Business ethics in the textile, clothing and footware (TCF) industries - 10

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SAP 2.60/WP.110

Business ethics in the textile, clothing and footwear (TCF) industries

By Jean-Paul Sajhau

Part 10

Conclusion: Towards a standard code of conduct

The preceding analysis shows that the most developed ethical initiatives share a number of common features. Most codes make direct or indirect reference to fundamental ILO standards in the sphere of human rights at work (although, it must be admitted, with few explicit references to freedom of association and the right to collective bargaining). In the same way, there are many references, in the case of relations with external trade partners, to the respect of national legislation and in particular, labour legislation, as well as to the need to monitor the practices of local enterprises (in particular as regards wages, to avoid the creation of distortions on the labour market). Finally, the codes contain a number of more or less structured application principles which, in relations with external trade partners, involve the technical departments responsible for purchasing and the quality control of suppliers and subcontractors. Experiments with external auditing, although promising, are for the moment more of an exception than the rule.

On the basis of these observations, coupled with a combination of approaches which have proved to be feasible, an attempt could be made, in collaboration with the representative employers' and workers' associations, to draw up a code of conduct which could, after adaptation to each particular case, be proposed and discussed with those enterprises wishing to join the "ethical ranks" now emerging in the TCF sectors. At this stage, it should be noted that with the necessary adaptations, such a code could be of use not only to the enterprises of the industrialized countries but to enterprises in developing countries, in particular when the latter are accustomed to contracting out their production.

A symptomatic feature of the current discussion on ethical codes concerns the responsibility of enterprises in the developed countries, with the trade partners of the developing countries often being seen only as suppliers who must conform to the codes established by the foreign enterprises placing the orders.

To reduce the ethical approach to this single perspective would be both a caricature and a distortion of the objectives to be achieved, namely to give a greater social dimension to TCF activities. In the developing countries, many governments are trying to promote human rights at work and enterprises in the formal sector, as well as trade union associations, are becoming increasingly aware of the economic importance of providing employees with decent working conditions which respect to national legislation. Although much undoubtedly remains to be done in the informal sector which, plays an important role in TCF production, it may be reasonably argued that the adoption of codes of conduct by enterprises in the formal structure would, in a trickle-down process, have a significant effect on the working and living conditions of workers in the informal sector.

Standard code: Main components

I. The general ethical approach of the enterprise

In this first part, which forms a preamble to the body of the code, the enterprise could indicate the general principles which it wishes to promote:

-- a "socially responsible" or "civic" enterprise;

-- desire to participate in the promotion of human rights at work and to guarantee decent working conditions to its employees;

-- to serve the surrounding community and participate in its well-being;

-- to protect the environment, including the working environment;

-- to satisfy the legitimate aspirations of its employees, in particular as regards career development within the enterprise, by eliminating discrimination;

-- choice of "keywords" defining human relations within the enterprise such as: loyalty, solidarity, mutual respect.

The enterprise could also indicate that it intends to promote the same principles with its external suppliers and subcontractors.

II. Respect of human rights at work

This part of the code could be based on fundamental ILO Conventions and incorporate their contents in a simplified form. It would apply to the enterprise itself as well as to its trade partners.

The provisions could be organized around four themes:

(1) Freely chosen employment, with the following reference texts:

-- Forced Labour Convention, 1930 (No. 29);

-- Abolition of Forced Labour Convention, 1957 (No. 105).

(2) Guarantee of freedom of association, the right to organize and collective bargaining, reference texts:

-- Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87);

-- Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

(3) Non-discrimination in employment, reference texts:

-- Equal Remuneration Convention, 1951 (No. 100);

-- Discrimination (Employment and Occupation) Convention, 1958 (No. 111).

(4) Prohibition of recourse to child labour, reference texts:

-- Minimum Age Convention, 1973 (No. 138).

Note: On this point, the minimum age shall not be less than the age of completion of compulsory schooling and, in any case, shall not be less than 15 years. However, if the national law sets the minimum age for work at 14 years, in accordance with provision of the ILO Convention ratified by the country, the lower age will apply. In addition, the minimum age for work hazardous to the health, safety or morals of young persons shall not be less than 18 years; if the national law does not prescribe the list of such types of work, account should be taken of relevant international labour standards concerning dangerous substances, agents or processes or the lifting of heavy weights.

Furthermore, enterprises with their headquarters in the industrialized countries could provide for the granting of assistance to their suppliers and subcontractors established in the developing countries who might encounter difficulties in complying with this obligation. In collaboration with the authorities, workers' organizations and local non-governmental organizations, consideration could be given to the establishment of transitional measures to provide schooling and financial subsidies for children who have lost their work as a result of the application of the code.

III. Other elements concerning working

-- to guarantee a safe and healthy working environment by appropriate and voluntary measures respecting occupational safety and health;

-- to practice a wage policy which is in accordance with legal requirements and respects local enterprise practice in the sector;

-- to fix maximum levels as regards overtime;

-- to practice a policy of transparency concerning recruitment and work contracts;

-- in the code the enterprise could also define the objectives and methods of its training policy (initial, including apprenticeship, and continuous).

IV. Application of the code

As regards this point, a distinction should be made between the application of the code by the enterprise itself and its application by its suppliers and subcontractors.

(1) Internal application

The internal application of the code should not give rise to any major problems. It would be for the enterprise to define the responsibilities of the different technical departments and to ensure an adequate dissemination of the relevant information amongst its staff. The enterprise should also determine at what levels, over and above its legal obligations, it would like staff representatives to participate in this application, including in the evaluation process. Finally, mention should also be made of the methods of disseminating information concerning this evaluation.

(2) Application of the code to trade partners

Ensuring the application of a code of conduct amongst suppliers and subcontractors established in different countries raises more problems and would require an appropriate strategy and logistics.

(a) In order to limit subsequent problems, each enterprise could initially make a selection of its suppliers. This selection could be made after a visit to enterprises and installations concerned not only by the services responsible for purchasing, but by persons specially trained for this purpose who should, furthermore, consult the trade unions and the local NGOs.

(b) The selected suppliers could then be invited to sign a document or protocol agreement containing the constituent elements of the code of conduct, adapted to local conditions (applicable legislation, translation into the official language, etc.). This document could also stipulate that any recourse to an intermediary would be subject to agreement by the enterprise placing the order and could subsequently be subject to a similar procedure.

(c) The methods for monitoring the application of the code by the trade partners could be stipulated in the protocol agreement:

-- presentation of relevant documents;

-- periodical (announced or unannounced) inspections of the enterprises concerned;

-- persons responsible for the monitoring: on this point, it seems essential for the persons responsible for the application of the code to be properly trained. In particular, internal auditors should be given specific training in social matters and should be familiar with the applicable national legislation; the specific role of workers' representatives should also be stipulated;

-- measures enabling employees in the enterprises concerned as well as their representatives to be informed of the nature and meaning of the code of conduct and, according to appropriate methods, to be associated in the control and evaluation procedures;

-- provision could also be made for independent monitoring when circumstances permit;

-- provisions concerning the practical methods of publication and dissemination of the results of the inspections carried out.

(d) Trade sanctions in the event of non-respect of the code: the document or protocol agreement signed by the trade partners could also establish a simple method for drawing the attention of a trade partner who does not respect the obligations established by the code and for redressing the situation. In the event of a deliberate violation, the protocol agreement could also establish trade sanctions proportionate to the nature of the infringement. Sanctions could range from a simple warning to the cancellation of an order and the termination of all trade relations.

Table XI. Codes of conduct and fundamental ILO standards

General reference to human rights
Freedom of association, right to organise and to collective bargaining
Child labour
Forced labour
Non-discrimination

ILO core Conventions

Freedom of Association and Protection of the Right to Organise Convention (No. 87) and Right to Organise and Collective Bargaining Convention (No. 98).
Minimum Age Convention (No. 138).
Forced Labour Convention (No. 29) and Abolition of Forced Labour Convention (No. 105).
Equal Remuneration Convention (No. 100) and Discrimination (Employment and Occupation) Convention (No. 111).

Levi Strauss
Criteria for selecting supply countries: observation of fundamental human rights.
No explicit reference.
Criteria for selecting trade partners: child labour is not acceptable. A "child" is defined as a person under the age of 14 or who is under the compulsory schooling age.
Criteria for the selection of trade partners: prohibition of the use of forced or prison labour at any stage in the production process.
Criteria for the selection of trade partners: employees must be recruited on the basis of their occupational capacities and not on the basis of their personal characteristics or belief.

Sara Lee (SL)

No explicit reference.
SL will not knowingly recruit persons under the age of 16. Suppliers/
subcontractors must not recruit persons under the age of 15 or under the age of compulsory schooling. If national legislation includes higher criteria, these should be applied.

SL will not establish trade relations with suppliers/
subcontractors who make use of forced or prison labour.

SL will not take account of personal characteristics and beliefs of applicants in recruitment decisions. This principle applies to suppliers/ subcontractors.

Phillips-van Heusen (PVH)

No explicit reference.
No explicit reference.
PVH will not establish trade relations with suppliers/subcontractors who make use of forced or prison labour.
PVH will not establish trade relations with suppliers/subcontractors who adopt discriminatory measures based on race, sex or religion.

The Gap
The Gap will not establish trade relations with suppliers/
subcontractors who violate fundamental human rights.

No explicit reference.
Refers to local regulations.
Suppliers/subcontractors must not force someone to work.
No explicit reference.

Reebok (R)
R will take account of the practices of its trade partners with regard to human rights. The respect of these rights is one of the characteristics of R.
R will seek trade partners which share its commitment to the right of employees to set up and join organizations of their own choosing. R will ensure that no employee is penalized as a result of the non-violent use of this right. R recognizes and respects the right of all employees to organize and to engage in collective bargaining.
R will not work with enterprises which make use of child labour. A "child" is defined as a person:
-- under the age of 14; or
-- under the age of compulsory schooling;
-- all trade partners must respect national legislation defining the concept of a "child".

R will not work with enterprises which make use of forced or obligatory labour, including the forced labour of political prisoners.
R will seek partners who do not practice any discrimination in recruitment or within the framework of work based on criteria of race, colour, nationality, sex, religion, political belief or other opinions.

Nike (N)
Code of conduct: N will do everything expected of a leader to ensure the respect of human rights.
No explicit reference.
Memorandum: suppliers/subcontractors must conform to local legislation respecting child labour.
Memorandum: suppliers/subcontractors must certify that they do not use forced labour in the manufacture of their merchandise.
In its code of conduct, N advocates the account taken of the diversity of each person and of equality of opportunity. In its Memorandum of Agreement, suppliers certify that they will not engage in discriminatory practices based on the sex, race, religion, age, sexual preference or ethnic origin of their employees.

J.C. Penney (JCP)

No explicit reference.
JCP will not knowingly import goods produced by children, as defined by law.
JCP will not knowingly import goods produced with forced or prison labour.
No explicit reference.

Sears, Roebuck and Co.

No explicit reference.
No explicit reference.
No explicit reference in the Import Buying Policy and Procedures, but a separate code concerning forced labour in China. The basic principle is the prohibition of the use of forced labour. Sears also refers to United States laws on the import of goods produced by forced labour.
No explicit reference.

Wal-Mart (W-M)
W-M will seek suppliers/subcontractors who endeavour to respect basic standards concerning human rights.
No explicit reference.
W-M will not accept the use of child labour in the manufacture of goods which it sells. Suppliers/subcontractors must not recruit persons under the age of 15 or below the compulsory schooling age. If national legislation includes higher criteria, these must be applied.
W-M will not accept products from suppliers/subcontractors which make use of forced labour at any stage of the manufacturing process.
W-M will give preference to suppliers/subcontractors who do not take account of race, national origin, sex, religion, disability, sexual orientation or the political opinion of a person during recruitment.

Woolworth (W)
--
No explicit reference.
W will not accept merchandise from suppliers which is produced by child or indenture labour. The respect of this principle is a condition of payment and the supplier/subcontractor must provide a certificate of compliance.
W will not accept merchandise produced by forced or prison labour. This principle is a condition of payment (Certificate of compliance).
No explicit reference.

Updated by BR. Approved by OdVR. Last update: 28 September 2000.

