Background

In the context of globalisation and international competition, companies have outsourced the production of labour intensive goods to developing and newly industrialised countries, especially in Asia.

The working conditions in these sourcing countries are often poor. While labour laws and policies exist, national governments tend to be lenient when it comes to enforcement. Companies which source from these countries risk damaging their reputation, especially as consumers increasingly care about the working conditions under which the goods they buy are produced.

Improving social standards in the producing countries supplying companies in industrialised nations has therefore become a very important topic on many companies' agendas.

The creation of the BSCI

To improve social compliance in the supply chain, companies and associations from the retail and industrial sector have created individual Codes of Conduct and monitoring systems. While such efforts have brought some improvement to the situation of workers, the mushrooming of individual approaches has led to inefficiency and high costs for retail companies and suppliers as a consequence of factories being audited several times based on various Codes and auditing procedures.

To create consistency and harmonisation, the Brussels based Foreign Trade Association (FTA) began in 2002 to establish a common platform for the various European companies Codes of Conducts and monitoring systems and to lay the groundwork for a common European monitoring system for social compliance. In 2002 and 2003, retail companies and associations held several workshops to determine the framework for such a system. In March 2003 the FTA formally founded the Business Social Compliance Initiative (BSCI). The experience and the know-how gained by companies and associations from their monitoring systems were cornerstones for the development of the approach and management instruments of the BSCI. In the spring of 2004 the development phase was achieved and since then the system has been implemented worldwide.

The FTA provides the Executive Office for the BSCI.

Please visit the FTA at www.fta-eu.org for more information!