From trust to compliance: accountability in the fair trade movement

Abstract

PurposeThere is a growing academic literature exploring the fair trade movement but, to date, there has been little explicit discussion of accountability within the movement. This paper aims to cast the development of the fair trade movement within a shift from trust‐based relationships to standards‐based systems. The authors particularly aim to focus on the dominance of an external accountability approach being used for Fair Trade Labelling Organization International (FLO) certified products versus an internal accountability approach being adopted through organizational self‐assessment of World Fair Trade Organization (WFTO) members.Design/methodology/approachWhile this is predominantly a conceptual paper, the authors draw on primary research with northern and southern fair trade organizations (FTOs). Five southern FTOs were interviewed along with three northern FTOs.FindingsThe paper illustrates the conflict that Power expressed about trust increasingly being placed in formalized “rituals” of auditing rather than in organizations. Standards‐based certification has played a crucial role in mainstreaming fair trade food which reduces the trust relationship to a label and relies on market‐based mechanisms of “ethical consumerism” to signal (dis)content with the operations of the certification system. By contrast, organizational self‐assessment under development by WFTO, which has proven popular amongst southern FTOs, fitting their organisational culture(s) and contributing to organisational learning and democracy, creates greater accountability to internal stakeholders such as producers.Originality/valueThis paper draws direct comparisons between the FLO system of certification of products and the WFTO process of self‐assessment of organizations. It demonstrates that the WFTO system builds on the movement's tradition of democracy and trust. Producers, southern FTOs, and northern FTOs must demonstrate their democratic principles throughout the supply chain up to consumers. Conversely the FLO system governs the products themselves and largely leaves the participants, other than producer groups, free of demands for corporate social responsibility and organizational learning.

How Millennials' Knowledge, Trust, and Product Involvement Affect the Willingness to Pay a Premium Price for Fairtrade Products?

“…Furthermore, Millennials" trust in Fairtrade products increases product involvement and the belief in them being safer, more ethical, and more sustainable than non-Fairtrade products, and this situation justify the higher price. These findings appear to echo previous research results on product involvement (Alexander & Nicholls, 2006;Pedregal & Ozcaglar-Toulouse, 2011;Davenport & Low, 2013) and WTP a premium (Krystallis & Chryssohoidis, 2005;Pedragal & Ozcaglar-Touluse, 2011;Langen & Adenauer, 2013;Kapusuz & Kimzan, 2016;Habibov et al, 2017). The following hypotheses are thus accepted -H 2a , H 2b .…”

“…A lack of trust in a Fairtrade product may be caused by a lack of knowledge, and this situation may influence the level of sales for certain Fairtrade products (De Pelsmacker & Janssens, 2007). While prior research exists to support the relationship between trust and knowledge in the Fairtrade movement (Davenport & Low, 2013), few studies have analyzed the specific influence of knowledge about Fairtrade and its impact on Fairtrade itself. Ultimately, it was concluded that consumers with a high degree of knowledge were more likely to trust a Fairtrade product because of its claimed ethical standards in further impacting on Fairtrade purchasing behavior (Wang et al, 2009;Low & Davenport, 2005).…”

“…Trust is generally explained as a person"s willingness to rely on the actions of others, based on an expectation of trust (Rotter, 1971;Barber, 1983;Young, 2009). Previous studies have focused on different types of trust: generalized trust (Rotter, 1967;Bo et al, 2017), organizational trust (McKnight et al, 1998;Felix et al, 2017;Liu et al, 2018) and ethical, Fairtrade trust (Castaldo et al, 2009;Davenport & Low, 2013;Langen & Adeneuer, 2013;Hong, 2015). Mostly, consumers tend to consider a company which is engaged in social responsibility activities through fair trade as trustworthy.…”

Governance, legitimacy, and stakeholder balance: lessons from Fairtrade International

“…In addition to extending theory on hybrid governance, this study contributes to the fair trade literature, which highlights several issues about FI's governance. Scholars argue that FI has lacked widespread representation (Lyon, 2011); adopted undemocratic processes (Bacon, 2010); consolidated power in the North (Renard and Perezgrovas, 2007); abandoned traditions of democracy and trust (Davenport and Low, 2013); and lost transparency (Johannessen and Wilhite, 2010;Mutersbaugh and Lyon, 2010). Several counterfactual studies argue that inclusive governance would have generated alternative outcomes, such as: different policies regarding transnational corporations, certifying hired labor groups and certification fees (Renard, 2015); deciding against the ISO-65 approach to third-party auditing (Wilson and Mutersbaugh, 2015) [13]; and de-emphasizing corporate relations and growth (Jaffee, 2010).…”

Introduction: The Politics of Environmental Accountability

“…Alternatively output‐oriented accountability refers to assessments over whether rule makers adequately use the resources at their disposal for addressing the end goal (Ebrahim, ). This is a more “common characterization of accountability as oversight of operations, or accounting for results or impacts” (Davenport & Low, , pp. 88–89).…”