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Fair Trade: Labour Conditions Without Borders?

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Fair Trade: Labour Conditions Without Borders? Fair Trade: Labour Conditions Without Borders? Perspective: Governments of Perspective: Multi-National Corporations Developing Countries and their Shareholders • What belief is held by this Can you think of any • Who might belong to this group? group? other perspectives? • What belief is held by this group? • What resolution would they opt for? • What resolution would they opt for? • Who would benefit? • Who would benefit? FAIR TRADE: LABOUR CONDITIONS WITHOUT BORDERS? Perspective: Farmers Perspective: Ourselves, as A number of resources have been provided for you in this package. • What belief is held by this consumers Use any/ all of the material to complete your analysis. group? Your Task: • What belief do you hold? • What resolution would they 1. Select an issue from the list provided. • What resolution would you opt for? 2. Describe the issue (150 words) opt for? • Who would benefit? 3. Explain why this is an issue of justice or the common good (150 words). • Who would benefit? 4. Identify the people or groups who have a stake in the issue and analyse their perspectives on it. Why would some stakeholders not want the situation to change? (750 words) 5. Analyse the issue in terms of the principles that have been studied that Perspective: Workers in Developing Perspective: Economist Peter promote human flourishing. Which perspective would most effectively Countries Griffiths promote the common good? (750 words) • What belief is held by this • What belief is held by 6. In light of your analysis, and after considering the ethical questions group? Griffiths? provided, discuss how you would respond to this issue. (200 words). • What resolution would they opt • What resolution does he for? propose? • Who would benefit? • Who would benefit? Perspective: A Christian Perspective • What belief is espoused in Christian Perspective: Retailers and Distributors teaching? • What belief is held by this group? • What resolution is presented in this • What resolution would they opt perspective? for? • Who would benefit? • Who would benefit? Copyright ©Australian Catholic University 2012 Background: Have you ever considered the origins of the material items that surround us or the food that we consume? How many people were involved in bringing you a chocolate bar or a cup of coffee? Do you consider how much they were paid or the comfort and safety of their working environment? Are you prepared to pay more for an item so that the supply of the goods to you can be guaranteed to be “fair”? Do you think about the origins of the designer shirt, jeans or joggers you are about to buy? This resource package will ask more questions than it will provide answers. It should lead you to asking many more questions about the production of food and goods that are everyday items in our world. There are three aspects of this topic that need to be considered: “fair trade”, “labour conditions” and “without borders”. Fair Trade Let us start with “fair trade”. You may be familiar with the labels on some products that state “fair trade.” These labels go back to 1989 and they signify that the product is “fair trade certified.” Browse A Fair Trade Hub for more information. The term “fair trade” is credited to Michael Barratt Brown, who first used the term in 1985. The definition used by Fairtrade International, outlined in the Fairtrade Glossary is as follows: The term Fair Trade defines a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in developing countries. A quick history takes us back to the 1940s when in the United States Christian faith-based groups sold handcrafts from Puerto Rico in the USA. The women who produced the needlework sold directly to the shop who sold it to the consumer. This reduced the number of people in the supply chain and ensured a “fair” payment to the women in Puerto Rico. The more familiar Oxfam Trading came into existence in 1964 as part of the Oxford Committee for Famine Relief in Europe. The trading of coffee as a fair trade good commenced in the late 1980s in the Netherlands under the label “Max Havelaar.”1 Max Havelaar is a fictional character in the novel of the same name by Multatuli published in 1860. The novel was written in protest against corrupt colonial policies and raised awareness of the plight of the indigenous farmers and workers while the European colonisers grew in wealth. Can you see any correlations with what happens in today’s world? A timeline is available on the Fairtrade Foundation’s website that details the formation of fair trade organisations and labelling. Notice that the single word “Fairtrade” refers to organisations associated with the Fairtrade Labelling Organisation, while “fair trade” is a type of trading partnership that can be defined as previously stated. 