ETHICAL TRADE

Papers discussed
• Blowfield, M. (2003). Ethical Supply Chains in the Cocoa, Coffee and
Tea Industries. Greener Management International, (43), 15-24.
• Freidberg, Susanne (2003). The Contradictions of Clean: Supermarket
Ethical Trade and African Horticulture, IIED Gatekeeper Series No.
109, International Institute for Environment and Development (IIED),
London.
• Heeks, R and R Duncombe (2003): Ethical Trade: Issues in the
Regulation of Global Supply Chains, CRC Working Paper 53, Centre on
Regulation and Competition, Manchester (UK), July.
• Browne, A W et al (2000): “Organic production and ethical trade:
definition, practice and links”, Food Policy, 25(1), 69-89.
Ethical vs Fair
Fair trade predates ethical trade.
Fair price vs Ethical processes
Ethicalness: people, environment, animals
ETI (1998)/EUREP-GAP: issues of price, inequality?
Role of supermarkets in North
Ethics anxiety
Benign Dictators
Case of Zambia’s baby veg industry
Ethical Trade as Regulation
Issues of labour standards as well as environmental standards.
Political and economic power of MNCs Environmental concerns

Impact on workers in South

Challenges with traditional regulation: Implementation
• Regulatory capture and hold up
• Implementation failure
• Entrenchment
High cost, Low credibility, impact failure
Adverse effect in case of effective regulation
2 alternatives to state regulation falling out of favour:
• Do nothing
• Something else: ARMs
Incentives: economic gain
avoidance of economic loss
social benefit
avoidance of social disadvantage
politico-legal benefit
avoidance of politico-legal disadvantage
Actual vs potential incentives
Efficacy emanating from incentives:
• Indirect internal efficacy
• Direct internal efficacy
• External efficacy

Mechanisms that apply incentives:

• Contracts
• Rules and Codes
• Informal agreements
• Peer actions
• Supply flows
• Demand flows
• Information flows
Regulatory mechanisms are complex: Bi/multilateral
Sector based
Self regulation/co-regulation
Non-state, non-self regulation

Regulatory impact of ethical trade: paucity of data

• Lack of research
• Lack of impact research
• Lack of good impact research
 Classification of available data

Pre-implementation Post-implementation
measures measures

• Existence • Effectiveness
• Extent • Efficiency
• Expedience • Externalities
Design focused vs institution focused analysis

Other forms of ethical trade regulation:

• Self regulation
• Peer and advocate regulation
• Supply market regulation
• Demand market regulation

Asymmetries

Prime focus of institutional analysis: multinational corporate

stakeholders
Case of tea, coffee and cocoa
Case of Premier Brands and Starbucks
Attention to price important to prevent exploitation of labour and
environment
Smallholder perception of benefit
Influences on ethical sourcing
Disparity between standards and norms
Organic and ethical production and trade
Interest has been consumer driven as well as trade driven
People before profits campaign
Increasing overlap between organic and ethical
Labelling/Alternative Trading Shops (ATOs)
Perceptions of consumer
Current vs potential links between organic production and ethical trade
Thank You