Flagging up ethical issues

18 July 2007

19 July 2007 | Antony Barton

Buyers are under pressure to take an active role in proving their CSR credentials, as campaigners keep ethical sourcing in the spotlight. Antony Barton reports.

Pressure groups have made the headlines recently with attacks on the sourcing practices of some big-name organisations, particularly retailers.

In May, action group Labour Behind the Label (LBL) claimed the "I'm Not A Plastic Bag" promoted by Sainsbury's was unethically sourced because it came from China, where workers cannot form unions. Sainsbury's said the company was "absolutely committed to sourcing with integrity" and took the matter seriously at every stage in its production process.

And as we report here, campaign group War on Want recently tried to force through a resolution at a Tesco annual general meeting to guarantee better conditions at its suppliers' factories. A Tesco spokesman said: "We welcomed the chance today to hold a full and open debate on Tesco's excellent record on ethical trading in Bangladesh and elsewhere. Tesco shareholders voted against the War on Want motion by nine to one, showing they support Tesco's continuing efforts in this area."

War on Want campaigner Paul Collins says its basic demand is independent audits on pay, working conditions, safety and freedom to unionise. So what can purchasers do to ensure this is the case?

He advises buyers who are confident of their credentials in these areas to collect tangible evidence, such as copies of wage slips. He suggests trade unions could help collate evidence and adds making this information freely available could provide a competitive edge over rivals. "If firms are convinced their independent audits are reliable, even though we find evidence of bad working conditions, they should join our call for government to set up an independent regulator for auditing services."

The Ethical Trading Initiative (ETI), an alliance of companies, non-governmental organisations and trade unions, aims to ensure good working conditions. Its members, which include Tesco, Sainsbury's and Asda, monitor their supply chains as part of their commitment to the ETI code.

Yet an ETI spokeswoman says UK buyers undermine the efforts of their corporate social responsibility (CSR) departments. She claimed this occurs when buyers force down prices to levels where it is impossible to pay workers a decent wage, place or change orders at short notice creating overtime, or pass as much commercial risk to suppliers as possible. "Joining up the work of buyers with ethical trade teams is a challenge and we would assess whether a company is doing well by the extent to which they are addressing this issue."

SM asked LBL campaign co-ordinator Martin Hearson if LBL stood by its declaration that nothing made in China can be called ethical. He said: "We would never say you shouldn't source from a particular country but we will say that if your country has a clearly stated aim to uphold the right to freedom of association, then there is an inconsistency with increasing the amount of sourcing you do in China."

But can purchasers meet all the expectations of pressure groups? Nigel Stewart, head of procurement and facilities at Focus DIY, warns that it's difficult to stick by an "infinitely expanding set of rules".

"We do quite a bit in terms of ethical sourcing but don't shout about it too much because if you use it as a PR exercise then you could be bitten for not doing enough."


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