Speakers' presentations
Sandra Ramos,
Women's
Movement in Nicaragua
Outline
Sandra Ramos highlighted how the mobilisation of civil society
on a nationwide basis can have a powerful influence on improving labour
conditions. She detailed some of the problems confronting workers in Nicaraguan
industry sited in the Export Processing Zone (EPZ). She went on to give an
account of the broad and successful campaign by women workers to have
International Labour Organisation standards and national legislation enforced
within the Nicaraguan EPZ.
Conditions
Conditions in the maquiladoras (factories in the EPZ) are hard
and were not helped when, five years ago, the Government tacitly agreed with
employers not to enforce statutory labour standards. Malpractices such as
forced unpaid overtime, unfair dismissals, and physical and verbal abuse were
rife, and there had been reports of physical assault.
Campaigning
Five years of campaigning with the slogan "jobs yes, but with
dignity" reaped success. Fifty thousand signatures were collected, and support
was won from churches, business people and parliament, as well as from US
consumers (98% of EPZ produce is exported to the USA). In March 1998 a 10-point
Code of Ethics was signed by the Minister of Labour, as well as by all
employers in the EPZ.
Partnership
Winning the commitment of employers required a sensitivity to
the cultural differences between, for example, Taiwanese, Korean, and North
American companies. An emphasis on dialogue and on a sharing of social
responsibility between a number of key stakeholder groups helped reassure
companies that gains in workers' dignity go hand in hand with increased
productivity.
The Code
The Code guarantees equal pay for equal work, protection from
discrimination in the case of pregnancy, and protection against abuse by
factory owners. It also ensures the right of workers to receive periodical
medical examinations, training programmes and social security benefits. In
addition, it prohibits the hiring of workers under 14 years of age.
Small steps
Improvements are becoming visible. Within the EPZ a health
centre, a Labour Ministry office and a nursery are being set up. Reports of
physical violence have declined. There are now 10 trade unions representing
workers where there were none two years ago. Five thousand workers have been
trained in their employment rights, and pocket manuals outlining workers'
rights have been distributed. The next step is to develop effective ways of
ensuring compliance with the Code. In this, worker involvement is crucial.
Workers can assess company by company what is happening, and identify the most
pressing problems. Tackling these, however, will require all sectors --
workers, employers, Government, unions and non-governmental organisations -- to
work together.
Philip
Mumby,
Premier Brands
Introduction
Philip Mumby mapped out the evolution of an ethical agenda at
Premier Brands (PB). Aided by the very short supply chain in the tea trade, PB
began building closer relations with its suppliers from the mid-1980s onwards
as a means of playing a more active role in safeguarding quality. Concern over
working conditions emerged as one component of what came in 1992 to be known as
the Quality Assurance Project (QAP) -- essentially a formalisation of the
supplier selection process.
This careful work was briefly derailed when marketing
endeavoured to promote Typhoo Tea, part of PB, as 'ethical' by self-certifying
it under the banner of "caring for tea and our tea pickers". This positioning
was quickly dropped, and the QAP refocused on its original Total Quality
perspective with the ethical component still included.
Over recent years the emphasis has shifted from supplier
selection toward supplier development, and more effort has gone into building
secure relations with smaller suppliers.
As a result of seeking to apply best practice in sourcing, the
following have come about or been observed as a natural consequence.
The importance of good relations with suppliers
A concern for labour standards emerges naturally from a concern
for quality and for good long-term relationships with suppliers. Direct contact
with suppliers makes possible a more hands-on approach to product improvement
-- "we can tell them what our consumers tell us". Within this context,
suppliers will more readily discuss sensitive issues like employee welfare. For
PB, an ethical agenda was more readily accepted by management when placed in
this context rather than in that of extra-curricular philanthropy.
Development not selection
Emphasis should be placed on developing labour conditions within
existing suppliers rather than simply 'cherry picking' the best suppliers. The
general philosophy should be: "Unless I'm doing something which materially
affects the conditions on the ground I'm not actually doing anything. I'm
covering myself maybe, but I'm not doing anything ethical myself."
