The SA8000 Global Ethical Standard - Ignore it at Your Cost!

The SA8000 Global Ethical Standard - Ignore it at Your Cost!

[Title slide on screen]
[Cue speakers slide as Richard introduces each speaker]

Thank you Richard.

Good morning! Thank you for resisting the temptation to have another hour in bed and for coming to see and hear our presentation this morning. I hope everyone is by now beginning to unwind as we enter the second day of the conference. Now, we know we're Brits and so we realise there may be a little confusion with some of the terms we might use - so feel free to question any unfamiliar expressions we might use. The first item, just to get everyone relaxed, is an animation that makes observations that have a lot of relevance when considering workplace conditions and care for the workforce - it also has relevance for all of us in our careers as EA professionals - it's simply called 'Stress'! [Cue Flash Animation]

Were there any "home truths" in that? For those who are interested, that animation, known as a 'flash' video is something that is revolutionising the way pop music is marketed over the internet. I must thank Jim Infantino of Jim's Big Ego. Jim is a New York musician who I corresponded with via email some months ago and whom was gracious enough to give us permission to use his work at this presentation. The animation itself was created by Matt Cohen at MoodyFood.com also of New York City. The song is on the newly released "Noplace Like Nowhere" CD and is available from record stores from November 21st. Alternatively, you can order it from bigego.com or via the link on our website to Jim's site from where you can also pick up a link to the Flash animation.

Naturally, you will have access to notes relevant to this presentation from the Conference Proceedings handbook. In addition, our actual presentation script and slides will be, for your convenience, posted onto the Validium website later this week so you can download them at leisure if required, should you have Internet access. To access the area, log on to our site at www.validium.com which looks like this [cue Validium website screenshot] and click the button named 'EAPA Conference' like this [demonstrate button link to Workshop 205 Resources section].

You're probably wondering what all these animals are for. I am reminded of Robert Kriegel's Keynote Speech - were you all there? He spoke about giving lots of small prizes to act as a motivator, rather than having just one big prize. So, we've got lots of small prizes for you, thanks to our friends at 'Toys 'R' Us. One of the things we'll come on to talk about is SA8000 and the fact that there are a number of companies that helped set it up and they include Toys 'R' Us. I called Tom Deluca of Toy's 'R' Us over here in the States some time ago and, in recognition of our achievement in being the first non-manufacturing company in the world to be awarded SA8000 certification. Tom is a member of the Advisory Board for SA8000. He and his colleague, Roger said he would support our workshop today by supplying these lovely toy animals. You can be assured, of course, that these animals have not been made by exploited labour and I would like to thank Tom and Toys 'R' Us for their generosity in making these items available. So we'd like you to participate and you may be rewarded for your efforts with one of these characters - but - the judges decision is final (and only one prize per delegate please)!!

Let's look [N?] at our learning objectives for this morning's workshop:

Firstly, [B?] to raise awareness of SA8000

Secondly, [B?] to identify the opportunities it brings

Thirdly, [B?] to review the standard itself

And fourthly, [B?] to consider why EAP should embrace it [R?]

We can have a try at making a statement that perhaps explains, [N?] in general terms, what SA8000 actually is.

It can be described as [N?] The Global Humane Workplace Standard [B?]- an effective, credible and efficient way for companies to assure just working conditions.

You may be asking yourselves "Where did SA8000 come from?". "Why should we take any notice of it anyway?"

Some of the answers hopefully lie ahead. [N?] Let's just look at a Situation Analysis.

[B?] Companies are under increasing pressure to improve social responsibility, particularly workplace conditions due to a number of factors. These are primarily:

[B?] Globalization

[B?] The information technology revolution, and

[B?] Strong consumer awareness and concern [R?]

Let's start with [N?] Globalization

[B?] More sourcing means that there is a large and growing share of consumer goods for the developed world produced under troubling conditions in the developing world

[B?] Free trade/fair trade. The private sector's enthusiastic support for unfettered free trade has elicited strong calls for fair trade by unions, Non-Governmental Organizations and government alike.

[B?] Importance of brand image. Brand differentiation is now more difficult due to: easier access to low-cost production, good quality, and appealing design and features. This gives rise to the increased role of brand image and cause-related marketing. [R?]

