Driving ethical trade to the heart of business practice

This project is helping shed light on how company buying practices can undermine progress in ethical trade. Retailers are already identifying ways in which they can develop new buying practices that support - rather than undermine - suppliers' ability to provide decent pay and conditions for their workers.

Why is this so important?

Suppliers have a key role and responsibility for providing good working conditions for the people they employ. But their efforts can sometimes be undermined by the buying practices of their customers - often the same retailers who are pushing them to comply with their codes of labour practice. Practices such as last-minute changes to orders and ever-shorter lead times can contribute to excessive overtime, increased use of casual labour, and even unauthorised sub-contracting. And pressure from retailers to reduce prices can make it difficult for suppliers to pay workers a living wage.

The Purchasing Practices project is looking at the specific ways in which buying practices can affect working conditions down the supply chain. The aims are to identify the effects of different buying practices, to develop better ways of doing business, and to encourage uptake of best practice among members - thus driving ethical trade to the heart of business practice.

Identifying impacts of current practices

Group members Gap, Next, New Look and George at ASDA are working with trade union and NGO members (including Women Working Worldwide and WIEGO) to analyse company purchasing practices in their key supply chains and to investigate the impact these have on workers.

Studies are currently being carried out in over ten factories in Bangladesh, India, China and Turkey. So far, project participants have:

• set up a global supplier survey to get regular feedback from suppliers on buying practices;
• developed and delivered training for buying teams;
• set up a new committee of designers and buyers to act as ethical champions and to develop good practice; and
• started to develop a set of responsible buying guidelines, in partnership with the Chartered Institute of Purchasing and Supply (CIPS).

Changing practices

The project is helping build increased collaboration between companies and NGOs/trade unions, and increased awareness among buyers and commercial staff of the impacts of their decisions on workers. Findings are already being used to develop new and more enabling business practices. Learning from the project is being captured in a guidance document which will provide companies with practical advice and case studies on how to make sure that purchasing practices don't have a negative impact on workers' lives.

Useful links

Better jobs in better supply chains, Oxfam business briefing, 2010

Win-win: Achieving sustainable procurement with the developing world, Traidcraft/Chartered Institute of Purchasing and Supply

Buying matters. Consultation: Sourcing fairly from developing countries, Traidcraft, 2006

Buying your way into trouble? The challenge of responsible supply chain management, Insight Investment/Acona, 2004

Trading away our rights: Women working in global supply chains, Oxfam, 2004