The Difference Between Fairtrade and slavefreetrade
Without a doubt, one of the greatest modern contributors to mobilising consumers to achieve social impact outcomes is Fairtrade. Hats off to the entire fair trade movement for being trailblazers in the social label field, and for the growth of human consciousness they enabled by promising more steady global market price for goods.
The Fairtrade movement has proven consumers buy with social conscience
Fairtrade proved for the first time that consumers can be a force for good, can become a factor in driving business decisions and, when provided the right information, can translate their values into actions. The fair trade movement also showed there is a market for socially aware products, that consumers will pay more for social conscience, and that the right information delivered at point of sale can change behaviour.
Everyone in the social impact world owes a debt of gratitude for Fairtrade, the pioneers of social labels. And we have learned a hell of a lot from the fair trade movement’s experience, both good and bad.
Fair Trade as a pioneer has had to bear the brunt of criticism, it is attacked by those on the left who say it has sold out and given in to the market and then lambasted on the right who argue that it distorts markets, and perpetuates inefficient modes of production. But let’s take a look at the ground breaking work Fair Trade has done.
The most recognisable ethical trade label is arguably the Fairtrade Labelling Organisations International, commonly known as Fairtrade International, a trusted brand that aims to allow consumers to ‘reduce poverty through their everyday shopping’ (Fairtrade International, n.d.). The idea is that a voluntary mark-up in prices gives poor and disadvantaged producers a fairer deal when international prices fall below a certain threshold, and an additional social premium allows their communities to finance social projects. Fairtrade International is a certifying organisation that awards Fairtrade certificates to cooperatives and other producers which meet certain regularly audited standards of ethical practices (economic, social and environmental). These may mark their products Fairtrade and charge the Fairtrade price and premium.
Each business, including the smallholders, pays Fairtrade to be a member. The Fairtrade accreditors offer their service at cost, to come and check out elements of the supply chain to see if it is fair.
Global Benefit to Fairtrade is Two-Sided
The key factor in Fair Trade was a collectivisation of resources by the farmers to pool resources into a farming co-op, selling power and know-how. This was intended to have the knock-on result of better being able to negotiate trade with those who needed their raw materials. The idea was that this in turn would result in better and fairer trade agreements, better sustainability, and better wages. The idea was really one of a now-discredited economic theorem: trickledown economics. This was supposed to mean that the now richer farmers would pass on those benefits down the chain. And higher retail prices would mean much more money being passed on down the supply chain. Like trickledown economics more broadly, it seems not to have worked like that.
Now, the fair trade accreditation bodies don’t monitor retail prices for fair trade goods, nor do they compare them to non-fair trade goods. So, knowing how much extra money goes to fair trade accredited farmers is not quantifiable. anecdotal evidence suggest it is anywhere between 0%-11%, and that is for the whole supply chain, not simply the farmers in the developing world.
Returning to the collectivisation of the farmers who incur certification and inspection fees, on top of that they need to provide the additional marketing costs, costs in meeting the Fairtrade political standards, and any possible costs arising from the collective monopolising the trade. Breaking that down, if you happen to be a farmer who joined the wrong co-op, you might not be getting any extra business despite your fair trade accreditation because companies want to deal with the biggest co-op. Even if you are in the dominant co-op only a small portion of your output will be sold at the fair trade price (that valuable 0-11%) according to a 2005 study from Mason University Virginia. Given that you will be selling only a small amount at that higher price you will likely sell the rest without certification at regular price.
In the best case scenario, the farmer is getting a return on what they invested in becoming a member and is getting paid better for the same product. And, again relying on trickledown Reaganomics, wealthier farmers are paying forward that benefit by buying more.
Now in the developing world when people get more money, they don’t necessarily have much incentive to spend more on labour since they already have their needs met, especially, if there isn’t increased demand and they can easily use their money to buy more land or products without benefitting the labourers who are the poorest people in that supply chain.
So, frankly the jury is hung on whether the global benefits of the fair trade movement have been positive or negative on balance. There are plenty of folks on both sides of that discussion.
slavefreetrade is a Different Beast from Fairtrade
But how is any of that different from slavefreetrade?
