Options for Code of Conduct IFOAM traders


Developing A code of Conduct

This document is a collection of ideas that could be used to draft a code of conduct for organic traders. It is intended to provide background information regarding the content and scope of codes of conduct more generally and explore particular issues relevant to the trade of organic products.

Of the numerous codes of conduct in existence, the vast majority address labour relations and are intended to be implemented at a particular production facility. Although many (multinational) companies have developed ethical trading guidelines, an international code of trading practice does not exist. This means that IFOAM traders will need to develop their own criteria in this area.

However, there are two initiatives of direct relevance with regard to social labeling and Codes of Conduct within the European Union: the integration of social criteria in the General System of Preferences and the adoption of a resolution regarding a model Code of Conduct for European businesses operating in developing countries and the establishment of a European Monitoring Platform.

Areas to Consider for Inclusion into the Code of Conduct

The document is divided into a number of sections, each representing specific issues that could be addressed within the code of conduct. The introduction section presents the underlying fundamental principles from which a code of conduct could be drafted. The Preamble section outlines the major themes to be addressed and sets the stage for the specific requirements. The next section is a presentation of basic labour codes of conduct. It is suggested that organic traders could adopt an already existing base code to cover basic labour standards.

Following this, issues specific to organic traders are considered. As organic traders are at the centre of a number of relationships in the organic supply chain, it makes sense to organise these issues according to these relationships. Relationships with the organic movement in general, relationships between organic traders, relationships with trading partners (both suppliers and clients) and internal relationships are each addressed in turn.

Once the text of the code has been considered, the next step is to examine how the code of conduct could be implemented and then monitored. A number of options are presented ranging from simply signing onto the code to third party verification of observance with the code.

Each issue raised in the sub-sections of the document is numbered; this is to facilitate discussions by making referencing easier.

How strong should the code be?

Instead of providing two or three sets of possible codes of conduct ranging from simple and/ or "weak" one to comprehensive and/or "strong" options, it was felt that presenting a wide range of options under each category was more appropriate. Organic Traders can discuss the merits of each issue individually and adjust the degree of observance to acceptable levels as seen fit.

Impacts on the Supply Chain and Financial Responsibility

While a code of conduct for organic traders would first and foremost be a code addressing the behaviour and activities of organic trading companies, this is intricately connected to the activities of suppliers and subcontractors. Traders play a key role in mediating between the demands of consumers for socially and environmentally responsible products and the abilities of producers to supply products that meet these demands. The base code on labour conditions is intended to be observed at both the trader and supplier level. The rest of the code relates specifically to organic traders and their relationships with key actors.

With the relationship between the organic trader and supplier, it is suggested that negotiations shall take into account the costs of observing the code by the supplier/subcontractor (as per ETI - principles of Implementation 5.1). The financial responsibility to ensure compliance with the code is a shared responsibility. A number of options will be presented as to how this could be implemented in the section on Relationships with Trading Partners.

Process to draft a code of conduct

To achieve effective end results, the process of drafting and implementing a code of conduct must be an initiative of organic traders. After incorporating feedback gained from discussions in Basel and from widespread circulation of this options paper among IFOAM traders, a first draft of a code of conduct could be developed for the IFOAM Working Group on Trade. It is suggested that a taskforce be set up that would be responsible for further development of the draft and for putting the code of conduct into practice. The task force could undertake the work itself or it could oversee its implementation by a third party.

In order to facilitate this process, the authors offer to write the first draft based on suggestions and feedback from organic traders.

email: info@novotrade.nl
last updated: 24 october 2000
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