Consumers

(a)  Ethical sourcing of products is not only in the interest of those selling such products: it is also an issue of consumers ability to make informed choices. As the debate on ethical trading unfolds, and as consensus emerges on the core standards to be respected and the means of their monitoring and verification, so will the case for the recognition that unethical trading is considered by some consumers to be offensive. It is therefore arguable that information to be provided to consumers by the Food Standards Agency might, where practicable, extend to ethical considerations (paragraph 6).

Role of the DTI

(b)  It could be said that the DTI has offered ethical trading all support short of actual help. The time is now ripe for the department to play its part in raising the profile of the debate with an adequate level of commitment of resources. If there is a role for the Department of Trade and Industry to help develop, benchmark and promulgate best practice by British companies, it is arguable that it is as likely to bear fruit in the essentially "political" area of trading ethics as in the encouragement of greater financial or technical efficiency. We would welcome some explicit Ministerial encouragement of ethical trading, and the devotion of an adequate level of financial and personnel resources (paragraph 10).

Trade and labour

(c)  The forthcoming November 1999 WTO Ministerial offers an opportunity for the Government to develop a rather more dynamic policy on linkages between trade policy and labour standards which while respecting the sometimes opposing views of our European partners and the suspicions of developing countries, does more to reflect public concern at the continuation of abuses of labour rights and the growing sense that the WTO is an obstacle to be surmounted rather than part of a possible solution. The case can be made for controls on imports which would bear down as heavily on products produced under demonstrably objectionable conditions as do similar controls on dumped goods on those being sold at an artificially low price. A case could [also] be made for democratic nations to be allowed under defined circumstances to give legal force to a desire on the part of their citizens to restrict or ban the import of certain classes of products (paragraphs 12, 13 and 15).

Preferential tariffs

(d)  If it is worth having a scheme of preferential tariffs for those signing up to and complying with international labour standards, then it must be worth having a successful scheme. We recommend that the Government press with vigour for a worthwhile scheme of preferential tariffs when the current scheme comes up for review, and that it insist upon regular reporting by the Commission of the outcome of the present scheme (paragraph 14).

Procurement

(e)  Clear guidance should be provided to local and other public authorities as to the permissibility of public procurement tenders containing specifications relating to ethical production (paragraph 16).

Ethical Trading Initiative

(f)  We warmly welcome the Ethical Trading Initiative, and the extent to which it has brought together those involved, to a degree not replicated elsewhere in Europe, to seek constructive engagement as a means of advancing towards agreed objectives. The Ethical Trading Initiative is a valuable example of voluntary initiative supported by Government which could usefully be drawn to the attention of our European partners (paragraphs 18 and 19).

Smaller firms

(g)  While the larger companies are in the visible forefront of developments, it must be remembered that many UK SMEs source globally and require a system of ethical assurance within their financial and management resources. Similarly the firms whose operations are the object of scrutiny are themselves often small and chronically under-resourced; it would be destructive of efforts to nurture the culture of entrepreneurship in less developed countries if onerous systems of compliance were to drive all but large concerns out of the export market (paragraph 21).

Labelling

(h)  There is no demand for a comprehensive social labelling initiative, and many doubts about the value of any such scheme. There may however soon be a multiplicity of social labels which will require some response from the public authorities, and which may demand a revisiting of trade rules on labelling (paragraph 24).

Social audit

(i)  The increased emphasis on ethical sourcing is part of a wider growth in awareness of the social accountability of companies to the community at large. We recommend that the Department ensures that its ethical trading concerns are given due weight in the current Company Law Review (paragraph 27).