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Retail business

Four stages at least

by Claudia Isabel Rittel
Clothes made from fair-trade cotton have been available in some European retail shops for several months. Monitoring the production process is far more difficult than with fruit, vegetables or coffee. Manufacturing textiles, after all, is more complex than growing plants.

Fair-trade coffee has become available in many places. In Europe, it is no longer exclusively sold at “one world” shops, not-for-profit retailers that deal in products from fair-trade sources and whose staff generally work as volunteers. Today, supermarkets offer fair-trade ground coffee as well as roasted beans. Even on the shelves of Penny, a cut-price German discounter, one will find coffee with the fair-trade logo of TransFair, a non-governmental initiative.

In August, textiles produced from fair-trade certified cotton were introduced in some European countries, including Germany. However, guaranteeing that fair-trade criteria are complied with in the manufacture of cotton products like jeans or T-shirts is far more complex than with coffee, fruit, spices or sugar. It is a long way from the plantation to the shirt. Claudia Brück of TransFair knows that “some jeans go through 20 stages before they reach the shop”.

A production chain is best monitored if it involves as few links as possible. “Once production stages are out-sourced and anonymised, there is no longer any chance of guaranteeing standards,” maintains Brück. For that reason, the TransFair association, which awards the only seal for fair-trade cotton products, exclusively works with clothing manufacturers that use short production chains. Nonetheless, there are at least four stages: plantation, spinning company, weaving mill and clothing manufacturer.

Currently, only the cotton producers proper are certified. TransFair generally banks on small-holder cooperatives. FLO Cert, a sub-organisation of the Fairtrade Labelling Organisation International (FLO), re-assesses partners every year to make sure the criteria are met. FLO is a joint undertaking of several fair-trade initiatives from various countries including Max Havelaar (Netherlands/Switzerland), TransFair (Germany) or the Fairtrade Foundation (Britain). In May 2007, producer networks from Asia, Africa and Latin America also joined the FLO. InWEnt appreciates such initiatives as they help to boost the general public’s understanding of North-South issues. Moreover, this agency supports municipal authorities that want to base procurement on fair-trade products.

“We know the producers very well, because we have been working with them for a long time,” explains Brück. Cotton importers, for their part, have to pay the cooperatives a fixed minimum price, which covers at least the costs of production. According to TransFair figures, the price is currently 38 to 51 cents per kilogram of cotton, depending on the country. Other important criteria include dealing directly with the producers, cutting out the middlemen, and guaranteeing minimum prices and premiums. Furthermore, the buyers must commit to pay the purchase price in advance, and to enter into long-term supplier relationships. Therefore, the producers of raw cotton – like those of other goods with certified fair-trade logos – work under better conditions than their colleagues, who often depend on middlemen. The livelihoods and working conditions of many smallholders improve as a result.

However, there are often problems at other stages in the production chain. Therefore, FLO is so far accepting lower standards at these stages. The audits undertaken so far only provide snapshots of what is going on. It is an absolute must that spinning companies, weaving mills and clothing manufacturers abide by the core labour standards of the International Labour Organisation (ILO). These rules, which are now widely accepted, are considered the minimum standards in employment law. Moreover, the companies that process the cotton have to prove they pay their employees fairly. FLO Cert regularly monitors these operations, without, however, certifying the companies yet.

Two types of labels

In addition to the FairTrade label, there are a number of other labels which promise customers quality or a clear conscience. The approaches vary greatly, and so do the focal areas of the initiatives. “There are two different types of labels,” says Frans Papma, who managed the Dutch Fair Wear Foundation (FWF) until 2006. In general, he approves of the work done by multi-stakeholder organisations which are supported by trade unions or non-governmental organisations. He says they often make a valid contribution to raising standards. Examples include the American Fair Labor Association (FLA), which opposes sweatshops, and the Social Accountability Initiative (SAI), which certifies production companies with the SA 8,000 standard for social accountability if they implement and monitor minimum social standards in their factories.

Papma refers to the second group as the “business-driven labels,” which were only designed to generate higher profits by leading customers to believe that they are purchasing something environmentally friendly or socially equitable. “As a consumer, you have absolutely no way of telling what it is all about when you hold such end products in your hand,” maintains Elke Meissner of Verbraucherzentrale, a consumer-rights group.

Credible intitiatives are gaining momentum. Rolf Heimann, who is responsible for quality management at German retail company HessNatur, has observed that more and more manufacturing plants have undergone the SAI certification process in recent years. “Several years ago, it was far more difficult to find SA 8000-certified companies. But word is getting around in the industry that customers demand this standard.”

On the whole, changes are slow to come about. Textile companies have always had a reputation of being tough employers and shifting to countries with lax labour laws. Heimann knows from experience that a differentiated approach is needed. In China, employees are legally allowed to work 60 hours a week at most, but this upper limit is often exceeded. “We have witnessed that women who are not allowed to work more than 60 hours in one factory, have signed on with a neighbouring firm,” the quality specialist reports.

Papma doubts satisfactory certification of the entire supply chain will ever be possible. Therefore, his organisation does not issue any labels. “We focus on the mainstream”, says Papma, “it basically comes down to changing the behaviour of companies.” Member companies of the FWF have to endorse a code of labour practices and inform their suppliers of it. In the first year of membership, the initiative audits at least 40% of the supply base, in the second year at least 60% and in the third year the entire production chain. Thereafter, the production plants are audited annually.

In 2008, the FWF began publishing information about its members’ endeavours on the Internet. It makes sense to raise awareness for working conditions in the countries of production. Approaches like this are very important, says Ingeborg Wick of the Clean Clothes Campaign in Germany. After all, she says, it is imperative that companies rise to their responsibility. She argues that state authorities should limit the confusing multitude of various labels.

Too many criteria

Doing so is difficult, however, because experts and consumers have such widely varying ideas about what criteria cloths should meet. While some focus on social standards, others emphasise consumer health, and yet others predominantly want to protect the environment. Alexandra Perschau of Germany’s Pesticide Action Network therefore believes that you have to consider “organic-fair-social” a comprehensive package.

This complexity is certainly one reason for so many different approaches existing side by side. HessNatur, for example, originally complied with environmental standards. Heimann, however, says that if you call into question conventional production practices in one area, sooner or later you will also come across dubious practices in other fields.

In order to give consumers meaningful guidance, the labels-system has to be simple. The gripping question in future will be how to certify the entire supply chain. As long as that is not done, however, what matters most is raising awareness – as for example at the FAIR2008 trade fair in late January. It was financially supported by InWEnt. (cir)