TOP hosted an afternoon tea and panel discussion in parliament yesterday along with the Fairtrade Foundation and the Ethical Trading Initiative (ETI). We were joined by Jenny Willott MP – Minister for Employment Relations and Consumer Affairs in the Department for Business, Innovation and Skills, Giles Bolton – Ethical Trading Director at Tesco, and Chief Adam Tampuri – Head of a Cashew Farmers Association and Chair of Fairtrade Africa. The event was chaired by Baroness Young of Hornsey – Chair of the APPG for Ethics and Sustainability in Fashion.
Since the tragedy at the Rana Plaza factory in Bangladesh, which killed over one thousand workers just over a year ago, the nature of global supply chains has been brought into the spotlight. Small scale producers, factory workers, and agricultural labourers often face unfair trading practices, poor terms and conditions and lack of skills training. Getting the benefits of trade to women farmers and workers in particular is a key challenge. The need for greater transparency and accountability on ethical issues within supply chains linked to UK markets is clear, as part of seeing such supply chains contribute effectively to poverty reduction and development gains. This was a chance to hear government, business and civil society views on work that is taking place to address these challenges, and what the emerging priorities are. What works well, and what more could be done by way of policy, guidance or regulation, to encourage and ensure good practice?
Baroness Young spoke of the greater focus that supply chains have received in the year since the Rana Plaza disaster and the need to continue to build on the initial momentum to continue to cut across the nexus of trade, aid and development. We have a real chance now to change in business behaviour
Keynote Speaker, Jenny Willott MP, spoke about the key role that businesses have to play in development and in encouraging investment. “The business case for why businesses should be transparent is very clear – it improves their reputation, reduces their exposure to risk, and can make efficiency savings by making organisations more productive.”
As the first country to publish a business and human rights plan last year, the UK is leading the way in this area, reflecting consumer opinion – consumers want to see businesses behaving in an ethical way and they are prepared to vote with their feet. 83% of people said that the ethical standards of the business they were purchasing from mattered.
Giles Bolton from Tesco emphasised the recognition that retailers like them give to the benefits of ensuring the benefits of trade reach those in their supply chains. The reputational case is clear, but there is an obvious business case too – if you treat people decently you get the best out of them….a long term relationship with suppliers means you will get the best innovation and loyalty, in a world full of competition.
He gave the example of how Tesco have changed their approach to their banana supply chain. “A few years ago Tesco used to buy bananas from a trader in the UK, who sourced them from various places. We had some rules about the quality and a little on the ethics. Now we have direct contracts and relationships with producers on the ground. This means we are more exposed to things going wrong, but our ability to ensure the ethics and labour standards has changed. Now more than 50% of Tesco bananas come from dedicated farms in Columbia and Costa Rica. We have specific agreements with those farms to pay the sustainable price of production, we actually use the Fairtrade minimum price, and we can strike agreements because we have 100% supply with those suppliers to make sure the workers on those farms are paid a living wage. We get a strong, sustainable supply chain that will be secure for the future, and we get the reputational protection.
Giles also spoke of the moral case – to be a responsible retailer, you cannot cut and run when there is a crisis, but should use your influence as a big company to help resolve the problems.
Speaking on behalf of Fairtrade, Chief Adam Tampuri, highlighted the need to recognise farmers and smallscale producers as human beings rather than just suppliers:
“Traders and agents walk into communities and dictate the prices they want, buy the produce, take it away and the farmers remain where they are. Without transparency you can’t plan for the future, you cannot make investments, either in social programs, environmental programs or any other business. Without transparency you have no negotiating power. You don’t know what new innovations are out there, what new quality or efficiency improvements you need to make. All these things are related to our relationship with those we trade with.” There is need to build long-term trust and a real partnership that goes beyond a buying and selling relationship.