DFID helped establish the Ethical Trading Initiative (ETI) in 1998 and since that time has provided over £2 million to support its development. The overall goal of our support to ETI is to improve the lives of workers and their families through the application of internationally recognised labour standards throughout global supply chains.
DFID regularly reviews the work we support. An independent review of ETI was undertaken by Ashridge Centre for Business and Society for DFID in 2005. DFID also supported the recently published Impact Assessment commissioned by ETI, which was undertaken independently by the Institute for Development Studies at the University of Sussex.
The Impact Assessment found that ETI member companies’ codes of conduct covered at least 20,000 suppliers, of which nearly all had been informed of the need to comply with the codes, and almost half (9,000) had been assessed for code compliance. The assessment found that many workers had benefited from the implementation of the ETI Base Code. In most of the supply sites in case studies used in the assessment, there were improvements in relation to health and safety, working hours, wages and child labour. For instance, it was more common for the minimum wage to be paid and for there to be greater provision for state insurance and payments, and there was less employment of children and young workers. The assessment foundless positive impact in relation to freedom of association, discrimination, regular employment and harsh treatment.
DFID is confident that the ETI takes the Impact Assessment seriously and is acting on its recommendations. We recently agreed a five-year Partnership Programme Agreement with ETI in which we have placed specific emphasis on: the need for more poor workers to know about their rights and to be supported by civil society initiatives; increasing the number of businesses taking action to ensure labour laws and standards are implemented; increasing civil society engagement with government to improve legal protection for poor workers; increasing the number of retailers in developed and developing countries that are aware of ethical trade and its benefits; and supporting the private sector to participate with trade unions and NGOs in support of DFID’s objectives.
We believe that in its relatively short life-span the ETI has done much to establish best practice in the credible implementation, monitoring and independent verification of corporate codes of conduct and we look forward to continuing to work with them to this end.