Ethical Trading Initiative
Purpose, Principles, Programme And Membership Information
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Purpose
It is increasingly recognised that companies adopting codes of labour
practice in respect to their global supply chains need to know for themselves
and be able to demonstrate to others what they have actually achieved for their
approach to be both effective and credible.
ETI is an alliance of companies, trade union organisations and
non-governmental organisations (NGOs), committed to working together to
identify and promote good practice in the implementation of codes of labour
practice, including the monitoring and verification of the observance of code
provisions.
ETI members believe that this collaborative approach provides the
opportunity for making significant progress in promoting the observance of
internationally recognised labour standards, in particular fundamental human
rights throughout global supply chains.
This document sets out the basis on which ETI operates.
It sets out ETI's:
- purpose and activities
- collaborative approach to involving companies, trade unions and
NGOs in learning how best to make ethical trading codes work
- established standards which it will use in its work
- membership criteria.
Activities
ETI will conduct, in co-operation with member companies and their
suppliers, experimental programmes to identify the most effective approaches to
making codes meaningful and credible, particularly with regard to monitoring
and verification. Conducting and learning from pilot schemes and disseminating
the lessons learnt will be ETI's core activities.
In addition, ETI will draw on other relevant experience, including the
work of individual companies, trade unions, NGOs, international institutions
and any joint or co-operative initiatives they may undertake. ETI will organise
conferences and seminars, conduct research, issue publications and facilitate
the development of training.
Although ETI is primarily concerned with finding effective ways
through which fundamental labour standards throughout global supply chains can
be respected and their observance monitored, ETI will, where appropriate,
consider the broader impact of its members' activities on human rights, and
environmental and development issues within the wider community in which they
operate.
Disputes may arise between members in relation to aspects of ethical
trade principles and practice. ETI has no direct jurisdiction over such
disputes except where they concern the commitments of organisations as ETI
members. However, ETI will in addition act as facilitator of dialogue or as a
mediator between members if requested by those members involved.
Principles
ETI is based on the principle of incorporating internationally-agreed
standards into codes of labour practice.
ETI member companies are committed to adopting codes based on these
standards, and to moving to the demonstrable implementation of their codes. All
ETI members must be committed to collaborating actively in developing means for
such effective and transparent implementation, particularly in relation to
monitoring and verification.
International standards
Responsible behaviour is always measured against the standards of the
relevant community. For international business, this means recognition of the
internationally agreed standards reached through the appropriate international
organisations. Such standards are critical for the protection of workers, and
their observance is one measure of human welfare.
International standards are also important to the overall political,
social and economic environment in which international companies operate. They
contribute significantly to the constitution of a stable and productive
framework for business. Although most international standards concern the
obligations of governments and companies are not signatories of them, the
meaning and intent of these standards can serve as equally relevant benchmarks
for companies and can be reflected in their codes of practice.
Responsibility for setting international labour standards is given by
the international community to the International Labour Organisation which was
established for this purpose. The ILO standards relevant to the work of ETI and
other relevant international standards are set out in Appendix A.
The Base Code
ETI has developed a code of labour practice - the 'Base Code' -
reflecting the most relevant international standards with respect to labour
practices which will be used as the basis of its work.
ETI member companies are expected to adopt this Base Code, or to adopt
their own code so long as it incorporates the Base Code. The Base Code which is
accompanied by a set of general principles concerning implementation, provides
a foundation for ETI's philosophy of learning.
Member companies must require that suppliers meet agreed standards
within a reasonable timeframe, and that performance in this regard is measured,
transparent and, ultimately, a pre-condition to further business.
The observance of some provisions in the code may not be immediately
realisable in all cases. Some suppliers may be unable to meet all the terms
within a short time or, in some cases, they may be constrained by national law.
Reasonable timeframes and the existence of any constraints not controllable by
the supplier may be taken into account. Failures to observe certain standards
require rapid corrective action for member companies to continue any business
relationship with the supplier concerned. These include the use of forced,
bonded or involuntary prison labour as well as physical abuse or discipline,
and extreme forms of intimidation.
The purpose of ETI is to acquire experience in the implementation of
codes of labour practice. ETI members are not expected to be able to implement
any code immediately and effectively for any or all of their activities.
At the time of joining ETI, member companies may stipulate the scope
of application of their code provided that this is clearly indicated in the
preamble of their code and that company publicity concerning the code also
indicates its scope of application. The scope of application may be certain
products made or marketed by the company or to the activities of any designated
part of the company. In any event, the code shall always apply to all work
performed within the scope of application.
