Archive for the ‘Consumer campaigns’ Category

Free entertainment? Yes – it’s called advertising

Posted: March 8, 2013 in Consumer campaigns
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20100426_cooky_1

Girls’ Generation endorse an LG handset.

Almost a year ago I first encountered ‘K pop’ (and that was before Gangnam Style I might add) and my musical taste has never quite recovered. I should have known it was too good to be true that these extremely high quality production music videos could be getting made without someone paying the piper.

It all seems like harmless fun: the K pop idols come across as being more hard-working and modest than many of their North American counterparts. The whole phenomenon seemed to be emblematic of a newly confident 21st Century Asia. Still does.

Then as I was walking through Sydney’s World Square I noticed a familiar face in a shop that sells beauty products: Yoona from the group Girls’ Generation. Curious, I wondered what other products the group has endorsed.

Well, it turns out that Girls Generation, collectively, are rated as Korea’s single most influential product pushers.  Their list of endorsements is so extensive it has its own Wikipedia page and includes Samsung, Hyundai and Philips Van Heusen, all of whom have current labour and/or environmental controversies.

These nine sirens work very, very hard at persuading people to buy stuff, without asking too many questions about where it comes from or how it is made. They, or at least their label, SMTown, are getting paid a lot to do so.

K pop stars, you see, aren’t struggling artists trying to break through the clutter. They are employees, completely owned by their record labels who find, package and then promote them relentlessly. They sign on in their teens to fifteen-year contracts. The music is all written by other people and put in front of them to sing. Their employer has the power to decide everything from what they eat to who they can date (typically no one! … sorry fellas) I’m sure they get no say over their brand endorsements either. Faust-like, they barter away their right to object when they signed on with the label. Korea has such a culture of conformity that it’s difficult to imagine a lone objector anyway.

The performers are themselves in need of better protection of their rights. Four members of another girl group, KARA, recently tried to sue their label, asserting that their contract was unfair. Essentially it made them carry the risk of poor sales and in one year each of the performers were paid just $10,000.

South Korea’s corporate hegemony could be the closest thing we can see in real life to Huxley’s Brave New World, a place where everyone cheerfully keeps the wheels of production turning without daring to ask questions. Just keep buying those cellphones and televisions thanks very much.

This is the dystopian 'Neo Seoul' from the film Cloud Atlas. It's hard to pick the difference

This is the dystopian ‘Neo Seoul’ from the film Cloud Atlas. It’s hard to pick the difference

Evil masterminds?

So when you want to point the finger, who is it that is responsible? Does the buck really stop with a handful of charming but ethically undiscriminating young ladies? Not really. The K pop idols are only so popular because of dupes who are suckered in by all the colour and movement, and all I can say is “Touchez”.

We have met the enemy, and he is us ~Walt Kelly

* Al Jazeera also looked at this issue of ‘Who’s to blame?’ only a week ago. Here is the segment:

Related posts:

Actually yes, do keep it personal

Posted: February 26, 2013 in Consumer campaigns
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3D TV static

3D TV static (Photo credit: Wikipedia)

The early advocates of universal literacy and a free press … did not foresee what in fact has happened, above all in our Western capitalist democracies – the development of a vast mass communications industry, concerned in the main neither with the true nor the false, but with the unreal, the more or less totally irrelevant. In a word, they failed to take into account man’s almost infinite appetite for distractions.

-Aldous Huxley, Brave New World Revisited (1958)

I was thinking more about the “Boomerang” theory of activism, which relies on getting results through media embarassment (see earlier post).

If you think about it, it’s inherently limited.

Realistically there is only so much airtime that the media is going to give to labour issues. Have a look at this infographic to see what I mean. Labour rights stories rarely make glamorous news, unless they are tragic.

There’s only space for one labour rights story at any given time. A few weeks ago it was Foxconn. Before that it was the Bangladesh factory fire. Before that it was the Pakistan factory fire. These factories represent a drop in the ocean. It just underscores the difficulty of ‘scaling up’ advances in labour rights.

Maverick social critic Ivan Illich was on to this decades ago. He asked people to take a hard look in the mirror: What is it that you are trying to accomplish? Do you want to “fix” things permanently? Why? He called this the ‘soft underbelly’ of delusions of power.

