Dr Alex Hughes
and
Dr Kanchana N. Ruwanpura
Evaluating
Ethical
Workplace
Standards:
Corporate and Public
Sector Workwear from
Karachi, Pakistan
Outline

Ethical trade in supply chains for health sector

Aims and scope of study in Karachi, Pakistan

Codes, standards and initiatives implemented by the
supplier in Karachi

Implementation of ETI (Ethical Trading Initiative) Base
Code: successes and challenges

Areas for further work: recommendations to supplier
Ethical trade in supply chains for
health sector

Long-standing academic,
media and public
attention to ethical
sourcing

Recent attention to public
(including health) sector
 Media attention
 Ethical Procurement for
Health (EPH) workbook
 ETI (Ethical Trading
Initiative) training
courses
 NHS Sustainable
Procurement Forum
Aims and scope of study in Karachi,
Pakistan

Production of uniforms for UK’s health sector
workers

Scoping study 5th-8th December 2012

Collaboration with UK-based work-wear
supplier, Dimensions, and Universities of
Newcastle and Southampton

Study aimed to evaluate the effectiveness of
ethical trading codes applied to a first-tier
manufacturing supplier of uniforms in Pakistan
The first-tier supplier and Karachi-based
factories

Total sales turnover of first-tier
supplier: USD 350 million

7 factories in gloves division and 3
factories in clothing division

3 clothing production facilities in
Karachi produce wide range of
workwear for European clients
including uniforms worn in the UK’s
NHS

3 clothing factories in Karachi
 ‘Factory A’ based in the Export
Processing Zone (EPZ)
 ‘Factory B’ in Karangi (outside
the EPZ)
 ‘Factory C’ in North Nazimabad
Study objectives

Objective 1: To establish which ethical
codes/standards/initiatives are used by this
supplier.

Objective 2: To evaluate the ways in which the ETI
Base Code, as the code covering labour
standards in the supplier’s factories, is
implemented.

Limitation: Interviews with management only
Codes, standards and initiatives
implemented by the supplier

Supplier group compliant with ISO
9001:2008 (achieved against
backdrop of developments to
improve production efficiencies
(lean implementation)

Materials suppliers accredited
against same Quality
Management Systems standard &
ISO 14001:2004 for Environmental
Management Systems

Oeko-Tex Standard 100
certificates held by fabrics
suppliers

Group’s factories work with
numerous environmental, health
and safety initiatives
Implementation of labour standards

Supplying group signed up to ETI
Base Code and SEDEX (the
Supplier Ethical Data Exchange)


2011 and 2012 audits and
compliance (STR and SERCURA)
2 other significant programmes
of corporate social responsibilty
affecting workplace standards:
 ILO pilot project for Promoting
Gender Equality for Decent
Employment
 United Nations Development
Programme (UNDP) GENPROM project on Gender
Promotion in the
Garment/Clothing Sector
through Skill Development
(supplier participating since
its inception in 2007)
Ethical Trading Initiative

ETI BASE CODE

1. Employment is freely chosen
2. Freedom of association and
the right to collective
bargaining are respected
3. Working conditions are safe
and hygienic
4. Child labour should not be
used
5. Living wages are paid
6. Working hours are not
excessive
7. No discrimination is practised
8. Regular employment is
provided
9. No harsh or inhumane
treatment is allowed