	General reference to human rights	Freedom of association, right to organise and to collective bargaining	Child labour	Forced labour	Non-discrimination
ILO core Conventions		Freedom of Association and Protection of the Right to Organise Convention (No. 87) and Right to Organise and Collective Bargaining Convention (No. 98).	Minimum Age Convention (No. 138).	Forced Labour Convention (No. 29) and Abolition of Forced Labour Convention (No. 105).	Equal Remuneration Convention (No. 100) and Discrimination (Employment and Occupation) Convention (No. 111).
Levi Strauss	Criteria for selecting supply countries: observation of fundamental human rights.	No explicit reference.	Criteria for selecting trade partners: child labour is not acceptable. A "child" is defined as a person under the age of 14 or who is under the compulsory schooling age.	Criteria for the selection of trade partners: prohibition of the use of forced or prison labour at any stage in the production process.	Criteria for the selection of trade partners: employees must be recruited on the basis of their occupational capacities and not on the basis of their personal characteristics or belief.
Sara Lee (SL)		No explicit reference.	SL will not knowingly recruit persons under the age of 16. Suppliers/ subcontractors must not recruit persons under the age of 15 or under the age of compulsory schooling. If national legislation includes higher criteria, these should be applied.	SL will not establish trade relations with suppliers/ subcontractors who make use of forced or prison labour.	SL will not take account of personal characteristics and beliefs of applicants in recruitment decisions. This principle applies to suppliers/ subcontractors.
Phillips-van Heusen (PVH)		No explicit reference.	No explicit reference.	PVH will not establish trade relations with suppliers/subcontractors who make use of forced or prison labour.	PVH will not establish trade relations with suppliers/subcontractors who adopt discriminatory measures based on race, sex or religion.
The Gap	The Gap will not establish trade relations with suppliers/ subcontractors who violate fundamental human rights.	No explicit reference.	Refers to local regulations.	Suppliers/subcontractors must not force someone to work.	No explicit reference.
Reebok (R)	R will take account of the practices of its trade partners with regard to human rights. The respect of these rights is one of the characteristics of R.	R will seek trade partners which share its commitment to the right of employees to set up and join organizations of their own choosing. R will ensure that no employee is penalized as a result of the non-violent use of this right. R recognizes and respects the right of all employees to organize and to engage in collective bargaining.	R will not work with enterprises which make use of child labour. A "child" is defined as a person: -- under the age of 14; or -- under the age of compulsory schooling; -- all trade partners must respect national legislation defining the concept of a "child".	R will not work with enterprises which make use of forced or obligatory labour, including the forced labour of political prisoners.	R will seek partners who do not practice any discrimination in recruitment or within the framework of work based on criteria of race, colour, nationality, sex, religion, political belief or other opinions.
Nike (N)	Code of conduct: N will do everything expected of a leader to ensure the respect of human rights.	No explicit reference.	Memorandum: suppliers/subcontractors must conform to local legislation respecting child labour.	Memorandum: suppliers/subcontractors must certify that they do not use forced labour in the manufacture of their merchandise.	In its code of conduct, N advocates the account taken of the diversity of each person and of equality of opportunity. In its Memorandum of Agreement, suppliers certify that they will not engage in discriminatory practices based on the sex, race, religion, age, sexual preference or ethnic origin of their employees.
J.C. Penney (JCP)		No explicit reference.	JCP will not knowingly import goods produced by children, as defined by law.	JCP will not knowingly import goods produced with forced or prison labour.	No explicit reference.
Sears, Roebuck and Co.		No explicit reference.	No explicit reference.	No explicit reference in the Import Buying Policy and Procedures, but a separate code concerning forced labour in China. The basic principle is the prohibition of the use of forced labour. Sears also refers to United States laws on the import of goods produced by forced labour.	No explicit reference.
Wal-Mart (W-M)	W-M will seek suppliers/subcontractors who endeavour to respect basic standards concerning human rights.	No explicit reference.	W-M will not accept the use of child labour in the manufacture of goods which it sells. Suppliers/subcontractors must not recruit persons under the age of 15 or below the compulsory schooling age. If national legislation includes higher criteria, these must be applied.	W-M will not accept products from suppliers/subcontractors which make use of forced labour at any stage of the manufacturing process.	W-M will give preference to suppliers/subcontractors who do not take account of race, national origin, sex, religion, disability, sexual orientation or the political opinion of a person during recruitment.
Woolworth (W)	--	No explicit reference.	W will not accept merchandise from suppliers which is produced by child or indenture labour. The respect of this principle is a condition of payment and the supplier/subcontractor must provide a certificate of compliance.	W will not accept merchandise produced by forced or prison labour. This principle is a condition of payment (Certificate of compliance).	No explicit reference.