Institutions of public health and education are, he said, the empty husks of the formerly Christian values of Western society, trying to make things better but no longer wanting to make any personal contact with their beneficiaries. I suspect that he would include labour regulations on that list.

I visibly encountered what he meant when I visited an aboriginal settlement in Australia’s Northern Territory some years ago. The largest building in town was the “CDEP” shed (the acronym stands for Community Development Employment Projects). It contained every imaginable kind of building or farming tool, up to and including articulated motorised diggers. It was all provided free by the Australian Government in a kind of guilty reparation for taking the aborigines’ land without compensation all those years ago. And it was all sitting there unused. People don’t put a value on free gifts.

You can pay people to work, but you can’t pay them to care

Similarly if labour advances are brought about by distant organisations that are not in touch with the beneficiaries, then who are they really for? The results will inevitably evaporate as they are not used. Advances won by public relations and legal means do not, on their own, represent a victory; the victory is the winning of respect.

The workers who’ve migrated from rural areas to manufacturing districts aren’t doing it so they can have lives filled with ‘things’, they just want to contribute to their families and gain dignity and respect along the way. When I glance around the train carriage, though, and see the number of people looking at their little glowing screens I sometimes wonder who is free and who is enslaved.

Related posts:

Fox con?

Posted: December 29, 2012 in China, Consumer campaigns
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iPhone6

The second-ever post on this blog was about Apple and Foxconn. I haven’t come back to them since, mainly because I figured that the story had been picked up by the mainstream media and an investigation was commenced. Then I came across this:

Journalism is printing what someone else does not want printed. Everything else is public relations (George Orwell – via @FredrikGertten)

The so-called investigation into Foxconn which took place in 2012 has made me despair of the media who uncritically reported that lots of progress has been made. Anyone with a high school diploma who read the entire report could see that the main issues are not resolved at all, and wage levels are not even mentioned.

In response I have put together my own White Paper, highlighting the shortcomings of Apple and Foxconn’s remediation point by point, which you can download here:

I spoke with SACOM before publishing this. There is no democratic union at Foxconn so, as the people in touch with the workers, SACOM are probably the next best thing. They say the workers’ priorities are:

  1. A better system for scaling of production during peak times, and
  2. Worker input into selection of union reps.

As you’ll see in the Paper, neither of these issues have been addressed at all.

See also:

Book Review: Globalization and Cross-border Solidarity in the Americas

Posted: December 10, 2012 in Books, Consumer campaigns
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Mujeres saharuis en la maquila

Mujeres saharuis en la maquila (Photo credit: gaelx)

I’ve written a few times about Latin American workers (see links below). Here at last is a broad description of attempts to cross-border advocacy in Latin American apparel-producing countries and North American apparel-consuming countries.

The book uses four 1990s campaigns as case studies:

  • Guatemala: Phillips Van-Heusen
  • El Salvador: Gap supplier Mandarin International (Taiwanese-owned)
  • Honduras: Kimi (Korean-owned), supplier of retail store-label clothes
  • Nicaragua: Chentex (Taiwanese-owned), another supplier of retail store-label clothes

The picture is not a pretty one. These four campaigns attained the rare victory of union recognition but, after that, their companies invariably relocate. The wonders of Capital Mobility. It makes me think of trying to stop a vacuum cleaner by holding its nozzle; it can simply detach the nozzle and use another (I’m sure there are better metaphors … suggestions are welcome!) Even so, the author writes, capital is not omnipotent and with better co-ordinated campaigns could be held to account. The world is only so big and brands in this day and age should have nowhere to hide.

The author, Ralph Armbruster-Sandoval, explains how pressure in each case was applied across borders, at both ends of the supply chain. He calls this the Keck-Sikkink or Boomerang Model (p. 22). Mis-coordinated boomerang campaigns, he argues, keep allowing the ball to be dropped after a short-term victory.

