Memorandum submitted by Banana Link
AN INTRODUCTION
TO BANANA
LINK, EUROBAN AND
FAIR TRADE
Since before Banana Link was founded in January
1996, the organisation's current International Coordinator has
been closely involved with the development of the Fairtrade labelling
initiative for small-scale banana producers. In February 1994,
he convened the first pan-European meeting in Brussels of organisations
which went on, later that year, to form the European Banana Action
Network (EUROBAN). One of the two key premises of EUROBAN since
its inception was to explore the potential for a "pan-European
fair trade banana initiative". In those days, there were
three alternative trading organisations in Switzerland, Germany
and Belgium importing under fair trade terms and distributing
several thousand tonnes of Nicaraguan bananas to their world shop
networks. The founding members included other European development
NGOs. The Network has been meeting three or four times a year
since then.
Within the framework of EUROBAN, Banana Link
has:
— Ensured the systematic participation
of small farmers' organisations from the Caribbean and Latin America
as well as independent plantation workers' union from Latin America
in the initial phase of development of fair trade banana standards
(1995-97), prior to the formation of the Fairtrade Labelling Organisations
International. This included organising tours of the UK and the
rest of Europe for COLSIBA and WINFA representatives to promote
the need for fair trade before it became a reality (in the Netherlands
in November 1996, then Switzerland the following year). In the
UK, it was The Co-op and Sainsbury which launched Fairtrade labelled
bananas in quick succession in January 2000.
— Insisted on the importance of minimum
environmental, health and safety standards as an integral part
of these standards, inseparable from social or labour standards.
These standards in bananas went on to be integrated by FLO into
all their generic product standards.
— Provided two members of the FLO Banana
Register Committee (from 1998 to 2001), the body responsible (until
restructuring of FLO in 2002) for taking certification decisions,
providing producer support and supplying accurate information
to FT labelling initiatives in the growing number of countries
where FLO-certified bananas were labelled.
— Organised two South-South meetings
in 1999 (Dominican Republic) and 2000 (St Vincent & The Grenadines)
for small farmers' organisations from Latin America and the Caribbean
which were either already certified or interested in becoming
so.
— Facilitated, since 2001 to the present
day, the continuing and increasingly regular involvement of both
Latin American trade unions (through their coordinating body COLSIBA)
and small farmers' organisations in discussions with FLO.
— Kept as high as possible on FLO's
agenda, together with IUF and our union partners in Latin America
and the UK, the issue of ensuring credible monitoring and verification
of labour standards in "hired labour" situations, ie
plantations.
— Involved ourselves in regular debates
about the certification of large plantation companies, especially
multinational fruit companies with a long history of bad social,
environmental and trading practices.
In the UK context specifically, Banana Link
has:
— In common with a multitude of other
local development education and community organisations around
the UK, promoted the concept and practice of fair trade since
before the creation of the Fairtrade Foundation in 1994.
— Explored the potential for adapting
the continental alternative trading models to the UK situation
(although they proved to be impractical in the UK context).
— Always held the view that Fairtrade
labelling should not be seen as exclusive to the large multiple
retailers, but should be equally accessible for smaller and independent
retailers.
— Undertaken proactive educational
and awareness-raising work since we were founded, both in East
Anglia but also nationally, within and beyond the formal education
system, in the media, in all our promotional material and in numerous
meetings of the trade union movement at all levels, proposing
fair trade purchasing as a practical alternative to citizen-consumers.
— Worked with retailers—both
national multiples and independents around the country—to
promote fair trade bananas sourcing and publicity, starting with
The Co-operative Group which was the first retailer to launch
in the UK, then later with Sainsbury, Safeway, Tesco, Marks &
Spencer and Asda.
— Worked, since 2003, with Britain's
main retail workers' union, Usdaw, to put fair trade on their
agenda.
— Been working, since 2001, with the
local consortium of citizens, church and farmers' groups—Fair
Trade in Norfolk—to promote sourcing and consumption in
the county where our organisation is based.
What is the role of supermarkets, retailers and
businesses in supporting ethical and fair trade production?
