The Ten Standards of Fair Trade
Rarely a day goes by when we at UK Vending (Britain’s longest serving Vending company and my family business) aren’t asked to explain what exactly is Fairtrade™ and Fairtrade products. For our BLOG (NewsVendor) I wrote and published a series of well received articles on the twin subjects of Fairtrade and Sustainability. The same question get asked each day so I have revisited the articles, brought them up to date and am republishing them in sequence.
IFAT prescribes 10 standards that Fair Trade organisations must follow in their day-to-day work and carries out continuous monitoring to ensure these standards are upheld:
- Creating opportunities for economically disadvantaged producers
Fair Trade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers who have been economically disadvantaged or marginalized by the conventional trading system.
- Transparency and accountability
Fair Trade involves transparent management and commercial relations to deal fairly and respectfully with trading partners.
- Capacity building
Fair Trade is a means to develop producers’ independence. Fair Trade relationships provide continuity, during which producers and their marketing organizations can improve their management skills and their access to new markets.
- Promoting Fair Trade
Fair Trade Organizations raise awareness of Fair Trade and the possibility of greater justice in world trade. They provide their customers with information about the organization, the products, and in what conditions they are made. They use honest advertising and marketing techniques and aim for the highest standards in product quality and packing.
- Payment of a fair price
A fair price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production which is socially just and environmentally sound. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men. Fair Traders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-harvest or pre-production financing.
- Gender Equity
Fair Trade means that women’s work is properly valued and rewarded. Women are always paid for their contribution to the production process and are empowered in their organizations.
- Working conditions
Fair Trade means a safe and healthy working environment for producers. The participation of children (if any) does not adversely affect their well-being, security, educational requirements and need for play and conforms to the UN Convention on the Rights of the Child as well as the law and norms in the local context.
- Child Labour
Fair Trade Organizations respect the UN Convention on the Rights of the Child, as well as local laws and social norms in order to ensure that the participation of children in production processes of fairly traded articles (if any) does not adversely affect their well-being, security, educational requirements and need for play. Organizations working directly with informally organised producers disclose the involvement of children in production.
- The environment
Fair Trade actively encourages better environmental practices and the application of responsible methods of production.
- Trade Relations
Fair Trade Organizations trade with concern for the social, economic and environmental well-being of marginalized small producers and do not maximise profit at their expense. They maintain long-term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. Whenever possible producers are assisted with access to pre-harvest or pre-production advance payment.
Where did it all begin?
There are many stories about the history of Fair Trade.
It all started in the United States, where Ten Thousand Villages (formerly Self Help Crafts) began buying needlework from Puerto Rico in 1946, and SERRV began to trade with poor communities in the South in the late 1940s. The first formal “Fair Trade” shop which sold these and other items opened in 1958 in the USA.
The earliest traces of Fair Trade in Europe date from the late 1950s when Oxfam UK started to sell crafts made by Chinese refugees in Oxfam shops. In 1964 it created the first Fair Trade Organization. Parallel initiatives were taking place in the Netherlands and in 1967 the importing organization, Fair Trade Original, was established.
At the same time, Dutch third world groups began to sell cane sugar with the message “by buying cane sugar you give people in poor countries a place in the sun of prosperity”. These groups went on to sell handicrafts from the South, and in 1969 the first “Third World Shop” opened. World Shops, or Fair Trade shops as they are called in other parts in the world, have played (and still play) a crucial role in the Fair Trade movement. They constitute not only points of sales but are also very active in campaigning and awareness-raising.
During the 1960s and 1970s, Non-Governmental Organizations (NGOs) and socially motivated individuals in many countries in Asia, Africa and Latin America perceived the need for fair marketing organizations which would provide advice, assistance and support to disadvantaged producers. Many such Southern Fair Trade Organizations were established, and links were made with the new organizations in the North. These relationships were based on partnership, dialogue, transparency and respect. The goal was greater equity in international trade.
Parallel to this citizens’ movement, the developing countries were addressing international political fora such as the second UNCTAD conference (United Nations Conference on Trade and Development) in Delhi in 1968, to communicate the message “Trade not Aid”. This approach put the emphasis on the establishment of equitable trade relations with the South, instead of seeing the North appropriate all the benefits and only returning a small part of these benefits in the form of development aid.
