Companies have long been under pressure to improve poor labour practices in their global value chains. Many now have codes of labour practice aimed at improving employment conditions. But are workers really benefiting from these codes? The Institute of Development Studies has just completed the most comprehensive study of labour codes to date, commissioned by the UK’s Ethical Trading Initiative (ETI).
The ETI is an alliance of companies, trade union organisations and non-governmental organisations working together to identify and promote good practice in the implementation of codes of labour practice.
IDS was commissioned to assess the implementation of member companies’ codes and resultant impacts for workers. This two-year project made recommendations for improving impacts and developing tools for ongoing impact monitoring.
Outputs
Summary of the Impact of code implementation on workers
Codes of labour practice have had positive impacts on certain issues:
- health and safety, for example better fire safety, introduction of training on emergency procedures, and safer use of chemicals;
- working hours – reduced regular and overtime hours;
- wages, for example ensuring payment of the minimum wage and provision of state insurance and pensions;
- child labour – less employment of children and young workers.
The team observed less impact in relation to freedom of association, discrimination, regular employment and harsh treatment, where serious issues frequently remained. Workers on some sites were weary of engaging with trade unions, especially when their jobs were insecure. Although codes had led to some practical improvements for women workers (such as provision of post-natal benefits), they had done little to address basic inequalities such as unequal access to employment, promotion and training. Social auditors often fail to identify these more embedded issues.
Permanent and regular workers benefited most from codes of labour practice. A significant finding was the extent to which migrant and third party contract workers were employed across the sectors and countries. Codes of labour practice often failed to reach these workers. Many experienced poor working conditions, particularly for those employed by third party labour contractors, where significant issues remained.
Implementing codes of labour practice in complex global value chains poses significant challenges. The study found that companies are more likely to achieve positive change through working collaboratively in conjunction with trade unions and NGOs. They need to engage more actively in the south with local stakeholders, suppliers and workers. The Ethical Trading Initiative provides an important forum for collaboration and learning. Codes of labour practice have helped to raise awareness of employment laws, but are not a substitute for more effective implementation of effective labour legislation.
This study was undertaken in collaboration with local research partners in the case study countries, and coordinated by Dr Stephanie Barrientos and Sally Smith. The final report from this study is being publicly launched on Thursday 19 October in London. It provides an a wealth of findings for all those with an interest in labour codes to improve their knowledge and draw inspiration for future work on ethical trade.
Further information
The ETI code of labour practice: do workers really benefit? Full report and summary available below and on the on the Ethical Trade Initiative website
Download ‘The ETI code of labour practice: do workers really benefit?’ reports:
- Summary report [PDF 548kb]
- Main Report [PDF 1.0Mb]
- India Chapter [PDF 587kb]
- Vietnam Chapter [PDF 605b]
- South Africa Chapter[PDF 549kb]
- Costa Rica Chapter [PDF 614kb]
- UK Chapter [PDF 620kb]
- China Chapter [PDF 489kb]
These documents, together with findings and recommendations of individual country case studies are also available.
- ‘Keeping their hands clean‘ in the Financial Times (16 January 2007)
- ‘Ethical traders work overtime to help‘ in The Guardian (6 November 2006)
- Report’s launch in The Independent (19 October 2006)
