Business, ethics and labour standards

I have no idea how "ethical" a corporation needs to be to be considered ethical; neither am aware of a trend in corporations making ethical stances and then going back on them, but I couldn't help feel a little concerned to hear that Somerfield - a large, yet relatively minor supermarket chain in the UK - has pulled out of the Ethical Trading Initiative (ETI).

The ETI is an alliance of companies, non-governmental organisations and trade union organisations, which exists to promote and improve the implementation of corporate codes of practice which cover supply chain working conditions - it's ultimate goal is to ensure that the working conditions of workers producing for the UK market meet or exceed international labour standards.

The article in question - Somerfield gives up on ethics (Nick Mathiason, The Observer) - suggests Somerfield may have made such a move because they "are more concerned about profits than about the fair treatment of workers in poor countries."

In private, "leaders of the ETI say they are frustrated at the slow progress of some retailers in addressing abuses of workers in overseas factories. The pressure on retailers to increase margins and sell, for instance, cheap clothes, is causing a 'race to the bottom' of labour standards that company bosses may be unable or unwilling to resist."

2 comments:

Chris MacDonald said...

James:

I agree that Somerfield's move warrants attention. But it seems the Observer headline was a pretty silly exaggeration, no?

For my own brief comments on this story, see my own blog entry:
http://www.businessethics.ca/blog/2006/05/what-counts-as-commitment-to-ethics.html

James said...

Now you mention it...! I agree with what you said on your own blog too. Cheers!