Moving the Fair Trade Agenda Forward by Paul Chandler
The Fair Trade movement has made considerable progress, to the stage where major supermarkets are now stocking Fairtrade products. Paul Chandler explores the challenges that this scaling up brings, the role of dedicated Fairtrade organisations like Traidcraft in the new environment, and the part that Christians have to play.
These are undoubtedly exciting times for those of us in the Fair Trade movement. Fair Trade products have never been more popular with the general public, nor more readily available. Supermarkets and other commercial organisations are not only stocking products from fair trade organisations, but are increasingly developing their own fair trade product ranges. Politicians now regularly pay lip service to the importance of what we do, and in the wake of the Asian tsunami the importance of addressing the issues of world poverty with a new urgency has been recognised.
But this success brings with it a range of challenges. Having become more significant commercially, Fair Trade is rightly becoming subject to greater scrutiny, and a range of vested interests are beginning to launch counter-attacks in an attempt to undermine the momentum of the Fair Trade sector. At the same time, the Make Poverty History campaign is heightening public awareness of wider trade justice issues, but is also experiencing challenges from economists, businesses and others - who feel threatened by the challenges being made to free market orthodoxy, or who consider the trade justice arguments to be ill-founded for one reason or another. Arguments on both sides are often over-simplified and overpolarised, making it difficult for more neutral observers to know where they should stand.
Against this background it is important that Christians contribute to the debate, understanding the arguments and reflecting on Christian perspectives on these issues. As a small contribution to this process, I propose to explore the understanding of fair trade and trade justice that has been developed by Traidcraft over the 25 years that it has been a leading practitioner of fair trade. I shall then consider some of the bigger challenges facing the fair trade movement over the coming five to ten years, and suggest several ways in which the movement needs to move on. Finally I shall consider what might be the role of churches and individual Christians in the fight for fair trade and trade justice.
Background
First I would like to say a few words about my own background and about Traidcraft I joined Traidcraft as Chief Executive in mid 2001, having spent the previous nine years as General Secretary of SPCK, the Anglican mission agency, publisher and bookseller. Before that I worked for nine years in Barclays plc, initially as a graduate entrant, and then, after studying for an MBA, as manager in a City of London branch, as manager responsible for Group long-term strategic planning, and finally as Assistant Director responsible for branch network changes and sales to personal customers in the southwest London region. I have thus worked both within the multinational capitalist system (and enjoyed it!), and within two mission-driven businesses that have combined the need to make sufficient profits to survive and grow with strong Christian and "third world" connections. I am a practitioner rather than a theorist; a businessman rather than a theologian.
Traidcraft is a Christian response to poverty, dedicated to "fighting poverty through trade" since its foundation in 1979. It is best known as the UK's leading fair trade organisation, but in fact operates within a much broader sphere than simply "Fair Trade", being a leading advocate of wider trade justice and corporate responsibility issues. Traidcraft runs many pro-poor trade-related projects around the world.
Traidcraft is an unusual organisation in that it brings together a public limited company - Traidcraft plc - and a development charity - Traidcraft Exchange. The two share the same senior management team, have overlapping Boards and, most importantly, share the same mission of fighting poverty through trade, through support activities in the Southern hemisphere and through influencing governments, businesses and the general public. The combination of being a business and a charity has proved very fruitful, with each able to inform the thinking and development of the other, giving Traidcraft a unique voice and an ability to understand both business and development perspectives on the various arguments around poverty and trade.
Traidcraft plc is the trading arm of the family, and the best known part of Traidcraft. It sources fairly traded foods, gifts and paper products from about 100 producer groups in some 30 countries, seeking both to generate income for those producers and to help them develop the capacity to establish sustainable businesses that can thrive in local as well as export markets. In 2004/5 our turnover was £16 million, double the figure in 2000/1. In the last three years Traidcraft plc has begun to generate a healthy level of profits, in line with norms for UK industry, which is vital both to sustain future growth and to demonstrate the viability of fair trade as a commercial (rather than a charitable) model.
