Ethical trading: debunking 3 myths Food and Drinks Innovation Network Seminar: Ethics Man-Kwun Chan Head of Communications and Research, ETI 16 April 2008

What do these companies have in common? + Premier Foods, Flamingo Holdings, Unilever, Tetley, Twinings, Finlay and many other food companies…

What is ethical trade? “There’s no need” “It’s not my job” “We don’t source from dodgy countries, so it’s OK” Presentation outline 1

What is ethical trade?

Ethical trade is about workers: Factory workers, farm workers, contract workers…in Asia, Africa – and in the UK

“Decent” working conditions? No forced labour Respect for trade union rights Working conditions are safe and hygienic No child labour Living wages are paid Working hours are not excessive No discrimination Regular employment (incl. security of employment and access to legal benefits such as social security) No abuse - physical, sexual or verbal

“There’s no need”

Protect your reputation… Child labour in West Africa, 2007 Poor conditions in China, 2006 Low wages & abuse of farm workers, UK Low wages/long hours, Bangladesh, 2007

The evidence? 81% of consumers say they would not buy a product if they knew it had been produced in a sweatshop 1 Consumer boycotts cost brands £3.6 billion a year in the UK alone articles/pieces on supply chain labour issues in the UK media between Jun 05-May 06 3 Oxfam, Action Aid, CAFOD and War on Want - as well as numerous other NGOs - have all campaigned on these issues in the last 2 years

Protect your bottom line… $$ saved on PR and fire-fighting (eg, ETI food supplier member) Increased efficiency of business operations: better supplier relationships, increased supplier productivity and quality (eg, Northern Foods) Attracting/keeping good employees (eg, Gap) Increased access to investment: SRI assets in UK grown 10 fold from £23b in 1997 to £225b in 2001 Mainstream investors increasingly consider supply chain labour standards as a risk factor

Global supply chains provide jobs for millions of poor people eg, est. 45 million people depend on export horticulture in African, Caribbean and Pacific (ACP) countries (2000) Many of these workers face unacceptable pay and conditions 12.3 million people forced to work. Tens of thousands lose their job every year for trying to join a trade union. Some lose their lives. 218 million children work to support their families. …and protect workers

“It’s not my job”

Kenyatta, 6, waits ‘til after dark for his mother to come home. She is doing unpaid overtime in a Nairobi garment factory. The impact of short lead times?

Case Study 1: Gap Inc Trigger: Oxfam and Insight Investments reports An emerging business case: poor critical path management also has financial costs Action 1: collaborative research to unpick what goes wrong in their supply chain Action 2: developing training for buyers and others Example Tesco: working with NGO, TU and 2 suppliers to review buying practices in fresh produce supply chains

“We don’t source from dodgy countries, so it’s OK”

Case Study 2: UK gangmasters NIMBY!….. But: Increasing media pressure on food industry to do something about widespread abuse of temporary farm workers in the UK Realisation that no-one could do it alone ETI brokered formation of a cross-sector Working Group: bringing together retailers, suppliers, several gov. departments and TUs.

What did we achieve? New legislation: “Gangmasters”: illegal to operate without a licence Licence conditional on meeting minimum labour standards Suppliers: illegal to use an unlicenced gangmaster Formation of Gangmaster Licencing Authority

Benefits: Retailers: can give clear guidance to their suppliers Suppliers: know who they can/can’t use Gangmasters: protected their reputation TUs: increased protection of workers’ rights.

It makes good business sense It’s everyone’s job No country, company or sector is immune! The myths debunked…

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