ETI Southern Participation Conference Report , Duncan Green

1. Introduction
2. Codes in Action
3. Lessons Learned/ Recommendations on codes
4. Comments on the Ethical Trading Initiative
5. How codes fit into wider issues of labour relations and regulation
6. The Informal Sector and Homeworkers
7. Priorities for future capacity building work on Southern Participation
8. Future Communications and Relationship with the ETI
9. Evaluation

Executive Summary

In September 1998 twenty NGO activists - half from the UK, half from Asia, Latin America and Africa - shut themselves in a room in London for two days for an in-depth discussion of codes of conduct. There was no prior agenda, overt or hidden. Instead, a frank, fascinating and high energy exchange ensued which was still going strong at 6pm on the second day, despite jet lag, language barriers and mental fatigue.

The consultation was organised by the Monitoring and Verification Working Group (the group of UK NGO members of the Ethical Trading Initiative) as a contribution to the ETI's need for southern participation in what has up to now been a process largely driven by groups in the North. Southern NGOs are a key constituency in the field of codes of conduct, both as a source of vital insights and knowledge and as partners in setting up systems of independent monitoring and verification in the South. The Southern delegates came from eleven organisations - five each from Latin America and Asia, and one from Africa, chosen on the basis of their active involvement in this field.

Delegates' general view of the ETI process was positive, welcoming both the purpose and content of the work to date, and the efforts made to build a genuine partnership with organisations in the South.

Delegates began by sharing their practical experience of the introduction and operation of different kinds of codes in Latin America and Asia. One key lesson that emerged from this initial discussion was that codes are most effective when they are designed on the basis of negotiations on the ground. These negotiations should involve both workers' representatives and suppliers.

Delegates also concluded that codes should be designed and introduced following a proper study of the local conditions in each country, and should be adapted to fit those conditions. Such an understanding of local context is vital in ensuring the code addresses the most pressing issues for the workforce, and in establishing effective monitoring and verification mechanisms.

Delegates stressed that while codes could be useful as a means of exerting leverage on management, the key issue was workers' own level of organisation and ability to carry out collective bargaining. While NGOs can play a role in facilitating the organisation of groups where trade unions are traditionally weak, such as women, child workers, homeworkers and the informal sector, they must not seek to replace trade union organisation. The ideal combination is for NGOs to play a supporting role by providing training and services and campaigning for the respect of trade union rights, and encouraging more traditional unions to take up previously unrepresented groups and gender issues.

Delegates pointed out that in many countries, most of the provisions of codes are already enshrined in national labour law. However, many workers have no idea that such rights exist, and trade unions often cover only a small percentage of the labour force. Furthermore, labour inspectorates are often too weak or corrupt to ensure compliance with national laws. Such issues could prevent codes from working effectively, and should be addressed by the ETI.

Some delegates felt that NGO work on codes was taking pressure off governments to improve and enforce labour legislation, and that a better balance between the two was called for, particularly at a time when many governments are rewriting national labour laws to reduce workers' rights in search of greater 'labour market flexibility' and enhanced competitivity.

One area of particular concern was the relationship between codes and those workers in small, unregulated workshops and homework arrangements. The delegates from India felt that codes are much less effective in 'informalised' industries such as the Indian garments sector. The difficulties and cost of monitoring codes in thousands of small production units are great, and the application of codes to the informal sector could lead companies to 'reformalise' the supply chain back towards the use of large factories. Although this might result in an overall improvement in employment conditions, it would adversely affect homeworkers, who are the poorest women workers in the world and are often unable to take up factory jobs for child care, cultural or other reasons. Delegates stressed the need for the ETI to confront these issues, for example by addressing homeworkers separately within its code of conduct.

Delegates welcomed the ETI initiative, and in particular the efforts being undertaken to ensure participation by southern NGOs, trade unions and people's organisations. In order to achieve this, they recommended the following priority areas for capacity building in the South:

• Training: This should be practical, explaining how codes of conduct work and equipping organisations and individuals to participate fully in monitoring and verification on the ground. It should also include training for suppliers, outside auditors and national labour inspectorates.
• Mass education: Production of materials for distribution to workers, explaining their rights, both under national law and codes of conduct, as well as other forms of labour rights education.
• Research: A number of areas for research were identified, such as country studies of political and institutional contexts for labour rights work, case studies of successful campaigns for codes of conduct and the interaction between voluntary codes and national legislation.

