[Part II, the pre-party before the workshop. The whole Certification Challenges series is here.]
First question to the panel: Can transnational companies participate in the fair trade movement? And if so, under what conditions?
All panelists — this is at the “New Challenges for Fair Trade Certification” workshop at the United Students for Fair Trade convergence last weekend — said yes to the first question. A good thing, because big, international companies already have products carrying the fair trade certified seal.
What surprised me was the level of consensus in the room regarding the second question. Aside from Jean of TransFair USA and the 2 Starbucks reps in the room — Cindy and Andy — pretty much everyone who spoke argued for more strict, binding and public conditions and guidelines.
An incomplete list of people and orgs who felt certification standards need to change [go here for more deets on the orgs]:
As a 100% fair trade certified company, Equal Exchange, represented by Julia, is, at least as of now, backing fair trade certification both ideologically and financially. Equal Exchange also has a lot to lose if the fair trade certification standards become — or even become perceived as — unreliable or untrustworthy — and because (or perhaps inspite?) of it, this co-op’s made their disenchantment with the current direction with fair trade certification known.
A few weeks ago, Equal Exchange’s Rodney North released a public letter regarding this matter, which is posted publicly at the bottom of this email, as it clearly defines not only Equal Exchange’s position, but also echoes many of the words of other companies, organizations, and individuals at the panel.
Thanksgiving Coffee, represented by Paul (not on panel), is somewhere between 30 and 50 percent certified, but can be described as a mission-based company, very much in support of fair trade ideals. I’d been told by TransFair USA employees that non-100% mission-driven companies would oppose stricter guidelines for fair trade certification because it would put them at a disadvantage compared to 100% fair trade certified companies. Instead, Paul spoke up in favor of such standards.
Monika represented Cooperative Coffees, an organization that includes 3 roasters whose members were so unhappy with the direction fair trade certification was going that they publicly severed ties with TransFair USA a few years back — meaning a few of the companies represented here are currently 0% certified. That said, many Co-Op Coffees members still sport the certification seal, and even those who left say they left only regretfully, after a 2-year-long attempt to salvage the relationship with TransFair USA failed. It seems that members of Co-op Coffees are generally behind the idea of fair trade certification, but that many have grave concerns about the way certification is done as of now. In addition, Andy of Peace Coffee (not on panel) a member of Co-op Coffees, spoke up to say that Paul already voiced what he wanted to say.
Global Exchange, represented by Valerie, is a non-profit organization that’s been publicly pushing big international companies like Nestle and Starbucks to market more fair trade certified goods. Beforehand, an employee of TransFair USA had told me that NGOs such as Global Exchange would NOT support stricter fair trade standards because if stricter standards led to big companies getting kicked off the fair trade roster, that would nullify the work done to bring those big companies into the fair trade fold in the first place. In stead, Valerie spoke up to point out that Starbucks’ meager 3.7% of fair trade certified products — despite having been welcomed into the fair trade market by TransFair USA about 6 years ago — does not represent a “commitment to fair trade.” I believe her exact words were “Starbucks shouldn’t even be here.”
(Updated 2/28/06) Presong Seesa-Ard, Thailand fair trade rice farmer.Presong’s statements here.
And now — The letter from Rodney North of Equal Exchange, titled “On Fair Trade ‘figleafs’”:
Something odd, and possibly very disturbing, happened recently in the United Kingdom that should interest everyone who believes that Fair Trade can help create a more just, morally grounded global economy. Nestlé—the world’s largest food conglomerate, and most boycotted company—recently introduced to the UK market its first ever Fair Trade Certifiedâ„¢ product, an instant coffee called “Partners Blendâ„¢â€. But so what? Large U.S. corporations have already jumped (or been pushed) onto the Fair Trade bandwagon. ‘What’s the problem? Don’t we want corporations to move in this direction?’. Good point. We do. But what we’re learning from the Nestlé example is that even a tiny bit of Fair Trade can go a long way to polishing even the worst corporate image, and all at the expense of real reform.
