Transcript It’s About Who Sounds the Loudest’

‘It’s a well known coloured label:
“It’s
a
coloured
graph:
it’s
even
it must be legitimately fair trade.
more
real”
Mustn’t it?’
Performance and Legitimacy of
Fair Trade in Public Procurement
Supply Chains
Presented by Alastair M. Smith
Performance and Legitimacy in Social Enterprises
3rd-4th March 2011 – HEC Management School
University of Liege
Argument
 UK Government policy encourages procurement
of “fair” and “ethical” goods to promote
sustainable development
 Terms signify heterogeneous practices with
different legitimacy and performance
characteristics
 However, arguably legitimacy a greater influence
that performance for local decisions
 Empirical investigation of social enterprise
suggests legitimacy and performance are not
necessarily correlated in public procurement
Although it depends on your perspective…
UK Gov’ Discourse on Fair (& Ethical)
Trade
Anthropocentric and
essentially an issue of
Social Justice (Langhelle
2000)
‘the essential needs of the
world’s poor to which
overriding priority should be
given’
(WCED 1987: 43)
OGC Discourse on Fair Trade…
(and ethical trade)
Discourses and Practices of FT
More longstanding, ‘more
radical’, ‘more militant’
WorldAFair
Trade
Organisation
whole
new
way of
trading;
solidarity and
Social Enterprises
partnership; to promotes
Internal norms
cooperation,
deliberative
decision
making,
mutual
Legitimised
Organisational
(craftsby
& food)
accountability
andprices
income
reputation
Negotiated
or min
redistribution.
To empower
Up-fron credit
Stable
Supportive
Relationsto
southern
stakeholders
Direct
Capacity
compete
and Building
prosper.
‘Softer, more commercial’
‘reformist’ version
Fairtrademore
International
Promotes
equitable
trade through existing
Profit Orientated
structures and commercial
channels which have no
social objectives and bring
Certification
less
benefit
togoods)
small
Product
(arifood
farmers. Approach
To internalise
cost
Min
Prices
Up-front
Credit
traditional
‘externalised’
to
Predictions
of Demand
south.
Social Premium
Consequences?
Fischer (2009, p. 995) has suggested that the
incorporation of fair trade within public
procurement could either raise standards or,
‘because some companies supplying the public
sector can be categories as “market driven
buyers” (Raynolds 2009) or “corporate
licensees” (Reed 2009), [equally] associated
with the more worrying dimension of
mainstreaming’.
OGC Discourse on Fair Trade…
(and ethical trade)
Academics Differentiation
Fair Trade
Ethical Trade
Conditions of production
Conditions of production
Mostly food goods
Manufactured & food
Southern producers
North and south
Fair prices
Capacity building
Long term relations
Up front credit
1st
Buyer
Producer
No requirements for buyers
1st
Buyer
Producer
Research Questions
1. How is the concept of ‘fair trade’
incorporated and interpreted in public
procurement discourse?
2. What factors have shaped these
interpretations?
3. How does the contestation of the term fair
trade impact the actual procurement
strategies of public institutions?
4. What are the consequences of this
process for producers in the global south?
Scotland as a Case Study
 Scotland and Wales developed the Trade Nation
scheme:
 Developed out of partnership between civil society in
Wales and WAG.
 Long consideration of criterion:
 Practical need to make quantitative requirements.
 Wanted to work with what was out there.
 Wales was declared first Fair Trade Nation 2008.
 Scotland has embedded objective to attain status
in International Development policy.
The Fair Trade Nation Criterion
• 100% of Local Authorities have Fair Trade
groups working toward Fairtrade Zone status
• 55% of our Local Authorities having achieved
Fairtrade Zone status. In following years, this
must increase 10% per year until all 32 are
Fairtrade Zones
• 100% of cities have achieved Fairtrade City
status
• At least 55% of towns have Fair Trade groups
working toward Fairtrade Town status
• 60% of universities have active Fair Trade
groups working toward Fairtrade status
Fairtrade Foundation’s
Fairtrade Town scheme
Fairtrade
products
must
beaused
by a
 The
local council
must
pass
resolution
number
of
local
work
places,
educational
supporting
Fairtrade,
and
serve
Fairtrade
establishments, faith communities and
coffee
tea at itsorganisations.
meetings andAinflagship
offices
otherand
community
and
employer
canteens.
is required for populations over
100,000.
Sample Council Motion
The initiative involves a commitment to:
•Widely offer FAIRTRADE Marked food and drink options internally and
make them available for internal meetings
•Promote the FAIRTRADE Mark using Fairtrade Foundation materials in
refreshment areas and promoting the Fairtrade Towns initiative in internal
and communications and external newsletters
•Use influence to urge local retailers to provide Fairtrade options for
residents
•Use influence to urge local business to offer Fairtrade options to their
staff and promote the FAIRTRADE Mark internally
•Engage in a media campaign to publicise the Fairtrade Towns initiative
•Allocate responsibility for progression of the Fairtrade Town initiative to
a member or group of staff
•Organise events and publicity during national Fairtrade Fortnight - the
annual national campaign to promote sales of products with the
FAIRTRADE Mark
Empirical Impact in Scotland
 Majority (6/8) of LA motions with a
general commitment use the term
‘Fairtrade’.
 4/9 motions which make procurement
commitments specify Fairtrade
certification.
 4/9 use the phrase ‘fair trade (such as
the Fairtrade Mark)’
 1/9 uses ‘fairly traded goods’.
Empirical Results in Scotland
 General preference for FLO (fair trade) certified
goods over Rainforest Alliance and Utz Café
(ethical trade).
‘because we are a Fairtrade City under the Fairtrade
Foundation scheme, we should only be using tea or
coffee with the FLO Mark’.
 Examples of more reflexive thinking:
 Ensuring Fairtrade MARK for hot drinks but thinking
more widely for other products.
A More Creative Example
 Local authority highly and reflectively
embedded in community Fairtrade group.
 Purchased non-certified ‘fairly traded’ rice
based on reputation of ‘social economy’,
‘not from profit’ social enterprise importer.
Local
Authority
Scotland
Just
Trading
Scotland
Imani
NASFM
Development
Malawi
‘Producer’ Perspective
 Malawi 160/182 UN HDI
 NASFAM’s Initial mission to
support smallholders during
liberalisation of tobacco farming.
 Also facilitates diversification of
community and national
production
Tobacco  Groundnuts & Rice
 Provide inputs and support. Acts
as buyer.
 Pays prices based on cost of
sustainable production
Radical Fair Trade?
 Kaporo Small Farmers Association




