News Update

There’s A Business Case for Fair Trade

Posted May 8th 2014

Article for Brandon Sun “Small World” Column, March 10/14

There’s A Business Case for Fair Trade

by Zack Gross

There was a time when Fair Trade was part of the idealistic world of charitable or justice-seeking activities that take place under the subject heading of “international development” and not part of the profit-seeking business world. Today, those two worlds have found common ground around issues of sustainability – sustainable supply for companies and a sustainable common home, our planet, for everyone.

Of course, fair trade is the moniker given to the process of production that pays people in the global South a fair wage for their labour, while safeguarding the environment and helping poor communities to provide better worker safety and rights, education, health care and governance for themselves.

At a recent national fair trade conference held in Toronto, which included participants from Brandon, Gimli and Winnipeg, supply chain managers, corporate executives, small business owners and activists shared the podium in discussing how to ramp up fair trade in Canada while ensuring its integrity as an alternative to “business as usual”. Business representatives, from coffee companies and grocery distributors, spoke out passionately about how they are working to meet social and environmental targets both because it is the right thing to do and also because this new direction will bring in a return for their investment.

What has brought business to this point is risk: the realization that moving toward ethical and sustainable production and purchasing gives their companies the best chance of survival and success in the rapidly changing landscape of today’s world. Their first worry is dwindling supply. Taking West Africa as an example, where 80% of the world’s cocoa originates but yields are dropping, or Latin America - a major coffee growing region which is currently facing a destructive plant rust outbreak - better care of the land is necessary or chocolate and coffee companies won’t have any product to sell. Partly this is a result of climate change and partly this is caused by a grow at all costs attitude, often on inappropriate land or by using slash and burn methods.

Using the same examples and looking at the key criterion for fair trade – a liveable wage for producers and workers - companies are also seeing peasants leave rural locations for the city in order to seek a better life. If coffee, cocoa, sugar and other world commodity prices remain low and people continue to feel that there is no way out of their exploitation, then there is no guarantee that they will stay where they are.

Conflict in the world’s poorest regions, often a result of that poverty, is another consideration facing companies today. Even with chocolate, armies are using revenues from cocoa they control to buy guns to fight civil and regional wars. Companies like Cadbury’s ask how they can expect a sustainable supply of their customers’ favourite chocolate bar to come from a war zone, on poor land, grown by destitute people? This is the reality of fragile states in West Africa, such as Ivory Coast and Mali.

Thus, Cadbury’s signed on with the United Nations and organizations of Ghanaian cocoa and sugar farmers to produce fair trade cocoa, now available to us in Dairy Milk and other commercial chocolate bars. Even cellphones, powered by “conflict minerals” have come under scrutiny, and technology companies are looking for alternatives, with the first fair trade cellphones now in production.

Our world today is very small and has cameras set up everywhere. No one can any longer say “We didn’t know.” Businesses need to know how their chocolate or coffee are produced because the media and consumers have questions, and are cynical about easy answers. Being able to pronounce your product “fair trade” in a credible manner will mean more sales, but also ensures a longer-term supply. That is where the Fair Trade Certified logo comes in – third party inspection and auditing of the supply chain, with the strongest guarantee against corruption or backsliding.

Once companies secure their supply of whatever commodity, they want consumers to buy it. Today’s better informed consumer and better educated, more activist younger generation don’t want to buy goods produced by child labour or in factories that collapse or burn down without a thought to safety. Kids vote with their dollars these days.

Employees meanwhile want to work for a business, if they can make that choice, that reflects their values. In my own experience managing a couple of retail fair trade outlets over the past generation, I noted how employees passionately want to find meaning in their work and make more of an effort if there is, along with making a living, a broader aim to the business they work for. A business that connects to a cause fires the imagination and captures the support of both staff and consumer.

There is a combination of self-interest and altruism at work today in the institutional and corporate sectors. While the aim is still to meet bottom lines or profit targets, social and environmental goals have become part and parcel of those economic considerations. For our fragile world and its businesses to survive, you can’t have one without the other.

Zack Gross works for the Manitoba Council for International Cooperation (MCIC), a coalition of over forty international development organizations active in our province.