Alex McKenzie, our Commercial Director, discusses ethical factory standards

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The first of March hailed the second week of Fair Trade Fortnight, a time to reflect on the importance of ethical factories and how ethical standards are maintained throughout the supply chain. In honour of this, we chatted to our commercial director, Alex McKenzie, about ethical factories and how to identify them.

How would you source an ethical factory or supplier?

There are two main audits / platforms that are often used from a non-food manufacturing perspective in the categories that we work in. These are called BSCI and SMETA. In effect they are a code of practice that manufacturers will sign up to and say, ‘this is what we consider to be important.' It’s around being more ethical. They put these principles into action. Then a third party will inspect them and give them their audit  and actions needed, known within Sedex as a CAPR (Correctional Action Plan Report). It’s a snapshot of a moment in time that says based on the criteria, this is where you’re at and this is what you can improve upon.  

The Business Social Compliance Initiative (BSCI) is an industry-driven movement that aims to monitor and assess workplace standards across the global supply chain. The audit helps a business to monitor its supply chain to ensure that all suppliers are treating workers ethically and legally.

SMETA (Sedex Members Ethical Trade Audit) is an auditing methodology used by Sedex and is the most widely used social audit in the world. SMETA assesses a site based on the organisation's standards of labour, health and safety, environment, and business ethics. Sedex has outlined these to be the key areas for assessing an organisations responsible business practices.

What are the key identifiers to look for in a sustainable or ethical supplier?

From an ethical perspective it’s about making sure the factories we’re working with are treating their employees well, which the BSCI or SMETA audit helps to support. As a business, we can also work with third party testing bodies or inspection houses to do a workplace assessment (WPA).

Sustainability is slightly different. Sedex, for example, covers a bit more about the environmental impact for businesses than BSCI. There are other bodies or processes a manufacturer can follow, one common one being ISO14000,  an additional international standard that factories can employ to show how they consider their environmental impact.

Are there any challenges that you face when working with ethical suppliers?

We have a lot of manufacturing projects running at the same time across multiple different sites, across multiple different countries. Those audit reports are a snapshot in time, so it’s important that we are working with factories to keep those up to date. We will also make sure that we’re working with the factories in a way that helps them to continually improve those standards. For example, overtime is something to take into consideration. If we’re asking factories to improve on their lead times, and the only way they are going to be able to do that is by asking employees to work even harder, that is something we don’t want. We want to make sure that we’re offering an ethically founded supply chain, and we can do that, but we need to make sure the supply chain is able to operate within the parameters set out by the BSCI standards. So that can sometimes be a challenge.

Between the supply chain and the client, we manage everything backwards. We’re that one point of contact for the client, so it’s making sure everything they want is achievable whilst maintaining the ethical standards both we and the client want to see but also that treat our stakeholders and those in our supply chain fairly.

Is there anything you’d like to see in the future for the factories we’re working with?

If there was one thing, it would be an acceptance of the true value of product. People have got so used to paying so little for product, and that can afford you to have a better quality of life, but it’s making sure that quality of life is made available throughout the supply chain. The value of the product needs to allow for the people producing the product to have the best quality of life available. I’d like to see that, a truer understanding of value and what should be paid for things.

Why is B Corp certification important to Fair Trade?

It’s a collective of businesses who believe in being better and profit isn’t the only motivator for existing in a commercial capacity, and that frees you up to ensure, and insist, that your ethical policies are taking care of the people who are forming your value chain. Everything you do has an impact and a human touch point, that should be at the front of all of our interactions.

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