The Network Project: SECOND CONFERENCE

 

Saturday 28th October 2006
London School of Economics, 11am-4pm,
"Fair Trade at the Crossroads"
Keynote Speakers:
Claude Moraes, MEP and Paul Chandler (Traidcraft)
with Whitni Thomas (Triodos Bank) and Meredith Cochrane (Fairtrade Foundation)

MINUTES OF THE CONFERENCE
(Apologies to members of audience not named properly)

 

Ian Brown explained that in his view The Network Project exists to pull together the alternatives to the neoliberal model of globalisation. Our purpose concerns both alternative ideas and action. The Network Project now considers that there is some cohesion in those ideas and activities that lead us to consider that we are at the beginning of a new global movement. Ian then went on to indicate some of the ideas that we think are important to this new movement, in particular to the Fair Trade movement.

Fundamental to our ideas is the notion that Another World is Possible. Directly linked to this is an understanding of The World as One Ecology, and this world ecology represents the interconnecting relationships of people and the world that make up a global Network of Relationships. These relationships imply a Global Imperative: the idea of the human race as being responsible both as a collective whole and as individual and interconnected parts. This responsibility extends to our place in both the social and the natural environment. This principle, which we call a Network of Responsibility, lies at the core of the relations of people and planet at all levels. This implies that human beings are collectively and individually responsible for global trade, which should be both fair and sustainable. Our long-term view is that One Day, All Trade will be Fair and Sustainable.

Rosamund Stock discussed the idea of the Shared Responsibility of consumer with producer, as voiced by Traidcraft and One Village, and the growing number of people prepared to acknowledge and act on that responsibility. Complexities exist within the system ­ for instance, the difficulties of small farmers maintaining prices in a global environment - require understandings between political and economic spheres.

Claude Moraes, MEP, began by saying that he considered Fair Trade as the single biggest issue apart from Climate Change. There is a need to see the difference between understanding the true context of Fair Trade as opposed to the official pretence of understanding. Claude explained that the position in the European Government was one of polarisation, in which neoliberals were seeking to further Free Trade, while Green MEPs, Social Democrats and Communists formed a Left alliance. The European Union (EU) was born in the post-colonial phase, and recognised the exploitative relationship between developing nations. There are problems with unfair Common Agriculture Policy (CAP) agreements and trade arrangements. The EU has been grappling with the CAP and the drain of resources and energy. Despite the collapse of Doha and WTO talks, there are positive and negative elements of bilateral agreements and the principle of rebalancing trade in the developing world. Multilateral trade talks are needed. MEPs have powers to negotiate and to question member states, which can be embarrassing for member states. Also comments that the general public does not know about the general struggle within the EU or the difference between the various institutions in the EU. People do not understand that Poverty is not yet History; they do not yet understand the Bush agenda or understand the issues. We must be committed for the long haul, to educating people. Claude mentioned Gordon Brown talking about debt and the kinds of myths that perpetuate poverty, the lack of infrastructure in India and the myths of economic progress that drain focus on global poverty in its many forms. We need to communicate this to the general population.

Paul Chandler of Traidcraft agreed with Claud’s comments on the importance of political levels and added that Traidcraft lobbies MEPs to fight poverty. Fair Trade is now at a crossroads. The market position will not be reversed, and Fair Trade faces both problems and opportunities.

Traidcraft fights poverty through trade, believing fair trade to be a way to really impact on poverty in the developing world. How many people can be lifted out of poverty via trade remains to be learned by building on Fair Trade success. The UK is now the largest Fair Trade market in the world, beyond previous aspirations. Traidcraft is a founding member of The Fair Trade Foundation, which has made it possible for other companies to enter the organization more easily. The essential backing for this has come from ordinary consumers. Political leaders have been forced to seek credibility by appearing to be in favour of Fair Trade; for instance, David Cameron has phoned Traidcraft every week for the last six months, hoping to win the next election by answering to consumer concerns about Fair Trade. This is a sea change that has happened in the last five or six years. Entrance of commercial licensees is an example of how a small person can make a difference in how governments and people think about the world. Tesco now has a wide range of FT products, as does Nescafe, Wal-Mart, and others. Setting up alternatives to capitalism was a part of the ideal of Fair Trade, so how to handle larger players is a major concern, but this is also a major victory due to the fact that large scale traders are needed if FT is to really impact world poverty, but cooption into the capitalist system is a risk. The opportunity to transform more lives should drive our tactics. New challenges include how to maximize opportunities, how to respond to increased scrutiny, and helping people understand the complexities of finding a Fair Price and reducing middlemen, (such as Traidcraft itsel), and cutting out exploitative middle men entirely.

