Ensuring companies stretch themselves: Learning from Oxfams Unilever report
Peter McAllister Director, Ethical Trading Initiative
14th Jul 2016
Peter McAllister, Executive Director of the Ethical Trading Initiative (ETI), shares with us his thoughts on our recent study on labour rights in Vietnam with Unilever.
It's always important to have an evidence base when addressing ethical trade issues. It's also important to acknowledge progress as well as to address any supply chain challenges.
That's why Oxfam's five-year collaboration with Unilever in Vietnam is so useful to other companies and brands that want to be ethical leaders in their particular industrial sectors.
But 'doing' ethical trade can be much harder than it sounds. ETI acknowledges that ethical trade is a journey, as this latest Unilever report shows.
While Unilever is not an ETI member, it is recognised as a global leader in sustainability. Certainly, its collaboration with Oxfam (which is a member) is fairly typical of the way we see our member companies developing, albeit each at their different rates of progress.
Unilever should therefore be applauded for improved union rights, for working towards a living wage and for emphasising the importance of responsible sourcing with its suppliers.
Yet, as Oxfam has pointed out, Unilever still needs to address some systemic issues, including the increased costs on suppliers that a more ethical approach dictates - rather than integrating or sharing the costs of such changes.
And, as Oxfam's report shows, they need to address issues faced by women workers, the majority of whom appear to be employed via third party providers, and so at much greater risk of exploitation. With increased pressure on companies to clean up supply chains... understanding how to do human rights due diligence right within the bounds of the UNGPs is critical
Interestingly, it also appears that Unilever is still very reliant on a traditional 'compliance' approach to supplier relations though the use of audits and self-reporting.
Clearly Unilever has a very large supply chain, and even though they were one of the first companies to explore the linkages between business, human rights and sustainability as demanded by the United Nations Guiding Principles on Business and Human Rights (UNGPs), now might be the time to revisit those protocols. .
With increased pressure on companies to clean up supply chains, and with national regulatory frameworks moving from voluntary codes and guidance to legally binding instruments, understanding how to do human rights due diligence right within the bounds of the UNGPs is critical.
To this end, ETI has published free Human Rights Due Diligence guidance as well as guidance on Working Hours and Living Wages to help all companies on their ethical trade journey.
So while we commend the progress and the willingness of Unilever to open themselves to credible scrutiny, what will be particularly important for them to acknowledge - and this is something that we point out to all ETI member companies - is the need to stretch themselves. To go that extra mile.
And perhaps to join with others, so that a critical mass of companies is working collectively to achieve significant change.
ETI believes in collaborative action. We bring together companies, trade unions and NGOs to promote respect for workers' rights globally.
We recognise that workers' rights encompass a breadth of labour standards including but not limited to working hours, health and safety, freedom of association and paying decent wages.
We also recognise that leadership is difficult and that sometimes it's important for businesses to realise that best practice is not always good enough - that the business case does not take precedence over fundamental rights.
The playing field is stacked against vulnerable workers in global supply chains, so I would congratulate Oxfam and Unilever's senior management and then ask where's the stretch?
I would also ask, how are you moving beyond what is doable to what is needed? And ultimately, how are you measuring your progress to ensure that it is meaningful?
The Ethical Trading Initiative (ETI) is a leading alliance of companies, trade unions and NGOs that promotes respect for workers' rights around the globe. Its vision is a world where all workers are free from exploitation and discrimination, and enjoy conditions of freedom, security and equity.
Download the report
Read the introductory blog to the report from Rachel Wilshaw
Read Words and actions: lessons from Unilever's supply chain by Liesbeth Unger, International Human Rights and Business Consultant
Read Unilever perspective: The importance of innovative partnerships in driving social sustainability by Marcela Manubens, Global VP for Social Impact, Unilever
Photo: Workers in a garment factory in Ha Dang. Credit: Respect Vietnam