For example, a recent survey in the UK, where Fair Trade enjoys a much higher public profile, showed that as many as 75% of otherwise knowledgeable shoppers who support Fair Trade were, in fact, mistaken and thought that the Fair Trade Certified™ seal meant the company had been evaluated and judged to be free of ethical concerns. We see the same pattern of consumer confusion in the US. The truth is the Fair Trade certification system examines only the individual products bearing the seal, and not companies. In the case of Nestlé it is estimated that, in fact, their Partners Blend™ represents less than 1/10th of 1% of Nestlé’s annual coffee imports, leaving the other 99.9% purchased the same old way. Likewise, Nestlé’s vast global trade in cocoa, sugar, dairy products, and dozens of other commodities remains unchanged. So, given the “Fair Trade glow†that Partners Blend™ might bring to the Nestlé brand (in the UK at least) this small product launch could be a very inexpensive way to overhaul their tarnished reputation while leaving their business operations untouched.
What does this have to do with US consumers? Plenty. The same rules that allow Nestlé to put on a Fair Trade figleaf in the UK market, apply in the US as well. And that’s why we at Equal Exchange are choosing to speak out, because we see this as the latest in a long line of actions by the world’s largest food businesses to make small gestures that look good in isolation, but ultimately forestall real change for impoverished small farmers, and instead offer marketing, PR, and token efforts in its place. In the same month as Nestlé’s product launch two of the world’s other largest coffee buyers also introduced Fair Trade Certified™ coffees, one in the US, and both as part of overall coffee product lines that are only 3% Fair Trade Certified™, or less.
Certainly marketplace opportunism is not limited to the grocery store shelves. Examples are all around us. Just check out two non-profits who help spotlight environmental greenwashing, and firms who exploit breast cancer for marketing purposes: (here and here). Conversely, Co-op America’s Green Pages can help you find companies who have a more authentic commitment to responsible conduct.
It could be argued that a corporation has to begin somewhere, and that these small product introductions at least represent a beginning. True enough. But there are signs to see if a corporation is sincere. Looking at just the realm of Fair Trade coffee—where we know something—here are some suggestions how large companies can make a convincing start:
â— Convert an existing product to Fair Trade status, one that already has an established customer base.
â— Offer consumers a variety of Fair Trade choices (regular, decaf, flavored, whole bean or ground, etc.)
◠Utilize Fair Trade ingredients (such as cocoa, tea, sugar) in the corporation’s other products.
â— Most importantly, convert a significant portion of coffee imports (we recommend at least 5%) to demonstrate good faith, and steadily increase that % over time.
We also recommend that the exclusive Fair Trade certifier in the U.S., TransFair USA, do its part on this front, by raising the bar so as to preclude tokenism. Requiring a minimum conversion of at least 5% before allowing use of the Fair Trade seal would be the best first step.
What’s at risk here? That thanks to corporate marketing machines merely token use of Fair Trade certification can lead well-intended consumers to mistakenly associate some whole brands with Fair Trade. This false image of reform can then pre-maturely undermine the public pressure for real change.
At the inception of the Fair Trade movement 20 years ago it was intended to be an alternative approach to international trade that addressed the endemic poverty, economic vulnerability, and isolation of the millions of small-scale farmers who grow most of the world’s tropical agricultural commodities, and as such challenge the status quo. It was not designed as a marketing device.
You can read the original Equal Exchange press release regarding Nestlé here.
Part IV to come — It’ll kick off with TransFair USA and Starbucks’ arguments.
Updates: Part IV: the “What about the farmers” argument.
[The whole Certification Challenges series is here.]
Thank you Siel for loads of important information. I wouldn’t have known…great posts :-)
Comment by Maya — February 21, 2006 @ 1:44 am
Dude, you rock.
I might have to do this fair trade rice campaign because I consume tons of that stuff, and Alter Eco doesn’t supply to my area.
Comment by Jasmin — February 21, 2006 @ 8:25 am
I think it’s interesting that companies/organizations like Thankgiving, EE, GlobEX, and Cooprerative didn’t talk about why Fair Trade exists in the first place: the farmers.
Frankly, I could give a rats ass about what they think of Starbucks or Nestle getting involved in Fair Trade. They all need to listen to the farmer from Thailand. It’s about the farmers. People who think Fair Trade is about companies are wrong. A million pounds of Fair Trade Certified product is still a million pounds of Fair Trade Certified product. NO MATTER WHO SELLS IT.
It’s also interesting that the only people who seem to care about how supposedly the “fair trade mark is being diluted by transnational companies” are the ones who actually have the least to do with the amount of Fair Trade Certified product gets consumed in this country.
It would have been nice to have retailers on the panel-sure, GlobEx is a retailer, BUT, why not Wild Oats (who are based in Colorado, ahem) or anyone else?