Paul showed examples of women from Jute Works in Bangladesh, who supply Traidcraft, who have worked in Fair Trade for thirty years. They use Fair Trade production in their spare time for reinvestment cash to set up other small businesses, to educate their children, but they remain in poor living conditions because they use multiple means of making a livelihood. A long-term perspective is needed to see Fair Trade making a difference, as with children educated via FT money who send back remittances from work in developed countries. Other factors include half of the money being paid in advance and a guaranteed sale, as well as improved linkages between producers which leads to allows greater efficiency, not only getting a fair practice. It is important for consumers to understand the added benefits to producers beyond fair price. Also, climate change and fair trade are two halves to the same problem. Thus the possibility of dilution of standards due to splitting of energy or regulation of Fair Trade leading to a weakened impact on poor people. As it easier to deal with large producers, we must also ensure that dedicated FT organizations serving small producers do not get left out. The focus on poverty depends on campaigners, which tends to be led by small and community sellers of FT via churches and community groups to keep pressure on the corporations as well as scaling up of non-food sectors. The contribution of dedicated organizations like TraidCraft is essential to the source of new climate being created today.

Rosamund Stock stressed that people who are not being treated fairly do not cooperate.

Whitni Thomas, Triodos Bank, emphasized the ‘I do’ of Triodos Bank’s philosophy. Only depositor savings are used for ethical investments. Triodos is a small group by banking standards, with Fair Trade close to its heart. She pointed out the role played by the four founders of Mercury Provident Bank (Cafedirect, Twin Trading, Equal Exchange, and Bishopton Trading) in supporting Fair Trade. Triodos uses a variety of methods to support and invest in a range of FT issues, to great success in the UK. Touching on challenges, she stressed the widespread consumer confusion with the large range of choices in supermarkets. We need to be far more sophisticated in our tactics for winning over consumers to the small FT producers rather than the Tesco FT brands, for instance, due to the support small FT gives versus the larger chains like Tesco. She cites supply chains and the differences among products in the difficulty of understanding the importance of openness and clearness regarding certification and what is achievable. Because different audiences can handle different messages, depth versus breadth differentiation on marketing is important. Triodos faces issues of size and investment in making transitionethical or conscious finance. Acknowledging the potentially greater importance of how we spend our money over voting patterns. Voting with your money has an effect via consumer demand.

Meredith Cochrane of the FairTrade Foundation differented Fair Trade from the FAIRTRADE mark and the movement, by citing the internationally agreed definition of FT as an alternative approach to conventional international trading via the principles of paying a better price, promoting development and continuity in the trading relationship. The FairTrade mark goes with a system of guarantees of a fair and stable price (which is unfortunately where many consumers stop), a social premium (which the producers tend to emphasize as most important), stronger position in world markets, which comes back to upfront payments and social premium, and the closer link between shoppers and producers. The FT movement is a grassroots movement that started with the collapse of Mexican coffee prices in the 1970s. Many UK NGOs worked hard together with consumer action and the media to help FT. The message must be very clear in order to withstand and correct the media scrutiny and consumer misunderstanding of Fair Trade. This is exciting as new consumers see the message. The FairTrade Foundation is the UK’s independent certification body, and works to mainstream FT as well as licence the use of the FAIRTRADE Mark on products. It is also part of a global movement. The FairTrade Labelling Organizations (FLO) work in 58 countries as umbrella organizations from primary producer to exporter to importer to manufacturer, licensee and finally to the retailer. This process cuts out the exploitative retailer by monitoring the supply chain. Awareness and growth of FT is massive, at 40-50% per year in sales, highlighting the importance of campaigns and media attention. More products continue to be added to FT sales as well as higher volume, showing an important impact on producers. Challenges include managing the growth of FT, maintaining a robust and credible system across products and countries while retaining focus and high standards. Effective communication on what FairTrade is becomes more essential. To summarize FT in a global context, she contents that without a fair price, producers are at a complete loss, citing the declining prices of basic products over time globally, and the need for sustainable processes. It is only one step from being a Fair Trade consumer to a citizen who is campaigning actively.

