Fairtrade International

Share the Passion! – for food, for people, for Fairtrade

Sunday 2 June 2013, by LAURA MITJANS, Maximilian Buck, Philipp Stemper

4 inspired

A. The main facts about the activities of the company.

Fairtrade International is an alternative approach to conventional trade and is based on a partnership between producers and consumers. Its strategy consists on offering producers a better deal and improved terms of trade in order to give them the opportunity to improve their lives and plan for their future. On the other hand, they also offer consumers a powerful way to reduce poverty through their every day shopping.

Fairtrade International designs standards to address the imbalance of power in trading relationships, unstable markets and the injustice of conventional trade. Moreover, when a product carries the FAIRTRADE Mark it means the producers and traders have met Fairtrade standards. In addition, Fairtrade standards exist for food products ranging from tea and coffee to fresh fruits and nuts. There are also standards for non-food products such as sport balls, flowers and seed cotton.

There are two distinct sets of Fairtrade standards, which inform different types of disadvantaged producers. One type of standards applies to smallholders that are working together in co-operatives or other organizations with a democratic structure. The other set applies to workers, whose employers pay decent wages, guarantee the right to join trade unions, ensure health and safety standards and provide adequate housing where relevant. Moreover, most products have a Fairtrade Price, which is the minimum that must be paid to the producers in order to cover their average costs of sustainable production. On the other hand, producers increase the price of their product by an additional amount of money, the Fairtrade Premium, to be able to invest this premium in their communities in order to improve their social, economic and environmental conditions.

B. The Ethical challenges this company is addressing.

1. Ethical and fair trade

The main ethical challenges that Fairtrade International is addressing are the unfair trade practices that some producers around the world are facing. Some would argue that if the results of a trade policy are for the greatest number (everyone benefits), this is a good policy. However, it is also true that some producers, especially in developing countries, are subject to exploitation and unfair labour conditions. Fairtrade’s aim is therefore to guarantee ethical and fair labour conditions for both small producers and hired labour workers. In order to be certified by Fairtrade, employers must pay decent wages, which must be equal or higher than the minimum wage or the regional average. Furthermore a certain number of health and safety standards must be met and housing must be provided for the workers when needed. Finally, the certification states that no child labour has been used and that workers are guaranteed the right to join trade unions.

2. Sustainability

Fairtrade is trying to tackle the problems of exploited producers in a sustainable way. The non-profit organisation has therefore set minimum fair-trade prices for most of their products in order to guarantee stable prices, even when world market prices fall. Moreover the Fairtrade has set up a Fairtrade premium, which is paid on top of agreed price. Producers then democratically decide on how these extra revenues are invested. Typically these investments go into education, healthcare, farm improvements and the like. This enables the whole community around the producer to increase their living standards permanently.

3. Environmental challenges

Fairtrade also promotes and rewards environmentally sustainable farming and production practices. In order to be certified by Fairtrade, producers must follow standards that protect the environment they live and work in. These standards include regulations on the use of agrochemicals, the reduction and recycling of waste, the fertility of the soil and also include regulations on the management of water in order to ensure conservation and non-contamination. Moreover Fairtrade certification prohibits the use of genetically modified organisms (GMO) and tries to limit de use of energy, especially from non-renewable sources in order to tackle environmental issues.

C. What makes you believe this company is really ethical and why you trust it?

What makes us believe this company is really ethical and the reason why we trust it is that its name already suggests the idea behind it. But obviously just having the name does not make this idea trustworthy or credible for people outside the company. What the company does in order to create trust is to lay open all the necessary data to prove that they engage in more ethical actions. In addition, we have to remark the fact that it is a company that has been set up for helping people to live in better conditions rather than making profits as its initial purpose.

As it was said earlier, the main difference to a normal company buying products from producers is, that Fairtrade International pays, under certain conditions like sustainable production, a higher price. These higher/fairer prices make it easier for the local producers to live in adequate conditions themselves but also to produce under more environmentally friendly, socially acceptable and sustainable conditions for people and nature. Further, in our opinion, this company is trustworthy as you can easily follow its actions and contributions in media or check their website about the latest news.

We feel that Fairtrade International is so successful in giving something to the worldwide community. One of the reasons is that they put preference on ethical issues rather than profits and their business have an immediate impact on people and communities. As consumers, we would prefer to buy products that fulfill Fairtrade standards because we know that we are contributing to make a change in a world that we feel is too selfish.

D.The possible challenges facing the company in the future and how you think this company may improve.

There are no real challenges for the company in the future, at least no specific ones because of its business actions. However, we think that there are three main challenges for the company in the future. First, they should find a way to really define clearly what fair-trade is and what it means. Second, raising awareness and making it available everywhere in the world could be seen as another challenge. Last, it should be defined in how far fair-trade can really contribute to solving the problems of the poor, in this case the third world countries producing the products for the first world. By doing this they would not only help themselves by making profits but also improve the future for all the producers that are still exploited right now. Connected to this, marketing this idea and promoting the higher prices to its customers would be a necessary action to be taken.

Bibliography

http://www.fairtrade.net/
http://fairtrade.ca/en
http://www.mars.com/global/press-center/press-list/news-releases.aspx?SiteId=94&Id=3182
http://fairworldproject.org/
http://www.fairtrade.org.uk/
http://dev.cftn.ca/sites/default/files/AcademicLiterature/keychallenges.pdf

Location: Bonn (Germany)

Sector: Other service activities

Official website: http://www.fairtrade.net

Key figures:

Annual revenue in 2011: €4.9 billion
Annual profit in 2011: €0 / this firm is a non-profit organization but they have reached a €420000 surplus in reserves for this year.
Number of employees: Staff members-73; Board members-14
Number of countries where Fairtrade products are sold: 120
Fairtrade participants: 1.2 million farmers and workers in 66 countries

Nbr. visits: 216

Nbr. inspires: 4