As work in this field and Southern NGOs' involvement in it are developing so fast, delegates felt that further consultation, perhaps on an annual basis, would be worthwhile. They agreed to form the nucleus for such a consultative process in the future. The equality and transparency of this consultation was seen as a model for future exercises, setting up a two-way partnership for the exchange of ideas, opinions and information. At this stage, southern delegates did not feel they needed a formal voice in the governance of the ETI.

The MVWG found the consultation both inspiring and enormously helpful. It was a genuine dialogue which enabled both UK and Southern participants to explore the issues in depth with southern partners. It is vital that this encouraging start is now built upon to establish lasting links and guarantee full southern participation in the ETI process.

1. Introduction

'The relationships between NGOs in the North and the South are often paternalistic. At this meeting, we felt we were equals', Magaly Piñeda, Dominican Republic

The two-day consultation with southern NGOs and other groups working on issues related to codes of conduct was held in London on 22-23 September 1998. It was organised by the Monitoring and Verification Working Group (the group of UK NGO members of the Ethical Trading Initiative) as a contribution to the ETI's need for southern participation in what has up to now been a process largely driven by groups in the North.

Southern NGOs are a key constituency in the field of codes of conduct, both as a source of vital insights and knowledge and as partners in setting up systems of independent monitoring and verification in the South. The Southern delegates came from eleven organisations - five each from Latin America and Asia, and one from Africa, chosen on the basis of their active involvement in this field. A full list of participants from both the South and the UK is given at the end of this report. Funding for the event was provided by the Department for International Development.

While it is impossible to do justice to the level of energy, enthusiasm and commitment which filled the two days of talks, this report summarises the main areas of discussion and the conclusions, concentrating on the views of southern participants, rather than those of the UK NGOs involved in the consultation. Other input comes from subsequent meetings in London and Oxford.

The MVWG found the consultation both inspiring and enormously helpful. It was a genuine dialogue, with no hidden agendas or PR function, which enabled participants to explore the issues in depth with southern partners. It is vital that this encouraging start is now built upon to establish lasting links and guarantee full southern participation in the ETI process. The MVWG would like to take this opportunity to thank DfID for its willingness to fund the project, Maggie Burns and Jane Turner for their excellent work on organising the event, and Anna Keene for the extraordinary feat of providing two days of non-stop simultaneous translation.

2. Codes in Action

'Codes of conduct are very new and there is a real need for information', Voravidh Charoenloet, Thailand

Although delegates reported overwhelming ignorance of codes among both workers and civil society in the South, several of them had been involved in pioneering work on different kinds of codes. A brief summary is given below.

Delegates also recommended study of other experiences of codes of conduct, such as the introduction in 1995 of a code for the Asian toy industry, drawn up by the British Toy and Hobby Association, and the impact of the Harkin Bill in reducing the numbers of child workers in the Bangladeshi garment industry.

The Gap in El Salvador: Hector Bernabe Recinos, CENTRA
'Since the code was introduced, conditions have improved and now the company is getting more orders. We did a survey which showed that women from other factories would now prefer to work at Mandarin', Hector Bernabe Recinos, El Salvador

Hector is a member of the Independent Monitoring Group, comprising human rights groups, Catholic Church organisations and CENTRA a labour rights organisation. Centra was called on by the National Labour Committee in the US to become part of the Monitoring group for Mandarin International, a Salvadorean supplier to the Gap, following a public campaign in the US which had persuaded the Gap to introduce a code of conduct at the plant. The campaign followed a dispute at the plant in which over 300 people had been sacked and the trade union broken up.

The Mandarin Agreement
There were 4 main points in the agreement
1. Return of workers who had been sacked
2. Return to work of trade union leaders and trade union activists on the "undesirable" list
3. The improvement of working conditions
4. The factory would remain in the country

A list of improvements to working conditions was also agreed. Mandarin paid for the improvements.

Monitoring and communication:

• The Monitoring Group can make unannounced visits to the factory
• There are monthly monitoring meetings
• There is continual communication between the workforce, the Monitoring Group and Mandarin management. Violations of the Gap code are discussed privately - going public is a last resort.
• There is a 24-hour telephone line for contact with the Monitoring Group from the factory
• There is permanent communication between GAP and pressure groups in the US.

Hector stressed that the monitoring group is not a replacement for the work of trade unions, and tries to facilitate trade union - management negotiation, but that even so, it has not been easy to build up the trust of the workers in the monitoring process. The Monitoring Group's work is funded by grants from northern NGOs, and receives no funding from the Gap.

Achievements

• Conditions have improved in terms of toilet breaks, permission for medical visits, social security payments and an end to abusive treatment by supervisors
• Mandarin is now one of the few factories that does not subject women to pregnancy tests before they are offered work.
• Labour stability and hence company stability have improved
• The company is now receiving more orders from the Gap
• According to a survey, women from other factories would now prefer to work at Mandarin
• Gap is now considering introducing monitoring for two other companies in El Salvador, while campaign groups want to replicate this experience in other countries

Bananas in Costa Rica: Gilberth Bermudez, General Secretary of SITRAP, (Union of Agricultural Plantation Workers)

Costa Rica is the second largest banana exporter in Latin America after Ecuador. Previously most of the bananas were exported to the US but over the last few years the majority have gone go to Europe via large transnational corporations like Del Monte, Dole, and Chiquita. Over the last ten years labour conditions have deteriorated, salaries have dropped and social conditions have worsened.

The main problems in the banana industry are the effects of pesticides on workers and the environment, the lack of labour stability, long working days, low wages and the persecution of independent trade unions. There is an "undesirables" list, many of them trade union activists, compiled and circulated by the companies.

The ILO has no means of enforcing international labour standards so SITRAP has looked for new ways to put pressure on the transnational companies to improve labour conditions. In 1997 SITRAP in Costa Rica together with the World Development Movement in the UK began a campaign on Del Monte.

The campaign pushed Del Monte into negotiating with the trade union and culminated in the signing of a five-point 'macro agreement' between Del Monte's local subsidiary and SITRAP. The agreement committed both parties to respect workers' rights under Costa Rican law, to support freedom of association and collective bargaining, to recognize the right to carry out union activities on company plantations, equal treatment between union and company employee associations, and established mechanisms for future co-ordination and negotiation.

Gilberth explained that to ensure that a campaign is a success it is crucial that the workers are involved prior to the campaign, since it is they who know what the companies are doing on the ground. There is a need for training at all levels for trade union leaders and workers. One of the greatest obstacles faced in Costa Rica is the creation of pro-company 'solidarista' trade unions with company and international funding from USAID and elsewhere, which severely complicates the issue of worker representation. This should be taken into account in designing and implement codes elsewhere, underlining the need for a full study of local conditions before a code is introduced.

Levi Strauss in the Dominican Republic: Magaly Pineda, CIPAF (Centre for Feminist Research)
'We have recently been looking at codes, and feel very committed to this approach. It is clearly complex, not at all black and white - we need to do research, to engage in this, and also to engage in new ways with transnational corporations. There are so many new issues here: internal monitoring, living wages, and how to deal with global codes - we need to draw the government into this, particularly the labour inspectorate.' Magaly Piñeda, Dominican Republic

The Export Processing Zones (EPZs) in the Dominican Republic were the first private-run zones in the world and developed in the 1960s following the US military intervention in 1965. There are now 49 free trade zones, with 500 factories and 200,000 workers. For the first 10-15 years 80% of the workers were women. In the last 4-5 years, however, an increasing number of men have entered the EPZ workforce due to the closure of many sugar plantations, and the introduction of a new labour code that includes maternity benefits making women workers more costly to employ.

The new labour code and the improvement of working conditions was brought about by trade union activity and pressure from the women's movement. At first trade unions showed little interest in organising in the EPZs as the workers were mainly women. However, the women's movement denounced the appalling working conditions.

Levis Strauss and monitoring:
In the Dominican Republic four contractors work for Levis employing 30,000 workers, (60% women, 40% men). These companies produce stone-washed jeans and dockers. Levis Strauss, a family firm, developed a code of conduct in 1991. With the Clinton initiative (Apparel Industry Partnership) the issue of independent monitoring was placed on the table. The pilot project in the Dominican Republic was partly an attempt by Levis to prove they did not need independent monitoring.

OXFAM-Great Britain, FLACSO (an academic institute of the Catholic University) and CIPAF participated, despite CIPAF's initial fears over the independence of the project. The project covered a period from January-June 1998. The aim was to provide an independent evaluation of Levi's code and monitoring process.

The process was quite technical and previously there had been no involvement of the workers. It began by developing an overall picture of the factory, working hours, age and sex of workers, social security payments and salaries. Interviews were carried out inside and outside the factory.

