11 July, 2014

Calling for stronger ethical standards in supply chains

by Tim Aldred, Head of Policy and Public Affairs at the Fairtrade Foundation

This past month, the public have been shocked by allegations in the Guardian of migrant workers being forced to work on Thai fishing boats supplying fish food to the prawn farming industry. Journalists, human rights organisations and politicians alike have denounced this as modern slavery.

CampaignerThis extreme case of human rights abuse has highlighted again the need for stronger ethical standards in the farms, fisheries and factories from which much of our food and other products come.

The public don’t want to buy products produced unethically, and don’t think standards are high enough. In case there was any doubt, the Department for Business released research last week which confirms this. Half of those surveyed believe that retailers are either “not very” or “not at all” ethical. And 83% said that the ethics of the companies they buy from matter. Even though times are hard for many, 40% said they would pay more for produce that they knew was ethically produced, though price remains important to many.

The Consumer Affairs Minister, Jenny Willott, responded to the public mood this week with a call in the press for much better transparency in supply chains, in order to tackle human rights abuses. She set out her thinking at a special event in Parliament on 26th June, supported by the Fairtrade Foundation, the Ethical Trading Initiative, and the All Party Parliamentary Group for Trade Out of Poverty. She wants retailers to radically improve the transparency of their supply chains with regard to human rights. Alongside the moral case, she said there was a clear business case for better transparency:

“It makes a massive difference to their reputation [of businesses] if customers think that businesses do care, are transparent and are paying attention to their supply chain. It reduces their exposure to risk, and can make efficiency savings by making organisations more productive,” she said, name-checking various UK businesses who were working to strengthen their ethical purchasing practice.

Campaigners at the event pressed her on how far the government would go. When the issues at stake are forced labour or human trafficking, improving the transparency of human rights reporting isn’t enough on its own. As the Modern Slavery Bill comes before Parliament, there is increasing pressure to strengthen the Bill’s proposals regarding the proactive role businesses must play on issues of trafficking and forced labour in their supply chains.

Jenny Willott felt that transparency was necessary and important, saying that the “purpose of transparency is to drive behaviour change, both by consumers and businesses”. She also pointed to new European legislation which will force companies to report on a range of demanding human rights issues, her call on the British Retail Consortium to put new ethical guidance in place, as well as the requirements on UK companies to comply with the law wherever they operate.

Giles Bolton from Tesco described the revelations about the Thai fishing industry as “appalling” and went on, “we will end slavery in that supply chain. It is untenable for us to continue to source from there if we can’t do that. We think we can use our influence as a big retailer to help resolve the problems.”

Chief Adam Tampuri, a cashew farmer based in Ghana followed. Chief Adam is also the chair of Fairtrade Africa, the network of African producer organisations. He explained that it is not just transparency to consumers which mattered, but that it was a real problem for farmers and workers too.

“Traders and agents walk into communities and dictate the prices they want, buy the produce, take it away and the farmers remain where they are” he explained.

And without long-term trusting relationships between buyers and farming communities, Chief Adam said it was hard for farmers to plan for the future or address the many challenges they face:

 “You can’t plan for the future, you cannot make investments, either in social programs, environmental programs or any other business. Without transparency you have no negotiating power, you are in an unequal relationship which means you lose out from terms and conditions or prices. You don’t know what new innovations are out there, what new quality or efficiency improvements you need to make. All these things are related to our relationship with those we trade with. We are the most vulnerable at the bottom of the value chain, and this requires some transparency with the way we trade” he said.

Chief Adam said that in his community, the failure to benefit from trade hit lives hard:

“From the community that I come from, it is very glaring, for all these years we have been farming and exporting, and yet the workers and farmers cannot have proper houses to live in, their children cannot afford slippers to walk to school. These same children are the ones who walk along the streets, and are the ones who are targeted and forced into labour and other forms of antisocial areas that affect their future.”

He challenged both the business and government audience to do more, to be more transparent to producers themselves, as well as to consumers. Fairtrade would do its part, but:

“We are not here as the Ethical Trading Initiative and Fairtrade to get business and government off the hook: we are here as a movement of civil society to show you that a better way is possible… We are here to call on you to raise your game and take action.” he concluded to an enthusiastic round of applause for his challenge.

Many of the problems in supply chains are structural and engrained, and won’t be solved quickly.  But both producers and consumers are clamouring for change. Government and business must be feeling under pressure to act.

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