Implementation of ETI Base Code:
successes and challenges
1. Employment is freely chosen
- Management said that documentation collected for employment
purposes is returned to the worker with only photocopies of relevant
formal documents kept with the company. Workers have freedom
to leave employment at his/her discretion, ideally with the formal
period of notice given.
2. Freedom of association and right to collective bargaining respected
- Weakly upheld globally
- Union activity prohibited in EPZ
- Worker Councils meet every 3 months (low no. of worker reps and
ad hoc selection, 1 woman on the council – even though women
workers are the majority and active recruitment of women is a
stated goal for the company)
- Room to raise more awareness of workers’ rights with respect to
ETI Base Code
Implementation of ETI Base Code
(cont.)
3. Working conditions are safe and
hygienic
- Against the backdrop of factory
fires, these suppliers have taken
important strides to emphasize
this code to workers.
- However, EPZ-regulations permit
factories for vertical expansion
without building planning
permission. Potential hazard as
fire exits were not followed.
4. Child labour should not be used
- Policy of hiring workers at no
less than 16-17 years or older is
best to aspire to. Inconsistencies
in Pakistan labour laws offer
possible loopholes for evasion of
global concerns around the nonuse of child labour.
Implementation of ETI Base
Code (cont.)
5. Living wages are paid
- Monthly salaries (PKRs 8,100 to PKRs 10,600) meet minimum wages
set by Pakistani authorities, but do not meet living wage aspirations
of the ETI Base Code
- Pakistan Institute of Labour Education & Research (PILER) in 2009
and in relation to the Asia Floor Wage campaign estimated the
living wage for Pakistani workers to be at PKRs 12,000
6. Working hours are not excessive
- No work after 5.00 pm, and it appeared that workers clocked off
at the noted time
- Yet, discrepancies in management accounts suggest that
overtime may in fact be in use. While overtime is permitted
according to Pakistani labour law and similar allowances are made
by the ETI Base Code (up to 12 hours per week), the need to pay
workers for overtime was emphasized in our feedback to them.
Implementation of ETI Base Code (cont.)
7. No discrimination is practised
- Non-discriminatory practices
according to the ETI Base Code are
defined as “no discrimination in hiring,
compensation, access to training,
promotion, termination or retirement
based on race, caste, national origin,
religion, age, disability, gender,
marital status, sexual orientation,
union membership or political
affiliation”
- UNDP’s GEN-PROM programme:
efforts to recruit, train and upgrade
skills of women
- But, growing unemployment
amongst men prompting UNDP to
review its programmes and to include
male workers
Implementation of ETI Base Code (cont.)
8. Regular employment is provided
- Regular employment provided to workers following
required laws with regard to this clause. Usually it was
the workers who left their workplaces with inadequate
notice given or because of unexpected social
problems.
9. No harsh or inhumane treatment is allowed
- During our short visits to the 3 factories, no visible
problems.
- Managers emphasized need for positive work context
and placed emphasis on affirmative working
relationships.
- Leads to a positive image for supplier’s ability to recruit
workers, i.e. workers come looking for work because of
its standing as a reputable employer.
Areas for further work: recommendations to
supplier
1) Management focus much more on quality
and environmental issues than labour.
Suggest balance between all areas.
2) Variation in management awareness of
labour laws. Knowledge could be checked
and improved.
3) Scope to develop initiatives for raising
worker awareness of labour codes and
rights and responsibilities in workplace.
Images or cartoons can be used to
enhance worker awareness, so that workers
– irrespective of their literacy levels – are
made aware of workplace rights.
Areas for further work: recommendations to
supplier (cont.)
4) Feedback boxes should be located in places easily
accessible to workers away from management
supervision, such as a canteen area, locker spaces,
outside of production floor, etc.—with culturallysensitive images. Workers should be encouraged to
offer feedback. Even where worker feedback may
not be offered in a constructive spirit, management
should be trained to listen and respond to workers.
5) Composition and meeting frequency of, and
selection procedures for, Worker Councils could be
improved. The company should consider monthly,
rather than quarterly, meetings as well as consider
larger worker representation in the Councils.
Areas for further work: recommendations to
supplier (cont.)
6) Continue collaboration with UNDP. GEN-PROM programme a
success and played vital role in skills upgrading & empowerment of
women workers. UNDP work evolving rapidly and entering new
stages. It recognizes balance between women workers’ increased
participation in the workplace and it not becoming a tool for
discriminating against men seeking similar employment.
7) Room to consider more engagement with NGOs (e.g. PILER) to
improve areas such as payment of living wage & effectiveness of
Worker Councils. European buyers increasingly emphasise the
value of input from local NGOs in supporting developments in
workplace standards.