Professional Documents
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Acknowledgement
I, Akash Gupta from FBM, 3rd semester (2008-2012), thank my advisor Mrs. Nandita Abrahem for being a guiding light through out the module. She was always there to correcting me. Her mentorship has made me to give my level best efforts in the project. On every stage her help and proper cooperation make the report submitable. I would like to thank her once again for her unconditional support, showing me the right track and for making me accomplish my project. I would also like to pay my special thanks to Mr. O.P. Yadav, Mrs. Roopa Mehta, Mrs. Swapna Das and Mr. Fahim Yahya and many others for giving me their precious time and kind cooperation. I would like to give special thanks to Suhani Upphal for her unconditional support. Ans also I would like to thank my classmate, friends and all those who have given me advices and encouragement.
Fair Trade
Declaration
This is to certify that Report entitled Fair trade which is submitted by me in partial fulfillment of the requirements for the degree of B.A. (Hons.) In Fashion Business and Management, Pearl Academy of Fashion, Naraina, Delhi comprises only my original work and due acknowledgement has been made in the text to all other information used.
Fair Trade
Certificate
This is to certify that Report entitled Problems in PAF (Wi-Fi) which is submitted by Akash Gupta (80153) in partial fulfilment of the requirements for the degree of B.A.(Hons.) In Fashion Business and Management, Pearl Academy of Fashion, Naraina, Delhi is a record of the candidate own work carried out by him under my supervision. The matter embodied in this report is original and has not been submitted for the award of any other degree.
Fair Trade
Table of Contents
Acknowledgment ................................................................................................................ 2 Declaration ........................................................................................................................... 3 Certificate .............................................................................................................................. 4 Aim of the Report ................................................................................................................ 6 Fair Trade .............................................................................................................................. 6 Basic Principals ................................................................................................................... 7 Main Actors ........................................................................................................................... 9 History of Fair Trade ...................................................................................................... 11 Requirements as trade partner .................................................................................. 13 Fair Trade India ............................................................................................................... 15 Standards............................................................................................................................ 16 Interviews .......................................................................................................................... 18 Conclusion .......................................................................................................................... 23 Annexure ............................................................................................................................ 24
Fair Trade
FAIR TRADE
The term fair trade was originally used by those who supported the concept of social justice, which can be defined as the belief that justice would be determined by whatever the strongest thought it should be. This is specifically intended to identify the relationships between different aspects of international trading and some of the reasons it became necessary to put some constraints on the products that are being traded.
Fair Trades strategic intent is: - Deliberately to work with marginalized producers and workers in order to help them move from a position of vulnerability to security and economic self sufficiency - To empower producers and workers as stakeholders in their own organizations - Actively to play a wider role in the global arena to achieve greater equity in international trade.
Source: www.fairtrade-advocacy.org/.../FAIRTRADEDEFINITIONnewlayout2.pdf
Basic principles
The basic principles and strategic intent, which the members of the FINE if it is not important take it out only put what you know and understand and feel group endorse, form the basis of their work and underpin the criteria/standards used for monitoring by the different networks. The first principle describes Fair Trade organizations and distinguishes these organizations from other commercial organizations that are involved in Fair Trade through the purchase of products labeled under the FLO certification system. The networks in membership of FINE ensure that their individual criteria/standards reflect the principles below: (1) Fair Trade organizations Fair trade organizations have a clear commitment to Fair Trade as principle core of their mission. Over and above their operational Fair Trade activities they differentiate themselves by: Providing financial, technical and organizational support to producers Awareness rising in North America and South America Campaigning for changes in the rules and practice of conventional international trade. (2) Trading partnership To see trade as a mutual beneficial partnership based on dialogue, transparency and respect:
Fair Trade
Treating each other with respect, taking different cultures and roles into consideration Being transparent and accountable in the presentation of the organization, its finance and its structure as required by law or as required by Fair Trade agreements. Providing information to facilitate market access Having an open and constructive communication In case of conflicts using dialogue and arbitration to overcome the problems (3) Fair Trades better trading conditions To improve trading conditions by Paying a fair price in the regional or local context. (A fair price should not only cover cost of production but also make socially just and environmentally sound production possible) Helping with access to pre harvest / pre production financing (e.g. advance payments on request) to avoid producer organizations falling into debt. Conditions of trade must support commercial continuity and longer term commitment.