The growth of Fair Trade (or alternative trade as it was called in the early days) from the late 60s onwards has been associated primarily with development trade. It grew as a response to poverty and sometimes disaster in the South and focused on the marketing of craft products. Its founders were often the large development and sometimes religious agencies in European countries. These NGOs, working with their counterparts in countries in the South, assisted to establish Southern Fair Trade Organizations that organize producers and production, provide social services to producers, and export to the North. Alongside the development trade there was also a branch of solidarity trade. Organizations were set up to import goods from progressive countries in the South that were both politically and economically marginalised.
Exotic crafts and food
In the beginning, Fair Trade Organizations traded mostly with handcrafts producers, mainly because of their contacts with missionaries. Often, crafts provide “supplementary income” to families; they are of crucial importance to households headed by women who have limited employment opportunities. Most Northern Fair Trade Organizations focused on buying these crafts and sold them through World Shops. The market for crafts through these World shops was wide open and for many Fair Trade Organizations sales grew and grew.
In 1973, Fair Trade Original in the Netherlands, imported the first “fairly traded” coffee from cooperatives of small farmers in Guatemala. Now, more than 30 years later, Fair coffee has become a concept. Meanwhile hundreds of thousands of coffee farmers have benefited from Fair Trade in coffee. And in Europe more and more consumers drink fair coffee. Right now between 25 to 50 % of turnover of Northern Fair Trade Organizations comes from this product.
After coffee, the food range was expanded and it now includes products like tea, cocoa, sugar, wine, fruit juices, nuts, spices, rice, etc. Food products enable Fair Trade Organizations to open new markets, such as institutional markets, supermarkets and bio shops. In addition to these food products, other non food products such as flowers and cotton have been added to the Fair Trade assortment.
From the mid 70s, Fair Trade Organizations worldwide began to meet informally in conferences every couple of years. By the mid 80s there was a desire to come together more formally and the end of the decade saw the foundation of EFTA (the European Fair Trade Association, an association of the 11 largest importing organisations in Europe) in 1987 and IFAT (the International Fair Trade Association, a growing global network of Fair Trade Organizations in 70 countries, aiming to improve the livelihoods of disadvantaged people through trade and providing a forum for the exchange of information and ideas) in 1989. The organizations that are a part of IFAT vary greatly. They represent the whole chain from producer to sale and also include support organizations such as Shared Interest, which provides financial services and support to produces.
Networking between Fair Trade Organizations is crucial to their success. All over the world, networks have been established. Regional networks include the Asia Fair Trade Forum (AFTF), Co-operation for Fair Trade in Africa (COFTA), the Association Latino Americana de Commercio Justo (IFAT LA) and IFAT Europe. National networks include Ecota Fair Trade Forum in Bangladesh, Fair Trade Group Nepal, Associated Partners for Fairer Trade Philippines, Fair Trade Forum India, Kenya Federation for Alternative Trade (KEFAT), etc.
FLO, IFAT, NEWS! and EFTA started to meet in 1998 and, when they work together, are known by their acronym, FINE. The aim of FINE is to enable these networks and their members to cooperate on important areas of work, such as advocacy and campaigning, standards and monitoring of Fair Trade.
Awareness raising, campaigning and advocacy
From the beginning, the Fair Trade movement aimed to raise awareness among consumers of the problems caused by conventional trade, and to introduce changes to its rules. The sale of products always went alongside with information on the production, producers and their conditions of living. It has become the role of World / Fair Trade Shops to mobilise consumers to participate in campaigning activities for more global justice.
The first European World Shops conference took place in 1984. This conference set the beginning of close cooperation between volunteers working in World Shops from all over Europe. The Network of European World Shops (NEWS!) was formally established in 1994 and now represents approximately 3.000 World Shops in close to 20 European countries. NEWS! coordinates European campaigning activities and stimulates the exchange of information and experiences about development of sales and awareness raising work.
In 1996, NEWS! established the European World Shops Day as a Europe-wide day of campaigning on a particular issue, often with a goal at the European level. This initiative has been taken up by IFAT, which brought it to a worldwide level. The first World Fair Trade Day, which involves the worldwide Fair Trade movement, was celebrated on May 4, 2002. Now World Fair Trade Day takes place every year on the second Saturday of May and has its own Website: www.wftday.org.