Questions:

Moeen Yaseen: Muslims are being asked: “What do you believe? What do you believe? What about Social Justice?”Is more money and liquidity being redirected into Fair Trade? Traidcraft member suggests that governments are trying to tackle the issue of revenues via trade, but there are limits to what Traidcraft can do about investment of revenues.

Mary Fee of LETSLink asked for clarification as to whether Triodos uses Fractional Reserve Banking (money creation) or whether Triodos in fact operates as a Credit Union. Whitni was not quite sure what was being referred to but responded that Triodios currently has more money on deposit than that which is lent out. We must be sceptical of things that claim to be ethical. Ask where ethical pensions are really invested. Ethical investment links in with Fair Trade.

Chris Cook mentioned the Bank of International Settlement and banking entitlement to create credit as multiple of capital base as a creator of inflation. Cites David Corton and the PLC being structured to extract value from production process for the shareholders. A napsterised non-hierarchical network exists.

Mary Corrall asked if the Claude Moraes has seen the postcard campaigning on climate trade and trade justice, stating that a UNA person denies that sending cards to the German EU delegation will help. His response is that the European Parliament does now have greater powers that will persist across EU presidencies, which is a good thing in helping to show that the expansion of the FT movement and dealing with the problem that FT is no longer seen to be a new thing. Fellow panellist asked about 6 month presidencies, to which he responded that a continual process tends to be ignored by an EU presidency because of constraints of time which progressive countries like Finland difficulty in addressing long-term issues in the EU parliament.

Paul Chandler commented on how few postcards (just 3000) are needed to get meetings with ministers on FT, so don’t get bored with signing postcards!

In response to question of Member of why FT, Triodos, EU hasn’t considered more micro-credit for developing countries, Whitni Thomas responded that Triodos Bank does have investment in micro-credit to serve that 60-70% of the population of developing countries which is ‘un-banked’ making it very difficult to obtain finance. Paul comments that Shared Interest also works with micro-finance. Fair Trade works on the same principles, but is the next level up. Whitni offers more via her chapter in a book on finance in Fair Trade. Rosamund Stock comments on the periodic bond issue for micro-credit, which is always oversubscribed.

In response to a question about Nestle, Paul Chandler noted that Nestle make a mistake in pitching it to FairTrade consumers, who already did not trust Nestle, rather than to existing Nestle consumers. The weaker labels are squeezing fair trade out in other markets, so Nestle must be encouraged to build the market rather than cannibalising it.

Felicity (from a fair-trade town) asks how to scale up in terms of international cooperation, regarding the need to not be simplistic, and the danger that Tesco shoppers will not be interested in wider social justice. As ground-level campaigners we must prevent an artificial distinction being made between people who can understand differing levels of complexity regarding

Fair Trade. Fair-Trade lady in the red dress cites EU funding for campaigns and FLO coordinating the international initiatives as examples of how national initiatives are being coordinated with academic and photo libraries. She also notes that the challenge of marketing messages being boiled down to sound bites is that they work, thus campaigning plays a really important role. We need to take the more complex messages forward because the media will not. Paul Chandler adds that FLO and Traidcraft have the European Fair Trade organisation in order to fund collective projects and share ideas. Belgium now has 107 fair-trade towns as a result of cross-Europe communication.

Audience lady asked what role Fair-Trade lady in red dress sees for FTOs. She responds that FTOs self-certify and are then allowed to use the FT letterhead, but not the FT logo. IPAC is important in this, but the pace cannot be to fast because the standards must be set by FLO very carefully.

Lady of Day Chocolate co. asked Claude Moraes how (since poverty is not yet history) can young people take advantage of the political phase of the campaign and hold MPs to account? He responded that kids don’t know what the WTO is, so it was a big thing when the UK government had the CAP battle (and saw retaliation via social legislation), because teachers denigrate the EU without teaching where the battle lines really are. Also institutions change so quickly, and now the European Parliament has more power ­ the average UK 18 year old does not know what the European Court of Human Rights (ECHR) is, but the average French 18 year old does. This is the crucial difference. If young people knew who is making decisions, or even what inflation is, they can’t connect Fair Trade to what is going on in the WTO, and this is the basic problem.

Penny from Ashanti development commented that they were founded on within their local Labor Party, to give water to a village in Ghana, was more successful than expected, and says everyone is helping them. Requests talk during lunch about Ghana.

Paul Chandler says the FTO mark is not yet robust enough to be useful at the moment, and craft producers, where FT started, in crafts, need more recognition. IFAT needs more communication with ‘southern producers’ and unity in Fair Trade, which is essential.

End of Morning Session.

 


Paul Chandler, Whitni Thomas, Meredith Cochrane, Rosamund Stock, Claude Moraes


Foreground:
Victor Anderson, Ian Brown, and Rosamnd Stock


Chris Cook, Mary Fee, Moeen Yasseen, Robert Corfe

Afternoon Session:
Grassroots Experience
.
Rosamund Stock pointed out the importance of ordinary people’s concern regarding fairness and an interest in micro-finance and Shared Interest in financing ethical investments. She asked members of the audience to explain how they got involved in Fair Trade.

Brian described how he became an ambassador for Shared Interest. At university while studying economics he began to ask how Fair Trade was financed, heard of Shared Interest, which shares risk and reward. It becomes a way to make Fair Trade work better, as an example, by funding micro-credit. The basis of shared interest is lending money for short-term loans.

Brian gave an example of a group who needed an unsecured loan to repair a truck, and how a long-term relationship was developed with this group. Rosamund comments that this is the idea behind Fair Trade model as opposed to the conventional economic model. Resources are allocated quite differently when face-to-face interactions occur with a possibility of long-term contact rather than short-term transactions.

Whitney Thomas of Triodos bank cited Twin Trading and Eco-Basis as examples of cooperatives and developing world organisations that Triodos lends to, in the same spirit and in a complementary way to Shared Interest. She added that we need more people supporting both as there is not enough capital currently to finance the needs of small producers. Due to tax legislation, Dutch funds that allow investments in several Triodos shared-interest funds are closed to UK residents. This underscores the importance of lobbying MPs to support renewables and developing countries. She cited the Netherlands as far ahead of the UK in this area due to tax incentives used for these ends.

Moeen said that Islamic banks are making capital available which can go to productivity and Fair Trade as a possible set of coalitions. Another comment regarding sharing of information encouraged sharing between volunteers and Shared Interest and Triodos due to the links between them and Fair Trade.

Mary Corrall mentioned that the West London micro-loan foundation is making loans to Malawi, if others want to support a local charity. Rosamund Stock asks, when campaigning, do you ever worry about information being taken merely as PR. How do attendees feel about being a Fair Trade borough or town? Mary Corrall replied that one must first get the council to pass a resolution to support Fair Trade, then by population of the borough, a minimum percentage of shops there must sell at least two Fair Trade products, then a further set of groups must also do so, and there must also be media support in the borough (clippings and such shown as supporting efforts) after the formation of a steering committee which includes two business partners supporting Fair Trade in the borough. She particularly complimented Friends of the Earth with being instrumental in using a survey to persuade the borough council to support Fair Trade.

Another comment included the requirement of the Council to appoint an officer to deal with Fair Trade. Regarding becoming Fair Trade as merely a PR stunt, a lady from Canterbury cites her experience in bringing Canterbury to become a Fair-Trade town in saying that the effect is what matters. Chris of another town cites progress in that where, previously, requests had to be made for Fair Trade, now Fair Trade drinks are the default. Others raised the need to maintain Fair-Trade status by being reviewed every year. The fact that Fair Trade is a noble cause sometimes overlooks the fact that frequently Fair-Trade products are also simply better quality. Others emphasize the holistic approach as well, thereby encouraging buying locally and twinning with other campaigning groups such as organic and Agenda 21 related issues.

Rosamund Stock raised concerns about faith-based models, given the limitations inherent in spreading beyond the group. She also asks if there is a difference between an elected person versus using a lay person to coordinate, viz-a vis persuading those in power to pay attention to such issues, particularly given the labour-intensive nature of the kind of campaigning we do. A response included university management and councils being approached with all of the work pre-done to make it easy for councillors and MPs to do. Another comment regarding using the MP to do it who is already on board to speak at internal meetings where the public is not invited. Chris Cook mentioned congruence between Sustainability Weeks and our work, mentioning a council in Scotland using bottom-up solutions and sustainable investment. Chris asserts that sustainable equals fair. Rosamund Stock agrees that people will not accept being exploited, and that this is where environmentalism meets Fair Trade. She asked Chris how his Sustainability was defined, and he cited community land trusts where it became more profitable to develop in a sustainable way rather than under the conventional profit model. Rosamund also expressed surprise at hearing that Japan has not got a significant Fair-Trade movement.

Rosamund asked Mary Fee of LETSlink if there is overlap between Fair Trade and community currencies. Mary responded that it could be relevant at both ends of the Fair Trade relationship. She saw a major opportunity for local currencies amongst the un-banked groups in the producer communities, as well using them to acknowledge volunteer hours amongst support groups in the UK. Regarding un-banked people, a gentleman attempted to open a bank account in Ghana with references from a police inspector, his Stock-Broker and the Second-in-Command of the Ghanaian Air Force, and was refused. The ordinary Ghanaian requires an address to open an account, and they don’t have one, making it virtually impossible, because it is imposed by the West for money laundering regulations. A different lady cited mobile phone use as a credit system in parts of Africa. Chris Cook said that the Egyptian Central Bank cracked down on Orange because the mobile credits became a more viable currency than the money in Egypt.

Rosamund then asked about Procurement, to which one lady responded that things need to be written in institutionally, and then scaled up. University procurement policy is easy, but council procurement is more difficult to deal with. Mary from Camden cited the Fair Trade Towns email discussion group for more detail on an expert who was cited in Camden during their FT process. Another comment about recognizing the power of the consumer and recognizing a supply line as FT and understanding the political implications of FT. The business world is just beginning to look at profit margins and see the value of FT, which is where we need to be focusing. The Audit Commission looks at social enterprises and procurement, citing recycling contracts as another examples rather than trying to attract big long-term contracts. Local spending is much better for the local economy, as Rosamund agrees. Mary, from the US, commented that their council initially refused to become Fair Trade due to lack of best value in terms of lowest price. Now they must simply show that they bought a more expensive product because there was in fact a valid reason via best value in terms of sustainability.

Chris Cook cited newer Lib-Dem policy in Scotland around a Guarantee Society and spending locally with universal application as a procurement tool. Mary from Camden cites Fair Trade Foundations Fair Trade at Work. Another lady cited the challenge as moving from FT as a single issue to extending to other approaches with a coalition of universities organizations and cities, remembering that it is about fairness, and that we are not only campaigning for trade justice, but for justice in general.

Rosamund Stock suggested a sketching out session for the suggested workshop. Mary Fee stressed the importance of a basic education regarding the monetary system, and Rosamund agreed with the need that Claude cited for wider education on political institutions. Ian agreed that keeping it real and complimented Felicity on the set of ideas incorporating both Fair Trade and sustainability pulling in certain types of people who associate those same core ideas together and all have an impact on the way we live. We all want a society that cares, and neo-liberalism excludes associations of any type from interfering with the market. Rosamund Stock suggested an ideas audit and a workshop for a mapping out future sessions.

End of Afternoon Session


The Network Project is a non-profit making organisation started by a group of enthusiastic and interested people. We are ordinary grassroots activist who want to do more than attend events run by bigger organisations. We are interested in the social innovations such as social enterprise, community currencies, co-ops and credit unions. We want to explore these new ideas in a political context and look at the underlying ideas. We are particularly interested in the importance of relationships, intelligent decision making, alternative economics and grassroots activity. We are not affiliated to any political party or organisation. To contact the Network Project, please go to the Registration page.

Sponsorship
We are grateful to the SE Region of the Co-operative for their support of this conference.

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