Fair Trade, Corporate Accountability and Beyond potx

FAIR TRADE, CORPORATE ACCOUNTABILITY AND BEYOND

This page has been left blank intentionally

Fair Trade, Corporate Accountability
and Beyond
Experiments in Globalizing Justice
Edited by
KATE MACDONALD
University of Melbourne, Australia
SHELLEY MARSHALL
Monash University, Australia

© Kate Macdonald and Shelley Marshall 2010
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted
in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior
permission of the publisher.
Kate Macdonald
and Shelley Marshall have asserted their rights under the Copyright, Designs and Patents
Act, 1988, to be identied as the editors of this work.
Published by
Ashgate Publishing Limited Ashgate Publishing Company
Wey Court East Suite 420
Union Road 101 Cherry Street
Farnham Burlington
Surrey, GU9 7PT VT 05401-4405
England USA
www.ashgate.com
British Library Cataloguing in Publication Data

Fair trade, corporate accountability and beyond :
experiments in globalizing justice.
1.
I
nternational trade Social aspects. 2. Commercial
policy. 3. Social responsibility of business.
I
. Macdonald, Kate. II. Marshall, Shelley.
382.3-dc22
Library of Congress Cataloging-in-Publication Data
Fair trade, corporate accountability and beyond : experiments in globalizing justice
/ by Kate Macdonald and Shelley Marshall.
p. cm.
I
ncludes index.
ISBN 978-0-7546-7439-9 (hardback) ISBN 978-0-7546-9119-8 (e-book)
1. I
nternational trade. 2. Competition, Unfair. 3. Foreign trade regulation Social aspects. I. Macdonald,
Kate, 1976- II. Marshall, Shelley.
HF1379.F343 2009
382'.3 dc22
2009030156
ISBN 9780754674399 (hbk)
ISBN 9780754691198 (ebk.I)

Contents
List of Figures and Tables ix
Notes on Contributors xi
Preface xvii
List of Acronyms xix

INTRODUCTION
1 Social Governance in a Global Economy: Introduction to an Evolving Agenda 3
Kate Macdonald and Shelley Marshall
PART I INDIVIDUAL AND CIVIC ACTION THROUGH FAIR TRADE
2 Fair Trade at the Centre of Development 37
Steve Knapp
3 Developing Markets, Building Networks: Promoting Fair Trade in Asia 57
Claribel B. David and Hyun-Seung Anna Kim
4 Mainstreaming Fair Trade: Fair Trade Brands and the Problem of Ownership 75
Anna Hutchens
5 What Gives Fair Trade its Right to Operate? Organizational Legitimacy
and Strategic Management 93
Alex Nicholls
6 Voluntarism and Fair Trade 121
Tim Wilson
PART II RESPONSIBLE CONSUMERS AND CORPORATIONS
7 Corporations and Global Justice: Rethinking ‘Public’ and ‘Private’
Responsibilities 137
Terry Macdonald
8 Corporate Responsibility and Stakeholder Governance: Relevance
to the Australian Garment Sector 149
Emer Diviney and Serena Lillywhite

Fair Trade, Corporate Accountability and Beyond
vi
9 CSR and Policy Incoherence 169
Peter Utting
10 Fair Consumption? Consumer Action on Labour Standards 187
Gordon Renouf
PART III MOBILIZED WORKERS

11 Corporate Accountability and the Potential for Workers’ Representation in China 211
Anita Chan
12 The Threat Posed by ‘Corporate Social Responsibility’ to Trade Union Rights 223
Jeff Ballinger
13 Can CSR Help Workers Organize? An Examination of the Lessons Learnt
and an Exploration of a New Way Forward 245
Andrea Maksimovic
14 Corporate Accountability through Community and Unions: Linking Workers
and Campaigning to Improving Working Conditions across the Supply Chain 259
Annie Delaney
15 Triangular Solidarity as an Alternative to CSR and Consumer-based Campaigning 277
Apo Leong, Chan Ka-wai and Anna Tucker
PART IV A STRENGTHENED AND TRANSFORMED ROLE FOR THE STATE
16 Regional Trade Agreements in the Pacic Islands: Fair Trade for Farmers? 293
Nic Maclellan
17 Crowding Out or Ratcheting Up? Fair Trade Systems, Regulation
and New Governance 313
Orly Lobel
18 The Regulatory Impact of Using Public Procurement to Promote
Better Labour Standards in Corporate Supply Chains 329
John Howe
19 CSR is Not the Main Game: The Renewed Domestic Response
to Labour Abuses in China 349
Sean Cooney

