If anyone thought the allegations about child labour and Marks & Spencer were an isolated incident, it is time to think again
The Sainsbury’s group is to introduce a code of conduct for suppliers of all its 14,000 own brand products by March 1998, with a comprehensive assessment and audit procedure. The company has chosen four key product areas for a pilot study during 1996/97, and will investigate:
wages, hours of work and entitlements;
health and safety;
child labour and forced labour;
Announced on May 17, the initiative is being developed in consultation with suppliers and advised by the Fairtrade Foundation among others. Contact Jane Reynolds, Sainsbury’s, on 0171 921 0100
CLOTHES CODE RETAIL CHALLENGE
The charity, Oxfam, launched a campaign on May 20 to force clothing retailers to say where their goods are made and how the workers are treated. The aim is to encourage companies to adopt a voluntary code of conduct and implement independent monitoring, to combat low pay, poor conditions, child labour and exploitation of women. Initially five companies are being targeted including Marks & Spencer, C&A and Next.
C&A has already prepared a code of conduct which satisfies Oxfam’s concerns and established an auditing capability, headed by two senior commercial directors operating independently from the rest of the group. Subcontractors who use child labour, illegal immigrants, forced labour or physical or mental abuse face having their contracts cancelled. Contact Oxfam Clothesline on 01865 312456 and John Green, C&A, on 0171 629 1244
ECONOMIC ESSENTIALS OF CHILDREN
The International Labour Organisation says in some parts of India, Indonesia and Ghana a quarter of children are working and handing over earnings to their parents. A study published on April 4 found children aged between 5 and 14 working nine hours a day, six or seven days a week, but said that their contribution was often essential to the household economy. Contact Graciela Carrillo, ILO, on 0171 828 6401
CCI BOOSTS STOCK MARKET
The Ethical Investment Research Service has published a 100 page guide to the UK’s 28 ‘ethical’ funds, worth nearly ?1 billion, much of it in UK equities. Investment policies are screened on 24 criteria, 19 negative factors for exclusion, such as animal testing, arms sales and tobacco, and five positive features for inclusion. These assess the extent to which companies in the funds:
are corporate givers: members of BITC or the Per Cent Club or Top 25 donors; donate at least 0.5% of profits; second employees, make gifts in-kind or have payroll giving;
show environmental awareness: publish policy statement, have independent audits; manufacture or sell ‘green’ technology or recycling; sponsor of conservation projects;
have equal employee opportunities: publish policy, give access to training; have managerial grades at least 10% female and 1% ethnic minority (or proper procedures for monitoring); have family friendly policies;
derive more than 25% of turnover from manufacture of ‘basic necessities’ such as food, water, medication.
Money & Ethics (ISBN 0 9527850 0 5, ?12.50) is principally a guide for those making personal investment decision on PEPs, pensions, etc, but such screening provides community affairs managers with explicit evidence that their programmes can impact the stock market. Contact Lorraine Heath, EIRIS, on 0171 735 1351
SOCIAL IMPACT EVALUATED
An independent evaluation of the social practices, performance and impact of The Body Shop was published in April. Conducted by Professor Kirk Hanson of the Stanford Graduate School of Business during 1995, it assesses practice against comparable companies on 39 separate topics, classified by stakeholder. On employee issues, animal testing, environment and community relations, The Body Shop’s performance is judged consistently above average. It fell down on corporate governance, customer complaints, and, worse of all, relations with the public including accuracy of communication, openness and reaction to criticism. Contact Adrian Hodges, Body Shop, on 01903 731500
Retailers can’t say they had no warning. In the US, child labour has been a big issue for years. The last edition of Community Affairs Briefing reported that the Council on Economic Priorities, which has led the campaign, has opened a European office. In the UK, Marks & Spencer is still suing the TV programme, World in Action. Even football is affected, with Euro 96 opening to a row about the balls being made in Pakistan by children.
This is an issue where community affairs, public affairs and business operations come together. Consumers are voting with their wallets. Governments are debating international labour standards, with the World Trade Organisation, the OECD and the European Commission all considering new rules.
But as with the environment, knee-jerk reactions are unwise. When Levi Strauss set out to eliminate child labour from subcontractors, it found that a simple ban actually makes the plight of children and their families worse. Instead it invested community affairs money in setting up schools and got its subcontractors to employ parents on the strict condition their children went to school. It took time to make the switch and cost more, but solved the ethical, humanitarian and public relations problems.
Oxfam risks falling into the same trap as Greenpeace, allowing campaigning zeal to force simplistic solutions that end up doing more harm than good. For the sake of the children, companies must act fast before this spins out of control.
Corporate Citizenship Briefing, issue no: 28 – June, 1996