avs Online

I just came back from Japan, where I've been for two weeks. It was really exciting and interesting - the stuff we saw ranged from cyberpunkish city scenes to calm bamboo groves, and from a-bombed buildings to JPOP music video filming. Speaking of cyberpunk, this video clip (AVI, 14 MB) shot in rainy Shinjuku evening cannot get much closer to Blade Runner's opening scene.

Amid light-sabre-wielding traffic wardens and rentacops, carefully manicured gardens, totally silent vehicles and television phones, there was one thing that really bugged me. Japan wins the Most Overkill Retail Packaging award hands down. A CD I bought was wrapped in two layers of clear plastic (the outer layer apparently protecting the stickers glued to the inner layer) and of course sold in a small plastic bag. Bread and pastries I bought from a bakery were individually wrapped in cellophane, taped shut, put into a plastic bag, which was then again taped shut. Bits of chewing gum were individually wrapped in aluminium. A bunch of chopsticks was taped over, wrapped in paper, wrapped in plastic, and put in a paper bag (however, they asked whether I wanted them wrapped even more). And to top all this, there are virtually no trash cans ("dust boxes", as they often call them) in the whole megacity. Probably they have been removed due to War on Terror.

Ok, enough of that. If you've been searching for a café anywhere else in the world than Finland (apparently), the chances are that you've visited Starbucks. Now, as Japan is completely infested with Starbucks branches, I decided to participate in the Starbucks Challenge. Basically it means that punters walk into a Starbucks, ask for Fair Trade coffee, and get blank stares back, and report their experiences in their blog.

I did not have too great expectations as I and most customer interface people I had met lacked a common language. Of course this is my fault: I should be able to speak the language of the host country, but I had only a ten-hour crash course in Japanese under my belt. Hence, I cannot really say whether I could have been successful the first time. However, I started the voice recorder of my mobile phone, and entered Shibuya Tsutaya Starbucks near the Centre Gai shopping street (21 Udagawachō, Shibuya). Our dialogue (transcribing from the audio file) went as follows:

ME

Ohayō gozaimasu.

BARISTA

Ohayō gozaimasu...

ME

Do you have Fair Trade coffee?

BARISTA

(Reaching forward to hear better) Aaa, Caffè Latte?

ME

Erm... Like, you have this Café Estima blend, are you brewing that now?

BARISTA

(Blank stare)

ME

Ok. (Deciding that the language barrier is too high to climb) Caffè Latte is ok.

BARISTA

Ok!

I got my unfair latte and cinnamon roll, and proceeded to walk upstairs. I noticed that this branch did not have packs of Café Estima on display even though I had seen it at another branch at Narita. However, they had a Japanese leaflet titled "Coffee CSR" which I picked up. And sure enough, there was the FLO Fairtrade logo, and a lot of kanji that of course made no sense to me.

A couple of days later, I decided to have another go. For reasons unknown I had ended up on an artificial island in Tokyo Bay. The island ("reclaimed land") boasted a mind-numbing faux-Italian shopping complex complete with a ceiling that was painted to look like Mediterranean sky. Near the entrance was a Starbucks branch. So I entered Starbucks Palette Town Sun Walk (1 Aomi, Port of Tokyo), and what I saw was astonishing.

Not one, but two Starbucks Fairtrade labelled coffees! I had never before heard of Timor Lorosa'e, but Google tells me it's been originally an APAC thing (launched in Australia), and available in Europe as well. The coffee is coming from East Timor. If anyone can read Japanese, I would be interested to hear what the sign says.

Armed with the CSR leaflet I picked up earlier, I walked up to the counter.

ME

Can I have a cup of this Fairtrade coffee (pointing at the CSR leaflet) that you have?

BARISTA

(Reaching forward)

ME

Fair Trade Coffee. This one. Can I have a cup of that?

BARISTA

Just a second. (Runs off to fetch a laminated paper of some sort, which turns out to be a list of all the different coffee drinks and blends they have, complete with Fairtrade blends.)

ME

(At this time I notice that a pack of Timor Lorosa'e is being prominently displayed on the counter. Is that their Coffee of the Day/Week? Cannot tell. Too much kanji, too little English.)

BARISTA

(Pointing at the picture of the basic coffee drink) This coffee...

ME

(At this time I venture a guess that they really don't brew FT coffees, and she wants to sell me just regular coffee, so I ask) So you don't sell this by the cup, do you? You only sell the packs of coffee, or...?