Health and Safety
The monitoring covered health and safety. In this area the factories scored well - 80% of the conditions were of reasonable standard and 20% needed to be changed. The contractor was given a time period in which to carry out the changes.

Wages
Salaries are around $200 a month which is the minimum wage, while the basic family basket of goods costs $500. There is therefore a necessity for a living wage, rather than one based on the minimum wage.

The Contractors
The contractors felt that Levis imposed the codes of conduct on them and resented having to foot the cost of the changes. For example, the contractors who carry out stonewashing had to invest in a new chemical waste system. However, this investment has proved to be cost-effective in the long term.

The difference between the Levis factories and other contractors is now that they have more labour stability and meet quality standards more easily and this has had a positive impact on profit margins.

Recommendations of the research
Overall, Levis' Terms of Engagement have had a positive impact on the contractor companies, and are seen as a means of modernising and improving quality and worker motivation. However, too much emphasis is placed on physical aspects of the plant, while not enough attention is paid throughout the process to workers, who have a poor knowledge of the Terms of Engagement and its implementation. The study
recommended extensive training for workers on this issue. Other recommendations included:

• There must be monitoring of the intensity of the work load
• There must be consultation with the doctors in the clinics
• more emphasis on freedom of association (in response, Levis agreed to upgrade the issue from a mention in the preamble to a central point of its code)
• training in how to interview workers
• Levis should be open to discuss a living wage
• the process should be reviewed on a yearly basis
• Levis should offer longer term contracts to the contractors as a recognition of the investments they have made.

Turning codes into national law: Sandra Ramos, Maria Elena Cuadra Women's Movement, Nicaragua
'We have good regulations, but they are not implemented. In our campaign, we were not trying to substitute for these laws, but building the capacity to enforce them.' Sandra Ramos, Nicaragua

In the 1990s, in the absence of trade union organisation in Nicaragua's EPZs, the Maria Elena Cuadra Women's Movement set up internal networks in the factories to discuss labour and human rights. In 1996 women's groups working in EPZs around Central America drew up a five point list of demands as the basis for a campaign entitled 'yes to jobs, but with dignity.' In Nicaragua, the campaign for an 'ethical code' gathered 30,000 signatures, and presented them to the EPZ authorities, the government and the Catholic Church.

In February 1998, the campaign achieved a notable success when the Nicaraguan Labour Minister signed a ministerial decree through which the code became Nicaraguan law. The decree included Articles covering non-discrimination; job security; non-abusive treatment; health and safety standards; registration of employees in the social security system; child labour; respect for employees' rights to organise and negotiate collective bargaining agreements and respect for national minimum wage and overtime laws. To date, the EPZs have trade unions in ten factories, including two collective bargaining agreements reached at Taiwanese-owned factories.

3. Lessons Learned/ Recommendations on codes

'Codes need to look not just at conditions, but at the heart of the matter, that of workers' rights… codes must be linked to the creation of independent trade unions',
Voravidh Charoenloet, Thailand

There is a huge range in the way codes come about, and are implemented. The above examples include:

• codes designed at the level of a single retailer (the Gap, Levis in the Dominican Republic, many UK company codes)
• codes introduced at a national level (Nicaragua)
• national sectoral codes, negotiated between trade unions and employers (Costa Rica)
• sectoral codes, introduced in response to external pressures, without negotiation (toy industry in Hong Kong)
• model codes used as guidelines for best practice (ETI, ICFTU)

A key aspect of such codes is whether they are negotiated locally, or imposed without consultation either by the company or a larger body, such as a manufacturers' association. One key lesson that emerged from this initial discussion was that codes are most effective when they are designed on the basis of negotiations on the ground. Codes introduced without negotiation are less effective, less likely to be properly monitored, and could even be harmful to the interests of the workforce. All the Latin American delegates stressed that these negotiations should involve both workers' representatives and suppliers. Sandra Ramos described the Nicaraguan case as an example of a positive combination of local mobilisation and negotiation, backed up by international campaigning pressure in the US and Europe.

Delegates from Latin America and South Africa also felt that existing codes drawn up without workers' involvement should be open to amendment following consultation, if it was found that workers' most pressing needs had not been included. Examples missing issues included job security in India and security of land tenure in South Africa.

In the case of El Salvador, the Gap rewarded the Mandarin company for introducing a code by guaranteeing larger orders. This important aspect of the Gap agreement has yet to be followed elsewhere.