My last question: How will the current state of international trade be altered in a way that is positive for farmers and farmworkers without engagement with large multinational companies?
Do Global Exchange, Co-operative Coffees, Paul Katzeff, or Equal Exchange care to answer?
Comment by bay area fair trade dude — February 21, 2006 @ 1:53 pm
sorry for the hurried and grammatically challenged post…
Comment by bay area fair trade dude — February 21, 2006 @ 1:55 pm
bay area fair trade dude — Dude, I’m not sure you quite understood the point of what the farmer from Thailand was saying — This may be the fault of my own unclear writing. His point, it seemed to me and other people in the room I talked with, was that who sells fair trade products DOES matter.
And please understand that the above was a summary of the arguments from people who thought reform needed to happen. The orgs and companies you mentioned above DID indeed talk a lot about some of the conversations they’d had with farmers, some of whom had even wanted to leave the certification system due to some of the concerns named above. I’ll write more about this in another post, but I just wanted it to be clear that what I’ve written so far is not by any means a comprehensive report of all that was said at the workshop.
Comment by Siel — February 21, 2006 @ 2:19 pm
ok, an important point here:
“I feel especially bad because what he said was immensely valuable — That fair trade would become a tough sell for farmers if certification lost its meaning and value, and that ensuring that fair trade retains the values that we’re all working for is important.”
Could someone explain to me how large multinationals’ purchases of Fair Trade Certified goods from FLOCERT-Certified co-ops/farms can cause Fair Trade Certification to lose its value? Or meaning?
Please?
It’s my understanding that the product is coming from a producer that has met the standards of FLOCERT in their inspection. How is certification weakended?
Are people still under the impression that the Fair Trade Foundation UK or TransFair USA certify companies in their respective markets?
Fair Trade is about a lot of things, but it’s not about saying that some companies can and some companies can’t participate in the model because it’s politically expedient.
I’m just wondering who would like to announce to all the farmers whose products are sold to Sam’s Club, McDonalds, and Starbucks, that they can no longer rely upon this business because, well, they’re bad companies and politically active people in the Fair Trade movement don’t like it…anyone?
And lastly, does anyone look at the comments & positions of Equal Exchange, Thanksgiving, Global Exchange, and Co-operative Coffees as statements made by competitors of these large multinatinals? Let’s not forget that many people who complain about the state of the Fair Trade Certified mark run businesses. Businesses that fear competition from large multinationals. How much of their concern is related to the fate of farmers or the fate of their own companies? I’m waiting for someone to say “I’m worried about the ‘integrity’ of the Fair Trade Certified mark because it’s going to impact my bottom line.”
Comment by bay area fair trade dude — February 21, 2006 @ 2:51 pm
Hey All:
First off, your comments are incredibly well-informed, BAFTD. I suspect that you are one of the movers and shakers at TFUSA, which would be really cool in the sense that TFUSA does not publicly engage these issues very often. If you are a TFUSA person, would you mind saying so and we can all be on the same page here?
To respond tho the “market share” question– of course many of us are concerned about big players being able to drive us off. If it were a level playing field this would be more paltabale. However, when you have huge comapanies that are subsidizing the 1%-3% of what they purchase at the fair trade minimum with the 97%-99% of the coffee that (in most years) they are paying .50-.80 cents for, then selling “fair trade” coffee for nothing, it is a little disconcerting. Especially to those of us who feel like FT is more than a label, but an actual commitment to deal with ALL people fairly. But this is only one aspect of the problem.
To go further, I’d like to ask you BAFTD (and others) to stop painting farmers as some monolithic block of people that you can somehow speak for. I think it is obvious by the description of the Thai rice farmer’s comments that many producers do care about who buys and sells their products. Many farmers that we work with at Co-op Coffees have an incredible sense of wanting to create a trade system that is fair. Many are not happy with the potential of having their coffee bought and sold by a multi-national that can hide behind the FTC label. Some of the people we work with spent literally decades, fighting and losing their lives, for social and economic justice. To then see the “fair trade” seal handed over to folks like Chiquita (coming soon to a banana near you) and P&G pisses them off. Is this really a stretch for you to understand? It is not universally the case I’m sure, but my point is that although farmers are hungry, many have other concerns as well. And farmers can speak for themselves, so maybe you should talk to some with differing view points. You won’t have to look too hard to find them.