He sets out the history of overlapping pressure groups, something I’ve noticed before. Apparently the Workers Rights Consortium (WRC) was set up in 1999 specifically by people unhappy about the compromise-solution of the Fair Labor Association (FLA) which, among other things, does not insist on a minimum living wage (p. 12). The FLA are now famous as Apple/Foxconn’s inspectors (more on them next month). Likewise the IGLHR, formerly NCLC, was set up in 1981 by people unhappy with the AFL-CIO‘s pro-US foreign policy approach during the Cold War (p. 82). The AWU-APHEDA spat in Australia is another symptom of the same division. People have long memories.

Even allowing for these historical differences, there is a recurring difference in approach between groups that push the need for independent unions, and groups that push for independent monitoring (p. 13). I wish I’d learned this sooner. Throughout this blog I’ve looked at campaigns run by both camps and I’ve been somewhat biased towards the AFL-CIO approach. As a union official, it’s hard not to be. I just don’t see how you can have a successful campaign without involving the people who stand to benefit from it; you’ll end up with a result on paper that is not enforced.

In Keck and Sikkink’s (1998) model, domestic non-state actors establish ties with NGOs, creating transnational advocacy networks (TANs), who, in turn, put pressure on their respective states to bring about social change. This model [...] is quite useful but it inadvertently places too much emphasis on TANs, making them seem like they are the “saviors” of the “poor, downtrodden masses” …

[T]heir model gives one the impression that domestic non-state actors cannot independently determine their own fates without “outside assistance”. (p. 103)

and again:

[W]omen maquiladora workers have often been framed as “victims” while U.S.-based consumers and activists are seen as “saviors”. (pp. 149-150)

However you need the consumer advocacy to open up the space for organising; it’s not often there as a given. Indeed weak labor regulation is usually one of the reasons production has been moved to these countries to begin with. It’s all very comforting to prefer organising over distant advocacy but it might not always be practicable. Consider the IGLHR report into the KYE Systems factory, maker of Microsoft peripherals (which I covered here). The only options for a local partner are the Chinese state union or unrecognised local NGOs whose leaders risk prison.

If it were ever used properly, the boomerang model would actually render the dilemma moot. Successful campaigns draw on moral and material leverage (p. 59). As one wit (@WithoutDoing) recently put it on Twitter:

For something to be changed it must be both pushed and pulled (12 Oct)

This is absolutely not a theoretical debate. The two camps need to have more than a passing regard for one another, they need to actively co-operate. Using the example of the Salvadoran maquila (garment) industry, the author notes:

Consensus between the NLC, AFL-CIO and UNITE existed, on the surface, during the Gap campaign. In reality, tensions ran high. It should be pointed out that all three groups did work together, but their strategic and historical differences generated unnecessary conflict. The NLC distrusted the [local peak groups'] involvement in the Gap campaign because of their previous ties with AIFLD [the pro-US foreign policy outfit which generally sought to undermine leftist regimes in Latin America]. AIFLD’s uncritical stance towards El Salvador’s human rights abuses generated dissent within the AFL-CIO, sparking the establishment of the NLC in 1981 [...] The NLC rejects working with all “corrupt” centrist unions like the CTD, CTS and CNTS [...]

The ACILS, AFL-CIO and UNITE also claimed that the NLC’s campaigns are too “media-driven” and that they leave workers defenseless after they are inevitably fired. These organisations suggest that the NLC should work towards empowering workers and making them (rather than consumers, students, or [NLC leader] Charles Kernaghan) the primary agents of change, on the ground, through unionization.

These perspectives highlight a crucial, though unstated point: officials from the NLC, UNITE, the AFL-CIO and ACILS generally mistrust each other (p. 82).

Touchez!

People need to focus on this bigger picture, an awful lot depends on it.

As to the issue of Capital Mobility, Armbruster-Sandoval suggests region-wide organizing as a means of limiting companies’ tendency to ‘cut and run’ (p. 133). It had not been launched at the time this book was published but the Asia Floor Wage campaign does exactly that.

Related posts:

The brand we overlook

Posted: September 25, 2012 in Consumer campaigns
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English: Generic brand cola can from Jewel Com...

English: Generic brand cola can from Jewel Companies (US, 12 oz., 355 ml) (Photo credit: Wikipedia)

A lot of time is spent pressuring brands over their supply chains (though not nearly enough).

