Responded to survey: yes

MSI involvement: yes, Ethical Trading Initiative

Grade 3.5: Can offer examples of steps to develop and implement a living wage methodology in supplier base, and are making progress with a number of pilot projects. [what's this?]

Summary

Next is working on a project building mature industrial relations in its supply base to create a climate in which wages can be negotiated between management and workers. We believe this approach is the right one and has the potential to secure long term increases in wages. Unfortunately, Next’s work is very limited in other areas: without the commitment to address its own purchasing practices or a willingness to set benchmarks it is unclear the extent to which the work will deliver a living wage to workers in the near future. 

Position on living wages

‘We are well aware that we do not have an internationally accepted definition of a living wage, or a methodology for calculating one. Whilst the Asia Floor Wage campaign offers strong discussion and benchmark figures, we continue to believe that less emphasis should be placed on finding a universal formula and more on how to ensure wages are increased sustainably through workers and employers engaging in dialogue, enabling mature systems of industrial relations to develop.’ 

Living wage benchmarks

None given.

Position on freedom of association

See above. 

Work so far on living wages

Next’s main area of work has been its Autopilot programme:

‘The overriding objective of Autopilot is to develop a way of working across our supply base that will replace auditing and instead will rely on sound management systems covering all aspects of our code.’

‘Our strategy is to develop workplace systems with clearly defined roles and responsibilities enabling workers to determine their own needs and priorities and to participate with management in decision making about their workplace. Training and model management s y stems have been developed to facilitate this form of internal ownership.’

‘Throughout 2010 we have actively engaged with a wide range of local stakeholders in our key sourcing locations. These relationships are essential in building the capacity we need to affect long tern social change...’ Partnerships with national and international trade unions were cited.

On scalability, Next said: ‘We always anticipated the first pilot to be very resource intensive and we planned for this and budgeted accordingly. We have been aware from the outset that the eventual scalability of Autopilot will also be a significant challenge and planning for this has been built into the project programme.’ As far as we are aware, ‘Autopilot’ is only being currently delivered in India.

We asked Next about the projects in China, Sri Lanka and Bangladesh which were the main focus of its 2009 submission. It said: ‘All of the pilot projects we outlined in some detail in our previous submission have since been integrated into programmes which form a part of our broader ethical trade strategy.’ 

Plans on living wages

‘We have partnered with ITGLWF [International Textile Garment and Leather Workers Federation] as part of the RAGS challenge fund. A significant part of this work is to expand our Autopilot project, as well as to initiate multi stakeholder social dialogue discussions.’

‘Our current strategy is to now focus the resources that will be necessary to deliver solutions to the underlying causes of labour issues.’ 

Other significiant information

Next ‘have developed a new internal data and contract management system which has allowed us to increase the support, information and tools needed by our commercial teams to take account of their impact on our suppliers’ ability to comply with our code.’ Next has collaborated within the ETI to share its autopilot work, and with external stakeholders including global and local trade unions, other MSIs and international local NGOs and campaign groups.

Our comments

We agree fully with Next’s Autopilot methodology and support its efforts to enable workers to feel empowered enough in their own workplaces to become the agents and enforcers of change. We recognise that establishing genuine freedom of association does take time but if done well it should deliver sustained improvements for workers. Next also seems to be working with a variety of different stakeholders and is sharing some of the learning with other brands.

It seems, however, that Next has moved away from seeing wage improvements as a key element of its project, although it does clarify that Autopilot is designed to replace audits as a method of meeting Next’s code and that as wages are part of its code so these will be included. However, as far as we can tell the worker-management dialogue doesn’t seem to have reached core issues such as wage improvements. Next need to move forward in this area if these pilots are to provide any useful evidence of how to deliver a living wage via this route.

There was little mention of any work looking at Next’s own purchasing practices, with no apparent work to look at labour costings or commitment to increase price where necessary to allow for whatever wage increases workers are able to negotiate. Next told us that its new data and contract management systems aim to align buying and ethical trade practices, but no detail was given on exactly what this would look like in reality. Ultimately if this project is to succeed in the long run Next will need to make clearer commitments on buying practices, including agreeing to stick with its suppliers and take its share of any price increases that may result.

Despite Next’s assurances, we still have concerns about the capacity required to deliver this on a large scale as it will be resource intensive. Work with the ITGLWF is the right place to start, and Next’s DIFD sponsored project is hopeful in this area, but for this work to deliver wider impacts Next needs to expand its sights beyond individual projects. The signing of a framework agreement with the international union could be an important first step in institutionalising its commitment to continue with the FOA work.

The impact of its programme could also be deepened if Next proves willing to lead the field on freedom of association and start work with other brands to expand the programme. The ETI would be a good forum for this. Next has been awarded a top grade for its innovative work in the field of FOA, and if it can demonstrate significant work on pricing, purchasing practices, and provide clear benchmarks for the living wage levels it is aiming for, we’d expect to see it move up the grades in the next year.