KNOWING WHAT’S ETHICAL, PART 3: THE NOT SO GOOD

This is Part 3 of the Fairtrade Spectrum series. In Part 1, I shared tips on what to look for when shopping to make sure your purchases help the world (and I also shared a quick reference Infographic). The shopping strategies I shared in Part 2 may not necessarily actively contribute to making the world a better place, but they ensure that our purchases don’t encourage the exploitation of the people making them.

In this third part of the Fairtrade Spectrum, I discuss what I consider to be the ‘not so good’- the unknown.


IS THE PRODUCT…?

Unknown

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Where can you find products from unknown origins?

Everywhere! Most of the clothing, home-wares, and beauty products available in supermarkets focuses more on selling the end product, rather than the product’s origin. As consumers’ focuses change, so too will the status quo. And it’s changing already; recently I’ve seen more consumers interested in where their food is coming from- and more companies advertising their products as sustainable.

Why is the unknown so dangerous? In reality, brands are not going to broadcast the fact that they outsource the production of their items for profit. They won’t disclose their workers’ poor rates of pay and conditions. They certainly won’t advertise it if the factories they outsource to aren’t well monitored and there is a risk that their products are made by children. Companies get away with less-than-desirable practices not because consumers don’t care, but because they don’t know.

That’s not to say that every company whose production practices are unknown are exploiting the people who make their products. However, it is much more likely… what is there to hide? Similarly, the cheaper the item, the more likely that its producers were employed as ‘cheap labour’. This isn’t foolproof – as Katherine Kirk of Primark points out, expensive items can still be made cheaply; there is just more of a markup. So when buying any brand where the supply chain behind the product isn’t transparent, proceed with caution. Make sure to email the company and get more information about how their people are paid and treated. If the information is vague or isn’t forthcoming, perhaps reconsider making the purchase – and let the company know why!  To do otherwise risks perpetuating a vicious cycle of companies operating without transparency to exploit people, resources, and the environment.

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Image from Reuters

The good

It can contribute to economic development. Some argue that trade, in any form, is good because it eventually contributes to economic development. The (simplified) process sees a number of companies producing in a poor country where large amounts of the population live in poverty, like Bangladesh, because the cost of production is extremely low compared to other countries. Cheap labour provides a comparative advantage for companies wanting to make big profits and attracts the business of more companies. As the number of companies operating out of Bangladesh grows, so too does the industry. Eventually, due to rapid growth, the industry reaches a tipping point where there are more jobs than workers. Wages increase to tempt people to move from rural to urban areas to fill positions. Investment in factories and an increasingly urbanised population lay the foundation for technological advances, which allow the country to move away from labour-intensive industries.

In other words, as the country undergoes industrialisation, it transitions from producing garments and food, to exporting electronic and other manufactured goods. Technical goods invariably attract better rates of pay that lead to a rise in the standards of living. Indeed, a recent report by the United Nations Industrial Development Organization concluded that employing the poor in labour-intensive industries can lift them out of poverty.

The not so good

It doesn’t always fight poverty. Economic development does not always result in poverty reduction: since there are many variables, every country’s experience is different.

Growth through ordinary trade does not guarantee that money will be distributed to the people and programs (such as education and healthcare) that need it most. In Fair Trade, alleviating poverty is a specific focus.

Further, there is a significant power imbalance between the employer (often global companies) and employee (an individual living in poverty). This means that, in some circumstances, employers can monopolise the industry and keep rates of pay low. In these circumstances – and with unions discouraged – employment can actually perpetuate the cycle of poverty.

It can be at the expense of the environment. Industrialisation through mass production uses natural resources and emits pollution. In Fairtrade and other labelling initiatives, such as GOTS, environment sustainability is a criteria to obtain and maintain certification.

It can be at the expense of people’s dignity and lives. If you accept the status quo as the path to economic development, then you accept ‘casualties’. I personally believe that any injury to human dignity or health, or any loss of human life is unacceptable, especially when there are alternatives.

It’s not the only option. The aim of the alternative shopping strategies I have suggested, such as buying Fairtrade, is not to cease trade altogether, but to encourage trade to take place under fairer conditions. Through shopping in ways that are alternative to the status quo – and letting companies what you are doing and why – you challenge the status quo and can contribute to making companies more accountable, making trade more transparent, and making the world a more fair and just place.


But what if the brand gives to charity?

‘Charity’ can be in many forms; brands donating a percentage of their sales to an existing not-for-profit organisation, brands setting up their own foundation; or a one-for-one model (i.e. ‘for every _____ you buy, we’ll donate one to someone in need’). On face value, it seems that giving to charity could only ever be a good thing. But while I would certainly argue that any charity is better than none, not all charity is equal.

The good

It demonstrates that the company focuses on something other than profits. If a brand is prepared to take a cut to profits to try and improve the lives of others, it generally means one of a few things: their founders and/or directors are pretty awesome, or their consumers demand it.

It can fight poverty. Regardless of whether the decision to donate is driven from the top-down or the bottom-up, appropriate donations can be very effective in fighting extreme poverty. Appropriate donations are those which are focused on empowering the communities receiving them, so that that community can escape the cycle of poverty long-term. Appropriate donations target the causes of poverty (lack of employment), not the symptoms (lack of clothing). An example may be donating money for improved sanitation, so that a community can permanently improve their health and reduce disease. Another example may be donating training so that individuals within a community can obtain better paid work. The types of initiatives are endless but the common theme is that are implemented after consultation with individuals and the community as to what they actually need.

The not so good

If it isn’t appropriate, it may not be effective – and could actually be detrimental – in the fight to end extreme poverty. Think back to a birthday where you had a need for something specific… but instead your grandmother or uncle got you something else. Maybe it was something you already had, or something that you will definitely never use. Either way, it was of little use. Well, it’s the same with donations – for example, it’s not particularly effective to donate clothing to a community who have clothing (albeit old and tattered clothing) but do not have access to education (and therefore have little opportunity to earn more to get out of  poverty. They will likely need clothing again in the future, but still will not have the money to buy it). Similarly, it can be detrimental to donate clothing to a community where local people make clothing, as it will effect demand for clothing and could be threatening to local jobs. Importantly, giving ‘handouts’ can negatively impact upon an individual’s dignity when they are working hard to get out of poverty. The good news is that brands are open to improve in these areas; recently, a well-known footwear company built on the one-for-one model announced their plan to provide more jobs for people living in poverty, rather than just donations.

It can mask poor ethical standards in other areas of business. Even where the type of charity given by a brand is appropriate, this in and of itself does not guarantee that the company is producing their products ethically. The negative impact of employing manufacturers under poor conditions and rates of pay may outweigh any charitable benefits flowing from the business.


The verdict

For the majority of goods available, the steps in the supply chain are not transparent. Without transparency, there is a risk that people and the planet are harmed or exploited in order to make goods and profits. The good news is a company’s profitability depends on their consumers and companies are therefore amenable to suggestions from consumers. With our voice and support, companies can move along the Fairtrade Spectrum from the ‘not so good’ to ‘good’.

I encourage you to contact the company to find out more information about where their products are made and under what conditions – demonstrating that you care about more than just the end product. And if you don’t like the response – reply letting them know you want their standards to be ethical (and their charitable efforts, if any, to be effective).

Has this 3-part series been useful? If there are any areas you would like me to cover, please let me know in the comments, below.

Yours Fairly,

Ashlee

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