People ought to challenge themselves about this: are you just picking on the brands that you see most often: the Apples, the Gaps and the Nikes of the world? What about, in the mundane world of groceries, the supermarkets’ store labels, such as Costco’s Kirkland or Wal-Mart’s Great Value? Ever wonder what conditions those goods are made under?

Perhaps now is a good time to start thinking about this, because store brands are on the march.

In Australia, the two largest retail conglomerates make no secret of their strategy of progressively expanding their store labels at the expense of intermediate producers. Controversially this has included an offer of $1 milk at Coles and $10 jeans at its stablemate Kmart, sourced directly from China.

This could mean greater transparency about producers’ working conditions, since the retailers are themselves responsible for the contract of supply, yet the issue is barely on the radar. When it comes to overseas-made store brand products I rarely if ever hear people voice concern for the people making the goods; the discourse is all about ‘buying local’.

Right now Australia’s Parliament is debating a Bill that would compel companies to reveal whether goods “Made in Australia” are merely canned or batched here or if they are truly made from 100% Australian produce. However the motivation behind the Competition and Consumer Amendment (Australian Food Labelling) Bill 2012 is not to encourage transparency, it’s to encourage local farmer’s markets by “shaming” companies that import food. The Bill’s drafters would prefer that food not be imported at all. Consequently, it contains no provisions for monitoring or reporting (and these people call themselves progressive!)

Store label goods are not intended to draw attention to themselves, and they normally do a good job of it. A rare exception was an IGLHR report published in March which detailed abuses at a Chinese-owned factory in Bangladesh. The researchers somehow uncovered that the factory’s sweaters were being procured by Australia’s Wesfarmers group (owner of Coles Supermarkets and Kmart Australia). It didn’t even break into the mainstream news.

So the more goods on shelves come in these nondescript black-and-white packages, the less we know about them. Unless retailers are forced to disclose the identity of their suppliers, or someone like the IGLHR goes digging for it, all that we have to go by is their CSR statements. These are generic blanket statements covering thousands, possibly tens of thousands of product lines, with no associated checking mechanism. Even with the best intentions in the world, that is a recipe for inaction.

“Trust, but verify”

Voluntary standards are not a top priority in the companies that use them, and even less so when they are invisible to the outside world. Their priority is making money. Someone else needs to check that standards are adhered to. An academic study into the banana supply chain, conducted in 2010, concluded that the competitive pressure to drive down prices is always going to take precedence. It concluded that:

The voluntary labour initiatives in the global banana industry appear to be both driven by and in the interest of business. This is particularly so when there is no mechanism for the relevant worker representatives to monitor compliance of such initiatives (Robinson, p. 562; emphasis added)

Incidentally the opposite holds true as well. In an interview with Australia’s Inside Retail the week before last, the owner of the Gideon Shoes fairtrade shoe company, Matthew Noffs, said:

We haven’t had much support from the big name chains [...] I have found the whole industry largely unsupportive (p. 4)

A lot of people like the idea of how [our product] is made but are also very scared, because as soon as you understand how things are really made and if you decide to get serious about it, it changes the way you buy (p. 5)

In other words, faced with the option of stocking a product that puts its commitment to ethical labour front and centre, retailers don’t want to touch it.

What does that tell you?

Sources:

See also:

  • The Battle of Tomato Identities: The Rise of Supermarket Own-Label in Harvey, Quilley & Beynon (2003) Exploring the Tomato: Transformation of Nature, Society and Economy, Edward Elgar Pub., Northhampton, Mass., pp. 174-200

More related posts:

Swedish-Latin American solidarity redux

Posted: September 13, 2012 in Consumer campaigns, Ethical decision-making, Films
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English: Cuban-American lawyer Juan J. Domingu...

Dole Food Co has copped a well-deserved one-two in two separate Swedish documentaries: Bananas!* (2010) and its unplanned sequel Big Boys Gone Bananas!* (2012)

The first film is about Dole’s continued use of DBCP, a hazardous pesticide, on its plantations in Nicaragua after the manufacturer had ceased production due to greater awareness of its safety risks. They are successfully sued in California under the Alien Tort Claims Act (ATCA) by workers who had become infertile.

