As the fair trade movement grows, some companies will do anything to catch the wave—even pretend to be something they’re not. What’s a store owner with a social conscience to do?
by : 

Megy Karydes

October 1, 2011

The terms “sustainable” and “fair trade” have become buzzwords at trade shows and in catalogs. From jewelry and apparel to home décor, many manufacturers and importers now offer retailers a dizzying array of choices, all presented as being true to the spirit of this emerging, socially conscious movement. Some hope to entice you with promises of environmentally responsible manufacturing and worker-friendly practices—but when you scratch the surface, a different picture emerges. After all, who exactly would come out and tell you their products are made using child labor or toxic ingredients?

The green movement has gone through similar growing pains, and the term “greenwashing” has become a watchword to describe the bandwagoning of companies that use the language and appearance of eco-friendliness without actually being green in more than name. If you apply this same principle to the fair trade market, you have what many are calling “fairwashing.”

It begs the question: How can retailers, fueled by more savvy consumers demanding more transparency and accountability, ensure these products and companies are living up to their claims?

Getting organized

While not a perfect solution, nonprofit organizations such as the Fair Trade Federation (FTF) and Green America can be a first stop for many retailers, as each organization requires its member companies to go through an application process in which they can be accepted or denied based on the information they share (or don’t share). Wholesale importers are required to meet or exceed the nine principles of fair trade, as outlined by the organization’s board of directors.

Applications for membership into the FTF have increased significantly over the past several years as more companies want to be aligned with and promote a movement that’s growing both nationally and internationally. Compared to the first quarter of 2010, the FTF saw nearly double the number of application inquiries in early 2011.

The Netherlands-based World Fair Trade Organization (WFTO) has been developing its Sustainable Fair Trade Management System (SFTMS), which serves as a certification of sorts. And TransFair USA, recently renamed Fair Trade USA, certifies commodities such as coffee, cotton, and body care products. However, the certification can be misleading to some since companies like Starbucks are “certified” as a Fair Trade USA company, even though only one of their coffee brands is actually certified as fair trade.

For companies such as Maggie’s Organics, popular among independent retailers for its organic socks and apparel, membership in the FTF is not an option because a majority of its sock production is done in the U.S., making it a “domestic” fair trade organization. As a result, Maggie’s Organics has received Fair Labor Certification from the Fair Labor Practices and Community Benefits by Scientific Certification Systems as well as Fair Trade USA.

Other companies have chosen to become certified by the Institute of Marketecology (IMO), an independent, nonprofit certifying body, known for its high-quality, stringent standard development and inspection in 90 countries with core expertise in smallholder agricultural systems.

Retailers strapped for time but still wanting to carry fair trade products often look at these labels when considering merchandise for their stores, and it can become confusing. While membership or certification is a great starting point, it’s still important to determine what fair trade means to those companies and how they are operating under the principles they espouse.

Research and ask questions

Carmen Iezzi, executive director of the FTF, often refers retailers to the organization’s website when they need to source products, since its members run the gamut from coffee to handicrafts and undergo a detailed application process to become a wholesale member. Nonetheless, she also highly encourages retailers to do their due diligence. “Whether dealing with FTF or WFTO member companies or not, retailers need to ask many questions [of the companies],” Iezzi says. “They need to understand wages, workplaces, environmental sustainability, capacity building, respect for cultural identity, and many other aspects.”

In the U.S., federal organic legislation allows use of the word “organic” on packaging only in a product that has at least 95% organic ingredients. Unfortunately, the same cannot be said for fair trade products. There is currently no federal legal standard in the U.S., so virtually anyone can claim their products are fair trade or sustainable without breaking any laws. This is why learning more about a company’s practices is crucial to gauging its level of social and ecological responsibility.

So much information is readily available on the internet and social networking sites that it’s hard to find reasons not to spend some time researching online. (See the sidebar on p. 13 for a list of websites to get you started.) But even if you don’t bother with that, simply asking some well-phrased questions of your vendors can help you separate fair trade fact from marketing fiction.

