Supermarket chains as well as companies in the automotive industry are joining forces to improve working conditions and combat child labour. However, an independent study is needed to see if globalisation can ever be sustainable.
To mix political metaphors, War on Want’s criticisms of leading retailers might be described as ‘old Labour’: the traditional ‘social’ emphasis on the working conditions of employees down the supply chain.
What’s interesting is that the terms of the debate are starting to broaden out into sustainability considerations: Sainsbury’s is looking at the economics (payment times) and the Cambridge study at the environment. To describe this as ‘new Labour’ risks condemning it as all-spin-and-no-substance, or more charitably that there is a third way allowing us to have our cake and eat it after all. In fact ‘new supply chain’ should be all about sustainability, getting the economics, social and environmental into proper balance.
And that’s the point behind Tesco’s defence – in short, the countries still need the money. Still, it would be nice to see a proper independent study showing that the price cuts in the UK that the company is trumpeting have not been at the price of lower living standards in the developing world and environmental degradation too. Indeed, that globalisation can be sustainable.
The other significant development seen in these news stories is how companies in the same sector are now working together. Pretty well every sector is now examining, publicly or still in private, how to make one set of ‘asks’ of the suppliers they all use. That challenges participant companies to broaden their approach to the level of the best, as those with lower standards now have the information to act on topics they’ve not previously addressed. It also challenges NGOs to move away from simple condemnations of individual practices or lapses in behaviour, to help devise a framework that actually supports global trade by really tackling difficult issues like governments, corruption and ultimate sustainability. Which means ‘new supply chain’ is not about easy answers, but is the future.
Related News
Global supply chain compliance scheme
The world’s four largest supermarket chains have agreed to set standard workplace guidelines, aiming to rid their supply chains of unpaid wages and child labour. The US’ Wal-Mart, France’s Carrefour, Germany’s Metro and the UK’s Tesco are working with Migros, a Swiss retailer, to develop the Global Social Compliance Programme.
The standards will be drawn from the companies’ existing codes of ethics and the programme will be headed up by CIES – The Food Business Forum. CIES is a Paris-based independent network of the CEOs and senior management of food retailers. Contact CIES 00 33 1 44 698 484 www.ciesnet.com
Auto-industry tackles working conditions
Ford, General Motors, Johnson Controls, DaimlerChrysler, Excel, Honda North America and Yazaki, have agreed to work together in a bid to improve the working conditions within the automobile supply chain. Guidelines have been developed to cover the codes and policies of individual companies as well as international standards and joint codes established by other industries. The Automotive Industry Action Group, the not-for-profit association of companies involved in the automotive industry, coordinated the project.
Child and forced labour, harassment and discrimination, health and safety as well as wages, benefits and working hours were some of the issues examined. The companies are also exploring the possibility of educating suppliers on local labour laws in country-specific training sessions. The training will be carried out by AIAG and Business for Social Responsibility. Contact Automotive Industry Action Group 00 1 248 358 3570 www.aiag.org; Business for Social Responsibility (BSR) 00 1 415 984 3200 www.bsr.org; Interfaith Center on Corporate Responsibility 00 1 212 870 2295 www.iccr.org
Well dressed?
An analysis of the UK clothing and textiles industry has assessed its sustainability as well as its global environmental and social impacts. Well Dressed? suggests that, although UK retailers are increasingly likely to specify codes of practice for labour standards, “difficulties in imposing these throughout the global supply chain” remain. It also highlights problems stemming from the use of toxic chemicals in manufacturing stages and suggests that in some countries, the rights of workers to form labour associations or unions is suppressed. The analysis was carried out by the Cambridge University’s Institute for Manufacturing. Contact Institute for Manufacturing 01223 766 141 www.ifm.eng.cam.ac.uk
Nike sacks ball manufacturer
US sportswear maker Nike has sacked its main supplier of hand-stitched balls, Pakistan-based SagaSports, after a 6-month investigation revealed that the company was outsourcing stitching to casual workers.
Despite efforts to change the situation, Nike concluded that Saga has not done enough to satisfy the multinational’s labour standards. Hannah Jones, Nike’s president of corporate responsibility, said that the company was “deeply concerned about the broader conditions and practices” seen in the home-based settings, which have been investigated. Contact Nike www.nike.com
Sainsbury’s adopts new payment system
J Sainsbury has joined forces with Morgan Stanley to establish a new payment system allowing small suppliers to receive their payment within a few days of the supermarket approving invoices. Suppliers will be invited to participate in a trial of the new system, called the Trading Finance Platform, which is thought to be an industry first. The platform will also allow suppliers to view online their trading account with Sainsbury’s, allowing greater visibility of their expected cash flow. Contact J Sainsbury 020 7695 6000 www.j-sainsbury.co.uk
Human Rights
Promoting human rights in the banking sector
Campaign group BankTrack has written to John Ruggie, the United Nations Secretary General’s Special Representative on Human Rights and Business, urging him to call for a more comprehensive approach to human rights responsibilities in the banking sector. BankTrack says that “many activities that violate human rights simply cannot occur without banks’ financial backing”.
The letter:
offers examples of how companies associated with human rights problems were backed by loans and capital raised by major financial institutions
notes that even where banks have developed human rights policies, it is not clear how human rights considerations affect business decisions
notes that the Equator Principles “apply only to a tiny fraction of bank financing activities, and do not adequately address human rights”.
BankTrack says that “if banks exercise their influence to prevent human rights violations rather than enabling them, the banking community can make a valuable contribution towards supporting
human rights”. Contact Johan Frijns BankTrack 00 31 30 233 4343 www.banktrack.org
In brief
General Electric has joined the Business Leaders Initiative on Human Rights. The business-led programme has 13 corporate members and its creation in May 2003, has helped lead and develop the corporate response to human rights. Contact Russell Wilkerson General Electric 001 203 581 2114 www.ge.com; Business Leaders Initiative on Human Rights 020 7841 8925 www.blihr.org
The International Labour Organisation has called for zero tolerance to violence against child labourers employed illegally worldwide. The statement follows the release of the World Report on Violence Against Children. The report claims that millions of child labourers face various forms of “systemic” violence at work. Contact International Labour Organisation 0041 22 799 6111 www.ilo.org; World Report on Violence Against Children www.violencestudy.org
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