Extinguishing Poverty Through Trade, why only consumers can end exploitation in the world’s trade – Glass interviews Michael Gidney, CEO of The Fairtrade Foundation
For a quarter of a century, the Fairtrade Foundation has been on a mission to make trade around the world fair and ethical. Founded in the UK as a response to the crash of coffee prices in the 1980s, Fairtrade is a remarkable example of what can be accomplished when NGOs pool together. Initiated as a collaboration between Christian Aid, Oxfam GB, Harriet Lamb, Traidcraft, CAFOD, Women’s Institutes and Global Justice Now, Fairtrade is a charity dedicated to providing financial stability and humane working conditions to the oft forgotten producers in the web of globalised commerce. This means the farmers and workers at the start of the supply chain producing the goods that we all so love to indulge in. The movement began with coffee but soon influenced other sectors such as cocoa, bananas, flowers, cotton and, most recently, gold.
The expansion into gold represents a huge step for the organisation as it expands from farming into the deleterious and often largely unregulated world of mining. So far Fairtrade are working with small-scale artisanal miners in South America and now also in Africa, namely in Uganda and starting in 2017 in Kenya. The situation is extremely critical in this sector due to the working and living conditions of the miners and the unimaginable hazards they are exposed to every day while working with poisonous substances without protection or safety equipment. (As the earth’s remaining gold supplies dwindle and prices rise, miners are increasingly resorting to extreme measures such as extracting tiny fragments from rock using mercury in makeshift backyard laboratories. This poses an enormous health risk to the miner and his community as well as untold environmental damage).
Michael Gidney is CEO of the Fairtrade Foundation, which owns and oversees the Fairtrade trademark in the UK. He is responsible for ensuring that Fairtrade achieves its ambitions, and here he shares with us the challenges and triumphs and what needs to be done in order to extinguish the poverty created by unfair trade.
What exactly does Fairtrade do?
The Fairtrade Foundation is a charity and our mission is to fight poverty through trade. Trade can transform lives and fight poverty if you do it right. That means you need to do it according to certain standards and we have globally agreed a certain standard which specifies the social, environmental and economic criteria. If you have a product that complies with those standards, we will verify you and you can have our certification mark on your packaging. That’s a way of showing the consumer that this product meets the standards.
In many ways, our charity is a hybrid. On one hand we’re certifiers, so we set those standards and verify them. On the other hand, Fairtrade is absolutely at its roots a campaign movement for change. One of the things that has made Fairtrade successful over the last 20 or so years is enormous public support. Now in the UK alone we have ten thousand local campaign groups who are lobbing for Fairtrade locally and politically. An incredibly strong public movement has been a huge energy driving us from the beginning.
How do you ensure that your work is effective?
So we have the standards that are set globally and we do that based on consultation. We talk to the farmers, producers and workers on plantations, and we consult with retailers, brands and exporters; everybody in the chain. First of all, we have a guaranteed minimum price. So there is a world price for coffee and there is a Fairtrade price for coffee. If the world price goes below the Fairtrade minimum price, then we expect the Fairtrade minimum price to be paid. The minimum price is an incredibly important means by which farmers can have some stability. It means that they know that the price they get for their coffee, cocoa or bananas won’t go below a certain level. That’s to protect them from the worst of global price fluctuation. And it’s as important now as it was 20 years ago. Price speculation and price productivity is still a very big problem for the world’s farmers.
The second element on top of that is what we call a “Fairtrade Premium”. Roughly speaking it is about 10% bonus on top of the Fairtrade minimum price. The Fairtrade minimum price goes to the farmer, the premium goes to their community group. One of the requirements of Fairtrade is that farmers need to be organised locally. We expect them to have a democratic, transparent, well-accountable local organisation. And those organisations receive the premium. They use that additional money to invest in social, educational, healthcare and regional development projects locally, or where they are hungry they will buy food. Farmers in east Africa, for example, have used their premium to buy maize when the world maize price is low, and when those prices are high, they sell it back. They are able to invest in schools and in hospitals. It’s an incredibly valuable and useful way of building a thriving, successful community.
We also have auditing which is run by a separate company, and that provides the certification and ensures that the standards are being met. Through this company we regularly undertake audits, inspections and farm visits. And we regularly challenge and suspend those that don’t comply with the standards. We are very much involved in best practice in setting standards.
On the other end, customers are often looking for the Fairtrade mark because it represents a stamp of quality. How do you stop the mark from being misused?
