How closely should firms monitor suppliers' ethical standards?
Mitre faced severe criticism when their footballs were discovered to have been made by child labour in Asia. The company said they would never knowingly have bought from such suppliers. This and the news that the Government is to reverse a key aspect of Britain's trade policy (by backing the adoption of minimum job standards linked to trade agreements) has raised the question of how far back down the supply chain companies should go in ensuring fair trade practices.
Marks & Spencer, says corporate communications manager Cheryl Kuczynski, insists on high standards from all suppliers, wherever they are. Only 20% of M&S products come from abroad - but, 'where we do source products from developing countries, we send buyers and teams of fabric and garment technologists on factory trips. We don't take anything for granted.' DIY retailer B&Q has gone a step further, working with Traidcraft Exchange and a local organisation in Bombay to make sure of humane trade practices. Jan Simmonds, business adviser with Traidcraft Exchange, explains: 'We set up local organisations to help suppliers develop codes of practice, and act as consultants for buyers from the UK.'
Birmingham Chamber of Commerce's Ethical Business Club will help members source fair trade suppliers. Policy director Tony Bradley says: 'The moves to manage the supply chain means that equal opportunities policies and business ethics are pushed further down the supply chain. Companies are becoming more conscious of the need to check.'
Oxfam is most concerned about the textile industry in India, Bangladesh and the Dominican Republic, where 16-hour days, child labour and severe health problems are commonplace. 'Someone has to take responsibility. For a large company to say that it is beyond their control is not good enough,' says a spokesperson. For a large company, this seems a fair argument. But what about smaller firms with limited, and already stretched, resources. Mike Williams of Jacquet Weston Plant believes it's not reasonable to expect a small company to monitor very far down the supply chain. 'We buy high-quality components from suppliers we've known for some time. But we're not big enough to check who our suppliers are buying from.'
Arnold Laver Timber World imports woods from around the world. It buys through agents, and concurs with Williams. 'We insist on reforestation certificates, but to be honest we make no check on people who actually produce the timber.' says shipping manager Arthur Munzer,
Harish Sharma, chairman of the Sharma Group, is horrified by the level of exploitation and corruption in some countries, including India, but knows how hard it is to stop. 'It's impossible to be 100% certain, somewhere there'll be a sweatshop that the monitors will never see,' he says.
David Page, managing director of Patak's Spices, supports the Government's move towards minimum employment standards, but adds: 'We have to be very careful about imposing Western culture on others.' Instead his company concentrates on product integrity. 'We insist on good food manufacturing practices, quality assurance on the ground - our ultimate concern is the safety of our customers.'
But back at Traidcraft Exchange, Simmonds is less tolerant. Bluntly, he asks: 'If B&Q can do it, why can't everyone else?