Contents
vii
CONCLUSION
20 Experiments in Globalizing Justice: Emergent Lessons and Future Trajectories 365
Kate Macdonald and Shelley Marshall

Index 387

This page has been left blank intentionally

List of Figures and Tables
Figures
4.1 Typology of trader-participation in fair trade/Fairtrade markets 82
4.2 The evolution of fair trade models: Certication to brand companies 87
5.1 A model of organizational legitimacy 98
5.2 Legitimacy tree nodes 108
11.1 Legal minimum wage per month for a 40-hour work week,
Outer Shenzhen, Guangdong Province, 1993–2007 213
Tables
3.1 Bangladeshi fair trade organizations engaged in domestic activities 59
4.1 Fairtrade labelling criteria for Fairtrade certied traders 78
4.2 Standards for fair trade organizations (FTOs) 79
5.1 Legitimating competences 99
5.2 A typology of organizational legitimacy 101
5.3 Legitimating discourses in fair trade public statements 103
5.4 Data summary for legitimacy typology 111
11.1 Ination adjustments to minimum wage, Outer Shenzhen, Guangdong Province,
1993–2007 213
14.1 Summary of homework regulation mechanisms to promote supply-chain
regulation and homework protection 268
20.1 Extent of contribution to institutional transformation 380

This page has been left blank intentionally

Notes on Contributors
Jeffrey Ballinger holds a JD (New York Law School) and is a PhD candidate (Political Science) at

McMaster University, Hamilton, Ontario (abd). He has, most recently, lectured in the Department
of Management, Webster University (Vienna), teaching Labor–Management Relations. Before
that he was a Research Associate at the Kennedy School of Government, Harvard University. In
1993 Jeff founded Press for Change, a non-prot human rights campaign organization focusing
on worker rights in the developing world. He was its director until 1999, appearing on US
commercial television networks, PBS and in several foreign broadcasts and documentaries as an
expert commentator on the global political economy. From 1983 to 1995 he worked in Asia for
the AFL-CIO. Before that, he worked for various trade unions as an organizer, leading campaigns,
boycotts and political education programmes. He has published articles in New Labor Review,
Social Policy, Brown Economic Review and Dissent.
Anita Chan is a research professor at the China Research Centre of the University of Technology,
Sydney. She has published widely on Chinese labour issues, rural China and Chinese youth. Her
current major projects involve editing a book on Walmart in China and one on labour in Vietnam,
and launching a new research project related to Chinese enterprise in comparative perspective.
Sean Cooney’s research interests are international and comparative labour law, with a focus on
Asia, and Chinese law. He is currently working on new approaches to improving international
working standards, including an Australian Research Council-funded project on regulatory reform
in China to deal with the problem of wage arrears. Sean speaks Mandarin Chinese, French and
German and has published articles in major refereed law journals in the United States, China and
Australia, such as the Comparative Labor Law and Policy Journal and Bijiaofa Yanjiu. He currently
teaches Obligations, Chinese Law, Employment Law, and Law and Economic Development in
Asia. Sean has studied at the University of Melbourne, Columbia University and National Taiwan
University. He also spent several years as a lawyer practising mainly in the areas of employment
and administrative law.
Claribel David, after starting a career in the nance sector, made a move to support fair trade in
1998 as the Chair of Association of Partners for Fair Trade. From 2002 to 2006 she was the Board
Chair for the Filipinas Fair Trade Ventures and the Director for Finance and Advocacy for the
Advocate of Philippine Fair Trade. She joined the International Fair Trade Association (IFAT) in
2003 as Treasurer and Asian Representative and took on the role of Vice President in May 2007.
IFAT is a global network of 350 fair trade and support organizations in 60 countries whose mission

is to improve the livelihood and well being of disadvantaged producers in the South.
Annie Delaney has worked as a union and community organizer and campaigner. She has
worked for the Textile, Clothing and Footwear Union of Australia and was the founding member
and driving force behind the creation of the FairWear campaign, coordinating campaigns and
organizing activities with homeworkers in the garment industry. She is a participant in the

