It is found in the form of a private label stuck to the produce, which is supposed to be a marker for environmental or social values, and very often both. Things are slightly different in the organic sector, since for the EU or the United States, the principles were set by the public authorities, although certification and inspection are outsourced to private firms (which can pose problems, especially in third countries). Conversely, for collectively applied private labels (Fairtrade, Rain Forest Alliance-RA, Global GAP, Max Havelaar, etc.) or internally applied private labels (Tesco Nurture or “Filière Qualité Carrefour”), the specifications are designed and proposed by intermediaries such as NGOs or supermarket chains. And since this must be publicised, marketing is provided by the label manager, i.e. by yet another third party which handles the concept promotion. Ultimately, it is a business like any other.
That in itself would not be so serious, if firstly the impacts of this labels race were assessed; and secondly if the most vulnerable players (farm labourers, small entrepreneurs, etc.) actually enjoyed the advantages oversold by the labels. It is there that the shoe pinches. There are few impact studies, and in many cases, they involve self-declaration. Where there are studies, their conclusions on the actual effects are mixed. Let’s look at two examples. The International Guide to Fair Trade Labels (2015 edition) reviewed tens of fair trade or similar labels. On paper, their commitments are solid, the inspections reliable, the procedures transparent, not to mention the impacts positive! However, the authors point out that: “unfortunately there are few works relating to the social impacts of sustainable development labels.” Of Rain Forest Alliance, the flavour of the month label, the authors’ verdict was that: “there was no difference between certified and non-certified farms on a number of points (…)”. Goodness gracious! So there appears to be a difference between the concepts on glazed paper and in reality. The second example is less stark. It comes to us from a recent study on the impact of Fair Trade certification on employment in the banana sector in three countries: Colombia, Ghana and the Dominican Republic. The conclusions are qualified. While the impacts are often positive (e.g. wages level), there is still progress, or even revolutions, to be made in certain fields, such as working conditions in the Dominican Republic or the situation of migrants within certified companies and more generally in Dominican society.
So there are plenty of risks for clients downstream in the industries in handing themselves over body and soul to a third-party certifier. From a cynical viewpoint, at the least, they take the risk of seeing their reputation stained, endangering their essential strategic assets. Less cynically, a genuinely socially responsible company could risk abandoning its own values. For all these reasons, it is crucial for such a company to take another look at its value chains, or else it could see its own image, its brand, its credibility and values collapse like a house of cards the first time a study is conducted by industry whistleblowers or watchdogs, who are now highly organised and influential.
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