• Purpose
• Activities
• Principles
• The ETI Base Code
  • Introduction
  • The Code
  • Principles of Implementation
• Programme
• Membership
• Governance and Organisation
• Appendix A: Relevant International Standards
• Appendix B: Definitions

Purpose 

It is increasingly recognised that companies adopting codes of labour practice in respect to their global supply chains need to know for themselves and be able to demonstrate to others what they have actually achieved for their approach to be both effective and credible.

The ETI is an alliance of companies, non-governmental organisations (NGOs), and trade union organisations committed to working together to identify and promote good practice in the implementation of codes of labour practice, including the monitoring and independent verification of the observance of code provisions.

ETI members believe that this collaborative approach provides the opportunity for making significant progress in promoting the observance of internationally recognised labour standards, in particular fundamental human rights throughout global supply chains.

This document sets out the basis on which the ETI operates.

It sets out ETI's:

• purpose and activities
• collaborative approach to involving companies, trade unions and NGOs in learning how best to make ethical trading codes work
• established standards which it will use in its work
• membership criteria.

Activities

The ETI will conduct, in co-operation with member companies and their suppliers, experimental programmes to identify the most effective approaches to making codes meaningful and credible, particularly with regard to monitoring and verification. Conducting and learning from pilot schemes and disseminating the lessons learnt will be the ETI's core activities.

In addition, the ETI will draw on other relevant experience, including the work of individual companies, NGOs, trade unions, international institutions and any joint or co-operative initiatives they may undertake. The ETI will organise conferences and seminars, conduct research, issue publications and facilitate the development of training.

Although the ETI is primarily concerned with finding effective ways through which fundamental labour standards throughout global supply chains can be respected and their observance monitored, the ETI will, where appropriate, consider the broader impact of its members' activities on human rights, environmental and development issues within the wider community in which they operate.

Disputes may arise between members in relation to aspects of ethical trade principles and practice. The ETI has no direct jurisdiction over such disputes except where they concern the commitments of organisations as ETI members. However, the ETI will in addition act as facilitator of dialogue or as a mediator between members if requested by those members involved.

Principles

The ETI is based on the principle of incorporating internationally-agreed standards into codes of labour practice.

ETI member companies are committed to adopting codes based on these standards, and to moving to the demonstrable implementation of their codes. All ETI members must be committed to collaborating actively in developing means for such effective and transparent implementation, particularly in relation to monitoring and independent verification.

International Standards

Responsible behaviour is always measured against the standards of the relevant community. For international business this means recognition of the internationally agreed standards reached through the appropriate international organisations. Such standards are critical for the protection of workers, and their observance is one measure of human welfare.

International standards are also important to the overall political, social and economic environment in which international companies operate. They contribute significantly to the constitution of a stable and productive framework for business. Although most international standards concern the obligations of governments and companies are not signatories of them, the meaning and intent of these standards can serve as equally relevant benchmarks for companies and can be reflected in their codes of practice.

Responsibility for setting international labour standards is given by the international community to the International Labour Organisation which was established for this purpose. The ILO standards relevant to the work of ETI and other relevant international standards are set out in Appendix A.

The Base Code 

The ETI has developed a code of labour practice - the 'Base Code' - reflecting the most relevant international standards with respect to labour practices which will be used as the basis of its work.

ETI member companies are expected to adopt this Base Code, or to adopt their own code so long as it incorporates the Base Code. The Base Code which is accompanied by a set of general principles concerning implementation, provides a foundation for the ETI's philosophy of learning.

Member companies must require that suppliers meet agreed standards within a reasonable timeframe, and that performance in this regard is measured, transparent and, ultimately, a precondition to further business.

The observance of some provisions in the code may not be immediately realisable in all cases. Some suppliers may be unable to meet all the terms within a short time or in some cases they may be constrained by national law. Reasonable timeframes and the existence of any constraints not controllable by the supplier may be taken into account. Failures to observe certain standards require rapid corrective action for member companies to continue any business relationship with the supplier concerned. These include the use of forced, bonded or involuntary prison labour as well as physical abuse or discipline, and extreme forms of intimidation.

The purpose of the ETI is to acquire experience in the implementation of codes of labour practice. ETI members are not expected to be able to implement immediately and effectively everywhere any code covering all of their activities.

