Do big companies really care?

Paul Dicken takes a look at the new 'caring corporation' trend in the clothing industry.

''The Ethical Trading Initiative (ETI) boasts membership from Gap, Tesco, Sainsbury’s, Next and, recently, Primark. It also counts Oxfam, Save the Children and trade unions as members.'' ''The report estimated that 200 to 300 children, some 11 years-old or younger, were working in the factory under contracts for big American brands, including Wal-Mart.'' ''It is unlikely that any company will have perfect conditions across its entire supply chain but they are expected to have a credible system for inspecting conditions in supplier workplaces.''

Corporate social responsibility is a fast growing concern for big companies as consumers are becoming more aware of how their buying affects others.

The Ethical Trading Initiative (ETI) boasts membership from Gap, Tesco, Sainsbury’s, Next and, recently, Primark. It also counts Oxfam, Save the Children and trade unions as members.

Yet, Tesco sells value jeans for £3 and its end of year profits are predicted to break records, reaching £2.5bn. From this you might presume it’s at the hard end of capitalism.

The supermarket was recently the subject of a Channel 4 News investigation exposing child labour and poor working conditions in factories making the company's Fred and Florence range.

The programme claimed Tesco was unaware, during the course of the investigation, that two factories were even making its clothes. When the supermarket visited the factories, it could find no evidence of child labour, insisting it is at the forefront of the industry, helping to stamp out child labour practices.

A Bangladeshi factory, Harvest Rich, was one factory investigated by Channel 4 News, and was also the focus of a recent report by the National Labour Committee. The report estimated that 200 to 300 children, some 11 years-old or younger, were working in the factory under contracts for big American brands, including Wal-Mart.

With such claims and evidence in mind, it seems difficult to fully buy into the notion of the caring company. There is no doubt that new social responsibility initiatives are an important part of marketing to maintain consumer confidence, but is it just good PR?

A Tesco spokesperson suggested this is not the case. Regarding the child labour claims, she said: "We took the allegations very seriously and are still investigating the cases."

It has been working with NGOs and suppliers in Bangladesh since the programme was broadcast and was "disappointed" it was not able to appear on Channel 4 to discuss the difficulties involved in managing suppliers.

"It's very difficult to look at someone and know how old they are,” the spokesperson said. “In places like Bangladesh people often don't have birth certificates to prove their age and there is a need to take proactive steps and be quite systematic."

The supermarket ethically audits its production sites and, working with the ETI’s base code, which includes paying a living wage, sets out strict "guidelines that must be met". Audits are also carried out by third party groups using local people.

For the ETI, it is the scale of the global economy that makes practicing what is preached a challenge:

"Given the complexity and sheer size of the supply chains of large retailers, it is unlikely that any company will have perfect conditions across its entire supply chain. But they are expected to have a credible system for inspecting conditions in supplier workplaces, and to drive tangible improvements to workers’ conditions throughout their supply chain."

The driving of tangible improvements is central to any hope for change. The ETI cannot enforce it, but an assessment of its work with companies would suggest that change has been felt.
The Institute of Development Studies has found that there have been some improvements for workers in global supply chains. Although, it was noted that "significant" challenges remained and there is still not enough being done.

ETI director Dan Rees has called for an “honest debate about the cost to workers of demand for cut price products” suggesting that company practices continue to be harmful. The Tesco child labour claims have also highlighted the difficulty in enforcing and monitoring the ethical trading rules companies sign-up to. The evidence suggests that the industry needs to do more to ensure the standards it aspires to.