provide infrastructure, basic services (including
health and education), social security and training for workers. But even
if retailers and brands improve the prices they pay suppliers, there is
no guarantee that workers will benefit from increased wages unless they have
the right to organise freely and bargain collectively.
3.1.2 Examples of negative
impact on workers
Some International Labour Organisation (ILO) examples.
EPZ cases:
- Bangladesh: three days of 24-hour back-to-back shifts and children
welcomed to speed up production.
- South Africa: night shift locked in resulting
in a pregnant women losing her baby.
- Central America: pregnancy testing
to ensure that women workers will not be absent or receive maternity benefits.
Examples cited by the National
Labor Committee (US) in the late 1990s
- Disney: Pocahontas pyjamas: retailed
in US, $14 - labour cost in Haiti EPZ 6-7 cents
- Disney: Mr Mickey Sweatshirts:
retailed in US, $17 - labour costs in Burma, 2-3 cents
Workers who have complained have been attacked, intimidated and
fired.
Workers have no unions, no rights and no freedom.
3.1.3 Looking ahead
Retailers need to integrate their ethical trade policies
with their commercial policies. They need to ensure the protection of internationally-recognised
fundamental human rights at work, such as the freedom to join or establish
free trade unions and bargain collectively and to work free of forced
labour. These will enable workers to negotiate their working conditions – for
example, overtime limits. In addition, low prices which lead to low wages
(and lame local markets) have a direct impact on the labour conditions
of workers such as their ability to resist overtime or earn a living
wage. However,
if prices and lead times were correct and decent, this could change.
It would provide suppliers with a sounder basis to negotiate with a brand.
If companies
co-ordinated and implemented the ETI code (inc. with shared suppliers)
this could also challenge current cut-throat competition, the current
consistent
and accepted driving down of prices, and the City analysts who base share
price on short-term profit margins. To progress and deal with the issues
raised we must recognise and begin to deal with the fact that Price Matters.
For
full presentation notes please contact adil@eti.org.uk
3.2 Winning profits, losing rights:
the causal link between buying practices and poor working conditions
Sumi
Dhanarajan, Oxfam GB, Policy Adviser on the Private Sector
3.2.1 Introduction
Despite a decade of ‘ethical trading’, there have been very
limited improvements in the working conditions for millions of workers within
global supply chains. This presentation draws from recent Oxfam reports:
Trading Away Our Rights: Women Workers in Global Supply Chains in particular
and the Play Fair in the Olympics report, illustrating the causal link between
the pressures that suppliers are placed under by the commercial imperative
and worsening working conditions (as described above).
3.2.2 Trading Away
Our Rights: Women Workers in Global Supply Chains
The scope of the research
- Research conducted/managed through partners in 15 countries.
- Focused on the garment and fresh produce sector.
- 1,500 worker interviews, 140 farm and factory managers, 50 supply chain
agents, 27 retail and brand company staff, 150 government, NGO
and Trade Union officials.
Key Findings
- Women workers are gaining employment through export-oriented industries BUT
it is precarious employment: insecure, without adequate labour protection
or benefits, and short-term.
- Trends in supply-chain management are moving in the opposite direction to
ethical trading. The desire for ‘flexibility’, low production
costs and fast turnaround are causing these precarious terms and conditions
of employment. There are a number of instances where labour legislation has
been amended or introduced to facilitate this ‘flexibility’.
- There is a severe disconnect between the buying and ethical functions of
the company. Separated within the corporate hierarchy, ethical staff
mandate is limited to policing suppliers’ compliance with labour
standards only NOT to ensure that the company’s own practices facilitate
suppliers’ compliance.
Buyers’ incentives are commercially-driven and oriented towards
short-term profit making with little room for considering the ethical
implications of
their actions.
Precarious Employment
The research revealed across both the fresh produce
and garment sector, workers are being employed under the following conditions
as suppliers
strive to
meet demands for flexibility, speed and low production costs:
- Short-term ‘rolling’ contracts – often with no written
contract - even though jobs are long-term;
- Pay by piece-rate. Production targets are excessive and if target is not
achieved during the normal working day, workers are expected to work overtime
on their own account until they complete i.e. no overtime premium paid.
- Forced overtime on very little notice leaving no time to make domestic arrangements.
- No benefits - maternity & holiday pay; social security or severance.
Union / organising rights undermined.
Women and migrant workers are in a particularly precarious position because
of their limited negotiating power. Women workers in these jobs bear the
double burden of paid and unpaid work.
Workers are increasingly being hired through contractors/ agents / gangmasters
to further evade the employer-employee relationship and the legal obligations
that that brings.
Purchasing Practices
Across both sectors, the general trend is towards transferring risk down
the supply-chain. ‘Just-in-time’ delivery requires keeping inventory
and warehousing to a minimum and making suppliers deliver products almost
straight to store as and when needed, often at great speed. Suppliers are
expected to bear the risk of price fluctuations and poor forecasting. An
aggressive buying culture and dominance by a handful of multinational companies
means that suppliers have no choice but to comply with these demands and
often easily sacrifice respect for workers’ rights in the face of such
pressure.
Buyers in both the fresh produce and apparel industry are adopting a number
of purchasing practices to keep delivery lead-time short and prices low,
and to maintain flexibility in meeting supply and demand. These include:
- Payment is determined and made only after product arrives;
- In fresh produce, if the product is unsatisfactory or not needed by the
supermarket, the farmer has to bear the cost of it being sold on the wholesale
market;
- Technical and packaging requirements, eg, new packaging – the packhouse/producer
absorbs the cost;
- Threats to relocate as a means of bargaining down the price;
- Placing smaller orders more frequently.
These pressures faced by suppliers
ultimately result in exploitative terms and conditions of employment. (Please
see Oxfam report
under Further Information for comprehensive list).
Integrating ethical commitments into sourcing
strategies / purchasing practices.
Ethical trading still seen as peripheral to a company’s core business
practices and is generally solely focused upon policing suppliers’ compliance
with its code of conduct. Failure to deal with the impact of purchasing practices
has meant that either:
- Certain worker abuses are accepted as an industry norm by compliance
staff e.g. excessive overtime during peak seasons or piece-rate payment
and excessive production targets; OR
- Factory managers fake compliance during inspections.
The main result of this is that no significant improvements are made in
labour standards. It is likely that this is leading to cynicism within and
outside companies about both the cost effectiveness and developmental impact
of having ethical policies.
The research also highlights that both sectors are driven by short-term
profit-seeking and that this permeates the whole business model, both at
the retail and the supplier level. We propose that if businesses were to
evaluate their current supply-chain management to a view towards long-term
sustainable operations that this would deliver both against long-term profit
and meeting ethical commitments.
For full presentation notes please contact adil@eti.org.uk
3.3 Challenges of Effective Buying:
How getting it right commercially can have ethical benefits too
Dena Freeman,
Partner, Acona Ltd
3.3.1 Introduction
Acona is an international consulting group focused on understanding risk
and improving performance.. The Sustainable Business team works in all areas
of Sustainability and CSR.
The report Buying your way into trouble was written by Acona for
Insight Investment, the asset management of UK financial services company
HBOS, which currently manages £68.7 billion.
3.3.2 The research
project
The project’s aims were to explore:
- How current supply chain management practices and the drive for ever-greater
efficiency puts pressure on suppliers’ factories or farms, potentially
forcing them to contravene some of the ethical standards in order to meet
the buyer’s requirements, and
- How to find practical ways to improve certain ethical standards in suppliers’ operations
by making some changes to the way that corporate buying is carried out.
The research included a literature review, 13 interviews with 8 companies
and 2 suppliers to those companies; 1 purchasing specialist; 1 ethical
trading specialist, 2 ‘validation workshops’ (attended by approximately
20 companies) and Acona’s experience in this area.
Key areas of focus/negotiation
Identifying and unravelling the full causes of poor labour standards is
immensely complex and subtle. However, certain characteristics, emerging
from the research, merited further attention and the table below provides
pointers to what can go wrong and suggested solutions to these, all of which
are covered in detail in the report.