Given the range of conditions in terms of supply chains, trade union structures, effectiveness of the government and levels of coercion, Gilberth Bermudez stressed that codes should only be introduced after a proper study of the local conditions in each country, and should be adapted to fit those conditions. Some delegates also felt that codes will never be effective where there is a repressive government.

The importance of economic conditions at the time codes are negotiated and implemented was also mentioned. Voravidh Charoenloet pointed out that, with deep recession under way in much of Asia, workers in Thailand are far more concerned about losing their jobs than about improving conditions or capping working hours. AMRC has seen some employers in China using the economic crisis as an excuse to close factories and sub-contract work, or to re-open factories with temporary workers.

Delegates working with women workers in the informal sector argued that while often a valuable addition to efforts to improve labour conditions, codes are not equally effective in all situations. For example they are more effective in unionised industries where the union can help guarantee worker involvement, but such industries often form a small minority of the workforce. Doubts were also raised about the possible counter-productive impact of codes introduced in industries with a high level of subcontracting and homeworking (see section 6). On the other hand, Shirin Akhter felt that codes could give workers an extra bargaining tool in a country like Bangladesh, where they find it difficult to unionise.

Delegates, especially those from Asia, stressed that while these examples of work on codes offer valuable lessons for the future, the reality is that the vast majority of workers have never heard of them - up to now, the discussion on codes has been almost entirely a northern affair.

Furthermore, some delegates felt it was hard to know what companies are really doing. Some are clearly attempting innovative ways of trying to implement codes, for example by translating the code into local language. Jennifer Porges reported that in factories supplying Reebok, complaints slips are handed out with pay slips - any complaints go direct to Reebok, not to the supplier. Reebok has established workers' committees to help implement the codes. However, Reebok is exceptional in this regard.

AMRC has found that in China many codes are only just getting off the ground. In one factory in Indonesia, workers are obliged to recite the code every day at morning exercise. Thus, they know the code by heart but have no idea what it means or how it affects them and their rights. In some factories, when workers are asked if they knew about the code, they thought it was the chart on the factory wall listing penalties for talking and other 'offences'.

Finally, delegates cautioned that codes of conduct only affect the export sector. It is important to remember that the export sector only employs a small percentage of the workforce, and that conditions are often worse in the domestic sector. Although it is argued that there will be a 'trickle-down' effect in which improvements in the export sector will filter through to the rest of the economy, there is currently no clear evidence that this is actually happening.

4. Comments on the Ethical Trading Initiative

'ETI is an important initiative with a big future', Hector Bernabe Recinos, El Salvador
'Take a risk, but do something', Sandra Ramos, Nicaragua

Delegates welcomed the ETI initiative, and were clear that it would only work if it ensured participation by southern NGOs, trade unions and people's organisations.

Some general comments/questions/suggestions included:

• Should the ETI consider some sort of labelling/public endorsement process?
• While codes generally strengthen the position of workers, there can sometimes be a conflict between ethical sourcing and ensuring labour rights - what if the introduction of codes leads to increased hardship, for example in the case of homeworkers? There is a need for long-term engagement with suppliers to minimise this risk.
• The ETI needs to think through its wider role in producer countries - for example, should it be working in some way with government or trade associations?
• The ETI and its code will need a process of continuous review and revision, but the key issue is to get started, and learn by doing.
• It is important that ETI co-operates closely with other initiatives, such as SA8000
• To build trust in the South, the ETI must be effective, transparent and treat southern partners with respect.
• If the gains achieved through codes of conduct are to be made sustainable, NGOs involved in the ETI need to go beyond checking on working conditions to supporting workers rights as a whole. That includes helping workers achieve the political space and capacity to use them. This involves basic labour rights education and other forms of capacity building.

On monitoring and verification, delegates views included:

• Independent local trade unions, where they exist, are better placed than NGOs to carry out monitoring and/or verification, and are more likely to be formally recognised and accepted by employers.
• Hector Bernabe Recinos felt that the severity of the problems facing workers, and the speed of introduction of codes, means that there is no neat dividing line over who should represent the views of workers. Whichever organisation (union, NGO or other) has the capacity to represent workers' views in the monitoring process should do so, provided it is in a responsible and transparent manner.
• Monitoring has to be a continuous process, not a one-off visit.
• When delegates had consulted workers on codes of conduct, it was felt that box-ticking inspections would fail to pick up issues such as excessive hours, compulsory overtime, wage deductions, fines and penalties and people being denied holiday. It was also felt that workers have to be consulted in a safe place outside the factory.
• Delegates were concerned that the speed and scale of development of the monitoring and verification industry could lead to workers' organisations and participation being bypassed, leading to monitoring and verification by external organisations 'parachuted in' with no roots or legitimacy among local organisations or the workforce.
• Specifically on the pilot studies now getting under way in the ETI, delegates pointed out that there was a rich tradition of sociological and methodological research in this area on which the pilot studies could draw. It was felt that the pilots should be continuous, rather than snapshot processes, and that success could only be achieved with the full trust, confidence and participation of the workforce. Local trade union involvement was crucial.

