Thursday, 18 August 2011

Betrayed by Fair Trade (and by ISO9001?)

Listening to a programme about the 'Fair Trade' mark on some of the products on the shelves in our shops, I was disappointed to hear that my skepticism is not entirely unfounded.

Fair Trade, for those who live outside the UK, is a label that a manufacturer can apply to their product to indicate that they have paid more than an agreed minimum amount to the original producer of the product.  It is supposed to guarantee that people in third-world countries are not being exploited for the benefit of multi-billion dollar corporations.  (Note that I don't mention the benefit of the consumer as I think that is rarely a consideration.)

Of course I have long suspected that this mark is more of a marketing ploy than a real guarantee of ethical behaviour.  To be perfectly honest, given the choice of a Fair Trade product or another it is likely that I would go for the other, perhaps not even considering the price difference.  But that is just an example of me being deliberately contrary I suppose.

But today I was hearing about a coffee company that was using the Fair Trade label.  This required them (at the time) to pay a guaranteed minimum price of $1500 per tonne.  They also pay a small percentage to develop the community in the areas supplying the product.  This sounds all well and good until you hear that the actually market value at the time was $3000 per tonne.    What does the Fair Trade scheme actually add to the equation?  Precisely nothing at all!

This reminds me of my former professional work as Quality Manager in a high-technology company.  Fortunately I have now escaped from that direct line of work but like almost all of us I am still affected by the scourge of the international quality standard, IS0 9001.  I have always felt that the process of getting registered for this standard is a little bit too incestuous and much too easy.  (Believe me - it really was easy even though we only paid lip service to many of the clauses of the standard!)

You, the 'customer' of the third-party registration body pay them to come and 'beat you up' a little bit - but not TOO much.  If they beat you up too much then they lose a customer, so it is not in their interests to apply the standards too ruthlessly.  On the other hand they have to demonstrate their professional competence to their own registering body, who they in turn have to pay for their services.  The circle starts again.

To me, the Fair Trade mark and the ISO9001 symbol are valueless icons of the era where we are not so much market-led, as led by marketing.

I know it is not quite as simple as that - but life is never simple!  One thing that is simple is the correlation between new initiatives and legislation with opportunities for value-less consulting businesses.  Another  is the anti-correlation with value for money.


Derby Sceptic said...

I too have looked into the Fair Trade system. It appears the Fair Trade organisation are the ones who gain the most, as they take a substantial fee from those who wish to be Fair Trade suppliers. These are the third-world producers who the system is claimed to help!

QMS Training said...

That is very unfair for third-world producers. Manufacturers from these countries have worked so hard to have ISO 9001 certification. They spent significant amount of money and have undergone rigorous training and audits in order to meet the quality standards of ISO so that their products/services will be competitive to the world market and be regarded as of high quality and high standard. With all these fees and expenses being collected from these manufacturers, it seems that Fair Trade system has found a legal way gain profit for their organization. Their fair trade system is a very unfair system.

QMS Training

robin said...

The Fairtrade label does a job.

Fair Trade is a set of values for the benefit of both consumer and producer.