Companies now reveal acquired brands on corporate balance sheets - but, once there, how can they really be valued? This is essentially a question for the accountancy profession to ruminate over. However, what is crystal-clear is that the cluster of propositions represented by the truly great brands (which make them synonymous with quality and aspirational values) is a priceless and fragile corporate asset. For example, could any brand other than Mercedes have withstood the problems encountered with the "elk-test" on the new "A" class car where the strength and resilience of the brand saw it through the difficulty? To most observers in 1997, the inability of Mercedes-Benz to predict that its new "A" Class car allegedly toppled over when avoiding moose on Nordic roads was extraordinary. The company compounded the problem when it waited three weeks before withdrawing the car from the market. The company lost 2000 pre-sales, worth some $200 million. The car had cost $1.65 billion to develop.

The issues were obviously safety, but also the management of key relationships, particularly the media and potential customers, and so fits into the category of corporate governance. Perhaps the most telling comment came from Mercedes' rival BMW, which said: "We are not gloating about this as this affects the reputation of our entire German industry. It could well be us next time and Mercedes will be on the defensive for a long time"1.

Companies today are acknowledging the value their brand-names represent, and recognizing that, in the global marketplace, the biggest single threat to brand strength (and hence brand value) is an attack on a brand's ethical integrity. It is scarcely surprising that the three main sponsors of a recent key international conference in Copenhagen on social and ethical accountability were General Motors, Shell, and Nike. All have experienced world-wide opprobrium for, respectively, design defects identified by Ralph Nader, community issues in Nigeria and excessive exploitation of cheap labor in the supply-chain. Today, all three blue-chips are acknowledged as having exemplary social and ethical monitoring systems as a key component of their business operations.

Market forces are ruthless and implacable - EAP's will do well to remember that!

Then we have the [N?] Information Technology Revolution. This results in [B?] Greater exposure. Information distribution is cheap, easy and fast so news about a firm's conduct anywhere is quickly available everywhere. And it's not a matter of choice either. A cam-corder pointed judiciously in a factory in the Far East together with a networked TV exposure can destroy a brand's value overnight. The only alternative to that nightmare scenario is focused corporate investment to develop a social and ethical programme that is independently monitored by specialist social accountability auditors. That way, brand value will actually be increased because the ethical component is publicly and independently demonstrated.

[B?] Union/NGO influence. Information technology also makes it is easier for unions and Non-Governmental Organizations to coordinate efforts to influence consumers and government at the national and international levels

[B?] More social investing. Greater access to information on corporate social conduct has driven big increases in socially responsible investing (SRI)

[R?]

Retailers are particularly vulnerable. In the modern retail sector, sourcing is a world-wide discipline, scouring every global corner in order to meet competitive price-margins. And there are clear dangers. Many of the world's economies are based, in large part, on homeworking, family and child labor - not necessarily as an exploitative activity but out of economic necessity. Nor is it coincidental that one of Britain's biggest trade unions is running a campaign requiring retailers to identify countries of origin on all their products - and backing it up with the picketing of High Street stores.

A huge part of retailers' asset value is locked-up in the value of their brand name, which can be undermined at any time by a determined journalistic investigation. For better or worse, we live in an age of mass instant communications and the devastating and immediate impact that they can have (as Hugh Grant or President Clinton could testify). Good brands are high-value, high-risk assets and should always be treated as such - whether by corporations or individuals!

[N?]

Consumer awareness and concern is high and growing due to increased media coverage, human rights activism and corporate cause-related marketing.

So, what evidence is there of what consumers are actually saying? [N?] I will now present some interesting statistics. For those of you who are interested in the sources for these statistics, they will be included in the script that will be posted on our web site, as I mentioned earlier.

[B?] 89% of Americans say companies should do more than focusing on profitability2

[B?] 80% have a more positive image of those that support a cause3

[B?] 86% of Britons have a more positive image of a company that is trying to improve the world4

[B?] One-third of Americans say companies should set ethical standards that go beyond [B?] legal requirements2 [B?]

