Fair trade provides a commercial and trade focus, social and environmental benefits — and a check on governance and accountability. It’s a timely business model says Molly Harriss Olson MAICD, CEO of Fairtrade Australia New Zealand.
More than 30 years ago (1988), Fairtrade changed our shopping habits by demanding we bring our consciences to the checkout. Shoppers were urged to consider the true cost of cheap goods, including the fleecing of farmers, the exploitation of workers and degradation of the environment.
Fairtrade Australia New Zealand is a not-for- profit, which licenses the use of the Fairtrade mark on more than 3000 products meeting its rigorous social, economic and environmental standards. Australian retail sales of Fairtrade certified products exceeded $327m in 2019, and globally, annual retail sales are nearly €10b.
While agriproducts such as coffee and cocoa have traditionally dominated, in more recent times the movement has broadened to services. Yet there remains much to do, says Molly Harriss Olson MAICD, CEO of Fairtrade Australia New Zealand. The American-born Harriss Olson leads the dynamic team strengthening Fairtrade supply chains, growing revenue and bolstering environmental and economic sustainability practices throughout the Asia Pacific region.
Harriss Olson cites modern slavery as an expanding frontier. “The ‘don’t ask, don’t tell’ isn’t going to work for very much longer, because there is starting to be real recognition of huge problems in many supply chains,” says Olson.
She notes that companies participating in Fairtrade supply chains understand that while this course of action is certainly more expensive than slavery in the short term, over the medium to longer term, healthier (and happier) supply chains result.
“Contemporary directors should expect the CEO to take consequent action when human rights, International Labour Organization (ILO) or environmental violations are found anywhere in their operations, and at any level of suppliers and contractors,” she says. “This requires unannounced audits and partners such as Fairtrade, which have measurable standards and require robust independent auditing for the company. Our economic systems created this problem, so our economic systems need to engineer the solution.”
Harriss Olson warns of the risk of modern slavery in supply chains across all regions and value chains. “Violations of the most fundamental human rights are creating corrupt profits of over US$150b per year,” she says.
The present structures of global trade are engineered for plausible deniability, enabled by lack of transparency and accountability. Yet with the passage of the Modern Slavery Act 2018 — which requires entities with annual consolidated revenue of $100m or more to report on the risks of modern slavery in their operations and supply chains and their actions to address those risks — that’s changing.
Harriss Olson points out that what has been happening around companies’ carbon disclosures, and reporting around climate and sustainability measures, needs to happen in relation to human rights and slavery. “As soon as companies and boards take responsibility for these challenges, it changes everything,” she says.
Fairtrade has the most transparent, robustly audited supply chains in the world, adds Harriss Olson. However, she acknowledges that integrity in supply chains today are analogue systems, involving people physically working on the ground, to verify “every step” along the supply chain.
“In some cases, there’s no other way, because when you’re talking about something as sensitive as child labour, you’re not going to solve that in a blockchain,” she says. “You’re only going to find that with unannounced audits, with protocols that protect the children, first and foremost, and then find ways of dealing with the commerce implications of that in properly confidential ways to protect the victims.”
The sooner we all get on the front foot and help each other to solve these problems, the more accountable all value chains can be.
Nevertheless, Fairtrade is supporting digital transformation to “enable real-time visibility so companies and consumers can see clearly the positive impact of supporting fair and slavery-free supply chains”.
Harriss Olson says digitisation is not designed to enable producers to participate fairly in their supply chains, control their own data or govern their future. “As presently practised, digital is most likely to increase the already severe inequality in these value chains,” she says.
For that reason, Fairtrade is partnering with Food Agility Cooperative Research Centre to create a sustainable food future, and AgUnity smartphones to design digital solutions that give farmers agency and control over their own digital future. The phones enable farmers to geospatially locate their plot of land to demonstrate the sort of assets likely to be valuable to any microfinance application; allow families to distribute income between accounts; and provide apps to help with climate identification or even identify when a coffee berry has reached its optimal ripeness to ensure the best price.
“The apps will help them take more control over their businesses — usually, small family businesses — and then help them be greater participants in those differently engineered Fairtrade value chains,” she says. “The sooner we all get on the front foot and help each other to solve these problems, the more accountable all value chains can be. Ultimately, it will be a grave risk for those that don’t.”
Harriss Olson says we’re at an exciting point in history, when the root causes of overwhelming problems are better understood, and the solutions more accessible.
From 1992–96, she served as the founding CEO of President Clinton’s Council on Sustainable Development, the first initiative of its type in a world where Sustainable Development Goals and Millennium Development Goals just didn’t exist. “There were just no guardrails at all,” she says.
However, the World Trade Organization (WTO) had begun to promote the concept of trade for aid, as opposed to aid as charity, which made explicit the notion that it was the structures and systems that were keeping people in poverty.
“It was about then we realised that if we can just engineer the structures differently for more inclusive growth outcomes, then this didn’t have to be a moral question, it could actually be a design question,” says Harriss Olson.
Contemporary business leaders, informed by a greater understanding of sustainability issues, have the opportunity to act more decisively than ever before. “It’s only a matter of time before we find that it’s much, much cheaper to do the right thing, to do the more business-savvy thing in your supply chain, than to ignore the problem and push it away.
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