Monday, April 23, 2012

60 – What Is Possible

Being informed and making an effort to shop ethically are not small matters. The choices individuals make as consumers do have an impact on the quality of life of the people in developing countries. Both governments and corporations do respond to public pressure. But these steps alone will not bring about the global changes that will be required to ensure that all persons on this planet have reasonable access to a decent standard of living and the satisfaction of basic human needs.

I started working in this field in the 1980s, which was a disastrous decade for developing nations. And while there have been, as I’ve noted, some very impressive successes at the community level in most developing nations in the years since, it is also true that if we employ the standard economic indicators for judging the strength of nations, then few developing nations are better off now than they were then. As I come to the end of my working career, I find that I don’t have a crystal ball, and, frankly, I do not know what the future holds in store. Will conditions in developing countries show signs of significant improvement over the next twenty years or so? The only answer I have is still “It depends.”

It will depend upon whether or not a means is found to control the AIDS pandemic affecting Africa and countries like Honduras; it will depend upon whether the crippling external debts developing countries are burdened with have been eliminated.

It will depend on the degree to which developing countries are able to achieve greater self-autonomy, greater sovereignty, the degree to which they are able to set their own development priorities and guidelines.

It will depend upon the nature of the trading agreements which are established between rich and poor nations; it will depend upon the controls that can be placed on multi-national corporations.

And it will depend upon the political will of nations like Canada and the United States to make a commitment to bring about change. It will depend upon the developed nations of the world striving to achieve reasonable targets for Overseas Development Assistance and making commitments to ensure that that aid is provided to those countries most in need and to those programs which most effectively address the needs of the poor. I believe that means it will depend on reductions in government-to-government aid programs and increases in assistance to non-governmental organizations in the developing world and in Canada.

It will depend on the ability of developing countries to reduce their dependency on foreign assistance and find ways of financing their development agendas internally.

It will depend upon both lesser developed and more developed nations working together to ensure that all of the world’s people have reasonable access to a decent standard of living and the satisfaction of basic human needs. That isn’t a slogan; that is the very bare minimum expectation that we should all have.

There is no guarantee that any of these things will happen. But the fact is that they could happen, and they should.

Monday, April 16, 2012

59 – “No Sweat” Purchasing Guidelines

As part of its YMCA Peace Week activities in 2002, the YMCA of Fredericton implemented “No Sweat” Purchasing Guidelines. The guidelines pertain to the suppliers and manufacturers of garments and textile products that the Fredericton YMCA purchases either for its own use or for resale. In introducing the “No Sweat” guidelines, the Fredericton YMCA joined a global movement pressuring manufacturers in the garment trade industry to comply with local labor laws, United Nations human rights guidelines, and the labor standards promoted in the International Labor Organization Conventions regarding wages, hours of work, workplace health and safety, forced labor, child labor, freedom of association, collective bargaining, and other relevant conventions.

One year later, in 2003, one of the major business stories in North America was the closure of all of Levi-Strauss’s factories in Canada and the United States. Levi-Strauss once proudly announced on its famous leather label that its product was “union made.” But in 2003, the work was exported to factories in developing countries where non-union labor costs were lower. This not only affected unionized Canadian and US workers, it was a further exploitation of workers in other nations.

Corporations continue to transfer manufacturing to nations where cheaper labor costs can be found. And efforts by workers in these countries to improve working conditions are met with threats to relocate the factories yet again.

The idea behind No Sweat Purchasing Policies is that corporations are as responsive to public opinion as are governments. And one way in which consumers can respond to this situation is by demanding that the clothing they purchase be produced under ethical conditions. “No sweat” purchasing policies have been implemented by schools and universities in Canada. Even municipal governments have implemented them.

Critics, however, have suggested that these policies are often only public relations exercises by the institution adopting them, and there have been questions raised about how effective the policies are. A recent article in the New Internationalist (Jan/Feb 2010) provides a compelling response to those questions, and it is particularly relevant to us in YMCA Canada East because it pertains to a situation in Honduras.

In November of 2009, Fruit of the Loom responded to a boycott of their products by colleges and universities in Canada, the United States, and Britain. This boycott had come about after a decision taken by Fruit of the Loom to shut down its factory in Honduras because of its union activity. As a result of the pressure brought about by the boycott, Fruit of the Loom not only reopened the factory and rehired the 1200 laid-off employees, they also agreed to pay $2.5 million in compensation to those workers and to restore union rights.

