You’d have to be living under a rock to have never heard of Starbucks, McDonalds, Gap or Nestle, but it’s less common to hear about how and where their products are made. To mark World Fair Trade Day, Sophie McAdam looks at the effects of globalisation on workers in developing countries, and asks ultimately: Does anyone care about ethical consumerism?
In the 21st century, globalisation and free trade are concepts so woven into the fabric of Western society that to question them at all is seen as bizarre. Supporters use the indisputable benefits of international flows of information, people and technology to justify the damage free trade and a global economy often brings to developing nations.
In theory, free trade is a mutually beneficial model in which goods and services are exchanged without Government restrictions. In practice, however, trade is often freer for some countries than it is for others, and the argument that globalisation benefits everyone on the planet is naïve.
Under free trade agreements, the West currently gives £25bn a year to developing nations in aid, but over £150bn to its own farmers in subsidies. Under World Trade Organisation (WTO) laws, this is illegal, but countries like the US have won exemptions. In Mali for example, where cotton growers are dependent on income from their crops, farmers can’t compete with Western companies.
Opponents of free trade agreements argue that globalisation is simply a hijacking of international goods and services for Western profit. A global economy allows multinational companies such as McDonalds, Disney and Coca Cola to expand across every corner of the world, sourcing produce and workforces from poorer countries in order to minimise costs and maximise profits. Along with the World Bank, International Monetary Fund and the WTO, multinational corporations have the power to choose fair trade suppliers and put pressure on them to act more ethically.
Globalisation is not a negative concept. But Western-controlled free trade agreements and economic globalisation in the hands of corporations who put profit before ethics simply does not allow developing nations to compete on a level playing field. Fair trade, on the other hand, is a socially and economically responsible alternative. It helps exploited producers by enabling them to continue with traditional ways of life without being pushed out by dominating Western companies.
Saturday May 12 marked World Fair Trade day, and thousands of people in over 60 countries promoted fair trade as a sustainable alternative, sending a message to global companies that capitalism can be successful without driving desperate people deeper into poverty. I asked people on the streets of Leeds their thoughts on these issues of globalisation, corporate responsibility and fair trade.
Sam Dobson, a 31-year old recruitment consultant, admits she doesn’t know much about these issues. “To be honest, I just find the likes of Tesco, Burger King and the rest really convenient. It’s good to know you have cheap food everywhere you go and can get a coffee and some food if required, it’s handier for my lifestyle,” she tells me. “I’m quite ignorant about the politics of it all.”
30 year old Akesh Deepak, a computer programmer, agrees. “It makes life so much easier,” he tells me whilst tucking into a cheeseburger at McDonalds. “Subway, Starbucks…they’re there to satisfy your needs, I love it that they are everywhere you go. What’s so offensive?”
Some would argue there are so many offensive factors about multinational corporations that it’s difficult to know where to begin. There’s the homogenisation of our planet, there’s the threat they pose to small businesses, and there’s the damage they inevitably cause to the environment. There’s the fact that big chains often pay well below the minimum wage, offer no sick pay or holidays, and will go to any length to keep unions out. And then there’s the cost to millions of humans around the world.
Coca-Cola, arguably the most successful and ubiquitous trans-national corporation in history, owns almost 400 brands in 200 countries, has contracts with thousands of schools, colleges and universities across the globe, and employs over 50,000 people worldwide.
But Coca Cola’s reputation has been marred by ongoing allegations of environmental and humanitarian abuses in developing countries. The company has contributed to major water shortages and contaminated water in several developing countries, often places where rainfall is scarce and water precious. They are also accused of having links to violent paramilitaries who murder union leaders campaigning for worker’s rights.
Coca Cola has become synonymous with union-busting, particularly in Colombia, where paramilitaries allegedly linked to the company and the government have regularly beaten, tortured and abducted trade unionists.
Since 1990, eight employees of Coca Cola bottlers have been murdered, 65 have received death threats and 48 have been forced into hiding. In Turkey, workers with their wives and children were beaten and sprayed with tear gas by over 1000 riot police whilst staging a peaceful protest against the dismissal of union leaders.
