More and more multinational companies are adopting Corporate Codes of Conduct which profess minimum acceptable standards of employment in respect of health and safety, wages and workers' rights. But how to judge if these claims are true in the absence of proof? The answer, according to research published by the New Economics Foundation (NEF) and CIIR (Catholic Institute for International Relations), is independent monitoring and verification

As globalisation of trade gathers pace, multinational companies operating in countries round the world are adopting self-imposed Codes of Conduct as a way of countering concerns over exploitation of cheap labour and failing health and safety standards, especially under conditions prevailing in developing countries where local employment laws and guidelines are often lacking or widely flouted. NEF and CIIR have led research investigations into options for effective monitoring of corporate codes of conduct, in harness with leading a process of dialogue with international aid, human rights and fair trade groups, companies, service providers and trades unions.

A cross-section of case studies formed the basis of research into existing practice. They tackle the questions: what elements add up to an approach to monitoring and verification that can make sure the situation is reported accurately, completely and meaningfully? And how can that information be delivered to all stakeholders promptly and intelligibly, without prohibitive cost and without risk of penalty to the workforce it is meant to assist?

The consultation finds that:

• An effective monitoring and verification system has to meet the needs of workers, consumers, companies, contractors, trades unions and NGOs in the North and the South
• Although different stakeholder groups have different expectations and priorities, there are clear areas of consensus about the primary features of an effective system

From these areas of consensus the report goes on to identify a set of core principles for effective monitoring of codes of conduct. These benchmark principles cover the following areas:

• scope
• methodology
• verification
• disclosure
• continuous improvement
• cost

The report goes on to recommend that companies, trades unions and service providers need to work together to build:

• a commonly accepted set of benchmark principles
• a common forum for agreeing on monitoring and verification processes
• an accelerated programme of pilots and research
• a program of institutional development of organisations who will be able to deliver effective monitoring of corporate codes of conduct.

Source(s):
Open Trading: options for effective monitoring of corporatecodes ofconduct, New Economics Foundation & CIIR, for the Monitoring & Verification Working Group (1997)

id21 Research Highlight: 1998-Feb-19

Further Information:
M. Forstater.
New Economics Foundation
1st Floor
Vine Court
112-116 Whitechapel Road
London
E1 1JE
UK

Contact the contributor: maya.forstater@neweconomics.org

New Economics Foundation (NEF), UK