Ethical trading issues and preparing for Ethical audits
Many large companies have extensive Ethical Sourcing Policy based primarily on the Ethical Trade Initiative (ETI) and International Labour Organisation (ILO) Conventions. In these cases Ethical Sourcing Supplier Requirements are often normative for those companies suppliers globally.
This means that suppliers both big and small will be examined and may be even audited as a condition of supply.
There are many service providers globally. However, ethical auditing is a far more bespoke proposition and in Australia, is mainly offered by the 4 large accounting companies. Their services are mainly aimed at (and priced for) large companies trying to minimise their Ethical Supply Chain risk.
Increasingly ethical sourcing aimed at a far wider supplier base with a diverse range of size and supply change complexity. These requirements use an existing self-assessment process, the SEDEX (SMETA) 4-Pillar version. Under this approach the supplier completes the self-assessment process and dependent on results, suppliers may also be audited.
For ethical sourcing the ETI base case is the core requirement:
- Employment is freely chosen
- Freedom of association and the right to collective bargaining are respected
- Working conditions are safe and hygienic
- Child labour shall not be used
- Living wages are paid
- Working hours are not excessive
- No discrimination is practised
- Regular employment is provided
- No harsh or inhumane treatment is allowed
But the question is, especially for a small business:
“How do I demonstrate ethical trading?” It’s likely that, in many cases you already are and Its just a case of collating and presenting the evidence of compliance. Some complications occur when you have imported ingredients since the requirements that fall to you for ethical trading also include your supplier’s practices.