Ragtrader founder Fraser McEwing obtains the latest terms handed to David Jones suppliers - and offers his two cents.
David Jones has crossed over into fantasyland by issuing a four-page ‘code of conduct’ direction to its 1600 suppliers.
CEO Iain Nairn wants every supplier to sign it and, for good measure, even those who are not importers.
The code appears to have bubbled up from the public relations department to ensure that David Jones can stand tall when it comes to the welfare of factory workers who make the goods offered for sale in David Jones stores.
Not only is that notion flawed, but the document itself holds water about as well as a string bag.
First, let’s take a look at the whole idea of complying with a set of working conditions that has been laid down by the Ethical Trading Initiative (ETI), a UK based organisation which promotes an international set of supplier guidelines to which David Jones is a signatory.
It logically follows that David Jones signing is meaningless unless its suppliers back it up with their pledges to comply.
In fact, David Jones’s code of conduct document lifts much of its wording from the ETI.
The problem with such agreements is that they override and bypass laws, regulations and practices set in place by governments in supply countries.
The ETI originators are attempting to impose their standards of worker welfare on countries where different standards lawfully apply.
They are, in fact, acting like a government in exile when it comes to the treatment of workers.
Their enforcement power rests in the order books of their members who are supposed to tell foreign factories: “if you don’t comply with the ethical standards we have laid down we won’t buy from you.”
Let’s put the boot on the other foot. Let’s pretend that there is a body called the Ethical Iron Ore Mining Mandate and that China is a signatory to it.
The imaginary mandate states that those who operate mining machinery must not work more than four hours a day, must be provided with a hot bath and a massage every afternoon and be given a fully paid two weeks family holiday every six months.
Our mining companies would laugh off such demands until the ore buyers in China threatened to stop buying.
Then our mining companies would point out that such demands are outside the industrial laws of Australia and to kindly get lost.
But the Mandate would come back with the response that it doesn’t take notice of, or agree with, Australian laws and if you boys don’t comply you can leave your damn iron ore in the earth –which you shouldn’t be disturbing anyway.
Yes, this is a ridiculous example, but you get the point. It is surely up to buyers to source suppliers and up to foreign governments, at various levels, to impose labour regulations.
The building that fell down in Bangladesh didn’t do so because there were poorly treated clothing workers inside.
It fell down because of badly drafted or neglectful policing of building regulations. There are probably thousands of either non-existent or badly policed worker conditions in Bangladesh.
Where is the ETI to stop? Even if the ETI had managed to achieve perfect working conditions for the machinists in the Bangladesh building, it would still have fallen down and caused and same fatalities.
When Australia began to buy clothing from China there were poor working conditions in many factories, but over time, and without the help of the ETI, that situation is quickly vanishing.
The change has been brought about by government initiatives along with the rising value of the clothing sector, which obliges employers to offer better working conditions as a matter of effective management.
At the same time, there has been a shift from clothing to higher value added factory production, leading to even better working conditions. By forcing compliance on factories in places like Bangladesh, either the compliance auditing becomes corrupt or the factories will be denied work.
Either outcome is on the nose.
Back to David Jones.
The major flaw in the document is a consequence of the following stated condition:
“Suppliers must comply with local and national laws related to labour practices and ensure that workers are afforded the highest level of protection, whether that be under local law or the following principles, which should be read in conjunction with the ETI Base Code.”
The problem is that local and national laws don’t square with the ETI manifesto.
Which is a supplier to choose? Obviously ETI if he wants to keep his David Jones business, so why bother to even mention local and national laws because the ETI laws override them.
When we get into the body of David Jones document, we see that compliance cannot co-exist with minimum lawful working conditions in many supply counties. The broad ground rules are stated as:
• Employment is freely chosen
• Freedom of association and the right to collective bargaining are respected
• Working conditions are safe and hygienic
• Child labour is not used
• Living wages are paid
• Working hours are not excessive
• No discrimination is practiced
• Regular employment is provided
• No harsh or inhumane treatment is use
An appendix, which follows, expands upon these headings, taking them even further from reality.
For instance: “Workers shall receive regular and recorded health and safety training, and such training shall be repeated for new or reassigned workers.”
You might, just might, find a condition of work like this in Australia, but in a place like Bangladesh?
The country is fighting its way up from the bottom.
Only time and growing prosperity will lead to better working conditions, not the pontifications of the ETI.
David Jones is much more positive about how it will check up on its suppliers, incidentally, than how it expects those suppliers to impose upstream rules on the factories they use.
Hence:
"To monitor compliance to this code, David Jones also reserves the right to conduct audits of any and all suppliers and their supply chain partners involved in production for David Jones. Audits may occur with or without notice, shall be unrestricted and may include off-site worker interviews."