5. How codes fit into wider issues of labour relations and regulation

'Workers must be able to use their own capacity to struggle. A code alone is not enough.' Sandra Ramos, Nicaragua

The discussion of the link between codes and labour rights, and the linked issue of relations between NGOs and trade unions, was a recurring theme of the consultation. Several delegates stressed that while codes could be useful as a means of exerting leverage on management, the key issue was workers' own level of organisation and ability to carry out collective bargaining. This led to concerns about the value of codes in countries and export processing zones where free trade unionism is outlawed.

On the basis of his experience at the Gap factory in El Salvador, Hector Bernabe Recinos stressed that where NGOs are involved in monitoring a code, they must ensure that they facilitate rather than substitute for the process of worker organisation and representation. In El Salvador, he felt that codes and NGO involvement had been a stimulus for trade union organisation.

There was a rich discussion on relations between trade unions and NGOs in the South, going well beyond simplistic characterisations of NGOs 'invading the territory of trade unions', or trade unions being 'unrepresentative of the workers'. Gilberth Bermudez, a trade union leader in the Costa Rican banana sector, stressed the dangers and confusions created by solidarismo, the new wave of company trade unions created in recent years. He also stressed that in some more traditional trade unions, work with the leadership may not always get down to the grassroots, and that NGOs should relate directly to the base of the trade unions.

A workshop on communications discussed the general issue of representation, agreeing that while NGOs can play a role in facilitating the organisation of women, child workers, homeworkers and the informal sector, they must not seek to replace trade union organisation. The ideal combination is for NGOs to play a supporting role by providing training and services and campaigning for the respect of trade union rights, and encouraging more traditional unions to take up previously unrepresented groups and gender issues.

Nicky Taylor from South Africa described how NGOs were currently 'plugging the gap' in trade union coverage (for example of rural workers and women) and that, up until now, relations have been harmonious, although NGOs may have to stand aside as the trade union movement grows stronger.

With rapid globalisation, traditional labour markets are breaking down, posing new challenges to traditional forms of worker representation. Delegates felt that obstacles to effective relations between unions and NGOs at local level are not so much differences of perspective, but stem from a failure to consult, listen and understand. At a local level, some trade unions feel threatened by codes of conduct, fearing they are an attempt to undermine their role. There is a need to raise awareness of codes, and the role of trade unions within them, and to build trust between NGOs and unions. It was felt that a study of some examples of best practice in union-NGO relations would be valuable.

Another discussion developed around the relationship between voluntary codes, legislation and labour rights. Delegates pointed out that in many countries, most of the provisions of codes are already enshrined in national labour law. In South Africa, for example, workers already have most of the rights laid out in the ETI code, but farmworkers have no idea that these rights exist, and trade unions cover only 3-5% of the agricultural labour force. Furthermore the labour inspectorate is too weak to ensure compliance with national laws.

What should be the appropriate NGO response to this? The ETI and individual NGOs could look at ways of strengthening national labour inspectorates, through training or lobbying. One urgent need is to boost programmes in labour rights education. By helping in the effort to alert workers to their rights under national law, NGOs can make a valuable contribution to worker organisation both inside the codes process and beyond.

Some delegates felt that NGO work on codes was taking pressure off governments to improve and enforce labour legislation, and that a better balance between the two was called for, particularly at a time when many governments are rewriting national labour laws to reduce workers' rights in search of greater 'labour market flexibility' and enhanced competitivity. At an international level, there is a similar danger, with NGOs' emphasis on voluntary codes squeezing out work on global regulation such as the inclusion of a social clause in the WTO.

