Indochine Natural's foray into the world of Fair Trade
started not as a philosophical approach to doing business but more as a
practical necessity in working with a commune of farmers in northern Viet Nam
during 2007. Over a period of probably five years this commune had seen its
fair share of "outsiders" coming and going with various business
proposals, and in most cases the farmers were on the losing end in these deals.
So not unexpectedly, they were cautious when approached by Indochine Natural.
Indochine Natural was interested in exploring the potential
for providing economic opportunities for rural communities in Viet Nam, as this
group is ranked as the poorest of the poor. The basic proposal was that farmers
would grow loofah, and along with their families and other members of the
community take part in value adding the loofah. This would provide a range of
export quality bathroom loofah products for the company. Another component of
the loofah products was a fabric backing made from hand-woven hemp produced by
a women's group in a mountainous region in the north of Viet Nam.
Dr. Mike Thair, the Australian Managing Director and founder
of Indochine Natural, developed an approach to build trust with the farming
commune. Ms Le Thanh Thuy, the Vietnamese co-founder of the company, carried
out the implementation. Central to the approach was a transparent contract with
the commune that identified all of the technical and quality parameters of the
loofah to be grown and purchased. Included in the contract were payment
details, and most importantly an advance to be paid to the farmers so that they
would not be out of pocket in purchasing fertilizer and other items required to
grow the loofah. Importantly, the company provided training and other capacity
building free of charge in those areas where the farmers lacked the skills and
resources in producing the loofah products.
Particular attention was given to ensuring that those
involved were earning a good living wage, especially as the payments were made
on the number of loofah pieces grown and/or processed by the farmers and their
families. The work was monitored by Ms Le Thanh Thuy to ensure that children
were not being exploited, and she made direct payments in cash to the farmers
and workers to ensure that middlemen weren't exploiting them.
Gender equity was important, and Ms. Thuy ensured that women
were not discriminated against in any of the activities and earning
opportunities. Safe and comfortable working conditions were provided in a
vacant warehouse, and Indochine Natural provided all of the necessary safety
gear and instruction on safe work practices.
The approach proved to be very successful with the initial
group of 50 farmers, and as a result more farmers wanted to become involved.
Subsequent research by Dr. Thair revealed that the approach adopted was in fact
very close to the principles of the World Fair Trade Organization (WFTO) and
similar organizations.
With the knowledge that Indochine Natural was using WFTO
practices in their cooperation with the farmers, inquiries were made to
WFTO-Asia on the steps required for accreditation and membership. An initial
requirement is referees, and one of the referees must be a WFTO member in
country. As there was only one Fair Trade accredited company in Viet Nam at
that time, Dr. Thair immediately made contact with the view of having them get
to know the company and provide the necessary reference. This approach from Dr.
Thair was not entirely welcomed, and this particular Fair Trade company was not
enthusiastic about becoming a referee. If one considers the position of this
company as the sole Fair Trade accredited company in Viet Nam, and the enormous
financial and competitive advantages this provided, perhaps it is
understandable that they were not particularly enthusiastic in having a
potential competitor. However, given the principles of WFTO membership and
accreditation, this attitude is indeed surprising. As it appeared impossible to
move forward without this referee, the ambitions of Indochine Natural for WFTO
membership were temporarily put on hold.
Despite this set back, Indochine Natural made contact with
approximately 100 Fair Trade retailers and wholesalers across the USA and
Europe to offer the products they had manufactured with the loofah produced by
Vietnamese farmers. Even though these were produced under WFTO conditions, the
general response from those contacted was that unless Indochine Natural had
Fair Trade accreditation with WFTO or a similar organisation, then these
companies were not interested in doing business.
Fortunately, two businesses in the USA responded positively,
and their approach was to make a personal visit and evaluate for themselves the
practices of Indochine Natural. During 2008 the owners of both companies
visited Ha Noi and did a reasonably thorough audit of Indochine Natural
operations, including meeting with the workers and looking at their employment
conditions. In both cases the company passed with flying colours and business
negotiations were commenced that resulted in exports to the USA.
In 2009 Indochine Natural set up operations on Penang Island
in Malaysia, and again the focus turned to Fair Trade. It was becoming clear
that "Fair Trade" has become a prominent buzz word in marketing, and
that certification through WFTO and similar organizations can be an expensive
and time consuming process. While many buyers sourcing fair trade goods insist
on some form of certification, the experience to-date indicated that some are
more interested in the beliefs and practices of the company than the actual
certification, and are willing to do their own audits.
With certification there were a number of other trends that
were becoming of concern to Indochine Natural. For example, a number of
cosmetics are being labelled as "Fair Trade" when in fact only a very
small percentage of the ingredients are sourced as Fair Trade, and often these
sources are hard to track. Also, from the direct experience a number of certified
Fair Trade companies and organisations in developing countries are dubious, and
often it is common knowledge locally that they are not following appropriate
practices. It was becoming increasingly apparent that "Fair Trade" is
a marketing term only as good as the self-policing a company puts into it.
There is certainly a lot of abuse of the term, and groups such as WFTO are
trying to change this, but with only limited success.
So where does this leave Indochine Natural on its Fair Trade
journey? Firstly, Dr. Thair and Ms. Thuy, the owners of the company are
committed to providing economic opportunities to women and disadvantaged
producers. On top of this, they are of the opinion that Fair Trade is simply
just good business practice. Therefore a decision was made to seek formal
recognition through WFTO. Indochine Natural became a member of WFTO-Asia in
2011, and a full member of WFTO global in November 2012.
For more
information please visit our website HERE
 |
| Ms. Le Thanh Thuy, our Executive Director - Fair Trade, with loofah farmers in Viet Nam |
No comments:
Post a Comment