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The Ethical Trading Initiative (ETI) is a UK-based independent body founded on 9 June 1998, which brings together companies,
trade union A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...
s and
non-governmental organisations A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in ...
(NGOs) to ensure compliance with international labour standards in the global
supply chain In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, acti ...
s of member companies. Minimum ethical standards are set out in the ETI Base Code.


Origin

The mid 1990s saw increased awareness of
sweatshop A sweatshop or sweat factory is a crowded workplace with very poor, socially unacceptable or illegal working conditions. Some illegal working conditions include poor ventilation, little to no breaks, inadequate work space, insufficient lighting, o ...
working conditions for overseas garment and factory workers. This triggered calls for radical change regarding the ethics of employment overseas factories. As a reaction, companies created their own codes of conduct and set moral expectations for their supply chains. These set maximum working hours, minimum pay and codified the employees' freedom of association. Investigation had found that former companies’ codes of conduct were, in effect, futile as they inadvertently controlled the workforce further. Additionally, enforcement of these codes was through in-house, company-paid monitoring programmes. These were often described as "piecemeal" and "lacking credibility". The subsequent formation of the ETI was backed therefore by NGOs, UK businesses, and the then UK Secretary of State for International Development,
Clare Short Clare Short (born 15 February 1946) is a British politician who served as Secretary of State for International Development under Prime Minister Tony Blair from 1997 to 2003. Short was the Member of Parliament for Birmingham Ladywood from 1983 t ...
. Acting independently from the companies, it could more credibly implement the code and provide protection for workers.


Current operations

, ETI membership includes 90 companies, employing 10 million workers globally within their supply chains. High-profile members include the
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,
Burberry Burberry is a British luxury fashion house established in 1856 by Thomas Burberry headquartered in London, England. It currently designs and distributes ready to wear, including trench coats (for which it is most famous), leather accessories, ...
,
Co-op A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-control ...
,
Fat Face FatFace is a British lifestyle brand, based in Hampshire, which creates product ranges across women's, men's, kids, footwear and accessories. FatFace is a multichannel retailer, with an international digital business as well as over 180 store ...
and
ASOS ASOS or Asos may refer to: * Asos, a village in Greece * ASOS (retailer), a UK online fashion store * Association Sportive Oussou Saka, a Beninese football team * Automated Surface Observing System, a type of weather station * Air Support Operat ...
. The ETI relies on annual subscriptions from its member organisations. These formerly comprised a few, albeit large, companies (such as
ASDA Asda Stores Ltd. () (often styled as ASDA) is a British supermarket chain. It is headquartered in Leeds, England. The company was founded in 1949 when the Asquith family merged their retail business with the Associated Dairies company of York ...
and
The Body Shop The Body Shop International Limited, trading as The Body Shop, is a British cosmetics, skin care and perfume company. Founded in 1976 by Anita Roddick, the company currently has a range of 1,000 products sold in about 3,000 stores, divided b ...
). Companies may apply for membership regardless of their size or type of business. The ETI is registered with
Companies House Companies House is the executive agency of the company registrars of the United Kingdom, falling under the remit of the Department for Business, Energy and Industrial Strategy. All forms of companies (as permitted by the Companies Act) are i ...
as a
company limited by guarantee In British, Australian, Bermudian, Hong Kong and Irish company law (and previously New Zealand), a company limited by guarantee (CLG) is a type of corporation used primarily (but not exclusively) for non-profit organisations that require legal pe ...
, number 03578127. The current Director of ETI is Peter McAllister, formerly the Executive director of the
International Cocoa Initiative The International Cocoa Initiative (ICI) is a Geneva-based nonprofit funded by major chocolate makers that focuses on addressing child labour in cocoa production in West Africa. ICI works with communities, farmers, unions, the cocoa and chocola ...
. McAllister took over the role from Dan Rees in 2010.


Base code

The ETI requires members to adopt and enforce the base code. This is expected to form the base for workers' conditions and rights. The code includes the following principles: * "Employment is freely chosen", meaning workers are not forced to work there or for longer than is contracted. They are also not forced to remain in the employment if they indicate they do not want to. *
Freedom of association Freedom of association encompasses both an individual's right to join or leave groups voluntarily, the right of the group to take collective action to pursue the interests of its members, and the right of an association to accept or decline membe ...
and collective bargaining. This allows workers to become members of
trade unions A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and Employee ben ...
or other forms of workers organisations. To the ETI, this condition is an essential requirement for membership and it has sanctioned companies for non-compliance. * "Working conditions are safe and hygienic." * "
Child labour Child labour refers to the exploitation of children through any form of work that deprives children of their childhood, interferes with their ability to attend regular school, and is mentally, physically, socially and morally harmful. Such e ...
shall not be used." This point has been criticised as having unintended consequences, discussed below. * " Living wages are paid." This differs from the
minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. Bec ...
and is often much more. * "Working hours are not excessive." This element relies on the states’ laws on maximum working hours. It has been argued in the theory of ' Race to the Bottom', that states compete with one another to raise maximum working hours (or lower safety regulations) so as to attract business, at the expense of workers’ health. Thus, exceeding the legal working limit is difficult in most cases. * "No discrimination is practised." * "Regular employment is practised." This would outlaw precarious and unreliable zero-hour contracts where the work attendance is at the discretion of the employer. * "No harsh or inhumane treatment is allowed." This includes physical, sexual and verbal abuse as well as subhuman working conditions and practises. The ETI admit that some of these points have better compliance than others, and work towards them is still required. This lies in the more subjective points. For example, working hours and no child labour are measurable and quantifiable aims, whereas freedom of association does not factor in the unmonitorable atmosphere and culture that may prevent someone from feeling free to join any such association. There is also difficulty in implementing the living wages point, due to factors outside of companies such as rising costs of housing, fuel and schooling that decrease the workers’ wages. There is also an economic theory that points out that by increasing the paid wage, in accordance to the perceived living wage can eventually decrease the ‘take home’ wage. This is because the pay increase means that the costs of goods will have to increase to cover the higher labour costs. Therefore the consumers (who include the ones making the goods) will have to pay more from their new ‘living wage’, decreasing how much they have left to live with.


