Changing the label for good

April 19, 2015

Reading Time: 3 minutes

In the minds of global consumers, reading labels on products originating from the global South trigger images of sweatshops, child labour, and the unscrupulous owners poorly paying their workers. In the past decade, the global backlash has forced major brands to reconsider the ethical practices of their sourcing. The fair trade movement has long advocated for certain principles, successfully placing a new form of branding on products that carry its label. Often, consumers simply equate fair trade to payment of fair wages. However it goes far beyond a few extra dollars in the pockets of producers to ensure their sustainability.

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In the minds of global consumers, reading labels on products originating from the global South trigger images of sweatshops, child labour, and the unscrupulous owners poorly paying their workers. In the past decade, the global backlash has forced major brands to reconsider the ethical practices of their sourcing. The fair trade movement has long advocated for certain principles, successfully placing a new form of branding on products that carry its label. Often, consumers simply equate fair trade to payment of fair wages. However it goes far beyond a few extra dollars in the pockets of producers to ensure their sustainability.

Uniquely, as a BRAC social enterprise, Aarong had built sustainability and fair trade principles into its original business plan over 35 years ago. Its producers receive design input, instant payment for their goods, marketing and retailing support, and other livelihood developmental support. In return, Aarong seeks that the producer groups maintain good working conditions, fair employment practices, and respect for the environment – all principles of fair trade. The real challenge in the model becomes monitoring compliance to these principles; this is where innovation and social auditing is required.

Photo: Global Village Peoria

10 Principles of fair trade (Photo: Global Village Peoria)

Social auditing is the practice of evaluating a business’s ability to fulfil economic, legal, and ethical responsibilities expected of it by its stakeholders. Many social auditing firms have strong tools designed for monitoring large-scale ready-made garments (RMG) factories. International brands are then able to mitigate the risk in their supply chains through engaging these agencies. However, this has left behind the millions of workers in micro, small, and medium enterprises (MSMEs) that have little to no institutional support to hire auditing firms to monitor their wellbeing.

Compared to larger factories, MSMEs have a significantly smaller number of workers. But when combined, much like Aarong’s supply chain of various producers, there are just as many to account for. As a pioneer in social auditing for MSMEs, Aarong has changed the rules of the game through its own technologically driven monitoring system. Through annual audits conducted through SourceTrace, an Android-based application, the most remote production units can be provided the support they require to sustain a safe and environmentally-friendly working environment. Being able to centrally analyse their conditions with real-time data makes it an efficient way to provide the necessary consultation to these enterprises. There is no one-size-fits-all solution as there may be for RMG factories. In sectors such as handicrafts, which is hardly driven by technology, it can see a revolution when introducing innovative solutions through low-cost mobile applications that can facilitate the process of development. No longer will geographical limitations be the reason for ignorance in businesses and consumers.

Today’s ‘concerned’ consumers demand to be connected directly to the producer and know that what they are buying is coming from a fair-trade conscious company. This new type of ‘social contract’ that more and more consumers are entering into is the trade-off in which they can enjoy high-quality goods at affordable prices, while ensuring that the most marginalised producers receive a fair share in the economic prosperity that globalisation has brought. “Made in Bangladesh should be a mark of pride, not shame,” Sir Fazle Hasan Abed, chairperson of BRAC, mentioned in his New York Times op-ed following the collapse of Rana Plaza two years ago. Through continued synergy and prioritising social compliance, the government, private sector, NGOs, and consumer groups can work to reverse the stigma and prevent such incidents in the future.


Tanvir Hossain is the manager of marketing and sustainability at Aarong.

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