Professional Documents
Culture Documents
1093/jeg/lbm011
Advance Access Published on 4 May 2007
Abstract
Ethical trade, involving corporate codes of conduct for sites of production, has become
a key means through which labour in retailers’ global supply chains is regulated.
Yet, there is evidence to suggest that retail corporations vary markedly in their
approaches to ethical trade and that such variation is shaped, in part, by the national-
institutional contexts in which retailers are based. This article explores this insight by
evaluating the distinct roles played by multi-stakeholder initiatives for ethical trade
in the UK and USA. While the UK’s core multi-stakeholder initiative, the Ethical
Trading Initiative (ETI), encompasses retailers from a variety of sectors and takes a
developmental and continuous learning approach to ethical trade, the US multi-
stakeholder initiatives are focussed more on corporate accountability based on
compliance monitoring exclusively in the clothing sector. Given recent organisational
attempts to foster transnational dialogue between multi-stakeholder initiatives, though,
we argue that the precise ways in which national-institutional contexts shape retailers’
ethical trading approaches are fluid and mutable. We contribute to the literature on the
governance of global supply chains, retailer power and corporate responsibility by
emphasising the political significance of national-institutional environments. However,
in line with notions of relational economic geography, we understand these national-
institutional environments as active and dynamic contexts, and accentuate the
coalitional ways in which nationally based organisations evolve in their home countries
and go on to shape broader transnational agendas for ethical trade.
1. Introduction
Ethical trade, involving corporate codes of conduct for sites of production, has become
a key means of regulating labour in retailers’ global supply chains since the mid-1990s
(Blowfield, 1999; Barrientos, 2000; Jenkins, 2002).1 Yet, there is evidence to suggest that
y
Corresponding author. Alex Hughes, School of Geography, Politics and Sociology, Newcastle University,
Newcastle upon Tyne, NE1 7RU, UK. email 5Alex.Hughes@ncl.ac.uk4
School of Geography, Politics and Sociology, Newcastle University, Newcastle upon Tyne, NE1 7RU, UK.
School of Geography, University of Southampton, UK.
1 Ethical trade, involving codes of conduct for minimum labour standards in supply chains, contrasts
markedly with the much more radical and developmental project of fair trade, which has the goals of
producer empowerment and equitable trading terms at its heart. However, there can be a blurring of the
boundaries of the two movements in some cases (Smith and Barrientos, 2005).
ß The Author (2007). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org
492 . Hughes et al.
retail corporations vary markedly in their approaches to ethical trade (Hughes, 2005)
and that such variation is shaped, in part, by the national-institutional contexts in
which the retailers are based (Christopherson and Lillie, 2005). This article develops this
insight both empirically and theoretically by presenting a comparative analysis of UK
and US multi-stakeholder initiatives (MSIs) for ethical trade, which comprise different
combinations of corporations, non-governmental organisations (NGOs), trade unions,
national government representatives and consumer groups. Such organisations have
played a pivotal role over the past decade in shaping retailers’ strategic approaches to
responsible sourcing in their global supply chains. We show that there is a marked
contrast between the UK and USA in terms of the genesis, structure and strategies of
these influential MSIs; a contrast shaped in part by the embeddedness of the MSIs in
distinct consumer campaigning environments. So while Christopherson and Lillie
(2005) highlight the significance of national-level industrial relations systems and
company practices in shaping retailers’ global labour standards strategies, this article
emphasises the additional influence of consumer-driven campaigns and national-level
ethical trading organisations in the home economies of retailers.
Conceptually, we aim to contribute to the growing literature on the governance of
global supply chains, retailer power and geographies of corporate responsibility by
emphasising the political significance of the national-institutional environments in
which retailers and brands are based. However, in line with relational/network-based
conceptualisations of globalisation and its regulation (Dicken et al., 2001; Amin, 2002,
2004; Bathelt and Gluckler, 2003), we understand these national-institutional
environments as active and dynamic contexts and accentuate the coalitional ways in
which nationally based MSIs both evolve in their home countries and go on to shape
broader transnational agendas for ethical trade.
