Fairtrade gambles its reputation

After considerable mental exertion, I have managed to identify one positive consequence of the Nopenhagen summit.

The event mercifully ensured that our Director was out of the country on December 7th.

I don’t care to imagine the atmosphere in the office on a day on which Anuradha’s morning newspaper would have contained a half-page advertisement with the heading:

Have a Break
Have a Fairtrade Kit Kat

Anuradha Vittachi has been a lifelong supporter of the Nestlé boycott in protest against the company’s refusal to respect the World Health Organization’s International Code of Marketing of Breast-milk Substitutes. Anyone flourishing a Kit Kat in a staff meeting is liable to be sentenced to six months’ hard labour of minute-taking and washing-up.

An alliance between Nestlé and the Fairtrade Foundation is bound to be controversial. Timing the announcement on the first day of the climate conference was a little too neat for my liking. Anuradha was not exactly the only development NGO leader buried in climate change issues – the entire cohort was similarly distracted.

Reaction in the UK duly amounted to a limp protest from the World Development Movement and some indigestible quotes from Baby Milk Action.

No one could be more aware of the sensitivity than the Fairtrade Foundation’s Chief Executive, Harriet Lamb. When I volunteered for WDM in the 1990s, she was a senior member of a campaign team which regularly lobbed grenades in the direction of Nestlé.

I can’t find any response from Harriet to the accusation that Nestlé is an unsuitable partner. She has however permitted a full debate on the Foundation’s website, where sensible views from both sides have been expressed.

My concern is that a partnership with a tainted company such as Nestlé draws attention to weaknesses in the Fairtrade model for poverty reduction. The most obvious is that the label certifies a product rather than a company. Consumers may be baffled when this apparent badge of approval does little to silence advocates of the Nestlé boycott.

There are similar discontinuities for Fairtrade in the source countries. Whilst Kit Kat sales will now deliver valuable assistance to members of a farming cooperative in Côte d’Ivoire, its output represents a tiny proportion of the country’s cocoa industry.

Nestlé and other global chocolate companies promised in 2001 to certify all West African cocoa as child labour free by 2005. Subsequent watered down targets have also failed. In this context, what is the point of offering certification for a postage stamp area in Côte d’Ivoire, providing consumers with comfort for a single chocolate bar marketed only in UK and Ireland?

As recently as April 2009 the International Labor Rights Forum was able to report that thousands of children in the region work as “modern-day slaves, bonded to their employers and forced against their will to work in hazardous and heartbreaking conditions.”

Both sides are being selective in their analysis, as made clear in a thorough piece of research on the cocoa industry published by the Payson Center at Tulane University earlier this year. Nonetheless, Nestlé is already the subject of a court action in connection with trafficking of Malian children to Côte d’Ivoire.

In the rarified business of office romance, it is often said that, if you embark on a risky affair, it is wise to choose a partner who has more to lose if the downside risks come to pass.

Nestlé has nothing to lose – the brand is already damaged goods. By contrast Fairtrade must be ethically spotless or it is nothing. If I was a trustee of the Foundation, I would be scrambling to check whether its formal risk assessment has something reassuring to say about reputational risk management.


this article was first published by OneWorld UK