Marks & Spencer and ethical trading
The reputation of retail giant Marks & Spencer (M&S) took a well-publicized blow in 1996 when a television production called World In Action alleged that one of M&S's suppliers was working unethically. Julia Dobson, social compliance manager at M&S, explains how far the company has come since then in terms of ethical trading
Catalyst for action
While addressing the shareholders in 1939, the chair of M&S, Simon Marks, said: 'We attach the greatest importance to the general wellbeing of our staff and are satisfied that the company has been amply rewarded by their loyalty and devotion and their increased efficiency in their work.' Concern for the welfare of employees has always been a fundamental element of M&S, and thus it seeks to expand the business alongside like-minded partner companies.
However, in 1996, around the time M&S was reviewing its policy on UK clothing production, World In Action alleged that underage girls were working for one of M&S's suppliers, a clothing factory in Morocco. Although the company won its resulting court case, in the minds of many customers it linked M&S's own strategy of overseas sourcing with a low standard of human rights. It was this incident that accelerated the journey towards responsible sourcing.
Global sourcing principles
M&S reconfirmed its code of conduct with its suppliers in 1999 by publishing the global sourcing principles (GSP), which set out the minimum standards M&S expects of its suppliers. The GSP document is the published M&S code of conduct and it builds on long-established principles of continually seeking improvements in everything M&S does.
It sets compliance standards for fairness in employment, safety in the workplace, the protection of the environment, correct labelling of products and the development of management systems to monitor, maintain and demonstrate compliance.
It also forms part of the terms and conditions of contract for suppliers. The GSP set minimum standards of attainment. These principles require that direct suppliers - ie those with whom M&S directly trades for both goods and services - ensure their facilities accord with what M&S believes to be acceptable standards, and that they are continually improving. We expect our direct suppliers to adopt similar principles in their dealings with those who in turn supply them.
M&S currently sources from approximately 60 countries and 1,500 suppliers. Main sourcing countries are China, Morocco, Sri Lanka, Turkey, Indonesia and the UK and suppliers go through a rigorous auditing and approval process. There are different audits for quality, safety, ethical and environmental, during which every site is visited.
From an ethical point of view, suppliers must demonstrate compliance to GSP and must be committed to achieving compliance to the ethical trading initiative (ETI) base code.
The Ethical Trading Initiative
GSP constitute M&S's code of conduct. These essentially insist that all suppliers must comply with country law with respect to labour and environment standards and have management systems, which give the supplier the capability to achieve, maintain and exceed M&S's requirements.
The ETI base code is an aspirational code based on the International Labour Office code for human rights. It goes further than GSP in demanding that workers should be paid a living wage and in some countries sets higher standards on working hours and freedom of association.
M&S's membership to the ETI commits M&S and its supply chain to achieving compliance to the base code through continuous improvement. All audits in the business's supply chain are against GSP and the ETI base code and as M&S's program develops the company is achieving greater compliance to both codes.
Maintaining suppliers' standards...
M&S's top 20 suppliers have accredited internal auditors who have been through its three-day audit course. They continually monitor their factories to ensure compliance. M&S technologists frequently visit factories and include compliance on their agendas. There is a system of due diligence audits in six countries each year, where suppliers' systems are audited to ensure their systems are robust and that compliance is maintained.
During these visits, M&S holds supplier workshops and conferences, where all suppliers in the region or country are invited to learn and share best practice. Benchmarking groups operate in nine countries and are made up of representatives of local factories who can work together to find solutions to the issues they face. Each country's benchmarking group has a UK sponsor who works for one of the top 13 suppliers sourcing from that area.
...all the way down the chain
Most of M&S's work to date has been with first tier suppliers. Inevitably this work is spreading through the supply chain faster in some areas than others. It supports lower levels of the supply chain through the development of tools such as manuals, workbooks, SEDEX (a web-based system for companies to maintain data on labour practices at production sites and then make it available to its customers), workshops and by developing best practice through pilot projects.
Long term partnerships have always been extremely important to M&S. It is through these established relationships that it has achieved so much in the field of social compliance. Its top 20 suppliers have dedicated social compliance managers who work very closely with M&S to achieve not only compliance but also continuous improvement. These partnerships are cultivated at all levels of the business.
Auditing and self-assessment
Self-assessment is useful when initially setting up an ethical auditing program. It is used in new ventures to consolidate knowledge about risk assessment prior to audit. Audits can be carried out by approved independent third party auditors or fully trained social auditors in the supply chain. In conjunction with IntertekLabtest, M&S runs a three-day social auditor training course. This course is unusual as it has a strong emphasis on practical exercises and role play. All course participants sit an exam and those wishing to be social auditors are then witnessed on two social audits. M&S fund a free NGO/trade union place on every course. M&S's ethical training is audited as part of the annual independent CSR audit.
For more information on M&S's broader corporate social responsibility policies, visit www2.marksandspencer.com/thecompany/ ourcommitmenttosociety/index.shtml
About the author
Julia Dobson is social compliance
manager for M&S and is responsible for implementing GSP in adult
clothing and homeware. She has worked as a garment technologist for
M&S for 14 years and spent two years based in Hong Kong. She has
recently taken on the social compliance manager role.
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