[B?] 46% of Americans and 51% of consumers in 23 countries made a purchase because of their perception of a company as socially responsible 2,5

[B?] 49% of Americans opted not to purchase because the company did not meet their standard for social responsibility2

[B?] Nearly 66% of Americans would switch to brand or retailer associated with a good cause3 [R?]

As we've mentioned, information technology is aiding the transmission of information around the globe. Coverage by the media [N?] itself is, of course, assisted by these advances. For example, [B?] People magazine ran an article covering children making the 'Kathie Lee' clothing line.

[B?] Shows like ABC television's 20/20 have included coverage of sweatshops and there has [B?] been regular coverage of sweatshops and anti-globalization activism by national publications such as Business Week, the New York Times and The Wall Street Journal.

[R?] Then we come to [N?] NGO, Union and Government Activism

[B?] There was opposition to the Permanent Normal Trade Relations (PNTR) status for China during the House vote (although it was finally signed at the White House by President Clinton on October 10)

[B?] There have been demonstrations in Seattle, Washington and Prague against the World Bank, IMF and World Trade Organization

[B?] There has been the boycott of Burma and Massachusetts State purchasing regulations

[B?] There is anti-sweatshop procurement legislation pending in Federal government, California, New York City and many other local or state governments

[B?] [B?] And, there have been a number of new or expanded workplace codes of practice. For example, the Ethical Trading Initiative in the UK, the Clean Clothes Campaign in Europe, and the Fair Labor Association and Workers Rights Consortium in the US.

[B?] The Organisation for Economic Cooperation and Development (OECD) has brought out new guidelines for Multi-National Companies and, [B?] The UN's Global Compact addresses many of these issues.

[R?] Having looked at the Situation Analysis in some detail, before we turn to where SA8000 fits into all of this, my colleague, Paul Warriner, is going to take you through [N?] a Case Study and will ask you to think about the implications and their impact. However, before he begins, I want to remind you of something Dr Robert Kriegel said to us all at the Keynote speech. He said we should try to learn something new from our experience at this conference. Well, I learned what a good idea it was to break for a minute and have a stretch in the middle of a presentation. So let's stand and do a couple of exercises - if I can remember them!

Now I'd like to call on Paul Warriner, to take you through the first Case Study, Paul:

Paul

Good morning. We are going to consider a dilemma [B?] - "A Sticky Situation"!

The question is: What responsibility does a manufacturer have for the misuse of its product?

H B Fuller, as some of you may already be aware, is a Minnesota-based manufacturer of adhesives, sealants, coatings and paints. The company has a generally good reputation on community, environmental and workplace issues, and is a member of the Five Percent Club, meaning that it contributes 5% of its pre-tax profits to its local community. It was one of the first Fortune 500 companies to commit itself to the Coalition for Environmentally Responsible Economies, or CERES, Principles. The CERES Principles cover:

Protection of the biosphere

Sustainable use of natural resources

Reduction and disposal of waste

Wise use of energy

Risk reduction

Marketing of safe production and services

Damage compensation

Disclosure

The appointment of environmental directors and managers

Assessment and audit

Fuller produces, in all, more than 10,000 products. One of them, however, a solvent-based glue manufactured by a wholly-owned South American subsidiary using a technology which is not used in the USA or Europe, has grabbed more than its fair share of attention. The product, which goes by the brand name of Resistol, was widely used as an industrial glue. It also became a favourite among homeless children and orphaned or abandoned adolescents living rough on the streets of Central American cities, because one of its ingredients, toluene, gives off fumes which, when inhaled, as many of you will be aware, lead to intoxication and wild mood swings. Apart from being highly addictive, toluene is carcinogenic, and can lead to kidney failure and brain damage.

There is no doubt that the street children were using Resistol in a way that its manufacturers never intended or anticipated. Yet the problem became so widespread and severe, especially in Guatemala, Honduras and some neighbouring countries, that special assistance programs were established to try to combat the addiction problem. A group of protesters picketed the company's 1993 annual shareholders' meeting, claiming, with some justification, that Fuller's products were damaging children's health. But these were not just any children; they were children living in poverty, driven to seek escape from the degradation of their lives through solvent abuse - the kind of children, in other circumstances, that the company would be supporting through its contribution to programs.

