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									  BMA International




Ethical trade in surgical
instruments: bringing change
to the supply chain

May 2008


The British Medical Association aims to investigate, promote and facilitate fair and ethical trade in the
production and supply of commodities to the healthcare industry. The BMA supports the Medical Fair
and Ethical Trade Group, which is an independent group with membership from fair trade groups,
industry associations and government bodies such as the NHS Purchasing and Supply Agency (NHS
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PASA), regional supply agency representatives from the Home Nations, and NHS Supply Chain which
provides supply chain services. The Group is coordinated by the BMA International Department and
the promotion of fair trade in healthcare goods is a key objective for the BMA International
Department’s work on improving global heath.

Background
Thousands of surgical instruments are used every day in operations throughout the UK, with a
significant majority of basic instruments used globally manufactured in Sialkot, Pakistan. Sialkot
supplies two-thirds of the world’s basic surgical instruments, though many of the end-users, like
surgeons in the NHS are not aware of their origin. This is due, in part, to the role of companies in
Germany or in the USA, where instruments are inspected and then distributed to health systems
throughout the world, including the NHS. The processes involved at this stage may be minimal, such
as simple checking or repackaging, but attract a significant increase in price: for example, a pair of
high-quality Iris scissors has a selling price of approximately US$2 from the Pakistani manufacturer
                                                         3
and retails to the end-user for approximately US$60.

To date, there has been no direct interaction between the instrument manufacturers and the end-users
in the NHS. However, just as consumers are demanding to know how the tea, coffee and bananas
they buy are grown, the UK health service is starting to examine how the surgical instruments that
supply its hospitals are made, and how to ensure that they are traded ethically, as part of a wider
initiative of sustainable development in the healthcare sector.

There are ethical concerns about many manufacturing industries throughout the world, with reports of
unhealthy, unsafe and unfair working conditions including exposure to hazardous conditions, use of
child labour and unfair contractual obligations. These concerns also apply to manufacturing goods for
health industries including, but not limited to, the surgical instrument manufacturing sector. A report
in the British Medical Journal in August 2006 identified concerns around unfair and unethical practices
                                                             4
in the manufacturing and supply of medical commodities. The Swedish NGO Swedwatch also
reported unethical practices in the manufacture of textiles in India and Pakistan destined for use in
uniforms for healthcare workers in Swedish hospitals, illustrating ethical issues throughout healthcare
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supply chains to European health systems.

1 NHS PASA is an executive agency of the Department of Health advising on strategic direction in procurement
  across the NHS http://www.pasa.nhs.uk/PASAWeb/NHSprocurement/AboutNHSPASA/LandingPage.htm
2 NHS Supply Chain is a 10-year contract for supply chain services to the NHS operated by DHL Logistics,
  on behalf of the NHS Business Services Authority (NHSBSA)
  http://www.supplychain.nhs.uk/portal/page/portal/Public/About%20us
3 Bhutta (2006)
4 ibid
5 Bjurling (2007)
    BMA International




    The manufacturers (Sialkot)
    The surgical instrument manufacturing industry in Sialkot annually produces 100 million surgical
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    instruments with a product range of over 10,000 items, worth approximately US$191m. The USA is
    the largest purchaser of these instruments, accounting for 30 per cent of those produced, with 14 per
    cent exported to Germany, 9 per cent to the UK, and the remainder to a variety of countries around
               7
    the globe.

    Manufacturing these products is labour intensive and, although mechanisation (with imported
    machinery) has been introduced in some of the larger factories, the majority of production is still
    manual. Manual production requires close attention to detail and necessitates a skilled workforce in
    order to ensure that the products are manufactured to a high standard. However, many manufacturers
    do not have the capacity to market products directly to international buyers, such as the NHS,
    meaning manufacturers are unable to access higher end-prices. Furthermore, the industry is very
    competitive which creates a downward pressure on wages. Employment conditions in manufacturing
    industries in general in Pakistan are poor with unsafe and unhealthy working conditions and
    inadequate remuneration presenting particular cause for concern. Though the minimum wage recently
    increased to Rs4000 (£31) per month, the official poverty line is Rs878.64 per person per day, and
    the average family size is 6.8 with 2.06 earning members, resulting in 36.5m people (24% of the
                                               8
    population) living below the poverty line.

    What are the key issues?
    Child labour
    According to the International Programme on Elimination of Child Labour (IPEC), 3.3m (8.25%)
    children aged between five and 14 years are reported to be working in industries in Pakistan ranging
    from domestic labour and clothing manufacturing to hazardous industries such as brick manufacturing
    and quarrying (surgical instrument manufacture is not classified by international regulations as a
                        9
    hazardous industry).