Relative improvement not absolute standards
Insisting on one absolute standard -- e.g. as with certification
schemes -- risks privileging large suppliers. For such suppliers the standards
should be set higher than in the case of smaller ones.
Smaller suppliers need security
The advantages of working with smaller suppliers include the
potential for a more rapid product development process. However, working
conditions are often worse, and such suppliers are typically far more
vulnerable to price fluctuations. By offering longer term contracts and
guaranteed price floors, smaller suppliers can enjoy security while committing
to making improvements in labour conditions.
Third-party monitoring
While conceding that this may have a part to play in other
industries where problems of scale and long supply chains exist, PB's
experience is that third- party monitoring is counterproductive. Carefully
built-up relationships are undermined and trust is eroded. Where monitoring is
involved from the very beginning, third-party involvement can work, but is no
substitute for active engagement. Overall, it is the business relationship that
is key.
Verification
PB recently undertook an independent verification trial, which
had positive results, and will be developing further independent trials in the
future as part of the ETI learning process.
Accreditation
PB does not support accreditation, as it transfers
responsibility from buyer to supplier, favours large suppliers, and further
marginalises small ones.
Employee welfare or workers' rights?
Are the two terms the same, or does the second go beyond the
first? Employers need to move beyond paternalistic approaches and take on board
the perspectives of workers. Employers' apprehensions about conflict with trade
unions can be overcome by pointing to best-practice examples of company/trade
union relations. The discussion focused in more depth on the themes described
above.
Additional Material:
Notes
from the discussion
Moving beyond conflict: the trade union position
- Some employers take the view that trade unions are
unnecessary, pointing to medical facilities, routine health check-ups and
worker complaint boxes, for example, as evidence of this. Yet free association
should be regarded as a right, and attempts to overcome memories of class
hostility, by identifying and pointing to best practice models of trade
union/employer relationships, should be made.
- The ILO Conventions are also important in this context
given that the ILO is a tripartite organisation in which workers, employers and
governments are all represented. The drive to improve working conditions needs
joint ownership.
Consumer pressure
Neither speaker assigned consumer pressure a particularly high
importance in the shift towards ethical sourcing. Various pitfalls in
overrelying on consumer pressure were identifed:
- Consumers are not dupes: they are well aware of the
difference between, for instance, the Fairtrade Mark and mere marketing.
- Supermarkets need to take a realistic long-term interest in
the conditions throughout their supply chains rather than make 'knee jerk'
ethical decisions in relation to the odd product.
- Consumer concern tends to be restricted to particular
issues - typically child labour is a big concern. Otherwise, consumers
generally want reassurance that they're 'not doing bad'. Companies hoping to
gain market advantage through improving their public image may be disappointed
if they expect quick returns.
- Consumer boycotts should be regarded as a last resort, a
sign - perhaps like a strike - that other searches for consensus have broken
down.
Does improving working conditions mean increasing costs? Will
increased costs have to be passed on to the consumer?
- In some cases the wage bill is so low that it could be
doubled with marginal impacts on total costs - whoever picks up the bill.
- The accounting perspective on costs ignores the central
issue. It is not labour costs, but net labour costs, that count. This entails
finding ways to evaluate and 'factor in' the advantages accruing to companies
from good relations with suppliers - simplicity in documentation, speedier
ability to adapt, increased productivity, and so on. Preliminary research
carried out as part of the UK Royal Society of Arts' investigations into the
shape of 'Tommorrow's Company" suggests that, for the auto sector at least, the
benefits are likely to outweigh the costs in this regard.
Verification: the importance of free association and worker
input
- Consultation in India on corporate codes of conduct has
shown that independent inspections are inadequate to identify abuses such as
unlawful deductions from wages, forced overtime or physical violence.
Consultations with workers off-site are essential, and workers must be informed
of the code, be trained in its implementation, and be involved in the
monitoring. Further, if the code is to be enforced, workers must have the right
of free association.
[Note: The views expressed in
this seminar are those
of the individuals concerned, and do not
necessarily
represent the positions of their organisations, or
of the
Ethical Trading Initiative.]
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