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Journal of Business Ethics (2009) 86:326 Springer 2008 DOI 10.1007/s10551-008-9757-5
What do Corporations have to do with FairTrade? Positive and Normative Analysisfrom a Value Chain Perspective Darryl Reed
ABSTRACT. There has been tremendous growth in the sales of certified fair trade products since the introduction of the first of these goods in the Netherlands in 1988. Many would argue that this rapid growth has been due in large part to the increasing involvement of corporations. Still, participation by corporations in fair trade has not been welcomed by all. The basic point of contention is that, while corporate participation has the potential to rapidly extend the market for fair trade goods, it threatens key aspects of what many see as the original vision of fair trade most notably a primary concern for the plight of small producers and the goal of developing an alternative approach to trade and development and may even be undermining its long-term survival. The primary purpose of this article is to explore the normative issues involved in corporate participation in fair trade. In order to do that, however, it first provides a positive analysis of how corporations are actually involved in fair trade. In order to achieve both of these ends, the article draws upon global value chain analysis.
KEY WORDS: fair trade, value chain, commodity chain, corporate social responsibility, social economy, co-operatives
ABBREVIATIONS: ATO: alternative trade organization; EFTA: European Fair Trade Association; FINE: FLO-I + IFAT + NEWS + EFTA; FLO: Fair Labelling Organization; FLO-I: Fair Labelling Organizations International; FTF: Fair Trade Federation; GVC: global value chain; IFAT: International Federation of Alternative Trade; NAATO: North American Alternative Trade Organization; NEWS: Network of European Worldshops;
NGO: Non-governmental organization; TNC: transnational corporation; UCIRI: Unin de Comunidades indgenas de la Regidel Istmo (Union of Indigenous Communities of the Region of the Isthmus); UFCO: United Fruit Company
Introduction
There has been tremendous growth in the sales of certied fair trade products since the introduction of the rst of these goods in the Netherlands in 1988. Many would argue that this rapid growth has been due in large part to the increasing involvement of corporations. Still, participation by corporations in fair trade has not been welcomed by all. The basic point of contention is that, while...