(4) Securing producers and workers rights To secure and improve upon producers and workers rights, making a commitment to: - Providing fair remuneration (which is not only the legal minimum wage but a living wage) - Providing a socially responsible, safe and healthy workplace - Complying with national laws PLUS maintaining conditions which safeguard the Human Rights of producers and workers as defined by the United Nations - AND ensuring that the core labour standards as defined by the ILO (International Labour Organization) are implemented.
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(5) Process of sustainable development To promote long term improvements in the economic and social opportunities of small producers and wageworkers and in the environmental practices of their organizations through: - Strengthening small producers organizations - Strengthening the ownership and the participation in decisionmaking of producers and workers - Providing support for training, capacity building and human resource development, especially of women - Actively encouraging better environmental practices and the application of responsible methods of production
Source: www.fairtrade-advocacy.org/.../FAIRTRADEDEFINITIONnewlayout2.pdf
at the same time giving consumers an independent guarantee of fair trade standards. At the moment, there are labels for the following products: coffee, cocoa, tea, honey, sugar, orange juice and bananas. World Shops: World Shops sell fair trade products. They, along with fair trade importers, organize joint campaigns to promote fair trade and change the rules and practice of conventional trade. They cooperate with fair trade importers in inviting industry and trade to adopt the fair trade model by, for instance, putting a number of certified fair trade products on the market.
Fair Trade criteria: Fair Trade implies the respect of the following broad criteria: A fair price is ensured to the producer. This cost provides a living wage that also covers the cost of production. Long term co-operation, allowing producers to finance the development of their communities. Good working conditions with adequate health and safety procedures for all workers. Democratic working processes define the make-up of producerled co-operatives and workers associations. Respect and promotion of human rights, especially those of women, children and people with disabilities. Ecologically sound production.
Source: www.euforic.org/docs/200505041421012106.pdf?&username/sany
alternative trading organizations can use the label. It can be found on produce, such as coffee, tea or bananas, on sale in 17countries in mainstream supermarkets as well as in specialized 'World shops'. The estimated retail value of Fair-trade labeled products is in excess of 200 million Euros per year. IFAT (INTERNATIONAL FEDERATION FOR ALTERNATIVE TRADE) - a network of alternative trading organizations (ATOs) and producer organizations in Africa, Asia, Europe, Latin America, North America and the Pacific Rim, established in 1989, working to improve the livelihoods and well being of poor people through trade. IFAT is a coalition to promote Fair Trade and a forum for the exchange of information. It links and strengthens handicraft and agricultural producer organizations from the South and ATOs from both the North and South. It brings people together in partnership to discuss Fair Trade issues. Key goals are providing networking opportunities, information and technical and business support, improving market access on Fair Trade terms, and engaging in educational, campaigning and lobbying activities. NEWS! - Established in 1994. It co-ordinates the co-operation between World Shops in Europe. It is a network of national associations of World Shops representing 2,500 shops in 13 member countries: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Spain, Sweden, Switzerland, United Kingdom. NEWS! Initiates and co-ordinates joint campaigns and awareness raising activities of the European World Shops (for instance the annual European World Shops Day in May) and supports the professionalization of national associations of World Shops. The aim of NEWS! Is the promotion of Fair Trade in general and the development of the World Shops movement in particular. EFTA - an association of 11 Fair Trade organizations in 9 European countries: Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Switzerland and the UK, established in 1990. The core business of EFTA is to make Fair Trade importing more efficient and effective. EFTA provides services to its members, like information exchange on products and producers, encouraging bilateral cooperation and the development of a common database. A second core activity is advocacy and campaigning: raising awareness of decision-makers and the general public by focusing on concrete
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examples like coffee, cocoa or rice and by proposing concrete solutions to redress the imbalances and to improve trade policies.