BARISTA

Yes. Aa. Yes. Ok. (Pointing at both the regular coffee drink picture and the Café Estima picture.)

ME

Ok, you have it?

BARISTA

Ok.

ME

(Pointing at the pictures in succession) So this is made of this?

BARISTA

(Nods)

ME

So this one. I'll take that please.

BARISTA

Ok. Which size?

ME

Small, please.

I see her picking up a bag of coffee, and hear whirring sounds. She is probably going to french press me a cup! Or, wait... is she actually filling the whole drip coffee filter with Estima? Looks like it. And some minutes later, the barista arrives to my table with a steaming hot cup of coffee, saying "Café Estima blend, here you are".

Success!

Later on I visit a Starbucks branch in Roppongi, to see a large blackboard with hand-drawn FLO logos and a lot of text (again, in kanji and kana, so the content is beyond my comprehension). There was a large pile of packs of both Estima and Timor Lorosa'e, and I bought the latter just to give it a go back at home. I must admit that the Estima blend I drank was not very good; probably it is because I normally drink espresso-based coffees and drip coffee is just too bland and/or bitter to my taste nowadays.

Anyway, if you're going to Japan, I should mention that there is a good alternative to the Mermaid. There are a lot of bakery cafés, where you can first select from dozens of varieties of bread, buns and pastry, and then buy coffee at the back counter and sit down at the far end to dive into the weird bread you've found. (And notice that the green colour is actually green tea and all the pastries have been filled with red bean curd. This is Japan, after all.) Remember not to order take-away, or otherwise you will get each small bun individually suffocated in plastic.

(Footnote: I have cancelled my trip's carbon dioxide emissions through Climate Care.)

In my previous post on WTO and consumer labelling I was fearing that this might actually threaten the Fairtrade mark. I got FoE UK & Ireland's campaign coordinator on the horn and got some pointers to background info from her. Thanks.

It turns out that the worry stems from WTO's NAMA (Non-Agricultural Market Access) negotiations, where a number of countries have expressed their wishes to discuss mandatory consumer labelling, which they see as a non-tariff barrier of trade. Many countries would like to dispose of national labels, due to extra work and cost that it entails. FoE has a table of the current challenges.

It seems that the Fairtrade mark is not necessarily under threat, as most challenges are towards mandatory labelling. However, the difference is rather minor and there is reason to worry (and of course, even mandatory eco-labelling is important and should be defended).

I heard from People in the Know that this is nothing new, being something that many countries try to pull every time they get a chance.

Friends of the Earth UK press release (via Adventures in Ethical Consumerism, pointed to me by green LA girl) tells us that at least Korea, US and China have started action against eco-labelling in the WTO, as they see labelling schemes as a threat to their competitiveness.

Actually what this means that these countries seek to transfer a part of the price into negative externalities: pollution and lack of human and worker rights. This means that the low price paid by the end customer is subsidised by the citizens of the country of origin. In case of pollution, possibly also neighbouring countries. (Or, in the case of certain countries not signatories to the Kyoto protocol, the whole globe.)

On the other hand, WTO is about to remove Ag export subsidies. However, negative externalities are actually just a form of export subsidies. They aren't just paid by taxpayers' tax money but by citizens' health and freedom.

Ecological and other labelling systems (such as Fairtrade) are currently one of the few ways in which customers in a free market economy can select products where the negative externalities are minimised. The only way to get the market economy to be sustainable is to internalise all effects of the full life cycle of a product into the price that is paid by the customer.

The case is about PPMs - production and process methods. The controversy is not new. In 1991, GATT ruled that US cannot restrict imports of Mexican tuna that was dolphin-unfriendly. In this ruling, GATT essentially said that tuna is tuna is tuna, independently of how it was caught, and by extension one could consider that cocoa is cocoa whether it has been picked by forced labour or not. Which it clearly isn't. Like the buyers of an iPod are not just buying an mp3 player but also a set of aesthetic values when compared to a no-name mp3 player that performs otherwise just as well for basic mp3 listening, when I buy coffee, I am not just buying coffee: I am buying a clean conscience and ethical values too. These are an intrinsic part of the product. It is not just the physical product we are trading. The difference between PPMs and brand is small, often nonexistent. But I don't see the countries demanding that everything should be sold without a brand, as generics!

However, even though there are similarities to this PPM case, there is the notable exception that the preferential treatment of eco-labelled products is done by end customer, not a country. WTO is about opening trade; it should consider only tariffs (actually, non-tariff barriers in this case) that are exercised by governments. WTO should not meddle with the freedom of the consumers to express their preferences.