The New Internationalist article also notes that the Honduran example may have contributed to the reversal of a decision Levi-Strauss had made to close down its unionized factory in Haiti.

For further information about No Sweat policies and the process by which your place of work or community can adopt them, visit the website for the Maquila Solidarity network at: http://en.maquilasolidarity.org

Sunday, April 8, 2012

58 – Ethical Shopping Alternatives

Fair trade increases the amount of money the primary producers receive for their products by reducing the distribution chain—the middlemen—between producer and purchaser.

Coffee is the flagship of the fair trade movement. While most coffee passes through several handlers en route between the farmer and the consumer, with fair trade the process is much more direct. The coffee goes from the grower to a cooperative, which may do the processing and exporting, then to an alternative trade organization and from them to the retailers. Fair Trade organizations guarantee that the primary producers whom they represent are paid fairly for their work, in terms of the local economy. In most cases, a price can be guaranteed regardless of market fluctuations. In addition, it is ensured that the working conditions adhere to the guidelines of the United Nations International Labour Organization (ILO). Exploitive child labour and forced labour are prohibited.

Fair Trade coffees are usually also guaranteed organic, and, in many cases, they are also “shade grown.” That means that land and forests did not have to be cleared in order to plant the coffee. Historically, coffee plantations were responsible for the destructions of thousands of acres of tropical rain forest; with shade grown coffees, rain forest is not depleted.

Following the success of coffee in fair trade markets, further markets have been created for fair trade tea, spices, bananas, and other commodities, as well as crafts and clothing.

Consumers should generally be aware of and concerned about the conditions under which the products they purchase regularly are produced. One of the major business stories in 2003, when I was researching material for the scripts of the 80/20 series, was the closure of all of Levi-Strauss’s factories in Canada and the United States; the work was being exported to factories in developing countries, such as Mexico, where labour prices were lower. This not only affected Canadian and US workers, it continued to be an exploitation of workers in other nations.

But corporations are just as responsive to public opinion, if not more so, than are governments. And one way in which consumers can respond to the issue of exploitive labour is by demanding that the clothing they purchase meet what are called “No Sweat” guidelines. “No sweat” purchasing policies have been implemented by schools and universities in Canada. The YMCA of Fredericton brought them into effect in 2002. Even municipal governments have implemented them.

Institutions which adhere to “No Sweat” purchasing guidelines require their textile suppliers to demonstrate that they comply with internationally accepted minimum labour standards based on the guidelines established by the ILO. These include provisions on exploitive child labour, forced labour, discrimination (particularly against women workers), harassment and abuse, wages, hours of work, and health and safety practices.

Individual consumers also have a right to be informed of the conditions under which the clothing they purchase has been made. Web sites such as that of the Maquila Solidarity Network can provide up-to-date information on many major clothing manufacturers and suppliers.

Monday, April 2, 2012

57 -Trade Agreements

Trade agreements are a significant element in the relationship between developed and developing nations. The nature of the trading agreements which will be established between rich and poor nations is one of the factors which will determine whether conditions in developing countries improve significantly as are the controls that may or may not be placed on multi-national corporations.

The North American Free Trade Agreement [NAFTA], launched in 1994, demonstrates some of the issues that still need to be resolved if such agreements are going to be of benefit to lesser developed nations. NAFTA was an expansion of the 1988 Free Trade Pact between the United States and Canada to include Mexico.

There are many critics of NAFTA in Canada who believe that the treaty was not in this country’s best interest, let alone the best interest of Mexico. They summarized their objection in a nearly mathematical formula: Mexican labour plus American money plus Canadian resources equals profits for Multinational corporations.

Because the agreement allows for the free movement of capital and goods but not of labour, the workers in all three countries ended up competing for the same jobs. But the wages in Mexico are much lower than those in Canada, so certain unions in Canada came to look upon the Mexican workers as their enemy. In fact, however, the Mexican workers were every bit as much victims to this agreement as the workers in Canada. The Mexican labour force did not work for lower wages because they wanted to but because they had no other option.

In the original Free Trade pact with the US, the Canadian government was eager to gain unlimited access to US markets, and it used the lure of this accessibility to US markets to encourage foreign businesses to set up in Canada. When NAFTA came into effect, those same companies recognized that they would be better off setting up in Mexico.