The Fairtrade certification mark that goes on a product belongs to the Fairtrade Foundation. Only those companies that have our approval can use it. We defend that vigorously and we have legal protection for that. The Fairtrade mark has a very high level of public trust; that is an unbelievably valuable resource and asset and we take it very seriously. And we are committed to maintaining the public confidence in Fairtrade. It has been incredibly helpful in getting Fairtrade known and there is no way we are going to compromise that.
How are your standards implemented in the countries you work in? Do you need governments to be cooperative or can producers approach you directly?
Yes, producers can approach us directly. The whole point of the consultation and what Fairtrade is about is to set up trading relationships, but essentially it comes down to the relationship between the buyer and the seller. And we require all parties in the chain to treat each other with respect. Rather than the supermarket saying ‘take it or leave it’, we require dialogue. Very often in trade the people at the start of the supply chain, the farmers or the workers, just have to accept whatever price the buyer gives them. Through consultation we understand what the standards would look like, and we are also able to spot risks and see where the challenges are likely to be.
Additionally, farmers need to be organised. If you are an individual farmer, a small tea holder for example, we would try to link you up with a local group, because if you only have a couple of acres of tea it’s unlikely you are going to be able to provide the kind of scale that an international tea retailer would need. So we try to help farmers create that kind of scale locally. What we do is work on the ground with farmers; we help them, see what they need, link them up locally to work as part of an association or a cooperative, to get them organised and to see the added value of them working together and how to run their business better.
We will support farmers in their agricultural practices and climate change mitigation. We have very rigorous standards in environmental protection so we have very strong requirements in what chemicals can and cannot be used as pesticides. And once they organise better and become more competent in farming effectively, their productivity goes up. It all starts with the farmer, which is actually the opposite to the way most trade works, where it usually starts with the buyer – the brand or the supermarket.
Fairtrade is very often associated with sustainability. Does this association come from your environmental awareness or are there other aspects?
Rather than just looking after your company’s economic performance, you also need to understand its environmental and social impact. What your company does to the planet is equally as important as what it’s doing for the shareholders. And that is gaining much more currency these days, and that’s very welcome. The increase of interest in sustainability has really taken off. Fairtrade has been at the forefront of this. If you are only chasing after economic return, then at some point you are likely to cut the corners. A really good example of that was the Rana Plaza collapse, the crash of the factory in Bangladesh where more than 1100 textile workers died.
When the market demands cheaper goods it just pushes risks and costs in the supply chain, and at some point, somebody will pay. Rana Plaza was a terrible scandal and what was happening there was illegal but this approach to the international trade is exactly why Fairtrade exists. Companies need to understand that they have an impact: that when they buy chocolate, tea, coffee or bananas it will have an impact on the other side of the world. And they have a responsibility to minimize the damage they do and to maximize the benefit they do. That’s what Fairtrade is all about.
Fairtrade is mostly associated with food – coffee or bananas. But it operates in other industries too. Your newest and very interesting field is gold. What does Fairtrade do in the gold industry?
I am very excited about the work we are doing in gold; it goes back to our roots as a campaign. When Fairtrade started, nobody was looking at social and environmental aspects of food production. People were just buying food without worrying about what the standards were, what the welfare was, what the human rights were. They just weren’t aware. Now it’s a completely different story. My hope is that as we made that revolution in food, we will do the same in mining. The mining sector is not transparent and not fair. As we are only starting, we are looking at small scale mining.
But I hope that we can carry those values and approaches into industrial mining. We started small so that we can learn as we go. What is important is that these miners are really a forgotten group in mining but there are millions of them. Very often they will move from site to site digging for gold; they have no land rights, they don’t own the land, and they are forced pay an extortionate rent to the land owner just to dig a hole and to dig a mine shaft with the possibility of finding gold. What I think is the most shocking are the absolutely appalling living conditions that they face. And Fairtrade is going to change it. For me the biggest irony in gold is that we give gold to the people we love. We give them engagement rings and wedding rings. But I believe that if people understood the degradation, misery and exploitation at the start of the gold production, they would just think again. We don’t want gifts of love to come from such misery.
We started to work with artisanal small scale mining in South America and in the last year or so we’ve been working to support miners in Africa. There is now a Fairtrade certified mine in Uganda and we just started one in Kenya, which is the second African mine to be certified. I actually met the miners in Kenya in Micodepro about 18 months ago. I have been on lots of visits and I’ve met a lot of producers but these miners were probably the most exploited I’d ever met. They have absolutely no money and no ability to invest. They don’t even have money to build a proper, safe mine shaft with scaffolding and props to be able to mine. They didn’t have anything, they were literally just digging holes. They have no safety equipment, no masks and they were using poison to extract the gold. They were using cyanide and mercury because it’s cheap.