I've decided to do some posting in English, for a change. The great thing in my blogging engine is that it should cater for any language. The blog itself is in UTF-8, and all the posts should (barring any coding mistakes I've made) be tagged with the right language codes.

If you are an activist, you have no doubt noticed that Nestlé, widely quoted by the blogosphere as being the most boycotted company in the UK, has launched a new Fairtrade certified coffee, Nestlé Partners' Blend.

It will be interesting as to where this will lead. Fairtrade, of the [tm] variety, has been tremendously successful in securing mindshare from customers. Before the Fairtrade[tm], 'fairly traded' did not have a set of specific criteria, but the system was run mainly by worldshops and different ATOs. All the respect to them - most ATOs now have the [tm] on their products, and still do fair trade in the non-certifiable (mainly non-food) items. However, if you'd ask from a random guy on the street back then whether they knew of Fair Trade, you would have probably got blank stares. Nowadays, four-fifths of Finnish customers recognise the brand - and this would not have been possible without FLO, the labelling organisation behind the [tm].

Previously, large companies have launched Fairtrade[tm] products, examples being Procter & Gamble and Starbucks. However, activist criticism has been nowhere as harsh as with the Nestlé case. Nestlé has a special place in every activist's heart - the first consumer boycott I heard about was that against Nestlé. Many activists feel betrayed and say that the brand has been tarnished by Fairtrade Foundation (the UK controller of the Fairtrade trade mark).

But this was inevitable, if we really want Fair Trade ([tm] or not) to go properly mainstream. Or not really, actually. Nestlé did have an alternative, but did for some reason decide not to pursue that path for now.

In November 2004, a Guardian article tells us an interesting tidbit:

'Nestlé, which makes the Nescafé brand, believes the fair-trade model exacerbates this problem [of supply rising faster than demand, -ed.] - in the long term, it draws farmers back into the market, attracted by a high artificial price, which will increase world production and force prices down further. Nestlé chief executive Peter Brabeck-Letmathe prefers a demand-led solution: "Present low coffee prices are the result of a global excess supply," he says. "The primary and most direct responsibility of companies like Nestlé lies on the demand side, with the promotion of coffee consumption."'

Now, there is an alternative certification system for coffee and other foodstuffs and that opportunity has been seized by many other companies: that of Rainforest Alliance. Chiquita's bananas are notoriously Rainforest Alliance certified (and many farms also have SA 8000, which is good). Both systems are based on many of the same good principles of ILO and UN agreements. The main differences are that Fairtrade[tm] has a concept of the Fair Trade premium, extra money that is directly channeled to the producer organisation to be used for social development. Some producer organisations are using this for schooling their children, some others for pension funds. The use is determined democratically by the producer organisation members (which often are co-operatives). Another difference is that Fairtrade[tm] has a floor price, which will never be undercut even if the market price would fall below that line. This aims to guarantee that the farmers won't go bellyup if the market crashes and they cannot repay their loans - and also ensures they have no incentive to cut corners in environmental issues and workers' well-being, which often are first casualties of financial instability.

Now, many companies feel that this kind of social responsibility stuff reeks of a Commie plot and is not their cup of tea. Which is the niche where Fairtrade[tm]'s competitor Rainforest Alliance comes into picture. Don't get me wrong: I think Rainforest Alliance do a great job. It just seems to me that they are being selected over Fairtrade partly because of the lack of social premium and floor price. But what I am trying to point out that in the light of past comments by Nestlé representatives, having them choose Fairtrade[tm] over a competing coffee certification must have some meaning.

The Fairtrade[tm] mark is only awarded to certified products, not companies. (For companies, there is a different, less-known, non-end-customer-visible certification by IFAT.) Now, if the certification is product specific, in a rational world one would think that this is just what ought to happen: you fulfill the criteria, and you get the Mark. However, a recurring theme in Nestlé Fairtrade criticism in the blogosphere is that if a company is somehow evil, then none of its products should enjoy this certification - the main point seemingly being that the Mark will turn into some kind of holy water that will greenwash the company from all past and future wrongdoings in the minds of customers.

