Ethical Trading Initiative
Encyclopedia
The Ethical Trading Initiative (ETI) is an alliance of companies, trade unions and voluntary organisations working in partnership to improve the working lives of people across the globe who make or grow consumer goods.
Established in 1998 with the backing of the Department for International Development (DFID), ETI now has over 70 member companies with a combined turnover of over £107 bn. Trade union members represent nearly 160 million workers around the world in every country where free trade unions can operate. NGO members range from large international development charities such as Oxfam and CAFOD, to specialised labour rights organisations such as Anti-Slavery International.
Companies that join ETI must adopt the ETI Base Code in full. The ETI Base Code is derived from the standards of the International Labour Organisation, and is an internationally recognised code of labour practice. They must also sign up to ETI's Principles of Implementation, which set out the approaches to ethical trade that member companies should follow.
Member companies must also play an active part in ETI activities alongside their trade union and NGO colleagues, including in members' meetings, supply chain programmes and working groups.
In 2010, ETI member companies' ethical trade activities covered over 9.8 million workers around the world. They requested that their suppliers take over 133,000 separate actions to improve workers' conditions. These numbers are growing every year.
Impact
An independent assessment of ETI members' ethical trade activities carried out by Sussex-based Institute of Development Studies found that improvements have been made in health and safety, reducing child labour, increasing wages and reducing the incidence of excessive overtime.
Yet conditions for many workers remain poor. Researchers found that fundamental principles, such as workers' rights to join a trade union and negotiate collectively, are not being sufficiently addressed. There has been little progress in other areas - for example, discrimination and harassment. Casual and informal sector workers are still receiving scant benefit from codes of labour practice. And global food and fuel inflation means that real wages are declining at an alarming rate in many countries.
Training
ETI training courses support both member and non-member companies who want to build their ethical trade capacity.
History
In the mid 1990s, several well-orchestrated trade union and NGO campaigns and media exposes highlighted the exploitation of people making clothes, shoes and other products for major global brands and retailers. In response, the companies started to adopt codes of labour practice governing the working conditions of the people in their supply chains.
But codes were widely criticised for lacking credibility. Often they were developed unilaterally, so seen as attempts by companies to dictate the agenda of workers' rights. Some did not recognise all the labour standards developed by the International Labour Organisation (ILO). And although companies started to invest in 'monitoring' programmes, aimed at checking supplier workplaces for compliance with their codes, these were criticised as piecemeal and lacking credibility, as they were usually paid for by the companies.
In 1997, a group of companies, trade unions and NGOs began a discussion about how codes could be made effective. They identified the need for a body that would establish consistent standards and guidance for ethical trade, which would combine the authority and expertise of the trade union and campaign movement with the practical know-how and buying leverage of big business.
A radical new approach to protecting workers' rights
In 1998, a group of UK companies, NGOs and trade union organisations, with the backing of the then Secretary of State for International Development Clare Short, launched a radical approach to protecting workers' rights in global supply chains. Their aim was to build an alliance of organisations that would work together to define how major companies should implement their codes of labour practice in a credible way - and most importantly, in a way that has maximum impact on workers.
The companies that joined ETI in 1998 were ASDA, Premier Brands, The Body Shop, Littlewoods and Sainsbury's.
Established in 1998 with the backing of the Department for International Development (DFID), ETI now has over 70 member companies with a combined turnover of over £107 bn. Trade union members represent nearly 160 million workers around the world in every country where free trade unions can operate. NGO members range from large international development charities such as Oxfam and CAFOD, to specialised labour rights organisations such as Anti-Slavery International.
Companies that join ETI must adopt the ETI Base Code in full. The ETI Base Code is derived from the standards of the International Labour Organisation, and is an internationally recognised code of labour practice. They must also sign up to ETI's Principles of Implementation, which set out the approaches to ethical trade that member companies should follow.
Member companies must also play an active part in ETI activities alongside their trade union and NGO colleagues, including in members' meetings, supply chain programmes and working groups.
In 2010, ETI member companies' ethical trade activities covered over 9.8 million workers around the world. They requested that their suppliers take over 133,000 separate actions to improve workers' conditions. These numbers are growing every year.
Impact
An independent assessment of ETI members' ethical trade activities carried out by Sussex-based Institute of Development Studies found that improvements have been made in health and safety, reducing child labour, increasing wages and reducing the incidence of excessive overtime.
Yet conditions for many workers remain poor. Researchers found that fundamental principles, such as workers' rights to join a trade union and negotiate collectively, are not being sufficiently addressed. There has been little progress in other areas - for example, discrimination and harassment. Casual and informal sector workers are still receiving scant benefit from codes of labour practice. And global food and fuel inflation means that real wages are declining at an alarming rate in many countries.
Training
ETI training courses support both member and non-member companies who want to build their ethical trade capacity.
History
In the mid 1990s, several well-orchestrated trade union and NGO campaigns and media exposes highlighted the exploitation of people making clothes, shoes and other products for major global brands and retailers. In response, the companies started to adopt codes of labour practice governing the working conditions of the people in their supply chains.
But codes were widely criticised for lacking credibility. Often they were developed unilaterally, so seen as attempts by companies to dictate the agenda of workers' rights. Some did not recognise all the labour standards developed by the International Labour Organisation (ILO). And although companies started to invest in 'monitoring' programmes, aimed at checking supplier workplaces for compliance with their codes, these were criticised as piecemeal and lacking credibility, as they were usually paid for by the companies.
In 1997, a group of companies, trade unions and NGOs began a discussion about how codes could be made effective. They identified the need for a body that would establish consistent standards and guidance for ethical trade, which would combine the authority and expertise of the trade union and campaign movement with the practical know-how and buying leverage of big business.
A radical new approach to protecting workers' rights
In 1998, a group of UK companies, NGOs and trade union organisations, with the backing of the then Secretary of State for International Development Clare Short, launched a radical approach to protecting workers' rights in global supply chains. Their aim was to build an alliance of organisations that would work together to define how major companies should implement their codes of labour practice in a credible way - and most importantly, in a way that has maximum impact on workers.
The companies that joined ETI in 1998 were ASDA, Premier Brands, The Body Shop, Littlewoods and Sainsbury's.
External links
- Ethical Trading Initiative
- The Democratic Legitimacy of Private Governance. An Analysis of the Ethical Trading Initiative Susanne Schaller, INEF-Report 91, Duisburg 2007.