Product certification and human rights LSJ/SIS 322 Fall 2009

Fair Trade LSJ 410/SIS 470 Fall 2007 Fair trade: a case study of coffee

Idea of “solidarity market” predates coffee crisis: Early efforts by religious and political groups to create niche demand in North for products lacking access to mainstream market: 1950s Ten Thousand Villages 1960s Oxfam “Helping by Selling” --> ATO (Alternative Trading Org.)

Creating a Fair Trade Label 1988 Van DerHoff and colleagues: attempt to go mainstream=> Max Havelaar Foundation in Holland Fair Trade Labelling Org. (FLO) created to set international standard for labelling In USA, Transfair –Co-ops pay to be certified –Transfair promotes product –Consumers recognize label “Make the market work for small producers”

Fair trade certified coffee: Grown on co-ops Conforms to some environmental standards Co-ops paid $1.26 minimum price per lb. ($1.41 if organic) plus social premium If bears Transfair seal, has been independently certified Alternative certification marks compete

Alternative Certification Marks “Fairly traded” Utz Kapeh, Rainforest Alliance Direct trade Starbucks C.A.F.E. standards

Fair trade as a movement, not a “solution” 1.Standards in flux; debate ongoing 2. The conversation is expanding –Colombian coffee growers’ federation –Ethiopian trademarking initiative 3. As the conversation expands, important not to lose sight of rigorous standards 4. Also important not to lose sight of consumer power –UW/Tully’s example

Fair Trade: strengths and limitations Questions remain about virtues and vices of mainstreaming and of market-friendly approaches in general Questions remain about virtues and vices of mainstreaming and of market-friendly approaches in general –Are we trying to reform capitalism? (i.e. is there something wrong with capitalism itself) or are we trying to extend its benefits to more people?

Fair Trade: strengths and limitations FT has worked well in coffee because of characteristics of coffee market FT has worked well in coffee because of characteristics of coffee market –Today’s market places premium on quality –Highest quality coffee made by small producers –Among roasters, competition for best quality coffee gives incentive to form relationships with producers

Fair Trade: strengths and limitations With many other commodities, there are fewer small producers With many other commodities, there are fewer small producers Ex. Fair Trade Certified Bananas: Ex. Fair Trade Certified Bananas: –Tries to promote co-ops, but also allows humane plantations –Standards include right to organize and bargain collectively on plantations, but does not require existence of union –Minimum wage vs. living wage

Challenges in applying Fair Trade model to clothing 1. Workers are employees, not owner-producers Therefore, paying a better price to employer (factory owner) may mean no difference to workers Therefore, paying a better price to employer (factory owner) may mean no difference to workers FT focuses on North/South consumer-producer relationships; sweatfree focuses on employee- employer relationship FT focuses on North/South consumer-producer relationships; sweatfree focuses on employee- employer relationship Inescapably, talking about sweatfree clothes means talking about organized labor Inescapably, talking about sweatfree clothes means talking about organized labor

Challenges in applying the Fair Trade model to clothing 2. Production occurs in so many sites, constantly shifting Inspections expensive, impractical, always shifting Inspections expensive, impractical, always shifting Unlikely any company truly knows how all its goods are produced Unlikely any company truly knows how all its goods are produced

Challenges in applying the Fair Trade model to clothing => reluctance to even attempt to certify anything as “sweatfree” when likelihood of inaccurate information is high Widespread acknowledgment that industry norm is exploitation Widespread acknowledgment that industry norm is exploitation Fear of inducing consumer passivity Fear of inducing consumer passivity Ideological opposition to market-friendly approaches Ideological opposition to market-friendly approaches

“Sweatfree” vs. “Buy Union” Disagreement over whether existence of union is essential for a facility to be sweatfree Disagreement over whether existence of union is essential for a facility to be sweatfree Insisting on unions ignores other forms of worker organization/empowerment Insisting on unions ignores other forms of worker organization/empowerment Danger of company-controlled unions Danger of company-controlled unions Who assesses what is legitimate worker representation? Who assesses what is legitimate worker representation?

Globalization of apparel production History of labor abuses in US garment industry addressed through US labor movement, laws History of labor abuses in US garment industry addressed through US labor movement, laws Multi-Fibre Agreement 1974: system to protect domestic industry, established quotas Multi-Fibre Agreement 1974: system to protect domestic industry, established quotas MFA phased out => more production shifts to Asia MFA phased out => more production shifts to Asia In absence of laws to regulate global industry, companies self-regulate In absence of laws to regulate global industry, companies self-regulate –Corporate codes of conduct: strengths? Limitations? Rodriguez-Garavito 2006: Codes of conduct are useful, but require action by NGOs, unions to hold them to codes Rodriguez-Garavito 2006: Codes of conduct are useful, but require action by NGOs, unions to hold them to codes

Attempts to improve code compliance “Independent” monitors to ensure code compliance “Independent” monitors to ensure code compliance –Fair Labor Association 1999 –Workers’ Rights Consortium 2001 Limited effectiveness because Limited effectiveness because –System reliant on worker complaints, yet w/ rampant abuse, this unreliable –Limited resources to monitor factories –Pressure on brands, factories limited  By WRC’s own admission, in 7 of 12 cases with significant WRC involvement helped establish union, now threatened by declining orders => Do market incentives favor exploitation?

Market incentives vs. codes of conduct Codes of conduct insist on respect for worker rights, yet industry practices (esp. pricing and just-in-time production) create environment ripe for abuse Codes of conduct insist on respect for worker rights, yet industry practices (esp. pricing and just-in-time production) create environment ripe for abuse “Given currrent market dynamics in this industry, even if workers successfully organize, they cannot negotiate substantial improvements without rendering their company less competitive, so that it fails to get new contracts.” Athreya & Robinson 2005 “Given currrent market dynamics in this industry, even if workers successfully organize, they cannot negotiate substantial improvements without rendering their company less competitive, so that it fails to get new contracts.” Athreya & Robinson 2005

Designated Supplier Program (WRC) Idea is to change architecture of apparel economy (for university apparel only): Idea is to change architecture of apparel economy (for university apparel only): –Designated factories comply fully with code –Allow freedom of organization into representative bodies –Living wage –Produce primarily for university market –Factories would be paid a higher price for goods, and promised ongoing orders A bold test of whether increased prices and stable sourcing translate into improvements for workers A bold test of whether increased prices and stable sourcing translate into improvements for workers

Will it work? First, more universities must sign on; at present only 2 of top 20 schools have done so (UW is fifth largest to sign on so far) First, more universities must sign on; at present only 2 of top 20 schools have done so (UW is fifth largest to sign on so far) Second, licensees must agree to it; don’t know if they will Second, licensees must agree to it; don’t know if they will Third, WRC must administer it; don’t know if it can Third, WRC must administer it; don’t know if it can But the conversation is moving forward, and that is hopeful But the conversation is moving forward, and that is hopeful

Thank you!