1. Supermarkets, retailers and businesses
have been considered as simply reacting to the demands of consumers
when it comes to supporting ethical and fairtrade production.
Without this market incentive, retailers do not have the internal
or financial drive to take action and improve standards of production
in supplier countries. This role, is however, steadily changing
as pressure from consumers, NGOs, labour organisations, governments
and producers press the big retailers to "clean up their
act" and take responsibility for conditions along their supply
chains. The very fact that retailers have the power to make this
happen makes the importance of their role within this process
unquestionable. For retailers to ignore this role and continue
to abuse their power along international supply chains will become
increasingly difficult as awareness of the impact of their actions
increases on a global level.
2. In the case of supermarkets, their abuse
of power has directly resulted in forcing down social and environmental
conditions in a "race to the bottom" for ever cheaper
produce. By recognising this fact and the impact of their actions
supermarkets can begin to reanalyse their position along the supply
chain and make positive changes by supporting ethical[59]
and fair trade production. This process has recently been evident
from the Sainsbury move to convert 100% of their banana supply
to Fairtrade by July 2007. The decision cannot simply be interpreted
as the result of consumer pressure, rather as the recognition
that sustainable social and environmental conditions in producer
countries do not necessarily equate to decreases in profits and
market share.
3. The prospect of all major retailers converting
all their produce to ethical and fairtrade is far from likely
at present, but small steps can be made that contribute to large
positive impacts in supplier countries. It is important that retailers
not only give the choice of fairtrade and ethical products on
their shelves but also contribute towards raising awareness and
educating on the benefits of purchasing these products, such as
is the case with the The Co-operative Group. This may not occur
currently due to fear of highlighting the unethical conditions
under which their non-ethically compliant products are produced.
This is why retailers must improve standards on all products,
rather than just increasing the share of ethically compliant products
on their shelves.
4. To this end, stricter and more participatory
auditing procedures carried out by retailers, in conjunction with
local workers' representatives, could greatly improve social and
environmental standards of production. Such an increase in participatory
auditing and standard verification could also be applied to ethical
trading standards compliance to ensure a true positive impact
ensues from any commitments made to purchase produce that has
been deemed to meet ethical trading standards or has acquired
Fairtrade certification.
5. A more active involvement of retailers
and businesses in an integrated supply chain initiative, bringing
together ideas from all actors on how to make effective progress
in improvements on trade and productions standards, could also
provide a sustainable mechanism for support of fair trade and
ethical production.
How can trade unions help to ensure that the drive
for cheaper produce does not undermine social and environmental
standards in developing countries?
6. There are a number of ways that trade
unions in developing countries can limit the degradation of social
and environmental standards. The combined activities of worker
organisation to help re-address the unequal balance of power between
workers and their employers (especially when considering the power
held by multinational companies), education and training to give
workers the knowledge and capacity to fully exercise their rights,
and legal support to enable workers to take action when faced
with unacceptable working conditions can—when taken together—help
prevent employers from decreasing social standards to exploitative
and unsustainable levels. Similar activities can be undertaken
with the objective of preventing the degradation of the natural
environment, using educational processes and independent organisation
to empower workers, their families and communities to take action
to challenge the negative environmental impacts of production.
7. If trade unions in developing countries
have the capacity to engage on an international level, through
alliances with other trade unions, NGOs or labour organisations,
they can use their awareness of the realities of production to
play a key role in putting pressure on the various actors along
supply chains that contribute towards exploitation of workers
and the environment. This could involve campaigning or negotiations
with production and trading companies, retailers and organisations
responsible for the implementation of international standards
of production (such as the ILO, WTO and the various private social
and environmental certification bodies).
8. Internationally, trade unions in developing
countries can play a key role in raising awareness on the realities
faced as a result of low prices paid for national produce, stimulating
action by various actors in importing countries to halt the drive
for cheaper produce and promote improvements in social and environmental
standards.