Fair Trade, Corporate Accountability and Beyond
xii
International Homeworkers Movement organization, and is currently a PhD candidate at Latrobe
University, Melbourne researching homework related issues. Her areas of interest include corporate
accountability, informal employment, labour organizing and the intersection of race, gender and
class.
Emer Diviney works at the Brotherhood of St Laurence in the Sustainable Business Unit where
she leads the BSL’s work on sustainability in the fashion industry. She is the author of the Ethical
Threads report and was responsible for managing the No SweatShop Accreditation of the BSL
Hunter Gatherer Stores. Emer holds a BA (Community Development) and has worked both
in Australia and overseas in the aid and development sector in the areas of education, income
generation, gender and development, disabilities and health. Before working in the community
sector she held management roles in the fashion industry in Australia and applies this industry
knowledge to the textile and clothing industry supply chain work at the BSL. She is the Chair of the
Program Advisory Committee at RMIT’s Fashion, a member of the Homeworkers Code of Practice
Committee, and was an International Chamber of Commerce Delegate at the World Summit on
Sustainable Development.
John Howe is Associate Professor and Director of the Centre for Employment and Labour Relations
Law at the Melbourne Law School. John’s research is concerned with the capacity of pluralist
regulatory systems to achieve socially just outcomes for working people and the unemployed. He
has written extensively on various mechanisms of labour regulation, and the intersection between
state-based regulation and corporate governance. John is co-editor of the book Labour Law and
Labour Market Regulation published by Federation Press in 2006, and his book Regulating for
Job Creation was published by Federation Press in late 2008. John is Secretary of the Australian

Labour Law Association, and a member of the editorial committee of the Australian Journal of
Labour Law.
Anna Hutchens has ve years experience in researching and writing on the fair trade industry.
Awarded her PhD, ‘Entrepreneurship, Power and Deance: The Globalisation of the Fair Trade
Movement’, in 2007, Dr Hutchens’ recent research on fair trade will be published by Edward
Elgar in her book Changing Big Business: The Globalisation of the Fair Trade Movement in April
2009. Dr Hutchens’ research interests include fair trade value-chains and ‘mainstreaming’, Fair
Trade labelling and brand companies; Fair Trade market development in the Asia Pacic region;
and gender issues in the Asia Pacic region. In 2009, she was awarded an AusAid-funded Pacic
Economic Postdoctoral Fellowship and an Australian Development Research Award to undertake
a two-year research project to evaluate how Fair Trade value chains can be made more accessible
to, and empowering for, female producers and artisans in the (Asia) Pacic region.
Chan Ka-wai headed up the China Project of Hong Kong Christian Industrial Committee for 13
years, focusing on transnational corporations and labour standards in South China. He is now the
Chairperson of Labour Action China and a board member of Worker Empowerment, two prominent
labour organizations in South China. Ka-wai received his theological training in Hong Kong and
later received his S.T.M. on Religion and Society at the Pittsburgh Theological Seminary. Ka Wai
is also active in Hong Kong’s politics. He was elected Kowloon City District Councillor for 2000–
2007 and became the Vice-Chairperson of the Kowloon City District Council for 2004–2008. He
is now the Chief Executive of the Democratic Party in Hong Kong and is sitting on the boards of
several public services.

Notes on Contributors
xiii
Hyun-Seung Anna Kim is a PhD candidate in management studies at the University of
Cambridge. Previously she was Marketing and Fundraising Ofcer at the Oxfam International
Secretariat, and a member of the Oxfam International Fair Trade Working Group. Originally from
South Korea, Anna is interested in learning from both the bright and dark sides of growth-oriented
economic development, and exploring alternative ways to align developmental goals with social
and environmental sustainability. As Oxfam School Speaker and Traidcraft Speaker she regularly