Traidcraft Exchange raises money from the general public and institutional donors to support trade development projects, especially in East and Southern Africa, India, Bangladesh and South East Asia. It has a training and consultancy arm which makes our expertise available to producers who do not supply Traidcraft plc, to NGOs and to businesses. A London-based Policy team is the leading think tank in the international fair trade movement, and is highly respected within the UK and Brussels for its wider advocacy of fairer approaches to trade rules and corporate ethical behaviour.
Underpinning both parts of Traidcraft is a substantial supporter community of shareholders, Fair Traders, donors and campaigners, who are drawn particularly (but not exclusively) from the UK Christian community. As a non-denominational Christian organisation all senior staff and Board members must be practising Christians, but Traidcraft seeks to work with and through people of all faith backgrounds and does not have an evangelistic agenda: rather it seeks to offer a practical expression of Christian love and concern for the poor and marginalised.
What is Fair Trade?
Many debates on fair trade are bedevilled by different understandings of what the phrase means. There are at least three commonly used definitions, and care is needed to identify which one is being referred to if discussions are not to become confused and unproductive.
"Free and fair trade" is a phrase increasingly used by politicians and business leaders in support of the trade liberalisation agenda. Fairness in this context refers primarily to establishing a "level playing field" between countries Faith in Business Quarterly Journal Volume 9 No.2 Summer 2005 27 and companies, removing protectionist tariffs and subsidies.
"Fair trade not free trade" is a slogan much used by campaigners within the Trade Justice and Make Poverty History coalitions. In this context it means allowing weaker countries to have greater access to developed country markets, whilst at the same time allowing them to use differing degrees of protection to prevent themselves being dominated by multi-national companies or flooded with cheap (and often subsidised) goods from developed countries. This is "fair" because it seeks to redress the balance between weak and strong.
"Fair Trade" (or "Fairtrade" for those products for which labelling criteria have been developed) refers to a specific form of pro-poor trade, paying above-market prices and premiums where needed to ensure a respectable standard of living for producers. This includes a commitment to investing resources in capacity building, to ensuring good working conditions and rights for workers in Fair Trade producer groups, and to seeking long-term relationships between suppliers and fair trade companies in the North. Fair Trade relates particularly to trade with smallholder farmers, cooperatives and rural crafts workers, although there are a number of plantations and private sector models emerging as well.
Where does Traidcraft stand on the various issues implicit within these definitions?
Our starting point is to recognise that trade is the most sustainable way of addressing global poverty, and is essential if other initiatives such as aid and debt relief are to be followed through to good effect. Some of the more extreme advocates of "fair trade" merge into elements of the anti-globalisation and anti-capitalist movements, but Traidcraft believes that business, whilst it has the potential to do harm, also has significant potential to do lasting good, and indeed will be the most essential part of any programme to combat world poverty effectively. On issues of trade liberalisation, we recognise that no western economy has developed without the use of protection during the early stages of its development, and although once sufficiently developed economies benefit hugely from more open markets, undue liberalisation at an early stage will tend to consign less developed countries to volatile and low margin commodity production and to other low added-value activities. Free markets are an illusory theoretical concept, given the huge imbalances of power that exist in today's world, and no developed country truly believes in free trade. All shelter their vulnerable groups and industries behind tariff and non-tariff barriers and subsidy programmes.
Turning to the most specific usage of the term, "Fair Trade" might in many ways be more accurately named "Biased Trade"! It represents pro-poor trade with a developmental intention. Whilst establishing a gold standard for showing how trade can benefit the poor and marginalised, and providing much direct assistance to those groups supplying fair trade products, Traidcraft believes that it should be seen primarily as an incubator - allowing additional resources to be channelled to the most needy groups until they have built the expertise and resources to survive in mainstream markets (which then allows fair trade companies to switch their attention to other poor producer groups). It is thus essential to ensure that fair trade producers develop sustainable businesses, with strong local markets as well as exports, and diversified product ranges and customer bases. Fair Trade should not be about creating cosy niche markets between a few fortunate producers and small dedicated ethical consumers!
