May 8, 2013

Fair Trade Apparel Labeling Arrives!

Fair Trade USA, the American fair trade labeling firm, is extending its reach to the apparel sector.

 I was expecting this to happen eventually. It has taken this long to get started because apparel has a more diffuse supply chain than foodstuffs. So there is a significant liability hurdle to overcome. For unlike fair trade coffee growers, who are usually worker-owned cooperatives, textiles are generally manufactured in sweatshops that aren't owned and operated by the employees. As such, there is much more of a risk that a company certified as fair trade might be using a rogue sweatshop that is not actually holding itself to basic labor standards. This is one of the reasons why the FLA, which already audits sweatshops for companies such as Nike and Apple, doesn't have its own label. I know this because I was personally involved in discussions a few years ago between Nike and the FLA while Nike was vying for the CU-Boulder sports apparel contract.

So it will be interesting to see how this evolves going forward. I expect there will have to be some kind of legal disclaimer on the new fair trade labels to protect brand name apparel companies from potential rule-breaking sweatshops that may fall through the audit cracks. This is how Nike got into legal trouble back in 2003, boasting about the labor standards of its own sweatshops without having adequate proof to back up its claims. As a result of the suit, it is now certified by the FLA.

It now looks like Fair Trade USA may begin to compete with the FLA. For if a company like Nike can get increased sales via a label that attracts socially-conscious consumers, this may pressure the FLA to develop its own label or risk losing clients to Fair Trade USA.

What's attractive about Fair Trade USA's approach is that it covers the entire supply chain including the farmers who grow the cotton, whereas farmers are not addressed in the FLA certification.

So this is a very exciting development. It will be interesting to see what companies join in. The program is still in pilot stage, with PrAna as first client.

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