Member companies, at the time of joining ETI, may stipulate the scope of application of their code provided that this scope of application is clearly indicated in the preamble of their code and that company publicity concerning the code also indicates its scope of application. The scope of application may be certain products made or marketed by the company or to the activities of any designated part of the company. In any event, the code shall always apply to all work performed within the scope of application.

The ETI Base Code 

The provisions of this code constitute minimum and not maximum standards, and this code should not be used to prevent companies from exceeding these standards. Companies applying this code are expected to comply with national and other applicable law and, where the provisions of law and this Base Code address the same subject, to apply that provision which affords the greater protection.

Principles of Implementation

The purpose of the ETI is to identify, develop and promote good practice with respect to implementing codes of labour practice. Critical areas include monitoring and independent verification, and transparency and disclosure, to determine and communicate whether standards embodied in the code are being achieved. ETI members accept the following as general principles upon which to develop or refine their search for best practice.

Programme

Pilot schemes

The ETI will undertake pilot schemes with the co-operation and support of specific companies, and in collaboration with other ETI members. These pilot schemes may target certain products, certain suppliers or be limited to certain countries. The purpose of these pilot schemes shall be to develop understanding of how best to put codes into practice. Each member company is expected to co-operate in at least one pilot scheme which shall be developed with the ETI Secretariat.

To ensure that most is gained from this and other learning processes, the members will agree and work to a common framework for analysis and information sharing, taking particular note of issues of confidentiality, whether for workers, suppliers, or companies.

Annual reporting

Members will produce annual reports to an agreed standard for content and format and submit them to the ETI detailing their progress in the area of ethical trade, particularly their activities related to their commitments as ETI members. This will serve the purposes of: ·

• providing a review of progress for each member and for the membership as a whole ·
• reinforce members' commitment to transparency and public accountability in this area ·
• provide a basis for the ETI to assess continuing membership eligibility ·
• promote good practices for members and non-members.

The ETI will publish an Annual Report that summarises progress, drawing on the experience of its members, as well as covering developments in related aspects of ethical trade.

Other Activities

ETI can also contribute to good practice by collecting and analysing other experience as a complement to its own pilot schemes and other research. This will come from members, which are themselves often engaged in other activities relevant to ETI's mission, and also through the ETI's international networks.

Endorsement and Evaluation

The ETI will not publicly or otherwise endorse any product or company, or any member or non-member organisation. Members will comply with agreements made through the ETI covering the basis on which endorsements of companies and products covering elements of the Base Code can be made. Members will be able to refer to their ETI membership in an agreed manner.

Membership

The ETI has three categories of members - companies, NGOs, and trade unions organisations. Membership will be on an annual basis.

Any membership application submitted by an authorised representative of the organisation should:

• indicate acceptance of the ETI's purpose and principles, including the Base Code and the commitment to monitoring and independent verification
• indicate the willingness of the organisation to participate in pilot schemes and other ETI activities
• stipulate the scope of application of their code of labour practice
• provide a brief report on its current commitment to ethical trading.

Membership applications will be considered by the Board at its quarterly meeting. The Board will make a decision based on the written confirmation by applying organisations of their willingness to comply with the conditions of membership, as set out in this document. Renewal of membership will be based on members' continued practical commitment as demonstrated in their annual progress reports.

Companies

Membership in ETI shall be open to companies accepting the purpose and principles stated herein and which are prepared to participate actively in ETI activities including pilot schemes. ETI membership is considered especially appropriate for companies operating in sectors which manufacture, market or distribute consumer products.

Trade Union Organisations

Trade union membership of ETI shall consist of the Trades Union Congress, the International Confederation of Free Trade Unions and those international trade union organisations representing trade unions organised by industry or sector referred to as International Trade Secretariats that choose to join the ETI.

These organisations shall be responsible for securing trade union co-operation and participation in ETI activities and may establish consultative bodies for this purpose. Trade union members will be expected to participate in the design and implementation of pilot and other ETI activities.

Non-Governmental Organisations

Membership in ETI shall be open to NGOs accepting the purpose and principles stated herein and which are prepared to participate actively in ETI activities including pilot schemes. The Monitoring and Verification Working Group (MVWG) will be the channel through which ETI member NGOs nominate, inform, and mandate the ETI NGO Board representatives.

