The Times

Premium paid for ethical goods may not be passed on

Supermarkets seeking to promote their ethical buying policies proclaim that their produce is Fairtrade, and customers buy such goods in the belief that they are doing their bit for workers in the developing world.

However, an investigation by The Times suggests that workers on plantations that supply Fairtrade tea are not seeing their lives improve as they should.

Sales of Fairtrade produce command a premium that is supposed to be used for the benefit of estate workers. It should be passed to them through a committee of managers and workers who decide where and how it is spent.

Managers at one tea estate in Kenya said that Fairtrade regulations were too expensive or difficult to implement and that some of their workers found them too restrictive. At an estate in India, Fairtade inspectors found problems with the way that the premium was managed and many workers complained that they had seen no benefit.

Some workers suspect that the scheme is being used to make estates appear socially responsible as demand increases in the West for Fairtrade-labelled goods.

Fairtrade has grown from a small nongovernmental organisation to a global enterprise, with 21 international bodies – including the Fairtrade Foundation in Britain – under the umbrella of the Fairtrade Labelling Organisation (FLO), which sets the standards for certification. Estates are checked and certificates awarded by FLO-CERT, which FLO says is independent but wholly owned by FLO.

Certification allows an estate to sell tea labelled as Fairtrade, but it is up to wholesalers to decide whether to buy the tea as Fairtrade – or more cheaply as standard tea without the label. Fairtrade estates can also supplement their output by buying from noncertified plantations, although they cannot then sell such produce as Fairtrade. For example, Eastern Produce Kenya, a Fairtrade-certified trader, regularly buys noncertified tea from the Kaprachoge estate, where conditions are far from those stipulated for certification.

Tom Heinemann, a Danish film-maker, visited more than 20 estates in India, Sri Lanka, Bangladesh and Kenya for his documentary The Bitter Taste of Tea. He found few workers who had benefited from the premium. “Workers get things like a gas cylinder, a Thermos flask or a laundry basket. But these would come after years of not getting anything,” he said.

Mr Heinemann also said that the Fairtrade inspections are announced in advance. “The estate owners can tell the workers not to be critical. It is a harsh system – [the workers] are deeply afraid of the owners because they can lose their job.”

In Kenya, Mr Heinemann says that it is common to find workers hired for three months, fired and later rehired to avoid laws that would oblige owners to hire workers full-time.

Paola Ghillani, the former chief executive of the Max Havelaar Foundation in Switzerland, the Swiss version of Fairtrade, and a former board member of FLO, says: “The Fairtrade label has grown so fast, but has forgotten to invest enough in growth management like normal companies.”

While at FLO, she found herself at odds with the Fairtrade Foundation in Britain. The foundation was unhappy with inspections being conducted by independent organisations and it tried to influence the outcomes of these inspections, she said.

“The Fairtrade Foundation at that time, and maybe now, has got too much at stake. They were living from funding, but also from licence fees [they received] each time they gave the label to a licensee. The inspection and certification system is not independent enough.”

Despite reservations, Ms Ghillani is still supportive. “ Fairtrade labelling is an inspiring instrument,” she said.

The Fairtrade Foundation denies that inspections are not professional. It claims that FLO-CERT is independent and meets the requirements of ISO 65, the international quality standard for certification bodies.

It also rejects the claim that workers do not benefit. A spokeswoman said: “Before becoming Fairtrade-certified, estates need to demonstrate that they meet Fairtrade standards to pay decent wages, guarantee the right to join a trade union, ensure health and safety standards, and provide adequate housing and other social provision where relevant.

“Educating workers about Fairtrade and the premium is an ongoing process. It is incumbent on management to make sure staff are aware of Fairtrade. However, where Fairtrade sales are low, management and the joint body can feel it is not fair to raise too much expectation of the Fairtrade premium.”