Beyond Fair Trade

As far as I’m aware of, having spent a lot of time in extensive research in this field, there is no such thing like an appropriate certificate for the degree of transparent, fair and unique way of our operating, so I will try to give you a clear depiction why we are “way beyond fair trade“.

Fair Trade

There are a few fair trade organisations and standards and almost all of them either don’t fix, or don‘t publicly state the amount of how high an „fair trade“ income or living wage for employees in a certain area or country should be (like Fair Wear) or it is pretty much the same as the legal minimum wage of the developing country and therefore insufficient and not really fair for employees (like the WFTO standards in Bangladesh).

By far the most transparent and fairest organisation, with the highest standards of all organisations known to me throughout my research, is Fair Trade International together with the Global Living Wage Organisation.

A small comparison of the different fair trade organisations and their standards I prepared for you further down in the article, but for now I will only compare our „fair trade“ practices to the standards of Fair Trade International.

Their fair trade standards are great, as they assure that workers in developing countries earn enough to be able to cover all their monthly expenses for a decent standard of living. The standards also support the general development of small producers as well as proper working conditions. Fair Trade International estimates the actual living wage per family very accurate and generous by visiting the workers homes and markets in their specific area, to collect information about all costs needed per month for a family including nutritious food, housing and other essential needs, as well as a provision for unexpected events. The living wage for a decent standard of living in an area is estimated regardless of whether or not the local employers feel they can afford this wage for their employees! (very important)

For more than 21 months till now I lived in the homes of friends amidst co worker families in the neighbour village of our garment manufacture and close to the handloom manufacture, sharing their everyday life. So I can confirm that the estimated living wage for Sri Lanka by the fair trade standards of fair trade international is indeed very fair and generous, and exceeds the common salaries for any job over here in Sri Lanka by far. For a deeper insight into our relationship and connection to the manufactures I recommend to read our blog articles „How it all started“ and „The Garment Manufacture“.

In Sri Lanka, for example, Fair Trade International’s report (June 2023) estimates the cost of living for a family of 4.5 members to be 76,266 LKR per month, which translates to a living wage of 47,464 LKR per person if only 1.75 family members work. This far exceeds the common salaries of 20,000 to 30,000 LKR per month and the legal minimum wage of 12,500 LKR.

Beyond Fair Trade

However, our approach is not only to be fair but to truly honor, support and value the handcraft of our brothers and sisters that weave our fabrics or sew our clothes.
Our co-workers in Sri Lanka earn 51% more from us per product than the highest fair trade standards known to us!

Because we don’t own the manufacture and we can’t provide them yet with large enough orders to fill a whole month, I broke it down to the earning of a worker for a single product in our calculation below to see everything in detail.

Beyond fair trade calculation Sri Lanka.pdf

On average our small manufacture can make 7 handloom products a day per worker. It seems a lot, but the making process is divided in groups. Each group is responsible for a certain part of the garment, which means no rush, just proper management.

Besides the high extra fair trade surcharge, that goes directly to our co-workers and artisans, we take care of each other in many different ways – like bringing fruits as a daily treat, snacks and tea for everyone, spending free time together to chat and enjoy. We step by step upgrade the working space and make it cozy by decorating it with plants, doing some wallpaintings, hanging up photos, etc.

For our products from Nepal we have the same standards as for our Sri Lankan products, we collect the actual cost of living from families of co-workers and artisans and then give them the difference to their current salary for our order. In Nepal there are no official fair trade wage reports from any organisation yet as far as I could find, we therefore have no comparison except to their current wage and the countries legal minimum wage. Below is our calculation for our hemp bags.

Beyond fair trade calculation Nepal.pdf

Why do we do that?

We embrace and live the qualities of the upcoming times and therefore like to support the shift from old trade and business models, that are based on conditional and competional hierarchies towards supportive, caring and cooperational communities of trade.

