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Developmental Relevance of Fair Trade and CSR Peter Knorringa Institute of Social Studies September 2008, The Hague, 17th AEEE Conference. Definition of responsible production. Includes both Fair Trade and CSR (Corporate Social Responsibility) initiatives

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Developmental Relevance of Fair Trade and CSR Peter Knorringa Institute of Social StudiesSeptember 2008, The Hague, 17th AEEE Conference

definition of responsible production
Definition of responsible production
  • Includes both Fair Trade and CSR (Corporate Social Responsibility) initiatives
  • ‘..where lead-actors in supply chains implement labour and environmental standards that go beyond the existing minimum requirements’
  • Paying ‘above market rates’
responsible production
Responsible Production

Value creation

Risk Minimization

Compliance with (inter-)national regulation

Semi-formal and Informal sectors

two basic questions to assess developmental relevance of responsible production
Two basic questions to assess developmental relevance of responsible production
  • ‘Reach’: Consumer Demand

Will it become increasingly mainstreamed?

  • ‘Depth’: Local Impacts

Will it increasingly be used to enhance local development, benefit more vulnerable workers?

mainstreaming reach 1
Mainstreaming Reach? (1)
  • Norm Life Cycle model: pyramid dynamics
    • Norm emergence: pioneers, idealists
    • Norm cascading: critical mass, reputation
    • Norm internalization: accepted new standard
  • Two processes:
    • Companies moving up or down in pyramid
    • Societal expectations change partitions inside pyramid
responsible production1
Responsible Production

Value creation

Risk Minimization

Compliance with (inter-)national regulation

Semi-formal and Informal sectors

mainstreaming reach 2
Mainstreaming Reach? (2)
  • 1 billion new ‘middle class’ consumers in the Global South
  • Need to investigate effective demand for responsible production
  • Do ‘new’ and ‘old’ consumers really care?
    • OECD research: less than 5% really cares
    • In 2030: 92% of global middle class in developing countries
from reach to depth
From Reach to Depth
  • Increased awareness of complementarities in broadening reach can help to enhance developmental relevance
  • Raising ‘floor’ of legal and societal compliance is key to increase reach: small improvements for many workers
  • But, do higher standards lead to enhanced local development: Depth?
responsible production2
Responsible Production

Value creation

Risk Minimization

Compliance with (inter-)national regulation

Semi-formal and Informal sectors

enhancing depth 1
Enhancing Depth (1)
  • So far, localised developmental relevance limited by:
    • Codes follow supply chain logic in setting, implementing and monitoring standards (focus on individuals and tangible indicators)
    • Only small numbers of workers covered by codes A-brand suppliers (who already ‘enjoy’ relatively better working conditions by local standards)
enhancing depth 2
Enhancing Depth (2)
  • Strengthening developmental relevance through:
    • Including local sub-sub-contractors in monitoring protocols
    • Move from individual to add collective and localised priorities: new social contracts
    • Embedding in local realities: What matters most is not the higher the standards the better, but their leveraging effect at local level
    • Brings State actors back into the game
conclusion new research questions
Conclusion: New Research Questions
  • Reach:

How to measure - and enhance - effective demand for responsible production? What triggers new middle class consumers?

  • Depth:

How to support pockets of responsible production and how to make them a catalytic element in a broader development strategy?

    • Profits of Partnership: Complementary roles of private, civil and public actors. Development is a struggle.