However you dress it up, it’s slavery

Startlingly cheap consumer goods like clothes, furniture and electronics all rely on one thing: slavery.

I am not trying to use an emotive turn of phrase to persuade you that there’s a real issue here. Our economy is fundamentally underpinned by real and traumatic slavery. Our discount stores. Our clothing. Even our school uniforms. Slavery here in Australia, or slavery overseas, the only way we can sustain incredibly cheap prices is by paying the people who make this stuff a pittance, treating them inhumanely, not spending money on fripperies like safe working environments, sick leave, or healthcare, and funnelling the profits off to those family friendly companies we rely on for our way of life – KMart, Bunnings, Target, Big W… those companies with pictures of happy smiley white children on all their catalogues.

Then every so often the media does a big exposé on factories that supply Apple, or KMart, or Nike. The company is, naturally, just horrified to learn of the appalling conditions its workers face. So it vows to clean up its act, and scuttles off into a new factory no-one has bothered to audit yet. Safe until the next exposé.  Happily preserving ludicrously low manufacturing costs, and not having to actually fork out any of their profit margins for anything so unprofitable as healthcare.

Meanwhile the workers at the original factory are saved, right?

Um… No. At this point the original factory, unless it can scrounge up another unscrupulous partner in crime, will close down. Those workers who roused the world to outraged indignation on their behalf? They are now unemployed and sunk deeper into the mire of inescapable poverty. They are unlikely to find work elsewhere. We might as well have signed their death warrants.

Bangladesh has now been exposed as a country chock full of sub-standard slave pits masquerading as factories. And KMart, Target and others are planning to step up, take responsibility, and ensure that a portion of their profit makes those factories safe, and provides decent working conditions, right?

Um… No. They will wring their hands, profess their undying horror at all these things they never knew, honest, and quietly move their manufacturing elsewhere, hoping no-one looks too closely at their new factories.

After all, no-one wants to pay a few dollars more for a t-shirt so that some poor stranger halfway across the world has access to healthcare, education and a decent standard of living, do they? If we weren’t exploiting them someone else would be, and we have to keep our prices down or people won’t buy our stuff. We are doing them a favour, in the end, paying them $60 a month to work 10-12 hours a day, 7 days a week, in factories that could collapse on them any second. If we didn’t, they’d have nothing.

Which is exactly what they will have when KMart and their friends wash their pure white hands of them and move on to less visible slavery elsewhere.

So next time you sign a petition demanding that these stores source their clothing ethically, think about adding a comment. Demand that they create ethical conditions where they are right now. Demand that they take responsibility for the entire clothing chain, and build an expectation of decent conditions around the globe, not just where the camera is currently pointing.

For more information, check out Oxfam’s reports on ethical clothing.

Lowest Prices, Slavery Guaranteed

“As soon as we have discount stores, we have slavery. As soon as we have major consortium retailers with every conceivable item at prices so low, then we have the economy of slavery. I say that because the only way they can do that is to buy the products at a cheaper price from people who earn a pittance. ”

Wells Trenfield, Managing Director of Jasper Coffee, is passionate about Fairtrade. Within moments of meeting him it is clear that he could not only talk all four legs off a donkey, he could also persuade it to walk to the nearest café for a Fairtrade latte afterwards.

Poverty, Wells argues, is about politics, and the solutions are largely outside the control of the people most affected. “That’s why I like Fairtrade – because it returns that empowerment of their own destiny into their own hands. To bring themselves out of poverty. Not asking somebody else to do it for them.”

Cameron Neil, of Fairtrade Labelling Australia & New Zealand, says that “Australians don’t fully appreciate the power of their purchases to empower farmers and workers and fuel development. Aussies understand sweatshops and factory exploitation, and many choose to avoid or boycott ‘bad’ products. Fairtrade is about the next step – people investing in creating a better world through choosing products and buying from businesses that ‘do good’ rather than just doing no harm.”

Cameron points out that Fairtrade is a very different paradigm to the old idea of alleviating poverty through charity. It’s the difference between a village in the hands of a charitable organization, saying “Look at what they did for us. We’re excited about what they will do for us next,”  and a  Fairtrade village that says, “Look at what we’ve done. We’re excited about what we can do next.” They have control of their own destiny, and the power to make the changes that are important to them. That’s a power we take very much for granted in developed countries.

Imagine you are a Peruvian coffee farmer. Or Ethiopian, Colombian, or Papua New Guinean. This is subsistence farming. It’s a small holding – you produce maybe 4 bags of coffee a year. You have no electricity, no mobile phone or internet, and no way of knowing the current price of coffee on the NYC (the New York Coffee exchange, where coffee prices are set by traders. It has all the hallmarks of a financial market – traders, futures, and speculation.). You don’t know that coffee is currently trading at a 13 year high.

You sell your coffee to an agent who comes to your farm gate (if you are lucky. If you are unlucky you trek 40km down a mountain with your coffee on the back of a mule, quite likely getting mugged along the way, but more about that later.). The agent sorrowfully shakes his head and tells you the NYC is tragically low. He would love to give you a better price for your coffee, but even he has to make a living.

He gives you a pittance – perhaps $4.10 per kg –  for the 4 sacks of coffee that are your total output for the year. You take that money and eke out a year’s existence with it, and there is nothing you can do but hope that the price will be better next year. Those 4 sacks of coffee are all you have to sell.

There, but for an accident of birth, goes you – stuck in a cycle of endless, extreme, irrevocable poverty.

Enter Fairtrade.  Kimaro of the Kilimanjaro Native Co-operative Union famously told the G8 countries in Edinburgh in 2005: “Pay us a fair price for our coffee, and we will make poverty history for ourselves.” Fairtrade, of course, guarantees that fair price. Farmers know that they will receive at least the Fairtrade minimum for their coffee every year. But that, as it turns out, is not the revolutionary aspect of Fairtrade.  The world-changing, earth shaking feature is the Fairtrade Premium.

To be certified as Fairtrade, farmers must first organize into a democratically run co-operative. This is their business, which they own collectively. The co-op buys the coffee from the farmers and pays them the negotiated price – always at least the Fairtrade Minimum, but usually quite a bit higher. Then the co-op sells the coffee beans to a Fairtrade buyer . (The buyer is also certified. To guarantee transparency and authenticity, every step of the Fairtrade chain from bean to cup is certified and regularly audited.) The co-op receives both the fair price and a Fairtrade Premium of 10c(US) per kilo.

Here’s where the revolution begins. The co-operative then decides, democratically, what their most pressing problem is, and uses the premium to solve it. Because the premium is paid per kilo of coffee, and it’s paid to the collective rather than to the individual farmers, it amounts to a significant sum that can achieve amazing things for the whole community. Things we take for granted, like education and healthcare.

That’s the premium for one year. The next year, they are free to tackle the next problem, with the next premium. Meanwhile the farmers are able to increase their personal standard of living with the fair price that they receive, and the stability of income provided by the Fairtrade minimum price and their stable trading relationships within the Fairtrade system.

Fairtrade farmers run their own business – they are not just farmers anymore. They own the business that buys the coffee. They have new opportunities to progress – for example being able to produce higher quality coffee, process their own beans, or apply for organic certification. Cameron Neil describes one farming family whose daughter has studied and taken on a marketing role in their cooperative. The children of coffee farmers no longer need to go into coffee farming or move to the city. Now they have choices. “Fairtrade’s ambition is for people to have what they need to progress” says Cameron.

Wells is emphatic that this is not charity. “They are proud people. They want to know that what they grow is what they earn a living from. They don’t want a freebie. They abhor that whole system of freebies. They have a sense of pride about what they do.”

“For them [Fairtrade] is the telling point of difference [that means] having their own power to make their own economic decisions. It’s about how to improve their own life. Not their own personal life. They recognize that the improvement comes as community. It’s how to improve infrastructure and facility. There are many examples of how that happens.”

Jasper Coffee sells an instant coffee grown in Colombia. There, the coffee farmers on mountaintops had to take their beans (a years’ worth of effort and their only means of supporting themselves) 40km down the mountain on the back of mules to sell it to buyers at the bottom of the mountain. “In Colombia, you get mugged,” says Wells. “If you have to take your mules and coffee to the bottom of the mountain and get paid, guaranteed, you won’t have your money by the time you get back to the top. You’ll be lucky to be alive.”

So the first act of the new local Fairtrade cooperative was to build a warehouse and a bank at the top of the mountain. Now farmers take their coffee to the local warehouse. They take in cash only what they need for the week – the rest stays safe in the bank. The coop bought vehicles to transport the coffee down the mountain, and built bridges, again to make transport easier. They bought more land next to the warehouse and built a drying plant (which increases the quality of the coffee because it dries evenly – leading to a higher price and better income).

Ultimately, Fairtrade is about an end to slavery. As Wells puts it: “Our Western culture, our economy is still under this umbrella of slavery. We still want those people to be poverty stricken so that we can have this cheap product.”

As I leave the premises of Jasper coffee I am buzzing – not only from the coffee fumes I have been delighting in for the last hour, or from the magnificent (and potent) latte I received on arrival, but from the ideas that Wells has planted in my head. The slave trade exists, indeed it thrives as a fundamental part of our economy. By switching to Fairtrade, we can end slavery, and be the agents of phenomenal positive, worldwide change. That tastes pretty good to me.

Fairly Astounding

I thought I knew all about fair trade. It didn’t seem like there was much to know. I thought it was about paying farmers a fair price for their produce. Which it is, of course. But I recently heard Wells Trenfield, Managing Director of Jasper Coffee, talk about the really significant aspect of fair trade, called the fair trade premium. I knew about this, too – it’s an extra fee, on top of the price for the coffee, that gets paid to the farmers collectively. According to the rules for fair trade certification, this premium must be spent on a community project that benefits everyone.

Ok, that’s nice. Intellectually I know that the premium gets spent on education, health care, or other community improvements. But then I heard Wells Trenfield detail some of the ways that fair trade premium has been spent out in the real world, and suddenly I realised that this is world changing, astounding stuff.

First of all, you need to understand that many of the farmers growing fair trade produce have incredibly small holdings – some less than a hectare. They may produce as little as 3 or 4 bags of coffee a year. And that’s it. That’s their income for the year. These farms are generally in isolated areas, and they sell their coffee to an agent who treks in specifically to buy it. The agent tells them prices are down this year, so he can’t give them much for their coffee – and what can they say? They have no other way to sell, so they take the low price and eke out their poverty stricken existence until the next year, hoping the price will be better for their next crop.

The first difference in fair trade is that, in order to be certified as fair trade, these farmers must organise into a cooperative. Suddenly, instead of selling 4 bags, there are hundreds of farmers in the cooperative, with hundreds, if not thousands of bags of coffee. Now they have bargaining power – game changing bargaining power. The cooperative must have a democratically elected governing committee, and they sell the coffee, distributing the proceeds among the farmers.

But here’s where it gets astounding. The farmers get their fair price, and the cooperative gets that amazing fair trade premium. Then, each year, the cooperative – the farmers themselves – decide what their community’s most serious problem is, and they use the fair trade premium to fix it. And then the next year, they do it again, fixing the next problem.

For one group of women in Peru (the producers of Jasper Coffee’s Cafe Feminino), their most serious problem was their cooking – which was done on campfires on the ground outside their homes. They had back problems from bending over, respiratory problems from always leaning over the fire breathing in the smoke, and no way around it. So their first fair trade premium went on research on how to fix that problem with the materials to hand. Now every household has an upright stove and an oven – inside, with a chimney. Built out of mud bricks, because mud was their only available material. No more smoke, no more bending. And that was one year’s premium. Every year more progress, and a new problem solved.

One cooperative in Papua New Guinea needed wash troughs for their coffee – washing the beans straight away means they are better quality and the cooperative can sell them for a higher price. But instead of simply buying wash troughs for everyone that would only last a year or two in the damp conditions, they bought a portable saw mill. They live in the forest, so they have plenty of wood. Using their saw mill they built wash troughs for everyone, as well as better building materials – so they now have roofs that don’t leak. Crucial in a very damp climate. And when the wash troughs rot, they can build new ones with their saw mill, so it’s a sustainable solution. Again, this was one year’s premium, but world changing for those farmers. Oh, and their coffee sells for a much better price now, too.

Every year these cooperatives pull themselves further out of poverty – step by step, with sustainable solutions that make a long term difference to their lives. And they get to choose their own direction, doing what is most important to them each year.

Today I went to a talk at World Vision that was quite literally stunning in its power (a whole new blog, or probably several, so stay tuned). But one of the key points that came out of that talk was that we can eradicate extreme poverty in our lifetimes. And by buying fair trade, and even better, telling your friends about fair trade, you can make that real.

Which means that Fair Trade empowers you to empower others.

It doesn’t get fairer than that!

How ethical are your clothes?

Most of us are dimly aware that some of the clothes in our shops are made in sweatshops. If we think about sweatshops at all, we think uneasily of poor people in overcrowded, unsafe and probably unsanitary conditions in far off countries. We don’t like to think of ourselves as contributing to that, but it’s hard to know how to avoid it. And most of us are blissfully ignorant that similar scenes are happening in Australia, every day.

So how do we buy ethically? Short of growing our own cotton and making the clothes from it ourselves, how can we buy attractive, fashionable clothes and be sure that we are not exploiting the poor, the marginalised and the disenfranchised in the process?

It’s a difficult business. There are a large number of ethical problems with the clothing available in our shops. There’s the fabric the clothes are made from – if it’s synthetic, is it sustainable, and environmentally sound? If it’s natural, is it fairly traded? Then there’s the manufacture of the clothing. If you buy Australian made, secure in the knowledge that Australia has labour laws, and minimum wages and entitlements, and generally reasonable working conditions, then surely these are ethical clothes? Unfortunately, it turns out that buying Australian made is no guarantee of … well, of anything, actually. The Brotherhood of St Laurence’s ‘Ethical Threads’ report found that Australian clothing workers are routinely getting paid as little as $6 per hour, and some are actually getting as little as $2.50.

The legal minimum wage in Australia is currently $14.31 per hour, so how can this be? These workers get no annual leave, no superannuation, no sick leave, and no work cover. They provide their own workplace and equipment, and frequently their whole families work all hours of the day to scrape together enough work just to survive. Due to poor working conditions and inferior equipment, these workers are 3 times more likely to suffer work related injuries than factory workers.

How is this possible? I’m going to try to explain the problem, but you’ll have to concentrate – it’s like a magician’s sleight of hand, only harder to follow. Company A sells t-shirts. They contract company B to do the “CMT” – cut, make and trim the t-shirts. Company B farms out the work to companies C, D, and E, all three of which often farm out work to each other, depending on how much work there is this week. Company C farms out the work to Company F, which hires outworkers, or homeworkers, to do the actual work. And this is a relatively simple supply chain. They are routinely much more tangled and difficult to trace than this one.

Once the work reaches homeworkers, they are paid a piece rate, rather than an hourly rate. That is, they are paid a certain amount for each garment or task that they finish. There is some room for conjecture about how the piece rate translates to an hourly rate. There are often sham contracting arrangements in place, where the company that employs the homeworkers argues that they are sub-contractors, not employees, and that they are therefore responsible for their own leave, work cover, superannuation etc. Homeworkers are often migrants who don’t know that their rights and entitlements are legally the same as factory workers. The union often doesn’t know who they are or how to find them. And even if the homeworkers become aware of their rights, they are afraid that if they speak up and demand them, they will lose the work.

Out of this quagmire comes the “No Sweatshop” label – a joint union and clothing industry initiative that aims to map the supply chain and encourage clothing companies to sign on to the “HomeWorkers Code of Practice” (HWCP). Complying with the code only requires that companies meet their legal requirements. That doesn’t seem like a lot to ask. Unfortunately not meeting the legal requirements is standard practice in the clothing industry.

Companies that have signed up to the HWCP have mapped their supply chains, and know how many outworkers are being employed to make their garments. They are committed to ensuring that these outworkers are being paid the correct hourly rates, as well as receiving all the standard annual leave, sick leave and superannuation entitlements that most of us take for granted. These companies earn the right to apply the “No Sweatshop” label to the garments for which the supply chain has been fully mapped.

The HomeWorkers Code of Practice ensures that the supply chain is transparent, and that the workers right down at the bottom of the chain receive at least the minimum legal conditions.

Tommy Clarke, National Program Coordinator of the No Sweatshop Label, says “With such complicated supply chains, fashion houses can easily lose sight of who is actually making their garments. Other times, it’s more a case of ‘don’t ask, don’t tell’ or ‘hear no evil, see no evil’. It’s a convenient ignorance. Whereas with the Code, we’re asking the fashion labels to take responsibility for their entire supply chain.”

Clarke admits that asking companies to meet their legal entitlements is not setting a particularly high benchmark. “Unfortunately the clothing and fashion industry both overseas and here in Australia is so riddled with exploitation, that we are willing to recognise the ethical credentials of companies that are putting in the effort to tackle exploitation by making their supply chains transparent.”

And that’s just the manufacture of the garments. What about the fabric itself? The cotton trade, for example, is notorious for, among other things, the use of forced child labour. Uzbekistan, the third largest cotton exporter in the world, only agreed on September 12 2008 to stop using forced child labour to pick its cotton. It had previously argued that the children “volunteered” to work 11 hour days in the fields picking cotton for less than $2. There is some doubt as to how effectively and honestly the ban is being implemented. As well as slavery, the cotton trade is rife with problems such as unsafe pesticide use (workers are frequently not given any protective gear when they apply the chemicals, many of which are banned in Australia), and subsidised farming in industrialised nations that often leave small farmers in the developing world without a livelihood.

To tackle the concerns about the ethics of cotton, Fairtrade Labelling Australia and New Zealand (FLANZ) released Fairtrade Certified Cotton in Australia in November 2007. Cameron Neil, Australian Operations Manager for FLANZ, explains that Fairtrade certification carries with it a number of conditions. “For any product that carries the Fairtrade Certified Cotton label, the cotton growers are smallholder farmers organised into some sort of cooperative or collective, and they meet the minimum social and environmental standards that are in the generic Fairtrade rules. They have some democratic form of governance so that when they are getting paid the Fairtrade premium they have some way of democratically deciding how it gets spent, and they are accountable for that, and they are inspected on that every year.”

However, it is only the cotton that is certified, not the fabric, or the clothing itself. Neil says that the Fairtrade system internationally has put the problem of fully certified Fairtrade clothing on hold for the moment.

Because Fairtrade certification means that producers are paid a fair price and a fairtrade premium, the question of fairtrade clothing is more complicated than it looks. There are so many steps in the supply chain, from growing the cotton, spinning, ginning, weaving, and dyeing the fabric, to the making of the garment itself, that applying the fairtrade premium at every step risks making the end product economically unviable.

The Fairtrade labelling system is really set up for simple agricultural products, such as coffee, rice, and quinoa, which have a fairly straightforward supply chain. It doesn’t map easily to the sort of complicated supply chain that goes from the cotton seed through to the finished garment.

To begin to address these issues in Australia, FLANZ requires that companies wanting to sell products made from Fairtrade cotton must be signatory to the Homeworkers Code of Practice (HWCP) for all of their Australian manufacturing, not just the products carrying the Fairtrade Cotton label. Neil says, “We’re using the label as a pull factor to get people to clean up their supply chains. Part of our long term vision is that the Fairtrade Certified Cotton label becomes so attractive that more and more businesses are willing to engage with the HWCP because they want to use the Fairtrade Cotton label.” Clothes made from certified Fairtrade cotton outside Australia must have independent evidence that basic International Labour Organisation conventions are being met.

Unfortunately there is not a lot of Fairtrade Cotton clothing available yet, and in the absence of a Fairtrade clothing standard, some manufacturers are creating their own ethical business models. Daron McFarlane, of Ecowear, a Melbourne-based clothing designer, retailer and wholesaler, argues that you don’t have to be Fairtrade certified to be doing the right thing. In business since 1991, McFarlane has gradually evolved a relationship with his suppliers that he describes as a win-win. “If you treat people well, they’ll do a better job and you get a better product. It all comes back in a karma kind of way. I don’t feel like I need to have someone tell me that I’m fair trade, because I know I am. I don’t have anything to prove.”

Ecowear’s clothes are largely manufactured in factories in Nepal and China. McFarlane doesn’t audit the books and check up on how much the workers are paid in his suppliers’ factories. He says it wouldn’t be feasible to check up on all the details. But he is sure of the character of his suppliers. He pays higher prices and encourages his suppliers to treat the workers well. McFarlane argues that he can tell a lot from meeting the workers, seeing the conditions they work in, the way they are dressed and the way they respond to him. He is confident that they are being treated better than most of their compatriots.

As well as requiring his suppliers to pay his workers better, McFarlane has set up a health fund for the workers in one of the Nepal factories, through the owner of the factory. For one of his other suppliers he pays a levy on each piece which is paid to just-one.org, an organisation that helps street kids in Nepal by setting up cottage industries and giving the families a sustainable livelihood.

McFarlane uses organic cotton where he can, and also produces a lot of hemp and bamboo clothing. He uses more environmentally friendly dyes. Although he admits that not all of his products are sustainably produced, McFarlane says he works hard to find the win-win. “Even for the things that I do that are not necessarily eco-friendly, I try to make sure there’s a strong ethical vein running through everything that I do.”

The trouble with Ecowear’s ethical credentials is that we have no way to verify them. All we have is Daron McFarlane’s word for it, and it could be argued that he plays somewhat fast and loose with the terms “fair trade” and “sustainable”. The other problem is that McFarlane himself can’t be entirely sure that his ethical endeavours are operating precisely the way he believes they are. Some of his clothes are made by outworkers in Nepal, and if we can’t be confident of the conditions for Australian outworkers, how can we be sure of conditions in distant Nepal?

Perhaps McFarlane is naïve, and I am naïve for believing him. Despite the lack of hard evidence, though, I find myself believing that Ecowear is making a difference in a disturbingly unethical industry. Personally, I would rather buy my clothes from a company like Ecowear that seems to be trying to do the right thing, than from a chain store that I can be fairly certain is exploiting people, somewhere along the line.

The range of unquestionably ethical clothing is currently so limited that we have to make these sorts of judgements ourselves. As Cameron Neil puts it, “With the information available to me today I make the best choice I can, knowing full well that I may get information tomorrow that means the choice I made was the wrong one, and I’ll have to do better next time.” According to Neil, the key is to ask questions. “We’re encouraging people to look for independent sources of evidence. There are a lot of people out there who are very genuine about what they’re doing. But it’s so hard to tell the difference between those people and people that are dishonest, who are making claims without any ability to back it up whatsoever, and who have no credibility.”

So how do we buy ethically? Neil’s advice is simple. “Talk to people with credibility – World Vision, Oxfam, Fairtrade, Fairwear – and say ‘give me a list of where I can go.’ and just go to those places. Find places that have some credibility and take your business there, until the system gets better and the information is better.”

Tommy Clarke says that the best thing we can do is to speak up. “Ultimately it will be up to consumers to be the driving force. So I recommend getting vocal and letting clothing companies know that there is a market for ethical garments made in Australia.”

It’s either that or start growing your own cotton.