Maquiladoras are corporations in Mexico which have a license entitling them to foreign investment without need of any special authorization. Maquiladoras receive special customs treatment which permits duty free import of machinery, equipment, parts and materials, and administrative office equipment, including computers, as long as these items do not remain in Mexico permanently. As a result, corporations can import raw materials into Mexico for processing without paying duty on those materials as long as the finished products are exported.

With the implementation of NAFTA, the growth of Maquiladoras was spectacular, going from 100 registered plants in 1980 to more than 4,200 in 2005. Approximately a third of these are involved in the textile industry. As a consequence, Mexico is now the largest exporter of textiles and clothing to the United States. Levi-Strauss, Gap, Tommy Hilfiger, and Guess are some of the popular brand names produced in Maquiladoras. Human rights advocates protest that these factories fail to abide by International Labour Organization guidelines. Wages remain low; child labour is involved; workers are frequently unable to form unions; local water sources are over-used; and factory waste is not properly disposed of.

NAFTA affected not only workers in the three countries which were signatories to the treaty, but workers elsewhere as well. Prior to NAFTA, the Caribbean nations had been larger exporters of textiles to North America than Mexico had been; after the treaty was established, the textile industries in countries like the Dominican Republic and Jamaica declined as factories were relocated to Mexico.

Monday, March 26, 2012

56 – Fair Trade

A little over a year ago there was an advertisement for a Canadian coffee chain which touted the benefits of a foundation it had created for the purpose of improving coffee production. It asserted that the foundation would help coffee producers become better businessmen and implied that its efforts would improve the quality of life of those producers. The advertisement was careful not to use the term “fair trade” nor did it speak directly about improving the income of coffee producers.

The “Fair Trade” movement began in the 1960s, when a number of NGOs, concerned about inequities in global trading relationships, developed the concept of an “Alternative Trade Movement.” Their hope was that this movement would help balance the terms of trade between wealthy and poorer countries. The idea was based on a handful of early experiments, such as the work of the Mennonite Central Committee in the United States which first imported needlework from Puerto Rico in 1946. This eventually led to the development of the chain of SelfHelp stores, later known as “10,000 Villages.”

The approach taken by these pioneers was to reduce the number of links in the distribution chain. By doing so, the primary producers received a fairer share of the market value of their products. The goal of the Alternative Trade Movement was to treat artisans and farmers in developing countries as equal partners able to set their own prices at what they considered a fair exchange for their labor within the context of the local economy. Alternative Trade Suppliers tended to be collectives which were organized to insure that primary producers benefited directly and fairly from their work.

As the Alternative Trade Movement gained momentum, the idea of a set of “fair trade” principles evolved. While there is still no universally accepted set of guidelines, in general these guidelines ensure that:

• Primary producers receive a fair wage in terms of the local economy;
• Revenues are distributed equitably among members of cooperatives and other collectives;
• Commodity products are guaranteed a minimum price regardless of world market prices;
• Workers are involved in the decision making processes and leadership positions of their cooperatives and organizations and have the right to collective bargaining;
• Exploitive child labor is prohibited;
• Working conditions comply with International Labor Organization [ILO] guidelines;
• Raw materials are gathered in an environmentally sustainable manner;
• Operations are open to public accountability and monitored by independent local bodies;
• In some cases, a “social premium” is paid from revenues to local cooperatives or NGOs for community and collective projects;
• In order to ensure stability, contracts are long term trade relationships between Alternative Trading Organizations.

The flagship of the Fair Trade movement has been coffee. A well organized information campaign has helped consumers understand the benefit of supporting Fair Trade coffee production. Fair Trade also tends to produce a better product.

The idea of Fair Trade coffee has become so mainstream that it is now good marketing for coffee companies to align their products with the Fair Trade movement even when their products do not meet Fair Trade requirements. Improving the quality of coffee or teaching farmers better business practices do not, in themselves, constitute Fair Trade.

When a coffee advertisement talks about the benefits of their programs but does not actually use the term “Fair Trade,” the chances are the product is not Fair Trade.

Monday, March 19, 2012

55 - And What Canadians Can Do

The large issues facing the economies of developing nations are beyond the capacity of individuals, no matter how committed to social justice, to do much about. But that does not mean that individuals are powerless when confronted with the type of inequities I have been discussing in this series of reflections.

One step individual Canadians can take to assist in the effort to improve the quality of life for men and women in developing countries is simply to be informed about the issues and to make their opinions heard by policy makers. Governments and policy makers will not act until there is a critical mass of public support for an issue; but once that critical mass is reached, the policy makers know they have no choice but to respond.