The second follows the filmmakers’ travails when the company then tries every legal means imaginable to prevent the release of Bananas!* starting with its premiere at the Sundance film festival in Los Angeles. It makes an interesting study of a successful public awareness campaign, although you can see that the filmmakers were clearly not enjoying the ride.

After a long period of setbacks, an unforeseen turning point comes when a Swedish blogger Alfonso Allende hears of the story and refuses a Dole fruit salad at a local burger chain. He writes about it and the chain’s owner, on hearing this, decides he wants to take the high road and drops it from the menu. Dole then (cack-handedly) mounts a full-scale PR offensive in Sweden which is so patently orchestrated that it gets journalists’ backs up. A screening of Bananas!* is organised in the Swedish Parliament, attracting bi-partisan support and from there the film becomes unstoppable.

Order out of chaos

Big Boys Gone Bananas!* makes an interesting counterpoint to the attempted cross-border solidarity in Ericsson covered in my previous post. That too involved Swedes attempting to assist Latin American workers (in Colombia, just a few hundred miles away from the banana plantations of Nicaragua) and the events occurred around the same time, late ’70s – early ’80s.

There, the formalised nature of the attempted co-operation appeared to be its undoing. The outcome was that the Colombian union was, over time, eradicated and the workers left worse off.

In this case, the assistance was quite informal. You can tell that Bananas!* was produced on a very low budget; a lot of the footage is taken off Court TV (the court case largely tells its own story). All of these walk-on characters come together to form a very very informal coalition to get the story out. So loose that many of them have never met. The cast includes the local Nicaraguan union leaders, two American trial lawyers, the producer of The Corporation, WG Film including Erik Gertten who becomes the star of the second film, consumer activist Allende, and sundry journalists and politicians in Sweden. At the outset, no one could have predicted the outcome; I think there is a lesson in that for the campaign planners among us.

When do you decide to sue?

The second film also has a very interesting theme, which I won’t dwell on here, about the influence of PR spin and media control in the United States. A clip is shown of a commentator dismissing Bananas!* on air. If you were a viewer of that program you’d never know any different, but this person later meets Gertten in person and was quite abashed about it.

I was also struck by the hard-headed assessment of one of the lawyers that Dole is not going to be embarrassed into action: “We have to litigate.” It makes me think of the still-ongoing Adidas saga. Not even a giant projection inside London’s Olympic Park and ensuing media coverage has been enough to make that company pay unpaid wages that laid-off workers in Indonesia are owed. I don’t know if legal action is part of War on Want’s end game, but maybe it should be.

See also:

Social entrepreneurs and sweatshops

Posted: August 12, 2012 in Consumer campaigns, Site announcements
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[These were my comments at a screening of two documentaries, Behind the Swoosh and Tejid@s Junt@s ("Stitched Together"), held at my alma mater UTS on Thursday night. The two films are included as embedded links]

My name is Michael Walker, I am an alumnus of the UTS Law and Social Sciences schools and am now working for a union just one block from this building. I am also the author of the blog Fair For All dot org.

To begin tonight, I’ll briefly explain what Fair For All is about.

Unions, including mine, have over the last century improved living standards in this country out of sight. To earn the cost of a loaf of bread, a shop assistant of a hundred years ago had to work for two hours. Today: only about five minutes.

When you walk into a shop you don’t have to be too troubled about the working conditions of the employees … not usually anyway.

What you should be troubled about is the working conditions of the unseen people making the stuff on the shelves.

In decades past – take Darrell Lea Chocolates as an example – in decades past the workers in Darrell Lea shops were protected by the Shop Award safety net. Workers in the Darrell Lea factory in Ramsgate, which is just down the road from my house, were protected by the Factory Award safety net. Delivery drivers were covered by the Transport Industry Award.

This is still how it works in Darrell Lea. Those three awards guarantee a reasonable rate of pay and conditions of work for everyone making Darrell Lea chocolates, including rest breaks, sick leave, four weeks of annual leave, and overtime payments.

In the last thirty years or so, this has become the exception rather than the norm.

Contrast that with Masters Home Improvement.

