Tackling the negative effects of fair-trade labelling

The report says that the negative effects, such as pushing young people into prostitution by banning child labour in third world countries, are often hard to anticipate. This is because it is difficult to monitor and regulate all the social and environmental effects during production processes in foreign countries.

Dr. Frank Wijen says: “A European certificate issuer might target the elimination of child abuse in order to protect a vulnerable group and mandate a ban on child labour. However, farmers in countries like Cameroon will react with bemusement: they often view the deployment of their children in a family enterprise as akin to routine domestic chores, and therefore not abuse.”

To minimise the negative effects of sustainability labelling, Dr. Wijen suggests that:

Standard setters should develop and enforce rules in a comprehensive way, considering in advance all direct and indirect consequences. They should also not feel pressured by a potential public outcry and rush procedures.

Rules set for one country or area may not be applicable for another. Therefore, each country or region will need its own, niche, set of rules, incentives and practices on top of a universal basis for all adopters.

Setters of standards should encourage intrinsic motivation—for instance, through regular training sessions—so that producers carrying a label have their motivations aligned with those of standard setters.

Labels such as Fairtrade, Green Seal and Utz, claim that a product was produced in a socially and environmentally sustainable way. However, producers might deliberately not live up to the duties being imposed, or simply not understand how to comply and therefore the above points become crucial to minimising the negative effects.

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