Table 1: How buying practices impacts on labour standards
| Key areas of focus/negotiation |
What goes wrong? |
Possible Improvements |
Time and Speed
(eg. shortening lead times, just-in-time delivery, fines for late delivery,
etc)
|
- Inefficient decision making
-
Holding back decisions
-
Disregard of certain dates on critical path
-
Poor communication between buyers and suppliers
-
Lack of trust between buyers and suppliers
|
- Simplify decision making
-
Segment the supply chain
|
Flexibility and Seasonality
(eg. making last minute order changes, taking large volumes at peak times,
etc) |
- Poor forecasting
-
Peaks and troughs in demand
|
- Increase sophistication of forecasting
-
Manage production outside peak periods
|
Cost and Risk
(eg. Cost : price reductions, open-book accounting, etc. Risk eg. ‘sale
or return’, rebates and profit contributions based on volume, etc) |
- Inappropriate incentives for buyers
-
Poor understanding of manufacturing costs
-
Balance between labour and materials
|
- Cost modelling (buyers)
-
Cost modelling (suppliers)
|
| Buying Culture |
- The ‘Sales Prevention Team’
-
Short term focus
|
- Rethink buyer appraisal frameworks
-
Organisational integration of buying teams
|
Conclusions
The research illustrated the complex connections between normal commercial
buying practice and ethical standards. In some cases commercial requirements
and ethical requirements may be in direct conflict, but this research suggests
that these cases are remarkably limited. More commonly ethical breaches are
driven by failures that are also commercially undesirable.
Moreover, the research also emphasised there is no single solution to these
problems.
For full presentation notes please contact adil@eti.org.uk


4. Key discussion points
4.1 Workshops Sessions
These sessions aimed to provide participants with the opportunity to explore
in more depth some of the specific problems encountered in modern supply
chain management and following this, to discuss the appropriateness of suggested ‘beginnings’ of
solutions in their current roles and company structures. Using data from
both reports and in particular the information outlined in Table 1 (above)
as a springboard, the ensuing discussions were detailed and wide-ranging.
Below
we have summarised
the many discussions, actions and recommendations into two areas:
- Core issues relating directly to current company purchasing practices, with
a view to better ‘marrying the commercial with the ethical’;
and
-
Wider, contextual issues, equally important to ensure progress and improvement
in dealing with the issues outlined.
The first session, ‘What goes
wrong?’, put forward four elements
which were considered to have considerable impact on suppliers’ ability
to uphold labour standards (full details in Annex 1 - available on
request from adil@eti.org.uk). These were:
- The need to produce quickly: time and speed
-
Issues relating to flexibility and seasonality
-
The search for lower prices and better deals: cost and risk
-
Issues relating to organisational culture.
The discussions focussed on the
impact of these purchasing practices through their supply chain and how
accurate these were, in addition to identifying
other problems participants encounter in their current roles.
The next session ‘Suggested
solutions’ provided solutions and
objectives drawn from the two reports presented earlier with the aim of
taking forward thinking on these issues (full details in Annex 2
- available on
request from adil@eti.org.uk).
The summary below identifies the key areas discussed and findings.
4.1.1
CORE ISSUES
Critical path management
Many retailers delay placing orders until the last minute, to make sure they
have more market information. The result is that any subsequent delays
often create unnecessary pressure for suppliers to fulfil orders on time.
Historically, critical paths had a certain amount of ‘padding’,
so there was a general feeling that there was less impact on suppliers
if key dates were missed. However, critical paths differ enormously for
every product and increasingly the padding is not there. Although product
development times have increased, this can create a false impression that ‘there’s
plenty of time to get things done’. This contributes to a lack of
focus on ‘getting it right first time’, which can then mean
that ‘less critical’ dates in the critical path get shifted.
Often, the ‘less critical’ dates are those that require action
on the part of the retailer, rather than the supplier.
“If I’m in the Far East for a couple
of weeks, some things come up that no-one else can deal with so decisions
get delayed. I think this happens in quite a lot of companies”
- Company participant |
Also key is for
the supplier to give you an accurate prediction of their production time.
Some participants noted that Far East and Asian companies are more accepting
of late lead times than European companies as Asia is a very competitive
market and flexibility is seen to be important to winning business. However,
many of these countries can be characterised as ones in which workers have
very little power.
