Resolution procedure 5
» Minimum Requirement:
It is a minimum requirement of membership that members are not on internationally recognised default lists of ICA, WCEA or CICCA. Appearing on a default list after becoming a member is a breach of the BCI Code of Practice.
Entities are listed on a default list when they have failed to fulfil awards arising out of contracts made subject to the associations’ by laws and rules. Parent or sister companies of an entity on the default list are also considered to be defaulters and are listed alongside.
The ICA also publishes a List of Unfulfilled Awards: Part 2 to denote closely linked entities of defaulting companies. The ICA define the legal bar of proof as “proving a common mind between the companies” when compiling the ICA List of Unfulfilled Awards: Part 2. The ICA implements a rigorous review policy, validated at several levels of governance of that Association, before adding a company’s name to the Part 2 listing.
» Why we need the minimum requirement:
The BCI Code of Practice, signed by all members, states that supply chain members support the BCI mission by their contribution towards building trust in the supply chain. This level of trust is only achievable when members are transparent in dealings and fulfil their contract obligations, including not defaulting on contracts related to cotton.
» How we monitor:
The BCI Secretariat checks the default lists regularly.
» Resolution procedure:
A member appearing on any default list (including ICA List of Unfulfilled Awards: Part 2) will be immediately suspended. The member will receive an official notification of the suspension from the BCI Secretariat and is advised to engage with their counterparty to find a solution. The member will be removed from the BCI Member List and access to the Better Cotton Tracer will be suspended, if applicable.
Then, after 3 months:
a) If the member can provide evidence that they are working towards removal of their name from the default list, they remain suspended indefinitely until the dispute is resolved and they are removed from the default list. This suspension holds over renewal periods (if they pay the renewal fee).
b) If the member does not take any steps towards removal of their name from the default list, they are expelled 3 months after their suspension.
There is also a default listing policy for:
New applicants: A new applicant cannot apply for membership until its name is removed from the default list, since they are not able to meet our minimum requirement for membership; and
Ex-members: Similarly an ex-member whose membership we have closed (due to non-renewal for example), and who then appears on a default list, cannot have their membership reopened again until their name is removed from the default list.
Access to the Better Cotton Tracer
A member may keep access to the Better Cotton Tracer during their suspension, if they regularly provide the BCI Secretariat with sufficient proof that they are actively working towards removing their name from the default list. This is to ensure that the Better Cotton traceability itself is not affected, and to recognise the efforts of those members who actively seek to resolve their dispute as soon as possible. BCI aims to be cooperative with its members.
Sufficient evidence is provided by a:
- Settlement Agreement between the two parties, which has been filed with the ICA
- Signed letter from the ICA confirming that satisfactory arbitration proceedings are under way
- Signed letter from counter party confirming that satisfactory arbitration proceedings are under way
No other documentation will be deemed sufficient evidence.
At the time of suspension, BCI will acknowledge all pending lint transactions in the members Tracer account. During suspension, a member may continue to trade BCCUs in their Tracer account if linked to yarn or fabric sales (but may not earn new BCCUs via purchases of lint). This is due to the fact that ICA rules and by-laws govern only contracts of cotton lint and not those related to the sale of goods such as yarns, fabrics or finished items.
To see a how many BCI members are currently suspended due to breaching the minimum requirements of membership, please click here.