Upheavals

What’s really fair?

Two interesting dilemmas in this piece about the politics and commercialisation of fair trading.

Firstly, should an idea with a deep social undertone be turned into a brand? Is that in itself ethical?

Secondly, is such a global brand a good thing or a bad thing?

Melbourne coffee trader Moshe Tawil has significant issues with the Fairtrade Labelling Organisation, a German based multi-national that has made its blue and green Fairtrade stamp synonymous with the movement, and in the process has become the recognised certification standard for all those wishing to promote this style of trade. The key issue seems to be that, in exchange of the endorsement that comes with that logo, the company takes 2 per cent of sales as a licensing fee.

There’s no doubt that this is a successful initiative. In 2007, sales under the Fairtrade logo accounted for about 2.3 billion (NZ$4.7b) worldwide, up 47 per cent on 2006, and supported 7.5 million people in the developing world. That means of course that the Fairtrade company is making a fair chunk of change, money that people like Mr Tawil argue should be going to the producers rather than into the pockets of the certifiers.

It seems that, perhaps in reaction to Fairtrade’s perceived monopoly, organisations like the British supermarkets are setting up new standards that some fear are based on minimum standards and could end up protecting the very practices that the fair trade movement intended to counter.

My questions:

1. What’s the difference between Fairtrade owning the concept of fair trade and the Heart Foundation charging to endorse healthy foods? Is the problem with the concept, or the scale of its application?

2. Would the fair trade movement have been as successful without the Fairtrade stamp? In other words, if there had been no brand, and therefore no licensing fee, would the movement be as popular as it is today? Is it just the existence of a middle-man that is bothering people?

3. If wider standards are adopted and those standards have different criteria, will that render the movement more powerful (because it is seen more often) or less powerful (because its standards are uncertain). Consider the mixed reviews that Wal-Mart is getting for its push to get sustainability and responsibility into its supply chain.

4. If indeed “Most well-meaning shoppers just go for the dolphins on the tin, the green tree-shaped logo or the fair trade sticker”, does that mean that people want to see the idea represented but literally do not understand what they are buying? Whose responsible for educating them? (Sounds a lot like the label debate revisited)

5. According to Victoria University PhD student Will Watterson, the way forward is the World Fair Trade Organisation's focus on promoting fair trade certification of a whole business. But could this mean even more compliance? Could we see the adoption of IFTRS (International Fair Trading Reporting Standards)? Is regulation the answer - and would it cost more, be worth more or deliver more than the current Fairtrade certification system?

POSTED: Sunday, 27 September 2009

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