As well as helping producers develop, Fair Trade is also to be seen as an effective tool for changing attitudes in the North. Fair Trade products on shelves and in churches raise popular awareness of world poverty issues. By providing a moral choice for consumers, it allows them both to put their money where their hearts are and to send powerful signals to companies and politicians about the importance of ethical business and trading behaviour. The recent and welcome expansion of Tesco, Sainsbury and Asda into Fair Trade products reflects not a moral conversion experience for their Boards, but a recognition of growing consumer demand for ethically sourced goods. Fair Trade also demonstrates that all businesses can afford to take ethical concerns seriously - that being a "good business" can make good business sense, and that not to respond to growing consumer pressure will be to court financial disaster.
Christian Perspectives on Fair Trade and Trade Justice
All the above arguments make sense from a purely practical point of view, reflecting the experience of Traidcraft's 25 years of trading. But how do the arguments look from a more explicitly Christian and theological perspective?
Our starting point must be the Biblical call for justice, repeated throughout the Old and New Testaments. God has a heart for the poor and marginalised - the widow, the orphan and the alien - and as Christians we should be seeking to reach out to help. Warnings against rich oppressors and unscrupulous exploitation of the poor are clear, whether expressed in Micah, Amos or James. Economic justice is a biblical imperative, and the fight for fair trade and trade justice should thus be seen as a key expression of the Christian message of love and justice for all. I believe it is a necessary part of our Christian discipleship.
As Christians we must look beyond concepts of poverty that focus only on income and consumption. People are more than economic creatures. As Christ himself teaches us, man lives by more than bread alone. Thus alongside our concern for the provision of adequate food, water, shelter and basic levels of education and health care provision - all of which are clearly essential - we must always place a strong premium on addressing more intangible dimensions of poverty. Promoting dignity, self-esteem, participation in decisions, and having opportunities to develop one's God-given potential are all aspects of the Fair Trade model that are profoundly Christian. Models of economic development require a deeper understanding of what contributes to real human wellbeing.
Central to the Christian perspective is our recognition of the value of each individual in God's eyes. Each of us is made in the image of God, and he cares for everyone of us. Too often in the arguments about economic development we are told that in the interests of market efficiency there is bound to be transitional restructuring pain, as people are forced out of one activity into more productive areas. This pain is allegedly worthwhile, because it will ultimately contribute to the creation of greater wealth that will reduce overall poverty. Yet in the context of extreme poverty, people often lack the resources, skills or opportunities to reallocate their efforts to new areas of production. Neutral sounding "structural adjustments" can mean utter penury and even starvation when you look at the implications for particular families and communities. From a Christian perspective we should surely not simply stand by and accept this as a necessary evil in the pursuit of greater long-term efficiency. Where human lives are concerned, the means may not justify the ends.
Traidcraft recognises that business and the operation of markets have great potential for good through wealth creation. Too often in Church and development circles there is an inbuilt suspicion of business, and an assumption that profit must always be at someone else's expense. We believe that enterprise is a God-given aspect of human creativity, and one of the ways in which we are able to be good stewards of the world's resources. Without human enterprise and the benefits of business, we do not believe that we will be able to create the wealth to reduce world poverty. However, like any other human activity, it has the potential to be turned to bad ends as well as good. This need not always be a question of conscious decisions to be exploitative or harm the poor, but may be the result of unforeseen and unintended consequences of actions on people further down the supply chain.
As Christians we therefore need to be conscious of our own complicity in economic systems Faith in Business Quarterly Journal Volume 9 No.2 Summer 2005 29 that may have an adverse impact on others. We need to think about the people behind the products we buy, rather than simply buying the cheapest of most attractively branded products without further thought. How we spend our money is a key moral issue, and Christians need to inform themselves and think about how they allocate their expenditure. Whilst welcoming the positive dimensions of business, Christians need to be aware of the need to create and support structures that will help mitigate the more negative aspects of corporate activity. Supporting steps that promote corporate responsibility and encourage all companies to find out about the impact their supply chains are having on the poor is an important part of our witness.