    Levels of child labour have been declining in light of international awareness and action on child
    labour, but recent estimates state that between 2,000-5,000 children are employed in the surgical
                        10
    instrument sector. Large factories have a total ban on child labour but children can be found working
    in the smaller, local sub-contracted manufacturing units where young boys are employed as
    apprentices, working alongside adult workers. Of the factors that generate and perpetuate child
    labour, the first and foremost is poverty, where a child may have no option but to work to contribute
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    to the household income (cited as the main reason for working in 64% of cases). Another reason
    may be that the child is sent to learn a trade because of the perceived benefit that learning a trade
    will generate employment in later life, or the paucity of alternative employment (cited as the main
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    reason for working in 19% of cases). Children employed as apprentices will not usually attend
    school, as the parents may deem that education will not give that child improved employment
    prospects when compared to an apprenticeship in surgical instrument manufacture, or school
    may not be possible because of financial restrictions.



    6    ILO/IPEC (2004)
    7    SIMAP (2007)
    8    ILO (1996)
    9    ibid
    10   Bhutta (2006), Bhutta (2007)
    11   ILO/IPEC (2004), CIWCEIR (2006)
    12   ibid



2   Ethical trade in surgical instruments: bringing change to the supply chain
BMA International




Health and safety
Health and safety problems in surgical instrument manufacture include: exposure to machinery used
in forging, grinding, drilling, and milling; poor wiring; metal dust; noise; repetitive strain injuries; and
exposure to toxic and corrosive chemicals including sulphuric acid, nitric acid, and trichloroethylene.
The limited evidence available suggests injuries and musculoskeletal pain are also frequent in the
                                                13
surgical instrument manufacturing industry. There are few funds or training for the workers to give
occupational health a high priority, and this is compounded by the lack of monitoring of health and
safety. There is also no state official with responsibility for occupational health.

Workers’ rights
In common with many other developing countries in the era of globalisation, workers in Pakistan are
increasingly employed on a contractual basis, rather than as ‘employees’ of a particular firm. Seventy-
three per cent (36.5m) of the workforce in Pakistan now works in this sector and consequently many
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face poor working conditions, long hours, insecurity and no legal rights, organisation, or voice.
There is little awareness of workers’ rights and unionisation in Pakistan is rare, with the number of
workers involved in collective action continuing to fall. There are existing state mechanisms for social
security, based upon contribution schemes, but these apply only to the formal sector’s permanent
employees and there is low coverage even in this group.

What can be done?
At the local level
The surgical instrument manufacturing industry in Sialkot is aware of the problems stated above and
is making changes, supported by international efforts such as the International Labour Organisation
International Programme on Elimination of Child Labour. The Independent Monitoring Association for
Child Labor (IMAC) is a not-for-profit monitoring agency that was set up in 2002 by the ILO-IPEC
initiative in Pakistan. Some companies regularly inspect their sub-contractors to ensure that no child
labour is used, and there are examples of further action such as companies making funds available to
sub-contractors for workers’ children to receive education as an alternative to employment. However,
complete eradication of child labour would be difficult until the issues of underlying poverty and lack
of alternative employment are dealt with. There are also difficulties in monitoring the huge number of
sub-contracted units where child labour may occur. There have been some successes, but significant
challenges remain. There needs to be greater communication between companies and support at the
local level, to help bring about change for the benefit of local communities.

One example of locally-generated support for change is the creation of the Pakistan Institute of Labour
                                15
Education and Research (PILER). This non-government organisation was established in 1982 for research,
training and advocacy in the areas of labour rights and labour legislation, social justice and human
development. The need for greater awareness and education has also been recognised by some
companies, who now provide training on workers’ rights, vendor and company responsibilities. However,
significant gaps in knowledge and support remain and require both local and international support.




13 CIWCEIR (2006)
14 PILER (2007)
15 http://www.piler.org.pk/




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    BMA International




    In the United Kingdom

    What can the UK health service do?
    The labour issues in the surgical instrument manufacturing sector are complex, deep-rooted and
    unlikely to be easy to solve in the short term, and the issues of child labour, health and safety and
    workers rights are inter-connected and linked to wider issues of poverty and human rights.

    Implementing policies to promote fair and ethical trade within the surgical instrument supply chain has
    the potential to improve working conditions, ensure fairer remuneration and the provision of welfare
    benefits such as education and healthcare. However, bringing change to a global industry worth
    hundreds of millions of pounds is an immense challenge and requires detailed and sustained effort
    from a number of actors, and will not occur overnight.

    Fair and ethical trade can also present difficulties when trying to incorporate it into business practices
    that traditionally give weight to price, delivery times and quality. Determining how to make ethical
    considerations as part of awarding a contract, yet still ensure open and fair businesses practices, is
    essential to ensure efficiency and competitiveness in the UK healthcare industry. Learning from the
    experiences of other industries, and other countries, may be a useful way to develop appropriate
    policies.

