The CRC Series on Competition, Regulation and Development
Edited by Paul Cook, Colin Kirkpatrick, Martin Minogue and David Parker
Chapter 10: Ethical trade: issues in the regulation of global supply chains
Richard Heeks and Richard Duncombe INTRODUCTION The growth of globalisation, including international trade, is typically regarded as a two-sided coin; bringing both benefits and problems. Implicit within many commentaries on problems is an assumption of market failure: that, left to their own devices, global production and international trade will fail to adequately reward and protect workers and their communities in the South. Put another way, the assumption is of failure to deliver public goods, such as good wages and working conditions; and of success in delivering ‘public bads’, such as pollution (Lee 1997). Ethical trade can be defined as regulatory initiatives that seek to improve the social and environmental impacts of global supply chains. By definition, then, ethical trade can be seen as an attempted solution to a perceived problem of market failure, and it represents a growing form of regulation. Despite the name, trade per se is typically not the main preoccupation of such initiatives. The focus has been more on the conditions and impacts of production. For example, there has been a concern with International Labour Organisation core labour standards: freedom of association and right to collective bargaining, abolition of forced labour, elimination of child labour, and elimination of employment discrimination (ILO 1998). Code SA8000 includes all these, and adds health and safety, disciplinary procedures, remuneration, working hours, and management systems (SAI 2001). These issues of labour standards are the typical fare of ethical trade, but there has recently been recognition of the overlaps with, and value of...
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