speaks to young people about fair trade and development issues.
Steve Knapp is the Executive Director of the FTAANZ and of Fairtrade Labelling Australia and
New Zealand (FLANZ). FTAANZ supports the development of the fair trade movement and FLANZ
the market for Fairtrade labelled products. Steve was involved in the establishment of FLANZ as
the regional Labelling Initiative member of Fairtrade Labelling Organizations International (FLO
e.V.). He is also a board member of FLO e.V. Originally from the UK, Steve has a social and
commercial business background. He was owner and managing director of a commodity trading
company, a senior manager within a large corporate entity and managing director of a social
enterprise support agency. He graduated from the London School of Economics and is a Master of
Development Studies candidate at Victoria University Wellington.
Apo Leong was born in Macao in 1949 and completed high school in Hong Kong. He worked in a
US MNC factory from 1969 to 1971. He was a local newspaper reporter from 1971 until he joined
the HR Christian Industrial Committee as a labour organizer in 1974. Ten years later he joined
the Hong Kong Trade Union Education centre as a trade union educator and researcher. In 1990
he took on the role of Chief Researcher for the Hong Kong Confederation of Trade Unions. From
1994 Mr Leong worked as the Executive Director of the AMRC, and from 2008 onwards as the
China Coordinator.
Serena Lillywhite is Manager, Sustainable Business with the Brotherhood of St Laurence. Serena is an
active corporate responsibility practitioner, researcher and advocate. She has expertise and experience
in responsible supply chain management in China and Australia, business and human rights, responsible
investment and corporate governance. Serena has considerable knowledge of the OECD Guidelines for
Multinational Enterprises and was involved in bringing the rst OECD Guidelines case in Australia.
She is an adviser to the OECD Investment Committee and works with the international corporate
responsibility sector. Serena works regularly with the business community to foster dialogue and multi-
stakeholder approaches to ethical business practices. Serena holds a Masters in International Business
from the University of Melbourne and has lived and worked in China.
Orly Lobel is an associate professor of law at the University of San Diego. She writes and teaches
in the areas of employment law, administrative law, legal theory, torts, consumer law and trade
secrets. Prior to coming to USD, she taught at Yale Law School and served as a fellow at the Harvard
University Center for Ethics and the Professions, the Kennedy School of Government’s Hauser Center

for Non-Prot Research, and the Weatherhead Center for International Affairs. A graduate of Tel
Aviv University Law School, she clerked on the Israeli Supreme Court and did her graduate studies
at Harvard Law School. Her recent publications include ‘The Paradox of “Extra-Legal” Activism:
Critical Legal Consciousness and Transformative Politics’, 120 Harvard Law Review 937 (2007)
(winner of the Thorsnes Prize for Faculty Scholarship). Lobel is also the co-editor of the forthcoming
Encyclopedia of Labor and Employment Law and Economics (Edward Elgar, 2009).

Fair Trade, Corporate Accountability and Beyond
xiv
Kate Macdonald is a lecturer in the School of Social and Political Sciences at the University of
Melbourne. Her previous positions include Fellow of Government (Global Politics) at the London
School of Economics and Political Science, Research Fellow at the Centre for Applied Philosophy
and Public Ethics at the Australian National University, and Research Ofcer at the Department of
Politics and International Relations at Oxford University.
Terry Macdonald is a lecturer in Global Politics at Monash University, and has worked previously
as a Research Fellow at the Centre for Applied Philosophy and Public Ethics (CAPPE) at the
Australian National University, and as a Junior Research Fellow and Lecturer in Politics at Merton
College, Oxford University. Her recent publications on global justice and institutional reform
include the book Global Stakeholder Democracy: Power and Representation Beyond Liberal
States (Oxford University Press, 2008).
Nic Maclellan works as a journalist and researcher in the Pacic islands. Nic has travelled
extensively throughout the islands region and lived in Fiji between 1997 and 2001, working with
the Pacic Concerns Resource Centre. In 2006 he worked with Oxfam International as Senior
Policy Advisor on the Pacic. He has written widely on trade, labour mobility and development
issues in the Pacic and is co-author of a number of books on the region, including: La France
dans le Pacique: de Bougainville à Moruroa (Editions La Découverte, Paris, 1992); After
Moruroa: France in the South Pacic (Ocean Press, Melbourne, 1998); and Kirisimasi (PCRC,
Suva, 1999).
Andrea Maksimovic worked at the Victorian Textile Clothing and Footwear Union and the
Victorian Trades Hall Council in Melbourne before moving to Brussels to work for the International

