“The greatest benefits of globalisation have been garnered by a fortunate few. A rising tide of wealth is supposed to lift all boats, but some are more seaworthy than others. The yachts and ocean liners are rising in response to new opportunities, but many rafts and rowboats are taking on water – and some are sinking”.[i] (Human Development Report 1997)
Economies are built on resources and trade. In the latter half of the twentieth century, global trade increased seventeen fold, global production has quadrupled and average global per capita income has doubled.[ii].
This economic upsurge has largely resulted from the post-war intensification of production facilitated by advances in science and technology and also by the regulation and freeing of the global markets by the Bretton Woods institutions. The modern legacy of this growth is a world marred by great social inequity and environmental degradation. Generally, the citizens of the industrially developed ‘northern’ economies enjoy an unprecedented standard of living, increased wealth and improved health and education. Those in the developing ‘southern’ nations have fared far less well.
Wealth is concentrated in the hands of the few and many continue to see their quality of existence decline.However, within all nations there is a great, and growing division of wealth. Poverty is still a fact of life for many in even the richest of countries. Large businesses account for 51 of the worlds 100 biggest economies. The other 49 are nation states.[iii] The worlds 225 richest individuals have combined annual earnings equal to the combined earnings of the poorest 2.5 billion.[iv]
Ethical trading describes approaches within the global trading system that attempt to incorporate responsibility for social and environmental impacts into all aspects of supply chain management. It can be distinguished from Fair Trade initiatives that are limited to addressing terms of trading for small producers. However, some commentators argue that this narrowing of the debate is not helpful when companies (both mainstream and alternative trading organisations) are together addressing a range of societal and environmental issues[v]. Ethical trading initiatives seek to address living and working conditions of producers and also the adverse impacts of production methods on the environment. Demands that trans-national producers take greater responsibility for the rewards and conditions of those who contribute their labour to the global production chain have intensified over the past decade. This has largely resulted from the campaigns by various non-governmental organisations (NGO’s) that have raised awareness as to the unsatisfactory living and working conditions faced by many of the world’s poorer producers. Many companies have consequently incorporated Voluntary Codes of Conduct (VCC’s) to address these issues.
Ethical trading initiatives necessarily involve stakeholder collaboration. It is not enough for one company in the supply chain to adopt ethical practices. These practices must be incorporated into all links in the chain. Therefore the development of partnerships is central to the development of ethical trading initiatives.
[i] Human Development Report. UNDP 1997. Also see discussions in ‘Time to rethink everything’ New Scientist. No. 2340. 27 April 2002
[ii] Europa. EU world trade and the WTO. www.europa.eu.int/comm/trade/wto (2000)
[iii] [iii] Human Development Report. UNDP 1997. Also see discussions in ‘Time to rethink everything’ New Scientist. No. 2340. 27 April 2002
[iv] ID21 How civil can corporations be? Ethical business in a fairer world. www.id21.org/zinter/id21zinter.exe?a=0&i=S7csz1g1&u=3c90de8c
[v]Blowfield, M. & Jones, K. Ethical Trade and Agricultural Standards – Getting People to Talk (1999).
Trading Initiative (ETI): http://www.ethicaltrade.org/
– For the Human Right to Feed Oneself: http://www.fian.org/index.htm
Ethical Junction: http://www.ethical-junction.org/
International Federation for Alternative Trade (IFAT): http://www.ifat.org/dwr/index.html
The Ethical Consumer Magazine: http://www.ethicalconsumer.org/
The Fair Trade Foundation: http://www.fairtrade.org.uk/
Oxfam Fair Trade: http://www.oxfam.org.uk/fair_trade.html
Quick Guide to Ethical Shopping & Other Ethical Links: http://www.rhizomatics.demon.co.uk/gvn/qges.html
The Sustainable Business Network: http://sbn.netforchange.com/
Ethical Investment Link: http://www.moneyworld.co.uk/glossary/gl00239.htm
Multinational Monitor – Guide to Multinational companies: http://multinationalmonitor.org/
Gaeia – Ethical Investment Information: http://www.gaeia.co.uk/
If you are interested in this process, please contact:
Michael Burke, Fair Trade Coordinator, firstname.lastname@example.org