6. The Informal Sector and Homeworkers

'When it comes to organising in the homeworking sector, we have to recognise that there are many relevant organisations, not only trade unions. Homework is increasing in the North, but is dominant in the South. Homeworking is not old-fashioned or dying out, it is part of modern industry. We also need to be clear that there is no rigid barrier between organising homeworkers, and organising people in factories. Some countries have laws and some do not, but homeworkers are almost always working outside of the law, at least until they are organised.

It is important that the ETI puts homeworking on the agenda. As it stands the ETI base code could result in the reformalisation and shortening of supply chains. That would mean homeworkers losing their jobs, and these are the poorest women workers in the world.'
Jane Tate, India

One area of major concern to several delegates was the relationship between codes and those workers outside the world of formal employment. The largely female workforce in small, unregulated workshops and homework arrangements already exists on the margins of national legislation.

The delegates from India felt that codes are much less effective in 'informalised' industries such as the Indian garments sector. The difficulties and cost of monitoring codes in thousands of small production units are so huge, that they feared the application of codes to the informal sector would lead companies to 'reformalise' the supply chain back towards the use of large factories. Although this might result in an overall improvement in employment conditions, it would adversely affect homeworkers, who are the poorest women workers in the world and are often unable to take up factory jobs for child care, cultural or other reasons.

Codes should therefore treat homeworkers as a separate category of workers, with specific provisions to deal with their situation. Codes addressing homeworkers should incorporate the recent ILO convention on homeworking, which requires governments to extend labour rights legislation to informal sector workers. Such measures should be applied equally to homeworkers in both North and South. The ETI code as it stands was seen as having potential negative effects on homeworkers. This was seen as a consequence of failing to consult homeworker organisations while drawing up the code.

The Indian delegates also pointed out that trade unions have a minimal role in this sector, and that specialist NGOs and people's organisations such as SEWA in India (the Self-Employed Women's Association) may be more representative in many countries.

It was felt job security - regularising the often precarious arrangements in the sector - was the key issue in this area, and that only when that had been addressed could a useful discussion be had about wages and conditions.

7. Priorities for future capacity building work on Southern Participation

'Our biggest challenge today is to build capacity - the capacity to organise, to communicate.' Gilberth Bermudez, Costa Rica

'We need to take risks, be more aggressive. We must try things out. We need to be clear that we are in an experimental period.' Magaly Piñeda, Dominican Republic

Delegates were told about the ETI's focus on building capacity in the South to enable fuller participation in monitoring and verification, and the broader field of codes of conduct. As the final part of the consultation, a list of possible areas of work was drawn up and voted on to establish priority areas of work. Each southern delegate had three votes. The results, in descending order of priority, were:

Number of votes
1. Training -9
2. Mass education -8
3. Research -7
4. Translation of materials into national languages -5
5. Events such as regional seminars -3
6/7. A dedicated Website; Regional ETI staff -0

Training: Delegates said that training, which was given top priority, should be practical, explaining how codes of conduct work and equipping organisations and individuals to participate fully in monitoring and verification on the ground, as well as other issues such as training for suppliers, outside auditors, national labour inspectorates and other bodies. It was felt that the ETI could usefully co-operate with other initiatives such as SA8000 in this area.

Mass education: This referred to the production of materials for distribution to workers, explaining their rights, both under national law and codes of conduct, as well as other forms of labour rights education.

Research: A number of areas for research were identified during the course of the consultation. These were:

• Impact of codes on homeworkers and the informal sector: do they lead to re-formalisation of the supply chain? How does that affect women workers in different countries? What are the options for limiting any damage?
• Leverage issues: Country surveys to identify pressure points for local and international campaigns on codes/labour standards, including governments, EPZ authorities and manufacturers' associations.
• Alliance issues: Country surveys to identify other civil society organisations as possible allies/actors/resources - people's organisations; academics; NGOs; media; political groups.
• Case studies and comparisons of successful northern-led campaigns on codes: Harkin Bill in Bangladesh; footballs in Pakistan; toys in East Asia, the Gap in El Salvador, Disney in Haiti. Most studies have been on social impact, but others are needed on the campaigns themselves - how they were organised, why they succeeded, strengths and weaknesses.
• Case studies and comparisons of successful southern-led campaigns on codes, such as the examples described in this report from Nicaragua, Dominican Republic, and the banana agreements in Central America. Analysis should be the same as for northern campaigns, but also compare and contrast the two in terms of achievements, and how best to combine domestic and international pressure.
• The interaction between voluntary codes and national legislation
• Codes and trade unions: comparison of how different trade union movements have used codes
• How to negotiate with southern supplier companies: case studies of successful NGO/union/company negotiations, with guidelines for best practice in building strong NGO/union alliances
• Where are codes most effective?: comparison across countries, sectors and production methods.
• How local trade unions can use codes as a tool in collective bargaining
• Definition of a living wage and a guide to calculating it for different countries
• Clarification of differences between fair and ethical trade