Trade Union Confederation. She now works for SOLIDAR, a European NGO network as the
International Cooperation Coordinator, on issues such as trade, aid, labour rights and migration.
SOLIDAR leads the Decent Work, Decent Life campaign, aiming to put decent work at the heart
of all policy-making.
Shelley Marshall is a lecturer in the department of Business Law and Taxation at Monash University,
Australia. Shelley began her career as a public interest and labour lawyer before coordinating an
Australia-wide campaign to improve the conditions of homeworkers. Shelley’s research interests
include industrial democracy, corporate governance and development. She has conducted a number
of consultancies for organizations such as Homeworkers Worldwide and the International Labour
Organization concerning novel methods of regulating informal and vulnerable workers. Shelley’s
recent publications include the edited volume Varieties of Capitalism, Corporate Governance and
Employees (Melbourne University Press, 2008) which she co-edited with Richard Mitchell and Ian
Ramsay.
Alex Nicholls, MBA, is the rst lecturer in social entrepreneurship to be appointed at the University
of Oxford and became the rst staff member of the Skoll Centre for Social Entrepreneurship in
2004. Nicholls’ research interests range across several key areas within social entrepreneurship,
including: the interface between the public and social sectors; organizational legitimacy and
governance; the development of social nance markets; and impact measurement and innovation.
Nicholls is widely published in peer reviewed journals and has done consultancy work for not-for-
prots, social enterprises, and the UK government. He is the co-author (with Charlotte Opal) of a
major research book on fair trade: Fair Trade (Sage, 2005). His ground-breaking 2006 edition of a

Notes on Contributors
xv
collection of key papers on the state of the art of social entrepreneurship globally was published in
paperback edition by Oxford University Press in 2008. He is a non Executive Director of a major
fair trade clothing company.
Gordon Renouf has been Director, Policy and Campaigns, at CHOICE, the Australian Consumers
Association, since 2005. He is a member of the Commonwealth Consumer Affairs Advisory
Council and represents consumers in various other fora. Gordon has worked on consumer issues,

legal services policy and other areas of social policy for non government organizations and as a
consultant to government, NGOs and the private sector. His previous positions include Director
of the National Pro Bono Resource Centre, Director of the Northern Australian Aboriginal Legal
Aid Service, National Convenor of the National Association of Community Legal Centres and
consumer lawyer at Redfern Legal Centre.
Anna Tucker works as a policy ofcer at the Department of Justice in the Victorian Government.
Anna recently completed a Bachelor of Laws at Monash University, where she also completed
a Bachelor of Arts majoring in Visual Culture and English. During her studies, Anna worked in
various roles across the arts and law, including as a research assistant for Shelley Marshall.
Peter Utting is Deputy Director, United National Research Institute for Social Development
(UNRISD), where he also coordinates the institute’s programme on Markets, Business and
Regulation. His edited volumes include Reclaiming Development Agendas: Knowledge, Power
and International Policy Making (2006), and The Greening of Business in Developing Countries:
Rhetoric, Reality and Prospects (2002). He has authored numerous articles on corporate social
responsibility and business regulation.
Tim Wilson is the Director of the Intellectual Property and Free Trade Unit at the Institute of Public
Affairs and specializes in IP, trade, globalization and investment policy. He is regularly published
in Australian and international newspapers, including the Wall Street Journal, and appears on
television and radio programmes including ABC1’s Q&A, and Joy FM’s The Spin. Tim worked as
a trade and communication consultant, has advised state and federal Members of Parliament, and
delivered the programme to build the logistical and policy capacity of the Vietnamese government
to host APEC in 2006. Tim has a Masters of Diplomacy and Trade and a Bachelor of Arts from
Monash University, studied IP at WIPO, and Global Health Diplomacy and the WTO, International
Trade and Development at the Institut de Hautes Études Internationales et du Développment.

This page has been left blank intentionally

Preface
It is often lamented that academics, activists and practitioners engaged in corporate accountability
and improving labour standards do not jointly reect upon the subject of their work enough.