The Base Code
The provisions of this code constitute minimum and not maximum
standards, and this code should not be used to prevent companies from exceeding
these standards. Companies applying this code are expected to comply with
national and other applicable law and, where the provisions of law and this
Base Code address the same subject, to apply that provision which affords the
greater protection.
Principles of implementation
The purpose of ETI is to identify, develop and promote good practice
with respect to implementing codes of labour practice.
Critical areas include monitoring and verification, and transparency
and disclosure, to determine and communicate whether standards embodied in the
code are being achieved. ETI members accept the following as general principles
upon which to develop or refine their search for best practice.
Programme
Pilot schemes
ETI will undertake pilot schemes with the co-operation and support of
specific companies, and in collaboration with other ETI members. These pilot
schemes may target certain products, certain suppliers or be limited to certain
countries. The purpose of these pilot schemes shall be to develop understanding
of how best to put codes into practice. Each member company is expected to
co-operate in at least one pilot scheme which shall be developed with the ETI
Secretariat.
To ensure that most is gained from this and other learning processes,
the members will agree and work to a common framework for analysis and
information sharing, taking particular note of issues of confidentiality,
whether for workers, suppliers, or companies.
Annual reporting
Members will produce annual reports to an agreed standard for content
and format and submit them to ETI detailing their progress in the area of
ethical trade, particularly their activities related to their commitments as
ETI members. This will serve the purposes of:
- providing a review of progress for each member and for the
membership as a whole
- reinforce members' commitment to transparency and public
accountability in this area
- provide a basis for ETI to assess continuing membership
eligibility
- promote good practices for members and non-members.
ETI will publish an Annual Report that summarises progress, drawing on
the experience of its members, as well as covering developments in related
aspects of ethical trade.
Other activities
ETI can also contribute to good practice by collecting and analysing
other experience as a complement to its own pilot schemes and other research.
This will come from members, which are themselves often engaged in other
activities relevant to ETI's mission, and also through ETI's international
networks.
Endorsement and evaluation
ETI will not publicly or otherwise endorse any product or company, or
any member or non-member organisation. Members will comply with agreements made
through ETI covering the basis on which endorsements of companies and products
covering elements of the Base Code can be made. Members will be able to refer
to their ETI membership in an agreed manner.
Membership
ETI has three categories of members: companies, trade union
organisations and NGOs. Membership will be on an annual basis.
Any membership application submitted by an authorised representative
of the organisation should:
- indicate acceptance of ETI's purpose and principles, including the
Base Code and the commitment to monitoring and verification
- indicate the willingness of the organisation to participate in
pilot schemes and other ETI activities
- stipulate the scope of application of their code of labour practice
- provide a brief report on its current commitment to ethical
trading.
Membership applications will be considered by the Board at its
quarterly meeting. The Board will make a decision based on the written
confirmation by applying organisations of their willingness to comply with the
conditions of membership, as set out in this document. Renewal of membership
will be based on members' continued practical commitment as demonstrated in
their annual progress reports.
Companies
Membership in ETI shall be open to companies accepting the purpose and
principles stated herein and which are prepared to participate actively in ETI
activities including pilot schemes. ETI membership is considered especially
appropriate for companies operating in sectors which manufacture, market or
distribute consumer products.
Trade union organisations
Trade union membership of ETI shall consist of the Trades Union
Congress, the International Confederation of Free Trade Unions and those
international trade union organisations representing trade unions organised by
industry or sector referred to as International Trade Secretariats that choose
to join the ETI.
These organisations shall be responsible for securing trade union
co-operation and participation in ETI activities and may establish consultative
bodies for this purpose. Trade union members will be expected to participate in
the design and implementation of pilot and other ETI activities.
Non-governmental organisations
Membership in ETI shall be open to NGOs accepting the purpose and
principles stated herein and which are prepared to participate actively in ETI
activities including pilot schemes. The ETI NGO caucus will be the channel
through which ETI member NGOs nominate, inform, and mandate the ETI NGO Board
representatives.
The NGO caucus remains open to those wishing to play an engaged and
active role in the process. Members will be expected to participate in the
activities of ETI, both directly and by facilitating dialogue and engagement
with NGOs elsewhere. NGO members will be expected to participate in the design
and implementation of pilot and other ETI activities.
Governance and organisation
Governance
ETI is constituted as a distinct, not-for-profit, legal entity. Its
Governing Board is made up of equal representation from the three main
categories of members, companies, trade union organisations, and NGOs. The
Board shall be trilateral in that the Board members from each of the three
categories shall be determined only by the membership of their respective
categories and not at large.