    Any change is dependent upon enthusiasm and support within the market for adoption of ethical
    labour standards when purchasing surgical instruments, whether in the NHS or in non-UK markets.
    The NHS can exert its influence on the supply chain by calling for improved standards such as fair pay
    and safe working conditions as well as social and economic welfare measures such as education,
    healthcare and housing

    What is the NHS doing?                                                       16
    As part of a wider UK Government Global Health Strategy, the Department of Health, through NHS
    PASA and NHS Supply Chain is working to ensure that national contracts for the purchasing and
    supply of healthcare commodities promote international labour standards. NHS PASA and NHS Supply
    Chain are also committed to investigate in greater depth where products are sourced from and under
    what conditions.

    Ultimately it will be for each NHS Organisation to adopt their own code of conduct, policies and
    approaches. In support of this, NHS PASA is developing guidance, templates, tools, example
                                       17
    approaches and training resources for ethical procurement in the healthcare sector.

    NHS Supply Chain also recognises the importance of implementing and maintaining high standards
    of social, ethical and environmental conduct on behalf of the NHS. NHS Supply Chain is working
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    closely with NHS PASA and with suppliers to adopt a consistent approach.




    16 Donaldson & Banatvala (2007)
    17 http://www.pasa.nhs.uk/PASAWeb/NHSprocurement/Sustainabledevelopment/LandingPage.htm
    18 http://www.supplychain.nhs.uk/portal/page/portal/Public/Sustainability/Sustainable%20procurement



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BMA International




What can the BMA do?
The BMA and its members are committed to working to promote fair and ethical trade in surgical
instruments, and other healthcare goods, through its members and networks of health professionals
in both the national and international arena.

Health professionals can support the promotion of fair and ethical trade by calling on their employers
to implement policies that ensure that workers are paid a fair wage and are able to benefit from
welfare policies that improve their working environment and support their families and communities.
Doctors can also encourage their hospital or practice to ensure that supplies are ethically procured, in
line with guidance from NHS agencies.

There are also benefits from closer links with partners from European health systems in order to learn
from others about their experiences in bringing change and to help promote change through other
health markets and bring change on a wider scale.

Note:
In March 2008, representatives of the Medical Fair and Ethical Trade Group visited the Surgical
Instrument Manufacturing Zone in Sialkot, Pakistan to establish the viability of good practice in surgical
instrument manufacture, increase local knowledge on the issues of fair and ethical trade in the
healthcare manufacturing industry and identify potential partners for developing this work.

This trip was funded by a grant to the Medical Fair and Ethical Trade Group from the BMA
International Department, using funds from the BMA/Department for International Development (DfID)
Strategic Grant Agreement.

Further information is available from the BMA International Department:
Tel: 0207 383 6793/6133
Email: international.info@bma.org.uk




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    BMA International




    References
    Bhutta MF (2006) Fair trade for surgical instruments. British Medical Journal 333: 297-9.

    Bhutta MF (2007) Practising fair and ethical trade within the health system. In: Improving health for
    the world’s poor: what can health professionals do? London: British Medical Association.
    www.bma.org.uk/ap.nsf/AttachmentsByTitle/PDFImprovinghealth/$FILE/improvinghealth.pdf

    Bjurling K (2007) The dark side of healthcare. Stockholm: Swedwatch.
    www.swedwatch.org/swedwatch/content/download/416/2090/file/SwedWatch%20report%

    Centre for Improvement of Working Conditions and Environment and Industrial Relations Institute
    (2003) Occupational health and safety problems faced by child workers in surgical instruments
    manufacturing sector. In: Annual report of activities 2003 Lahore: Centre for Improvement of Working
    Conditions and Environment and Industrial Relations Institute.

    Department for International Development. Pakistan Country profile.
    http://www.dfid.gov.uk/countries/asia/Pakistan.asp

    Donaldson L & Banatvala N (2007) Health is global: proposals for a UK Government-wide strategy.
    The Lancet 369 (Issue 9564): 857-61.

    ILO/Federal Bureau of Statistics (1996) National child labour survey in Pakistan. Islamabad: ILO/Federal
    Bureau of Statistics. http://www.oit.org/public/english/region/asro/newdelhi/ipec/responses/index.htm

    ILO/IPEC (2004) Baseline survey report on child labour in surgical instruments manufacturing industry
    in Sialkot. Lahore: ILO/IPEC.

    Pakistan Institute of Labour Education and Research (2007) Denial and discrimination: labour rights in
    Pakistan. Karachi: Pakistan Institute of Labour Education and Research.

    Surgical Instrument Manufacturers Association of Pakistan Brief Information on Surgical Industry of
    Sialkot, Pakistan www.simap.org.pk




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