Academics talk to practitioners when they want information and practitioners don’t often have
the time to step back and reect upon the efcacy of their strategies, except in planning meetings.
This book arose out of a workshop held in December 2007 which aimed at creating a new space
for reection and collaboration. Its purpose was to bring normative and empirical scholars from
philosophy, law, politics and economics together with practitioners, activists, social entrepreneurs,
and companies with an interest in socially responsible supply chain practices, to reect upon the
challenges confronting the goal of strengthening labour regulation, social governance and human
rights in a globalizing economy, and to explore new directions for building an effective and
legitimate system of global social governance.
The workshop was organized by the Centre for Employment and Labour Relations Law at the
University of Melbourne and the Centre for Applied Philosophy and Public Ethics at the Australian
National University, with the support of the Centre for Governance of Knowledge and Development
at the Australian National University and the Fair Trade Association of Australia and New Zealand.
We are especially grateful to Cameron Neil from the Fair Trade Association of Australia and New
Zealand for working with us on this project. He bought together a range of fair trade ‘practitioners’
who shared the stories of the development of Fair Trade and critically compared those stories with
the parallel development of other forms of corporate social responsibility.
We were fortunate to have funding from an Australian Research Council grant received by
Govnet (The ARC Governance Research Network), from CAPPE (Centre for Applied Philosophy
and Public Ethics) as well as a small grant from AusAid. This funding allowed us to y corporate
responsibility scholars, practitioners and activists from the economic South, as well as those located
in Europe and North America, to Melbourne, Australia for two days of discussions.
There are people who made signicant contributions to the workshop, whose efforts are not
apparent in this book, but without whom the workshop, and thus the book, would not have been
a success. Jessica Cotton and Charlotte Morgans provided efcient administrative support. Later,
Anna Tucker and Kamillea Aghtan provided outstanding research and editing assistance. Cheryl
Kernot worked hard behind the scenes to publicize the workshop. Damien Carrick of ABC Radio
and Jiselle Hannah of 3CR both put together radio programs based on the proceedings that helped
us shape the book. A number of people from the procurement departments of companies attended
and provided insights into the difculties of turning large otillas of companies around so that their

practices reect new values. We are grateful to everyone who attended the workshop and shared his
or her views, leading to what was often a heated and passionate conversation.
These debates about the failure of existing governance arrangements to ensure decent work
and livelihoods for millions of workers and producers around the world, and the potential of new
governance initiatives to reassert principles of social justice in the governance of a globalizing
economy, are what drive this collection.

This page has been left blank intentionally

List of Acronyms
ACFTU All-China Federation of Trade Unions
AMRC Asia Monitor Resource Centre
APEC Asia Pacic Economic Co-operation
ATNC Asian Transnational Corporation Monitoring Network
AWATW Asian Women at Work
AWFA Asia Wage Floor Alliance
BSL Brotherhood of St Laurence
CA corporate accountability
CCC Clean Clothes Campaign
CR corporate responsibility
CSR corporate social responsibility
EFTA European Fair Trade Association
EPA economic partnership agreement
ETI Ethical Trading Initiative
FDI foreign direct investment
FLA Fair Labor Association
FLO Fairtrade Labelling Organization
FTO fair trade organization
GRI Global Reporting Initiative
HWCP Homeworkers Code of Practice

HWCPC Homeworkers Code of Practice Committee
IFAT International Fair Trade Association (formerly the International Federation
of Alternative Trade; now the WFTO)
ILO International Labour Organization
IOC International Olympic Committee
ISO International Organization for Standardization
ITUC International Trade Union Confederation (formerly the ICFTU)
MNC multinational corporation
MNE multinational enterprise
MOLISA Ministry of Labour, Invalid and Social Affairs (Vietnam)
MSI multi-stakeholder initiative
NCP National Contact Point (of the OECD Guidelines for MNEs)
NEWS Network of European Worldshops
NGO non-governmental organization
OECD Organisation for Economic Cooperation and Development
OSHA Occupational Safety and Health Administration
PACER Pacic Agreement on Closer Economic Relations
PICTA Pacic Island Countries Trade Agreement
SME small or medium enterprise
TCF textile, clothing and footwear

Fair Trade, Corporate Accountability and Beyond
xx
TCFUA Textile, Clothing and Footwear Union of Australia
TNC transnational corporation
UNCTAD United Nations Conference on Trade and Development
UNRISD United Nations Research Institute for Social Development
VGCL Vietnam General Confederation of Labor
WFTO World Fair Trade Organization (formerly IFAT)
WRAP Worldwide Responsible Apparel Production

WTO World Trade Organization

INTRODUCTION

This page has been left blank intentionally

Chapter 1
Social Governance in a Global Economy:
Introduction to an Evolving Agenda
Kate Macdonald and Shelley Marshall
1
Introduction
In January 2007, the UK arm of the corporate giant McDonald’s announced that it would be sourcing
all its coffee with a certication from the US-based non-prot organization Rainforest Alliance.
‘Today’s announcement … means we can offer our customers great tasting coffee that benets
coffee growers, their communities and the environment’, declared Steve Easterbrook, President and
CEO of McDonald’s UK, in the statement accompanying the launch of the new initiative.
2
Around
the same time, the then CEO of global retailing giant Walmart – the reigning poster-child of global
corporate abuse in the minds of many
3
– began to embrace the language of environmental and social
responsibility, littering speeches and public statements with pronouncements about the company’s
new-found commitment to ‘Doing Well by Doing Good’, which involved the introduction of several
environmental initiatives and incorporation of a range of ‘ethical’ products – including Fairtrade
certied and organic ranges of coffee – into its ‘Sam’s Range’ of premium products.
4
Such announcements have been met with scepticism among many who have come to associate
corporate brands such as Walmart and McDonald’s more closely with ‘McJobs’, ‘Always Low

Wages’ or the destruction of the Brazilian rainforest to feed the huge demand for beef burgers,
than with agendas of social and environmental responsibility. Despite being the subject of great
controversy, the embracing of such new strategies by major businesses symbolizes a huge shift in
ideas around the responsibilities of business that has occurred in the last 10 to 15 years.
Indeed, such cases of large global corporations scrambling to climb aboard the ‘corporate social
responsibility’ (CSR) and ‘Fairtrade’ wagons are by no means isolated examples. All around the
world – but particularly in core centres of the industrialized global North – major global corporations
have been searching for new ways through which principles of corporate social responsibility can
be incorporated into the way they do business; or, as some would suggest, at the very least into the
way they do their public relations and marketing. Putting aside questions regarding the strengths
or weaknesses of these instruments, the quick and steady growth of companies that have adopted
CSR mechanisms has been impressive. By the end of 2007 the UN Global Compact, the world’s
largest CSR initiative, had approximately 3,600 participating companies, out of what UNCTAD
estimated to be a total of 78,000 transnational corporations (TNCs) and 780,000 afliates operating
1 The authors would like to thank Kamillea Aghtan for her wonderful research and editing assistance
for this volume.
2 http://www
.rainforest-alliance.org/news.cfm?id=mcdonalds [accessed: 7 April 2009].
3 As one of the world’s largest and most high-prole retailers, Walmart has been the subject of
widespread criticism from a range of activist groups. See for example: http://www.
hatewalmart.com/; />4 />News/NewsRoom/ [accessed: 7 April 2009].

Fair Trade, Corporate Accountability and Beyond
4
worldwide (UNCTAD 2007, cited by Utting in this volume, Chapter 9). Increased recognition
of the importance of CSR is also reected in rising government interest, especially in Europe,
expressed for example through intergovernmental initiatives such as the OECD Guidelines for
Multinational Corporations, and the passing of ‘ethical sourcing’ legislation in a number of
jurisdictions (McBarnet et al. 2007).
These developments have broadly mirrored a parallel rise and expansion in the scale and support

for ethical initiatives such as the Fairtrade system that operate within the civic domain. Some such
initiatives have provided institutional vehicles through which growing constituencies of concerned
coffee drinkers, consumers, investors and citizens can give direct expression to their concerns
regarding the conditions under which goods are produced. Others have emerged to support and/or
demand responsible corporate action, as well as to promote more far-reaching agendas of justice in
the domains of production and trade. In short, over the course of the last decade and a half, agendas
of ethical trade and consumption, together with associated agendas of corporate responsibility and
accountability have been expanding and consolidating across both ‘barricades and boardrooms’
throughout the world (Bendell 2004).
It would be a mistake to overstate the extent or impact of this shifting agenda with respect
to mainstream corporate practice. As a proportion of international corporate numbers, very few
businesses have adopted practices associated with corporate responsibility such as social auditing,
joining established corporate responsibility mechanisms such as the UN Global Compact or even
creating their own ‘corporate codes of conduct’. Furthermore, the agenda’s impact on business
practices associated with labour standards or environmental sustainability has in many cases been
very limited. In the same period in which corporate responsibility has gained ideational leverage,
real wages for many vulnerable workers have continued to fall. In December 2007, Neil Kearney
of the International Textile, Garment and Leather Workers’ Federation noted that over the past 12
years real wages in the textiles sector have fallen by 25 per cent and working hours increased by 25
per cent (cited by Utting, this volume, Chapter 9).
5
Instead of shrinking, as most labour economists
expected, informality in working relations increased, placing great numbers of workers beyond the
reach of legally enforceable standards (ILO 2002).
Regardless of such contradictions, there is little doubt that the many social movements
campaigning for global social justice (a term we shall address in greater detail later in this
chapter) have made some gains in the battle over ideas. