This is a question we get asked constantly – “what exactly is Fair Trade?” And it`s a good one, too.
The World Fair Trade Organisation (WFTO) lays out a number of standards that Fair Trade groups and businesses must follow in their day-to-day work and carries out monitoring to ensure these principles are upheld.
However, some of these standards can be a little deep and complicated, so below I have selected five of them and provided simplified explainations of each to help answer the question “what is Fair Trade?”
I`ve called each of them a “Fair Trade Fact” – hope you find them useful….
FAIR TRADE FACT No 1: CREATING OPPORTUNITIES FOR ECONOMICALLY DISADVANTAGED PRODUCERS.
Poverty reduction through trade forms a key part of the Fair Trade movement, which involves supporting marginalised small producers. It seeks to enable them to move from income insecurity and poverty to economic self-sufficiency and ownership. The trade supports community development.
FAIR TRADE FACT No 2: TRADING PRACTICES.
Fair Trade must involve concern for the social, economic and environmental well-being of marginalised small producers and does not maximize profit at their expense.
Suppliers respect contracts and deliver products on time and to the desired quality and specifications.
Fair Trade buyers, recognising the financial disadvantages producers and suppliers face, ensure orders are paid on receipt of documents and according to the attached guidelines.
An interest free pre-payment of at least 50% is made, if requested.
It also encourages long term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade and effective communication with its trading partners.
FAIR TRADE FACT No 3: PAYMENT OF A FAIR PRICE.
A fair price is one that has been mutually agreed by all through dialogue and participation, which provides fair pay to the producers and can also be sustained by the market.
Where Fair Trade pricing structures exist, these are used as a minimum. Fair pay means provision of socially acceptable remuneration (in the local context) considered by producers themselves to be fair and which takes into account the principle of equal pay for equal work by women and men.
FAIR TRADE FACT No 4: CHILD LABOUR AND FORCED LABOUR.
The WFTO organisation adheres to the UN Convention on the Rights of the Child, and national / local law on the employment of children.
The organisation ensures that there is no forced labour in its workforce and / or members or homeworkers and that buyers of Fair Trade products from producer groups either directly or through intermediaries ensure that no forced labour is used in production.
FAIR TRADE FACT No 5: WORKING CONDITIONS.
Fair Trade practices must provide a safe and healthy working environment for employees and / or members. It complies, at a minimum, with national and local laws and ILO conventions on health and safety.
Working hours and conditions for employees and / or members (and any homeworkers) comply with conditions established by national and local laws and ILO conventions.
Fair Trade organisations are aware of the health and safety conditions in the producer groups they buy from. They seek, on an ongoing basis, to raise awareness of health and safety issues and improve health and safety practices in producer groups.
Are there any Fair Trade “facts” that you think are more important than the ones I have outlined above?
Is there anything you want further clarification on?
If so, please leave a comment at the bottom of this Blog post and I will get back to you – Paul.
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