Ethical Trading Initiative

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Background

The Ethical Trading Initiative describes itself as 'a ground-breaking initiative which brings together a wide range of organisations from all parts of society. Together, we aim to improve the lives of poor working people around the world. Specifically, we are an alliance of companies, NGOs and trade union organisations working to promote and improve the implementation of corporate codes of practice which cover supply chain working conditions'[1].

According to its website, a 'Base Code' and 'Principles of Implementation' underpins the work of the ETI. ETI claims that these are used to provide a 'basic philosophy or platform from which ETI identifies and develops good practice', and to 'provide a generic standard for company performance'. The ETI states that companies which become members of the ETI are committing themselves to 'implementing our Base Code in their supply chains and reporting annually on their progress in doing so'[2].

Yet companies such as Asda, Marks & Spencers, Tesco and Primark, which are ETI members, come under continued criticism for the exploitation of workers[3]. Primark was even named as the least ethical place to buy clothes in Britain by Ethical Consumer magazine in 2005, with Marks & Spencer rated third[4]. The contradiction here is glaring, however People and Planet may be shedding some light onto this when they state that a 'company’s membership of the ETI is no guarantee that conditions for its workers are acceptable. Retailers do not have to meet minimum standards to be members - they just have to commit to working towards these standards'[5]. This would explain why Asda and others remain, whilst Levis Strauss was suspended. Asda etc have voiced a commitment (even thought their actions speak otherwise) whilst Levis openly stated that they wouldn't commit.

ETI Base Code

The 'Base Code' has 9 principles which are[6]:

  • EMPLOYMENT IS FREELY CHOSEN
  • FREEDOM OF ASSOCIATION AND THE RIGHT TO COLLECTIVE BARGAINING ARE RESPECTED
  • WORKING CONDITIONS ARE SAFE AND HYGIENIC
  • CHILD LABOUR SHALL NOT BE USED
  • LIVING WAGES ARE PAID
  • WORKING HOURS ARE NOT EXCESSIVE
  • NO DISCRIMINATION IS PRACTISED
  • REGULAR EMPLOYMENT IS PROVIDED
  • NO HARSH OR INHUMANE TREATMENT IS ALLOWED

History

The Ethical Trading Initiative was set up in 1998 in response to increasing pressure from trade unions, non-governmental organisations (NGOs) and consumers to ensure decent working conditions for the people who produce the goods for companies selling food and clothing to UK consumers.

According to its website, the ETI was established 'to bring the combined knowledge and influence of relevant NGOs and the international trade union movement to work alongside these companies in identifying and promoting good practice in code implementation'.

Failing to stop exploitation

In 2006, The Institute of Development Studies published the results of a study it had undertaken into the ETI. It is reported that the ETI 'has had little impact' and has 'failed to stop the exploitation of workers who produce the bulk of the products sold in UK shops'[7]. Verkaik of The Independent describes how the report 'shows that while some working conditions have improved, in most cases the agreement has made little or no difference'. Workers continue to 'remain on low incomes, have no union representation and in some cases are harshly treated by their bosses'.

They also reported that 'there were several cases where a decrease in working hours in order to comply with codes of labour practice had led to reductions in take-home pay... In all countries at least some workers complained that their basic wage was not adequate to live on'.

Another of the ETI's base codes in relation to 'freedom of association and the right to collective bargaining' had also not been effective with the report finding 'that workers were being denied membership of trade unions in the five countries chosen for the study - the UK, Costa Rica, India, South Africa and Vietnam. Quoting from the report, The Independent stated that "In none of the 25 sites did we [The Institute of Development Studies] find an increase in union membership".

The Independent reports ETI's Director, Dan Rees as saying, "We must all recognise that despite the growing pressures on UK retailers to address consumers' ethical concerns, they face much greater pressure to deliver the cheapest products in the shortest possible time".

Funding and finances

According to it's website, The ETI is 'funded by a combination of membership fees (currently [in 2009] comprising approximately 60% of our funding base) and a grant from the Department for International Development (40% of funding). Our members also contribute in-kind to ETI’s work (eg, staff time, travel expenses, meeting facilities)'[8].

In 2002, Clare Short, Secretary of State for International Development, sanctioned a three year grant from the government by awarding ETI £1.315m[9]

People

Director

Board

According to its website, the ETI's 'Board has nine voting members or directors, comprised of three representatives from each of the three main categories of members, ie, companies, trade union organisations, and NGOs. Each of the three constituencies also has one alternate director, who may attend Board meetings as a voting member if any of the other three representatives in their constituency is unavailable'[11].

In April 2008, ETI's Board consisted of[12]:

Chair:

  • Alan Roberts - Group Business Standards Director for Littlewoods Retail Limited. Roberts has been on ETI's Board since 1998 and became Chair in 2002[13]. Littlewoods is owned by Associated British Foods which also owns Primark[14]. Primark has come under repeated criticism for the exploitation of workers producing its clothes. For example, War on Want's 2008 report, 'Fashion Victims II: How UK clothing retailers are keeping workers in poverty', 'exposes the appalling conditions faced by workers producing clothes for Primark, Tesco and Asda. The report comes two years on from War on Want’s original Fashion Victims report, published in December 2006, which found that garment workers struggle to survive on extremely low pay, suffering poor working conditions, arduous hours and a complete lack of trade union representation in the factories'. The report continues by stating that despite promises from companies to improve the lives of their workers, 'workers are now in an even worse position than they were before.'[15]

Vice Chair:

Corporate representatives:

Trade union representatives:

NGO representatives:

Department for International Development (DFID) observer:

Membership

In 2009, ETI lists its members as follows[16]

Companies

Trade Unions

Non-governmental organisations


Suspended membership

In 2007, Levi Strauss & Co. (LS&Co.) resigned from ETI 'following their suspension for refusing to adopt the ‘Living Wage ’ provision of the ETI Base Code'. They were initially given a 12 month suspension by the ETI but later resigned claiming that they did not believe it possible to impliment a living wage provision with their suppliers[17].


Affiliations

Subsidiaries

Publications

Contact details, Resources, Notes

Contact

  • Address:
  • Phone:
  • Fax:
  • Website:

External Resources

Notes

  1. ↑ Ethical Trade Initiative About the Ethical Trade Initiative Accessed 15th January 2009
  2. ↑ Ethical Trading Initiative The ETI Base Code Accessed 15th January 2008
  3. ↑ War on Want 'Fashion Victims II: How UK clothing retailers are keeping workers in poverty'. December 2008. Accessed 15th January 2009
  4. ↑ Hickman, M. (2005)Primark is named as least ethical clothes shop The Independent. 8th December 2005. Accessed 15th January 2009
  5. ↑ People and Planet Ethical Commitments Accessed 15th January 2009
  6. ↑ Ethical Trading Initiative Base Code Accessed 15th January 2009
  7. ↑ Verkaik, R. ( Ethical trading agreement 'has had little impact' The Independent. 19th October 2006. Accessed 15th January 2009
  8. ↑ Ethical Trade Initiative About the Ethical Trade Initiative Accessed 15th January 2009
  9. ↑ Ethical Trading Initiative ETI Press Release. 9th May 2002. Accessed 15th January 2009
  10. ↑ Ethical Trading Initiative Press Release 9th May 2002. Accessed 15th January 2009
  11. ↑ Ethical Trading Initiative ETI Board Accessed 15th January 2009
  12. ↑ Ethical Trading Initiative ETI Board Accessed 15th January 2009
  13. ↑ Ethical Trading Initiative Press Release 9th May 2002. Accessed 15th January 2009
  14. ↑ Butler, S. (2005)'Primark expands after ABF buys Littlewoods stores' Times Online. 12th July 2005. Accessed 15th January 2009
  15. ↑ War on Want 'Fashion Victims II: How UK clothing retailers are keeping workers in poverty'. December 2008. Accessed 15th January 2009
  16. ↑ Ethical Trading Initiative Members of the Ethical Trading Initiative Accessed 15th January 2009
  17. ↑ Ethical Trading Initiative Resignation of Levi Strauss & Co. from ETI. 5th February 2007. Accessed 15th January 2009
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