Transnational companies can water down the meaning of fair trade in numerous ways. BAFTD, you obviously have a lot of knowledge of these issues (nudge, wink). To claim to not have an inkling as to how this could happen seems like you are either being disingenuous or just blinded by your own momentum.
Some consumers (and roasters) have lost trust in the label because they see it on the products of companies that they perceive as having little or no commitment to changing their overall business practices. To a lot of us out here fair trade is about economic justice. And that goes for consumers, business people, and farmers alike. If there were strict contractual commitments laid out by TFUSA for big fellers to up volume over a defined period of time and for transparency in their business practices, I think some skeptical people would be more open to the presence of TNCs. As-is they get to have their cake and their cheap coffee too.
Another concern is that multinationals can exert a lot of influence on the system (pushing to include plantations, for example) in general, and the certification organization in particular, by pumping oodles of cash into the certifier’s operating budget. Next thing you know, actually holding them accountable for not keeping up to standards gets pretty daunting, I would imagine. Then when they use the label in ways that are not allowed in their contract, or when they don’t offer pre-financing to the co-ops that they buy from, or when one of their executives gets steamed over activist campaigns against them and wants you to kick out a public statement, I imagine it is pretty difficult to stand up.
I have a challenge for you BAFTD, if you are a TFUSA person, how bout telling us the percentage of cash into TFUSA’s 2005 operating budget came from SBUX, Dunkin, P&G, and Sara Lee. That would be an interesting exercise in transparency, no? I think it might shed some light on an important aspect of all of this.
And that is something getting lost in the haze here– what about transparency? Why does TFUSA not audit their roaster-licensees? TF Canada audits the vast majority of its licensees anually. How can TFUSA even pretend to hold roasters accountable when they rely on unchecked self-reporting to get their numbers? Has TFUSA ever “written up” SBUX or any other big company for misusing the seal? This all points to a near total lack of transparency to me, a former licensee.
I want to relate a question asked by one of the farmers that we work with from Guatemala. The question is: Why do the farmers have to be democratically organized and transparent when the roasters and certifier do not have to be. Why do the farmers have to answer to their constituencies when the SBUXs and TFUSAs don’t have to? The majority of producers that we have heard from feel that this is about more than $1.26/$1.41 a pound, which incidently is NOT considered to be a fair price by many farmers any more. They are in this to create a system that is just. Many farmers want to make trade fair, like the name says.
I’d like to end this tome by saying that what the fair trade movement in the US needs right now (IMHO) is open dialogue about this issues between all stakeholders. This cannot end in Denver, that would be way too easy. The FT movement is full of people from all stripes, with opinions that stretch from mine to BAFTD’s and beyond. What we need now is for TFUSA to open up to the rest of us, put this stuff on the table, and be willing to engage in the same sort of messy democratic process that the grower co-ops go through to hash things out. Why is the conversation happening over this blog with clandetine yet snappy nick-names and not around a table where we all can see each other and commit to working on these hard issues together? We need to demand that TFUSA open their process and let others in the movement (growers, NGOs, student-activists, long-winded disaffected 100% roasters, etc) have input in the shaping of this thing. What do they have to lose?
That is all, thanks…
-Matt Earley
http://www.justcoffee.net
Comment by mateotemprano — February 21, 2006 @ 5:24 pm
Matt,
Thank you for taking the time to respond to the questions I posted above. I was hoping that someone would answer them as they’re essential to
the continuing debate. I also hope that people understand that someone may ask a question even when they know the answer. I wanted to see if anyone could provide their own answers. I also don’t think that prioritizing concerns of farmers over US companies is parternalistic.
Certainly, the opionions of farmers and farmworkers in the developing world are more diverse than the opinions of those of us in the movement here in the US. There are coffee growers in Mexico who don’t want to see Fair Trade spread to farm workers no matter what the products are because they only want co-ops in the sytem, there are growers in Nicaragua who make incredible selfless efforts to educate their fellow farmers on organic practices and lift the quality level of the country, and there’s farmers in East Timor who publicly state that Starbucks is more important to their future than “foreign aid, Fair Trade, or anything else.” (Starbucks latest CSR Report, p24) And there’s a million more opinions. Furthermore, Just Coffee’s efforts with farmers are commendable and a model for other roasters to follow, but it doesn’t grant them any more or any less cred than Paul Rice who worked with the Sandanista government to build coffee co-ops for 11 years and friends & colleagues of his were assassinated by Contras and Samozist sympathizers. Honestly, who cares who’s got more street cred w/farmers? Dean’s Beans? Technoserve? Paul Katzeff? Oxfam? Does it matter? Almost makes it seem like some kind of marketing tool. A lot of the people that you work with are people I’m sure TransFair works with too. Consider this-if Fair Trade Certified bananas are a way for Chiquita to start getting their act together, isn’t it worth a try? It’s not 1954.
