How Sustainable is our Latte?

An Asessment of Trends and Standards in Fair-Trade From the Perspective of a New Truly Sustainble People and Planet-Centred Paradigm

As in the case of Corporate Social Responsibility (CSR), there are two distinct versions of Fair Trade (FT). In the past two decades both FT and the social responsibilities of business have received diverse interpretations that have been advanced by various players. On one side of the fence, the greed and hypocrisy of big corporations have prostituted both concepts. To no ones' surprise, in the case of FT, the token advanced by the big corporations has become the most prevalent due to the sheer size of their business and their power to convey their message. Indeed, as I will expose in this paper, the sole motive of big players, such as Starbucks, to participate in FT is not to improve the lives of people. It is anchored instead on their commitment to increase shareholder value by increasing their intangible assets: the enhancement of the perceived image of a "good corporate citizen" through token gestures, which presumably will translate into greater market share and consumer loyalty. In reality, as with the broader concept of CSR, these are nothing more than attempts to dodge criticism and control the activity to their mercantilist advantage, which destroys the authentic origin and purpose of FT.

On the other side of the fence, there are other businesses, usually much smaller, that believe that it is possible through FT to make a profit and also bring meaningful positive changes to the livelihoods of many producers. This is definitely a step in the right direction. Indeed, regardless of how much hoopla big players try to give to their token Fair Trade in pursuit of good old shareholderism, FT is only truthful to its meaning when it is comprehensive -as some genuine coffee fair traders argue- and each stakeholder deems it to be sustainable. Yet, even on this side of the fence, to achieve true sustainability, the bar has to be lifted significantly; not only to guarantee an existence just above the poverty line, but to guarantee equitable terms of trade that provide a dignified life to all stakeholders in the South in line with that enjoyed by equivalent stakeholders in the North.

With the current market-driven structures governing societies worldwide, for the small landholders and labourers of the South to entertain the idea of pursuing a dignified life, equivalent to that in the North, through FT, it is sheer wishful thinking and a futile and frustrating exercise. To make it a realistic expectation, conventional wisdom both North and South must be radically changed to redefine the purpose of society, democracy and business. This entails that corporations must make the social purpose and their social responsibility as the pre-eminent and inextricable element of corporate culture in pursue of truly holistic sustainability, replacing money and shareholder value as its intended end. To put it succinctly, it is quite acceptable for business to reproduce and accumulate as much capital as possible for its shareholders, as long as none of it is done at the expense of the welfare and the sustainability of people and the planet, as it is systematically done today. Thus, to change the current ethos, true democracy and sustainability for people and planet, instead of today's untrammelled Darwinian capitalism, has to be the only purpose of societies. In this new ethos, the logic of the market would no longer rule, for markets and corporations must become mere vehicles to achieve our new intended end. Under this vision, FT would then become a natural end result of the socially-devoted and responsible new nature of business culture, which, along with the newly-redefined purpose of democracy, of government, of consumption and citizenship, all centred on the sustainability of communities and the planet, would act as mechanisms to achieve long-term sustainable well being. Then and only then, both in the case of FT in particular and in the broader case of the social responsibilities of business, may we achieve a sustainable and fair existence where we can actually procure the welfare of all and every rank of society.

To support my contention of the evident shortcomings and failures of today's market-based societies in creating an equitable ethos for all its participants, both through FT and more broadly through a responsible business culture, I will use FT coffee to illustrate the argument. Fair Trade coffee is undoubtedly the most important of all FT activities in the number of participating stakeholders, in the market value generated and in the level of consumer awareness. For these reasons, it is the best arena to observe how the interaction of the visions and missions of a diversity of stakeholders, from large corporations to small retailers, and from small landholders to crop labourers, illustrates the deviations, failures, shortcomings and also successes generated supposedly in pursuit of a truly sustainable ethos. Indeed, assessing the realities of Fair Trade coffee -and FT in the broader ethos of sustainable business practice- as an economic and social interaction, provides a sound case study to assert that there will be no realistic sustainability and, thus, no true fair trade and no such thing as a truly socially responsible corporation unless we transform the purpose of society, of government and business to make it the welfare of people and planet and nothing else.

Álvaro J. de Regil

Executive Director

The Jus Semper Global Alliance