Companies often point to their membership in the Ethical Trading Initiative (ETI) to bolster their claims that they do business ethically. But a recent complaint brought to ETI by workers in the supply chain of fashion brand Next, an ETI member, shows just how little power that ETI has to compel action from its members–and underscores the weakness of multi-stakeholder initiatives such as ETI to change corporate behavior.
Clean Clothes Campaign (CCC) details their engagement on behalf of 104 workers for the Turkish factory Neo Trend Textile who manufactured for Next until the factory shuttered, leaving workers shorted their legally owed severance and other compensation.
All ETI members have agreed to adopt ETI’s Base Code, a baseline set of standards for labor conditions based on the International Labour Organisation conventions. ETI also has a process by which breaches of this Base Code can be raised by members. Following this procedure, in July 2022, ETI member Home Workers Worldwide filed a complaint against Next in support of the former workers of their supplier. After 14 months of engagement, during which time workers saw no remedy, ETI issued a disappointing ruling that left workers empty-handed.
As the CCC details, ETI’s review of the case was slow and repeatedly demanded little supporting documentation from Next to bolster their refusals. The lack of enforceability of the ETI Base Code is painfully evident:
On the ETI’s recommendation that Next consider “a financial goodwill gesture” to the former Neo Trend workers, we learned that the company declined to make a financial contribution out of concern that this might create a precedent. ETI was not willing to require members to comply with the recommendations of the review. NEXT ultimately refused to consider the recommendation as necessary and walked away.
While many companies point to their membership in voluntary multi-stakeholder initiatives (MSIs) such as ETI to bolster their ethical claims, this case shows that these initiatives lack the means to make good on those claims. This is, unfortunately, not a surprise. A 10-year study of the impacts of these MSIs resulted in a report that dubbed them Not Fit for Purpose, a fitting summary of their inability to protect fundamental human and labor rights.
After 14 months of fruitless engagement on behalf of workers, Bego Demir of the Clean Clothes Campaign Turkey, who led the effort on behalf of the garment workers, concluded: “This case proves once more that if there are no binding laws to hold companies accountable, voluntary multi-stakeholder initiatives such as the Ethical Trading Initiative cannot be the solution to achieve real remedy for workers, especially because they are financially dependent on the brands themselves. The time and efforts spent engaging with the initiative’s complaints procedure ultimately hasn’t resulted in any tangible change for the workers, who are still owed severance to this day.”