There are really unbelievable health consequences. There is an example that really stuck in my mind about how poor gold miners are. The women were using plastic washing-up bowls to mix the mercury. They use their bare hands. And mercury is a poison, so eventually it will get into your system. But very often they only owned one plastic washing up bowl. So the same bowl that they were using to mix the mercury they would then use to wash their babies later. I’ve heard quite extraordinary stories of people who have died or their children have died, or were malformed or had brain damage because of mercury poisoning.
There was a miner called Moi and he broke his spine in a mine shaft because it collapsed. So after that he had no income at all. His wife was going out to find whatever local work she could get and she earned 17p a day, which is just enough to get maize. They were living off maize but they couldn’t buy anything else. Kenyan school is now free but kids still have to pay for their school uniform and books. And they couldn’t afford that, so the kids couldn’t go to school. I don’t know what their choices are. They are just about surviving but they are malnourished. It’s clear you can’t live on just maize, you need a balanced diet. He is in bed, there is no healthcare and there is no responsibility taken by anybody. And that for me is pure exploitation. The jewellery market is worth $100bn a year globally and at the bottom you have someone like Moi with his wife earning 17p a day to keep her kids from starving.
What are the industries you’ve been working with the longest?
Fairtrade started with coffee and from there we went into other agricultural commodities. For us the starting point is farming, agriculture, because the poverty of the producers at the start of the global supply chain is something that we can solve if we shop differently. That poverty is man-made. Coffee is now becoming much more of a speciality. There is an increasing consumer interest in the origin, in organic and really high quality coffee. And that’s terrific and I encourage it. But even with the increasing consumer interest over the last 10 or 15 years, the poverty at the other end of the supply chain hasn’t changed quite enough.
Coffee is mostly grown by smallholders and now there are problems of climate change. Climate change is a significant problem in the coffee growing areas of the world and it’s the farmers’ biggest concern. Also, farmers run out of money between one harvest and the next. They don’t earn enough in one harvest to be able to put food on the table for their children. There is a gap in the year of around two months during which coffee farmers cannot feed their families properly. The farmers give it a name. In east Africa they talk about a month of silence, others call it a month of the big stomach. It’s just a shocking image of malnutrition. Those of us who love coffee and want to enjoy our coffee don’t want it to come to us if it means that somebody somewhere on the other end of the supply chain is unable to feed their family.
That’s what we’ve been really focusing on over the past few years, on seeking to make a real impact on the welfare, on the lives and the wealth in the farming communities. And we can see real progress. Farmers that are involved with Fairtrade are more likely to be able to feed their families and to have access to healthcare. When you make a choice of buying a Fairtrade product you are helping farmers get a better financial deal today but also giving them an opportunity to invest in the future, in environmental protection and in their communities.
Can you think of one big success story that you’ve come across over the years that you’ve been working with Fairtrade that really stuck with you?
There are a lot of examples of farmers using their premiums to create amazing social change. On a tea farm in Kenya one of the problems was that girls were missing school regularly because when they had their period they didn’t have any sanitary protection. So they used a small part of their premium money and the school bought sanitary towels for all the girls in the school. And that changed the girls’ enrolment. It just stopped the problem overnight. So where before half of the girls were missing school on a regular basis up to a week a month, now all the girls were in school. It’s about local control and local ownership.
I think it’s about the fact of the farmer having a voice. It’s something I hear time and time again in Fairtrade. Just recently I was in Rwanda talking to some coffee farmers. Twenty years ago, during the genocide in Rwanda, millions of people were killed. And one of the horrible things that came out of it was a huge number of widows who had lost their husbands. Women in Africa often don’t have access to land ownership, they don’t have rights in any way. And I was speaking to the coffee farmers and they were telling me what they were doing; they were showing me where they invested their money and the impact that their community projects are having and it was really inspiring. But when I was going around the room there was one lady that was silent.
Then, when she spoke, she said that she was one of the Rwandan genocide widows. She said, “I’m on the premium committee for the Rwandan coffee farm and I have a say in how our community investments are being made and I have a voice for the first time in my life.” One of the things that happened to many women in the Rwandan genocide was rape and abuse, and she was saying, “Because of Fairtrade I have a voice, I have a say and I have dignity.” If you look at how globalisation supports the exploitative, not necessarily the ones who are looking to exploit others, when it happens by default rather than by device, the way you tackle it is by giving the people a voice, by enabling them to feel empowered, by showing them respect. And that I think is inspirational. If we can capture that and bring that to other sectors then we will achieve the kind of sustainability that we are all talking about.
by Sara Hesikova
For more information on Fairtrade visit www.fairtrade.org.uk