In fact, there are just 3 similarities: we both have a consumer-facing label, we both have broad, world-changing social impact intentions, and we both have the word ‘trade’ in our name.
The similarities end there. In every other respect, we are a totally different beast.
slavefreetrade is a Swiss non-profit formed by modern slavery and human rights experts with a bunch of social impact-minded folk from all walks of life. Our mission is to eliminate modern slavery from business. We do that by proving respect for work-related human rights. Demonstrated human rights and modern slavery are on the same spectrum of workplace conditions, but they are kryptonite to each other, they cannot co-exist. The more respect for human rights exists, the less modern slavery can.
Our goal is that consumer-facing label Fairtrade has, with high resonance, understandability, and recognisability. We aim for that label to not just stand on its own, however. Instead, our labels speaks to consumers in a very special way. Through our consumer app. When you scan the barcode of a product with our label on it, our app takes you on a journey down the long, winding path the product has taken to get to you. Right back to the beginning. You can see where your products started.
The label can be trusted in a way no other can because we back it up with hard facts, built on the input from every worker in every workplace behind the product. What makes this possible is a magnificent platform we are building; a proprietary hybrid of conventional tech and distributed ledger technology (blockchain), to conduct zero-knowledge cryptography enable interviews. Which sounds pretty buzz-wordy and nerdy.
What it actually means is that we securely, anonymously and untraceably interview workers on a rolling real-time basis asking questions about their working conditions. We ask them in a way that they cannot be traced or uncovered by employers. This ensures employers being unable to interfere with employee answers and unable to track who is airing their dirty laundry. slavefreetrade then analyses the results of the generated data and assess the workplaces against our 10 Principles of Decent Workplace; no forced labour, freedom of association, no child labour, etc. So instead of using auditors, and accreditors, we cut out the middleman, everything is digital, untraceable, un-bribable, and very, very secure.
There are several reasons why we will use an app for interviews.
- The process is un-bribable. It’s not going to take back-handers or make deals at the expense of any employees.
- It’s permanently asking questions, getting many, many different views and angles, so employers can’t change workers conditions without being tracked.
- It’s anonymous, meaning workers are protected, there can’t be repercussions against anyone. Anonymity also means we get more honest answers than, for example an auditor standing in front of a worker asking questions.
- The highly cultivated standards it operates on are the same wherever you are. Those standards are the highest level of human dignity and best workplace standards.
Now, we don’t, of course, expect everyone to have a champagne fountain, or a ping-pong table, but the international human rights and labour standards framework gives us plenty of material for painting a great picture of a decent, respectful workplace. By applying the highest standards, and offering them in a way that every person answers it from their own context and perspective. we can measure every workplace equally. That builds great data consistency regardless of product, country, socio-economic status, gender, industry etc.
That’s all very nice I hear, you might say, but then what? Well, two things, really. slavefreetrade started out as a consumer movement. Everyone in the world buys things, and is a consumer, either as an organisation or as an individual shopper. So we work with any organisation that buys anything, and with any consumers.
Once our platform is built, you’ll be able to discover and map your whole supply chain. The data generated from working conditions will show you how well you’re going as an employer. The visualisation quickly allows you to see issues identified: where issues might exist, how to improve, and how you have improved. You can drill down in the data to see the responses for every question, for every workplace, see where issue arise, and together we fix where something shows as broken.
We give you 100% visibility (see every workplace in your supply chain), and 100% transparency (understand conditions in every workplace). Let’s say you make t-shirts, all the people from the cotton farms to the manufacturers to the designers can be on that single visual data supply chain.
Once all the suppliers involved with a product join slavefreetrade, the platform builds the links and as each part of your supply chain becomes clear and demonstrates that it’s slavefree, your transparent and slavefree supply chain becomes a fact. Once an entire chain has gone ‘green’ in the platform, you have the right to carry the slavefreetrade label. Our beautiful bright blue label, signifies your supply chain is ethical, verified and powered by free people.
So, you see, nothing at all like the fairtrade movement. We make sure that what you buy in the shop is slavefree. And that no product has done anyone any harm.