CAMPAINING FOR CODES OF CONDUCT

Alister Smith, Banana Link

Let us start with the definition: a corporate or a business code of conduct is a statement about the ethical standards that a company claims to follow. Clauses about working conditions might be part of broader statements covering areas such as responsibility for the environment. These codes are voluntary and the most cases drawn up by the company itself (so we need to be very clear about where they come from). Clearly it is important that such individual company codes are measured against some commonly accepted criteria. Organisations concerned with workers rights have campaigned for decades for the establishment of an agreed of an international code for multinational companies. The UN developed proposals in 1980, but these where finally dropped after 12 years of unsuccessful negotiations. The International Labour Organisation (ILO) has had a declaration on the principles of multinational enterprises and social policy since 1977. But it has no way of commenting on or sanctioning particular companies. Model codes of conduct are being now drawn up by the International Trade Union movements and by NGO’s as part of current campaigns. The ICFTU Working Party and multinational companies met in Washington in July 1997 and agreed the basis for a code of labour practice for all industries. And that was published in December, I have a copy here, it is called ”The ICFTU basic code of labour practice”. Meanwhile a number of codes have been developed in North America and in Europe, some of which are specific to particular sectors. Although these model codes have different origins, they cover the same basic principles, which are based on key ILO conventions.

I want to make a distinction: two different types of codes of conduct are emerging, and particularly in the textile garment sector. I would like to tell you about a new development in the banana sector. And the two different types of codes can be defined in this way: there is a type which is between production companies and workers or workers organisations. And there is a second type which is between retail companies, essentially supermarkets, and their suppliers. Of course, the suppliers of these people are these people here.

So, there are two different types of codes of conduct and may be the strategy for both types needs to be differentiated.

Why company codes of conduct?

Many companies producing consumer goods for the world market of now adopted codes of conduct on labour standards. This is mainly in response to growing public awareness (citizens and consumers awareness) in North America and in Europe. Public concern has increased as the media has reported stories about representative companies selling goods made by exploited workers. One of the first was in 1992, when a public scandal followed a report in the Washington Post about the production of Levi’s jeans by a Chinese prison labours in the island of Saipan. The company, Levi Strauss, reacted immediately by drawing up a code on labour standards for all its overseas suppliers. Through adopting such a code, companies hope to be able to maintain a positive image. The company codes of conduct need to be considered as a strategy and one only among a number, so that it would be part of the action for strengthening workers rights in a global economy. I think that as part of a short term strategy they are valuable because they apply to all workers making products for a particular company. Those codes operate across national and regional boundaries. As clear statements of company policy, they have the potential to add strength to workers demands for improvements in their working conditions. However, many people have doubts about the value of existing codes. Some see this as nothing more than public relations exercises as they fear that they might undermine processes of collective bargaining.

Campaigners who are promoting the adoption of codes need to be sure that it is workers rather than companies it will benefit most. This requires the development of stronger international alliances between worker and consumer organisations.

So, this is one of the numerous strategies towards a sustainable banana economy.

What are the strategies?

Social and environmental clauses has been discussed. The Latin American Trade Unions have a very clear proposal on the contents of such clauses. Standards in labelling has been discussed in the last session. It is supposed this activity involves necessarily governments and international institutions; the second activity generally takes place in the private sector between public interest organisations and private companies and consumers. And it can happen without governments. In my opinion governments might have an important role to play; the EU plays of course a very important role in setting standards for labelling but it can happen without as a first step to kick-off a process of improvement. History has shown that involving governments has been impossible in the practice; may be at the latest stages.

Collective labour agreements: Collective labour agreements takes place between organised workers and employees, private companies.

An area we haven’t talk about much: but what about, in the food-hotel sector, the International Union of Food Workers has global labour agreements with two major transnational companies; why not in the banana sector? Why not imagining global labour agreements as a strategy?

Other strategies we have heard about this morning is for example alternative trade; we haven’t heard anything about an international commodity agreement. They are not very fashionable, this is probably why.

However there are functioning agreements. The rubber agreement is relatively successful: an agreement between producing countries and consuming countries at an international level, governmental level, to control and regulate the market, so that the market is more predictable and stable. Why not imagining that out of the current chaos, in a few years we could come up with the first multilateral banana agreement, which includes the social and economic justice issues and ecological issues that we all want.

I think that given the conflict about what is sustainable and what isn’t, we could use some defined criteria, and actually start looking at current productions and see how sustainable is it, what improvements can be made, over what time of period analysing country by country.

And of course relative to all this is the next question: how do you monitor independently for the satisfaction of the agreements and how do you verify that something that has been signed is being implemented? This is the hardest question. And it is the actual debate in Great Britain.

So, what the codes of conduct say? They can be very different. Some as the ones from the Gap and Levi Strauss, both in the garment sector, are detailed and comprehensive, while they establish very basic principles. However the requirements are very similar: all demand compliance with local and national laws. Beyond these standards they are often vaguely defined; specific reference is not made to ILO conventions although these form the basis of many of the provisions. Most include health and safety requirements and prohibit the use of force and child labour. Some of them also require the absence of discrimination. The provisions in company codes do not on the whole match much with those in trade unions and NGO’s model codes. Model codes are more clearly related to ILO conventions and include conventions on the freedom of association and the right to collective bargaining. For the trade union movements in particular, these are key clauses though they are rarely required in company codes. The Levi’s, Gap, and Reebok codes are notable exceptions. Model codes also require the establishment of a proper employment relationship. So void the use of contract labour in apprenticeship for example, an issue that is not addressed in company codes. Model codes also include clauses about implementation and monitoring. When suppliers are found not to comply with the codes some form of positive engagement is required rather than an immediate termination of the contract, with job losses as a consequence. You can find all this in your paper.

The campaign which was launched with this publication called ”The global supermarket” by one of the largest NGO’s, Christian Aid, came out in Great Britain in late October 1996 and the target was to achieve codes of conduct on labour standards (they didn’t mention environmental standards at this stage). They wanted to get the supermarkets of Great Britain, who have an extreme power -more than anywhere else in Europe-, to sign a labour code of conduct with their suppliers, which of course include banana companies among many others. I don’t propose to read through that but for the sake of translation I’ll go through some of the key points:

The first point mentions conventions 97 and 98 of the ILO, the core convention without which workers have no chance of improving their conditions in historical experience: Right of association and collective bargaining.

Equality of treatment.

Wages, a very tricky issue, which depends on the standard of living of the different countries …So, here it says:

”Pay should be in cash, direct to the workers, promptly and in full. Information relating to wages should be available to workers in an understandable form. Wages should exceed industry averages or legal minima and be at least sufficient for basic needs”.

Now, the problem is when you take a country like Nicaragua, for example, where banana workers are paid above the legal minimum wage, but the legal minimum wage is the equal to approximately half the basic family food needs.

Then we have working hours, health and safety, security of employment and there is a reference to environment:

”Suppliers should minimise water consumption, avoid contamination of the local environment, decrease chemical use and abide by the FAO code of conduct on pesticides”, (this is a different type of code of conduct, it is a rear example of an international institution code of conduct and which is virtually not respected by anybody anywhere, but it exists).

Implementation, the last point in this text:

”This code of practice should be monitored by an independent body trusted by all parties -difficult, but we need to work on it-. Worker representatives should be involved in the development of standards appropriate to the local situation and in the verification process. It should be translated into local languages and prominently displayed in the place for work” - there is no point in thinking of an industry in India having a code of conduct nicely post on the wall in English.

This code was developed in consultation with the Fairtrade Foundation, the International Union of Food and Agricultural Workers and Christian Aid partner organisations across the world.