In the course of the years, the Fair Trade movement has become more professional in its awareness-raising and advocacy work. It produces well-researched documents, attractive campaign materials and public events. It has also benefited from the establishment of European structures that help to harmonize and centralise its campaigning and advocacy work. An important tool was the establishment of the FINE Advocacy Office in Brussels, which focuses on influencing the (European) policy-makers. It is supported, managed and funded by the whole movement, represented in FLO, IFAT, NEWS and EFTA – hence its acronym FINE.
Fair Trade and Fair Trade Organizations have been recognised repeatedly by European Institutions as well as national and regional governments for its contribution to poverty reduction, sustainable development and consumer awareness-raising. The European Parliament passed several resolutions on Fair Trade (in 1994, 1998 and 2006) and many European ministers and prime ministers have publicly endorsed Fair Trade. Ever more public institutions are serving Fair Trade products and local authorities include fair and sustainable criteria in their public tenders. Thousands of towns, universities and churches have applied for Fair Trade status, committing to promote Fair Trade and to contribute to overcoming poverty and exclusion. Increasingly, representatives from developing countries promote Fair Trade because it enables small and marginalized producers in their countries to live and work in dignity. Fair Trade is increasingly on the agenda of policy makers throughout the world.
Fair Trade Organizations and Fair Trade labelling
In the first decades Fair Trade products were sold mainly by Fair Trade Organizations that had Fair Trade as the central ethos guiding their activities. In the seventies and eighties, Fair Trade products were sold to consumers mainly in world shops or Fair Trade shops.
In the second half of the 1980s, a new way of reaching the broad public was developed. A priest working with smallholder coffee farmers in Mexico and a collaborator of a Dutch church-based NGO conceived the idea of a Fair Trade label. Coffee bought, traded and sold respecting Fair Trade conditions would qualify for a label that would make it stand out among ordinary coffee on store shelves, and would allow not only Fair Trade Organizations, but any company to sell Fair Trade products. In 1988, the “Max Havelaar” label was established in The Netherlands. The concept caught on: within a year, coffee with the label had a market share of almost three percent.
In the following years, similar non-profit Fair Trade labelling organizations were set up in other European countries and in North America. In 1997 their worldwide association, Fairtrade Labelling International (FLO), was created. Today, FLO is responsible for setting international standards for Fair Trade products, certifying production and auditing trade according to these standards and for the labelling of products. The range of labelled products now counts almost twenty and is expanding. Fair Trade labelling has helped Fair Trade to go into mainstream business. Currently, over two-thirds of Fair Trade products, are sold by mainstream catering and retailing.
Parallel to the development of labelling for products, the International Fair Trade Association (IFAT) developed a monitoring system for Fair Trade Organizations. In order to strengthen the credibility of these organizations towards political decision-makers, mainstream business and consumers, the IFAT Fair Trade Organization Mark was launched in January 2004. The FTO Mark is available to member organizations that meet the requirements of the IFAT monitoring system and identifies them as registered Fair Trade Organizations. IFAT is working with FLO on a Quality Management System for Fair Trade and on finding a way to provide an “on product” Mark for handcrafts of all kinds.
During its history of over 60 years, Fair Trade has developed into a widespread movement. Thanks to the efforts of Fair Trade Organizations worldwide, Fair Trade has gained recognition among politicians and mainstream businesses. More successes are to be expected, as Fair Trade Organizations develop into stronger players and mainstream companies become more and more attuned to the demand for Fair Trade in the marketplace. Watch this space!
Martin Button is the Managing Director of UK Vending, Britain’s longest serving vending company. UK Vending (UKV) is a national supplier of prestige vending products and a provider of unique financial packages supporting UKV sales. UKV is a family owned business started some fifty years ago by Martin’s father John. It was the first vending company anywhere in the world hosted on the internet when most had not yet heard of the World Wide Web. One of Google’s ‘naturals’, UKV had an online shop before Amazon or Ebay. UKV had a successful background in email marketing before most companies had begun to understand its power. Imaginative marketing coupled with excellent staff recruitment and management, planning and customer service may be key to UKV’s long-term success in this competitive market. However, sheer business savvy and insight is what makes it work.