Besides this core principle of us, we know each of the workers very well by heart and we see their skillful handcraft as a fundamental and basic need for each human on earth – clothing – which simply deserves the appreciation and visibility of the makers.

For us in Europe it means a few euros more per product, but for the people here in Sri Lanka it is a significant benefit and support, especially after the financial crisis the country was facing recently.

Why not „fair trade“ certified?

A certification will cost us in between 1.200 to 3.000 € for each member of the supply chain per year (handloom manufacture, garment manufacture and our online shop).
At this point we cannot afford these costs, so we prefer to save this money and instead provide real transparency and insight through the documentation here in our blog. We really like to keep our affordable price levels and the high allocation for the artisans and co-workers.

I hope this could shed some more light on us and our way of operating.

‍Fair trade standards in comparison
As mentioned above, most of the organisations claiming „fair trade“ standards only ensure general human rights, so no child labor or forced labour is being done, but without any clear and fixed standards for fair wages to ensure workers can sustain a decent standard of living. As an example I will present the Fair Wear Foundation, World Fair Trade Organisation (WFTO) and Fair Trade International.

Fair Wear Foundation: „Receiving the Fair Wear stamp of approval does not guarantee any existing quality of labour standards, instead only demonstrating a stated interest in working toward improvement. Fair Wear helps to establish a higher lowest wage floor to a agreed wage in between the factory and brand if there‘s interest for it from both sides.“

I copied this quote directly from one of their documentations on their website around June 2023. It must have been deleted or changed for I can’t find it anymore, but it is still accurate and sums up their standards with ensuring human rights, but still leaving the implementation of actual fair labour conditions and wages as a choice for brands and producers, which comes out to almost the same as the legal conditions, standards and laws of the developing country, which are usually not fair at all.

World Fair Trade Organisation (WFTO): Principle 4 Fair trade criteria

„The aim is always the payment of a Local Living Wage.“

„Fair wages: a fair wage is an equitable, freely negotiated and mutually agreed wage, and presumes the payment of at least a Local Living Wage.“

„Minimum wage: you pay your workers at least the legally required minimum wage. If your wage analysis shows that you do not pay legally required minimum wages, this needs to be addressed with top priority on your way towards Local Living Wages“

„You pay your workers a Local Living Wage. FTOs who are not paying Local Living Wages analyse their gaps and have a plan to work towards local living wages with a realistic time-line and targets (included in their WFTO Improvement plan).“

Source: https://wfto.com/wp-content/uploads/2023/08/2023_1_WFTO-Fair-Trade-Standard-1.pdf

WFTO Is basically just ensuring human rights and no illegal labour practices, which in my eyes is common sense and not „fair trade“. Legal local wages in most developing countries are not enough for a living and can keep workers trapped for generations who even live in rent in their factories and can never save up enough to escape their wheel of – working in a factory – earning the amount it takes to live in rent in the factory – not able to save anything – repeat. Through such common business practices especially in the garment and agriculture sectors, people can’t start a new life or get their kids proper education even if they would like to.

Fair Trade International: Is the only organisation I know with actual reports of estimated and proper living wages for certain areas and/or countries regardless of whether or not the local employers feel they can afford to pay this wage.

The „fair trade“ surcharge ads up on the product price for the consumer and does not shrink the profit margin for the producers! Besides proper wages they also care about the production and use of natural materials and organic foods, which does no harm to employees.

Comparison
Sri Lanka 2023	Living wage per month
Legal Minimun living wage	12.500 LKR	42,07 $
World Fair Trade Organization (WFTO)	38.640 LKR	130,04 $
Fair Trade International	47.464 LKR	159,74 $
Tribe Vibe	71.789 LKR	241,60 $

Not to blame any organisation or their efforts of course, but simply to inform you and to give a clear comparison to our „beyond fair trade“ standards and the differences.

Hope you enjoyed this article and feel free to check out our other blog posts.

Beyond fair trade calculation Sri Lanka.pdf
Beyond fair trade calculation Nepal.pdf

Citations, sources: