Ethical Trade Research Articles

The making of a ‘business case’ for environmental upgrading: Sri Lanka’s eco-factories

There is a growing emphasis on environmental sustainability and ‘business case’ approaches in corporate social responsibility programs. As part of an effort to become a world leader in sustainability, British retailer Marks and Spencer (M&S) piloted more environmentally friendly apparel factories. This paper examines the politics of environmental upgrading in Sri Lanka, where suppliers for M&S built three of ‘the world’s first’ apparel eco-factories in 2008. Drawing on multi-sited, meso-level research in Sri Lanka and the United Kingdom, I investigate how and why these factories originated in Sri Lanka and how a business case for environmental upgrading was formulated. However, despite cost savings and exceptionally favorable circumstances for environmental upgrading in Sri Lanka, I found that suppliers were ambivalent about whether there was a sufficient business rationale for investing in environmental upgrading. Therefore, I argue that the business case for environmental upgrading is limited by the lack of mechanisms for ensuring that suppliers can obtain a return on investments. Contributing to debates about ethical trade and upgrading in global value chains (GVCs), this case suggests that power dynamics in GVCs shape the extent to which suppliers can capture a share of the gains from environmental upgrading that is proportional to their share of investment in upfront costs.

Commentary: Getting to Compliance. Multisector dialogue, collaboration and the International Code of Marketing of Breast Milk Substitutes

Ensuring exclusive breastfeeding for the first 6 months of an infant’s life with ongoing breastfeeding to 2 years of age could decrease child deaths by 13%. The inappropriate marketing of infant formula and breast milk substitutes can present a challenge to meeting this critical goal, which is why, in 1981, the World Health Organization (WHO) adopted the International Code of Marketing of Breast Milk Substitutes (the Code). The Code remains today an important yet deeply divisive piece of international policy intended to prevent inappropriate marketing and promote breastfeeding globally. In his paper in this issue of the Journal of Public Health, Stewart Forsyth argues that the Code has instead had the opposite effect because it has driven a wedge between the various sectors needed to dialogue and collaborate to promote breastfeeding. This criticism could also be heard in the hallways at the 65th World Health Assembly in Geneva this past May, and it reflects more broadly, the general atmosphere of mistrust between stakeholders in the infant and young child nutrition (IYCN) community. As a way forward, Forsyth proposes a Memorandum of Understanding (MOU) to be established between key agencies to set out common understandings, express a convergence of will between the parties and indicate an intended mutual line of action. The proposal is a good one. What is missing, however, are the concrete steps to convince various actors from the public and private sectors to actually come together to discuss challenges and build trust. From our program, Singh et al. proposed a set of shared principles of ethics for IYCN in the developing world—derived from relevant existing laws, trade regimes, international codes and international goals—from which stakeholders may be able to begin dialogue around establishing an operational framework for cooperation, collaboration and oversight. In addition, Singer et al. have suggested that stakeholders in IYCN explore a multi-stakeholder initiative, somewhat analogous to the Ethical Trading Initiative, which was established to address sweatshop violations in the international labour industry. There is a need to explore how these and other proposals may complement and strengthen one another and be implemented in practice. There is also a need for key leadership to initiate the process of building the trust necessary to implement them. For example, the WHO along with other key international agencies could act as a neutral arbitrator to negotiate the terms of an MOU between stakeholders, incorporating conflict of interest guidelines and the set of shared ethical principles for IYCN. The negative impact of the lack of dialogue between stakeholders in the IYCN community, specifically over the Code, should not be underestimated—of particular concern is that despite these deep divisions and perceived ineffectiveness of the Code, some stakeholder groups continue to hold that it ought to be extended to include complementary foods in addition to breast milk substitutes. Such a move will only further exacerbate international efforts to tackle infant and young child undernutrition. The various proposals mentioned here recognize the complex nature of these relationships and offer key agencies and stakeholders opportunities to begin dialogue that can lead to solutions collectively addressing the lack of Code compliance, establish partnerships, prioritize IYCN globally and ultimately save children’s lives.

Retailers, supply networks and changing articulations of ethicality: lessons from Flower Valley in South Africa

This article advances debate on retailers’ supply networks and ethical trade using the case of sustainably harvested wildflower bouquets supplied from South Africa to domestic and UK retailers. It illustrates three developments concerning: an evolving relationship between retailers’ brands and ethical trading strategies; a growing role for institutions in the global South in shaping ethical standards and acknowledgement of the challenges facing producers when retailers’ buying practices clash with ethical requirements. These trends concern strategizing, embedding and practising ethicality, respectively, with the term ethicality capturing not only the ethical standards themselves but also the changing practices shaping what counts as ethical.

Ethical food standard schemes and global trade: Paralleling the WTO?

Global food trade embodies a range of different interpretations of the nature of food and its role in society. On the one hand, the WTO food regulation regime, in particular the SPS agreement, is based upon a somewhat instrumental value of food consumption in which food is seen as a commodity to be traded in accordance with international trade rules. At the same time, a number of private standards, such as GlobalG.A.P and various organic standards, are emerging which embody broadly postmaterialist values that suggest that food purchasing and consumption are also social, ethical and perhaps even political activities. This paper analyses the relationship between the WTO food trade regime on the one hand and the GlobalG.A.P and organic food trade regimes on the other. We suggest that competing values can co-exist in parallel institutions and in a commensalistic relationship which protects the values base of each institution while giving expression to both materialist and postmaterialist understandings of the nature of food.

Sowing the seeds, reaping the benefits: How an ethos of quality and ethical trading can improve health in Asia and Europe

Sowing the seeds, reaping the benefits: How an ethos of quality and ethical trading can improve health in Asia and Europe

Fairtrade, fair-trade, fair trade and ethical trade: semantics, politics and development

Fairtrade, fair-trade, fair trade and ethical trade: semantics, politics and development

Corporate ethical trading in an economic downturn: recessionary pressures and refracted responsibilities

Corporate ethical trading in an economic downturn: recessionary pressures and refracted responsibilities

Gender in Practices of Fair Trade and Decent Work

This article questions the effectiveness of the dual approach of Fair Trade as a development instrument and a business, focusing on the ability of Fair-trade Organizations (FTOs) to implement their principle of gender equality as they enter mainstream markets. Current research has revealed that while the certification scheme—a requirement for entry into ethical trading—has boosted Fair-trade sales, it has also broken down the producer–consumer relationship and reduced social awareness about what is ‘fair’ in Fair Trade. On the basis of a case study of an FTO producing handicrafts in West Bengal, India, this article brings into focus the impact of third-party certification on women workers at the lower end of the production chain. The introduction of a certification regime has resulted in a shift in the operative principle of the FTO, from one based on solidarity and development for the poor to one driven by market demands. While the FTO applies the principle of “fairness” in the relationship between itself and Northern buyers, it does not extend this notion to its relationship with the lower-end producers on whom it relies for entry to the global market. Gender equality as a Fair-trade principle has been narrowly interpreted as the creation of opportunities for women as marginalized producers, without due attention to ILO standards of Decent Work.

The costs of compliance? Views of Sri Lankan apparel manufacturers in times of global economic crisis

Complementing the rise of ethical trading initiatives there has been a parallel growth in the number of academic studies tracking their origins and evolution, and assessing the implementation and success of social auditing practices. Despite this, the consequences and responses to the implementation of codes of conduct relating to labour standards at sites of production remains an understudied topic. This article focuses on those issues in the context of the global apparel industry using evidence from interviews with managers in the Sri Lankan garment manufacturing sector. In particular, it focuses on the contradictions and tensions inherent in compliance, and the anxieties management face during a period of global economic crisis, in a country which is generally considered to be in the vanguard of promoting and protecting ethical labour standards

LINKING SMALL HORTICULTURAL PRODUCERS WITH MARKETS: INDIAN EXPERIENCES AND LESSONS

ISHS International Symposium Postharvest Pacifica 2009 - Pathways to Quality: V International Symposium on Managing Quality in Chains + Australasian Postharvest Horticultural Conference LINKING SMALL HORTICULTURAL PRODUCERS WITH MARKETS: INDIAN EXPERIENCES AND LESSONS

Gap (RED): Social Responsibility Campaign or Window Dressing?

This study interrogates the Gap (RED) campaign from a political economic perspective to determine whether it goes beyond merely touting the virtuous line of social responsibility. Critics cite the irony of capitalist-based solutions that perpetuate the inequities they are trying to address. Others suggest the aid generated is problematic in and of itself because it keeps Africa from becoming self-sufficient. This research contends the purpose of the Gap’s participation is genuine, going beyond window dressing and the surface level benefit of capitalistic enterprise, and is in fact linked to a higher motive of propagating ethical trade which ultimately offers African beneficiaries a path to financial independence. However, because the message of the current Gap (RED) advertising campaign does convey a false sense of doing good, another advertising approach is warranted.

Four Key Trade Union Movements in Puebla, Mexico 2001-2008: A Comparative Analysis of the Efficacy of Non-Governmental and Inter-Governmental Complaint Mechanisms in Addressing Worker Rights Issues in Mexico’s Garment Manufacturing Industry

Workers in Mexico increasingly turn to international mechanisms for redress of worker rights violations and support for organization of free trade unions. Between 2001 and 2008, indigenous and women workers in the garment manufacturing industry in the state of Puebla, Mexico utilized several non-governmental mechanisms such as corporate codes of conduct, the Ethical Trading Initiative (ETI), the Worker Rights Consortium (WRC), the Fair Labor Association (FLA) and Verite as well as inter-governmental mechanisms such as the North American Agreement on Labor Cooperation (NAALC or NAFTA labor side agreement) and the International Labor Organization Committee on Freedom of Association to improve working and living conditions and establish independent trade unions. This paper conducts a comparative analysis of the efficacy of these mechanisms under a single analytical framework, and contextualizes these modern movements in the history of the garment industry and development of labor law and culture in Mexico. While none of the mechanisms were utilized fully or achieved ideal outcomes, non-governmental mechanisms were more responsive to and effective in addressing workers’ complaints than inter-governmental mechanisms. Entrenched wealthy elites, charro (“ghost”) unions and protection contracts are obstacles to achieving workers’ rights and freedom of association in Puebla and to the sustainability of Puebla’s garment industry. While the ILO was more effective than the NAALC institutions, lack of genuine representativity in Mexico’s corporatist labor culture hinders implementation of the ILO’s Decent Work Agenda in Mexico. Business relationships in Puebla’s garment manufacturing industry may implicate corporate governance norms and the Foreign Corrupt Practices Act (FCPA), but application of the FCPA will not solve all the problems raised in workers’ complaints. The paper concludes that an Ombudsman or Special Rapporteur mechanism housed in the Inter-American Commission for Human Rights (IACmHR) may be the most effective tool to address the complex business, corporate governance, economic, social, racial and human rights problems raised in Puebla’s garment manufacturing industry. The IACHR was partially effective in protecting labor rights activists in Puebla from violence, but more robust utilization of the IACHR would better improve working conditions and the overall sustainability of Puebla’s garment industry.

Fairness and Ethicality in Their Place: The Regional Dynamics of Fair Trade and Ethical Sourcing Agendas in the Plantation Districts of South India

In this paper we argue for a ‘horizontal’ approach to the analysis of fair and ethical trade, one which asks questions about the wider eddies they create within regional production contexts. This approach runs counter to much of the existing literature on the topic, which typically examines initiatives ‘vertically’, in terms of how they affect the lives of participating producers and communities. Applying this method to critique fair and ethical trade in the tea and coffee plantation districts of South India, we find that, at present, initiatives fail to intersect with the most pressing problems of poverty and development within this regional production system. Somewhat ironically, these schemes seem to be having their greatest positive effects within industry segments that are not the most needful of support, and tend to have very limited engagement with those industry participants in direst straits (notably, smallholders and workers on abandoned estates). Consideration of these issues highlights how the uneven penetration of fair and ethical trade is contributing to transformations in the institutional formations and systems of governance. Producers oriented to servicing affluent Western markets are increasingly enmeshed within fair and ethical trade agendas and interact with dense ensembles of suprastate and civil society regulation (involving international nongovernmental organisations and audit firms). Yet, more marginalised producers remain regulated by traditional institutional mechanisms embedded within the nation-state (government departments, trade unions, etc). These assessments point to the limitations and challenges facing fair and ethical trade as a strategic intervention for addressing the social, economic, and environmental injustices of global agriculture.

LACK OF RIGOUR IN DEFENDING FAIRTRADE: A REPLY TO ALASTAIR SMITH

Alastair Smith (2009) claims to refute a few criticisms of Fairtrade. It is shown that his empirical evidence consists of anecdotes with no statistical or other evidential value, and that his economics is wrong. Though Fairtrade is an agricultural marketing system, he appears not to be aware of the literature on agricultural marketing or co-operatives. Accordingly he makes statements not in accord with the accepted theory or evidence. He assumes, for instance, backward-sloping supply curves and that the prices offered by state marketing boards are not affected by markets. There are ethical trading alternatives which avoid all the criticisms of Fairtrade.

The Importance of Baobab (Adansonia digitata L.) in Rural West African Subsistence—Suggestion of a Cautionary Approach to International Market Export of Baobab Fruits

The European Commission recently authorized the import of baobab (Adansonia digitata L.) fruit pulp as a novel food. In rural West Africa the multipurpose baobab is used extensively for subsistence. Three hundred traditional uses of the baobab were documented in Benin, Mali, and Senegal across 11 ethnic groups and 4 agroecological zones. Baobab fruits and leaves are consumed throughout the year. The export of baobab fruits could negatively influence livelihoods, including reduced nutritional intake, change of power relations, and access rights. Capacity building and certification could encourage a sustainable and ethical trade of baobab fruits without neglecting baobab use in subsistence.

A Cross-National Investigation on How Ethical Consumers Build Loyalty Toward Fair Trade Brands

Although Fair Trade has recently experienced rapid growth around the world, there is lack of consumer research that investigates what determines consumers’ loyalty toward Fair Trade brands. In this research, we investigate how ethical consumption values (ECV) and two mediating variables, Fair Trade product beliefs (FTPB) and Fair Trade corporate evaluation, (FTCE) determine Fair Trade brand loyalty (FTBL). On the basis of two empirical studies that use samples from the U.S. and Korea, we provide evidence demonstrating that the manner in which ECV influence FTBL differs in the U.S. and Korea. In the U.S., ECV determine FTBL only indirectly via FTPB, whereas in Korea they determine FTBL directly as well as indirectly via FTCE. We discuss theoretical and managerial implications of these findings.

On forgetful goldfish and failed mnemonics: Transforming political economies of conflict using voluntarism, regulation, and supervision

This article examines three types of initiatives that have been deployed in the effort to transform the political economies of civil conflict: Voluntary ethical trading initiatives, formal regulation to promote ethical trading or good resource governance, and economic supervision schemes. The article draws on brief case studies of the United Nations Global Compact, the Extractive Industries Transparency Initiative, and the Kimberley Process Certification Scheme as well as discussing economic supervision schemes such as those imposed on Chad and Liberia. The article argues that the current representation of these initiatives obscures that they represent a retreat from the more ambitious programs of reform articulated in the 1970s.

Responsible retailing: Regulating fair and ethical trade

AbstractDeregulation in the 1980s and 1990s reaffirmed a market approach to the global trading of goods. Suggestions that this contributed to unfair terms of trade and poor labour conditions led to calls for greater corporate accountability. Following pressure to improve conditions, companies embraced a range of voluntary initiatives under the umbrella of fair and ethical sourcing. This article examines these commitments on the ground, in a global banana supply chain. Taking the case of bananas is significant because the major corporations at each end of the chain are in a potential position to orchestrate fair and ethical trade. Despite this potential for standards to be upheld, the case of bananas suggests that whilst supermarkets continue to drive down consumer prices, voluntary initiatives will fall short of their guarantees. This leads the paper to consider the policy implications of a more regulated approach to fair and equitable trade in the world's supply chains. Copyright © 2009 John Wiley & Sons, Ltd.

Placing Ethical Trade in Context: wieta and the South African wine industry

How ethical trade develops in specific ways in particular national-institutional and historical contexts remains largely unexamined. This paper analyses approaches to ethical trade in the South African wine industry through a case study of the Wine and Agricultural Ethical Trade Association (wieta). It examines factors influencing wieta, including the legacies of colonialism and apartheid, its relationship with post-apartheid restructuring and legislation, and the role of international retailers. wieta's impact within the wine industry, stakeholder perceptions, and improvements in on-farm standards are explored. The paper illustrates how these impacts are mediated by political and economic factors operating at various scales, and by the contradictions of improving working conditions within free market globalisation. Within these broader contexts, it argues that expectations of wieta are unrealistic and its role in transformation widely misunderstood. Instead, ethical trade initiatives need to be understood within their spatial, institutional, and historical contexts so as not to overestimate and undervalue their contribution to socioeconomic transformation.

The Fair Tracing project: mapping a traceable value chain for Indian coffee

This research note describes the second stage of ‘Fair Tracing’, a research project funded by the Engineering and Physical Sciences Research Council of the United Kingdom. The project aims to support ethical trade by implementing digital tracing technologies in value chains to provide consumers and producers with enhanced information about specific products; in this case, Chilean wine and Indian coffee. The genesis and first stage of the project – as it relates to the India case study – was documented in an earlier research note published in Contemporary South Asia one year ago. This note goes on to describe the second stage of this case study, which begins by mapping the life of the coffee bean in its current global commodity chain, and ends with proposing a traceable value chain for small growers of Indian coffee. It is argued that the use of tracking technologies will help increase the value chain ‘rents’ that accrue to farmers in developing countries by allowing them to charge more for differentiated products increasingly demanded by informed consumers, both in the West and in home markets.