As the world becomes more intertwined, an increasingly complex supply chain has emerged. From computers to coffee, the end products that consumers purchase often travel thousands of miles before landing in the hands of their new owners. While that may not be such a bad thing per se, longer supply chains mean more chances that respecting sustainability will slip through the cracks, a fact that the media has picked up on in recent years. As a result, human rights abuses and environmental degradation are becoming more of a concern for the average consumer. A slew of labels (Fairtrade, organic, locally-produced, etc.) have become a way to help make informed purchasing decisions.
However, reports increasingly demonstrate that these standards are not always followed. In 2006, the Financial Times reported that Fairtrade-certified coffee growers in Peru had been underpaying their seasonal workers, a direct violation of the certification requirements. In a report to Bloomberg last year, journalist Cam Simpson exposed the child labor practices of cotton farms in Burkina Faso. Such a report would not be quite so surprising if it weren’t for the fact that the cotton produced was being used almost exclusively by Victoria’s Secret for its “sustainable” underwear. The US Federal government is now investigating the matter.
Most recently, Apple was hit last week, following the publication of a New York Times exposé that revealed its workers had been exposed to toxic chemicals, as well as arduous working conditions. According to the report, some workers were forced to work 12 hours a day, 6 days a week. Such conditions clearly go against Apple’s own codes of conducts. Created in 2005, the standards dictate ''that working conditions in Apple's supply chain are safe, that workers are treated with respect and dignity, and that manufacturing processes are environmentally responsible.'' Despite its good intentions, it is clear that Apple has been unable to control its supply chain.
Consumer advocacy groups and think tanks have come down harshly on many of the standards and labels used today. According to Tom Clougherty, policy director of the Adam Smith Institute, “Fairtrade is a marketing device that does the poor little good.” Similarly, Greenpeace has a dedicated blog on “greenwashing,” which they describe as “the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.” The project showcases ad campaigns by major companies that tote their environmental credentials, while simultaneously lobbying against stronger regulation.
Dr. Lucio Baccaro, director of the Masters in Standardization, Social Regulation, and Sustainable Development at the University of Geneva, describes standards and labels as a “second-best solution.” Baccaro and others acknowledge that given the complexity of the global production, it is nearly impossible to have complete oversight over supply chains at all times. Proponents of standards and labels believe stronger enforcement mechanisms and more reliable third-party inspections may help to curb violations. They recognize that although the system may be imperfect, labels and standards help raise consumer awareness that would otherwise not be there.
While much controversy remains, the market value for sustainable goods has increased substantially over the past years and will continue to do so in the future. It is estimated that global consumers spent just over $2.5 billion on Fairtrade certified products in 2007 alone. Such figures demonstrate that more focus is being placed on improving supply chains, as corporations are being held accountable for how their goods are produced. If the stories above are indicative of a growing trend, it is certain that more scandals will unfold. As long as consumers continute to vote with their pocketbooks, corporations will have to pay greater attention to their supply chains. But should standards and labels continue to prove unreliable, more consumers may begin to take corporate promisies with a pinch of salt, whether it's certified or not.
(Photo © DR)