ETI is a civil, that is private, and not a public initiative. However,
in recognition of its supportive role, the UK Government will be accorded
observer status at Board meetings. The Board may also co-opt experts or other
individuals for specific purposes provided they do not have voting rights. ETI
may establish, consistent with its rules, consultative bodies and appoint
individuals to serve on these bodies.
Secretariat
The Secretariat co-ordinates all of ETI's activities and is
responsible for the servicing of the Governing Board and of any Task Groups
that might be established by the Board. The Secretariat is also responsible,
subject to approval by the Board, for the organisation of pilot schemes, the
commissioning of research, the organisation of seminars, conferences and other
events, the publishing of reports and other documents, and any other activities
as may be determined by the Board.
Appendix A: Relevant International Standards
With respect to human rights the most comprehensive standard is the
United Nations Universal Declaration of Human Rights. The most comprehensive
and universally applicable standard directly addressing the responsibilities of
business operating internationally is the International Labour Organisation's
Tripartite Declaration of Principles concerning Multinational Enterprises and
Social Policy.
Another comprehensive standard addressing the responsibilities of
business operating internationally, and one that is applicable to all
businesses operating internationally in or from the United Kingdom, is the
Guidelines for Multinational Enterprises developed by the Organisation for
Economic Co-operation and Development (OECD). Another relevant standard
ratified by almost every member state in the United Nations is the United
Nations Convention on the Rights of the Child.
Responsibility for setting international labour standards is given by
the international community to the International Labour Organisation (ILO)
which was established for this purpose. The tripartite structure of the ILO,
involving both employers' and workers' representatives as well as governments,
together with the technical expertise of this organisation in all matters
relating to the world of work, make the ILO the authoritative and legitimate
source of international labour standards.
ILO standards are set in Conventions, having the force of
international law and binding for states that have ratified them and in
Recommendations which provide additional guidance to governments. ILO member
states must provide regular reports on the application of ratified Conventions
to the ILO. The findings of ILO supervisory bodies form ILO jurisprudence.
With the adoption in June 1998 of the ILO Declaration on Fundamental
Principles and Rights at Work, all 174 ILO member states have an obligation,
regardless of ratification, to respect, promote and realise the principles
contained in the core ILO Conventions.
These core Conventions and their accompanying Recommendations
comprise:
- ILO Conventions 29 and 105 & Recommendation 35 (Forced and
Bonded Labour)
- ILO Convention 87 (Freedom of Association)
- ILO Convention 98 (Right to Organise and Collective
Bargaining)
- ILO Conventions 100 and 111 & Recommendations 90 and 111 (Equal
Remuneration for male and female workers for work of equal value;
Discrimination in employment and occupation)
- ILO Convention 138 & Recommendation 146 (Minimum
Age).
- ILO Convention 182 & Recommendation 190 (Worst forms of Child
Labour)
- ILO Convention 81 (Labour Inspection)
- ILO Convention 122 (Employment Policy).
Although not core ILO conventions, other ILO standards especially
relevant to the work of ETI include:
- ILO Convention 135 & Recommendation 143 (Workers'
Representatives Convention)
- ILO Convention 155 & Recommendation 164 (Occupational
Safety & Health)
- ILO Convention 159 & Recommendation 168 (Vocation
Rehabilitation & Employment/Disabled Persons)
- ILO Convention 177 & Recommendation 184 (Home Work).
- ILO Convention 190 & Recommendations (Safety and Health in
Agriculture)
- ILO Convention 154 (Collective Bargaining)
- ILO Convention 131 (Minimum Wage Fixing)
- ILO Convention 175 (Part time work)
- ILO Convention 183 (Maternity Protection).
Appendix B: Definitions
- Child
- Any person less than 15 years of age unless
local minimum age law stipulates a higher age for work or mandatory schooling,
in which case the higher age shall apply. If however, local minimum age law is
set at 14 years of age in accordance with developing country exceptions under
ILO Convention No. 138, the lower will apply.
- Young person
- Any worker over the age of a child as
defined above and under the age of 18.
- Child labour
- Any work by a child or young person
younger than the age(s) specified in the above definitions, which does not
comply with the provisions of the relevant ILO standards, and any work that is
likely to be hazardous or to interfere with the child's or young person's
education, or to be harmful to the child's or young person's health or
physical, mental, spiritual, moral or social development.
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