The MVWG remains open to those wishing to play an engaged and active role in the process. Members will be expected to participate in the activities of the ETI, both directly and by facilitating dialogue and engagement with NGOs elsewhere. NGO members will be expected to participate in the design and implementation of pilot and other ETI activities.

Governance and Organisation

Governance

The ETI is constituted as a distinct, not-for-profit, legal entity. Its Governing Board is made up of equal representation from the three main categories of members, companies, trade union organisations, and NGOs. The Board shall be trilateral in that the Board members from each of the three categories shall be determined only by the membership of their respective categories and not at large.

The ETI is a civil, that is private, and not a public initiative. However, in recognition of its supportive role, the UK Government will be accorded observer status at Board meetings. The Board may also co-opt experts or other individuals for specific purposes provided they do not have voting rights. The ETI may establish, consistent with its rules, consultative bodies and appoint individuals to serve on these bodies.

Secretariat

The Secretariat co-ordinates all of the ETI's activities and is responsible for the servicing of the Governing Board and of any Task Groups that might be established by the Board. The secretariat is also responsible, subject to approval by the Board, for the organisation of pilot schemes, the commissioning of research, the organisation of seminars, conferences and other events, the publishing of reports and other documents, and any other activities as may be determined by the Board.

Appendix A: Relevant International Standards

With respect to human rights the most comprehensive standard is the United Nations Universal Declaration of Human Rights. The most comprehensive and universally applicable standard directly addressing the responsibilities of business operating internationally is the International Labour Organisation's Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy.

Another comprehensive standard addressing the responsibilities of business operating internationally, and one that is applicable to all businesses operating internationally in or from the United Kingdom, is the Guidelines for Multinational Enterprises developed by the Organisation for Economic Co-operation and Development (OECD). Another relevant standard ratified by almost every member state in the United Nations is the United Nations Convention on the Rights of the Child.

Responsibility for setting international labour standards is given by the international community to the International Labour Organisation (ILO) which was established for this purpose. The tripartite structure of the ILO, involving both employers' and workers' representatives as well as governments, together with the technical expertise of this organisation in all matters relating to the world of work, make the ILO the authoritative and legitimate source of international labour standards.

ILO standards are set in Conventions, having the force of international law and binding for states that have ratified them and in Recommendations which provide additional guidance to governments. ILO member states must provide regular reports on the application of ratified Conventions to the ILO. The findings of ILO supervisory bodies form ILO jurisprudence.

With the adoption in June 1998 of the ILO Declaration on Fundamental Principles and Rights at Work all 174 ILO member states have an obligation, regardless of ratification, to respect, promote and realise the principles contained in the core ILO Conventions.

These core Conventions and their accompanying Recommendations comprise:

• ILO Conventions 29 and 105 & Recommendation 35 (Forced and Bonded Labour)
• ILO Convention 87 (Freedom of Association)
• ILO Convention 98 (Right to Organise and Collective Bargaining)
• ILO Conventions 100 and 111 & Recommendations 90 and 111 (Equal Remuneration for male and female workers for work of equal value; Discrimination in employment and occupation)
• ILO Convention 138 & Recommendation 146 (Minimum Age).

Although not core ILO conventions, other ILO standards especially relevant to the work of ETI include:

• ILO Convention 135 & Recommendation 143 (Workers' Representatives Convention)
• ILO Convention 155 & Recommendation 164 (Occupational Safety & Health)
• ILO Convention 159 & Recommendation 168 (Vocation Rehabilitation & Employment/Disabled Persons)
• ILO Convention 177 & Recommendation 184 (Home Work).

Appendix B: Definitions

Child: Any person less than 15 years of age unless local minimum age law stipulates a higher age for work or mandatory schooling, in which case the higher age shall apply. If however, local minimum age law is set at 14 years of age in accordance with developing country exceptions under ILO Convention No. 138, the lower will apply.

Young Person: Any worker over the age of a child as defined above and under the age of 18.

Child Labour: Any work by a child or young person younger than the age(s) specified in the above definitions, which does not comply with the provisions of the relevant ILO standards, and any work that is likely to be hazardous or to interfere with the child's or young person's education, or to be harmful to the child's or young person's health or physical, mental, spiritual, moral or social development.