The circumstances that lead to young children living unprotected on city streets are complex, and not the responsibility of an individual company, but manufacturing a product which adds to the danger and vulnerability experienced by those youngsters is not easily ignored. Yet, Resistol was an accepted and widely used product, and the manufacturer had relationships with legitimate customers which would be severely disrupted if it were suddenly withdrawn from the market. Indeed, some of Fuller's customers were small shoe manufacturers, that worked to specifications requiring them to use that particular adhesive, meaning that their businesses could not be run without it.

[B?] Was this the manufacturer's responsibility? [B?] What should it do?

I'd like to now invite comment from the floor to see whether we can come up with some possible answers to this ethical challenge.

Mike

OK! Thank you for your contributions. Let's move on. We'll look at another Case Study in a while.

The situation [N?] that we've outlined in our presentation so far, presents firms with risks and opportunities that can be managed to improve the lives of workers and the bottom line.

[N?] Let's examine the first risk. [B?] This is the pursuit of low-cost production regardless of labour conditions. This is likely to achieve a number of less-than-desirable results.

[B?] It can expose workers to health risks and limits their economic and social well-being and future [B?]

It can expose companies and brands to reputation loss and lost purchases and loyalty

[B?] Employee morale can be jeopardized and this in turn hurts employee recruitment, retention and performance

[B?] Legal liability can be increased - for example, the Alien Torts Claims Act and the Foreign Corrupt Practices Act

[B?] It can lead to loss of contracts with government agencies with anti-sweatshop purchasing regulations

[R?] The second risk [N?] is that of what might be thought to be a laudable sentiment: [B?] Addressing labour conditions through a company code and monitoring system.

This option, however, [B?] can take a significant investment of time, staff and money to create and maintain. Also, it has [B?] limited credibility with stakeholders, and, there is [B?] no shared experience base with other companies using the same system [R?]

So, [N?] here lies an opportunity: [B?] Taking a leadership position by implementing a strong code, independent monitoring and public reporting.

In turn, this should lead to:

Firstly, [B?] gains in brand and company reputation which should lead to greater sales and loyalty

Secondly, [B?] Better employee recruitment, retention and performance

Thirdly, [B?] Improved supply chain management and performance, and, finally [B?] Stronger relationships with trade unions, customers, NGOs and government [R?]

So, to summarise, as the 21st Century matures, successful brands will have to demonstrate an ethical component, not merely by overblown corporate assertions, but by universal marketplace acceptance of their ethical worth. And that acceptance will only be achieved by companies implementing social and ethical evaluation programmes. To achieve that objective, the programme will have to be founded on strong, mutually supportive, partnership arrangements between a company and its suppliers, jointly sharing and implementing ethical values in a progressive relationship of continuous improvement.

Speaking of overblown corporate assertions, its now time for a short competition, for which there is a prize! We will call it 'Spot the Mission Statement'. It can sometimes be difficult to identify an organization from its Mission Statement. Let's see if we can place these companies with the correct statement. If you can write your answers on the sheet of paper you found on your seat, marked with your name and contact details here, the nearest correct answer will win this animal, donated by Toys 'R' Us. I'll put up the names of the organisations and then read out the mission statements and give each one a number. So, if you think that A: Shell has Mission Statement number 1 then write A1 on your answer sheet. The winner will be the person who gets the most right. In the event of a tie, we will draw the winner out of a hat containing all the correct entries. (And, there may even be a prize for a runner-up or two).

So, now for the Mission Statements:

"We will devote our human resources and technology to create superior products and services, thereby contributing to a better global society."

"We strive to be a good neighbour at home and abroad."

"Our corporate value is to be a good neighbour concerned for the community and the environment."

"Our customers choose [our] clothes and furniture because our designs are excellent quality and our values are outstanding. Manufacturing to these standards demands very close attention not just to the appearance of the finished goods but to the methods, materials and processes used to produce them."

"The way we trade creates profits with principles."