In terms of the origins of the ethical trading movement, commentators have
documented the rise of corporate codes of conduct as private forms of supply chain
regulation in the context of globalisation and neoliberalism (Blowfield, 1999;
McClintock, 1999; Jenkins et al., 2002; Esbenshade, 2004; Merk, 2005). Drivers of
voluntary ethical trading initiatives are suggested to be: (i) the growth of global supply
chains which extend beyond the reach of national governments; (ii) the rise in the power
of corporate brands and reputation, which make large companies vulnerable to negative
publicity; (iii) an increase in public awareness of overseas production conditions via
improvements in global communications; (iv) the growing importance to the investment
community of ethical performance on the part of public companies (Blowfield, 1999;
Barrientos, 2000; Adams, 2002; Jenkins et al., 2002). As a response to campaigning and
the threat of critical media attention, retailers and brand manufacturers since the 1990s
have initiated ethical trading strategies that tend most commonly to centre on a code of
conduct for labour practice derived from core International Labour Organisation (ILO)
conventions (Murray, 2002).2 Practices of auditing are then typically used to monitor the
degree to which the codes are enforced by their suppliers in practice (Hughes, 2001b;
Barrientos, 2002; O’Rourke, 2002). While much of the growing literature on ethical trade
has rightly evaluated its impacts on development and working conditions at sites of
production (Barrientos, 2000; Mather, 2004; Hale and Opondo, 2005), the key focus of
2 Blowfield (1999) has pointed out that while some ethical codes of conduct also incorporate environmental
clauses, the majority centre on labour standards.
Organisational geographies of corporate responsibility . 493
this article is on the development of ethical trading agendas in the home countries of the
retailers, and how these agendas are informed in different ways by national-level MSIs.
The article proceeds, first, with the positioning of our UK–US case study of ethical
trade MSIs in the context of broader literatures on retailer-driven global supply chains,
geographies of corporate responsibility and the governance of labour standards,
advancing a relational understanding of national-institutional contexts in these debates.
Second, we move on to present our comparative analysis of the strategic significance of
national-level ethical trading MSIs, attending to the following three themes for the UK
and USA in turn: (i) the emergence of MSIs in particular national contexts for
campaigning; (ii) their structure and governance; and (iii) the strategic approaches to
ethical trade they advocate. Following this comparison, attention turns to a recent
transnational initiative in which both UK and US MSIs are collaborating to develop a
common approach to ethical trade. Throughout the discussion, it is suggested that
national-institutional contexts play a powerful role in shaping particular philosophies
and practices of ethical trade, which in turn are purported to influence retailers’
strategies for responsible global sourcing. However, our comparative analysis shows
that these national-level institutions and influences are themselves far from rigid and
immutable. Rather, they are fluid and dynamic as they continually evolve through
multi-stakeholder networks at different spatial scales.
The empirical material reported in the article derives from a research project
sponsored by the Economic and Social Research Council in the UK, which aims to
evaluate UK and US differences in retailers’ approaches to ethical trade in the food and
clothing sectors. The extensive fieldwork for this research involves 96 in-depth
interviews with UK and US ethical trade practitioners working for leading corporate
food and clothing retailers and those involved in campaigning for, and developing,
ethical trade on behalf of multi-stakeholder organisations, NGOs and trade unions.
This particular article draws on 44 in-depth interviews conducted in 2005 and 2006 with
key informants central to the development of the ethical trading agenda and
campaigning in the UK and USA. These include representatives from prominent
MSIs,3 NGOs, international trade unions, college-based campaigning organisations
and journalists. Representatives of organisations quoted in the paper are not always
named, in order to respect the wishes of those interviewed.
3 The Ethical Trading Initiative (ETI) in the UK, and the Fair Labor Association (FLA), Worker Rights
Consortium (WRC), Social Accountability International (SAI) and the Worldwide Responsible Apparel
Production (WRAP) in the USA, as well as the transnational Joint Initiative on Corporate Accountability
and Workers Rights (JO-IN) project.
