Do Workers Benefit from Ethical Trade? Assessing Codes of Labour Practice in Global Production Systems

Key Insights for Managers

Companies often rely on codes-of-conduct to ensure that their global suppliers meet minimum labor standards, but do workers actually benefit from this? This study, conducted by Stephanie Barrientos and Sally Smith, finds that the impact of codes on workers is uneven: codes tend to improve a health and safety conditions, such as fire safety, the use of personal protective equipment, and limiting long working hours. However, the study finds no evidence that codes improved worker rights, such as their freedom of association, collective bargaining, or gender- or ethnic-based discrimination. Codes of conduct have improved the working conditions of permanent workers more so than temporary workers or migrant workers. The findings also suggest that a buyer’s code-of-conduct will have a greater influence on a supplier’s working conditions when the buyer has more financial leverage, such as by purchasing a larger share of the supplier’s output and placing more regular orders—or when a larger number of the supplier’s other buyers require similar standards.

This study is based on interviews of more than 400 workers and 80 trade union officials and other informants, focusing on 23 suppliers of fruit, garment, and footwear in Costa Rica, the United Kingdom, South Africa, India, and Vietnam who sell to 11 companies that are all members of the Ethical Trading Initiative (ETI).