Central to all of this, is the need for the Church to speak out prophetically against the tendency in modern societies to judge everything by its financial worth. Wealth creation, efficiency and cost-effectiveness have become the constant mantras of our leaders in political and business spheres. Yet so often this ignores wider human and Christian values: the values of community and of human well-being, for which growing wealth may not be an adequate proxy measure. Is our society in too great an abeyance to Mammon? When church leaders speak out on economic justice they are told not to interfere in areas they don't understand - we must obey the dictates of economists in the world of economics for only they know how to maximise wealth. But surely we should be bringing to the fore arguments that society should be focusing on wider values than money. That is a key prophetic message for our age.
Future Challenges for Fair Trade
So what does the future hold for those of us engaged in the world of Fair Trade, and what in particular should be the role and contribution of churches and Christians?
In my opening remarks, I spoke of the great opportunities that are arising, as Fair Trade is becoming fully embedded in mainstream business, with growing levels of commercial involvement bringing a new scale of opportunities - albeit with greater competition for dedicated fair trade organisations and increased scrutiny of everything that we do.
Within this environment Traidcraft will need to continue to advocate best practice in Fair Trade. We will need to ensure that standards are not diluted or corners cut as multinationals place ever greater pressure on the limits of Fair Trade practices. We need to push for the raising of the bar: the bringing in of higher standards, the extension of fair trade to new areas of the supply chain. Our role as pioneer and innovator will come to the fore.
To ensure that we are still able to survive to carry out this role, Traidcraft will need to develop new commercial strategies - linking to markets with commercial allies, and developing expertise in providing ingredient supply and producer support services on behalf of others. There are real opportunities in all of these areas. For example, Traidcraft has recently decided to licence its successful Geobar brand to a commercial partner. This partner now owns the product and the risk associated with it, releasing a lot of capital for Traidcraft, whilst ensuring we have a strong income stream from the profits of the trade. But they also bring their much bigger sales force to bear, offering the scope for volume growth that will drive up business for our Fair Trade suppliers. Our partner's new product development team is also coming up with suggestions for new products that could use Fairtrade ingredients and still hit important price points in supermarkets. This offers further scope to expand volumes for our producers - something that Traidcraft alone would struggle to achieve.
At the same time we need to differentiate our offer from that of commercial fair trade suppliers, making it clear that we go beyond the minimum standards that are guaranteed by the Fairtrade mark, investing far more in relationships, capacity building and other benefits for producers. For Traidcraft in particular we need Christian consumers to recognise that we are seeking to bring a distinctively Christian approach to bear on the market, calling on them to buy our products and to support us in other ways to ensure we can continue to speak out prophetically.
Traidcraft will also continue to work in the wider sphere of corporate social responsibility, building on its strong reputation as one of the leading plcs in the sphere of social accounting and ethical approaches to business. But any advocacy work we can carry out at this level needs to be underpinned by consumer pressure - for it is ultimately only the demands of consumers that will force business to take such matters seriously.
The Role of Churches and Christians
So what can Churches and Christians contribute to all this?
First, we must continue to proclaim a prophetic challenge to the rule of money in our lives, arguing that moral choices over the structures of world trade must be assessed on the basis of their impact on people rather than being purely arguments about the most effective means of wealth creation.
Second, by encouraging churchgoers to think seriously about these issues, and to take an active interest in trade justice and Fair Trade, the Church can play an important part in mobilising public opinion. The leadership of the Church was a key element in the success of the Jubilee 2000 campaign, and we believe the fight for trade justice is in some ways a natural extension of this leadership role.
Third, churches and Christians who are convinced of our cause can show in a practical way that they are serving the needs of the poor by opting to buy and use Fair Trade products and encouraging others to do so too. Whilst each purchase seems insignificant in itself, cumulatively they send powerful signals to the business world - all the more effective if underpinned by constant prayer.
Is the challenge too enormous to offer the hope of success? Surely not. The campaigners for the abolition of slavery faced many similar arguments to those being wielded in today's debate over trade, yet through persistent efforts they managed to overturn that system. Arguably, the fight against global economic injustice is the moral crusade that our generation needs to take up if we are to live out gospel values. With God's help we will make a difference.
Paul Chandler is Chief Executive of Traidcraft
Paul Chandler is Chief Executive of Traidcraft