The campaign:

The campaign started in October; it had a huge media impact, almost every newspaper in October the 28th, 1996, covered the story, because this document contains lots of concrete examples of abuses of workers rights, in the Peruvian asparagus industry, in Brazil etc. and it gave very specific testimonial evidence of where basic human and workers rights were being violated -products which were in the British supermarkets.

Also in the same day a consumers campaign started: up to two thousands post cards with basic demands were sent to supermarkets. And very quickly supermarkets reacted, a number of them very positively; they started to engage in negotiations. The results after one year were reflected in the publication by Christian Aid -”Change of the checkout?”. These reports are available from Christian Aid in London. Thus, there was some progress.

I would like to finish by telling you what happened in the banana sector. So, bananas are one of the 6.000 products coming into the British supermarkets. The Banana Group is a group of companies who after 10 years have form an association to advertise bananas generically, in other words to increase the consumption of bananas. It gathers all the major companies, except for the companies of the Windward Islands working in the British market, which is the same company as Chiquita, Dole, Del Monte and one or two other major importers. So their thinking was, before the supermarkets as a result of this huge campaign come to us, we need to seat down as banana companies and work out our own code of conduct. So the supermarkets who are actually more powerful than the banana companies -the top ten supermarkets in Britain have the same annual turnover as the 35 poorest countries in the world, and the probably have much more influence over production systems. Anyway, these companies sat down over a period of 12 months in response to this campaign on labour issues, but also in response to other campaigns going on in Britain (with SITRAB, for example), and they realised that they could not only address labour issues, they had to address other issues like environment in their code of conduct. And they had written a code of conduct which is for the whole banana sector at an international level, something potentially very important. We haven’t seen this document yet, because the supermarkets decided to read it and sign it as well, but they wanted to make some changes. They are still making changes, so we hope to see it before the International Conference. It is not a hundred per cent wonderful but it address all the issues we have been campaigning about for the last few years.

I just want to finish by asking the question about monitoring. Can codes of conduct be properly monitored?

It is not enough for the companies themselves to claim that their codes are being implemented. Campaigning organisations now demand that these are verified and monitored by ever independent and appropriately trained bodies. Some companies are now hiring management and accounting firms to undertake monitoring, claiming that they are independent. However, campaigners insist that monitoring processes involve trade unions and NGO’s, which are in a position to represent workers interests. The Gap is frequently referred to as the first company to accept such independent monitoring. This followed highly publicised criticism of conditions of one of their suppliers demanding factories in El Salvador. After a period of negotiation, the Gap agreed not only to employ officers but to use an external monitoring team involving Salvadorian human rights groups. However, the Gap has 1000 contractors in 50 countries, and the factory in El Salvador is the only one to date which has been opened to independent monitoring. One of the problems with independent monitoring is that since these codes are a new development there are no existing frameworks or procedures. There is also the question of who will pay for what would be a fairly expensive exercise. Campaigners claim that companies themselves must pay the major costs. They maintain that the exercise is in companies interests, because without independent monitoring their codes lack credibility. In Britain, a group of NGO’s and trade unions have developed a joint project called the ”Ethical Trading Initiative”, which have set up a board with 3 member from the trade unions sector including the ICFTU, 3 NGO’s members and 3 companies -not including banana companies. And there has been a large support from the International Development Ministry in Britain for that initiative to get off the ground. One of the key objectives is to develop the first government backed independent monitoring and verification process -not with government participation, as I understand it. This is a very new initiative.

So, let us keep it in mind. I think that the development of codes of conduct is a very important step to us, in our way towards sustainable banana economy. Companies have taken it sufficiently seriously to have many meetings during the last year to come out with a code of conduct which attempts to respond to our criticism. I think we have to well come that -obviously, we have to want to see that piece of paper-, and we look forward to the first discussion that we hope will be several weeks before the Conference, so that we will have a chance to analyse the document.

So, let’s keep it in perspective, this is a good strategy in the short term, but there is no substitute for a diversity of strategies such as this package here, which is not an exclusive one.

Thank you very much!