Ethical trade code fails to end exploitative practices

2 November 2006
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02 November 2006 | Emma Clarke

An ethical trade code signed by some of the UK's leading brands has had a limited impact on worker exploitation in supply chains.

The findings come from research commissioned by the Ethical Trading Initiative (ETI), an alliance of firms, non-governmental organisations (NGOs) and trade unions, into the effect of member companies' activities.

More than 400 workers from 25 supply sites in South Africa, Vietnam, India, UK and Costa Rica who work in the fruit, clothing and shoe industries were interviewed along with representatives from ETI members and alliance organisations.

Body Shop, Boots, Marks & Spencer and Tesco are among ETI members, not all of whom took part in the study.

The research, conducted by the Institute of Development Studies (IDS), found the codes had led to advances in health and safety in 20 of the 25 sites and improvements to working hours were evident in 16 of the 25 sites. All but one supplier reported no use of child labour. However, this was not as a result of the codes, but enforcement of the law.

Despite signs of progress, major issues remain. The researchers found no increase in union membership and women still had less access to employment, promotion and training.

While the codes had encouraged payment of at least the minimum wage at nine of the sites, they had had no impact in terms of a living wage.

As a result of the findings, the IDS has set the ETI, brands, retailers and trade unions four key recommendations: to work collaboratively to maximise potential; extend the reach of codes to all workers; shift the focus to sourcing countries and to make ethical trade more central to core business practice, and in particular purchasing.

"Suppliers in all countries and sectors reported difficulties in improving labour practices in a context of downward pressures on price and shortening lead times," said Stephanie Barrientos, research fellow at IDS. "Messages from buyers often conflicted with messages from ethical trade managers. And where they had to make a choice it was usually to comply with the commercial requirements."

Dan Rees, director at ETI, said: "Member companies are the pioneers and a light should be shone on firms that are yet to do anything."


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