Sample SA8000 CertificateLatest since the factory fires in December 2012 we know:
Audits and responsible business practise don’t always go together. In fact they don’t always square up, because the system of audits and accreditations as it is designed has weaknesses.
The mentioned fires showed the weaknesses of one of the most stringent certification systems to date: SA8000. In other words: at least one of the factories had just weeks previously passed their SA8000 re-audit.
The most recent Rana Plaza tragedy did not add much to those insights – other than the fact brands still often have not a clue about where their orders are really produced (as could be verified by Benetton’s reaction to the events).
The trouble is … just as the December events that soiled SA8000’s credibility and reputation, previous incidents – to which I’ll add some insider information – did exactly that with other audit and certifications.
Fraud – the organic cotton drama
Indian authorities discovered in April 2009 that at least 2 certification organisations – the French EcoCert and the US-based Control Union were involved in certification fraud, and fined these organisations subsequently.
However, the news did not hit the headlines until January 2010, at which point of time either of the above mentioned organisations had yet to issue a statement about their involvement and prosecution.
When the news finally did hit the headlines, the CEO of Textile Exchange – one of the largest organic cotton organisations, notably with their own proprietary certification concept in place – could not forgoe commenting and telling the world media that (of course) all this was a singular case.
What few know, and you just have to take my word on this, is that these events kept resonating within a number of organic cotton organisations until at least mid 2011 – two years after the original discovery.
Consequently, users and consumers went off to do their own research and not all the results looked pretty, specifically with regard to Chinese and Indian ‘organic cotton’ products.
Video: David Packman show reporting in January 2012 on the news that Victoria’s Secret organic cotton from Burkina Faso in fact had been harvested by what must be considered child slaves …
The downsides of Fairtrade
“Trust, but verify.”
Ronald Reagan
The problems in the Fairtrade system are equally little discussed. The label has certainly won over many consumers, but there remain structural issues within the Fairtrade organisation.
For example: FLO – currently the organisation creating the Fairtrade standards – was founded in 1997. Up until 2004 it played however both roles: That of the standard devising authority, and that of the supposedly independent third party auditing organisation.
Only in 2004 was FLO-CERT – a for profit organisation as opposed to FLO which is technically a charity – founded. However – to the day the profits from FLO-CERT are funneled into FLO, and the two organisations share at the very least the same office building at their German headquarters as can be verified on their websites (FLO, FLO-CERT).
This issue is not new – in fact it has been raised in publications in more than one European language, for example in this 2009 French book about the Fairtrade movement or Peter Griffith’s 2011 paper ‘Ethical Objections to Fairtrade.
Video: Peter Griffith speaking at Allegra Strategies symposium
WFTO unknown sides
Not that the WFTO (World Fair Trade Organisation)’s practises are any better than Fairtrade. In fact, WFTO practises could nearly be labelled as a collection of best ‘how not to do audits or certifications’ practises.
“Trust is good,
but control is better.”
Vladimir Lenin
For one, WFTO accreditation is handled very loosely. It’s akin to a self assessment, and most organisations that bother will manage to get accredited.
Then, already for the WFTO Sustainable Fair Trade Management System (SFTMS) the organisation relies on what cannot be called anything else than ‘self-audit’. In other words: it was the certification candidate that audited his/her own organisation. Sure enough the standard was given by WFTO, but as for the rest …
As for the WFTO SFTMS’s successor – the WFTO Fair Trade System and its Guarantee Scheme – I have bad news:
While a step ahead of the past, the audits still are either self-audits or peer-audits.
How I know? Let’s say ‘been there, done that’ for the first part. And ‘information from 1st hand’ for the second part. The sources are reliable, and I know their name, address, email, and where they live.
Conclusion
“It takes 20 years to build a reputation and 5 minutes to ruin it.
If you think about that you will do things differently.”
Warren Buffett
What these cases show once and again is that consumers are very well advised on taking labels with a grain of salt.
While we know that consumers rely on certification labels for their more responsible purchases, they still feel it is a thing they cannot entirely trust.
And cases as the ones above are the reason why. These certification schemes are no doubt a step into the right direction, but the lack of transparency of their practises is an absolute catastrophe for themselves, as well as – possibly more importantly – all those consumers willing and wanting to buy better. A reputation is after all easy to loose, and very, very difficult to recover as Warren Buffet famously said.
It remains to be said that while I picked the above cases as prime example – and because I have first hand insight of one type or another into them – they’re by far not the only ones.
Labelling organisations after all have an interest in boasting as many accredited products or brands as possible. The more there are, the healthier their financial balance sheet. And it is exactly here that lies the crux: when confronted with the option of loosing a good number of their accredited members but sticking to the values of their promise, finances, sadly, more often than not tend to win over vision, values and ‘doing the right thing’.
