Ethical Performance
inside intelligence for responsible business


Powerful retailers unveil a code for all seasons

February 2009

A group of multinational retailers has produced the first part of what it hopes will become a single global standard for ethical supply chain management.

The companies, including Carrefour, Hasbro, Ikea, Hewlett-Packard, Tesco and Wal-Mart, have finalized a ‘reference code’ covering areas such as freedom of association, health and safety, working hours and discrimination.

The document has been produced by the Global Social Compliance Programme (GCSP), a project started in late 2006 to formulate a single code to replace the plethora of supply chain-related standards (EP8, issue 9, p1). Other documents will follow, including on how to audit supply chain ethics and measure auditor competence.

Intended for the whole supply chain, including sub-suppliers and sub-contractors, the reference code contains best practice standards on aspects such as overtime payment, worker representation and working hours – stipulating, for instance, that suppliers must recognize trade unions and allow collective bargaining.

In addition, it contains a long list of international standards with which suppliers should comply, such as International Labour Organization conventions on equal remuneration and freedom of association.

The GSCP was formed by Comité International d’Entreprises à Succursales (CIES), a Paris-based global network of 400 companies in 151 countries. Retailing members have combined annual sales of more than $1.19trillion (£1.3tn), employ 6.4 million people and run 200,000 stores worldwide.
CIES hopes its programme will become the main ethical supply chain vehicle for businesses in all areas, not just in retailing.

Veronique Discours-Buhot, Carrefour’s sustainable development director, said that while many supply chain codes are of a high standard, their proliferation is leading to confusion among suppliers and ‘is not improving conditions for workers in global supply chains’. She said the new reference code ‘can provide a new foundation to drive convergence’.

However, some critics, in both businesses and NGOs, have claimed the project, far from simplifying the field, will just add one more code to the collection.

The programme has 23 company members and is overseen by a board of eight companies. An advisory board that includes NGOs such as the International Federation of Human Rights and the Global Union Network has been formed to ‘challenge’ the executive board ‘and to help monitor and evaluate progress’.

GCSP reference code
The code stipulates, among other things, that suppliers should:

  not retain workers’ identity documents, such as passports and identity cards
  base all terms and conditions of employment ‘on an individual’s ability to do the job, not on the basis of personal characteristics or beliefs’
  avoid excessive use of fixed-term employment contracts
  compensate workers for all overtime at a ‘premium rate’
  not allow employees to do more work than 48 hours a week regularly, excluding overtime

Global Social Compliance Programme | Global | Supply Chain Management

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