FLO pilot projects on social standards for garment workers

The FLO cotton standard so far only properly certifies the processes on the cotton fields and the traceability, but not adequately e.g. social standards in the garmenting factories. Clothes labelled “Made with Fairtrade certified cotton” so far therefore do not guarantee that workers in the garment factory are allowed to form trade unions or get paid a living wage etc.

Last year, the FLO launched a “textile project” which tries to “find out the best approach to improve livelihoods of textile workers in the
Fairtrade cotton supply chain”. The idea of this project is to identify ways to transfer the FLO standards for cotton to the whole supply chain. In December 2010 a steering committee was set up to guide the project. The FLO is now undertaking five pilot studies on five different options, which are most in an early stag.

Here is the summary of a brief update by the FLO:

1) Third Party Verification

Description: This pilot is led by Max Havelaar Switzerland in partnership with the Fair Wear Foundation (FWF) and Max Havelaar Netherlands. It explores to what extent working with an external third party verifier can contribute to measurably improving the working and living conditions for workers along the textile supply chain for Fairtrade certified cotton. FWF will audit textiles suppliers against its wage ladder and benchmark actual wages against different definitions of minimum and living wage. We hope to learn if and how Fairtrade could incorporate auditing on living wages and how an MSI’s (multi-stakeholder initiative) verification approach could be applied in the Fairtrade textiles supply chain.

Status: This option has already started and is in the stage of consultations with project partners, identifying and mapping of FT cotton supply chains and preparing audits and analysis.

2) Development & Empowerment of Textile Workers

Description: This pilot is led by the Fairtrade Foundation UK and focuses on supply chains in India. The objective is to investigate opportunities to extend the benefits of Fairtrade to workers through the textile supply chain (with specific focus on final product manufacturing – i.e. for apparel CMT), using a model that enables the development and empowerment of workers and contributes to improvements in the wider community including investigating the potential of impact through payment of a Fairtrade premium.

Status: This project is in the initial stages. The consultation group that has been involved to date of UK experts and expert organizations will continue to be consulted and offered opportunity to input into the development of the pilot work. This group includes Oxfam GB, Labour Behind the Label, the
International Textile, Garment and Leather Workers’ Federation (ITGLWF), Maggie Burns (ETI board member and independent textiles social compliance expert) along with representatives from various retailers.

3) Fairtrade Framework for Developing Possible Standards for Textiles

Description: Fairtrade International and Fairtrade Label South Africa (project lead) will jointly run this pilot in collaboration with the Southern African Clothing and Textile Workers’ Union (SACTWU). We will identify unionized and/or worker-owned textile factories and study the feasibility of a fully unionized “All African” supply chain from raw Fairtrade certified cotton production in Africa to finished garments in Cape Town. We will use the findings of this research to consider what we would need to include in a Fairtrade standard for textiles. Trade Union organizations and workers rights NGOs will help us with research and to evaluate our findings. We are especially interested on what we can learn about wages and living wage
calculations. This study will also feed into FLO’s Hired Labour approach as a whole.

Status: We already initiated a research about the feasibility for processing of Fairtrade certified cotton in textile supply chains in South Africa and after a kick-off meeting in March we will soon begin work on the ground.

4) Fairtrade Premium Benefit and Social Investment for Workers

Description: The Fair Trade Certified™ Apparel & Linens pilot by Fair Trade USA (formerly TransFair USA) researches the possibility and impact of paying a Fairtrade Premium to workers in CMT (cut, make and trim) factories. Workers can invest the Fairtrade Premium in social projects to better their working and living conditions in their facilities or distribute it as a cash bonus. The program monitors and evaluates outcomes in both factory and cooperative settings. Fairtrade International works closely with Fair Trade USA to get lessons learned from the pilot.

Status: In December 2010 Fair Trade USA announced a full range of Fair Trade Certified™ clothing items available in the United States as part of the pilot test. They are currently working with several brands to launch further clothing items in spring 2011. These will be sourced from India, Liberia, Peru and Costa Rica.

5) Improvement in Fairtrade Certified Cotton Standard Only

Description: FLO will identify and implement ways to improve the current approach it takes to ensure that operators in the supply chain are showing “efforts to comply” to labour standards (core ILO conventions) and reflected through various indicators stated in Section 10 of “Product Specific Standard for Seed Cotton.” FLO will undertake several studies to review the used indicators for compliance, to evaluate the impact of various product standards which focus on product safety or environmental impact of textile production and to compare requirements of FLO’s Section 10 and
GOTS (Global Organic Textile Standard) for possible adjustment and harmonization. FLO will also use the findings of the other four options’ pilots.

Status: Two of the studies are commissioned to Helvetas and FLO-CERT. We are in a consultation period with experts in textile ecology to find partners in our research in this area.”

For more information contact: Rossitza Krueger (r.krueger(at)fairtrade.net)


How are fair prices set?

My colleague, Juliane Reineke,  just published the article “Beyond a subjective theory of value and towards a ‘fair price’: an organizational perspective on Fairtrade minimum price setting” in Organization 17(5): 563-581. The abstract looks promising, but I haven’t yet read the article:

This article explores Fairtrade minimum price setting as an organizational formulation of a critical response to economic liberalism and its underlying notion of value—a subjective theory of value. The aim of the article is to show what happens if such meta-level philosophical debates on fairness and markets are lived out organizationally. This is achieved by using an ethnographic study of the price setting process of the Fairtrade Labelling Organizations. The case unpacks the complexities of defining a ‘fair’ price beyond the principle of marginal utility. I draw on French pragmatist sociology in order to decompose the political and moral constructions that underpin the organizational practices of minimum price setting. Challenging the assumption of free choice in neo-classical economics, Fairtrade redefines not only how value should be calculated, but also what it is it that should be valued and who values. This makes visible the political confrontation at the point of price determination, notably by providing a social arena for where conflicts of interest between opposing parties are played out. Once the producer enters price formation processes as a person and not only as the alienable owner of a commodity, the social, political and ecological and relations of production come to the fore that are otherwise concealed through the spontaneous market mechanism.

Juliane wrote her PhD on “Corporate Social Responsibility, Ethical Consumption, Moral Agency versus Market Rationality” at Judge Business School, Cambridge,