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The audit-dominated era of ethical supply chain management has been
declared dead by one of the most influential bodies in the field.
The Ethical Trading Initiative, a 17-year old alliance of dozens of multinationals, trade unions and non-governmental organizations, claims it has delivered the last rites to the current vogue for reliance on auditing, and that its 38 corporate members have agreed a 'new agenda' that will radically shift their focus.
The ETI, most of whose corporate members are retailers, argues that all parties have been guilty of 'an over-emphasis on auditing' their supply chains, which has led to an 'overly top-down' approach. Now its members will be placing much more emphasis on working in collaboration with suppliers and workers, as opposed to simply auditing their behaviour.
Michael Kobori, vice president responsible for the global code of conduct at Levi Strauss, an ETI member, expects the balance to shift dramatically away from auditing and towards improving working conditions. 'As an industry, we have spent 80 per cent of our resources on monitoring and 20 per cent on actually changing working conditions. This needs to be reversed,' he said.
ETI says that as a result companies are now likely to :
spend more time working with suppliers on corrective plans
encourage workers at factories to become involved and make them more aware of their rights
ensure suppliers include worker representatives in management structures
train buyers on ethical matters.
Companies are also likely to bring social and environmental considerations to bear on logistics and production processes. Nike is attempting to do this using a 'balanced scorecard' approach to ordering that puts environmental and social considerations on a par with price, quality and delivery.
ETI, which counts Gap, Fyffes, Christian Aid, Oxfam, Tesco, WH Smith and Spanish fashion retailer Inditex among its members, warns companies to be 'careful not to jettison supply chain auditing simply because of its limitations', as it has led to 'real improvement' and has raised suppliers' awareness of workers rights.
But it says companies needed 'to get smarter at auditing', seeking workers' views directly and making audits 'about learning and not just policing'.
ETI concedes 'not everyone has bought into this new agenda' but says there was 'violent agreement' on it at its biennial conference this year. It is to offer training sessions to assist companies making the change.
The Ethical Trading Initiative, a 17-year old alliance of dozens of multinationals, trade unions and non-governmental organizations, claims it has delivered the last rites to the current vogue for reliance on auditing, and that its 38 corporate members have agreed a 'new agenda' that will radically shift their focus.
The ETI, most of whose corporate members are retailers, argues that all parties have been guilty of 'an over-emphasis on auditing' their supply chains, which has led to an 'overly top-down' approach. Now its members will be placing much more emphasis on working in collaboration with suppliers and workers, as opposed to simply auditing their behaviour.
Michael Kobori, vice president responsible for the global code of conduct at Levi Strauss, an ETI member, expects the balance to shift dramatically away from auditing and towards improving working conditions. 'As an industry, we have spent 80 per cent of our resources on monitoring and 20 per cent on actually changing working conditions. This needs to be reversed,' he said.
ETI says that as a result companies are now likely to :
spend more time working with suppliers on corrective plans encourage workers at factories to become involved and make them more aware of their rights ensure suppliers include worker representatives in management structures train buyers on ethical matters.Companies are also likely to bring social and environmental considerations to bear on logistics and production processes. Nike is attempting to do this using a 'balanced scorecard' approach to ordering that puts environmental and social considerations on a par with price, quality and delivery.
ETI, which counts Gap, Fyffes, Christian Aid, Oxfam, Tesco, WH Smith and Spanish fashion retailer Inditex among its members, warns companies to be 'careful not to jettison supply chain auditing simply because of its limitations', as it has led to 'real improvement' and has raised suppliers' awareness of workers rights.
But it says companies needed 'to get smarter at auditing', seeking workers' views directly and making audits 'about learning and not just policing'.
ETI concedes 'not everyone has bought into this new agenda' but says there was 'violent agreement' on it at its biennial conference this year. It is to offer training sessions to assist companies making the change.
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