All participants agreed that critical path management
is key. Furthermore, it is important to ensure that ethical measures are
in place for buying teams
as well; otherwise workers do not receive benefits.
Forecasting and Seasonality
It was widely recognised by all participants that poor forecasting, such
as last minute orders (seeing if something sells before putting in big
orders – driven
by management and buying teams) or order changes and seasonal peaks and
troughs lead to worsening labour conditions, such as overtime. They can
also result
in factories using forms of employment where workers are potentially more
vulnerable to abuse such as casual labour, short-term contracts (year-on-year)
and subcontracting arrangements.
“Holding back decisions
Yes, this does happen. For example one of our directors might come back
from a trade fair saying ‘we have to rethink our range’ and
everything is thrown up in the air again.”
- Company participant |
A number of factors were seen to influence forecasting such as; demand,
delivering the margin, cash flow, delivery of raw materials etc. These factors
are then exacerbated by seasonality requirements, particularly when weather
here in UK is so temperamental. For example, a heat wave on one day can cause
a sharp increase in demand for a product, which then plunges when a rainy
spell starts.
While to some extent forecasting is getting better (assisted by technology),
it is also getting harder with, for example, consumer fashion trends being
highly erratic. Whilst technology can help analyse data some participants
felt that having so much more information available, in some ways, made the
whole area more complex.
However, participants highlighted a range
of solutions for poor forecasting and seasonality which included:
- Specialist Advice
- use of forecasting specialists that may also be able
to look across sectors as well as individual products
- use of fashion consultants who are experts in identifying/predicting
future trends etc
- Consolidating Suppliers
- long-term relationships
- % of production taken from a particular site/farm for increased leverage
- Supplier Communication
- two-way relationships with suppliers e.g. attending retail staff meetings
- Vendor Managed Inventories (computer procurement system giving the
supplier access to warehouse information and visibility of the supply
flow so they
can better predict and plan their own production).
- Internal Systems and Structures
- Communication between designers/technical and buying teams
- Reduce management pressure on buyers to make last minute decisions
- Rationalising decision-making structures – empowering people
to take decisions rather than having to refer everything back up to their
bosses,
cutting down on decisions needing to be taken by Committee
- Out of season advance orders
- May only be possible with core products (e.g. white T-Shirts - required
every season).
- Although other participants believe being able to do this is more
about having the nerve to commit to a line in advance and to commit cash
flow for it (some
of which in any case may be off-set by avoiding high overtime
payments etc)
- Dual sourcing
- For example putting first orders to China but placing repeat orders
in Europe, thereby avoiding putting pressure in locations at high risk
of abusing standards
in order to meet short deadlines.
- Development of global markets
- As domestic markets develop in the southern hemisphere these may help
to smooth out the peaks and troughs (e.g. high season in Thailand or
Brazil
will be different from high season in Europe and the US).
- Peaks and troughs in demands
- Multiskilling workers - if there is a delay on one line they can switch
to support another line or another area of production within the factory
- Half-making clothes – eg,. making a T-shirt in advance but dying
it later when the fashion is known
Definitive costing model
The establishment of true net costing was seen as important tool in ensuring
that ethical trade policies could be adhered to. It was widely accepted that
this was not currently taking place as retail is fast moving and current solutions
are impractical due to problems assigning ‘invisible costs’ and
the time to implement a total cost model for products. Some companies highlighted
that an average unit cost is calculated but is limited. Suggestions on how
to provide this measurement ranged from a balance sheet (seen as cumbersome),
taking the worse case scenario , eg, calculating a cost for returns, complaints,
lost sales, campaigns and sharing this with buyers and wider as opposed to
just the initial mark up.
Retailers and suppliers to work together to provide a total cost, which
could incorporate an identified minimum level to allow legal payment, which
is learnt from and taken forward.
Buyers
Throughout the discussions, it was apparent that the buyers were seen as a critical
audience in finding solutions. Buyers were seen to be short-termist, tending
to move quickly between jobs and being aggressive in their partnerships with
suppliers.
