Ethical Trade Challenges South Asia/America CSRD 1 November 2010.

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Presentation transcript:

Ethical Trade Challenges South Asia/America CSRD 1 November 2010

Introduction Summary (short) – CSRD to date Fair vs. Ethical Trade (pros and cons) CSR and Representation Do Fair and Ethical Trade matter to vulnerable groups (children and Dalit)?  Caste-Based Discrimination (India)  Children in Soccer industry (Pakistan) Next Session

Summary:CSRD (Myth or Magic)? UN-PPP Participation Codes of Conduct SMEs & CSR

Summary Theoretical  CSR could make a difference, possibilities of win-win situations (benefit both companies and local economic development/population/environment/workers/SMEs) Practical  Difficult to identify the gains (the magic) – UN-PPPs tend to favour companies, Codes do not benefit workers at large, SMEs tend to be excluded from GVCs etc

Summary Looking through the lenses of Impact Assessment and Participation:  CSRD looks more like myth than magic!  Difficult to find the win-win situations, and  Mostly we find lack of participation of Southern voices (workers, SMEs, local communities)

Fair vs. Ethical Trade Newer approaches to CSR in Developing Countries  Multistakeholder initiatives/approaches  Beyond market/company driven Fair Trade and Ethical Trade  What are the benefits that incur from these approaches?  Prefer one to the other? Or supplementary?

Fair Trade vs. Ethical Trade Fair TradeEthical Trade ControlSocial /CivilCorporate PriceFixed PriceFluctuating Price BuyersAlternative NGOsRetailers, MNCs, Supermarkets SuppliersSMEs, Cooperatives Large, Capable Enterprises, Plantations Supply Chain Stable Supply (Relational) Fluctuating Demand (Modular/Captive)

Fair vs. Ethical Trade In assuring better livelihoods (income, jobs, economic growth) and more voice to Southern stakeholders (workers, communities etc): What are the pros and cons of the two multistakeholder approaches? Prefer one to the other? Supplementary?

Fair Trade vs. Ethical Trade Fair Trade? (S&B 2005)  Fair, Minimum Price  Stable Supply Relationships  Partnership: Dialogue, transparency, respect  Relationship Value Chain  Access to Credit  Social Premium – Development Projects

Ethical Trade Workers’ conditions (Labour issues) Codes of Conduct (MSI)  Compliance Monitoring Governance - Global Value Chains  Retailers, Brands, Agents  Medium & Large Scale Suppliers  Quasi-Hierarchical/Modular Chains

Fair Trade vs. Ethical Trade Fair TradeEthical Trade ControlSocial /CivilCorporate PriceFixed PriceFluctuating Price BuyersAlternative NGOsRetailers, MNCs, Supermarkets SuppliersSMEs, Cooperatives Large, Capable Enterprises, Plantations Supply Chain Stable Supply (Relational) Fluctuating Demand (Modular/Captive)

Fair Trade – economist perspective Trade and Fair Trade in Global Economy (Nicholls 2005)  Growing trade AND Growing inequality! Small producers face:  Lack of Market Access  Imperfect Information  Lack of Access to Credits  Inability to Switch  Weak Enforcement

Fair Trade – economist perspective Trade and Fair Trade in Global Economy (Nicholls 2005)  Fair trade can (potentially) address the shortcomings! If, so: Direct impact of Fair trade include:  Increase income (product + social premium)  Education (and female empowerment)  Preserving indigenous culture  Psychological effects (producer empowerment)

Fair Trade – economist perspective Trade and Fair Trade in Global Economy (Nicholls 2005)  (Neo) Liberal critique:  Distortion of market mechanism (artificially high prices)  Structural oversupply (farmers encourage to produce above demand) The Economist:  Lack of incentive to increase quality  Focus on small farmers/cooperatives excludes the majority in need  Insufficient way to get money to the poor (retailers get the most!)

Fair Trade / Ethical Trade Critique Common points of critique  Trustworthiness of Label? - Fair Trade: Sufficient monitoring at workers/farmers level? - Ethical Trade: Benefits beyond permanent (male) workers  Is Fair Trade Becoming Ethical Trade? Additional point of critique ¤ Lack of involvement of local government

CSR Representation Ethical Representation? (Khan 2007)  No Speak, Us Speak  Same Speak, Other Speak  Finding Middle-Point Ethical Trade Literature  No Speak Dominates

CSR Representation Do Fair Trade and Ethical Trade matter to vulnerable groups (children and Dalit)?  Caste-Based Discrimination (India)  Children in Soccer industry (Pakistan)

CSR Representation Do Fair Trade and Ethical Trade matter to vulnerable groups (children and Dalit)? Use the Dalit text and the Khan text to discuss: A. How do MSIs like Fair and Ethical Trade address such ‘culturally embedded’ issues of particularly vulnerable groups? B. Could Fair and Ethical Trade be extended to be of particular relevance to such groups?

Next Session (Week 45) ’Guest’ – Peter Lund-Thomsen Clusters, Chains and Compliance  Bair and Gereffi 2001  Lund-Thomsen and Nadvi (forthcoming)  Lund-Thomsen and Nadvi (2010)