Source:related:www.traidcraft.co.uk/OneStopCMS/Core/CrawlerResourceServer.a spx?resource=7523
Coffee starts as a Fair Trade good 1990 Creation of EFTA, European Fair Trade Association 1994 Creation of NEWS! (Network of European World Shops), an association of Fair Trade shops 1997 Creation of FLO, Fairtrade Labelling Organization, made by the merge of Max Havelaar, Transfair and Fair Trade 1999 During the WTO meeting at Seattle (USA), three Global Exchange members are arrested by police while they were addressing the attendees 2000 Garstang (Lancashire, UK) becomes the first Fairtrade town in the world. Now, some other 250 have followed 2007 The three major Fair Trade producer organizations become part of the governance structure of FLO First Fair Trade franchise business becomes available in the United Kingdom As for the term Fair Trade itself, it was first used by Michael Barratt Brown in 1985, during a Trade and Technology Conference in London, altough during the early days some other names existed: "Alternative trade", "Alternative commerce"... and some of them are still in use. The history of Fair Trade certification labels goes back to 1989, when a sharp crisis on coffee prices pushed growers to poverty in spite of being producing a nice coffee, well above average quality. By then, the dutch organization Max Havelaar was working with them, on Chiapas (southern Mexico), and father Franz Vandelhoff had the idea of differentiating that coffee, charging the final customer a little more, cutting off the middlemen and providing farmers a fair wage. The Fair Trade certified label was born. Source : http://www.fair-trade-hub.com/history-of-fair-trade.html
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Requirements of the organizations of the fair trade Selection of the trade partners
Trade partners of the fair trade are preferentially jointly organized small producers in the handicraft and in the agriculture as well as disadvantaged and suppressed female workers and workers in factories and Plantagen. Social requirements at trade partners The requirements at trade partners, who are independent small producers, are aligned to their existence safety device and to its responsible person co-operation. On the other hand requirements aim at trade partners with dependent persons employed at the observance and improvement of the industrial laws, the job conditions and the social, ecological and economic surrounding field. Fair trading terms The paid price is to make remuneration possible, which goes beyond the direct satisfaction of the material needs and contains a contribution for the future safety device. The total output of the fair trade must lie clearly more highly than those of the commercial trade. Long-term trade relations Long-term trade relations are an important guideline for the fair trade and must be therefore contractually embodied. Long-termness in the relations is ensured, if the trade runs off in connection with dialogue, transparency as well as product and system information. Monitoring The application of the guidelines of the fair trade have to be examinable transparency and. The monitoring must consider the development beginning and the beginning of the partnership trade relation. It must be payable, and the costs may not load the small trade partners super proportionally.
Source : http://www.economy-point.org/f/fine-40087.html
Worldwide, fair trade sales total $400 million each year. In North America, fair trade retail sales totaled $35 to 40 million in 1998. Of $3.6 trillion of all goods exchanged globally, fair trade accounts for only .01%. Fair trade businesses return 1/3 to 1/4 of profits back to producers in developing countries. According to the National Labor Committee, Haitian sewing clothing for the U.S. market may earn less than 1% of the retail price.
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Sales for Ten Thousand Villages, the largest fair trade organization in the United States, grew from nearly $3 million in 1985 to nearly $12 million in 1998. Ten Thousand Villages' Canadian operations reported another $3 million. Combined, that represents the creation of the equivalent of 12,500 full-time jobs for disadvantaged artisans and farmers. Of its $5.2 million in sales for 1998, SERRV International returned nearly $2 million directly to producers. North American consumers pay $4 to $11 a pound for coffee bought from growers earn $1.12 to $1.26 a pound. Sixty to seventy percent of the artisans providing fair trade hand-crafted products are women. Often these women are mothers and the sole wage earners in the home.
Fair Trade Forum - India is a national network of Voluntary Organizations, Producer Cooperatives, Producer / artisan groups and development organizations involved in income generation activities, facilitators of fair trade, Alternative Trading Organizations, Intermediary and support services organizations and promoters of fair trade concepts etc. Fair Trade Forum - India is a registered national organization, a nonprofit society with its constitution and by-laws governed and managed by an elected Executive Committee.
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The National Administrative Secretariat functions from Chennai and day to day affairs are managed and administered by the Executive Director. Fair Trade Forum - India is a member of the Asian Fair Trade Forum and shares concerns with International Federation for Alternative Trade (IFAT).
