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Why comply with labour codes? ETI presentation for suppliers

Why comply with labour codes? ETI presentation for suppliers. Name Company Date. User notes (delete when read). Who are the slides for? They are for use by ETI member companies seeking to introduce ethical trade to new suppliers.

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Why comply with labour codes? ETI presentation for suppliers

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  1. Why comply with labour codes?ETI presentation for suppliers Name Company Date

  2. User notes (delete when read) • Who are the slides for? They are for use by ETI member companies seeking to introduce ethical trade to new suppliers. • What do they cover? They answer the questions ‘what are labour codes’ and ‘why should suppliers bother to comply?’ How to use the slides: • This is a standard presentation, relevant for different countries and industries. • This short version of the presentation can be used for presentations to suppliers, for example supplier conferences, workshops and training sessions. This generic presentation may need to be followed by more detailed information about your suppliers’ code. • You can adapt the slides. However, if you substantially change/take out key messages, please remove the ETI logo and make it clear it is not an ETI presentation. • Wherever possible, tailor the slides to reflect the specific concerns, interests and context of the country and industry where you are using them. • A longer version of these slides is available from the ETI Secretariat. • Background information on some slides can be found in the ‘notes’ pages.

  3. Why comply with labour codes? • What are labour codes? • Consumers care • Your customers care • It’s the law • It’s good for business • It’s the right thing to do! • What we ask of suppliers

  4. 1. What are labour codes? • They are about improving working conditions in global supply chains – including in the UK • They’re about retailers, agents and suppliers (factories, farms) working together to improve conditions • For the large part, they’re simply about complying with national labour laws

  5. What issues are covered by labour codes? • Forced labour • Trade union rights • Health and safety • Child labour • Wages • Working hours/overtime • Discrimination • Security of employment and access to legal benefits (social security, etc) • Abuse – physical, sexual and verbal

  6. 2. Consumers care Consumers in Europe and North America increasingly care about working conditions in global supply chains • Media coverage of these issues is growing – and retailers are being held responsible • International and national non-governmental organisations (NGOs) continue to campaign about these issues – which keeps up the pressure

  7. The evidence? • 78% of consumers would like to know more about the way goods are made including the conditions in the factories where they come from1 • 81% of consumers say they would not buy a product if they knew it had been produced in a sweatshop2 • 82% of adult consumers say it is important to improve working conditions and rights for employees of overseas suppliers3 • Consumer boycotts cost brands £billions a year – in the UK alone, food and drink boycotts cost £1,144 million and clothing boycotts cost £338 million4 • Oxfam, Action Aid, CAFOD and War on Want – as well as numerous other NGOs – have all campaigned on these issues in recent years

  8. Consumers care Child labour in West Africa Poor conditions in China Low wages & abuse of farm workers Low wages/long hours, Bangladesh

  9. Your customers care We are one of many global companies asking our suppliers to meet labour standards. These include:

  10. Your customers care • All these companies are members of the Ethical Trading Initiative (ETI) (www.ethicaltrade.org) • ETI has over 70 member companies • All these companies work towards a common set of labour standards • *As of June 2010 • **2009

  11. It’s the law In most cases, complying with the ETI Base Code simply means complying with national labour laws • This is true for most countries in Asia, Africa and South/Central America, as well as for European and North American countries • Most national labour laws are based on International Labour Organisation (ILO) standards – and so is the ETI Base Code

  12. It’s good for business Many suppliers say that improving working conditions is good for business • Not complying is costly: eg, long working hours means workers work slower and make more mistakes - which affects productivity and quality • Conversely, compliance brings benefits: higher productivity, less absenteeism, improved employee retention, better worker morale - and higher profitability • Investing in your workerscan help you stay ahead of competitors. More lucrative/secure contracts are won through improving productivity and quality – and a better trained and motivated workforce is key to achieving this

  13. It’s good for business (case study) Precious Garments, Lesotho Background: • Leading garment exporter faced two competing unions on-site, and allegations of interference with trade union rights • In response, Precious Garments adopted more union-friendly measures including agreeing to engage with both unions on a regular basis. Business benefits included: • Improved trust between workers and managers • More cost-effective disciplinary processes • Early and more effective attention to grievances

  14. It’s good for business (case study) Northern Foods, UK Background: • Company producing chilled ready meals, etc and employing 920–1,500 staff • Put in place measures to reduce excessive overtime Business benefits included: • Reduced absenteeism – from over 12% to under 8% • Number of accidents has fallen – Site Safety Rating reduced by 32% • Reduced sick pay – monthly sick pay reduced by £1,500

  15. It’s good for business (case study) Accessories factory, Dongguan, China Background: • Factory had high overtime, low wages and productivity issues • Put in place range of HR and productivity improvements after receiving training in these areas, including…. • targeted worker training • Introduction of productivity bonus for exceeding production targets in ordinary time • Changes led to improved wages (% workers earning minimum wage in normal time up from 40% to 95%) Business benefits included: • 30% increase in productivity • Increased worker motivation • Improved product quality (rework rate reduced) • Reduced overtime

  16. It’s good for business (case study) Marks & Spencer, Ethical model factory programme (Bangladesh) Background: • Campaigners call for higher wages in Bangladesh • Three factories identified to take part in programme • Programme run and developed with GTZ, BIM (Bangladesh Institute of Management), GSD (General Sewing Data) • Training on: worker rights, HR management systems, productivity • Impact assessment and roll out Benefits for workers: • Wage increases of 12-55%; increase in basic salary (more than 200 Tk) • Significant fall in grievances • 90% workers felt there was an improvement in their personal productivity • Improved worker knowledge of labour law Business benefits included: • Reduced absenteeism and migration • Post training GSD productivity improvements of 25–61% • GSD payback time in model factories between 7 and 12 weeks

  17. 6. It’s the right thing to do! After all, labour codes are about: • Respecting internationally recognised human rights • Being a good employer • Avoiding your company/industry/country becoming a dirty word for workers, customers, NGOs and consumers…

  18. 7. What we ask of suppliers • Don’t assume it’s someone else’s problem ETI members regularly find significant labour problems in their supply chains, including in the UK • Don’t hide behind double books We don’t expect you to be perfect. Spend money on improving your labour practices, not on covering them up – it’s a better investment • Do think ahead Succeeding in the future marketplace requires improving productivity and quality – which require investing in your workforce • Do ask for advice and support…

  19. What we ask of suppliers What support we can offer: • [add your No. 1 company resource for suppliers– eg country labour law briefings] • [add yourNo. 2 company resource for suppliers – eg compliance workbook/manual for suppliers, training sessions] These and other practical tools for suppliers are available from: [add contact name and details at your company]

  20. What we ask of suppliers What support ETI can offer: • ETI supplier factsheet – answers frequently asked questions from suppliers, including ‘what is an ETI audit?’ and ‘who conducts audits against the ETI Base Code?’ • Managing compliance with labour codes at supplier level – a short briefing paper with practical tips and good practice case studies • Ethical trade: the Business Case – a free film explaining the benefits of complying with labour codes These and other ETI resources are available for free from: Ethical Trading Initiative 8 Coldbath Square, London EC1R 5HL t: +44 (0) 20 7841 4350 e: eti@eti.org.uk www.ethicaltrade.org

  21. Thank you About ETIThe Ethical Trading Initiative (ETI) is a ground-breaking alliance of companies, trade unions and voluntary organisations. We work in partnership to improve the working lives of people across the globe who make or grow consumer goods – everything from tea to T-shirts, from flowers to footballs. Ethical Trading Initiative8 Coldbath SquareLondon EC1R 5HLUK T +44 (0) 20 7841 4350F +44 (0) 20 7833 1569eti@eti.org.uk ethicaltrade.org

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