Fair trade organisations have an important role in putting pressure on companies to comply to socially responsible criteria and to denounce violations of regulations.
by Vince Caruana
Many people consider fair trade to be marginal or alternative because the total amount of trade in fair traded products as a percentage of all world trade is still very low. However, there is another often overlooked aspect to fair trade and that is the pressure fair trade organisations put on mainstream business to act more responsibly.
Fair trade organisations have contributed significantly to the empowerment of an ethical consumer movement and to the creation of an ethical consumer market. Corporations are now striving to meet these new consumer demands with claims of being concerned about their social responsibility and with various statements of intent and codes of conduct.
Fair trade organisations have thus laid the foundation for economic and business practices that respect producers and workers involved in the production chains. A number of companies and major corporations are setting up networks to jump on the bandwagon of social responsibility and to devise strategies that might help them implement their commitments to social responsibility.
Although fair trade organisations approve and encourage initiatives from companies to be more socially responsible, their first priority is to set the basic standards. Unfortunately, various commitments on paper often fall short of social responsibility and various efforts by corporations can be regarded as "window dressing". Fair trade organisations believe that increased accountability requires hard facts to be put into the public domain so that people can judge how and whether the industry is meeting credible corporate social responsibility targets. A statement of intent is not enough.
One global observation that can be made is that working conditions have not really improved and the efficiency of codes of conduct is controversial. Here are some examples:
The ethical trading initiative (ETI) was initiated by NGOs in the UK and is an alliance of NGOs, trade unions and corporations. ETI is mainly committed to developing the implementation of codes of conduct and ethical trade. In a recent survey on the compliance with its own code among 11 of its 14 member companies, the ETI assessed 1,183 suppliers. Sixty-six per cent did not comply with the code, mainly insofar as working hours, minimum living wage, health and safety and freedom of association go.
A government survey carried out in 70 textile workshops in Los Angeles in 1998 revealed that compliance with the main labour standards (child labour, minimum wages, overtime, etc.) had remained significantly unchanged for six years in spite of various schemes being set up to verify the implementation of labour laws.
Nevertheless, other efforts show a good direction, really leading to improvements in social conditions. For example the Clean Clothes Campaign has established important contacts between northern and southern organisations, thus strengthening the monitoring of voluntary initiatives.
Fair trade organisations have an important role in putting pressure on companies to have them comply to socially responsible criteria and to denounce violations of regulations. While they are powerless to impose sanctions, they can impose moral sanctions, which in some cases can be prejudicial to the company's interests as it tarnishes its image.
For more information contact Koperattiva Kummerc Gust at http://www.maltaforum.org or firstname.lastname@example.org.