How companies take responsibility in respecting human rights
A brief introduction to codes of conduct, supplier codes and other ethical documents
Have you ever bought shoes from Adidas? If so, have you ever wondered where these shoes came from and who made them?
Products made by a company like Adidas have traveled a long way. People and companies all around the world have put in effort gathering materials, putting them all together, controlling logistics and so on in order to accomplish the final product. Over the past 30 years, companies started to account for the human rights of the workers in their global supply chains. Stockholders and societal debates have put moral pressure on companies to document their ethical values and principles. This has led to the introduction of so-called ‘codes of conduct’ for employees and ‘supplier codes’ for suppliers. Sometimes companies add other ‘ethical documents’ like due diligence reports.
To clarify, here’s a concise definition of each of the documents to be found on the websites of companies.
Code of conduct
In essence, a code of conduct contains the principles to which a company wants to commit. According to O’Rourke1, codes of conduct are written statements serving as the enforcement of norms or rules by which labor practices at work can be evaluated. These principles are internal, meaning that the code of conduct applies to its own employees. Often, yet not always, these codes of conduct refer to international conventions related to human rights. You can for instance think of the Fundamental Principles and Rights at work as mentioned by the International Labour Organisation (ILO)2 in 1998.
For example, when looking at the code of conduct of Adidas, you can find a principle about supporting a diverse workforce. All Adidas employees must “treat others with respect and fairness”, as stated in the code of conduct.
A supplier code also contains fundamental labour rights. However, it’s an external code: instead of principles regarding its own employees, the company focuses on workers in the supply chain. Simchi-Levi3 generally defines the corporation’s supply chain as the series of companies that work together in order to accomplish services for the end customer. To illustrate this, you can think of a chocolate fabricant who buys cacao from another company. The presence of a supplier code reflects the responsibility taken by the buyer-company to monitor the compliance of fundamental rights of all employees in the supply chain, even though these workers are not its own employees. A supplier code gives insight into how the cacao factory will look after their fundamental labor rights as well.
In these documents you can also find references to international conventions.
At first sight, the supplier code of conduct on the website of Adidas seems to be very similar to the code of conduct. However, you can detect small differences by which you can distinguish the supplier code from the code of conduct. Example given, Adidas mentions that they expect their business partners in the supply chain to not employ children under the age of fifteen years old, or, when education until a particular age is compulsory in a specific country, not to employ children until they reach that certain age. Here, the emphasis lies on the buyer-companies, not on its own employees.
Other ethical documents
In addition to, or instead of a code of conduct or supplier code, companies put other documents on their website.
Besides a code of conduct and a supplier code, Adidas also provides a compliance policy in which they elaborate on some other topics not covered in the other documents. Furthermore it is explained which procedures are applied when one of the principles in the documents is being violated.
In short, the presence (or absence) and content of the mentioned documents on a company’s website can tell us a lot about how it aims to take care of the people involved in the company’s products. On the Database of Business Ethics, you can find links to codes of conduct of many of the biggest companies all over the world. In the near future, links to supplier codes and other ethical documents will also be added to the database.
So next time you buy new shoes, maybe look up the codes on our website when comparing Nike, Adidas and Puma. Because although only the wearer knows where the shoe pinches, you can make a difference for employees and/or suppliers by choosing the company who respects human rights.
1 O’Rourke, D.: 2003, ‘Outsourcing Regulation: Analyzing Nongovernmental Systems of Labor Standards and Monitoring’, Policy Studies Journal 31(1), 1–29.
3 Simchi-Levi, D., P. Kaminsky and E. Simchi-Levi: 2002, Designing and Managing the Supply Chain (McGrawHill/Irwin, New York).