8. Future Communications and Relationship with the ETI

'Don't over-elaborate; stay simple. The key issue is that you know what workers want, that you stay in contact with the grassroots.' Gilberth Bermudez, Costa Rica

'We are at a good moment. People are really talking about a global living wage. This is our chance, we are strong.' Magaly Piñeda, Dominican Republic

Delegates were consulted on the appropriate level of representation for southern NGOs within the ETI, for example through formal representation on the Monitoring and Verification Working Group; a place on the ETI board as one of the NGO delegates, a system of individual links between ETI member NGOs and Southern partners to feed into the MVWG process or nominated MVWG contacts in each country.

They were unanimous in saying they did not want formal representation at this stage - codes are not their priority area of work, and they needed to limit the amount of time and resources spent on it. Their main request was to be consulted and kept in touch with the fast-changing nature of the field. Their recommendation was that MVWG establish an email list of southern groups interested in and working on these issues, and devote resources to distributing relevant information. As a first step, they suggested that briefings be produced in English and Spanish on the origins, structure and objectives of the ETI and MVWG. They also expressed interest in the forthcoming Oxfam website on corporate responsibility.

Delegates recommended that the ETI explore the possibility of exchanges between NGOs working on codes in different regions, in particular to enable experiences in Central America and the Caribbean to be disseminated among Asian and African NGOs.

As the field and their own involvement in it is developing so fast, delegates felt that further consultation, perhaps on an annual basis, would be worthwhile. They agreed to form the nucleus for such a consultative process in the future. Delegates stressed that this was a Southern, not an international, network on codes, and should be limited to those people actively working with codes of conduct on the ground. They stressed that communications should be two way, and therefore rejected being called a reference group for the ETI.

9. Evaluation

Rather than a formal evaluation, participants were asked to write one sentence each on the good and bad aspects of the consultation. These included:

Good
· This was a genuine, real and participative consultation
· Equal participation of the South (which is not always true in international meetings)
· Good representation from North/South
· The debate and the respect with which we have listened to each other, plus some concrete initial proposals
· Open agenda meant we could alter the programme as we went along to take account of what emerged

Bad
· Lack of more African participants
· Needed more time
· Needed clearer explanation of the ETI from the outset
· Very long days!
· No dancing, and we never got to know the city!

Appendix 1: Participants

From Asia
1. Hong Kong: Jennifer Porges, Asia Monitor Resource Centre
2. India: Rohini Hensman, Union Research Group
3. Bangladesh: Shirin Akhter, Karamojibi Nari (working women's organisation)
4. Thailand: Voravidh Charoenloet, labour studies specialist, Chulalongkorn 5. University
5. India: Jane Tate, SEWA (self-employed women's union) and Homenet

Latin America
6. Nicaragua: Sandra Ramos, Movimiento de Mujeres Empleadas y Desempleadas 'Maria Elena Cuadra', Maria Elena Cuadra Women's Movement
7. Costa Rica: Gilberth Bermudez, SITRAP (Sindicato de Trabajadores de Plantaciones Agrícolas, Union of Agricultural Plantation Workers). Banana workers' union.
8. Dominican Republic: Magaly Piñeda, CIPAF (Centro de Investigaciones sobre Acción Feminina, Centre for Research for Feminist Action)
9. El Salvador: Hector Bernabe Recinos, CENTRA (Centro de Estudios del Trabajo, Centre for Labour Studies)
10. Colombia: Gilma Madrid, Cactus (women workers' rights centre)

Africa:
South Africa: Nicky Taylor, Centre for Rural Legal Studies

Britain:
Maggie Burns, organiser
CAFOD: Duncan Green
Central America Women's Network: Jane Turner
Christian Aid: Liz Orton
Ethical Trading Initiative: Raj Thamotheram
Fairtrade Foundation: Rebecca Abbott, Phil Wells
New Economics Foundation: Maya Forstater, Simon Zadek
Oxfam: George Tarvit, Sumi Dhanarajan
Save the Children Fund: Fiona King
World Development Movement: Bethan Brookes, Barry Coates
Women Working Worldwide: Angela Hale