While the multinational denies all allegations, there is a growing anger which seems to have caused Coca Cola to assess its ethics. Not before time, it has signed up to a voluntary Corporate Social Responsibility Initiative, commissioned a study of its production in India regarding water shortages caused by production plants, and has engaged the International Labour Organisation to study its Colombian practices. The company claims it is a target simply because it is a global brand, and has launched a campaign against what it refers to as ‘slander’.
In McDonald’s, nobody believes the hype. Student David Meagher, 20, tells me he loves Coca Cola and the lack of an alternative means he wouldn’t boycott the product. “It’s not that I don’t care, but how do we know that it’s true about the links to paramilitaries and the other stuff?” He argues. “Pepsi could be making up these stories to bring down their sworn enemy.” He gestures to his large Coke. “I don’t want to be a hypocrite and slag them off while I’m drinking their product.”
“People seem to like jumping on a bandwagon and attacking a company just because it’s big,” agrees graphic designer Hugh Lawless, 28. “I think it’s rather sad to complain about it. You don’t like it, you go somewhere else. People moan about poor wages, but if it’s not illegal, I don’t see why companies should have to spend more on getting what they need.”
In the USA, a group of migrant tomato pickers living in Immokalee, Florida, has spent the last six years lobbying fast food giant Taco Bell for an increase in payment for the fruit they gather. Since the start of the campaign in 2001, workers’ wages have only risen by a few cents per bucket, to the equivalent of just £25 for every 2 tons of tomatoes they pick.
Although this could be seen as a small victory, workers now have to pick double the amount of fruit to earn the minimum wage as they did in 1980.
By comparison, Taco Bell is owned by Tricon Global Restaurants Incorporated, along with KFC and Pizza Hut. This multinational owns more than 30,000 restaurants around the globe, with annual sales reaching almost £11bn in 1999 and increasing year on year.
Tomato pickers in Immokalee are excluded from fair labour legislation, refused the right to organise unions, and in the worst cases, held against their will, beaten, and forced to work 12 hour days in blistering temperatures for no pay at all. Federal Civil Rights officials have prosecuted five slavery operations involving one thousand workers since 1997. One referred to the tomato fields of Florida as ‘ground zero for modern-day slavery.’
In one of Leeds City Centre’s several Subway restaurants, I told 26 year-old marketing executive Rosie Williams about the tomato-picker’s plight. “That’s really shocking,” she says. “The thing is though, you feel so detached and so far from these people that you don’t feel it’s your responsibility.” She trails off and looks guiltily at her steak and cheese sub. “I think people want a nice happy convenient life full of nice clothes and food, and our society is based on consumer culture; buying things to make yourself feel happy. It’s a lot easier to do that than to boycott companies.”
But not everyone I spoke to was so apathetic. Neil Moston, a 35 year-old store manager, tells me: “There’s nothing redeeming about any of them. They do little to help the Third world countries they exploit, they care little for their customer and they care probably even less about the planet. These are the types of companies who only take action and make it look like they are making a difference when they’ve been exposed as the corrupt corporate fat cats that they are.”
He refers to McDonalds’ health campaign after the success of Morgan Spurlock’s ‘Supersize Me’, and the trend for companies to join the Ethical Trade Intitiative (UK) or Fair Labor Association (US) in pursuit of positive PR. Nike’s infamous admission in 2005 that their Asian workers were paid below the minimum wage, often had restricted access to toilet facilities and clean water, and were punished for refusing overtime led to massive public pressure for them to join the FLA.
In the wake of these revelations, it was then discovered Umbro, manufacturers of the England football kit, paid Chinese workers just £1.07 a day to stitch shirts, shorts and socks worth £73. They also bowed to public pressure and agreed to regular and rigorous audits of the factories they source from.
Perhaps times are a-changing, and we can be optimistic about corporate responsibility becoming more than just a buzz word.
PR executive Alexander Myer, 28, seems to think so. “I don’t agree with cultural homogenisation being a 21st Century problem,” he tells me. “The UK and Europe are now regressing to localised sourcing and we’re also seeing thriving niche for markets such as sushi chains, noodle bars, tapas bars etc, which I think makes our culture richer in diversity, rather than the other way around. And people are more aware- these issues would not see the light of day in the 1980’s. McDonalds will need to change to offer local strategies or it’ll die. I think we’re seeing a reversal on the high street.”
