Over 1,000 supplier agencies, factories and farms around the world have responded to a survey inviting them to speak out and help their customers improve their purchasing practices. We hope that many more will join them, writes Sabita Banerji at the Ethical Trading Initative.
Do the purchasing or procurement practices of buying companies – or their sourcing strategies – have a significant impact on the ability of suppliers to provide decent wages and working conditions for their workers?
There has never been a survey on this scale to interrogate this question. Until now.
And the questions the survey is trying to anwer are varied. For example:
What strategies do suppliers use to meet late orders or changes in technical specifications? Do they request or demand additional overtime? Do they outsource? Do they bring in temporary workers? Does this vary from country to country? From sector to sector? What impact does it have on their own budgets? How common are these strategies? And do they vary from sector to sector and from country to country?
Conducted by the ILO and the ETIs of Denmark, Norway and the UK – with support from SEDEX – the survey's insights will be used to develop a new guide to purchasing practices and sourcing strategies, updating ETI Norway’s popular ‘Suppliers Speak Up’. The ILO will also publish a research report.
Over the past few years, there has been growing concern among consumers about the working conditions of those who produce their purchases.
There have also been major new international standards to protect people affected by global supply chains including the United National Guiding Principles on Business and Human Rights. These have been accompanied by new legislation protecting workers, like the UK’s recent Modern Slavery Act 2015.
As a result, many companies now require their suppliers to sign up to codes of conduct that cover ethical as well as environmental and quality issues.
But buyers are still under pressure to find the best deal. If this pressure is passed on to suppliers, how does this impact on their ability to comply with codes of conduct?
Perhaps the most important question we hope to answer is, 'what can brands do to ensure that their own purchasing practices and sourcing strategies help rather than hinder their suppliers’ ability to meet their ethical codes of conduct?'
Phase II of the study will be a series of interviews with people along the length of supply chains – including, where possible CFOs, buyers, technicians, agents, factory owners, supervisors, worker representatives and workers.
These interviews will probe the key findings of the on-line survey more deeply.
Never before have so many suppliers been asked to explain exactly what happens as a result of the decisions of their customers. Over 1,000 have responded so far.
We hope that many more will do so, so that we can get as broad and accurate a picture as possible.
We are not the only ones to be focusing on this important issue. For example, earlier this month, a smaller group of suppliers began to beta test a new online system called ‘Better Buying’ for rating the purchasing practices of their buying companies.
These will be published online and will help companies to identify where they need to strengthen their purchasing practices.
This differs from our survey in a number of ways: the Better Buying initiative is on-going and brands will be named, whereas the ILO-joint ETI initiative is a one-off study of a substantially larger sample size, looking for general patterns and trends.
We believe the two – as well as other purchasing practices initiatives – can complement each other to help buyers and their suppliers find a better balance between good prices and decent working conditions.
For brands and retailers, the message is that while there is now increasing scrutiny of their purchasing practices and sourcing strategies, there will also be more and better support for improving them.