Social & labour
Ethical Trade
Definition
Ethical trade refers to commerce in which companies take responsibility for the labour rights and working conditions of the people who produce their goods, wherever in the world they are produced. It is institutionalised by the Ethical Trading Initiative (ETI), a UK-based alliance of companies, trade unions and NGOs whose Base Code sets minimum labour standards derived from ILO conventions.
References
Supports definition and framing.
Overview
What it means
The ETI Base Code covers nine provisions, beginning with freely chosen employment (no forced, bonded or involuntary prison labour), freedom of association and collective bargaining, and safe and hygienic working conditions, extending to living wages, working hours, discrimination, regular employment and prohibition of harsh treatment.
Ethical trade practice involves adopting such codes, monitoring suppliers, and remediation.
How it is used
Used by retailers and brands in supplier codes, audits and collaborative programmes; complements fair trade (which centres producer prices and terms).
Why it matters
Ethical trade frameworks are the main voluntary architecture for labour standards in global supply chains.