“Buyers are often rewarded for ‘numerical
benefits’ to the business eg cost savings. We rotate buyers around
a lot. Buyers are not necessarily rewarded for their expertise or their
length of service”
- Company participant |
However, buyers indicated that their companies rotated them frequently,
resulting in a ‘sink or swim’ culture. They also said they had
targets and incentives set that did not encourage the integration of ethical
policies. One corporate member indicated that a shift in their structures
to involve buyers and assessing them on ethics and driving continuous improvement
was currently in place and providing results.
Some buyers expressed that seeing them as a solution to worsening labour
conditions was simplistic and that the whole organisation and its culture
should be examined. The linking of the whole team’s objectives not
just those of buyer but also those of sourcing, technical, quality staff
is important. Buyers also stressed the importance of looking at the whole
supply chain and of developing strategic partnerships with suppliers in order
to foster progressive change. Many participants, including buyers, stressed
the importance of looking at the nature of commercial relationships with
suppliers, for example, examining the potential for more long-term buyer/customer
relationships. However, in the words of one buyer, though these are viable
solutions, “the question is whether a corporate culture can resist
going for the lower price.”
4.1.2 CONTEXTUAL ISSUES
“We always tell the supplier you need to
allow time for things to go backwards and forwards. The difficulty is that
the supplier feels that to get an order, they have to underestimate the
time it will actually take to provide something – they’ll say
it takes 45 days when actually it is more like 50. The problem is compounded
by the fact that I tell the supplier if you’re going to take longer,
then we won’t order as much from you”
- Company participant |
Closer supplier relationships/longer term commitment
Many participants pointed to the benefits of long-term relationships with
suppliers which would help build trust and better communications and ultimately
lead to better practices. Forming these key relationships would help stabilise
supply chains, allowing better education and awareness raising down the
supply chain thus making it easier to identify and overcome problems. Furthermore,
participants expressed the importance of educating both suppliers and buyers.
Top management commitment
It was felt an understanding and commitment to ethical trade by company
Directors, senior managers and other stakeholders was essential for real
changes to
be made in the above areas. The fact that managers sometimes fail to ‘walk
the ethical talk’ and thus make decisions without realising their
effects on labour standards was identified as an issue. Awareness raising,
education
and peer appraisals were seen as tools to achieve greater buy-in as well
as more guidance as to what is acceptable practice.
The value of ethical
trade
Many participants raised the issue of how to ensure that companies recognise
the value of ethical trade, and in particular how to reward companies that
pursue ethical trade practices. It was perceived that the main motivation
of companies is brand reputation, i.e., the risk of what might happen if
you don’t do it rather than what happens if you do. It was said that
cost targets are tangible and the easiest to quantify, while ethical trade
targets were seen to be the hardest to quantify. This made it difficult
to use ethical trade as an argument against current short term practices
which
lead to worsening labour conditions. However, brand risk is a major issue
for companies and raising it as an issue with marketing and brand directors
would help them to realise the value of ethical trade at least in terms
of the business benefits. (please see below - Further
information: The
Business
case.)
Consumers/customer behaviour is a key driver for ethical practices.
However, a current lack of information on the benefits for customers of
good practice
or on how to make ‘ethical’ choices has meant that they do
not currently exert great power to influence retailers. This audience is
very
fragmented and although some consumers make choices with ethical criteria
in mind, many are driven by price alone. There is a belief that costs are
usually passed on to consumers but in the experience of one NGO participant,
it is often the supplier who pays. Labelling was raised as a possible solution
but was also seen to carry more risks than gains (see further information).
Many
companies were seen to view the value of ethical trade/codes of conduct
to its business as the ‘easiest’ way to meet their legal responsibilities
with respect to labour practices in their supply chains. A current company
mindset was seen to be one of ‘we have exercised our responsibility
to ethical trade as we have adopted a code of conduct and have an ethical
trade team.’ This had led to the ‘ethical team’ being
siphoned off with no integration into the commercial aspects of the business.
However,
all participants agreed that the ethical team and its goals had to be integrated
into the whole of the business and that it is everyone’s responsibility
to ensure that the positive effects of ethical trade were realised.


