Ethical Trading Initiative

Definition

The Ethical Trading Initiative (ETI) is a leading alliance of companies, trade unions, and NGOs that promotes respect for workers' rights worldwide. It focuses on improving the working conditions of people in global supply chains by ensuring that businesses commit to ethical trade practices. The initiative is a collaborative effort aimed at promoting fair labor practices, transparency, and accountability among organizations engaged in international commerce.

5 Must Know Facts For Your Next Test

1. The ETI was established in 1998 in response to growing concerns about labor conditions in global supply chains, particularly after events like the Rana Plaza collapse in Bangladesh.
2. Members of the ETI commit to upholding the Ethical Trading Initiative Base Code, which outlines key principles for ethical labor practices, including the prohibition of forced labor and child labor.
3. The ETI promotes collaboration among its members to share best practices and develop effective strategies for monitoring and improving labor conditions.
4. Organizations involved in the ETI work together to conduct audits and assessments of suppliers to ensure compliance with ethical standards.
5. The initiative emphasizes the importance of worker voice and representation, encouraging businesses to engage with employees and support their rights within the workplace.

Review Questions

• How does the Ethical Trading Initiative influence companies' approaches to ethical supply chain management?
  • The Ethical Trading Initiative influences companies by providing a framework for ethical supply chain management through its Base Code, which outlines essential labor rights. By committing to these standards, businesses enhance their accountability and ensure better working conditions for their suppliers' employees. The initiative also fosters collaboration among members, enabling them to share resources and strategies that promote ethical trading practices across various industries.
• Discuss the impact of the Ethical Trading Initiative on labor conditions within global supply chains.
  • The Ethical Trading Initiative significantly impacts labor conditions within global supply chains by establishing clear guidelines for ethical practices that member organizations must follow. This encourages companies to implement better working conditions, fair wages, and the prohibition of exploitative labor practices. Furthermore, through regular audits and assessments, the ETI helps identify areas for improvement and holds organizations accountable for their labor practices, ultimately leading to more sustainable and equitable supply chain operations.
• Evaluate how effective the Ethical Trading Initiative has been in addressing challenges related to workers' rights in international trade since its inception.
  • Since its inception, the Ethical Trading Initiative has made notable strides in addressing challenges related to workers' rights in international trade by promoting best practices among its members and raising awareness of labor issues globally. While progress has been made, such as improved compliance with labor standards and increased collaboration among stakeholders, challenges remain due to the complexity of global supply chains. Issues like inadequate enforcement of standards and variations in local laws continue to hinder progress. A comprehensive evaluation reveals that while the ETI has contributed positively to improving working conditions, ongoing efforts are necessary to strengthen its effectiveness and reach within diverse industries.

Related terms

Fair Trade: A movement that advocates for equitable trading conditions and fair wages for producers in developing countries, ensuring they receive a fair share of the profits.

Corporate Social Responsibility (CSR): A business model that integrates social and environmental concerns into a company's operations and interactions with stakeholders.

Supply Chain Transparency: The degree to which companies disclose information about their supply chains, including sourcing practices and working conditions.