Corporate Codes of Conduct & Labour Standards in Global Sourcing: Incomes Data Services and Cardiff Business School - IDS Documents Series, 1998
Posted: 9 Apr 2014
Date Written: 1998
Ethics and social accountability have acquired a growing and immediate significance for many managers in recent years. This has often been the result of unfavourable media exposure of breaches of generally accepted employment standards in both domestic and foreign operations and the response to this of increasingly sensitised consumers. High profile brands have been ensnared in public controversy and obliged to take emergency remedial action in the glare of publicity. In the UK, shareholders meetings have offered telling opportunities for non-governmental organisations to air their concerns about companies' ethical conduct.
The underlying forces which have shaped this new agenda are unlikely to go away, and could grow stronger: a new recession in the industrialised world, worsening social conditions in Asia following the 'Asian crisis', and new sourcing opportunities in Eastern Europe and Turkey could all fan fears and raise concern about deteriorating standards - fears which could be transformed into pressures on companies to produce remedies as a result of consumer concern and lobbying by non-governmental organisations.
Political efforts to address these issues have been limited - and the prospects for national or global mandatory provisions are uncertain. Although the International Labour Organisation (ILO) has stepped up its campaigning on child labour, the likelihood that binding social clauses will find a place in the World Trade Organisation is low. Nonetheless, government - especially in the U.S. and UK - broadly supports an 'ethical trading' agenda, albeit with differing emphases. In the UK, official support for the newly-formed Ethical Trading Initiative may nourish an atmosphere of expectation which companies wanting to pursue best practice will respond to. The absence of a strong global framework combined with a higher profile for ethical sourcing raises the pressures on companies to take action themselves.
Remedying such problems cannot be dealt with simply by adding a few clauses to an existing ethical statement. The complex and international character of many supply-chains calls for an investment in understanding a series of complex legal, cultural, policy and political questions - and making a top management commitment to support and promote change if needed. Many companies in the U.S., and a growing number in the UK and Europe, have been responding to this new environment by: understanding and actively intervening in their supply-chains, appointing specialist staff to set up and monitor codes of conduct or explore broader social accountability standards, or deploying existing staff to take on this role, engaging with NGOs and other organisations to address the issues and initiate remedial action.
Not only are the issues complex, but the policy debate and the numerous initiatives are also sometimes less than transparent. The debate is also fast-moving. How should these issues be tackled - and what competences must companies develop to address them?
This study sets out to: offer an overview of the main issues involved, explore the remedial options on offer - political, sectoral and corporate, look at the capacities and competences companies need to develop, set out some of the main organisations and institutions involved, with contact names and addresses, provide examples of the main documentation involved for easy reference (ILO Conventions, Corporate Codes of Practice, European Union GSP, NAFTA Labour Agreement etc.).
Keywords: corporate codes of conduct, labour standards, global sourcing, supply chains
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