9. Trade unions within consumer countries
can also play an important role in preventing the degradation
of labour standards in producer countries. Trade union members
have power as consumers, trade unionists and workers actively
involved in international supply chains (for example, British
retail workers are unpacking and putting the bananas out on shop
shelves that have been produced by workers at the beginning of
the supply chain in developing countries). It is therefore important
for these trade union members to be made aware of conditions in
producer countries to enable them to use their power to act in
solidarity with workers on an international level. This action
may involve: direct support—financial, legal, moral—to
the trade unions in developing countries; putting pressure on
their local retailers, employers and sub-contractors, labour organisations
and government to ensure basic standards are met in producer countries;
carrying out education and awareness raising work amongst their
members and the general public to highlight the impacts of pushing
down prices; being actively involved in campaigns targeting retailers
and multinationals responsible for driving down prices and subsequent
social and environmental standards in developing countries.
10. The role of trade unions is therefore
fundamental to the maintenance of social and environmental standards
in the face of the drive for cheaper produce, however, it must
also be understood that trade unions are not able to face this
struggle alone. Support is needed from all actors throughout international
supply chains if a sustainable solution to the continual degradation
of social and environmental standards in developing countries
is to be found.
How does the international trade system impact
on ethical and fair trade production (for example the impact of
changes in the EU tariff regime for bananas on small developing
country producers)?
11. Liberalisation of the current international
trading system is, by and large, having a detrimental impact on
ethical and fair trade producers and trade. An example of this
is provided by the decision by the EU to move to a "tariff
only" import regime for "third country" bananas
in January 2006. This move has threatened banana production in
some of the African, Caribbean and Pacific (ACP) states whose
industries were previously protected to some degree from free
market forces by preferential trading arrangements.
12. This liberalisation has particularly
affected banana producers in the Caribbean region, especially
the Windward Islands and Jamaica,[60]
where production is characterised by small, often family-owned
farms. This pattern of production has come about as a result of
successful land reforms and means that banana production has historically
driven poverty reduction and rural development since the end of
the plantation system in the 1970s. A clue as to the vulnerability
of small-scale Caribbean banana producers in an increasingly liberalised
EU market became apparent in 1999 when country-specific quotas
were abolished, allowing West African producers in the Ivory Coast
and Cameroon to take a larger market share of the overall ACP
quota. In the last 12 years, the number of banana farmers on the
island of St Lucia has declined from 10,000 to 2,000. Whilst it
could be argued that this shift in trade benefited producers in
the West African states, as production is on large-scale, multi-national
owned plantations which aim to rival the Latin American plantations,
this increase in export revenue has done little to improve the
lot of the workers on these plantations.
13. It seems that to survive in a liberalised
EU banana regime, countries engaged in banana production have
to lower wages and labour standards. Small-scale producers in
islands such as the Windwards should not be penalised for maintaining
higher labour standards, despite the pressure from successive
WTO rulings—and, more recently, from the EU—to grow
ever cheaper bananas to stay in the game. To remain viable
and maintain standards in production, WINFA (the Windward
Islands Farmers' Association) has encouraged farmers to gain Fairtrade
certification to take advantage of this new market in Europe (exclusively
in the UK at present).
14. In the Windwards case, maybe it could
be argued that liberalisation of the EU market is encouraging
the development of Fairtrade certification and labelling. However,
the reality is that it requires a well organised small farmer
sector, led by a visionary organisation like WINFA, to foresee,
pioneer and plan for the negative impacts of trade liberalisation.
This is not always a "given" in many developing countries.
Nor are the necessary resources always available. What Windward
Island farmers have done is in spite of—rather than
thanks to—EU import regime liberalisation. The fact
is that the farmers' livelihoods, whether with Fairtrade certification
or not, remain totally dependent on the "goodwill" of
British retailers and consumers.
15. The power exercised by big UK retailers
over whole island economies—should they choose to ignore
consumer preference and reduce or stop purchasing in these islands—is
a matter of considerable worry until such time as long-term written
and public commitments can be made by the retailers. The Windwards
experience is salutary, because the development of Fairtrade labelling
is in response to the need to find survival strategies for the
livelihoods of whole rural (and by extension urban) economies,
and most certainly not because the principles of fair trade (in
the generic sense) have been integrated into the rules and everyday
functioning of the world trade system.
16. In Latin America, the move to a liberalised
tariff-only regime by the EU is not viewed in a positive light
either. Many Latin American workers' unions have argued that by
ending the quota system which regulated the amount of bananas
that were allowed into the EU, a race to the bottom in the banana
industry has been accelerated as companies push down the prices
paid to producers (large and small) in order to remain competitive,
in so doing reducing labour standards, wages and investment in
environmental improvements. In "higher cost" exporting
countries like Panama and Colombia, for example, banana producers
have been forced out of business in 2006 or seriously risk losing
their markets in 2007 as a direct result of EU import liberalisation.
Meanwhile, in the North West of Nicaragua, the end of the EU banana
import licence system has led directly—and virtually overnight—to
the dramatic impoverishment of some 30,000 of the poorest people
in the whole of the Americas.
17. Liberalisation of international trade,
as exemplified by the liberalisation of the EU banana regime,
is not encouraging fair and ethical production and trade on the
world market, even if some traders registered in the FLO system
may have been able to benefit from the end of the licence system.
Efforts to instil some of the values and standards of Fair Trade,
for example from the international umbrella bodies FLO and IFAT,
are being undermined by an international trade system which holds
free market access and open competition without minimum social
and environmental standards in higher esteem than sustainable
development, poverty reduction and ethical production in developing
countries.
In an increasingly crowded ethical marketplace,
how can consumers be supported to distinguish between different
fair trade brands, labels and codes?
18. The key to supporting consumers in their
desire to shop ethically is information and education on how to
use that information to make choices when faced by a multitude
of different brands and labels. The boom in the fair trade sector,
encouraged by campaigns by NGOs such as the Fairtrade Foundation's
"Fairtrade Fortnight" and recent highly publicised moves
by retailers such as The Co-op, J Sainsbury, Waitrose and Marks
& Spencer to use fair trade as a marketing tool must be accompanied
by an increased awareness and understanding of what it means to
buy fair trade and ethical products and why there is a need to
make this choice as a consumer.
19. There is a responsibility for the Fairtrade
Foundation, as the UK's most visible fair trade NGO, to ensure
that the information they provide to the public about the fair
trade system is clear and, very importantly, transparent. Other
labelling organisations and NGOs that promote ethical and fair
trade must also support and actively promote information on why
consumers should be prepared to pay more for their produce. Retailers
that choose to stock fair trade products must also play a role
in raising awareness and empowering consumers to make ethical
product choices, for example by displaying information about where
consumers can find answers to their questions about the fair trade
system (ie Fairtrade Foundation or Traidcraft posters with clear
contact details displayed.)
20. It is perhaps easy for those people
who work in organisations which promote fair trade to forget that
to the average consumer/member of the public the Fairtrade mark
is a logo which they recognise, but perhaps do not completely
understand. Therefore information available on the complexities
of the subject needs to be sensitively disseminated, in formats
that are suitable for the wider audience. This means using resources
and information sources which are appropriate for a diversity
of target groups, for example school children, university students,
trade unions, community organisations and the general public.
21. The increase in consumers' desire to
buy fair trade products has come about largely due to active awareness-raising
activities and information dissemination by NGOs. It is important
for these organisations to ensure the momentum is not lost through
confusion over brand names and potential lack of confidence in
the system by decisions such as the one to certify a Nestle product
as fair trade or the view that supermarkets are benefiting from
conscientious, ethical consumers by marking up the prices of fair
trade goods to increase their profit margin. The most effective
way to avoid a future lack of confidence in the fair trade system
and to support consumers in their ethical shopping is by enabling
them to understand the reasons behind such debated decisions in
the ethical sector whilst continuing to promote the inherent benefits
of fair trade. By making information on the subject widely available
and accessible, the fair trade system will continue to be perceived
as an accountable, transparent and trusted way for consumers to
exercise their power ethically in the marketplace.
February 2007
59 By this we understand compliance with the ETI Base
Code of Labour Standards. Back
60
Jamaica's exports are mainly based on two large plantations,
but where labour conditions and wages are much higher than in
most comparable plantations in Latin America or West Africa. However,
there are still a hundred or so small-scale family farms involved
in the export trade. Back
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