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From the Principal Scientist of the Natural Resources and Ethical Trade programme at the Natural Resources Institute
As the author of the reports that provided most of the material for Ethical Performance’s recent article on the affordability of ethical codes of practice (Vol. 3, Issue 5), I would have stopped short of claiming that “The cost of complying with ethical codes of conduct appears to be affordable to most emerging economy companies”. My research was limited to just two African industries. Given the substantial differences in compliance costs that each industry is experiencing, I would not feel confident about generalizing the findings to industries in other countries, either within or outside Africa. Stepping outside the confines of my own research, I would like to embellish a point that the Ethical Performance article briefly mentions: the smaller the company, the more burdensome compliance costs tend to be. The work of several of my colleagues in the Natural Resources and Ethical Trade (NRET) programme at the Natural Resources Institute suggests that codes of practice, as currently implemented, will probably exclude small scale producers from export markets.
One could argue that if small farms and enterprises in developing cannot compete on world markets while conforming with necessary standards, then maybe we should give them up for lost. Perhaps the best response to this argument lies in the plight of workers in the majority of developing countries where small-scale agriculture and enterprise provide the bulk of employment. Excluding millions of people from the benefits of expanding global trade at a time when groups claiming to represent marginalised people are engaging in ever-more violent activities appears, at least to me, a pretty short-sighted strategy.
My NRET colleagues point out that the exclusion of small-scale enterprises is a likely but not inevitable consequence of private sector codes of practice. A more inclusive approach will require action from international buyers and developing country suppliers, and support from developing country governments and the international aid community. If readers would like to know more, they can email NRET at nret@gre.ac.uk.
Chris Collinson
As the author of the reports that provided most of the material for Ethical Performance’s recent article on the affordability of ethical codes of practice (Vol. 3, Issue 5), I would have stopped short of claiming that “The cost of complying with ethical codes of conduct appears to be affordable to most emerging economy companies”. My research was limited to just two African industries. Given the substantial differences in compliance costs that each industry is experiencing, I would not feel confident about generalizing the findings to industries in other countries, either within or outside Africa. Stepping outside the confines of my own research, I would like to embellish a point that the Ethical Performance article briefly mentions: the smaller the company, the more burdensome compliance costs tend to be. The work of several of my colleagues in the Natural Resources and Ethical Trade (NRET) programme at the Natural Resources Institute suggests that codes of practice, as currently implemented, will probably exclude small scale producers from export markets.
One could argue that if small farms and enterprises in developing cannot compete on world markets while conforming with necessary standards, then maybe we should give them up for lost. Perhaps the best response to this argument lies in the plight of workers in the majority of developing countries where small-scale agriculture and enterprise provide the bulk of employment. Excluding millions of people from the benefits of expanding global trade at a time when groups claiming to represent marginalised people are engaging in ever-more violent activities appears, at least to me, a pretty short-sighted strategy.
My NRET colleagues point out that the exclusion of small-scale enterprises is a likely but not inevitable consequence of private sector codes of practice. A more inclusive approach will require action from international buyers and developing country suppliers, and support from developing country governments and the international aid community. If readers would like to know more, they can email NRET at nret@gre.ac.uk.
Chris Collinson
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