"This company believes that one of the main reasons it has been successful is its long-term commitment to [Third World] countries. The track record which has been established as a socially responsible, apolitical and trustworthy employer has proved invaluable in dealings with governments worldwide and has undoubtedly contributed to the success of the international business."

"Achieving quality, value and service, with integrity."

"Environmental management continues to be a corporate priority, fully integrated into business. We believe sound environmental practice is a key factor demonstrating corporate management."

"[We] recognise a responsibility to society to conduct business as responsible corporate members of society, to observe the laws of the countries in which we operate, to express support for fundamental human rights in line with the legitimate role of business and to give proper regard to health, safety and the environment, consistent with their commitment"

[Run statement and answers slides after collecting entry forms]

I would just like to point out that much of the research for this presentation has been derived from this book [Hold up copy of book] [N?] Corporate Citizenship and would like to thank two of the authors, Keith Jones and Deborah Leipziger for their support in the preparation of this presentation.

The growing concern among consumers about labour conditions around the world and the concern among corporates as they attempt to protect their brand assets is being addressed by [N?] Social Accountability International (SAI), an agency based here in New York City, founded in 1997 as the Council on Economic Priorities Accreditation Agency (CEPAA). I am also endebted to Eileen Kohl-Kaufmann, SAI Program Director and Matt Shapiro, SAI Marketing Director, both based here in New York City, for their generous support and permission to reproduce various materials. We feel it therefore to be particularly appropriate that we are making this presentation in the home city of the SA8000 standard.

Since early during the last decade, a growing number of US and Western European companies have responded by publishing workplace codes of conduct, which they seek to enforce in their own factories and their suppliers' factories, as you may remember was on our 'Risk Number 2' slide. While creditable as a principle, these often-diverse codes of conduct published by individual companies have become somewhat problematic, both for consumers who want clear information and for companies seeking to enforce these codes.

SAI's affiliate, the Council on Economic Priorities - a 30-year-old corporate social responsibility research institute - carried out a series of studies on workplace codes of conduct. The studies found that corporate internal codes of conduct tend to be highly inconsistent, expensive and inefficient to monitor, due to unclear definitions and a lack of trained auditors. Such codes and their monitoring systems also tend to be weak on audibility and sensitivity to local laws and customs. In fact, the study covered 360 US companies and identified that 71 had their own codes. Fewer than half covered compensation or limits on the working week. Fewer than a third were monitored at all. Virtually none are independently verified by third parties. Internal systems, by their nature, are neither transparent nor independently verified resulting in credibility problems instead of solutions.

In response to the inconsistencies among workplace codes of conduct, SAI developed a standard for workplace conditions and a system for independently verifying factories' compliance. The standard, SA8000 or Social Accountability 8000, to give its full title, and its verification system draws from established business strategies for ensuring quality (such as those used by the international standards organization for ISO 9000) and adds several elements that international human rights experts have identified as essential to social auditing.

In order to ensure maximum effectiveness of this system, SAI seeks to continually improve techniques for verifying factories' compliance with the standard. These techniques can also help employers develop more effective management systems that have the potential to reduce the risk of accidents and improve productivity. To this end, SAI consults with a broad range of stakeholders - workers, employers, and other interested parties such as NGOs and unions - thus continually working to make the SA8000 system responsive to regional and cultural differences.

In this era of instant communications, there is unprecedented momentum for global social change in the way workplace conditions are managed. Many major corporations know that their reputation for social accountability is a competitive asset, and they are beginning to see it as an issue of risk management. Many NGOs and unions also recognize that by offering technical advice and constructive criticism, they can encourage employers to improve.

SA8000 is based on the principles of international human rights norms as delineated in twelve conventions of the International Labour Organisation, the United Nations Convention on the Rights of the Child and the Universal Declaration of Human Rights.

SA8000 is consensus based, developed by a diverse international Advisory Board. Advisory Board members include representations from global companies like Toys 'R' Us (US), Avon Products, Inc (US), Otto-Versand GmbH Co (Germany), The Body Shop (UK), Grupo M (Dominican Republic), Reebok (US), Sainsbury's (UK) and Eileen Fisher (US); NGO's such as Amnesty International (UK), the Abrinq Foundation for Children's Rights (Brazil), the National Child Labour Committee (US), the Association Francois -Xavier Bagnoud (Switzerland), Comptroller of the City of New York, Alan Henesi, Professor Jagdish Bhagwati (Columbia University) and trade union participants such as the International Textile, Garment and Leather Workers' Federation (Belgium) and UNITE's Amalgamated Bank (US).

