Trade Justice - Fair Trade
WarOnWant.org
For workers the success of fair trade products means a huge difference can be made to their lives, and it is vital that the projects receive the support that they deserve.
One method by which workers’ rights might in future be protected from the most serious abuses is the development of ethical trading, by which companies voluntarily agree to improve the rights of the workforce.
One approach to ethical trading which has been in operation for some time is fair trade. Products that satisfy specific fair trade criteria are eligible for the Fair Trade Mark.
Many products sourced according to fair trade principles are available from a variety of retailers, including supermarkets and can be distinguished by the Fair Trade Mark which is the guarantee to the consumer that the product meets certain agreed criteria.
War on Want supports Zaytoun (Arabic for Olives) a UK-based non-profit project to import olive oil from Palestinian farmers at fair trade prices. Click here for more information.
The definition of fair trade agreed by international fair trade organisations (known as the FINE definition of Fair Trade)is:
Fair trade is an alternative approach to conventional international trade. It is a trading partnership which aims at sustainable development for excluded and disadvantaged producers. It seeks to do this by providing better trading conditions, by awareness raising and by campaigning.
The goals of fair trade are:
- To improve the livelihoods and well-being of producers by improving market access, strengthening producer organisations, paying a better price and providing continuity in the trading relationship.
- To promote development opportunities for disadvantaged producers, especially women and indigenous people, and to protect children from exploitation in the production process.
- To raise awareness among consumers of the negative effects on producers of international trade so that they exercise their purchasing power positively
- To set an example of partnership in trade through dialogue, transparency and respect.
- To campaign for changes in the rules and practice of conventional international trade.
- To protect human rights by promoting social justice, sound environmental practices and economic security.
Core labour standards, especially the promotion of the right to organise and collective bargaining, are central to the criteria for fair trade products that are sourced from plantations, estates and companies such as bananas. However, the criteria for fair trade products that are sourced from small producers are largely about trading terms, rather than core labour standards. They focus on offering the producer a fair price (sometimes with a price premium), advance payments, a long-term trading relationship and support. There are also important fair trade terms when buying from larger enterprises with employees, but the core labour standards are added to the criteria.
What the criteria mean:
- Pre-payment — Disempowered producers tend to have difficulty in paying for inputs and so fair trade aims to offer a percentage of the final price up front to reduce the credit barrier of small producers.
- Fair price – The aim is to arrive at a mutually agreed price; in labelling there is a minimum price, based on the international commodity price.
- Price premium – Some fair trade relationships involve the payment of a premium; this is something over and above the minimum. It may be based on an assessment of what the consumer is willing to pay for a fair trade product (e.g. for Cafédirect, an ATO coffee sold through mainstream outlets in the UK) or a percentage of the operating profit of the ATO (the Oxfam Fair Trade Company sets aside a percentage of profits as a fund for trade development). Premiums tend not to be directed at individual producers but are entrusted to a representative group that decides upon how they should be used.
- Long term trading relationship - Fair trade aims at building up trading relationships that last longer than one buying season.
- Fair or ethical trade started out as a niche industry operated with the help of the large charities reliant upon a pre-existing market of ‘concerned liberals’ who were willing to crunch their way through acres of woody chocolate and gritty coffee in the name of solidarity with the oppressed. The low sales of the products did little for workers and little for consumers - multinational corporations (MNCs) scarcely noticed that Oxfam was selling fair trade coffee.
Fortunately, fair trade has come a long, long way in a relatively short time and now a wide range of products (in particular foodstuffs) are available in almost all of the major supermarkets and even high street shops. Fair trade goods have also rocketed in terms of quality and you will find that many really tasty products - chocolate, coffee and cocoa from the ‘luxury’ end of the market – now carry a fair trade logo.
With these developments the goods have also won a large consumer base and (the best possible badge of success). Trans-national corporations have started to raise objections on the grounds that if these products are fair then this label suggests to consumers that their own products are somehow unfair.
An end to massively unfair exploitation
For workers the success of fair trade products means a huge difference can be made to their lives, and it is vital that the projects receive the support that they deserve. The industries in which the Fair Trade programs are operating are some of the most exploitative in the world:
Cocoa /Child Labour – In West Africa, which produces the majority of the world’s cocoa, there is a staggering incidence of child labour. fair trade programs in the industry aim to ensure that parents earn enough money to allow their children to stop working and return to school.
Bananas – In Latin America, where most of the world’s bananas are produced, workers are exposed to chemicals without adequate protection – workers who complain have been attacked and kidnapped. Fair trade bananas ensure that workers receive safety equipment and training, are allowed to form unions and workers are not kidnapped. The fair trade companies also favour small farms which have suffered from competition by massive plantations which force down prices.
Coffee – In Latin American coffee ‘fincas’ (plantations) tales of exploitation are rife – anti-union practices, poor wages and long hours. Union leaders have received death threats. Again fair trade companies ensure decent conditions for their workers.
The problem with Fair Trade Mark companies is that the programmes, by their nature, improve rights only for a small group of workers within the fair trade company’s supply-chain, and the programme does not attempt to lift standards across at industrial or national level. However, the knock-on effect of consumers learning that some coffee is fair and some coffee is not fair will be hugely important in raising consumer awareness of the conditions faced by the workers who grow such crops.
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