FAIR TRADE

FAIR TRADE

What is it?

“Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers . Fair Trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.”

(source: http://www.fta.org.au/node/43)

International trade is the trading of goods or services across international borders or territories. It is a major source of economic revenue for any nation that is considered a world power. It is used to increase corporate profits and boost the economy.

Unfortunately, the advantages of this increase in profits are sometimes not passed on to the wider community.

In developing countries small farmers find it difficult to access the market price for their product. They must use middlemen who will determine the price for them. Therefore, even though the middlemen may be receiving an increasing profit , the farmer may be receiving smaller and smaller amounts for their work. In bad times they may lose their property, land and livelihoods.

The dwindling profits of the struggling farmers of course passes down to the people working on the farm or plantation- who not only are forced to endure very low pay but also have unsafe working environments and poor living conditions.

Fair Trade is an alternative approach to conventional trade.

It focuses on helping farmers and producers in developing countries to move towards economic self-sufficiency and stability. By paying producers and their workers fair prices and helping them gain the skills and knowledge needed, allows them to have a greater stake hold in their own business, provide safer and ethical working environments and therefore play a wider role in international trade. Fair trade also encourages better environmental practices and the application of responsible methods of production.

It is about providing a fair go – not charity.

A Fair Trade Certified Company ensures that the supply chain down to the production of goods in factories has purchased all their manufactured components from producers that have been treated ethically using the Fair Trade principles.  It not only guarantee’s they have received fair prices but ensures they comply with International Labor Office (ILO) Agreements, which are set in place to ensure prevention of accidents and diseases that cause human loss, pain and security in the work place.

This covers:

• Banning child and slave labour
• Guaranteeing a safe workplace and the right to unionize
• Adherence to the United Nations charter of human rights

According to ILO estimates, ‘some 5,000 job-related deaths occur each day, or some 2 million each year and workers suffer approximately 270 million occupational accidents and 160 million occupational diseases each year.’

The importance of buying products that are ethically produced becomes even more relevant as more and more stories emerge of mistreatment of employee’s in companies located in countries such as Korea.  Legal loopholes are allowing the exploitation of workers: migrant workers receiving 60% lower pay whilst working the same job, same hours and under the same roof.

Horror stories are emerging of employees losing limbs in factories only to receive no compensation and without the ability to work, not being able to afford to go home.  An Amnesty International report tells the moving tale of a Chinese woman who had been working 12-hour night shifts in an embroidery factory in Korea, who wrote this on her suicide note:

“Migrant workers are also human beings. Why don’t they pay me for my work? I cannot go home because I don’t have money. I have chosen to kill myself, as there is no other way.”

Misrepresentation by “Fair trade” labeling

It would seem logical to assume that buying any product that is described using the words “Fair Trade” would avoid supporting the terrible abuses described above.  Unfortunately this is not always the case.

The expression “Fair Trade” can be deceiving, and is increasingly wielded as a PR tool by savvy marketing departments to increase sales without any actual worker protection being guaranteed.

Many companies will advertise behind the Fair Trade terminology which may imply they trade under the ethos of Fair Trade, however outlined below are two “Fair Trade” organizations which companies can align themselves with while still practicing inhumane and unfair trade practices. They are both established to protect consumers not workers.

The Office of Fair Trading (UK) who are responsible for ‘making markets work well for consumers’ by ensuring businesses are fair and competitive and do not monopolize the market. Again, Fair Trade in a business markets context but certainly nothing to do with ensuring fair treatment of workers in the 3rd world!

Korea Fair Trade Commission (KFTC), Korea’s regulatory commission for economic competition, regulates competition law and policy. They protect the interests of entrepreneurs trying to compete in the economies markets, as well as consumer protection against a monopolized market.  Again, this has nothing to do with Fair Trade!

The danger of this is that consumers could unintentionally be purchasing products that they deem to be ‘Fair Trade’ while practices such as the abhorrent yet legal Tiered Salary System in Korea are in place. Under this system migrant workers (in particular the Chinese) are paid much less than minimum wages (in itself only 40% of the national average workers wage) than those of their colleagues. Other cases of abuse include workers receiving below average wages while even working unpaid overtime hours.

So what you have to remember when purchasing a product from somewhere that states they are a Fair Trade Company is that anybody can claim Fair Trade. There are no laws that prohibit an organization to do so.

The only way to 100% guarantee that your purchase has been produced following the fair trade guidelines is if you see these two internationally recognized symbols used to identify a Fair Trade Company.

The first is issued by WFTO to registered members and is called the Fair Trade Organization Mark, or FTO Mark for short. This is a mark to identify organizations that practice Fair Trade:

The other is issued by the FLO (the Fairtrade Labelling Organisation) and is called the Fairtrade Label. It is used to identify Fair Trade products. You may know FLO by another name: TransFair, Fairtrade Foundation, Max Havelaar etc. These are all national initiatives of FLO.

As stated on the Fair Trade Organisation website:

“The Fairtrade Label is a “seal of approval” that appears on products that meet internationally agreed Fairtrade standards and which guarantees to consumers that their purchases will benefit the producers, their families and the surrounding communities from the developing countries that they originate from.”

These “seals of approval” are a long process where a company or corporation once approved will be audited regularly to ensure they are compliant with Fair Trade principles right from the production stage, through the supply chain, and through to the final packaging.

Envirosax and Fair Trade

Here at Envirosax we make no claim to the use of the ‘Fair Trade’ symbol or terminology.  However we uphold the principles through all stages of our production, distribution and sales.

Our bags are produced in China where there is no Fair Trade Organization – instead in all our production we follow the new Chinese Labor Laws.

These laws ensure (amongst other things) that:

• A contract is signed by each worker agreeing on the conditions of the working environment
• The workplace pays Workers Insurance on their behalf
• All workers are paid fair and above the minimum wage mark + extra pay for overtime hours
• All employees are over the age of 16
• Workers can protect their personal rights by unionizing

In addition to following these laws strictly, we have an Australian employee who is on our factory site in China every day, who overseas all operations to ensure the highest Workplace Health & Safety standards for employee’s, while also ensuring high quality control.

As well as the day-to-day direct contact with factory workers, twice yearly the Envirosax owner’s Belinda and Mark David-Tooze visit and inspect the factory site.

Currently, Envirosax is in the process of gaining approval for use of the Fair Trade label for our Organic Cotton Series bags. These bags are created in Peru using organic materials produced by local farmers under the Fair Trade guidelines.

Envirosax would like to thank Fair Trade Organization – Netherlands for helping with the research for this article.

If you would like to read more information on Fair Trade principles or have any other queries please visit www.fairtrade.net.