This point is something that Lindsey Roberts, who works at the Borough Café in nearby Morley, agrees with. “We sell traditional home cooked food, buns and coffees, and because of our philosophy people are willing to travel from all over. If we were in Leeds city centre I think it would be a different kettle of fish; there’s a big corporation on every corner. Then again, I think more than ever, people want good home-made food rather than a pre-packed sandwich. I think the days of fast food are coming to an end.”
Sales Director Rachel McCarthy, 58, tells me that she avoids chain stores and supermarkets in favour of family-run cafes and shops. “I prefer to experience local products and give profit to local businesses,” she says. “For me, although they are powerful organisations, these companies will never have the capacity to replace individual niche retailers, because that is something that they can’t reproduce.”
Student Natalie Benson, 24, agrees, and says she doesn’t understand why fast food outlets and chain coffee shops are so popular. “What annoys me is that people waste so much money in these places,” she argues. “Starbucks is way overpriced- I can buy 3 jars of coffee of the price of one of their large drinks. It’s stupid, people are greedy. Money is power, and the amount of money these massive companies make gives them the power to behave the way they want to.”
This may be the case, but history shows that people power can still make all the difference to a corporation’s policies, and it is an undeniable fact that multinational companies are striving to be more ethical. Starbucks now sources Fair Trade coffee, although this accounts for only 3.7% of the total bought. The company is also under pressure from the Organic Consumer’s Association to stop serving milk from cows injected with GM recombinant growth hormone. With the exception of the US, this is illegal in most developed countries.
In Starbucks, the people lounging on sofas and sipping caramel macchiatos don’t seem to mind. Jenny Davis, a 29 year-old legal executive, argues that this practice is understandable and cost-effective. “GM foods seem to be the way of the world now,” she tells me. “At least we are aware of them, unlike 5 years ago, and can make our own choices. It makes good business sense for Starbucks and I can see why they do it.”
Outside the coffee shop, 39 year-old light engineer Alan Grey says it’s simple. “I think it’s a shame that these places prey on people’s laziness or lack of imagination, but it’s all about supply and demand. As long as people keep going there, they’ll continue to thrive.”
One thing on which everyone is agreed is that consumers hold the key to positive change. Between 2004 and 2005, fair trade sales were up by 37 %. While this is an encouraging step in the right direction, fair trade products generally account for only 0.5-5% of all sales in their product categories in Europe and North America.
One of the main criticisms of fair trade produce is the expense- so how many of the consumers I spoke to are willing to pay more for goods that are ethically produced?
“I don’t know what fair trade is,” admits David Meagher. “I don’t get why if it’s so much better, every company doesn’t use it. It’s confusing.”
Tony Bamforth, a 46 year old teacher, thinks fair trade products should be the norm. “I buy fair trade,” he says. “To me, chocolate is chocolate and bananas are bananas, so if I can buy them without putting money in these massive, corrupt companies’ pockets and help the poor people who produce the goods then I’d rather do that.”
Rosie Williams resents the cost of fair trade items and argues that the concept needs more publicity. “I’m skint, so I feel a bit annoyed having to pay extra for fair trade stuff,” she tells me. “I think they need to raise the profile of fair trade more, as well as educating people on what it actually means, so it justifies the cost. What annoys me is that it’s ok for people with money to only buy ethical goods because they’re rich, but its way too expensive for most normal people to buy all of it.”
Natalie Benson agrees this is a huge hurdle. “I wouldn’t buy fair trade, but only because those things are more expensive. But I have started to shop at the market rather than the supermarket- everything’s cheaper, the food is better quality and it feels nice knowing that I might be supporting a local or British farmer.”
Neil Moston argues that fair trade products need to be more accessible. “I’d switch in an instant,” he says. “The only problem is, there aren’t enough of these companies around. I do use fair trade wherever I can, I don’t even mind that they are sometimes a bit more expensive, I just want all corners of the market covered by companies like this: food, drink, clothing, media. Maybe then the big companies will start bowing to our demands rather than vice versa.”
Fireman Dan Cole, 27, admits all these issues make him depressed. “Talking about corporations, poverty, and fair trade motivates me to ensure my children grow up in an undeveloped country,” he says. “I’m not optimistic about anything changing for the better, because as long as the average Joe in the street remains unaware of these facts- or devoid of shame- then nothing will change.”
Published in the Big Issue in the North, May 2007