People

In 1911 a fire in a garment factory in New York killed 500 workers. Workers were working in inhumane, unhealthy conditions and poorly paid. You'd think, almost 100 years later that things might have improved, but workers worldwide are still subject to sweatshop conditions.

In 2005 a fire in Bangladesh killed 250 people. The doors of the factory were locked so they could not escape. In this category, we include all cases of workers abuses - whether it's being forced to work over 60 hours a week, low wages, cases of harassment or a company ignoring health & safety legislation.

Workers' rights sub-categories

• Aggravated - provision of an inadequate or dangerous working environment
• Intimidation of workers by management (including dismissal for strike action)
• Banking, investment or other financial services relationship with a company criticised in this category
• Payment of wages below that necessary for an adequate living
• Company self-disclosure of an incident in this category
• Positive policy addressing a workers' rights issue
• Denial of right to associate, unionise or bargain collectively
• Provision of an inadequate or dangerous working environment
• Discrimination by employers on grounds of race, sex, sexuality, age, creed, caste or disability
• Retails cotton products but no cotton sourcing policy, ie avoiding forced labour
• Enforcement by a company of a working week over 48 hours
• Secondary criticism
• Enforcement of forced or excessive overtime
• Secondary criticism aggravated
• Enforcements of excessive or unjustified penalties (fines etc) on workers.
• Secondary evaluation of supply chain policy exploitative use of child labour serious criticism or fine from government Health & Safety body Harassment (Inc sexual harassment) or bullying of workforce.
• Use of forced or slave labour
• Use of Prison Labour

Many of the products that we buy are manufactured overseas in factories which may not even by owned by the company itself. Even so, we think that the companies ought to be responsible for the kinds of conditions those workers find themselves in, so we ask all companies sourcing from overseas to supply us with a 'supply chain policy'.

This is a document set out by a company detailing how the workers in their supply factories must be treated. Like environmental policies, these used to be documents with broad statements about "abiding by country laws". Nowadays, the supply chain policy can be a sophisticated document outlining lots of different conditions and may also include results of factory audits. Companies which are members of 'multi-stakeholder initiatives', such as the UK's ETI (Ethical Trading Initiative) have to abide by the ETI's own code.

Unfortunately, the existence of a good code doesn't mean that it is actually being adhered to and so we can find huge contradictions, so that companies with the best policies sometimes receive the most criticisms for workers rights abuses.

Most companies that we rate in our product guides will have had their supply chain management assessed. The criteria on which this assessment is based is listed below.

As you will see the rating is broken down into the four areas (policy, engagement, reporting, and difficult issues) each with a certain set of criteria that a company must fulfil to get top marks.

Small companies (turnover less than £10.2m) with an effective if not explicit practice addressing workers' rights in their supply chains are exempt.

So are companies whose products are all certified - or where necessary marketed - as fairtrade.

• 1. SUPPLY CHAIN POLICY (SCP)

1.1    Coverage of six key issues

A code for labour standards in the supply chain exists that covers all International Labour Organisation (ILO) core conventions, without qualification, and the code includes a clear living wage provision and an hours of work provision that is consistent with ILO conventions [48hrs per week +12 hour overtime]
1) no use of forced labour
2) freedom of association
3) payment of a living wage
4) working week limited to 48 hours and 12 hours overtime
5) eliminations of child labour (under 15 years old, or under 14
if country has ILO exemption)
6) no discrimination by race, sex etc

1.2    Plus a  statement that it applies to the whole supply chain

The code is clearly stated to apply to the entire breadth of the supply chain, plus some depth (e.g. some second tier suppliers).

Scoring

Company has good SCP (Requires: Children, Forced labour, Discrimination, Freedom of association, Living Wage, Max 48hrs, whole SCP statement.)
Company has reasonable SCP (5 or more of the above )
Company has rudimentary SCP (Children, Forced, Discrimination, TUs )
Company has no/poor SCP or did not reply

• 2.    STAKEHOLDER ENGAGEMENT (SE)

2.1    Membership of multi-stakeholder processes (MSI)

The company is a member of the Ethical Trading Initiative (UK or Norway), the Fair Labor Association, the Fair Wear Foundation, or Social Accountability International.

2.2    Trade Union/NGO/NFP Engagement

There is third party involvement that includes systematic input from NGOs and/or labour and/or not-for-profit in the country of supply into the verification of labour standard audits.

2.3    Complaints Process

There is evidence that workers can, on a regular basis, provide anonymous feedback on working conditions to the retailer or brand at no cost and in their first language, ideally  independently investigated and governed by a formal agreement with a global union.

Scoring

Company has good SE (Requires: multistakeholder initiative (eg ETI), NGO involvement and employee complaints mechanism)
Company has rudimentary SE (one of two of the above)
Company has poor SE, no evidence of SE or did not reply

• 3.    AUDITING AND REPORTING(A&R)

3.1    Disclosure

There is full and complete reporting of the results of audits including quantitative analysis of audit findings at the factory or supplier level.