1 See “A Fair Trade Hub”; see also P.T.M. Ingenbleek and M.J. Reinders, “The Development of a Market for Sustainable Coffee in the Netherlands: Rethinking the Contribution of Fair Trade”, Journal of Business Ethics (April 2012). Copyright ©Australian Catholic University 2012 There are opposing views to the idea of “fair trade.” Valkila2 and Weber3 have conducted studies into whether farmers can make a living from growing fair trade coffee. Both studies came to the conclusion that small-scale farmers in Nicaragua and Mexico are not lifted out of poverty. A further criticism is that fair trade promotes cash crops (those crops grown only for money and which cannot be eaten). Farmers are not encouraged to diversify or improve production processes.4 However, there are benefits such as: fair trade coffee has a social premium that is retained by the cooperative and it is intended for social projects for the community;5 and Fairtrade has helped raise the standards of non-Fairtrade organisations by providing a benchmark to which organisations aspire and are measured against by consumers (for example, sustainable production practices).6 Labour Conditions The next aspect to consider is the condition under which people work to produce goods. Read the following extract, which outlines an employer’s obligations to an employee: M.G. Velasquez, Business Ethics: Concepts and Cases, 7th ed. (Upper Saddle River, New Jersey: Pearson Education Inc, 2012). Velasquez states that “The basic moral obligation that the employer has toward employees, according to the rational view of the firm, is to provide them with the compensation they have freely and knowingly agreed to receive in exchange for their services.”7 From this obligation, the fairness of wages and working conditions are important considerations. We will expand on this point further when we examine the stakeholder perspectives. Refer back to the supplied notes in this unit on the principles of human flourishing, and to the following document: Michael Costigan, “Catholic Social Teaching: A Foundation Document of the CES.” Note here, the guiding principle of labour and capital from Catholic Social Teaching (CST): The teaching affirms the dignity of work, the rights of workers to suitable recompense and conditions, the legitimacy of trade unions and the right to strike in appropriate circumstances. The primacy of labour over capital is affirmed.8 Without Borders The final aspect of the topic is trade “without borders”. Carroll and Buchholtz9 draw the distinction between internationalisation and globalisation. Globalisation at its extreme would mean one global economy which requires free trade, free capital mobility and accessible migration. Internationalisation relies on understandings between 2 J. Valkila, “Fair Trade Organic Coffee Production in Nicaragua — Sustainable Development or a Poverty Trap?” Ecological Economics 68, no.12 (2009): 3018-3025. 3 J.G. Weber, “How Much More do Growers Receive for Fair Trade-Organic Coffee?” Food Policy 36, no.5, (2011): 678-685. 4 M.G. Hayes, “’Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade’—A Comment,” World Development 36 no.12 (2008): 2953-2961. 5 Valkila, “Fair Trade.” 6 Ingenbleek & Reinders, “Development of a Market for Sustainable Coffee.” 7 M.G. Velasquez, Business Ethics: Concepts and Cases, 7th ed. (Upper Saddle River, New Jersey: Pearson Education Inc, 2012), 415. 8 Michael Costigan, “Catholic Social Teaching: A Foundation Document of the CES” (paper, November 21, 2006), 2. 9 AB Carroll, & AK Buchholtz, Business & Society: Ethics, Sustainability, and Stakeholder Management, 8th ed., (Mason, Ohio: South-Western Cengage Learning, 2012). Copyright ©Australian Catholic University 2012 countries. Formally internationalisation can be defined as a “process by which firms increase their awareness of the influence of international activities on their future and establish and conduct transactions with firms from other countries,”10 for example, “exporting, acting as a licensor to a foreign company, establishing joint ventures outside the home country, and establishing or acquiring wholly owned businesses outside of the home country.”11 Globalisation, on the other hand, is based on trade being conducted without borders. Carroll and Buchholtz12 outline the ethical perspectives of the globalists and antiglobalists. For example, on human rights, globalists cite South Korea and Taiwan as examples of countries that have benefited from the economic and political freedoms afforded by globalisation. Antiglobalists believe that globalisation is entirely about profits for organisations without regard to human rights. View the film by John Pilger, “The New Rulers of the World” YouTube video with subtitles available, 53:12, January 20, 2011, http://www.youtube.com/watch?v=v3WbztsqScw, for an insight into this perspective. Along with the social, economic and political issues depicted in the above film, also consider the health issues that relate to the people who work in the factories. See the following articles: T. Schofield, “Workplace health,” in Second Opinion: An Introduction to Health Sociology, edited by J.
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