494 . Hughes et al.
increasingly creative and manipulative ways in which powerful food and clothing
retailers, in particular, were crafting relationships with their own-brand suppliers-
dictating pricing and payment terms and making strict demands on producers in terms of
product specifications and delivery times (Grant, 1987; Crewe and Davenport, 1992;
Bowlby and Foord, 1995; Doel, 1996). From the mid-1990s onwards, academics also
documented the increasing globalisation of retailers’ supply chains within a broader
political-economic context of neoliberalism, retail FDI liberalisation and rapidly
expanding transnational retail activity (Wrigley, 2000; Reardon et al., 2003; Coe, 2004;
Coe and Hess, 2005; Wrigley et al., 2005), observing the application of aggressive models
of retailer-led supply chain management to transnational trading links (Hale, 2000;
Hughes, 2001a; Barrett et al., 2004; Crewe, 2004; Dolan and Humphrey, 2004; Kritzinger
et al., 2004). Studies on retailer buying power in global supply chains have drawn, in
particular, on the notion of global commodity chains (Gereffi and Korzeniewicz, 1994)
and, more recently, the global value chain approach (Gereffi et al., 2005), in order to
understand the buyer-driven forms of coordination and organisation used by retailers in
their global sourcing strategies (Dolan and Humphrey, 2004; Kritzinger et al., 2004;
Gibbon and Ponte, 2005). It is against this backdrop of retailer power in the supply chain
that ethical trading programmes have been called for and developed.
Barling and Lang, 2005) and certification systems for organic produce and fair trade
(Raynolds, 2000; Renard, 2003, 2005). In terms of ethical trade, the absence of a WTO
social clause (Haworth et al., 2005) and the lack of global enforcement of ILO
conventions, along with anti-corporate campaigning, have laid the foundations for
voluntary codes of conduct concerning labour standards (Pearson and Seyfang, 2001;
Freidberg, 2003, 2004; Sadler, 2004; Christopherson and Lillie, 2005). These codes,
developed by corporations in collaboration with other stakeholder groups, have
become key tools in the re-regulation of global labour standards.
Recognising the diversity of the global standards movement and its application to the
governance of trade, geographers in particular have conducted research on the power-
laden practices through which codes and standards are often developed in the global
North and applied to sites of production in the global South (Mutersbaugh, 2002;
Freidberg, 2003). With specific relevance for this article, Christopherson and Lillie (2005)
complement these perspectives by evaluating the embeddedness of standards in sites of
retail and cultures of capital circulation. Asserting the importance of the national
contexts in which retailers are based, they analyse the contrasting cases of the Swedish-
based furniture retailer, IKEA, and the US mass merchandiser, Wal-Mart. They suggest
that while IKEA’s approaches to improving labour standards in its transnational supply
chains link closely to the labour and union-friendly social norms in its Swedish home
context, the minimalist and defensive strategies of Wal-Mart derive from the American
model of economic organisation associated with the externalisation of cost and risk and
more adversarial supply relationships. In our analysis, we aim to build on this insight
from Christopherson and Lillie regarding the role played by the country of origin of
retailers in shaping their approaches to improving global labour standards, highlighting
the role of national-level, consumer-driven ethical trading intitiatives.
4 Scalar regulation is a term used by Amin (2004, 224) to reflect spatial imaginaries of regulation built on
territorial units and geographical hierarchies.
496 . Hughes et al.
are materially and discursively constructed through complex sets of interactions and
practices between different organisational actors at a range of geographical levels.
Against the backdrop of theories of regulation in the world economy that rest on
notions of territory and hierarchy, Amin (2004) suggests instead that global economic
flows and networks have encouraged new heterarchical, hybrid and decentred practices
of regulation. He terms these ‘micro-worlds of regulation’, which are:
5 ‘Concerned primarily with the ways in which socio-spatial relations of actors are intertwined with broader
structures and processes of economic change at various geographical scales’ (Yeung, 2005, 37).
Organisational geographies of corporate responsibility . 497
(Freidberg, 2004). Media reports in the late 1990s focussed on the poor working
conditions of overseas labourers supplying own-brand products to the UK supermarket
chains and clothing retailers in particular. Articles appeared in broadsheets, high-
lighting poor environmental and working conditions at sites of export production
(for example, Durham, 1996; Bowcott, 1997; Abrams, 1999; Monks, 1999). Radio and
television documentaries, particularly the well-known Mange Tout film, were also part
of the process (Hughes, 2001a). At the same time, direct pressure was exerted on UK
food and clothing retail corporations by NGO campaigns. In the mid-1990s, Christian
Aid’s focus on supermarkets’ global sourcing practices (Orton and Madden, 1996) and
CAFOD’s Fashion Victims campaign against the high street clothing retailers
represented two key examples. The Labour Behind the Label group- a UK-based
coalition of labour unions and activists united in their solidarity with garment workers
in the global South and affiliated with the European-wide Clean Clothes Campaign-
also focussed on exploitation in the global production of clothing with reference to UK
fashion retailers and supermarkets. Supermarkets targeted in these campaigns included
the leading four corporations of Tesco, Sainsbury, Safeway (since taken over by
Morrisons) and Asda (since taken over by Wal-Mart). High street retailers targeted
included Marks and Spencer, Next, Debenhams and the Aracadia brands of Topshop,
Top Man, Dorothy Perkins, Burton, Miss Selfridge, Evans and Wallis, since acquired
by Philip Green.
The Ethical Trading Initiative (ETI) has its origins in this NGO campaigning in the
mid-1990s, along with decisions made by many UK retailers to respond to the criticism
by acting collectively and in collaboration with willing NGOs and trade unions. There
was a push by NGOs and trade unions to institutionalise recommendations for socially
responsible trade. As a result, the Monitoring and Verification Working Group was set
up, including representatives from the Trades Union Congress (TUC), the International
Textile, Garment and Leather Workers’ Federation (ITGLWF), the International
Confederation of Free Trade Unions (ICFTU), Oxfam, CAFOD, Save The Children,
the World Development Movement and the New Economics Foundation. Co-operation
with the group’s recommendations was gained from high-profile retailers, including
Sainsbury and the high street retailer, Littlewoods. The idea of establishing a more
formal tripartite alliance of companies, NGOs and trade unions, in order to develop
ethical trade collaboratively, was then taken to the Department for International
Development (DfID) of the UK government, which endorsed the initiative, not least
because it epitomised the ‘third-way’ politics associated with its then new Prime
Minister Tony Blair. The ETI was formally established in 1997 and now represents one
of the largest and most strategically significant civil initiatives of its kind in Europe. Its
endorsement and sponsorship by the DfID and its base location in London roots the
organisation in national political structures. However, its origins in the political work of
various UK-based NGOs and trade unions with links to overseas civil society
organisations at sites of export production also demonstrate the rooting of the ETI in
transnational networks and negotiations.
Since the establishment of the ETI, journalists and campaigning groups have
continued their focus on retailers’ supply chains, with a developing critical spotlight on
retailers’ ethical trading programmes themselves. Television documentaries have
continued with, for example, BBC Panorama and Real Story programmes in 2000
and 2005 examining retailers’ labour codes in global supply chains for clothing and
horticulture, respectively. Newspaper reports have also maintained their critical focus
498 . Hughes et al.
on supermarkets and high street clothing retailers with respect to their supply chain
management (Pratley and Finch, 2005; Mathieson, 2006; Mathieson and Aglionby,
2006a, 2006b).6 And, despite the establishment of the ETI, campaigns aimed at retailers
have continued, exemplified by Action Aid’s Rotten Fruit report (Wijeratna, 2005)
illustrating how workers on South African fruit farms supplying Tesco are being
exploited despite the retailer’s claims to be trading responsibly, and Oxfam’s Trading
Away Our Rights (Raworth, 2004), which focuses the debate on the power and
purchasing practices of retailers.
6 Media exposés and campaigns recently have focussed on UK-based as well as overseas food suppliers to
supermarket chains, attending to the issues of migrant workers and gangmasters (see, for example, Vidal,
2006).
7 http://www.ethicaltrade.org/Z/abteti/who/memb/list.shtml#tu [Accessed 2 August 2006].
Organisational geographies of corporate responsibility . 499
This is not an exact science. Membership is not a badge. It doesn’t mean that these companies
are all great. Actually what it probably means is some of them are doing good and bad things
all the time, and we try and identify the good and talk about the good.
Interview, 12 September 2005
that its focus on learning represents organisational strength and weakness simulta-
neously, with a risk that the institution simply becomes a ‘talk shop’ (interview,
14 November 2005). The following view from an NGO representative in the ETI
expresses similar concerns:
Although the idea of learning organisations is a helpful one and I think it has created an
atmosphere of trust within ETI, at the same time sometimes it’s possible for companies to just
say, ‘Well, we are participating’. And you do have to keep thinking, well what are the
outcomes? What has changed as a result? And there is quite a difference in terms of the
corporate members, the extent to which they are investing in changing practices.
Interview, 05 October 2005
The ETI is regarded by many practitioners as a successful civil initiative for ethical
trade, with a focus on developmental approaches supported by both the UK
government’s Department for International Development and proactive NGO
members. However, while corporate members are required to produce annual reports
to the ETI on the progress they have made with code implementation in their supply
chains, there are no requirements for the public disclosure of inspection results. This
arguably stems from the fact that campaigning in the UK has mainly been conducted by
NGO and trade union activists rather than ordinary consumers themselves, in contrast
to the USA where campus-based consumers have been involved in direct protests,
discussed subsequently. In the UK, calls for public disclosure of social auditing results
are notable for their absence, and this has engendered more of a culture of learning than
one of rigid compliance in the ETI.
Stolen Childhoods (Morris, 2005) and Wal-Mart: The High Cost of Low Price.
While student activism on the theme of sweatshops continues through USAS, it is now
mainly channelled into the ongoing programmes of the WRC such as recent sweat-free
campus campaigns. Focus on the retail sector has developed, though, through
the emergence in 2005 of two groups targeting Wal-Mart—Wake-up Wal-Mart and
Wal-Mart Watch—though these organisations address a broader range of issues
relating to Wal-Mart’s domination of the US market, rather than purely supply chain
exploitation.
In contrast to the UK, US-based campaigning has a significant legal dimension, with
groups like Human Rights First and the International Labor Rights Fund both being
run by lawyers and experimenting with legal frameworks, such as the Alien Tort Claims
Act, which hold corporations accountable for actions affecting foreign workers.
Another significant UK–US contrast concerns the lack of attention paid by the US
media and campaigning groups to the global supply chains of supermarkets (with the
exception of the mass-merchandiser, Wal-Mart). It has been suggested by several
interviewees that this stems from the absence of prominent national supermarket
chains/brands in the USA and the weak position (compared to the UK) of US super-
market own-brand products (Hughes, 1996; M. Sinclair, personal communication),
though this situation is changing with the increasing concentration of capital in US
food retailing (Wrigley, 2002). While there have been campaigns focussed on labour
rights within the US agricultural industry, including the work of Oxfam America
(Mesbah, 2004) and the Coalition of Immokalee Workers (Imig, 2005), these
movements have tended to concentrate on agricultural supplies to fast food chains.
Campaigns and media reports concerned with issues of labour standards in the global
supply chains of US supermarket chains are notable for their absence, and this stands in
marked contrast to the situation in the UK with implications for the structure and
scope of US MSIs.
reports, such as Wal-Mart, JC Penney, Sears and Target, appear to be pursuing global
labour standards strategies outside MSI structures in the USA, which represents
another important contrast with the UK context. Gap Inc., through its involvement in
Social Accountability International (SAI) and the UK’s ETI, is one of the few
US retailers engaging with MSIs. The formal multi-stakeholder approach to ethical
trade therefore appears to be more directly influential with retailers in the UK than it is
in the USA.
The FLA code of conduct is very similar to that of the ETI, including clauses relating
to: forced labour, child labour, harassment of workers, non-discrimination, health and
safety, freedom of association and collective bargaining, wages and benefits, hours of
work and overtime compensation.9 There is not space to detail the precise clauses of the
FLA code here. For a comprehensive comparison of different MSI codes of labour
conduct, see SGS (2005). However, a key point to make is that the FLA code does not
refer to a ‘living wage’ in the same way as other MSIs, which relates to the absence of
unions on its Board. Rather, it states that employers should pay as a minimum the legal
or prevailing industry wage required by local law in the country in which the supplier is
based. This absence of a living wage in the FLA code remains a target of criticism
by NGOs, unions and other MSIs in the USA (personal interviews). The FLA is
also less specific than the WRC in terms of its standards concerning overtime work
(Jenkins, 2002).
The WRC differs from the FLA, and also the UK’s ETI, predominantly because it is
limited to supply chains for clothing bearing college and university names. It does not
include mainstream retail members. By 2006, there were 157 colleges and universities
affiliated to the WRC, and the focus on college apparel is a direct result of the strength
of the campus-based anti-sweatshop movement in the USA. The organisation has
permanent staff based in Washington DC and a Governing Board comprising five
representatives of its university caucus, five from USAS (who continue to be supported
by UNITE-HERE) and five members of its Advisory Council made up of independent
labour rights experts.10 Its model code of conduct is very similar to the codes used by
the ETI and FLA, though it specifies and defines a ‘living wage’11 and has an additional
section devoted to women’s labour rights (Jenkins, 2002).
The Worldwide Responsible Apparel Production (WRAP) and Social Accountability
International (SAI) are other US ethical trading organisations worthy of mention.
WRAP is essentially a business association code rather than a MSI (Jenkins, 2002;
O’Rourke, 2002) and therefore receives less attention here. Its code of conduct reflects
its dominant private sector membership, omitting a detailed clause on a living wage for
example. By contrast, SAI represents a much stronger MSI with a history of close
relations with the ETI, FLA and WRC. As well as its involvement in accrediting and
training social auditors, it promotes a strict workplace standard in the form of its SA
8000 code which is arguably more detailed than that of any other MSI and which works
progressively with a ‘basic needs’ wage.12 The organisation was set up in 1997 and has a
Board including two NGO representatives, one lawyer and three companies. It also has
a trade union presence, though significantly these are European-based unions.
Although based in the USA, SAI does not quite fit with the model of a national-
level MSI as it has always had European as well as US companies as signed-up
members. It also differs from other US MSIs in terms of its sectoral scope,
incorporating European food in addition to clothing companies. However, its influence
on US retailers and brands is limited. Of the leading food and clothing retailers in the
USA, only Gap Inc. is involved in the organisation and working with SA8000.
The ultimate test, if you like, for a company walking the walk is the fact that they don’t
know when we are going to arrive and they know that whatever we find is going to be public.
Interview with the President and CEO of the FLA, 02 December 2005
This fundamental contrast with the ETI’s approach hinges on firmer strategic
connections being made between the FLA, its members’ supply chains and the US
consumers of apparel. As the organisation asserts on its website, ‘The FLA serves as a
source of information to consumers and promotes public awareness about labour
conditions around the world through candid and transparent reporting.’13 This reflects,
in part, the notion of consumer sovereignty lying at the heart of the US anti-sweatshop
movement, and in effect enrols consumers into the auditing process as a critical
audience in a way that is absent from organised ethical trading programmes in the UK.
The ways in which auditing can be as much about ‘being seen to be audited’ as it is
about the audit outcome itself (Miller, 1998, 202) are, therefore, more apparent in US
organisational approaches than they are in the UK. However, it must be noted that the
FLA also engages in additional activities that move the organisation beyond the
12 SA8000 is essentially a certification standard focussed on factories rather than brands and retailers.
13 http://fairlabor.org/all/transparency/reports.html [Accessed 16 August 2006].
Organisational geographies of corporate responsibility . 505
The WRC can’t compromise. They can’t come down from where they are at, and these other
organisations at this point, given who their Boards are, can’t get to that transparency level.
Another challenge has been the difficulty of getting Turkish suppliers to sign up to
the project. Indeed, increased labour costs and the possible exposure of the factories of
suppliers to public scrutiny are particular concerns that must be addressed by JO-IN in
its ongoing work (interview with the Chief Executive of the WRC, 07 March 2006).
However, despite these challenges, JO-IN is continuing as a transnational experimental
project on ethical trade. As the Executive Director of the FLA noted:
I think the more interesting story is the fact that these six organisations, as different as they are,
the fact that they’re still talking to each other is really the amazing aspect of what’s happened
so far.
Interview, 08 March 2006
508 . Hughes et al.
In the case of JO-IN, the pursuit of a common standard for, and common
approach to, improving global labour standards through transnational organisational
networks is progressing through continual negotiation between nationally based
MSIs with contrasting philosophies and approaches. As a result, it is these
nationally embedded philosophies and organisational approaches that are
shaping specific pathways of transnational code development, as well as
themselves being challenged and re-shaped by such cross-border dialogue. The JO-IN
project, therefore, exemplifies the discursive construction of both national MSIs
for ethical trade and the so-called construction of a common approach to global
labour standards.
reason why many US retailers avoid engagement with MSIs, in contrast to the UK
where the ETI provides a ‘safe space’ for many companies to learn about evolving
ethical trading approaches. With broader significance for understanding the global
economy and its governance, this contrast between the UK’s learning approach and the
US model of rigid compliance monitoring for ethical trade is mirrored in regulatory
practices for accounting standards. It has been shown, for example, that the
management of accounting standards in the UK is associated with a ‘principles-
based’ approach, while in the US a more ‘rules-based’ system has been dominant
(Schipper, 2003; Nobes, 2005).
In terms of the strengths and weaknesses of each MSI’s approach, the key asset of the
ETI’s learning-based strategy centres on the production of a safe space for corporations
to develop leading edge approaches to the implementation of ethical trading principles
in collaboration with various stakeholders. However, in the absence of rules for strict
enforcement, the wider impacts of these positive developments run the risk of being
limited. In contrast, the key strength of the US MSIs’ methodology based more on
compliance monitoring and transparency is the potentially broader extent to which
labour standards are implemented and guaranteed. The most advanced MSI in terms of
working with a comprehensive and progressive code, collaborating with stakeholders
and developing transparent monitoring programmes appears to be the Worker Rights
Consortium. In the context of the JO-IN project, the standards embodied in the WRC’s
approach present a challenge to other MSIs. The resulting tensions between MSIs as
this transnational experiment unfolds illustrate both the political significance and the
fluidity of national-level contexts and institutions in the developing ethical trading
agenda.
Ethical trade remains a central subject of inquiry for social scientists interested in
understanding the broader architectures of global supply chain governance and
transnational retail activity. As retailers are becoming increasingly responsible for
labour standards in global supply chains, understanding the strategies they use to
manage these standards is an important academic and political objective. The rising
market power of transnational retailers (Wrigley et al., 2005) implies that power and
authority in the governance of global supply chains is falling increasingly into the hands
of an elite group of globalising retailers. What is clear from this comparative analysis,
though, is that the national-institutional contexts in which these (and other national)
retailers are based continue to play a significant part in moulding their strategies for the
management of ethical trade. However, recognising the dynamism of national
institutions and organisations—the ways in which they are always shaped through
practices and interactions at a variety of spatial scales—is crucial to grasping their
significance. Taking a relational approach to understanding UK–US differences in
corporate ethical trading approaches therefore highlights the remarkably unsettled
geographies of corporate responsibility that are currently shaping the global economy.
Acknowledgements
We would like to thank two anonymous referees for their very helpful comments on an
earlier draft of this article. The research was carried out as part of an ESRC research grant
(award number RES-000-23-0830), for which we are very grateful. And finally, we thank our
interviewees for their valuable participation in the study.
510 . Hughes et al.
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