Masters opened up a very large store out near Narellan just before Christmas last year. If you walk through, you will be hard pressed to find any goods made in Australia whatsoever.

The products sold in Masters are mostly made in factories in Asia – very often by people who are not paid enough to support a family, who are docked their pay if they are sick and who are often working exposed to hazardous chemicals. Because their regular rate of pay is so low, they work long hours of overtime, often 70 or more hours per week, to provide for their families.

They do all this to make our t-shirts, our jeans, our sneakers, our phones and our iPads.

These people, who feed and clothe the world, deserve the protection of basic labour standards, regardless of where they live.

So Fair For All is my project to raise awareness about the crucial need for improvement. It’s not part of my day job; the union I work for is essentially a mutual society for the benefit of its members. It’s not an NGO and it doesn’t exist to roam around solving the world’s problems, so Fair For All is something I work on in my own time [see related post on national self-interest].

So, how do we feel about this? As consumers we are all participating in an unjust system, whether we like it or not.

We are all participating in an unjust system, whether we like it or not.

It’s true that the problem is big and complicated and has no easy solution but that’s not to say that we should throw up our hands and say that nothing can be done.

Tonight we are going to view two short films about people who have done something about it – college students in both cases. Many of you here tonight are college students and I think I can assume because you are here that you don’t need persuading about this issue and want to do something yourselves. Sit tight, we’ll come to that at the end!

Also on your seats you will find a pamphlet for the Playfair 2012 campaign [the pamphlet can be downloaded here], which has been shining a spotlight on the working conditions of sportswear makers in the lead up to the London Olympic Games. The campaign co-ordinator from the global garment and textiles union has kindly agreed to join us by Skype during the break between the films. She is actually in Geneva – fortunately it is only about 11 o’clock in the morning there!

This first film we’re going to watch, Behind the Swoosh, is about conscientious objection and the power it can have if done effectively. One athlete refused to wear the logo of a sportswear maker associated with sweatshops until it cleaned up its act, and his stand has had a large impact at his college and even on the company. Beyond that I’ll let it speak for itself.

One thing this film brings home is how tenaciously companies will fight to protect their brand. They will stare down strikes if they can but they will not allow their brand to be trashed without responding.

This is what Playfair2012 is striving to do. Playfair has the same agenda as Team Sweat: ensure that workers are:

  • paid enough to live on,
  • provided with ongoing rather than short-term employment contracts, and
  • allowed to establish and join trade unions without being victimised

This second film we’ll see takes a different approach altogether. It is about Alta Gracia, a former sweatshop in the Dominican Republic that has been reopened as a workplace that pays its employees a living wage and – and this is the most important bit – connected to a reliable market for ethical apparel. Alas, it’s not enough to rely on people’s goodwill to pay above-market prices, you need to supply them with something unique [see related post].

I took the liberty of touring the UTS gift shop earlier. As expected, the branded apparel is made in China. Nothing wrong with it coming from China per se, it’s just that this tells me that no one has ever pressured the university over its apparel procurement.

Ethical procurement policies are not all that difficult to have put in place, it’s been done successfully down the street at the University of Sydney. Two Victorian campuses are completely Fairtrade. Dozens of American universities source from Alta Gracia.

So why not bring them to UTS too?

Global solidarity during the Olympics

Posted: August 9, 2012 in Consumer campaigns, Indonesia
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In an extraordinary month, embattled sportswear maker adidas has faced protests in both the developed and developing world.

Global solidarity at work! Co-ordination could be better though.

First up, in Jakarta, 2,000 employees of supplier PT Panarub Dwikarya initially went on strike over a number of issues including:

  • a forced labour system
  • unpaid wages
  • freedom of association

The manufacturer, in retaliation, sacked 1,300 of them who have been on picket since. You can read the full details of their story here.

Then, last Sunday night, UK group War on Want staged an impressive display of guerrilla activism, beaming a huge “exploitation – not ok anywhere” projection onto a building within the Olympic Park in London, right after the men’s 100m final.

It certainly got people’s attention but I do hope something comes of it. Last week BusinessWeek ran a feature titled ‘Why Chick-fil-A and Other Brands Aren’t Being Bullied’. in which a corporate “crisis management” specialist made the withering assessment that

People live in short attention span theater. They get upset and then they move on.