I do agree, at least on a theoretical level, that FLO standards could come under threat from large multinationals. But what you’re assuming is that the people who work for FLO and who’re on the board would have some motive to allow this to happen. What would be that motive? You have to assume that people are willing to sacrifice standards and ideals for some kind of personal gain.
With regards to your question about what % of TFUSA’s operating budget comes from Starbucks, Protctor & Gamble, Sara Lee, and Dunkin Donuts,
**why did you leave out Equal Exchange, Cafe Mam, Green Mountain, Tony’s, Peace Coffee, Thanksgiving, Alterra, etc?**
Interesting choice of companies Matt. What about the companies who do a good job? Does TransFair get any credit for working with them?
If TransFair started auditing roasters, would you feel better about the whole issue of transparency? If TransFair dropped laggard multinationals, would you feel better about what’s happening with the Fair Trade Certified lable in this country? If things improve on these fronts, would Just Coffee change their position?
Comment by bay area fair trade dude — February 21, 2006 @ 6:46 pm
Hey BAFTD and all:
Thanks for the note.
In your response you appreciate that there are a wide variety of opinions from growers out there. Thanks because that was a point I really was trying to stress. When arguing for TNC participation TF should always acknowledge this and not play the “this is what all growers want” card. That, as Siel also pointed out in her recent post, is not all true.
I know of Paul’s background, which makes it more strange to me that he seems to be building an organization that is not democratic or transparent. He knows better than a lot of folks up here what people have sacrificed in Nica and elsewhere. And you are totally right, it is not about marketing, “street cred”, or whatever– this is exactly about people’s lives. It is about being able to feed your family today and about building a better system and world for tomorrow so you can continue to feed them. We can do both if we all work together as equals, I believe.
And it seems possible that TNCs can attempt to change. We need to ask ourselves what that would look like. Probably it would begin with sticking a foot in the water and trying to wade in slow. But we also need to ask what an attempt at co-optation would look like. It would probably look similar, except that the TNC would commit as little as possible for as long as possible while trying to reap the most benefit from exploiting the system and label. We need to watch out for this too. Without TFUSA making TNCs legally commit to upping their commitments on a percentage basis, or asking them for anything other than their cash, TFUSA has no power to lead them. To the contrary, by becoming dependent on their cash, I think that they are in a bad spot.
So why did I not mention Peace or EE or Thanksgiving? If you know TFUSA than you have to know where they get the bulk of their money to operate. It is by licensing fees that are paid on a “per pound” basis. It has been made abundantly clear to us smaller mission-based roasters in the past that SBUX’s 2% is worth much more in cash than our 100% ever was. Simple economics, money talks as they say. So all of the companies that you named (save possibly Green Mountain) are a drop in the bucket compared to the 4 that I mentioned.
And no, I don’t think that TFUSA deserves a big pat on the back for working with someone like EE who was doing FT in the US before TFUSA even existed, that is who they should always be allied with. Rather, I think we should ask why committed companies like Larry’s Beans are leaving or why EE is forced to put out public challenges to TF because they are so undemocratic and unresponsive to their concerns.
But if you could get us that break down of cash inflow to TFUSA BAFTD, maybe I am completely mistaken about all of this. I hope I am, but I doubt it.
Finally, yes I would feel better about some of this if TFUSA actually audited roasters. That would be a step in the right direction. As far as dropping multi-nationals, I would rather just see them held to strong commitments, all FLO criteria, and to their licensing agreements. that way we can get them to transform themselves, if that could indeed be done.
What would bring Just Coffee back? Well, that is quite a humdinger (sorry, I’m from KY). I can only speak for myself as we are a worker-cooperative, but my opinion is that if we could, along with a bunch of other stake-holders, establish a regular, official, and open dialogue with TFUSA, we would consider a lot of things.
Thanks again…
-Matt
Comment by mateotemprano — February 21, 2006 @ 7:27 pm