For NGO members, four key differences encapsulate the challenges facing ETI members, including NGOs, as we move forward:

1. The difference between:

• Short-lived islands of change in a few workplaces; and
• Sustainable change across and down the supply chain

Most change achieved so far has been driven by a compliance or risk management approach to supply chain monitoring. As a result, conditions have improved considerably in some workplaces, particularly where companies are able to work with suppliers over a period of time. However, the NGO caucus believes corporate engagement with the supply chain needs to go further if positive change to workers’ lives is to be sustained.

First, improvements must be driven by workers themselves. Sustained change will only come about when workers are able to express their concerns about their workplaces and are involved at the heart of monitoring processes and activities.

Second, monitoring activities must extend down the supply chain to indirect suppliers including homeworkers and other informal workers. These workers, the vast majority of whom are women, endure poor working conditions, insecure employment and minimal benefits, and at the same time have the least power to change these. The Homeworkers’ Group is developing guidelines, which are a useful start.

The NGO caucus has an important role to play in bringing expertise on participatory techniques, workers’ rights and other development issues to ETI.

2. The difference between:

• The patchy picture of labour problems painted by audit reports; and
• The reality of workers’ lives.

Corporate members find it relatively easy to spot certain non-compliances with the code: health and safety issues, excessive overtime and illegal wage levels for example. However, some elements of the Base Code are still consistently under-reported, notably, discrimination, freedom of association and payment of a living wage.

The experience of NGOs shows that discrimination, notably against women, is endemic in employment practice in some developing countries. The failure of auditing to pick up discrimination suggests that the auditing process is sometimes inappropriate. The auditor may not be trained to look for signs of discrimination; women may not be comfortable speaking about discrimination to a male auditor; or women might be willing to speak out in groups, but not if interviewed alone.

Rights-based issues such as discrimination must come into the spotlight of ETI activities. NGOs have expertise and experience in these issues to bring to ETI.

3. The difference between:

• The intensive activities of some members; and
• Others who have yet to embrace fully the challenges of ethical trade.

Although ETI is not an accreditation scheme its good reputation means that companies derive credibility in the field of ethical trade from their membership. Some companies are clearly earning their connection with ETI by devoting resources, commitment and imagination to code implementation. But as the summarised annual reports on pages 23 - 26 show, others are struggling to make the necessary commitment. If ETI is to continue to prosper, it is essential that all member companies make their commitment a reality by investing sufficient resources to implement the Base Code throughout their supply chains.

NGOs must also sustain and improve their commitment to ETI. The appointment of an NGO co-ordinator and the use of the membership fees of larger NGOs to fund ETI activities by smaller NGOs are proving helpful.

4. The difference between:

• The work of companies’ dedicated ethical trading staff ; and
• Core business activities.

ETI member companies commit to integrating implementation of the Base Code into their core business activities. Yet sometimes, business activities are undermining improvements made by ethical trade staff. Purchasing practices can make it effectively impossible for suppliers to meet the demands of the Code. The price paid may not allow for implementation, or the lead time may be so short that the order cannot be delivered without excessive overtime by workers. Buyers’ alterations to the order can affect the length of time needed to deliver within the short lead time, or poor market forecasting can drive buyers to suppliers for one-off orders where their influence is limited.

The NGO caucus needs better understanding of the challenges facing companies, so that we can maximise the benefit of our membership. But companies must address these issues if the change achieved by code implementation is to be more than superficial.

Sometimes a company’s business activities are undermining
improvements made by ethical trade staff. Purchasing practices can
make it effectively impossible for suppliers to meet the demands
of the Base Code. Companies must address this issue if the change
achieved by code implementation is to be more than superficial.

Picture:
Companies need to do more to reach homeworkers who often come at the end of supply chains.