Getting to work on ethical trading

  annual report 1999/2000

intro

contents

The Ethical Trading Initiative is an alliance of companies, non-governmental organisations (NGOs) and trade union organisations committed to working together to identify and promote good practice in the implementation of codes of labour practice, including the monitoring and independent verification of the observance of code provisions.

Our aim is to ensure that the working conditions of employees in companies that supply goods to consumers in the UK meet or exceed international standards.

We are an independent, not-for-profit organisation.

This report, the first since our establishment in 1998, sets out our achievements in the year 1999 and our priorities for 2000.

 Editorial Consultant:
Hilary Todd
 
 Design (hard copy):
Anne Moritz Design
 
 Printing (hard copy):
Streamline Offset Ltd
 
 Design (web copy):
Jon Ralls
 

 
Contents
 

• Sharing the benefits of globalisation; by the Rt Hon Clare Short, Secretary of State for International Development
• Working together for change; by Yve Newbold, Chair of ETI
   
• Board and staff
• ETI profile
• A year of growth and practical progress; by Dan Rees, Manager of ETI
   
• Tackling the supply chain challenge: the corporate sector
• Examples of good practice
• How to implement an ethical trade policy
   
• Promoting workers' self representation: the trade union sector
• Building awareness and capacity: the NGO sector
• Putting codes of conduct into practice: the pilot projects
• ETI publications and seminars
   
• Financial Statements [ available on request ]
   

 
Sharing the benefits of globalisation
 

 
This Government is committed to mobilising the international community to meet the agreed target of halving the proportion of people living in abject poverty by the year 2015. ETI's focus on the workplace and the communities which are involved in the global supply chain, is key to achieving this goal.
 

	Rt Hon Clare Short

Globalisation has the potential to deliver real benefits to the developing world. I disagree with those protesters at Seattle who claimed that globalisation is a bad thing. Successive studies have shown that trade raises incomes, and opening up markets accelerates economic growth. It is important that we do more to ensure that growth is achieved in each country and that poor people are included in its benefits.

Investment flows to the developing world outstrip official development assistance. Clearly inward investment can be very important in helping to reduce poverty. The role of business is crucial to development.

ETI was launched in recognition of the growing global influence of business, and largely as a response to consumers' demands for business to take proper account of the conditions and environments of all the workers involved in their supply chain.

This first Annual Report gives an important account of the combined efforts of the business community, trades unions and NGOs who give ETI life. It also recognises the valuable contribution of ETI's board and its new chair, Yve Newbold, who have steered ETI from its inspirational beginnings to practical delivery.

This Government is committed to mobilising the international community to meet the agreed target of halving the proportion of people living in abject poverty by the year 2015. ETI's focus on the workplace and the communities which are involved in the global supply chain, is key to achieving this goal. The factories and farms of developing countries are focal points of the economic linkage in the global economy. Their ability to generate a decent income under fair conditions for those who work in them is key to success in global poverty reduction.

If we are to meet the 2015 targets, we must develop practical ways of delivering real benefits to all the world's people. ETI has an essential part to play, and I welcome the positive signs illustrated in this first Annual Report.

Rt Hon Clare Short,
Secretary of State for International Development

 
Working together for change
 

 
Socially responsible trading will come to seem commonplace in the years ahead but as yet there is much to learn and there are many divergent initiatives and activities directed towards that goal. We are happy to be among that diversity.
 

	Yve Newbold, Chair of ETI

It is both a privilege and a pleasure to present this, the first Annual Report of the Ethical Trading Initiative. From my background in corporate law, chairing ETI has given me a rapid learning experience in the world of ethical supply chain management. The genesis of ETI was the growing dissatisfaction with the exploitation of labour in countries which produce the goods we buy in our high street or supermarket. Today, there is almost universal acknowlegement that ethical supply chain management is an essential part of any good corporate social responsibility programme.

We have been in existence for just over two years and in that time have developed a code of practice which has been accepted by an increasing number of corporate members for application to their clothing, food and footwear products. In supplier countries we seek acceptance of the principles of fair working practices by local stakeholders. Independent monitoring of our code and new ways of social auditing are important parts of our learning process. Importantly, we need to be able to see real evidence of improvement in working conditions at farm or factory level in order to justify our efforts.

One of our conditions for membership is that members should participate in a pilot programme to assist our learning. Such pilots act as a test bed for social auditing or the implementation of improved working conditions. Our most advanced pilot in Zimbabwe had fortunately provided us with much useful material on social auditing on farms before being interrupted by political events. In South Africa, our wine industry pilot is well advanced and our China pilot is examining the application of our code in the manufacture of apparel. Aided by our recently recruited secretariat, we are making real progress

Challenges abound. We are expanding our membership rapidly yet proceeding with caution. Much of our success to date has grown out of developing trusting relationships between our various constituents and we are determined to preserve that trust. Many of our code principles reflect International Labour Organisation Conventions and our trade union members have provided much insight into their interpretation and application. Equally, NGO members have been unstinting in their provision of practical experience and valuable information much of it on the ground, frequently at short notice. Corporate members have begun to recognize the value of shared learning in this most complex field and are making good progress in bringing ethical trading principles to the heart of supply chain management. Special acknowledgement should go to those who represent the corporate constituency on our board without whose skill and dedication we would be unable to succeed.

Finally, I would like to recognise the personal support of the Secretary of State at the Department for International Development, Clare Short. Her personal vision and ambitious ideals for the elimination of poverty in southern countries have given us motivation and inspiration to pursue a most difficult and demanding set of objectives. Socially responsible trading will come to seem commonplace in the years ahead but as yet there is much to learn and there are many divergent initiatives and activities directed towards that goal. We are happy to be among that diversity.

Yve Newbold,
Chair of ETI