Ethical trade is not new to co-operatives … it’s been a century-long practice

The co-operative movement is one of the biggest supporters of Fairtrade, one of the best recognised logos in the UK. But the coffee, tea, chocolate and bananas that...

The co-operative movement is one of the biggest supporters of Fairtrade, one of the best recognised logos in the UK. But the coffee, tea, chocolate and bananas that make up most Fairtrade sales only account for a small fraction of the UK grocery market.

Does this mean that if it does not have the Fairtrade logo, the product is “unfair trade”? Not quite. Around 20 years ago, growing public concern about allegations of “sweatshop” practices in factories producing apparel and other fast-moving consumer products prompted some retailers and manufacturers to act.

Various schemes were launched by companies to assure customers that products were made under humane working conditions. Frankly, some of these claims were bogus – so campaigners demanded proof.

One response was the development of “codes of conduct” – a statement of basic labour standards which companies wanted their suppliers to conform to, which are underpinned by regular checks.

For these initiatives to have any credibility, they needed the involvement of the trade union movement and campaign groups and so, in 1998, the Ethical Trading Initiative (ETI), a coalition of companies, trade unions and campaign groups was set up.

The Co-operative Group was among the first UK retailers to sign up. Food Retail adopted the ETI Base Code, which founded on the conventions of the International Labour Organisation (ILO), a UN agency. A nice link for co-operators is that the ILO was influenced by Robert Owen – the father of co-operation. He advocated, in 1817, internationally co-ordinated action to protect workers. And it is the UN agency for co-operatives.

Implementation of the code is monitored by independent checks and through a programme of building supplier capacity. The Code of Sound Sourcing forms part of the contract with suppliers.

Most UK high street retailers are members of the ETI – only Morrisons and the discounters have stayed out. John Lewis Partnership – the UK’s other large member-owned business – has been a member for several years.

Companies from other countries have started to join, and turnover is £180bn a year – quite a footprint. Around 10 million workers are covered by ETI members.

Of course, ethical trade does not provide the workers on farms and estates with many of the benefits of Fairtrade, such as the social premium, but it tries, in a world of complex supply chains, to ensure that workers enjoy basic rights. It is far from perfect, but it is a move in the right direction.

Fairtrade a century ago

In some ways, this is nothing new. A century before fair or ethical trade, the co-operative movement was already practising these principles. In the National Co-operative Archive is an old photograph album from a trip by Co-operative Wholesale Society (CWS) directors to West Africa.

They gaze out at us from a century ago, some wearing pith helmets – regarded as essential sun protection in the tropics in the heyday of the empire.

In the 21st century, we are used to the idea of products from all over the world. One in five workers is linked to global supply chains – around 450 million, according to the ILO.

The CWS pioneered such global supply chains in the 19th century – not just to get cheaper prices, but to ensure quality by getting as close as possible to the producer.

By controlling supply chains, the CWS could also ensure fair prices for farmers and better treatment for workers. One way the CWS made trading links all over the world was through sending deputations
of directors and staff to liaise directly with producers and establish local depots.

The Crime of the Congo

In 1909, Arthur Conan Doyle published The Crime Of The Congo. This was not a Sherlock Holmes mystery but an expose of genocide in the Belgian Congo – a privately controlled colony owned by King Leopold II of Belgium.

Leopold, with help from the explorer Henry Stanley (of “Dr Livingstone, I presume?” fame), persuaded the European powers to cede him the Congo when Africa was being carved up in 1885 at the Congress of Berlin, under the pretence of a civilising mission.

Leopold then amassed a huge personal fortune by exploiting his personal colony – 80 times the size of Belgium. The so-called ‘Congo Free State’ enslaved millions and mutilated its inhabitants. Communities were ordered to bring ivory, rubber, and palm oil to government or company depots. Hostages were held by the government and sanctions for failure to deliver the quotas included mutilation. There was no question of payment for the products.

The consequences were horrific. One estimate is that ten million people died as a consequence of the policies of Leopold – half the population. There was a huge public campaign in the UK against the atrocities. This is one of the first modern campaigns we would recognise. Such pressure led to the Belgian government taking over the colony in 1908 but, while some of the worse excesses were stopped, slavery continued.

Soap wars

This, clearly, is appalling. But what is the co-operative connection? It goes back to that photograph album.

One of the co-operative movement’s biggest enemies, 100 years ago, used slave labour in the Congo Free State: William Lever, the founder of today’s Unilever, who manufactured ‘Sunlight Soap’.

From the mid 19th Century, advances in chemistry made large scale production of better quality soap possible. The growth of advertising, modern manufacturing and the need for cleanliness in the dirty industrial towns and cities of Britain all combined to produce one of the first mass consumer products. CWS opened a large, purpose-built soap factory in Irlam, near Manchester in 1894.

A decade later, the ‘soap wars’ started. Lever and other soap producers formed a cartel to keep prices high. Lever also reduced the weight of a bar of soap, while leaving the price unchanged. CWS had a solid reputation for honest trading, particularly when it came to honesty in advertising and true weights and measures. As a result, many consumers turned to CWS, away from the ‘combine’ soaps.

The cartel soon collapsed, but Lever had a grudge against the movement, and in 1910 launched legal cases claiming that co-operative societies were ‘passing off’ co-operative soaps instead of selling Lever ones. The courts threw out the case – the judge even criticised Lever for wasting the court’s time.

“We are not going out to exploit the natives”

From the 1890s, soap manufacturers began scouring the world for new sources of raw materials including an essential ingredient – palm oil.

In 1911, Lever signed a treaty with the Belgian government to gain access to the palm oil of the Congo, and established the main co-ordinating base at Leverville – yes, a town named after himself (now Lusanga).

The depot oversaw a huge operation for the extraction of palm oil from the Congo. The enterprise was based on slave labour, with appalling punishments inflicted on the workers and terrible mortality rates. Each year, up to a third of workers died on some plantations.

Lever developed plantations in the Congo to benefit from lower costs, even after the appalling crimes in the Congo Free State were well publicised.

And where did the CWS get its palm oil from? Starting in 1913, following the delegation to British West Africa, it negotiated with local tribes and made arrangements to buy palm oil from farmers. There was no forced requisition of raw material. No chopping off hands if the required quota was not brought in. No forced labour.

A member of the CWS deputation said, before they left the UK, that: “We are going out in the interests of co-operators at home, but not to exploit the natives.”

The people in funny hats believed in values for money.

• Read more: How to stay ethical in a globalised world

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