There are other steps that can be taken as well. As one becomes better informed about the issues, one will discover there are personal lifestyle choices that individuals can make which have a direct impact on people in developing countries. One’s choice of coffee is an example.

It is estimated that Canadians drink as much as 60,000,000 cups of coffee a day. As was pointed out earlier in the series, coffee comes from tropical countries–Third World countries. About two-thirds of the world’s supply comes from Latin America where it is largely grown by small-scale farmers, who can be paid a little as ten to fifteen cents a pound for their product. By the time the coffee gets to a retail shelf in Canada, it can cost as much $6.00 a pound. So where does the other $5.85 go?

There is a distribution chain the coffee travels along. The primary producers, the coffee farmers, sell their beans to traders–sometimes called “coyotes”–who, in turn, sell them to processors. Processors then pass the coffee onto shipping companies for transport to North America, where there are exporters, importers, brokers, wholesalers, coffee companies (the ones who actually put their name on the coffee), and distributors. Each of these charges a fee for their services before coffee gets to the shelf of your local store and finally to the consumer.

We say that the value of the coffee is $6.00 a pound, but most of that money remains in North America with the distributor and retailer, the importers, brokers, and so on. Only a few pennies actually make their way back to the primary producers whose work and care was responsible for the quality of the coffee.

So coffee growers and their supporters began to look for a way in which they could receive a fairer share of the market value of their product. The model they developed is now called “alternative” or “fair trade.” The first fair trade certification effort was established in Holland in 1988; today the Fair Trade Labelling Organization operates in Europe, Japan, North America, Mexico, Australia, and New Zealand.

Today a wide range of “fair trade” commodity products are available—tea, sugar, cocoa, even bananas—as well as a range of craft and clothing items.

Monday, March 12, 2012

54 - What Canada Could Do

At the end of the 20th century, Canada’s Official Development Assistance budget, excluding emergency food aid, totaled about $2 billion a year. But less than 20% of this amount was spent on meeting those basic human needs which have the most profound effect in improving the quality of life for ordinary women and men. Less that 20% was spent on things such as primary health care, basic education, safe water, sanitation, and family planning. And yet those are the areas which must be addressed if poverty and its effects are going to be eliminated.

When we look at what have been the most significant advances made in developing countries over the last twenty-five years, the period of time during which I’ve worked in this field, we see that much of it has been the result of the work of Non-Governmental Organizations. As a result of what these groups are doing within local communities, global nutrition (except in Africa) has generally improved. The rate of death for children under the age of five has been cut in half. Overall life-expectancy has improved. Girls in primary and secondary school have increased from 38% of the female population to 68%. Immunization has decreased preventable diseases and has eliminated others, such as smallpox. Access to clean water has improved.

These and many other accomplishments have only been achieved because of the efforts of community-based Non-Government Organizations in developing countries which are often—but not always—supported by overseas partners (like the YMCA) which have some access to funds from national development assistance programs such as CIDA. But CIDA support for NGOs is stingy, and the fact is that by further empowering NGOs much more could be accomplished.

In times of fiscal austerity, which seem to be the norm globally, International Aid is an easy target for reductions. Certainly Canada has no chance of reaching the promised 2015 target for committing 0.7% of GDP to International Aid. Other countries have; Canada has not, and will not.

But even if there were decreases in funds for Overseas Development Assistance [ODA], major improvements in the way Canada’s foreign aid dollars are spent could be achieved simply by redirecting them to the areas of greatest need and the areas which have greatest potential for success. The Canadian International Development Agency made an attempt to move in this direction by identifying twenty priority countries which met those dual conditions; then they undermined their own criteria by focusing most of their aid on Afghanistan, which did not meet the criteria. That was a political decision rather than a good development decision.

Many of the most effective programs to address basic human needs such as the provision of primary health care, basic education, family planning, nutrition, water and sanitation, and shelter, are not only effective but often fairly inexpensive. CIDA, however, has chosen to withdraw support for YMCA programs under $35,000 because they see the administrative costs for such projects as inefficient. As a consequence, for example, CIDA support for YMCA work in Cuba—one of the few civil society agencies in that country—came to an end, because the entire annual national budget of the Cuban Y was less than $35,000.

If CIDA would redirect funds from politically-based projects (like the Business Development programs) to agencies, like NGOs, which work directly for poverty reduction and ensuring basic human needs, our national aid program would be much more beneficial.