Certification: A Tool with Limits

Contributing Writer
Kerstin Lindgren

Certification labels for consumer products are a tool that serve, on the surface, a simple purpose: to distinguish products that otherwise appear similar from one another. A conventional apple and an organic apple may taste and look identical, but a consumer may wish to choose the organic apple based on the lower environmental impact and/or lack of pesticide residue. Similarly, although fair trade and conventional bananas may look similar, a consumer wishing to be assured that the farmers who grew the bananas were paid a fair price, are part of an organized structure that received a premium for community development projects, and have met standards for environmental protection and worker welfare, may choose fair trade bananas.

In practice, it is not quite this simple. For one thing, fair trade certification no longer guarantees that small-scale organized producers are at the start of the supply chain because most fair trade certifiers have opened up their programs to large-scale farms, at least for certain crops and sectors.

On the one hand, this reflects good news in the larger picture. Where farmworkers are historically largely invisible and disempowered, there is a growing awareness globally that they endure some of the most dangerous and low-paying work there is, usually without significant protection or safety nets, despite performing some of the most important work in agriculture. Clearly, we need to do more for farmworkers.

However, it is not necessarily good news that fair trade programs have jumped into the void. Most are not equipped to create standards or monitoring systems for large-scale farms or factories. This is reflected first and foremost in their governance structures, as no traditional fair trade standard-setter has significant labor representation as part of their top-tier governing or decision-making bodies.

Some of the certification programs have tried to correct this by reaching out to labor NGOs and unions to improve their hired labor programs. Fairtrade International (FLO) provides the best example of this, and upon recommendations made by their Worker Rights Advisory Committee (WRAC), made up of union representatives and labor rights advocates, they have improved their requirements in key areas such as collective bargaining (now a requirement, not just a right) and living wages (now must be benchmarked and assessed, rather than just presented as an unattainable ideal).

Though in some cases there has been progress in improving requirements for workers on large-scale farms, in the marketplace products and ingredients from these large-scale operations are confusingly labeled “fair trade,” presenting a new obstacle for organized small-scale farmers who originally developed the term to distinguish themselves. Fair trade labels were intended to open up new markets for small-scale producers, allowing them to compete in a global market that favors larger-scale farms and consolidated buyers. Now, once again, fair trade producers are being forced into competition with large-scale farms using the very same fair trade label, and they are understandably worried. So worried about this trend, in fact, that a group of small-scale producers has now launched a new label, the Small Producers’ Symbol (SPS), to recreate the market advantage that fair trade was intended to provide.

Two solutions have been proposed within the movement to counter this dynamic. The first is to set the bar for large-scale farms even higher in order to level the playing field. If standards for large-scale farms required true democratic organization (not just limited participation on a committee to discuss premium use, which is often the case now), and true living wages, along with empowerment, long-term commitment and other fair trade principles – rather than simply focusing on improved health and safety, as many do – it would be more costly and difficult for large-scale producers to achieve and therefore would help reduce competition for small-scale farmers.

The second solution is to call these hired labor programs, the best of them at least, “fair labor” rather than “fair trade.” Right now a consumer has no way of knowing just by looking at the label whether their fair trade avocado comes from a large-scale plantation or from a cooperative of smallholders. This would eliminate any confusion for consumers who believe they are supporting small-scale farmers with their purchases. Mounting evidence suggests that small-scale producers globally are the key to feeding the world while protecting the environment, but that they also need better support systems through both policies and market access.

Another increasing problem with fair trade certification schemes concerns multi-ingredient products: some labels require as little as 20% of the total product to be certified. A consumer choosing between, for example, two bottles of iced tea labeled with the same fair trade label may in reality be choosing between one that contains 100% fair trade tea, sugar and mint from small-scale farmer cooperatives and one that contains only 20% certified tea from a plantation with no other certified ingredients. Thus, a label alone is not adequate to demonstrate that key principles of fair trade have been met.

Meanwhile many brands are going above and beyond what certification requires, and labels do not do an adequate job of distinguishing these dedicated fair trade brands either. For example, two different chocolate brands, a fair brand and a conventional brand, may buy cocoa from the same cooperative on fair trade terms. The same exact farmers benefit from both purchases of that ingredient. However, the fair brand buys other ingredients, like sugar, on fair trade terms from other smallholder groups around the world, while the conventional brand likely buys sugar through cheap and exploitative supply chains and also lobbies to keep U.S. sugar subsidies intact and therefore global prices low. Low global prices mean profits for conventional brands and poverty for small-scale farmers. The fair brand is helping to build a just economy, while the conventional brand is not, even as they carry an identical label on some chocolate bars.

This is why many of the brands that are doing the hard work of creating a just economy are de-emphasizing fair trade labels or even leaving them off product packaging entirely, instead talking about what comes “beyond certification” – that is, how to have accountability, transparency and distinction in the marketplace without relying on the imperfect tool of certification.

Does this all mean that certification is meaningless? Not at all. Third-party certification to rigorous credible transparent standards is an important component for consumers to understand and trust ecosocial claims. While many certification standards fall short of the fair trade principles they are supposed to uphold, even the World Fair Trade Organization (WFTO) is implementing third-party certification of its trading members in order to meet consumer expectations for even the most dedicated fair trade companies. These companies often blaze the trail that certifiers are wise to learn from and follow.

For example, Patagonia, known as a leader in ethical apparel, is taking admirable steps to address labor abuses in its supply chains that most ecosocial standards do not even try to touch. The Atlantic magazine recently covered the story of Patagonia’s efforts, which were a result of their own internal audits. Though Patagonia has not released the audits, the public discussion of their results represents an unusual degree of transparency, and transparency is part of their plan to address the issues they have uncovered.

One of the findings reported is that the most serious labor abuses happen not in cut-and-sew factories, but further up the supply chain in ginning and spinning mills, for example. As The Atlantic article points out, most audits and certification standards, as well as public attention, focus on the cut-and-sew factories, ignoring these other stages of the supply chain.

The article does not mention fair trade certification at all, but one of the most interesting aspects of the story is the relationship between Patagonia and Fair Trade USA (FTUSA). Patagonia has adopted FTUSA’s “fair trade” apparel program, even though it falls short in significant ways (for example, no labor representation in governance, a focus on large-scale factory production, and a focus on health and safety rather than on democratic organization and living wages). Even more problematic, FTUSA’s apparel program also awards a fair trade label, even though they only monitor the cut-and-sew factories. This means that any labor abuses in earlier stages of production, as uncovered by Patagonia’s own internal audits, are overlooked in “fair trade factory” certification, and thus some products could contain fabric spun by children working in deplorable conditions. Based on information in The Atlantic article, it appears that Patagonia recognizes the limits of their existing fair trade certification program, and the company is investigating deeper into their supply chains, working with the labor auditor Verite, to create transparency and leverage supplier contracts to bring about true change.

Fair trade is a social movement, and certification is the tool used to verify claims. The resulting label gives us some information but rarely the complete picture. As a society that thrives on sound bites, this should not surprise or dismay us. But all too often these certification programs are weak and certify companies and products to a low or incomplete set of standards. As a movement, we need to continually evolve all of our tools to better meet the needs of producers for empowerment and of consumers for clarity – indeed that is what is required to bring about lasting change.

To read the entire article written by The Atlantic on Patagonia’s supply chain: http://www.theatlantic.com/business/archive/2015/06/all-your-clothes-are-made-by-exploited-workers/394658/