Private Standards
Standards may be classified in numerous ways, and often the different terminologies used can be confusing. Classifying them by how they are developed allows us to look at the implications on developing country exporters:
- At the national level, government standards, which are often called technical regulations, are developed and promulgated by Federal, State, and local agencies to address health and safety concerns. Technical regulations differentiate from the rest, as they are by law mandatory.
- International standards are developed and disseminated by international governmental and non-governmental standards development organizations, such as International Standardization Organization, International Electrotechnical Commission, the International Telecommunication Union or Codex Alimentarius. These international standards are voluntary standards. At the international, regional or sub-regional level, harmonization of standards is done through regional standards bodies or sub-regional standards organizations.
- Industry/private/buyer standards can be broken down into three categories:
- Consortia standards – which are often developed by a sector-specific consortium (ie. GlobalGAP)
- Civil society standards - established as an initiative by an non-profit organization usually as a response to concerns over social and environmental conditions (e.g. Forest Stewardship Council)
- Company-specific standards - which are developed internally and apply to the whole supply chain of a company
While private sector firms and consortia have often been the driving force behind the formulation of management and product standards in industrialized countries for more than a century, there is an emerging sense that the multitude of private standards and retailer requirements have a growing impact on developing country firms’ ability to participate in global production and supply chains, essentially acting as an another barrier to entry.
There are probably a variety of reasons for this growing concern. Firstly, there is increasing awareness about standards and technical regulations in general due to the WTO TBT and SPS agreements. Secondly, and probably most importantly, the building-up of health and safety concerns in industrialized countries (such as food safety, chemicals, allergens, working conditions etc.) resulted in an environment where not only the government regulations have become stricter, but the retailers/supermarket chains have started to drive the trend for stringent standards due to consumer awareness. Of course, reputation and brand protection, global sourcing, differentiation in the marketplace, and control and rationalisation of supply have been important drivers for private standards.
The growing attention to retailers requirements has led to several influential research projects and publications on the role of private standards in the agro-food sector in the recent years. There are also an increasing number of studies looking at the capacity of developing countries to comply with social and environmental requirements.
However, there seems to be a gap in global knowledge on private standards prevalent in other manufacturing sectors - especially those that can be expected to gain more importance for developing country exporters (such as footwear, garments, leather, toys, gifts and decorative items, furniture and wood products, chemicals etc.) due to structural change and emerging competitive pressures.
As a development agency with a clear mandate to provide technical assistance in the area of industrial development and trade capacity building, UNIDO initiated a research project in 2008 to help to bridge this gap by identifying the obstacles faced by developing country suppliers and exporters through the publication of a guidebook on private standards and good practices required by international buyers.
A first Expert Group Meeting was held in Vienna in May 2008 to refine the approach and identify the country/sector case studies to be undertaken. Subsequently, UNIDO researchers undertook exporters surveys in Turkey (textiles and apparel), India (leather and footwear) and Brazil (furniture), followed by in-depth interviews with selected exporters and buyers to identify, (i) the list of most frequently demanded standards, (ii) the implications arising from implementation of private standards in terms of financial and economic/social costs and benefits and market access. In addition, analysis was carried out on mapping out the basic components of the most commonly cited standards from the surveys.
Based on the research conducted, the project is expected to yield a practical guide to private standards for ambitious exporters and sectoral associations in developing countries as well as a technical report with an overview of the project and recommendations for international technical cooperation providers. The Guide is expected to be published by end of September 2010.
A workshop will be held in Vienna on 6 July 2010 to bring together representatives from exporters associations, buyers and sellers in international textile, leather and furniture value chains as well as other stakeholders such as certification companies, NGOs and academia to discuss the draft Guide to Private Standards and to provide expert feedback on the accuracy and usefulness of the information contained therein.
Aide memoire of the workshop
Contact:
UNIDO Project Manager:
Ms. Müge Dolun Bora
Industrial Development Officer
Email: U.Dolun@unido.org
