What ethical and labor-related issues are a major challenge to footwear and clothing MNEs that operate in developing countries? What guidelines are provided by the Ethical Trading Initiative?
What will be an ideal response?
The many labor issues that companies must deal with include fair wages, child labor, working conditions, working hours, and freedom of association. These issues are especially critical in retail, clothing, footwear, and agriculture where MNEs outsource production to independent companies abroad, usually in developing countries. The challenge for MNEs is that they work in an environment with different cultural, legal, and political rules than what they are used to in their home countries. The objective of ETI is to get companies to adopt ethical employment policies and then monitor compliance with their overseas suppliers. ETI's trading initiative base code identifies the following issues:
a. Employment is freely chosen.
b. Freedom of association and the right to collective bargaining are respected.
c. Working conditions are safe and hygienic.
d. Child labor shall not be used.
e. Living wages are paid.
f. Working hours are not excessive.
g. No discrimination is practiced.
h. Regular employment is provided.
i. No harsh or inhumane treatment is allowed.
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