Fair Trade label courts success in two-year pilot project

It is also the first time that a Fair Trade certification attempted to deliver direct economic benefit at two different levels of the supply chain: cotton farmers and cut-and-sew factory workers. The report, co-written by the MSG and Fair Trade USA, reveals that Fair Trade can play a role in promoting ethical and sustainable supply chains in the apparel sector.

During the two year pilot period, four factories out of 55 applicants were certified, with four more in process—a testament to the rigorous Fair Trade standards. A total of 16,000 cotton farmers in India, Egypt and Nicaragua directly benefited from participation in the program, along with 1,300 factory workers in India, Liberia and Costa Rica. This impact was made possible due to participation and purchases made by pioneering brands, including prAna, Maggie’s Organics, HAE Now and Good & Fair.

Key findings include:

Workers in certified factories earned 15 percent above local minimum wage on average, and up to double the minimum wage in one facility.

Distribution of the Fair Trade premium resulted in tangible change in the local community (e.g. building a school in war-torn Liberia, and distributing cash bonuses equivalent to one week’s pay).

Impact (as measured by Fair Trade premiums) tripled each year of the program, due to availability of certified products through national channels like REI and Zappos.com.

There is no one-size-fits-all approach to worker representation in cut-and-sew factories, and worker training is needed to ensure that all employees understand their rights, including the right to freedom of association as required by Fair Trade standards.

Several members of the MSG, a working group of 12 diverse representatives from across the apparel supply chain, visited pilot partners in India in 2011 with generous support from Catholic Relief Services’ Fair Trade Fund. One NGO participant, Green America, observed a transformation in worker attitude, confidence, and sense of security.

“[Workers] had more pride in their work and felt more respected at this factory than at previous jobs,” said Elizabeth O’Connell, Fair Trade Campaigns Director at Green America. “They stressed the importance of being paid on time, and relief that their payments went via direct deposit into their personal bank accounts—something especially important for the women, as their cash wages were often taken by their husbands in the past.”

The full report outlines recommendations from the MSG, and includes Fair Trade USA’s approach to promoting continuous improvement and economic development, premium management, higher wages, worker representation, and consumer transparency. All recommendations are intended to address the complexity of the apparel supply chain while providing the greatest benefit to farmers and workers.