GOTO www.lifeworth.com PURCHASE LIFEWORTH REVIEW OF 2006 LIFEWORTH REVIEW OF 2006 LIFEWORTH REVIEW OF 2006


Select an article in this quarter from the dropdown menu below.

Or jump to a particular quarter.

Jem Bendell
Adjunct Associate Professor,
Griffith Business School, Australia

Founder, Lifeworth, Switzerland

Shilpa Shah |
Associate, Lifeworth

Tipping Frames: The Lifeworth Review of 2006
[ PDF: 2585kb | 54 pages ]

Appendices available in all PDF versions.

Fair Fight


Not only are food and drink important for what they contain but also the way they are produced. Controversy over the launch of Nestlé's first product certified as 'Fairtrade' in the UK in October 2005 continued into 2006. The association between the company awarded the 'most blatant case of corporate irresponsibility' award at the Public Eye awards in Davos in January 200518 and the green and blue Fairtrade label raised important questions about the future of the fair trade movement.

The responses to the introduction of 'Nescafé Partners' Blend', a Fairtrade brand by one of the world's four largest coffee roasters, were a mixed bag. Some campaigning NGOs were sceptical of the Fairtrade certification of one product out of over 8,500 Nestlé brands, affecting the working conditions of only a small ringfenced proportion of the three million coffee farmers dependent on the Swiss food giant: the World Development Movement, based in London, argued, 'if Nestlé really believes in Fairtrade coffee it will alter its business practices, lobbying strategies and radically overhaul its business to ensure that all coffee farmers get a fair return for their efforts'.19

It was argued that Nestlé is using the Fairtrade label as a shield to deflect criticism about its contribution to the suppression of world coffee prices (as flagged up by Oxfam in 2002),20 its labour standards and its aggressive manner of marketing baby-milk substitutes in low-income countries.

However, Harriet Lamb, Director of the Fair Trade Foundation, which is responsible for awarding the Fairtrade label in the UK, was enthusiastic about the development, declaring 'this is a turning point for us and for the coffee growers'. 21 Ethical Corporation columnist Mallen Baker argued that Nestlé had been 'unfairly roasted'22 by these critics and that a breakthrough of the Fairtrade label into the mainstream should be welcomed by all.

The Fairtrade label is a certification awarded to products whose production and form of trade adheres to standards set by the Fairtrade Labelling Organisation International (FLO-I), an umbrella organisation which supports licensing of products for sale in 19 countries including the US, Japan and a number in Europe. Certification requires that producers integrate a range of environmental, labour rights and community development interests, and that those who purchase from such producers offer more supportive and stable contracts at prices usually above market rates.23 Producers of coffee, tea, sugar, bananas and other products in low-income countries are given a stable, sustainable price for their products and investment into community development programmes. The Fairtrade label also acts as a signal of 'ethical' credentials to consumers on supermarket shelves; both ends of the supply chain are addressed by this movement, which has attracted the support of business and campaigning NGOs alike.

While Fairtrade products make up only a tiny percentage of their respective markets, recent years have seen a strong growth in their popularity. In Europe, the net retail value of sales of Fairtrade products in over 79,000 outlets, including 50 supermarket chains, grew to €660 million in 2005, achieving an increase of 154% on sales at the turn of the century.24 Over 5 million producers and their families in Latin America, Asia and Africa are said to have benefited from Fairtrade relationships25-the number of certified producers is growing rapidly, increasing by 25% in the year 2005 alone.26 The green and blue Fairtrade logo issued by the FLO-I is now recognised by 50% of the adult population in the UK.27

'Fairtrade Fortnight', an annual awareness-raising event in the UK in March was marred this year by publicity surrounding the Nestlé controversy and also by news that McDonald's, another common target of consumer boycotts, is now publicising the sales of Fairtrade coffee in 650 US east-coast stores.28 The issue is one of trust; informed consumers and activists who have supported the growth of the fair trade movement and the Fairtrade brand feel that the movement is being co-opted by those powerful companies that it seeks to challenge. New Internationalist magazine argued that 'the allure of the mainstream is largely illusory. Tributaries do not change its course; they disappear into it.'29 Whether and how to engage powerful actors in social systems, and to focus on incremental but tangible change or more transformative but often unlikely change, has been a central dilemma for social actors throughout history, and debates around the fair trade movement are one recent illustration.

The more broad your view, the more complicated and challenging this becomes. Over Valentine's Day 2006, those romantics giving their well-informed, 'ethically' minded sweethearts Fairtrade roses from Kenya may well have been rebuked for not considering the environmental damage caused by the cut-flower industry around the Lake Naivasha area. The introduction of Fairtrade certification has seen increases to workers' wages and an expansion of businesses, but local ecosystems and water supplies are being put under severe strain by the increased production and the migration of workers from northern parts of Kenya, attracted by the higher wages.30 In addition, sweethearts may have turned their noses up at the amount of pollution caused by flying flowers in from another continent, given the growing impacts of climate change.

The growth in popularity of 'fairer trade' initiatives, such as Equitrade31 chocolate from Madagascar and Just Change tea from India,32 which market themselves as providing better, more stable conditions than the Fairtrade brand for only small and medium producers, reflects the growing mistrust many consumers feel towards Fairtrade.

