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Promoting Responsible and Sustainable Sourcing Through Fair Trade

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Promoting Responsible and Sustainable Sourcing Through Fair Trade BRUSSELS RURAL DEVELOPMENT BRIEFINGS A SERIES OF MEETINGS ON ACP-EU DEVELOPMENT ISSUES Promoting Responsible and Sustainable Sourcing Through Fair Trade This Reader was prepared by Lebo Mofolo, Junior Programme Associate, CTA Brussels Office Isolina Boto, Manager of the CTA Brussels Office June 2016 Promoting Responsible and Sustainable Sourcing Through Fair Trade This Reader was prepared by Briefing n. 44 Lebo Mofolo, Junior Programme Associate, CTA Brussels Office With the assistance of Isolina Boto, Promoting Manager, CTA Brussels Office Responsible and Sustainable The information in this document was compiled as background Sourcing Through reading material for the 44th Fair Trade Brussels Development Briefing on Promoting Responsible and Sustainable Sourcing Through Fair Trade. The Reader and most of the resources are available at Brussels, 22 June 2016 http://brusselsbriefings.net Promoting Responsible and Sustainable Sourcing Through Fair Trade Table of Contents 1. Introduction ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 4 2. What is Fair Trade: concepts and key players ������������������������������������������������������������������������������������������������������������������������ 9 3. Fairtrade as means to Responsible Agricultural Sourcing �������������������������������������������������������������������������������������������������� 17 4. Fairtrade in international supply chains: Issues and Implications for the ACP ��������������������������������������������������������������� 27 5. Fair Trade in ACP-EU Trade context: scale, opportunities, successes and Case Studies ��������������������������������������������� 29 Annexes ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������?? Glossary �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������40 Acronyms �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 47 Resources ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������49 Websites ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������60 (Endnotes) ..........................................................................................................................................................................................62 Promoting Responsible and Sustainable Sourcing Through Fair Trade 1. Introduction Rationale The range and functions of standards agencies were also involved and certification methods have in actively working to support The term “Fair Trade” (FT) has changed, to cover new areas of producers in the Global South to various meanings. In this Reader, commerce beyond those traditionally reduce inequality and poverty in it is used to indicate the “Fair concerned with FT, for example their livelihoods.4 Trade movement”, represented in public procurement or services. particular by Fairtrade Labelling This necessitates a broader analysis The commercialisation of fair trade Organisations International (FLO) of the trading regime between started in the United States, where and its associate organisations developing and developed countries Ten Thousand Villages (formerly (and hence the use of “Fair further to the activities of the FLO Self Help Crafts) began buying Trade” in this note is with capital and its associate organisations. In needlework from Puerto Rico in 1946, letters). These groups aim to this regard, equitable trade is not and SERRV began to trade with poor provide an alternative business in and of itself a specific standard communities in the South in the late which attempts to redistribute framework, but rather encompasses 1940s. The first formal “Fair Trade” returns to factors of production all the principles of a more balanced, shop which sold these and other in a manner that is “fairer” for fairer and sustainable trade items opened in 1958 in the USA. developing-country producers. In commercial relationship between this sense, conventional trading producers and consumers, the The retail development of Fair Trade relations involving developing former largely constituting farmers in Europe date from the late 1950s country producers are deemed or other service providers from when Oxfam UK started to sell “unfair” insofar as the returns to developing countries. This has crafts made by Chinese refugees those producers are abnormally changed, and there is a growing in Oxfam shops. In 1964 it created low in an economic, environmental recognition and validation in the EU the first Fair Trade Organization. and/or social sense. Hence, Fair at least, that considerations that are Parallel initiatives were taking place Trade seeks to secure higher not purely about trade can be taken in the Netherlands and in 1967 the earnings for developing country into account in commercial activities, importing organization, Fair Trade small-producers that will allow regulation and partnerships.3 Original, was established. At the them to cover production costs, same time, Dutch third world groups earn higher returns and address Historical background began to sell cane sugar with the potential market failures such as message “by buying cane sugar environmental degradation and/or The fair trade concept has been you give people in poor countries a low labour standards.1 Fair Trade, developing in western nations place in the sun of prosperity”. These therefore, seeks to connect low- throughout the past 40 years or so, groups went on to sell handicrafts income producers and consumers in in response to a growing recognition from the South, and in 1969 the first large markets in more equitable and that benefits accruing from trading “Third World Shop” opened. World sustainable ways. It originates in a and trade growth are not necessarily Shops, or Fair Trade shops as they growing interest among consumers shared by all countries and all are called in other parts in the world, in large markets in the development layers of the population within each have played (and still play) a crucial of socially responsible traders, country in a comparable manner. role in the Fair Trade movement. that would allow for a “social They constitute not only points value added” in their commercial Fair or equitable trading has its roots of sales but are also very active in transactions. This value added is in the Italian and British cooperative campaigning and awareness-raising. generated when the purchase of a movement of the 19th Century, which product, besides its intrinsic value, was then followed by religious and During the 1960s and 1970s, NGOs gives the final consumer the benefit political movements in the 1950s and and socially motivated individuals in of knowing that it contributes to 60s in Britain and the US, seeking many countries in Asia, Africa and improve the quality of life of a group alternative trade models. Religious Latin America perceived the need for of low-income producers.2 organisations and development fair marketing organizations which 4 Promoting Responsible and Sustainable Sourcing Through Fair Trade would provide advice, assistance and and the need to respond to changing poverty reduction and sustainable support to disadvantaged producers. global commodity prices and trade development”. Finally, in 2006, the Many such Southern Fair Trade regimes. In this regard, severe price European Parliament unanimously Organizations were established, volatility and instability in coffee adopted a resolution on Fair Trade, and links were made with the trade which led to the dismantling of recognizing the benefits achieved by new organizations in the North. the International Coffee Agreement the Fair Trade movement, suggesting These relationships were based on 1989, necessitated a rethink in coffee the development of an EU-wide partnership, dialogue, transparency marketing and retail. In this context, policy on Fair Trade11. and respect. The goal was greater Solidaridad, the Dutch development equity in international trade. agency, spearheaded the foundation Two very notable developments of the first ever Fair Trade label and in the ACP-EU trade relations took Parallel to this citizens’ movement, FT organisation, Max Havelaar in place between 2010 and 2015. Firstly, the developing countries were 1988, whose first FT labelled product the second revision of the Cotonou addressing international political was coffee. Agreement, which was concluded fora such as the second UNCTAD in 2010, saw significant revisions conference (United Nations Fair Trade in the ACP- and new provisions being made Conference on Trade and for economic and trade provision Development) in Delhi in 1968, to EU context between the ACP and the EU (title communicate the message “Trade II Cotonou Agreement, 2010), not Aid”. This approach put the Fair Trade has repeatedly been which amongst other things now emphasis on the establishment recognized
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