Granted she has a vested interest in saying so, but there is more than a little truth to it.

War on Want and others can counter this by keeping it personal. Rich world consumers might have trouble keeping their attention focused but the people sitting on that picket in Jakarta today aren’t going to “move on” so quickly. They will still be there tomorrow unless the company is forced to act. The more we hear of their stories, the more likely we are to act.

Support the ‘not ok anywhere’ campaign by signing their online petition.

Related post:

The ‘Not ok anywhere’ campaign video:

Keeping foreign influence in context

Posted: June 13, 2012 in Consumer campaigns, Economic Development, Indonesia
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English: Palm oil from Ghana with its natural ...

English: Palm oil from Ghana with its natural dark color visible, 2 litres Español: Aceite de palma de Ghana con su color oscuro natural, 2 litros (Photo credit: Wikipedia)

Ethical consumption is not going to solve the world’s problems, and here’s why.

To Western eyes, we only know the goods that are ‘Made in China’ that make it to our shores, so we can be tempted to think that they are representative of the country’s entire production, which would be wrong.

I’ll use Indonesia’s stats as an example.

Indonesia’s formal economy produces about $1 trillion of goods and services each year. The informal economy, which is not reported and not measured, is much larger than the formal economy. So many Indonesians working in small workshops, driving rickshaws, and so on are paid in cash and do not pay taxes.

Even within that smaller area which is the formal economy, only 15% (or 1 in 7 workers) are making goods for export, much of it raw materials such as palm oil and copper. So these companies that form part of the supply chain connected to Western consumers but are largely locally-based businesses, not employees of multinationals. Incoming foreign investment - where the operations are substantially controlled by overseas interests - represent about 5% of the economy, so it is generating perhaps 7-10% of economic activity or about 1 in 15 formally-employed workers.

Do-gooders have to remember their limitations. Even if every Western company invested in Indonesia magically stuck to all the core ILO standards overnight (ha!) it would hardly put a dent in solving the issues of Indonesia’s workers.

Besides, there is something slightly offensive in the notion that Westerners need to come in and fix things. Indonesians (and Indians, Cambodians, etc) understand their country’s challenges better than we do.

Having said all that, I’m not denying it has its place. I do think something is wrong with the world if consumers don’t care whether the person who made their household products was paid fairly, had reasonable hours and a safe workplace, regardless of where in the world they are located. I’m just saying we ought to think of ethical consumption more in this transactional manner only and not as a magic wand.

Read on:

Fairer than fairtrade

Posted: May 8, 2012 in Books, Consumer campaigns
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fairtrade products

Conor Woodman has recently put out a second book Unfair Trade, as a follow up to his 2011 book The Adventure Capitalist (the film version of which I reviewed here). The two books sit together well: the first is a travelogue with the unique twist that Conor is aiming to get back home having made more money than he’s spent. The second is a more circumspect look at how trade in and from developing countries could lift more people out of poverty than it currently does.

I found it to be inspiring but also unsettling. Conor gently shows the greater effectiveness of market-driven means to prosperity as against the simplicity of fairtrade solutions, which is a hard message to accept.

He uses fairtrade coffee as an example. To obtain fairtrade certification, a company need only promise that it will always pay, at a minimum, the fairtrade price of US $2.81/pound. However the market price has been far in excess of that for the last five years ($5.73 at time of writing) – it’s a pretty easy promise to make! In exchange coffee sellers get the aura of fairtrade certification.

Meanwhile, other companies working fairly with developing-world suppliers do not get the branding aura they deserve because they are not certified - three examples being Ethical Addictions, the Rare Tea Company and Olam International‘s work in Cote D’Ivoire. These companies go even further, paying suppliers roughly double the market price because they can connect their goods to users interested in their particular blends. Sounds pretty fair to me, but you’d never know it from the label.

Conor also points out that fairtrade organisations receive income from companies to use their logo and they spend it roughly equal proportions on marketing and administration – the money is all spent in the developed world. Food for thought indeed!

The book is available on Amazon UK, including e-book and audio editions.

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