Four ethical trade issues forcing their way onto the 2016 public agenda

From UK based companies’ first reports on modern slavery and addressing forced labour in sectors such as Thai fishing and seafood processing, to making progress towards paying a living wage and ensuring that migrants – including Syrian refugees – can work legally, here’s what we predict will be some of the major ethical trade stories of 2016. 

ETI's new Base Code Guidance: Modern slavery - practical guidance for brands and retailers.

Legal jobs and protection for migrant workers, including refugees

Migration has always been a feature of labour markets. Now – as Syria dominates headlines with over four million of its citizens fleeing conflict – migrant working is re-emerging as a crisis.  

From fishing to construction we see appalling treatment across many sectors.

Conditions in Turkey are a particular concern for brands purchasing ready-made garments for European high streets. Turkey hosts half of all Syrian refugees and although it has just tabled legislation allowing access to work permits, it has been illegal for many refugees to work.

Desperate to escape destitution, Syrian and other migrants seek work in the informal sector for poverty wages.

Turkish garment suppliers often subcontract to the informal economy. Yet, according to Martin Buttle, ETI’s apparel and textiles lead, this has always been “problematic” with sweatshops beset by poor labour standards, unregulated working arrangements and inadequate union representation.

Our members’ solution is to take a common approach with their suppliers – recognising that refugees and other migrant workers are employed within the industry but emphasising a process that will regularise employment and reduce exploitation.

With no end to the Syria crisis in sight, or even of other migrant crises including Rohingya refugees working in the Thai fishing industry, or North African and East European workers picking salad vegetables in Spain and Italy, this is a story that will run and run.

At least until migrant workers gain access to valid work permits, full legal protection and fair and equal treatment in the workplace.

The importance of a living wage

Earning a decent wage is one of the best routes out of poverty.

The introduction of a compulsory UK ‘national living wage’ of £7.20 per hour from April 2016 has been widely lauded. Even if it is based on median earnings rather than the cost of living as recommended by the Living Wage Foundation.

Globally too we are seeing increasing calls for progress towards living wages. Most recently in Cambodia and Myanmar. But this is equally relevant in South Africa, India, Bangladesh, Costa Rica and beyond.

We predict that the demand from workers to be able to earn enough to meet their needs from their employment can only continue and where they are not represented by effective trade unions, this can often result in unrest.

In line with the UN Guiding Principles on Business and Human Rights, it is the responsibility of multinationals to respect the rights of workers to negotiate their wages. And to factor this into their purchasing practices to make it economically viable for local suppliers to pay a living wage.

However, what is crucial to note, is that progress towards a living wage in one market only, can easily lead to an exodus if this is not matched by similar progress in other markets for the same products.

Trafficking and bonded labour, component parts of modern slavery

With at least 30 million trafficked into bonded labour worldwide, the U.S. State Department estimates people trafficking is the world’s second largest criminal enterprise. After drugs.

Recent investigations into bonded labour in the Thai seafood industry uncovered a catalogue of abuses against Rohingya refugees from Myanmar as well as other migrant workers, which were reported worldwide.

Nick Kightley, ETI’s food and farming lead believes in working with progressive thinkers within local suppliers and in the importance of brand pressure from sourcing retailers. “Both sets of influencers can have an impact,” he says. He believes progress is being made but warns there is an ultimate threat. European Union blacklisting.

EU inspectors are revisiting the industry to see if improvements have been made. If not, there is a real possibility that Thailand will be prohibited from exporting seafood into Europe.

What will be the economic and reputational risks for Thailand if that happens? And in what country and sector will the next trafficking revelation occur?

Reporting under the UK’s Modern Slavery Act

In the UK, the ethical issue discussed in many boardrooms is the new Modern Slavery Act.

Companies with a presence in the UK and an annual turnover of more than £36M must produce a slavery and human trafficking statement each financial year. And report on remediation efforts.

Interest could well peak at the start of the new financial year when the Act comes into force and the first reports start to come in.

“This is a good thing,” says ETI’s Head of Knowledge and Learning, Cindy Berman.

Cindy points out that a recent ETI survey found 71 per cent of companies suspect the presence of modern slavery in their supply chains.

She believes the Act has the potential to be “game changing” for both workers and companies.

“For the first time all large companies, and not just those that have typically been leaders, will legally have to consider the human rights of the workers who produce the goods they sell.”

Companies will not only have to report on their immediate suppliers but on manufacturers in the lower levels of their supply chains and Cindy advises this will require more than just a reliance on audits, which have proven inadequate at identifying hidden practices.

Other ethical trade stories in the spotlight

Of course, other ethical trade stories will be spotlighted in the coming months.

The world’s new Global Goals on Sustainable Development include business and labour standards but so far have largely passed business by. Acknowledging the rights of women workers is crucial too. Women make up a huge proportion of the workforce in many sectors but are too often discriminated against – despite being a key campaign focus for many organisations.

But what else?

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