Prospect of ethical purchasing in Asia - Prasad Modaak

Prospect of Ethical Purchasing in Asia

Prasad Modak

Chairman, GPNI

Image source - https://www.zoobarcelona.cat/en/know-the-zoo/where-the-animals-live/asia/

What is Ethical Purchasing?

Ethical purchasing promotes good labour and environmental standards in supply chains

Image source - http://threadfair.wordpress.com/category/sweatshop-free/

‘The assumption of responsibility of a company for the labour and human rights practices in its supply chain’.

Source - http://www.ethicaltrade.org/

Ethical Trading Initiative Base Code

o Employment is freely chosen

o Freedom of association and the right to collective bargaining are respected

o Working conditions are safe and hygienic

o Child labour shall not be used

Image source - http://theaidworker.com/?p=110

Image source - http://www.theguardian.com/society/2008/dec/08/nhs-instruments-child-labour

Ethical Trading Initiative Base Code

o Regular employment is provided

o No harsh or inhumane treatment is allowed

o Living wages are paid

o Working hours are not excessive

o No discrimination is practised

Source - http://rhodiesworld.com/5-ways-to-live-and-not-merely-exist/

FAIRTRADE Certification

o A product certification system that allows people to identify products that meet agreed environmental, labour, and developmental standards.

o Overseen by a standard-setting body, Fairtrade International (FLO), and a certification body, FLO-CERT.

FAIRTRADE Standards

Source - http://www.fairtrade.net/standards.html

Products Certified by FAIRTRADE Source - http://www.fairtrade.net/products.html

Relevance of Ethical Purchasing in Asia

Source: http://www.cbc.ca/news2/interactives/timeline-bangladesh/

Children employed in a workshop manufacturing surgical instruments for export. Sialkot, Pakistan. © International Labour Organization/ Crozet M.

Worker and Fire Safety

Low Wages

Child Labour

Prospects of Ethical Purchasing in Asia

Members of Ethical Trading Initiative

Brands purchased in Asian Countries

Source - http://www.thebodyshop.in/

Vodafone Code of Ethical Purchasing

o Designed to promote safe and fair working conditions and the responsible management of environmental and social issues in Vodafone’s supply chain.

Image Source - https://www.vodafone.com.mt/supplychain

Application of the Code

o Suppliers are asked to confirm (in writing) that they are implementing the Code, or similar purchasing standard such as:

– Electronics Industry Code of Conduct (EICC)

– Ethical Trading Initiative (ETI) Base Code

– Social Accountability International’s SA 8000

– Chartered Institute of Purchasing and Supply Ethical Business Practices in Purchasing and Supply

Code of Ethical Purchasing

1. Child Labour

2. Forced Labour 3. Health & Safety & Wellbeing

4. Freedom of Association 5. Discrimination

6. Disciplinary Practices

8. Payment

7. Working Hours

10. Environment

9. Individual Conduct

Arcadia Ethical Sourcing

o Arcadia group - UK's largest fashion retailer

o Do not own or operate factories and have a network of international suppliers

o Goods sourcing - top five countries are China, Turkey, Romania, Mauritius and India

Source - https://www.arcadiagroup.co.uk/fashionfootprint/our-products/Ethical%20Trading


o Ethical trading:

– Ethical Audit Programme – Country Risk Assessments – RAGS - the Responsible and Accountable Garment

Sector Project – Joint Turkey Project – Strategic Labour Priorities – Code of Conduct Guidebook – Management Systems – Sumangali – Prohibited Activities



o Code of Conduct applies to the supplier, manufacturer or any other person involved in supplying goods to the companies

o Code based on International Labour Organisation (ILO) conventions and recommendations

o Code of Conduct Guidebook extends practical guidance to suppliers and factories on how to improve labour standards based on their Code


Arcadia Code of Conduct

o Employment is freely chosen

o Freedom of association and the right to collective bargaining are respected

o Working conditions are safe and hygienic

o Child labour shall not be used

o Living wages are paid

o Working hours are not excessive

o No discrimination is practiced

o Regular employment is provided

o No harsh or inhumane treatment is allowed


Deepa grows cotton on a Fairtrade certified farm in Gujarat, India. Sourcing Fairtrade cotton healthcare textiles is one way of demonstrating sustainability and can improve the lives of small-scale cotton farmers.

© Simon Rawles

India Agrocel Pure & Fair Cotton Growers’ Association formed in

2005 with the guidance of the Agri-Service Division of Agrocel Industries Ltd

Aims to improve the livelihoods of

small-scale and marginalised Indian farmers by enabling them to

participate in organic and Fairtrade production and by

marketing with added value their production of cotton, rice, nuts and other crops

Project in 5 States - Gujarat,

Tamil Nadu, Andhra Pradesh, Orissa, and Karnataka

LI & FUNG LTD

Hong Kong-headquartered multinational group

Source - http://www.lifung.com/eng/company/

Environment

Community Engagement

Human Rights

Source - http://www.lifung.com/eng/company/

The Ruia Group is one of the fastest growing multinational industrial conglomerates headquartered in India. A member of Ethical Trading Initiative.

Source - http://www.ruiagroup.co.in/

Study conducted as part of the annual Ethical Shopping

Survey by MasterCard both online and offline in 25 countries

within Asia/Pacific, Middle East and Africa between 5

December 2011 and 6 February 2012

Asia/ Pacific region - interviews with 7,373 respondents from 14 markets, with 500 consumers in Hong Kong, were asked questions about their ethical shopping habits.

Consumers in Thailand, Philippines, Vietnam, Indonesia and China have a greater willingness to pay more for items

that are environmentally friendly, observe fair trade principles, or where a percentage of the item’s cost is donated to a good cause, as compared to their counterparts in New Zealand, Australia and Japan.

Hong Kong Consumers Continue to Embrace Ethical Shopping: MasterCard Survey Hong Kong, 7 May 2012

Willingness to pay more for products that are:

o environmentally friendly (56%) o observe fair trade principles (51%) o where a percentage of the item is donated to a good cause (49%)

Women and those aged between 18 and 24 more likely to make ethical purchases.

Respondents between ages 50 - 64 are more willing to buy from merchants known for partnering with and donating to charities.

Retail outlets preferred over online purchase – 60%

Concluding Remarks

Micro-Small-Medium Enterprises in most Asian nations

Unorganized sectors

Absence of enabling regulatory and governance framework for environmental issues, health & safety of workers

There is a market and purchasing practice for environmental friendly and fair trade practices goods. Ethical Purchasing in Asia will go a long way in improving environment and working conditions. Large brands sourcing from Asia should extend their international practices to these countries which will boost local practices

“Fostering a socially and environmentally sound approach to doing business also makes good business sense, as our experience is that driving improvements in these areas enhances performance across the board”.

THANK YOU