Is Fair Trade Selling Out?

by Sophie Colsell

Fair Trade is a movement that has been gathering momentum over the years: from its humble beginnings as Oxfam’s ‘helping-by-selling’ program in the ’60s to today, it has grown into a multi-billion-euro enterprise affecting the lives of millions of people. Fair Trade is acquiring a definitive niche in the public consciousness; even large brands with questionable human rights records are joining the movement: notable examples being Nestlé, which has been allowed to label all its Kitkats in the United Kingdom as Fair Trade, and Starbucks, which has committed itself to using only Fair Trade Certified coffee in its espresso-based drinks in the UK.

However, there are differences in opinion within the Fair Trade movement as to whether these new territorial conquests by the Fair Trade movement are indeed a good thing. What does it mean for Fair Trade to negotiate with these enormous companies, which have mostly arrived at their current position by ruthlessly pursuing profit, often at the expense of their producers? Such an attitude runs, to say the least, a bit against the grain of the Fair Trade movement. But does Fair Trade have to get involved with these companies in order to grow? As Daniel Jaffee puts it somewhat dramatically in his book Brewing Justice, does the Fair Trade movement have to ‘dance with the devil’? And if it does dance, can it do so without selling out?

On one hand, it is the case that the success of Fair Trade depends on the demand for Fair Trade products in the North, and that the number of people helped by Fair Trade depends on the quantity of Fair Trade products sold. It is also the case that large multinationals such as Nestlé and Starbucks cover an enormous proportion of the market for, say, chocolate and coffee, and are currently mostly selling products that are not Fair Trade. The solution seems obvious: if these companies could be persuaded, cajoled or coerced to use certified Fair Trade products, surely the benefits for the producers in the South would be enormous?

On the other hand, there are many arguments against certifying large multinationals. Firstly, one could argue on principle: certifying large multinationals could be considered a betrayal of the core principles of the Fair Trade movement, which was set up to protect the rights of marginalised producers precisely in response to the unethical activity of these companies. Fair trade was set up to ensure decent living conditions at every level; it was envisaged as an alternative to corporate domination, not as a niche market to be conquered by the very corporations it was trying to undermine.

Secondly, one could argue that as soon as large companies are allowed to join the movement, the rules of the game start to change. Several motions have in the last decade been introduced by the Fairtrade Labelling Organisation (FLO) to lower the standards of what constitutes Fair Trade; fortunately these have up till now failed. We can assume that such attempts to lower standards stem from corporate pressure. Another concern is the danger of ‘fair-washing’: a means whereby companies providing a comparatively tiny quantity of certified Fair Trade products can as a result be perceived by the public as ethical. Should a multinational with a history of human rights abuses selling a negligible amount of certified Fair Trade produce really be allowed to fair-wash its image by parading its Fair Trade certification mark? Additionally, if the same mark is assigned to both a fair-washed corporation and an independent cooperative that functions democratically, respecting human rights at every level, the value of the Fair Trade mark will be compromised. This could lead to public disillusionment compromising the entire movement.

Is there a correct answer? Should the Fair Trade movement opt to sacrifice some of its principles in order to increase the sheer bulk of Fair Trade produce? Or should it remain faithful to its principles and continue to oppose the large corporations while watching them violate human rights across the world? Or is there a third way?

(This article was originally published on the website of Il-Ħanut l-Arka and can be accessed here)

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2 comments
  1. Fair Trade does not have to ‘sacrifice some of its principles in order to increase the sheer bulk of Fair Trade produce’ or remain impotent in the face of corporate human rights violations, in order to create greater impact; there are other options. Fair Trade USA, a non-profit organization and the largest third party certification organization in the United States, would argue that to best way to benefit farming families around the world is through collaboration with companies of varying types and sizes, creating both a stronger foundation for the Fair Trade movement and to deliver the most impact. Fair Trade should be an inclusive system that serves the needs of farmers, workers, industry and consumers.

    It is important to remember that Fair Trade USA ONLY certifies individual products and their respective supply chains, NOT companies. A large multinational’s products would not be allowed to bear the Fair Trade Certified label if its products don’t meet strict certification standards. Fair Trade USA never lowers certification standards for any company. Our standards combine stringent environmental criteria with the highest income and labor standards of any product certification. The strict criteria used to determine Fair Trade certification are consistent, regardless of where you buy the product and from whom.

    We believe that shifting from a faceless global marketplace to one where all stakeholders are rewarded equally – producers, industry, consumers and the earth – will take everyone’s help, no matter where they shop. We promote the empowerment of U.S. consumers to choose Fair Trade Certified products when they have the option, and by securing this option in multiple marketplaces nationwide, we not only help that many more farmers, but also give that many more consumers the power to be a part of the solution.

    To read further about Fair Trade USA’s views on this issue, please refer to this blog post written by our CEO, Paul Rice: http://www.fairtradeusa.org/press-room/in_the_news/triple-pundit-why-fair-trade-usa-parted-ways-flo

  2. Hi Lauren, thank you for your reply. There is certainly a lot to be said for empowering consumers to choose Fair Trade products and for making this option as available as possible, thereby greatly increasing the number of farmers positively affected by Fair Trade.

    Concerning the sacrificing of principles, in my opinion whether or not the Fair Trade movement risks violating some of its principles by dealing with large companies taps into the age-old debate surrounding what the founding principles of Fair Trade are.

    According to the WFTO, the first principle of Fair Trade is “Creating Opportunities for Economically Disadvantaged Producers”, which means, according to the website, supporting “marginalized small producers, whether these are independent family businesses, or grouped in associations or co-operatives.” A concern voiced by the WFTO is that including large companies in the Fair Trade system will force the smaller, democratically-governed organisations Fair Trade was set up to protect off the market (http://www.wfto.com/index.php?option=com_content&task=view&id=1574&Itemid=314).

    Another problem with involving large companies in Fair Trade certification is that, some might argue, structures that are historically rife with abuse will never be fully reformed, and will only ever respect the Fair Trade standards to as minimal an extent as possible, trying to cut corners wherever possible. Practices engaged in could involve, at a high level, lobbying to lower Fair Trade standards, as described in the article. Murmurings of human rights violations in Fairtrade-certified farms (for instance, in the HRW report “Ripe with Abuse,” concerned with South Africa’s Fruit and Wine Industry, where Fairtrade-certified farm-workers complained of encountering dangerous substances, inadequate access to toilets and water, and “poor treatment of union members”: http://www.hrw.org/node/101085/section/10) might be considered by some proponents of Fair Trade to be an inevitable result of an approach that focuses on reforming existing hierarchical structures by encouraging them to adopt ethical practices, rather than on encouraging the formation of new organisations which are naturally based on ethical principles.

    Another way in which dealing with large companies with allegations of abuse might be considered to be a violation of the principles of Fair Trade is when large companies selling Fair Trade produce (which itself may be 100% ethical) treat their workers unethically on a different level – for instance, in retail. An example of a company that has come under allegations of unethical behaviour is Starbucks, which, despite selling Fair Trade certified coffee, was relatively recently (around 2007) the object of union-busting allegations (http://www.guardian.co.uk/business/2007/jun/07/usnews.internationalnews). If Fair Trade is a considered to be a philosophy of ethical behaviour, then hypocrisy of this nature – encouraging union formation and ethical practices on one level and engaging in union-busting on the other – is clearly unacceptable.

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