Governmental influence

The UK
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has granted unrestricted funding. They often work with other governments to ensure adequate funding and also to lobby for legislative changes, if found to be necessary.


Departures

Boohoo Boo hoo may refer to the sound of someone crying. Boo hoo may also refer to: * '' Boo Hoo'', a 2002 album by musician Voltaire * "Boo-Hoo", a 1937 hit song recorded by Guy Lombardo and His Royal Canadians * Boo Hoo the Bear, the mascot of Queen' ...
, one of the largest UK fast fashion brands, withdrew their interest in becoming a member in 2019. Boohoo refused to meet and answer USDAW’s (Union of Shop, Distributive and Allied Workers trade union)  questions. This came after the UK
Environmental Audit Committee The Environmental Audit Select Committee is a select committee of the House of Commons in the Parliament of the United Kingdom. The remit of the committee is to examine how government departments' policies and programmes will affect both the envir ...
’s inquiry into the fashion industry, recommended that the retailer engaged with USDAW in a bid to repair their damaged reputation. The committee also suggested becoming a member of the ETI which would bind the retailer into ethical practices, including paying a living wage and protecting workers'
freedom of association Freedom of association encompasses both an individual's right to join or leave groups voluntarily, the right of the group to take collective action to pursue the interests of its members, and the right of an association to accept or decline membe ...
. This follows revelation that workers in their
Burnley Burnley () is a town and the administrative centre of the wider Borough of Burnley in Lancashire, England, with a 2001 population of 73,021. It is north of Manchester and east of Preston, at the confluence of the River Calder and River Bru ...
warehouse were being paid £3.50 per hour, a fraction of the legal £8.21. The key recommendation from the committee was to recognise the workers' right to join a
trade union A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...
. The ETI statement on the subject wrote, “a key expectation ETI has of its members an open attitude towards the activities of trade unions, enabling effective representation and ideally for workers to bargain collectively.” The ETI made a submission to the Environmental Audit Committee, meaning they actively disagree with the evidence given by Boohoo. Since then, there has been no further advancement in the retailer’s membership process to the ETI.
Fyffes Fyffes plc () is an Irish fruit and fresh produce company headquartered in Dublin, Ireland. The Fyffes brand is most closely associated with the banana industry, although it is applied to a wide range of fruits and fresh produce, including the ...
, an Ireland-based banana supplier, was suspended and eventually expelled, due to repeated failure to enforce the base code. In March 2016, NGOs Banana Link and the International Union of Food workers (IUF) complained to the initiative about the supplier not  respecting their workers’ right to freedom of association; disallowing and not recognising the trade unions some workers chose to associate with. In some cases farmers were sacked who had chosen to associate with trade unions. In light of these concerns, a suspension order was put in place in May 2017. During this period Fyffes were encouraged by the ETI to reform their practices in line with the code; specifically to allow their farmers in Honduras to join trade unions at their discretion.  Despite warnings, the highlighted concerns were not redressed, leading to membership being revoked in March 2019. Fyffes, in a statement to ''
The Grocer ''The Grocer'' is a British magazine devoted to grocery sales, published by William Reed Business Media. It has been published since 1862. The Grocer 33 A feature of the magazine is 'The Grocer 33'. This is a survey of each of the 5 leading s ...
'', said that although "disappointed", they ultimately did not agree with the decision made by the ETI on the grounds that the trade union in question, Sindicato de Trabajadores de la Agroindustria y Similares (STAS), is not legally recognised in Honduras. Hence, denial of association remained, from their perspective, ethical. They decided not to appeal the order. Fyffes also said that they would continue implementing the base code in their practices across the supply chain. Banana link, a not-for-profit co-operative aiming to protect and restore plantation workers’ rights, also told ''The Grocer'' that they will press Fyffes on their agreement put in place in January 2019. The agreement states that they would reinstate sacked union members, while also raising wages and conditions for their workers, thus supported by STAS.


Criticism

One element of the base code is particularly contentious: the prohibition of child labour. A group of academics in 2016 condemned a United Nations convention banning child labour as promoting a particularly Western view of childhood as innocent and labour-free. They argue that paid work may be the means by which a child will feed their family or fund their siblings' or their own schooling. They argue that banning child labour, without effective actions against the large-scale poverty that necessitates it, can be futile or counterproductive. When the Indian government took nationwide measures to prevent child labour, they inadvertently caused more. As legal employment was no longer an option, families needing money for food and education turned to informal child employment. These operations are illegal and unregulated, so the employers can pay much less and often have harsher conditions, pushing other children into work to supplement the lost wages.


References

{{reflist


External links


Official web site
Fair trade organizations British companies established in 1998 Regulation in the United Kingdom Supply chain management