Well, no. Let's first investigate how large a dent has been made in Nestlé's sales by the boycotts that have been running for two decades. Not much. Some studies claim that the 'naturally ethical consumers' make up about 3 to 5 per cent of consumer base. These are the ones that probably join the boycotts. The next 20 per cent are defined as 'strongly ethical', meaning that they can be educated into making the right buying decision. And the rest, essentially, don't care. The holy water effect would only strike the 20 per cent in between the Naturals and the Dontcares, because the Naturals 'know better' and the Dontcares don't care. Given that the Fairtrade[tm] logo guidelines actually are rather strict in how you can use it, and given Nestlé's notoriety in consumer activism circles, I would very much doubt that any greenwashing - if they properly tried - would have any lasting effect.

It is true that Nestlé would probably be making more good in the world by putting some more Fairneß in their old sourcing chains, like many critics have said. But let's face it: in a megalithic corporation like Nestlé, there are different forces brewing in different parts of the company. How would you explain the change from the tone in the abovementioned Guardian article into this in less than a year? Contrary to what many people believe, when a company is large enough, it gets less and less centrally (and coherently) managed.

I hope that what we see here are some cracks in the façade, the Forces of Good staging a small victory over the Dark Side within the company. Now that Nestlé have a certified product, this will further invigorate the watchdogs, and actually serve as a platform for further criticism (without this certification hoo-hah, I would probably have missed the news about the assassinated Nestlé union leader in the Philippines which did not rise above the mainstream media noise floor). Also, one should not forget that Nestlé's marketing money also boosts the general recognition of the Fairtrade[tm] Mark with the 75 per cent of Dontcares of the population.

I think that Fairtrade Foundation and FLO have made the right decision, and that the risk of cross-pollination of fairness to other Nestlé products is minimal, and that this is a real victory for Fairtrade[tm] over other competing certification systems. I also wish Nestlé's social responsibility people success in their continuing battle, which I believe is being fought.

And who in their right mind would drink instant coffee anyway?

In other news, if you happen to read this in a country where Starbucks has successfully built its stronghold already, have a look at Starbucks Challenge - a type of café campaign not entirely unlike the one we run locally here in Finland (with no Starbucks in sight).

I recently ran into the Consumerium project while visiting the Finnish Social Forum. The Consumerium is a consumer activism project which aims to make the supply chain information (and other product information, too) completely transparent to the customer.

One might criticise Consumerium for its 'almighty consumer' attitude, which obviously sounds extremely good to everyone not wanting governments and politicians to meddle in the business of world (free) trade. I do believe in it, although I do not see it as the overarching solution to every problem. It was already years ago when I dreamed up a system (which was then supposed to run on the ill-fated WAP) that would have enabled customers to pick up allergy, toxicity and ethicality data on their mobiles based on the EAN code (UPC for you US dwellers).

An idea that has been raised in their Wiki is Fairtrade on demand. The idea is simply that the consumer may opt to pay more money to the producer at the point of sale. The writer likens this to Fairtrade, where a certain premium of the price is directed towards democratically governed social programs at the producer community.

Even though sounding good at first, I see quite a few problems with this idea. First, Fairtrade (Fairtrade[tm], the certification system) is not just about more money. It is also about respecting human rights, childrens' rights and the environment. This differentiates it from aid. When I buy Fairtrade produce, I choose to pay the price difference not only because the producer's kids need schoolbooks but also because I get the added value of knowing that the environment has been respected, and that the workers have been taken care of. Granted, the system might also convey this information for me to make the decision. But, there's more. I am personally against the 'tipping' system. I do tip, even in Finnish restaurants (where service has been good), but I am totally against the practice where the employees get paid (only, or mostly) from their tips. The on-demand Fairtrade system would possibly lead to the situation where the producers are competing with a low price, and the employees are relying on the 'on-demand' payments - essentially, on the whim of the customer - to get paid. I would rather fix the world market so that the prices would be set to reflect the true cost of production and associated worker benefits. This would actually obsolete the whole Fairtrade system, and it is its eventual target.

The premium is also not the only difference in price. For example, for coffee, the market price of Fairtrade coffee is something like three times the current world market price (see slide 11 in Pro Fair trade Finland training set). Would the customer also have the opportunity to choose whether to pay the right price (which covers the production costs) or the market price (which suffers from dumping of cheap coffee)?

More gripes are directed towards the (probable) fact that only a minority of customers would actually pay the producer premium, and the rest of the customers would just get the 'added value' (if it is of any value to them) without paying. In the current system, this of course happens in a way that the majority buys non-Fairtrade produce. But, the price is hidden in the total transaction experience. I am worrying that for psychological reasons, having to acknowledge an extra payment would be even harder than selecting the Fairtrade brand now (80% say they would, 10% really do).