But alternatives to Fairtrade have not all been welcomed in this way. The plethora of copycat 'fairly traded' brands and standards supported by big business-such as Kraft's 'Sustainable Development' coffee brand, produced in conjunction with the Rainforest Alliance initiative-springing up on supermarket shelves in the US and Europe have also led to concern over confusion between different 'ethical' products. These other brands may not meet the standards set by the FLO-I or uphold elements of empowerment that the Fairtrade brand seeks in relationships with producers, but are competing with Fairtrade products to produce the brightest halo to attract consumers. This echoes the banana disputes between the Rainforest Alliance and Fairtrade movement during the 1990s, which also revolved around the dilemma of whether one step forward, a better banana, was helping or hindering a leap forward towards a sustainable and responsible one.

The question of governmental involvement in regulation of the 'ethical' market has arisen, in order to standardise the certification process and reduce conflict between the numerous emerging standards. In France, Fairtrade products are certified with the Max Havelaar label, but a number of private certification processes have also emerged over the past few years. A system of definition and qualification of Fairtrade products is expected to be introduced by the French government in 2006,33 aiming to standardise the meaning of 'Fairtrade' and reduce consumer confusion. This move has been opposed by Max Havelaar as regulation would mean the lowering of 'fairness' standards and would also detract from the awareness-raising and lobbying aspect of Fairtrade.

Similarly, regulation of the increasingly popular market for organic food produce has raised concerns about the lowering of standards of certification. The Soil Association, one of the certification bodies of organic produce in the UK, argued that, as demand for organic produce continues to increase, 'product integrity is potentially threatened by dilution of standards world-wide'.34 The European Commission announced new EU-wide regulations governing the certification and labelling of organic produce in December 2005, which will 'allow a certain amount of flexibility' in production methods.35 Friends of the Earth (UK) have taken issue with the inclusion of a clause that allows products that contain a small percentage of genetically modified organisms to be labelled as organic, arguing that economic concerns are being prioritised ahead of human health and protection of the environment.36

Next back to top


18 'And the winner is ...', Center for Media and Democracy (1 February 2005); www.prwatch.org/ node/3240.

19 World Development Movement, 'Statement by WDM on Nestlé FAIRTRADE Partners' Blend Coffee', press release, 7 October 2005; www.wdm.org.uk/news/presrel/current/nestle.htm.

20 Oxfam, 'Mugged: Poverty in Your Coffee Cup' (2002), www.oxfam.org.uk/what_we_do/issues/trade/mugged_coffee.htm.

21 Fairtrade, 'Press statement on launch of Nescafé partners' Blend', 7 October 2005; www.fairtrade. org.uk/pr071005.htm.

22 Mallen Baker, 'Nestlé: unfairly roasted over Fairtrade', Ethical Corporation, 7 November 2005; www.ethicalcorp.com/content.asp?ContentID=3963.

23 See www.fairtrade.org.uk/suppliers_become_a_licensee.htm#principles.

24 FLO, IFAT, NEWS! and EFTA, 'Fair Trade in Europe 2005: Facts and Figures on Fair Trade in 25 European Countries' (2006); www.ifat.org/downloads/marketing/FairTradeinEurope2005.pdf.

25 FLO, IFAT, NEWS! and EFTA, 'Towards a coherent Fair Trade Policy: Fair Trade demands to European decision makers' (April 2005); www.ifat.org/downloads/advocacy/TowardsaCoherentEUFairTradePolicyApril%202005.pdf.

26 Fairtrade Labelling Organisations International, 'Delivering Opportunities: Annual Report 2004/ 2005'; www.fairtrade.net/sites/news/FLO_AR_2004_05.pdf.

27 www.fairtrade.org.uk/pr270505.htm

28 TransFair USA, 'TransFair USA Joins Oxfam in Welcoming McDonald's Rollout of Fair Trade Certified Coffee', press release; CSRwire, 31 October 2005; www.csrwire.com/article.cgi/4622.html.

29 David Ransom, 'Fair trade for sale', New Internationalist 377 (April 2005); www.newint.org/issue377/essay.htm.

30 Jeevan Vasagar, 'How Kenya is caught on the thorns of Britain's love affair with the rose: Rising demand for flowers leads to trade-off between economy and environment', The Guardian, 13 February 2006; www.guardian.co.uk/frontpage/story/0,,1708492,00.html.

31 Chocolate Trading Co., 'Equitably-Traded Chocolate: 100% Pure Malagasy'; www.chocolatetradingco.com/special.asp?ID=17.

32 Stan Thekaekara, 'Linking Hands', The Guardian, 8 March 2006; society.guardian.co.uk/societyguardian/story/0,,1725463,00.html.

33 See Fair Trade Organisation, 'Almost Famous: Fair Trade Products', 11 July 2005; Business in Development Network, www.businessindevelopment.nl/article-1012.6845.html.

34 Soil Association, 'Certification Equivalence', 5 December 2005; www.soilassociation.org/web/sa/saweb.nsf/848d689047cb466780256a6b00298980/289589ffa17a49ab802570ce005ca208!OpenDocument.

35 European Commission, 'Organic Food: New Regulation will improve clarity for consumers and farmers', press release, 21 December 2005; europa.eu.int/rapid/pressReleasesAction.do?reference=IP/05/1679&format=HTML&aged=0&language=EN&guiLanguage=en.

36 Friends of the Earth, 'EU Commission allows GM contamination of organic farming', press release, 22 December 2005; www.foe.co.uk/resource/press_releases/eu_commission_allows_gm_co_ 22122005.html.

back to top


HOME | CONTACT US | SITEMAP | SPONSORS COPYRIGHT 2007. LIFEWORTH REVIEW OF 2006.