Let's have a look at a summary of the Standard on the next slide [N?]:

A fully operational [B?] global humane labour standard with all the elements of an effective, credible and efficient system, it covers [B?] all widely-accepted core labour rights6: child labour, forced labour, health and safety, freedom of association and collective bargaining, discrimination, discipline, working hours, and basic need wage. [B?] It also requires [B?] management systems to assure long-term compliance, [B?] Independent certification of compliance by individual facilities conducted by accredited certification bodies around the world, [B?][B?][B?], Involvement in the certification process by all key stakeholders: business, workers, trade unions, and NGOs, [B?] Public reporting of facilities that are certified, [B?] Complaints and appeals process with public reporting of all substantiated claims [B?] Oversight of the system by a multi-sector Advisory Board with experts from business, trade unions, NGOs and government, and [B?] Regular reviews of the standard and certification process with input from all stakeholders [R?]

Now, I'm going to ask my colleague, Anne Payne, to take you through our second Case Study:

Anne

In 1995, [N?] several British brewers introduced a new range of alcoholic, drink targeted at younger drinkers. The drinks are as intoxicating as strong beer, but are flavoured to taste like soft drinks such as lemonade or cherry soda - hence the name "alcopop". Perhaps I should explain, in case "alcopop" is an exclusively British invented word. Anyway, in England "pop" is a slang term for what I think you'd call a "soda" over here. So, alcopop is an alcoholic soda. The labels on the bottles were designed to appeal to young people, carrying cartoon characters and bright colours, and have humorous names; the two leading brands were "Hoopers Hootch", produced by Bass, and "Two Dogs", produced by cider-makers Merrydown. The product was a great success, and commanded a market in the UK worth around $578 million in a year.

However, a problem emerged. Although alcopops were aimed at drinkers in the age range 25 to 35 years old, it became apparent that they were very appealing to under-age drinkers. Teenagers liked their fruity flavours and sweetness, as well as the bottle designs, and parents became very concerned that their children were prey to a cynical marketing ploy by brewers. Concern was expressed that people might drink alcopops unknowingly, thinking they were drinking a soft drink. The newspapers carried stories of drunken children as young as 11 or 12 being found wandering the streets carrying bottles of alcopops. The issue was widely debated on television, radio and in the newspapers.

Brewers responded that their product was a legal one, appealing to a niche market of younger drinkers bored by the taste and image of more traditional beers and ciders. They were not responsible, they said, if these drinks were illegally sold to under-age young people.

In response to the media furore, a few national supermarket chains decided to refuse to stock alcopops, and some public houses removed them from their stock. Sales in the first part of 1997 fell by around 11 per cent as a result, but the brewers are confident that a buoyant market remains.

The appearance, packaging and taste of alcopops make them seem fun and fashionable, and appeal to children who would not otherwise be interested in alcohol. The questions we need to address then, are: [B?] Should brewers produce drinks specifically designed to appeal to young people? [B?] Should such products be openly available in supermarkets and corner stores, where teenagers will see the eye-catching labels, and where they may not have too much trouble getting past the busy check-out assistant without being challenged about their age? [B?] Should retailers take an independent decision on this, and refuse to sell alcopops, even though they may lose some business, and possibly come under pressure from the suppliers, or, [B?] is it up to parents to exercise control over their children?

Let me throw [R?] this one open to you again.

[Audience participation]

Mike

Thank you everybody, for your contribution and thanks again to Toys 'R' Us, Signatory Members of SA8000 for supplying the incentive to get involved with this debate.