is democratic farmers association
Just Trading Scotland (JTS) is a
not for profit actor
JTS pay what is calculated
Proactive efforts to add as much
value in Malawi and Kaporo as
possible
JTS & Imani have invested in rice
processing plant in Karonga
 Value chain upgrading is fundamental
to sus development
 Provided scholarships
NASFAM and Fair Trade
 Some FLO certification for groundnuts
 Assisted market access, premium beneficial:
‘Without Fairtrade we would have never exported ground
nuts to Europe’.
‘Fair Trade provides a great market angle!’.
‘Fair Trade is a very important market, the brand
recognition side, if you are supplying to Fair Trade in
Europe, any other conventional buyer will know that you
are able to comply with the standards and that you are
probably not able to cheat the farmers’.
Limitations to FLO Certification
 Costs of Certification
‘Fees are quite high and management was of the view that it is
like we are subsidising Fair Trade...Yes the farmer members are
maybe benefiting in one way or another, but from a corporate
point of view we are subsidising Fairtrade’.
 Geographic restrictions:
FLO certification for rice is only currently available for small
farmers in Benin, Egypt, India, Laos, Sri Lanker and Thailand.
 NASFAM are seeking cheaper WFTO membership
for KSFA as a means to legitimise Fair Trade
credentials.
 Producer knowledge about fair trade depends on
‘who shouts the loudest’
Analysis
 Fairtrade Foundation Towns scheme has





influenced government procurement.
Fair trade and particularly FLO certification
prioritised over Ethical Trade and particularly
Rainforest Alliance certification.
Procurement likely to reinforce softer version of FT
due to best value for money criteria
But: local steering groups can shape council policy
and procurement decisions to differentiate.
Such choices shape opportunities for producers
and set limitations for who gets assistance.
De facto requirement for FLO certification might
bar some producers from market opportunities.
Questions and comments
please!