Fairtrade International (FLO)

Abstract

Several types of initiatives are associated with the genesis of fair trade. In the 1950s and 1960s ‘charity trade’, involving the importing of handicrafts made by vulnerable groups (for example, refugees and orphans, among others) arose. The 1970s and 1980s saw the emergence of ‘alternative trade’ movements (which critiqued the dominant trade system and sought to establish alternative trading relations based upon solidarity) and ‘solidarity trade’ (which focused support specifically on governments and movements in the South that were promoting alternative forms of development, such as in Tanzania and Nicaragua) (Low and Davenport 2006). Out of these movements, two contemporary fair trade networks have emerged. In one, the World Fair Trade Organization (WFTO),1 the practice of fair trade is defined on the basis of support for democratically controlled small producer groups and a commitment to fair trade principles (see Chapter 21 in this volume). In the other, the practice of fair trade is associated with the certification of (mostly agricultural) products which have been produced under fair conditions. Participation in this network of certified ‘fair trade’ (FT) does not require allegiance to fair trade principles, but merely conformity to minimum standards established by national labelling initiatives (LIs) and their umbrella organization, Fairtrade International (FLO).2 As a result, FT allows for participation by both alternative trade organizations (ATOs) – often called FT businesses or organizations – and conventional for-profit companies, including large agro-food corporations and agricultural estates. This chapter examines the working of FLO as a non-state regulatory initiative. It begins with an account of the origins of certified FT. It next examines the key features of FLO, including some of its early controversial decisions and the governance reforms subsequently undertaken to address concerns raised by small producers and ATOs. The next section argues that FLO’s policy choices have effectively resulted in the incorporation of two parallel business regulation strategies within FLO and analyses the development impact of these competing practices. The chapter concludes with reflections on where FLO and FT may be headed.