Human rights and business ethics news and comment CCB 116
March 25, 2011
The launch of Fairtrade and Fairmined gold in February should be applauded. There are a few big names amongst the current list of suppliers and one hopes that this list will grow and grow as both supply and demand increase. However, as Fairtrade moves from is traditional stomping ground of agriculture into mining, it is pertinent to remind ourselves of the significant limitations of the model.
The first criticism of Fairtrade is the price distortion argument where the price floor, which is usually set above the market price, acts as a subsidy. This results in increased production and excess supply, lowering prices for those in the non-Fairtrade market. This problem is exacerbated by the fact that often, Fairtrade products are sourced from particular geographies, such as Latin America. Whilst countries in Latin America are poor, they are not as poor as others in Africa. Therefore, the advantageous Fairtrade prices which benefit Latina American farmers and consequently disadvantage those on the outside of the ‘Fairtrade family’ are even worse for African farmers, for whom similar price changes carry much greater weight. This is particularly relevant in the case of the newly launched Fairtrade gold, which seems to be, for the time being, solely sourced from South America. Reading horror stories about the Kimberley Process (see the Business and Human rights report outlined in this section) and its recent failures to ‘deal’ with Zimbabwe reminds us of the huge costs of failing to tackle mining supply chains in Africa.
A further critique of Fairtrade is the mainstreaming argument, which attacks the movement for not being ambitious enough; for working with the ‘immoral’ corporates and mass retailers instead of setting up a fairer, autonomous trading system. This final point is all well and good for the idealists out there – but given all the challenges faced by those wishing to ‘clean up’ supply chains, it could be argued that creating a totally independent trading system might be termed ‘biting off more than you can chew’, at least for the time being.
Despite these significant criticisms, I will be supporting Fairtrade gold. Not because it has all the answers, but because for a contentious industry, it is the best option we as consumers have at the moment. And I will be keeping an eye on the list of countries the scheme involves, hoping to see some African names on it, sooner rather than later.
Francesca is a Senior Researcher at Corporate Citizenship. Contact her to discuss community investment and stakeholder engagement at Francesca.hicks@corporate-citizenship.com
Google’s actions in Egypt boost human rights score
Actions by IT giant Google to promote freedom of speech in Egypt during the recent uprising have led SRI firm Vigeo to upgrade the company’s human rights score. Google, coupled with Twitter, launched a ‘speak to tweet’ service in Egypt that enabled residents to communicate internationally despite the government shutting down internet and mobile phone networks. The system allowed users to dial a number from payphones and subsequently converted voice messages into text. Tweets were then translated allowing the world to gain first hand insight into the Egyptian plight. Vigeo has stated that it considers Google’s initiative as a “contribution on the part of the firm towards the promotion of freedom of expression in society” and thus advised investors and asset managers of an upgrade in the company’s human rights score.
Apple report highlights serious supply chain challenges
Apple released its Supplier Responsibility 2011 Progress Report in February, highlighting both the achievements and the challenges facing the company. Child labour was found to be an increasing problem: the report found 91 children working at 10 facilities in Apple’s supplier base, up from the previous year. The company also acknowledged for the first time that 137 workers making Apple products had been poisoned by hydrocarbon n-hexane at a supplier factory. The report also highlighted decreases in compliance with requirements on working hours, workplace injuries, hazardous substances and environmental standards between 2009 and 2010. Compliance with wage and benefit standards increased however. The report and its increased transparency is a reaction to the much publicised tragedies in Apple’s supply chain last year, when over a dozen people committed suicide after working for Apple supplier Foxconn.
Business and human rights in Anglophone Africa overview
The Business & Human Rights Resource Centre launched its first regional briefing Business & human rights in Anglophone Africa in February. The report provides an overview of business’ human rights impacts in the region including concerns and company responses, case studies of positive initiatives and legal and political developments. Positive examples from the briefing include Marks & Spencer which has made strides in ethical supply chain recruitment by being the first UK retailer to launch Fairtrade-certified vegetables. The efforts of Microsoft and HP are recognised due to their partnership with the United Nations to combat the dumping of electronic waste in developing countries. The HIV/Aids support programmes of Anglo American and De Beers are also commended.
First company convicted of corporate manslaughter in UK
Gloucestershire firm Cotswold Geotechnical Holdings became the first company to be convicted under new UK corporate manslaughter legislation in February. Alexander Wright, a geologist from Cheltenham, died at a development site near Stroud in September 2008 when a trench collapsed on him. He was a junior geologist investigating soil conditions in the deep trench. A jury found the company guilty of failure to ensure the safety of Mr Wright. The company was subsequently sentenced to pay a £385,000 fine due over 10 years at a rate of £38,500 per annum. The Corporate Manslaughter and Corporate Homicide Act 2007 is described by the Health and Safety Executive as “a landmark in law” which represents the first time organisations can be found guilty of gross breach of duty of care resulting in death.
Fairtrade and Fairmined gold went on sale worldwide at 20 companies for the first in February. Companies involved include Garrard. Each piece will be hallmarked with the Fairtrade Mark and the Fairmined Mark of the Alliance for Responsible Mining (ARM), the stamp of reassurance that miners are getting a fair deal. The launch of the certified gold is designed to help thousands of small-scale, impoverished, artisanal miners in countries including Bolivia, Colombia, Ecuador and Peru. Human rights in the gold supply chain is a big issue as globally over 100 million people depend either directly or indirectly on small scale mining for their livelihoods, risking serious disease, injury and death in dangerous conditions with little legal protection. Miners benefitting from the system will receive a set minimum price for their gold, either at or above the market price plus a Fairtrade premium to invest in community and business development projects.
Report guides ICT companies in protecting human rights
A new report published by BSR on 14 February entitled Protecting Human Rights in the Digital Age tackles the growing number and complexity of human rights risks faced by ICT companies. The report highlights the tension between freedom of expression and issues including national security and the protection of children and the vulnerable, heightened by digital communications. These challenges are felt keenly by technology companies facing competing demands. The report concludes that risks to freedom of expression and privacy apply to the full ICT value chain. Businesses can inform dialogue and mitigate risk exposure by undertaking human rights due diligence across their operations, says the report.
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