By Heinz-Dieter Koeppe for FORUM CSR international.

Acting socially responsible in a global economy has become a major issue for today’s trade. Companies are facing increasing concern about the working conditions under which consumer goods are produced. Sourcing ethically can be a challenge for importing companies, as a global supply chain can involve thousands of suppliers worldwide and frequently changes. How can importers, manufacturers and retailers meet the demand for high quality at competitive prices while ensuring socially fair production?

In the context of globalization and international competition, retail, importing and brand companies have outsourced the production of labor intensive goods to developing and newly industrialized countries, especially to Asia and Eastern Europe. This strategy is aimed at decreasing production costs and being closer to production sites of raw materials. However, the working conditions in these sourcing countries are often poor. While labor laws and policies exist, national governments tend to be lenient when it comes to enforcement. Companies who source from these countries take a risk of damaging their reputation, especially as consumers increasingly care about the working conditions under which the goods they buy are produced. Through joining the BSCI, our members express their wish to do business with suppliers who take social compliance seriously.

The BSCI believes that it is the role of governments in supplier countries to create laws that protect workers’ rights and to ensure that these laws are enforced. Nevertheless, BSCI members also assume their share of responsibility for the improvement of the working conditions. We also believe implementing proper social standards enhances productivity and quality through the effects of a motivated workforce, a lower number of staff turnover and a stronger management system. Besides, creating a business case for suppliers and also for BSCI members by pooling efforts and resources puts members in a stronger position to require their suppliers to improve the working conditions in sourcing factories. Finally, BSCI members also recognize the difficulties that suppliers face in meeting labor standard requirements within the intense competitive climate in which they operate. Thus, the BCSI advocates a development-oriented approach enabling the companies and the suppliers to work together on practical solutions to reach the requested standards.

We do not believe in a pass-or-fail logic to ease business relations with suppliers who are respecting social requirements. We want to find sustainable solutions to the problems in a stepwise approach. That is why we do not rely solely on audits. We are of the opinion that external audits are essential to get a clear and transparent picture of the situation on the factory floor. Social compliance can only be achieved, if monitoring is accompanied by support to the suppliers through training and qualification measures.　

Our system is based on the BCSI Code of Conduct, which needs to be implemented in the supply chain. Our standardized management tools and guidance documents help our members to implement the Code through the different steps of the external　auditing process. To ensure continuous improvement, we organize trainings to raise awareness of suppliers, try to empower workers and ensure sustainable change on the factory level. As a platform for companies, the BSCI also provides a unique structure in which its members can discuss and exchange best practices on social compliance.

Our members accept and adopt the BSCI Code of Conduct. It includes the following ten key elements:

• freedom of association and the right to collective bargaining,
• prohibition of child labor,
• prohibition of all forms of discrimination measures,
• compensation : minimum　wages/living　wages,
• working hours,
• health and safety at the workplace,
• environmental issues,
• implementation of a policy for social accountability,
• establishment of an anti-bribery and anti-corruption policy,

These requirements are based on the most important international conventions protecting workers’ rights:

• International Labour Organization (ILO),
• United Nations Universal Declaration of Human Rights,
• United Nations Convention on the Rights of the Child,
• United Nations Conventions on the Elimination of all Forms of Discrimination against Woman,
• OECD guidelines for multinational enterprises,
• UN Global Compact.
In order to achieve an improvement, there is a clear need for strong commitment. We request our members to commit themselves to involve two thirds of their buying volume or a minimum of two thirds of their suppliers from defined risk countries in the BSCI auditing process to be audited within 40 months after joining the initiative.

The practical implementation of the code is controlled by independent auditing companies accredited by Social Accountability International (SAI), which has issued the SA8000 standard that is currently regarded as our “Best Practice”. Suppliers with good social performance are encouraged to strive for SA8000 certification. To control the BSCI process, the members share the results of the audits in a common database. This also avoids multiple audits and reduces audit fatigue.

The whole BSCI process is accompanied by local and European stakeholder networks which bring their expertise to the initiative and help to ensure the long term local ownership of the process. Cooperation with governmental authorities, trade unions, NGO’s and associations also facilitates social acceptance and independence of the system. The BSCI releases a detailed annual report each year about their activities and progress to ensure transparency and open communication. The initiative has more than 130 members from ten countries as of today. BSCI is member of the UN Global Compact and is an Organizational Stakeholder of the Global Reporting Initiative (GRI).

Heinz-Dieter Koeppe, 62, was – until his retirement – Group Executive Director for Environmental and Social Policy of KarstadtQuelle Group (Germany). He worked in Asia for more than 20 years in charge of sourcing. He now serves as senior advisor for the FTA / BSCI.
[1] www.bsci-eu.org

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