We'll now take a look at the [N?] certification of the SA8000 standard. The process [B?] of independent certification is modeled on the ISO standards for quality (ISO 9000) and environmental management (IS0 14000) which are now used in over 300,000 facilities worldwide. SA8000 is based [B?] on certifications of individual facilities by independent, accredited certification bodies and auditors. [B?] SAI and its Advisory Board set accreditation guidelines and oversee accreditation of certification bodies and [R?] auditors. This SA8000 [N?] Standard Certification has at its heart the [B?] accreditation of certification bodies. This requires extensive background in systems auditing, intensive training in SA8000, and the institutional capacity to assure quality and consistency. Each SA8000 [B?] certificate is good for three years and requires surveillance audits every six months to a year.

In addition to this, [B?] Accredited certification bodies undergo semi-annual surveillance by SAI [R?] There are currently five accredited [N?] certification bodes [B?] - SGS, DNV, ITS, BVQI and UL - further details can be found on the validium.com website - and there are [B?] four applications for accreditation in process.

On the certification front [B?], 63 facilities certified [B?] since SA8000 launched in 1997 which includes certified facilities in [B?] twelve countries on four continents:

In Asia there's China, India, Indonesia, Laos, Turkey and Vietnam; in South America: Brazil; in Europe: France, Italy, Spain and the UK and in North America, the USA. In the first nine months [B?] of 2000, the rate of certification has increased 50% to three per month versus two per month for the 1997-99 period and the certification [B?] rate is expected to rise sharply as several large multi-national companies begin to roll-out their implementation of SA8000.

[R?] With any new standard, [N?] it's interesting to see who is endorsing it. [B?] The AEDT, the European Textile Retailers Association endorses the standard and will promote the use of SA8000 among its 500,000 member small and medium clothing and fabric retailers [B?] Amnesty International - France, is encouraging French companies to adopt SA8000 [B?] It is endorsed by the Global Sullivan Principles as meeting their standard and [B?] The International Labour Organization review of workplace codes of conduct gave SA8000 a positive assessment.

[R?] It is also helpful to look at the forthcoming [N?] potential revisions so that we can see which direction SA8000 is likely to take. As part [B?] of the regular process of reviewing and updating the standard, the following issues are being explored: The treatment of contract workers, debt bondage and working hours.

I hope that you've seen for yourselves that SA8000 has a direct relationship to EAP core technology. Afterall, EAPs help work organizations address productivity issues and 'employee clients' identify and resolve personal concerns or issues that may affect job performance. The issue areas that SA8000 addresses have a direct bearing on the welfare of employees and an employer's failure to develop and implement policies that are in line with the standard's recommendations can only adversely affect the well-being of its workers. Does it not seem right, therefore, that EAPs should play a leading role in advocating for ethical and social accountability and respect for the rights of workers? Surely, we have a duty to ensure we are a responsible part of our customers' supply chains? Remember those long-standing companies that were in the vinyl record industry that didn't embrace the new CD technology - most went out of business within 12 months.

If the momentum of ethical and social accountability continues at the accelerating pace currently being demonstrated, with more and more global companies taking on board the principles of SA8000 to protect the integrity of their brands, EAPs that have not embraced the standard may find themselves forcibly excluded from the SA8000 certified supply chains of their most valued, and profit-providing, customers.

To again borrow some [N?] of Robert Kriegle's wisdom from the keynote speech for our [B?] conclusion , "Be a leader, not a follower", as EAPs, let's be the industry that leads the [B?] way in adopting this standard that so closely reflects the ideals we stand for. Remember what we said earlier [B?], "Market forces are ruthless and implacable - EAP's will do well to remember that" - Ignore SA8000 at your cost! [B?]

On behalf of Anne, Paul, myself and Validium, thank you for listening.

References
1The Economist (1997) "Mercedes Bends," 15 November, Guardian (1997) "Moose test topples Mercedes," 13 November
2The Conference Board, Inc. 1999. Consumer Expectations on the Social Accountability of Business. New York, NY
3Cone Inc. 1999. Cone/Roper Cause Related Trends Report: Evolution of Cause Branding. Boston, MA
4Business in the Community 1997. Access Omnibus Survey. London, England
5Environics International, Ltd. 1999, The Millennium Poll on Corporate Social Responsibility. Toronto, Canada}
6UN Universal Declaration of Human Rights, UN Convention on Rights of the Child, and International Labor Organization conventions