As the UK Government mentions the term “ethical trade” alongside that of fair trade, it is important to develop an understanding of this concept. Arguably mirroring the government’s discourse, Robinson (2009, p. 1015) sees ethical and fair trade initiatives as “being based on similar ideologies”. However, other literature argues that these terms signify qualitatively different systems of governance that have their own distinct beginnings, aims and scope for implementation (Barrientos and Dolan 2006).
In comparison to fair trade (discussed above), ethical trade emerged during the 1980s as a result of campaigns by a variety of social actors concerned with poor worker welfare and environmental situations arising in the supply chains of large scale, profit-orientated companies (Hopkins 2004; Jenkins et al. 2002). In response to this activism, the majority of companies developed first-party governance systems based on Codes of Conduct (COC) that were applied to some of the companies in their supply chains (Gereffi et al. 2001a). Most commonly, COCs establish and monitor the implementation of minimum requirements by producers in the supply chain (Hughes 2005, p. 1146) and have normally coalesced around core standards established by the International Labour Organisation (ILO) (Hale and Shaw 2001).
While some conditions did genuinely improve, there was continuing concern that not all schemes were sufficiently effective or credible, and a series of scandals prompted more developed mechanisms to be introduced (Locke and Romis 2006, p. 3). These more complex schemes include bilateral partnerships with NGOs as well as ‘Multi-Stakeholder Initiatives’ (MSI) which include a diverse range of partners such as third party auditing firms, unions, factory managers and worker representatives (O'Rourke 2006). These third-party schemes have been adopted in both manufacturing and also agrifood food sectors as their arms length nature is considered by stakeholders to be more impartial than first or second party self- governance and certification (Hatanaka and Busch 2008). It is this COC-based approach to the regulation of the social and environmental conditions of production that has come to be known collectively as
“ethical trade” (Blowfield 1999). Defining ethical trade more precisely, however, is even more difficult than locating specific principles to identify fair trade. According
65 to Courville (2003, p. 269), there is now a “dazzling array of initiatives to integrate social justice issues into business practices”, and this is certainly true in the agrifood sector (Busch and Bain 2004).
Despite this vast array of available governance systems, the literature has specifically differentiated between fair and ethical trade approaches. The key difference is that while ethical trade is concerned with the social and environmental conditions at the site of production only, fair trade extends its concern up the value chain to also set requirements for initial trade interactions (Smith and Barrientos 2005). For example, whereas the ETI Base Code and SA 8000 draw on the core International Labour Organisation conventions to focus on labour standards, FLO certification is also concerned with the provision of support for producers marginalised by the global trade system (Barrientos and Dolan 2006; Dolan and Blowfield 2010). However, importantly for this investigation, Jaffee and Howard (2009, p. 8) note that while there are a range of schemes which purport to be part of the fair trade movement (ranging from the genuine to the fraudulent), Rainforest Alliance and Utz – the two other schemes expressly mentioned by UK Government procurement policy – do not claim to be part of the fair trade category. This might well explain the use of the separate terms “fair trade” and “ethical trade” by the UK government – although not entirely why discourse blurs them together.
An important point about the proliferation of standards is that where systems of private certification cover the same areas or products, they are placed in competition with one another as corporations choose among a range of options (Busch and Bain 2004). Furthermore, Smith and Fischlein (2010, p. 514) identify that where companies find themselves isolated from a certain governance system they are motivated to develop other rival approaches which set different standards. Renard (2010, p. 289) finds similar tendencies as agrifood companies have responded to the growth of fair trade by involving themselves with other governance and certification systems.
Interestingly, among the prominent examples which Renard (2010, p. 290) notes are ident ified to “compete” with fair trade certification, are the Rainforest Alliance and Utz Certified labels mentioned by UK procurement advice39.
39 Also see Rosental (2011, p. 169).
66 This situation is relevant to those interested in public procurement as different initiatives often have a different focus and accompanying principles – and it is useful here to refer back to the understanding of sustainable development elaborated in the first chapter. As was pointed out in Chapter One, there is also a multitude of perspectives on what elements of sustainable development should be given greater emphasis – and these are best represented as a position on a map sketched between social, environment and economic concerns. With this in mind, it can be noted that after a comparative analysis of different standards available for the certification of coffee, Reynolds et al. (2007) conclude that while “Fair Trade has by far the strongest social justice and development standards across the commodity chain” (154),
“Rainforest Alliance’s environmental standards are the broadest” (156), and “Utz Kapeh’s social standards are similar to Rainforest Alliance’s – although environmental criteria are ‘less stringent’” (156). Although it is concluded that these ethical trade standards uphold “minimum requirements”, “private certifications can and should do more” (Raynolds et al. 2007, pp. 159-160). Unfortunately, however, while there have been impact assessments of various ethical trade schemes in the agrifood sector (Barrientos and Smith 2006; Tallontire et al. 2005), there is not sufficient evidence to draw universal conclusions about how these governance systems actually impact the empirical world.
In summary then, the qualitative difference between fair and ethical trade, as well as the differences between the specific requirements of all third-party certification schemes, raises important questions for the focus of this investigation. While the government policy discourse blurs fair and ethical trade as governance schemes which contribute to sustainable development, it can be hypothesised that different concentrations will result in different empirical outcomes. For this reason, the issue of how top line government policy is translated into local procurement practice is of considerable importance in opening the black box of government procurement. Before this chapter concludes however, it is important to discuss one final theme which is likely to have a significant bearing on this issue: the rise of certification for the sphere of consumption, and specifically, the Fairtrade Town scheme and Fair Trade Nation (FTN) programme in the UK.
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