Why All The Fuss About A Code of Conduct?

A code gives your clients an extra boost of confidence to buy from you.

Maybe you have read articles on product safety, participated in responsible sourcing education, completed PPAI’s Product Safety Aware program or attended a PPAI Product Responsibility Summit. In these and other ways your eyes have most likely been opened to the reality of the risks you now face as a supplier or distributor of promotional products. Now you find yourself asking, “Where do I start?” or “What’s the next step?”

One of the first things you’ll want to do is to adopt a code of conduct. A code is the cornerstone of any responsible sourcing program as it identifies an organization’s guiding principles and is a tangible presentation of what you are doing to meet the expectations of the end buyer for product safety, social and environmental assurances. It is a document a supplier can hand to a distributor, and a distributor can share with an end buyer as a public statement of the organization’s values and ethics. Many end buyers, particularly larger businesses, have already adopted their own codes and often look for their business partners to adopt their code as well.

A well-written code of conduct lays out the standards by which the organization will evaluate factories and trading partners. It serves as a statement of principles of compliance with the laws, standards and regulations of the United States and the regions around the globe in which the organization conducts business.

While there are no specific laws that require a code of conduct, adoption of a code gives buyers an extra level of confidence when doing business with a vendor which communicates its code in some fashion—for example, posting the code on its website, sharing it in the catalog or providing it to clients with quotations.

The Meaning Behind The Components Of A Code Of Conduct

While codes of conduct can vary, the actual components or principles of a code were established to ensure “decent and humane working conditions” across the globe by addressing labor standards as defined primarily by the United Nations (UN), through the International Labour Organization (ILO), a specialized agency of the UN.

For simplicity, PPAI has created a voluntary industry code of conduct and recommends that all members—suppliers, distributors and business services companies—adopt it. More than 1,170 of the largest and most well-respected companies in the industry have already done so. View the full list at www.ppai.org under the Inside PPAI/Corporate Responsibility/Social Responsibility tabs.

A code can contain as many or as few components as an organization wishes to include. In many cases the multiple standards outlined by the ILO are often consolidated, by one organization or another, into one component or singular principle. The objective of this article is to help you understand, at a high level, the basic intent behind each principle within the PPAI Code of Conduct. PPAI’s code is based on the UN Global Compact, the ILO’s standards and good labor practices recognized by the international community, the Fair Labor Association (FLA) workplace code of conduct and the unique needs of the promotional products industry. For more information on items 1-6, go to www.ilo.org.

1. Abuse of Labor Also referred to as forced labor, this is defined by the Forced Labour Convention, 1930 as "all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily.” Forms of forced labor include indentured, forced-prison, bonded or slave labor.

What it means to you: Policies acknowledging workers’ rights and educating those most vulnerable are just a couple of ways to eliminate abuse of workers.

2. Child Labor Child labor is “work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development,” according to the ILO. The Minimum Age Convention, 1973 defines the minimum age for which children are allowed to work and the ILO website contains a list of countries that have ratified these standards. Within the 1973 convention there are three forms of children’s work: children in employment, child labor and hazardous work. The Worst Forms of Child Labour Convention, 1999 defines a child as someone under 18 years of age and calls for eliminating the worst forms of child labor. For more about child labor trends and statistics visit the Resources page at www.ilo.org.

What it means to you: Organizations are expected to not use child labor and comply with all minimum age provisions of applicable laws and regulations.

3. Freedom of Association At the core of the ILO’s values is the “right for workers and employers to establish and join organizations of their own choosing without previous authorization.”

What it means to you: Employees are free to associate or organize without fear of reprisal or interference from employers or government. A well-intended code is designed to foster respect for the rights of employees to associate, organize and to bargain collectively.

4. Discrimination The ILO defines workplace discrimination as “treating people differently because of certain characteristics, such as race, colour or sex, which results in the impairment of equality and of opportunity and treatment.”

What it means to you: It is generally accepted that discrimination not occur based on age, religion, political affiliations, disabilities, sexual orientation, social origins, genetics and lifestyle choices. Discrimination in the workplace, whether obscured or public, is considered a violation of international labor standards.

5. Hours and Wages “ILO standards on working time provide the framework for regulated hours of work, daily and weekly rest periods, and annual holidays. These instruments ensure high productivity while safeguarding workers’ physical and mental health.”

The ILO standards on wages address wage gaps, lack of guaranteed wages, non-payment of wages and wages paid in other forms such as with goods, bonds or alcohol “by providing for regular payment of wages, the fixing of minimum wage levels, and the settlement of unpaid wages in case of employer insolvency.” Under the Protection of Wages Convention, 1949 “the term wages means remuneration or earnings, however designated or calculated, capable of being expressed in terms of money and fixed by mutual agreement or by national laws or regulations, which are payable in virtue of a written or unwritten contract of employment by an employer to an employed person for work done or to be done or for services rendered or to be rendered.”

What it means to you: This principle of a code of conduct plainly states that an organization complies with all applicable wage, work hours, hiring, benefits, and overtime laws and regulations. In the absence of law in a particular location relating to product safety, labor, employment, environment or working conditions, the spirit and intent of these policies shall be met.

6. Workplace Conditions The ILO principles state that “workers should be protected from sickness, disease and injury arising from their employment.” To address this and improve working conditions for workers, the ILO has adopted more than 40 standards and codes of practice in order to deal directly with occupational safety and health issues.

What it means to you: Inclusion of this principle in a code of conduct communicates that your company will provide a safe, healthy and secure workplace by abiding by all applicable laws and regulations for safety and health. Additionally, proper sanitation, lighting, ventilation and fire safety protection will be provided.

7. Environment The UN Global Compact, using principles provided by the 1992 Rio Declaration, states that “business has the responsibility to ensure that activities within their own operations do not cause harm to the environment. Society expects business to be good actors in the community. Business gains its legitimacy through meeting the needs of society, and increasingly society is expressing a clear need for more environmentally sustainable practices. The FLA maintains that “employers shall adopt responsible measures to mitigate negative impacts that the workplace has on the environment.” Find more information at www.ppai.org under Inside PPAI/Corporate Responsibility tabs and at www.unglobalcompact.org.

What it means to you: Organizations are expected to abide by all applicable environmental laws and regulations. In addition to existing laws and regulations, this may include expectations to make all reasonable efforts to manage your company’s environmental footprint by minimizing the adverse impact on the environment resulting from manufacturing and distribution processes. This includes managing energy, water and waste systems.

8. Subcontractors and Sources This principle addresses an organization’s supply chain and business partners. Implementing best practices within one’s own facilities is only the start. The business partners that a company chooses to conduct business with, whether directly or indirectly, reflect an organization’s values and commitment to upholding the values of code of conduct. For example, the UN code of conduct explicitly states that “the UN expects that suppliers ensure that this Code of Conduct is communicated to the employees and subcontractors of all suppliers, and that it is done in the local language and in a manner that is understood by all.” Additionally, “the UN expects that its suppliers encourage and work with their own suppliers and subcontractors to ensure that they also strive to meet the principles of this Code of Conduct or equivalent set of principles.”

What it means to you: The expectation of this principle is to require all businesses that support your business as subcontractors, manufacturers or sources of goods comply with all of the same policies stated in the organization’s code of conduct and ethical behavior policies. In short, organizations must have visibility and control of all subcontractors and suppliers within the supply chain in order to ensure true compliance with all applicable national and international laws. Find more information at www.wipo.int.

9. Product Safety Product safety regulations are increasing on federal, state and international levels. As a result, it is essential that the industry as a whole recognize and understand the importance of product safety, and every company should develop a basic awareness of the importance and requirements of product safety. When regulations exist, compliance is required by law. It is vital that you communicate frankly with your promotional products partners to ensure you select the right products for your specific application. This principle communicates your organization’s commitment to complying with all applicable laws and regulations regarding the safety of products you sell, and that you will meet applicable, recognized voluntary industry standards for your products and processes. Find more information at www.ppai.org under the Inside PPAI/Corporate Responsibility tabs.

Communicating Your Code

All employees within an organization and its factories should be aware of the company’s code of conduct and be trained in its application. Vendors should commit to audits and corrective action plans as part of a sustainable social responsibility program.

It is considered a best practice to translate a code into local languages where factories are located so that factory personnel understand their rights and responsibilities. The PPAI code is available in English as well as in French Canadian, Chinese and Spanish.

Closing A Loophole Means Stricter Enforcement

In the past, social standards on a global scale were typically considered more of a “nice thing to do.” While standards and principles have been adopted over the past century, there has rarely been much enforcement, and the lack of laws addressing the social irresponsibility only served to exacerbate the problem. This is no longer the case. On February 24, 2016, President Obama signed a bill that prohibits the U.S. importation of goods produced by convicts, or forced or indentured labor. The bill closes a loophole in the Tariff Act of 1930 that allowed goods produced through forced labor into the U.S. if demand exceeded domestic production. Through the Trade Facilitation and Trade Enforcement Act this loophole has been closed thus opening the door for stricter enforcement of goods produced via forced labor.

Tim Brown, MAS, is PPAI’s product responsibility manager. In 2013 he brought his background in supplier relations, sourcing and vendor compliance to his role at PPAI with the intent of driving member advocacy and communicating product safety issues throughout the industry. Prior to joining PPAI, Brown was the supplier relationship manager at distributor Cintas Promotional Product, where he implemented industry-leading supplier management best practices. He has served on the Quality Certification Alliance (QCA) Distributor Advocacy Council, as well as on the board of directors for Tri-State Promotional Products Association (TSPPA) as president in 2012. He also served as a member of PPAI’s Product Responsibility Action Group (PRAG). Brown was named a PPB Rising Star in 2012.


RESOURCES

The quick reference list below features links to the websites included in this article, plus two additional sites to help you better understand, develop and communicate your company’s code of conduct:

PPAI Corporate Responsibility

PPAI Code of Conduct

United Nations Global Compact

International Labour Organization (ILO

Fair Labor Association Workplace Code of Conduct

BCorporation COD Development


Ready For Adoption

PPAI has developed a code of conduct that is available for member companies to adopt. Download it in English, French Canadian, Chinese and Spanish versions at www.ppai.org under the Inside PPAI/Corporate Responsibility tabs.

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