Ethical trade is becoming sexy. Codes of practice to help companies monitor social and environmental performance and relationships with suppliers are proliferating. Why are there so many? Why has there been greater concern for the environment than for the welfare of developing country workers at the end of supply chains? Can ethical sourcing and sustainability come to be part of the same agenda?

These are the key questions addressed in a report from the Natural Resources Institute of the University of Greenwich which examines the scope for developing standardised codes to simultaneously address social and environmental concerns.

Public interest in ethical sourcing is having an impact. Pressure to adopt better practices is particularly apparent in sectors such as horticulture and apparel. Codes currently in use have generally been developed by reputation-conscious multinationals rumbled by the media, trade unions or NGOs. They are usually generated in-house and either audited internally or by an external auditor reporting to company management.

In general codes have been unilaterally developed to prioritise concerns of northern stakeholders. Meeting the requirements of similar, but ultimately different codes, can be an added burden to developing country producers.

What are the practical pros and cons of integrated codes? Should social concerns related to child labour and trade union rights be highlighted separately from issues around recycling and energy consumption? Given that companies usually have separate staff responsible for social and environmental issues, it seems sensible to do so. Could premature integration undermine the progress that has been achieved (in forestry and agriculture) in establishing verifiable mechanisms for implementing environmental standards?

The report concludes by arguing that if codes of practice continue to evolve as a response to single issues there will be little enthusiasm for tackling the challenge of developing coherent regulatory mechanisms built around an understanding of sustainable business practice.

Key findings highlighted by the report are:

• Codes of practice have so far been little more than an ad hoc collection of standards driven by the need to meet consumer and other northern stakeholders’ perceptions of business responsibility.
• Recognition that not all aspects of sustainability can be codified and regulated.
• Recent progress in developing sectoral and cross-sectoral standards allowing a wide range of stakeholders to be involved in auditing, reporting and consultation.

Changes urged on corporate policy-makers include the need to:

• realise that in the long term codes are not an end in themselves, but a starting point for increased business awareness of global social and environmental issues.
• move away from prescribing what developing country suppliers must do towards process-oriented consultative approaches involving social auditing.

Source(s):
‘Ethical Sourcing: A Contribution to Sustainability or a Diversion?’ by Mick Blowfield, Natural Resources and Ethical Trade Programme, Natural Resources Institute, November 1999

Funded by: Department for International Development

id21 Research Highlight: 1 May 2001

Further Information:
Mick Blowfield
Natural Resources Institute
Central Avenue
Chatham Maritime
Kent ME4 4TB
UK

Tel: +44 (0)1634 880088
Fax: +44 (0)1634 8833706
Contact the contributor: yjp60@dial.pipex.com

Natural Resources Institute, University of Greenwich, UK

Other related links:
ETI promotes good practice in the implementation of codes of labour practice

NRET is a comprehensive site on ethical trade

Corporate Watch has further links and a guide for researching corporate conduct

ILOLEX is a database of International Labour Standards

Search ILO Standards and Fundamental principles and rights at work

Sustainable Markets Group has projects on sustainable trade and supply chains

SA8000 are baseline standards on which many audits are being based