5. Putting it into Practice
5.1 Company Perspective
Director of Production, Apparel retailer
Increasingly, apparel retailers and global brands are being asked to consider
the impact their business practices have upon working conditions and labour
standards in the factories that produce their products. Whilst some of these
impacts are driven by the realities of the industry - ever-increasing competition,
the pressure to be ‘on trend’, as well as the seasonal nature
of the fashion business - individual companies must also look at whether
their supply chain practices are also adversely impacting factory conditions.
The challenge of continually improving labour standards across the apparel
industry is determining how both areas of impact can be addressed.
Competition
within the sector requires companies to minimise costs while simultaneously
attracting more customers to improve their market share. At
the same time, customers demand extra ‘special’ products and
improved quality, so brands are challenged to lower costs while upgrading
product. Brands must decide how best to balance these competing priorities.
The
drive to have the best product for the customer and react as quickly as
possible to trends and sales analysis may lead to changes to product after
it has already been confirmed with a supplier. Reacting to trends also
leads
to late product development and placement. Last minute changes such as
these may increase the burden placed on suppliers to deliver an order on
time,
unintentionally creating compliance issues. Improved communication between
the compliance and production teams helps to address this, giving production
people a view to the factory-level impacts of their decisions.
Because the
fashion industry designs and buys according to season, production levels
at any given factory fluctuate by season. Due to peak selling time
periods - i.e. back-to-school and holiday - a retailer’s inventory
receipts will never be constant month after month. There will always be peaks
and valleys in the orders going out to vendors, which can impact staffing
levels. Brands should make sure that vendors understand this reality and
run their business accordingly.
While communication between compliance and
production is an important part of improving working conditions, brands
must now look to more consistently
embed compliance into their supply chain. If done correctly, improved compliance
performance will lead to supply chain efficiency that ultimately helps
brands remain competitive.
5.2 Final comment
This seminar raised many issues and debates in addition to providing some
answers and suggested plans of action to deal with a key area of ethical
trade. As such, this report provides an overview, and can only touch on the
many discussions which took place. Whilst we all agreed that this event is
neither at the beginning nor at the end of the road for any of us, significant
steps took place. Over 70 participants from many different organisations
and a significant number of buying and ethical trade staff within UK retailer
companies provided a wealth of knowledge and experience to help to progress
current work and thinking in this area. It is apparent that when faced with
such a range of hurdles or obstacles, (price, seasonality, organisational
culture), the way forward is for a holistic approach, involving many more
of the organisations departments, eg, buyers, sourcing, technical, quality,
and ethical. Furthermore, participants noted that retailers working together
would be required to address the systemic values and practices currently
occurring and would provide results and impacts quicker.
Changing purchasing
practices is a huge challenge, one without a single solution, which will
require an investment of time, resources, collaboration and commitment
from many different sectors. However, the fact that some purchasing practices
hinder and prevent the improvement of labour conditions leaves us no choice
but to continue to address this issue.


6. Further information
Acona/Insight Investment
www.acona.com
'Buying
your way into trouble? The challenge of supply chain management'.
[PDF 850kb on www.insightinvestment.com]
ETI
www.ethicaltrade.org (this site)
Raising the stakes ETI Annual report 2001/2002
"Ethical labels: more risks than gains?"
How influencing suppliers
is best achieved when buying power is limited?
Raising the stakes: ETI AGM November 2002
Purchasing
practices: what impact on labour conditions?
Key challenges in ethical trade: Report on the ETI Biennial Conference
2003
Case Study
Of Good Practice In Code Implementation: The business case
Labour standards for investors seminar (Oct 2002)
ETI Base
Code and the accompanying Principles of Implementation
Oxfam GB
www.oxfam.org.uk
TRADING
AWAY OUR RIGHTS: Women working in global supply chains
[PDF 4.1MB on www.oxfam.org.uk]
Play
Fair at the Olympics: Respect workers' rights in the sportswear industry
A report produced by Oxfam, The Clean Clothes Campaign,
and Global Unions
ILO
www.ilo.org
All conventions and Recommendations can be found in full on the ILO
website
[ends]
See also: