The Ethical Trading Initiative (ETI) was founded in the UK in 1998 and is one of the most influential civil society organisations in the field of ethical trade. UK and international retail chains such as Marks & Spencer, Tesco, ASDA, Primark, Mothercare and John Lewis are active members of the ETI. The ETI Base Code is the nine-point ethical trade code published by the ETI, and it is used by many major brands as their "minimum acceptable" social compliance requirements.
The 9 Principles of the ETI Base Code
- Employment is freely chosen: Forced, bonded or involuntary labour is prohibited.
- Freedom of association and collective bargaining: Workers have the freedom to join a trade union.
- Safe and healthy working conditions: Fire safety, prevention of occupational accidents, PPE.
- Child labour is not used: Employment of those under the age of 15 is prohibited.
- A living wage is paid: A wage above the minimum wage that can cover living expenses.
- Working hours are not excessive: A maximum of 48 normal + 12 overtime hours per week = 60 hours.
- No discrimination is practised: Discrimination based on gender, race, age, religion or trade union membership is prohibited.
- Regular employment is provided: Contractual employment; the use of temporary and sham contracts is prohibited.
- Harsh or inhumane treatment: Physical punishment, verbal abuse and intimidation are prohibited.
ETI Membership Structure
The ETI brings together three different stakeholder groups:
- Corporate members: 80+ retailers and brands. They commit to producing in compliance with the ETI Base Code.
- NGO members: Civil society organisations focused on human rights and workers' rights.
- Trade union members: International and national workers' unions.
This three-stakeholder structure transforms the ETI from being merely a brand audit into a multi-stakeholder ethical trade platform.
How Member Brands Approach Suppliers
ETI members expect compliance from their suppliers in two ways:
- Direct ETI Base Code compliance audit: Some brands require their suppliers to undergo a direct ETI Base Code audit.
- Verification of compliance with the ETI Base Code clauses through SMETA or a similar audit: The more common approach. A SMETA 4-Pillar audit is accepted because it covers all of the ETI Base Code clauses.
Preparation Process
- 9-clause compliance analysis: Comparing current practices against the Base Code.
- Living wage calculation: Determining the living wage according to the basic needs of the region and the family.
- Arranging contractual employment: Ensuring all workers have a written contract.
- Establishing trade union relations: Setting up worker representation or a workplace committee.
- Training: Awareness training for all workers on their rights and the ETI Base Code.
- Audit: A direct ETI or SMETA audit, depending on the request of the ETI member brand.
The ETI is designed not as a "minimum tolerable" standard but as a standard of "what one should aspire to be". Concepts such as a living wage are among the innovations the ETI introduced in 1998 and have today become globally accepted norms.
Frequently Asked Questions
- I am a supplier to a brand that is not an ETI member, yet it requests the Base Code. Why?
Many brands use the ETI Base Code as the basis for their own supplier requirements even when they are not ETI members. This shows that the ETI Base Code has become established as a de facto minimum standard in the sector.
- If I already have a SMETA audit, do I need a separate audit for the ETI?
Usually not. Since the SMETA 4-Pillar covers the 9 clauses of the ETI Base Code, no separate audit is required. Some ETI members may prefer their own audit format; in that case, you should get in touch with them.
- How is the living wage calculation carried out?
The Anker Methodology published by the Global Living Wage Coalition is used. The basic needs of a family of five are calculated through research into regional living costs (housing, food, healthcare, education, transport, savings).