With globalisation, small producers everywhere need to conform to international standards. These can, for example, relate to the environment, working conditions, or forms of quality assurance. Standards reassure environmentally and ethically conscious consumers. International retailers and producers benefit from better control of increasingly complex global supply chains. But what impact do global standards have on developing country producers?

A recent report by the Institute of Development Studies, asks how small and medium enterprises in Pakistan have responded to challenges set by a variety of global standards. Has compliance improved production processes and raised competitiveness? Where did the necessary knowledge to conform come from? What are the policy lessons for government and international donors?

Standards have mainly originated from the north with increasing participation of northern NGOs, businesses, and consumers alongside government. Commonly agreed standards assess a product or a service’s performance, its technical characteristics, and production and delivery processes. For southern producers, it has become increasingly important, however, to conform with international standards on quality assurance, ethical and environmental considerations: failure to comply can result in a loss of markets.

Different types of process standards relate to labour and social concerns, environmental impact, and quality assurance. How have such standards evolved in the international arena? What consequences do they have for trade? How have small southern firms responded to pressures to comply with international quality assurance and child labour standards? How was firm performance affected and what role did local and external actors play in assisting the process?

Key research findings include:

• Contrary to received wisdom, small firms can meet international quality assurance and labour standards.
• Well developed and competitive services for compliance have reduced costs to firms.
• Local institutions, such as trade associations, and local government play an important role in facilitating compliance.
• External buyers are not an important source of knowledge or support for compliance.
• Compliance with standards leads to some improvements in firm performance, but not to competitiveness.
• For standards to be effective they have to be properly regulated.

Main policy lessons are:

• Public intervention is particularly important where standards require complex arrangements for monitoring and certification. International donors and governments can also provide material and technical support for compliance, and assistance to national standardisation bodies.
• Local institutions, such as business associations and producer services centres can play an important role in developing the knowledge base necessary for compliance.
• An important channel for intervention can be through working with global lead firms to improve standards within their supply chain.
• Intervention is needed in regulating those who audit standards, ensuring effective monitoring of international certification agents.

Source(s):
‘Global Standards and Local Responses’, Institute of Development Studies, Brighton, mimeo, by Khalid Nadvi with Sajid Kazmi, 2001
'Making Sense of Standards', Institute of Development Studies, Brighton, mimeo, by Khalid Nadvi and FrankWältring, 2001

Funded by: UK Department for International Development (Escor) 1998 - 2001

id21 Research Highlight: 5 June 2001

Further Information:
Khalid Nadvi
Institute of Development Studies
University of Sussex
Brighton BN1 9RE
UK

Tel: + 44 (0)1273-877355
Fax: + 44 (0)1273-621202
Contact the contributor: K.M.Nadvi@ids.ac.uk

Institute of Development Studies (IDS), UK

Other related links:
'Small is beautiful? Safeguarding the African smallholder'

Asia Monitor Resources Centre focuses on labour movements and ethical trade

ETI promotes good practice in the implementation of codes of labour practice

Refer to the ILO Standards and Fundamental Principles and rights at work

ILOLEX is a Database of International Labour Standards