4. Promoting Fair Trade Fair Trade Organizations raise awareness of Fair Trade and the possibility of greater justice in world trade. They provide their customers with information about the organization, the products, and in what conditions they are made. They use honest advertising and marketing techniques and aim for the highest standards in product quality and packing. 5. Payment of a fair price A fair price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production that is socially just and environmentally sound. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men. Fair Traders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-harvest or pre-production financing. 6. Gender Equity Fair Trade means that womens work is properly valued and rewarded. Women are always paid for their contribution to the production process and are empowered in their organizations. 7. Working conditions Fair Trade means a safe and healthy working environment for producers. The participation of children (if any) does not adversely affect their wellbeing, security, educational requirements and need for play and conforms to the UN Convention on the Rights of the Child as well as the law and norms in the local context. 8. Child Labour Fair Trade Organizations respect the UN Convention on the Rights of the Child, as well as local laws and social norms in order to ensure that the participation of children in production processes of fairly traded articles (if any) does not adversely affect their well-being, security, educational requirements and need for play. Organizations working directly with informally organized producers disclose the involvement of children in production.
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9. The environment Fair Trade actively encourages better environmental practices and the application of responsible methods of production. 10. Trade Relations Fair Trade Organizations trade with concern for the social, economic and environmental well-being of marginalized small producers and do not maximize profit at their expense. They maintain long-term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. An interest free pre payment of at least 50% is made if requested.
Source: http://www.fairtradeforum.org/what_is_fair_trade.asp
Over the past few years a number of brands, retailers, and export house have approached Trans Fair USA about the potential of extending the Fair Trade certification system beyond its current products to the garment sector. As Trans Fairs expertise lies primarily in agricultural products, Trans Fair commissioned a study to better understand the potential of applying Fair Trade standards to garment production. The main objective for this phase of the project is to know why buyers and exporters have became so conscious about fair trade. As the consumer has become very sensitive and aware about this issue, they consider fair trade practices as an important aspect to emphasis on. Im interested in knowing in what are the major changes they made after they started to implementing the fair trade practices. Moreover what are doing to get the maximum credit for the fair trade? Ill also try to know is there is the same applicability of fair trade in the supply chain. I want to reach every person from top to bottom to know that to what extent they are following the fair trade practices. Here are the high lights of the conversation done for collecting the primary information from various people associated with fair trade in various aspects Interview 1 Name of the person- O.P. Yadav
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Conversation Highlights When did the concept of fair-trade emerged in India? - Well, it stared in mid 60s but it boomed in late 70s. And from that point of time it kept on rising. But still there is a long run to cover. Up to what extend fair trade is practiced in India? - It will be very hard to define that in terms of percentage or in figure, but there is significant growth in the no. of fair trade manufactures in India. People slowly started realizing the value of the term Fair in their trade. And with we have a market that has demand of fair-trade products, it is still not in India, but in Europe it is massive. How do you monitor the working of your members? - We dont really monitor the working, there are separate bodies made by the International Fair Trade Forum, they keep a check on the fair trade producers. The national and regional fair trade bodies has nothing to do with it.
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What is your prime focus when you certify any industry from fair trade? - The 10 principals, Out these we have 4-5 principals, which are not negotiable at any cost. What are your criteria to announce someone as your member or fair trade? - Its a long process, we have lot of legal formalities involved in it. How are you different from other companies which have excellent CRM policy and they are also doing fair trade? - There are a couple of companies, which have the finest CRM in the world, but the reason for existence of a fair trade forum to sustain fair trade and fair trade manufactures. On the other hand for companies the CRM is more like a strategy to be in the limelight or it is just consider as a part of their working. Moreover fair trade is a way bigger than CRM of any company, it covers socio-economic issues, cultural issues and environmental issues. Where as CRM deals in particular issues and problems that had some relation with their industry. What could be the possible benefits and limitations to a certified fair trade manufacture? - Most of the companies use this as a strategy to pull customers, like Nestle you know they their one product certified from fair trade that is kit-kat, and they sell thousands of non-certified products but still they advertise them selves as a fir trade certified company. The same goes to Marks and Spencer they sell fair trade certify coffee, and they n no. of food products in their store, but they only highlight their fair trade certified coffee. Why is the demand of fair trade products is good in European Markets and almost negligible in India? - This certainly is the ugly truth, but we cannot shut our eyes from reality. The major flaw here is that we are unable to position that what is fair trade in the minds of Indian people, if you go out from here and ask a random person What is fair trade, I dont think he will be able to answer that. So here is the point of awareness among the people or consumer of India. There is a major fault of fair trade manufactures here say if we have 70 fair trade manufactures then all the 70 are going in 70 different direction. For some manufactures it
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has a different meaning and the rest it has a different meaning. We need to make a collective effort to bring awareness about this issue in India.
Interview 2 Name of the person- Roopa Mehta Designation- Director, Sasha (Fair trade organization)
Conversation Highlights How are you associated with fair trade? - I am the director of Sasha. What is Sasha? - Its a NGO working for upliftment, of fair trade craftsman and producers in all India. We can assume that its a baby organization that parent organization Fair Trade Forum India or we can say its the regional fair trade forum. How is the demand of fair trade products? - Ahh, Its pretty good in European countries, especially in the last decade it has a sizeable growth. We account it to $ 4 billion. But if we
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compare with the demand of fair trade products from normal products, than it is not a remarkable position. Maam there are four major players in fair trade produces, world shops, organization and Buyers, which of them get the maximum benefit? - Every one, which directly or indirectly are equally benefitted. We can not categorize these segment, because none of these organization had a aim to make money. Can the fair trade certification misused? - Oh, yes it can. It can attract and deceive the masses. Some companies are using it as a tool to attract buyers, some to attract consumers and few as a USP of there product. So the motto of fair trade does not get accomplish. Further detail of the conversation in given as a recording in Annexure. Interview 3 Name of the person- Swapna Das Designation- General Manger, Equitable Marketing Association
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Conversation Highlights What is Equitable Marketing association? - Its a co-operative society, which deals in leather products, musical instrument, silk scarves, candles, wooden product, palm and coconut wood, terracotta articles and few more product range. When did your organization get fair trade certification? - Long back, its been ages around 34 years ago. We are one of the oldest entities that got fair trade registration. Who are your major buyer countries? - Many of European countries, but for now our major buyer is Austria. What benefits your workers get with you, or how are they different from workers working in a normal industry? - There a couple of advantages that our workers got, these are trimly payment, less work length, continuity, hygienic working condition etc. Did you face any trouble in implementation of fair trade policies? - There were a little difficulty in the initial stage, but later the
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functioning becomes a part of schedule and to maintain it is not a problem. How often the community or buyer comes to inspect your company? - There is no such duration, sometimes in months, sometimes in weeks. It is random. Interview 4 Name of the person- Fahim Designation- General Manger, Hometex International What did your company deals in? - We are mainly into home furnishings, and a little in garments. Why are you not fair trade certified? - Because our market does not demand it. What could be the possible threats for you, if you get fair trade certification? - Nothing as such, we are not fair trade certified does not necessary means that we are indulge into lot of unfair trade practices. Its just that we will be having a certain set of rules to follow after getting the certification from fair trade. Do you want to get fair trade certification in future? - Certainly, as it leaves a good impact on to the business. It will also help us get buyers. We will get a certification if our current buyer ask us to do so.
CONCLUSION
After interviewing people and learning enough about fair trade. I can come to a conclusion that fair trade is restricted to a particular community; they are unable to position it to the masses, but still there are changes. The revolution is yet to come. Now I have a decent knowledge and understanding about fair trade. I understand what is fair trade, what are their values, how they work, what they stand for, what are the supporting organization, how the producer are working and many more things. Why is it considered as global issue because the awareness level in the low in a common man. It has good level of awareness in the European countries, but in the rest of the world it is still about to come. My suggestion could be that if the efforts were not made in the same direction the level of achievement would be
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very limited. People indulged in fair trade must synchronize and should made a collective effort. Fair trade practices also shows how responsible a person is.
ANNEXURE
BUSINESS CARDS
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