The new CEO of Fairtrade, Senthil Nathan, is excited about his new position, sharing that the idea of Fairtrade is well known now, more than ever, specifically in Oceania.
“It’s a region with some dynamic economies and powerful consumers, yet communities live under poverty and are the frontline of climate change impact. It’s a privilege for me to lead this movement designed to work at the intersection of such forces,” said Nathan.
Nathan worked with Fairtrade in India between 2015 to 2017, after which he worked with not-for-profits before returning to Fairtrade as CEO. Nathan revealed that working with the organisation had felt like a homecoming, as Fairtrade was the organisation where he began his career in the development sector.
Having worked closely with smallholder communities in most of Asia and Oceania, across these countries, and as varied as they are, Nathan said that the aspirations of each smallholder community were the same.
“They need fair prices which will help them to lead a dignified life, improve their farming practices, and provide necessities for their families.”
When sharing why fair trade was important to him, Nathan said that when consumers walk into a supermarket and choose a product, they choose between paying the lowest price or choosing sustainable products. Nathan gave the example of whether a consumer should choose a product that alleges its sustainability or a product certified as fair trade.
“Fairtrade remains the best option by far. When a consumer buys a product with the Fairtrade mark, the value directly flows through to the producer communities as Minimum Price and Fairtrade Premium.”
When consumers choose a Fairtrade product, the choice compounds and has the power to transform the world. Furthermore, the Fairtrade mark is the world’s most ethical label.
Nathan elaborated Fairtrade’s practices are outlined by three key features, Fairtrade Minimum Price, Fairtrade Premium, Fairtrade Standards, and Ownership by Producers.
Fairtrade Minimum Price for all commodities acts as a safety net for farmers and workers, protecting them from market fluctuations and helping them plan for the future.
Secondly, Fairtrade Premium is an extra sum paid to a community fund where the product is produced. Then the community democratically decides how to spend it based on environmental, social and economic needs.
Nathan commented that this funding could be for anything from health centres to new farming equipment and solar panels for electricity.
Thirdly, Fairtrade Standards, wherein producers and traders must meet standards or rules about conducting their business to be considered fair trade. This encapsulates environmental protection, fair pay, and gender equity.
To monitor these standards, an independent body conducts audits to make sure that the Standards are being met.
Finally, Ownership by Producers is a method of conducting business where Fairtrade is the only certification system co-owned by the producers, who have 50 percent of the votes in the organisation’s decision-making. Therefore, producers have the opportunity to help shape the Fairtrade Standards and prices so that they genuinely benefit.
Consumers globally have become more focused on the impacts of their purchasing decisions, with a global study revealing that 94 percent of those surveyed wanted to live a more sustainable life. In New Zealand specifically, research conducted through Kantar revealed that from 2000 New Zealanders surveyed, 90 percent were committed to taking action to live a more sustainable lifestyle, which has increased by 9 percent in 12 months.
Furthermore, Fairtrade is one of the most recognised ethical labels in New Zealand, with 55 percent of New Zealanders surveyed stating that they knew buying fair trade products was essential.
Consumers and businesses have grown more knowledgeable about the impact of Fairtrade, with ethical sourcing transitioning from a ‘fringe’ issue to a part of the mainstream. Nathan explained that this growing awareness and understanding has meant that ethical sourcing has become a manner of making good business decisions.
Nathan shared that Fairtrade has remained driven by addressing the inequities of the trading system. He offered the example of cocoa farmers worldwide, with approximately five to six million global cocoa farmers who possess mostly small farms in areas such as Cote d’Ivoire and Ghana, where 70 percent of the world’s cocoa is produced. The cocoa industry is dominated by nine global companies, from trading to processing and manufacturing.
“For every tonne of cocoa sold, farmers are estimated to receive less than seven percent of the value of the final product, whereas the manufacturers get 35 percent and the retailers get 44 percent. Pushing cocoa farmers into poverty and causing issues like child labour.”
By comparison, Fairtrade cocoa farmers are part of a cooperative or group to become Fairtrade certified, after which they have access to a market where they are paid a guaranteed minimum price for their cocoa, with their communities receiving an extra premium to spend on environmental, social and economic issues that they are facing.
“We also support them to address issues like gender equity and child labour. It’s not a perfect system, but it goes some way to redressing the balance.”
Nathan hopes that there will be more awareness around Fairtrade and that consumers and businesses will recognise Fairtrade certification as the gold standard. However, consumers are increasingly demanding more regarding ethical practices from businesses, supported by their willingness to pay a premium for ‘green’ products. While businesses have begun moving towards sustainable business practices, Nathan warned temptation to cut corners where consumers couldn’t see was still present in some companies.
He emphasised the importance for the industry to maintain vigilance in ethical and sustainable practices being based in fact to avoid issues such as greenwashing.
When describing Fairtrade’s manufacturing processes and products, Nathan said that the organisation audits each of its products against its Fairtrade Standards, which means that with every purchase of Fairtrade coffee, for example, consumers can be confident in the knowledge that the farmer was paid fairly, as well as the exporter, packers, and roasters. Achieving these assurances through the organisation’s globally recognised certification.
As the new CEO, Nathan focuses on building a better platform of understanding between consumers and businesses about the connection between paying people fairly for their work and sustainability. He explained that ensuring farmers can feed their families will ensure that they can take care of the environment through their farming practices, thus guaranteeing sustainability throughout the lifecycle of every product produced while also caring for the communities which farm some of the most significant ingredients in the market.