3.2    Schedule

An auditing work plan has been scheduled, the process is transparent (e.g. 75% of factories in Vietnam by June 2010) and is based on risk assessment,  and is currently being implemented and reported upon, and the company has ideally publicly disclosed the names and addresses of  the facilities producing its products. 

3.3    Whole supply chain

There is a policy committing the company to auditing labour standards across the entire breadth of the supply chain, plus some depth (e.g. some second tier/some suppliers of internal products).  OR the auditing program applies to the vast majority of the breadth of the supply chain, plus significant depth.

3.4    Remediation

There is a policy for handling instances of non-compliance with the code, and this policy includes a staged approach to dealing with violations.

3.5    Costs

All or part of the costs of an audit are paid by the buying company.

Scoring

Company has good A&R policy (Requires: discolsure of audit results, schedule or audit plan, commitment to audit the whole SC, remediation strategy and costs)
Company has reasonable A&R (3 or more)
Company has rudimentary A&R details (2 or more)
Company has no/poor A&R details or did not reply

• 4.    DIFFICULT ISSUES(DI)

4.1 Purchasing

There is ongoing, scheduled training for buying agents on labour standards in the supply chain and/or financial rewards for suppliers meeting labour standards, and/or a preference for long- term supplier arrangements has been demonstrated.

4.2 Audit Fraud

There is acknowledgement that problems of audit fraud exist and a systematic approach to addressing audit fraud, e.g. use of unannounced audits/quality auditors with high risk suppliers.

4.3 Other

One or more of the following:

Illegal FOA
There is explicit acknowledgement of the problems of freedom of association in countries where independent trade unions are restricted/illegal (e.g. China, Bangladesh and Belarus) and a systematic approach to addressing this problem.

Outworkers (where relevant)
There is explicit acknowledgement of the problems stemming from the use of homeworkers/outworkers/subcontractors and a systematic approach to addressing this problem.  Living wage project might help.

Other
Other measures which are considered significant

4.4 Living wage

Company is taking measures to address living wages (other than inclusion of living wage clause in code of conduct)

Scoring

Company has good DI policy - addresses all DIs (DIs = Audit Fraud, purchasing practices, living wage + homeworkers where relevant, trade unions in china etc)
Company has reasonable DI policy - addresses some DIs (2 or more)
Company has rudimentary DI policy - addresses 1 DI
Company addresses no DIs or did not reply

This column highlights companies that have marketed their products in a way that has been criticised for causing physical harm, or is detrimental to health. The most famous company that has consistently been criticised in this area is Nestle which has been criticised for the way that it markets its baby milk products.

Other examples of irresponsible marketing include drug companies which have been criticised for putting products on the market even after negative results.

Irresponsible marketing sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Criticism for irresponsible marketing of food products
• Company criticised for marketing alcoholic drinks in a way appealing to children (under 18)
• Criticism of irresponsible marketing of food products - aggravated
• Company criticised for marketing unhealthy food/drink products in a way designed to appeal to child
• Infringement of the International Code of Marketing of Breastmilk Substitutes
• Company has been criticised for marketing tobacco in a manner which appeals to young people
• Irresponsible marketing of alcohol
• Company has been criticised for marketing tobacco products
• Irresponsible marketing of non food items
• Company invests in the tobacco industry
• Irresponsible marketing of non-food products - aggravated
• Company manufactures tobacco products Irresponsible marketing of pharmaceuticals
• Company self-disclosure of an incident in this category Irresponsible marketing of pharmaceuticals - aggravated
• Company sells tobacco products
• Positive policy addressing an irresponsible marketing issue
• Company supplies the tobacco industry
• Use of excessively thin or childlike models in fashion advertising

This not only includes companies that supply weaponry to the armed forces, but also those supplying any goods or services to the armed forces (though the severity of the rating is different!).

The sale of handguns is also included in this column, which is why you might find a famous US owned supermarket receiving a bad rating here.

Arms and military supply sub-categories

• Banking, investment or other financial services relationship with a company criticised in this category
• Non strategic manufacture or supply for the military
• Development, manufacture or supply of chemical or biological weapons
• Provision of promotion, marketing or sales services to the military or arms manufacturers
• Development, manufacture or supply of combat aircraft, including spy planes and 'drones'
• Supply of communications services and equipment for the military
• Development, manufacture or supply of launch, guidance, delivery or deployment systems for missiles
• Supply of computers/electronic equipment to the military
• Development, manufacture or supply of tanks or armoured vehicles or vehicles adapted for weapons lau Supply of financial and banking services to the military
• Development, manufacture or supply of warships and other boats involved in military intelligence or Supply of fuel to the military
• Development, manufacture or supply of weapons systems components. including guns
• Supply of weaponry or torture or restraining equipment illegal under international law
• Development, manufacture, supply or maintenance of nuclear weapons, nuclear weapons systems and part
• Unspecified or specified strategic services to the military, eg where weapons supply is mentioned bu Illegal sale of arms