Go beyond labels—be an educated buyer

Teresa Hendricks understands the importance of fair trade products in the lives of artisans and is committed to the movement both as a retailer and wholesale importer. As the owner of Lucia’s World Friendly Boutique in Lexington, Ky., Hendricks attended trade shows armed with the FTF member list in hand so she could personally visit every fair trade vendor at the shows and ask questions about their products and artisans.

“While we are committed to only carry products from FTF members in our shop, we still ask our vendors questions about the artisans and the products because it’s an important story to share with our customers,” Hendricks says. She admits she learns a lot by asking specific questions about the importers and their involvement with the artisans.

As the owner of Lucia’s Imports, she also imports and wholesales Guatemalan handicrafts such as beaded jewelry, handbags, and pottery. Since she knows what types of questions to anticipate from retailers, or questions she feels retailers should ask, she readily shares information about her groups in Guatemala and how every purchase is making a difference in the artisans’ lives.

“Consumers are more demanding about knowing how their products are made and that they aren’t made using sweatshop or child labor conditions, among other things,” says Hendricks. “For me, being a part of the FTF is more than just sending in my dues. It’s the camaraderie of being with other people who share my same vision, networking to learn best practices and to figure out more ways to support our artisans.”

Jennie Misner, founder of Venture Imports, agrees with Hendricks that the support and encouragement she receives from FTF members is a key benefit of membership, but she also believes it reassures her customers that she is truly committed to fair trade principles.

“I have let others review my business so that everyone can know I’m not just using the phrase as marketing shtick,” Misner says. “It is quite a process to get into the Federation, so you have to be very dedicated to take that step. I also love being part of a movement that can truly change the world. I want to support such a movement through my own company and through the work of the Federation at large. It makes sense for me from a purely business point of view, but I would want to support the movement regardless of what it could do for me personally.”

Naomi Czerwinsky, product manager for MayaWorks, another organization that works directly with artisans from Guatemala, suggests retailers go beyond developing relationships with their customers and develop stronger relationships with those from whom they buy fair trade products. “Retailers should create strong relationships with the representatives of the companies they buy from to better understand how the companies work and if they are truly practicing fair trade,” she says.

Asking how much money goes back into the artisans’ hands, whether they maintain direct relationships with producers, and what other programming the company offers to ensure relationships are sustainable and mutually respectful are all questions that can and should be asked of companies that say they are practicing fair trade.

Learn the stories

Everyone I spoke to about this topic strongly recommends that retailers ask vendors to share images, videos, or stories about their production process as an important step in determining whether a company is legitimately fair trade. And while images can be manipulated and stories spun, true fair trade companies are very forthcoming and even encourage use of their materials in store merchandising.

Bená Burda, president of Maggie’s Organics, initially was concerned about sharing so much information about her producers in Nicaragua and Costa Rica. However, transparency was required as part of her certification process, so she went all-out, creating a 14-minute video entitled “The Fabric of Humanity,” showing their production cycle in Costa Rica. Additionally, PDF documents on their website (www.maggiesorganics.com) highlighted each of the companies they work with and what they are responsible for within the entire supply chain.

“The video has been online for about two months, and it’s only received 234 views,” says Burda. “Our sales team thinks we’re beating our customers over the head with all of this information, but we want to show our customers how we run our business, and for those who want proof, it’s there.”

Burda notes that some retailers want more information to share with their own customers and appreciate all the money and time her company spends on certification. Others, though, don’t realize the amount of work, time, and money it takes to become certified and don’t care. “We put the video on our website so our customers could see how the products are made and learn more about the process,” she says.

Burda’s website also includes all of their certifications and explains why the company underwent the certification process with several different organizations. “No organization certifies everything from beginning to end,” she says. “One organization certifies us on the front and back end of the production cycle, while another certifies the cotton.”

Misner, too, tries to educate her customers as much as possible through her website (www.ventureimports.com), which includes the names of some of her artisans, as well as story cards. Her Shona sculptures from Zimbabwe are popular pieces among her customers, and allowing retailers to share the face of the person who crafted a particular piece allows customers to have a connection to the artisan in a way a mass-produced product cannot.

Developing products and relationships

Knowing that importers are working directly with their artisan partners during product development is a key component for many retailers, as it demonstrates the company’s commitment to improving the lives of the workers and their communities. For the importers, that relationship is important as well because it allows them to share market trends, get feedback, and strengthen their relationships.

Manish Gupta, founder of Handmade Expressions, knows sales of products are a big part of his business strategy in helping create real impact for his artisans in India, so he invests heavily in product development. “For us, fair trade is about being sustainable and supporting communities and their environments,” he says. “We define sustainability as providing safe working conditions, paying fair wages, providing equal opportunities for women, and ensuring there isn’t any child labor. But we also want to empower our artisans and move them from producers to traders.” Gupta says helping his artisans become more self-reliant creates greater impact at the ground level.

“With fair trade, what we get are beautiful products that allow us to give back to the communities and strengthen them,” he adds. “Non-fair-trade products are just about the product.”

Misner agrees with Gupta that sustainability is a large part of fair trade business ethics. “I consider it my duty as a fair trader to run my business in such a way that I can continue to provide income for my trading partners for years to come,” she says. “Part of that is maintaining an ongoing dialogue with the artisans with whom I work, giving them feedback on the market here as well as design ideas, and giving them money up front so they have the ability to buy their raw materials without being taken advantage of. I also believe in especially seeking out trading partners who are in the greatest need and would have the most difficulty accessing our markets here, and then working with them to overcome those obstacles.

“Fair trade is more than just paying a fair price, although that is very important,” she adds. “Fair trade is building respectful and enduring trading relationships. I consider sustainability to be paramount to the definition. It’s nice to pay a fair price for the souvenirs one buys on vacation, but that’s not fair trade.”

Michelle King, cofounder of Mata Traders, works directly with women in India to create fashion-forward women’s apparel and accessories. She, too, agrees that product development is key to working with her artisans, and she spends weeks at a time in India developing their biannual collections. “Mata does a significant amount of product development, and our customers consider the quality and aesthetic value and our mission inherent in our collections,” says King, who often shares stories of her artisans by name when speaking with retailers.

No label = not fair trade? Not necessarily.

Of course, if a product or company doesn’t have an organizational label, that doesn’t necessarily mean it isn’t fair trade. Official certification can be costly, making it difficult for some small businesses to obtain. For companies where a portion of their production is done in the U.S., membership in organizations like the Fair Trade Federation isn’t an option, as is the case for Maggie’s Organics.

King notes that while membership in organizations such as FTF are important for fair trade companies like hers, it’s not one-size-fits-all. She cites the example of a friend who works with a fair trade co-op in Nepal but whose company is not a member. That doesn’t make her friend’s company any less “fair trade” in King’s mind. “The FTF needs successful, for-profit companies to strengthen its ability to do good work,” she says, which is one of the reasons she’s encouraging her friend to join.

If a company isn’t certified or part of a fair trade organization, it should have a good reason. And it should be very clear about exactly what its fair trade claims include and how they are verified. It is possible, after all, for a company to be environmentally friendly yet have poor labor standards.

Next time you’re considering stocking a fair trade product in your store but don’t see the “certified” label, remember not all fair trade claims are misleading. There are plenty of products available that meet high standards of responsible and ethical production. The best advice is to do your research to ensure the products you buy meet your own ethical standards. Definitions of fair trade vary, so be sure you are comfortable with what you are buying—and selling. Don’t be afraid to call a company and ask about its fair trade policy. Your customers will thank you for taking the time to provide them with products that truly make a difference in the world.

A Fair Place to Start—Online

The following organizations have made it their mission to promote fair trade practices and standards. Their websites are filled with valuable information about what fair trade is (and isn’t), giving you what you need to know, right at your fingertips.

Megy Karydes is founder of World Shoppe, a fair trade wholesale importing company that works directly with South African artisans. Her company is an active member of the Fair Trade Federation, Green America, and a founding member of Chicago Fair Trade. To learn more, visit www.World-Shoppe.com. Illustration: Jessica Snow