Centre on Regulation and Competition WORKING PAPER SERIES

Increasing numbers of ethical trade initiatives are being launched, reflecting concerns about the limited benefits that globalisation brings to producers in developing countries. Ethical trade is an informationintensive activity yet little is known about the role of information systems in supporting this activity. Ethical trade – with its voluntary codes and consumer campaigns – also represents a new approach to interaction between market actors. This form of self-regulation is seen as an alternative to state regulation and sanctions, and more appropria te to a liberalised international economy. This paper provides a summary of the literature concerning ethical trade, selfregulation and the role of information. It presents models and issues in relation to both ethical trade information systems and information and communication technologies. Findings about information systems and ethical trade also advance our understanding of self-regulation. INTRODUCTION Ethical trade is increasingly moving into the mainstream of development activities, through programmes such as the UK’s Ethical Trading Initiative (ETI, 2000). Ethical trade is seeking to encourage voluntary codes of conduct amongst large producers with subsidiaries or suppliers in developing countries. The codes of conduct and related standards are intended to benefit workers’ rights and human rights, and help to meet other social and environmental development goals. Ethical trade is a form of market intervention practised through selfregulation. Selfregulation is an alternative to the more traditional forms of regulation, such as binding national or international agreements. It allows stakeholders – including government, the private sector, and advocates of ethical trade – to work together in order to set voluntary standards governing developing country workplaces, and communities, involved in the global supply chain. It also provides collective representation for the values and choices of consumer groups, whilst enabling the power of individual customers to be exerted in the marketplace. Self-regulation has been presented by business as a means for consumers to find better traders who subscribe to codes of practice. It is increasingly being promoted as an alternative to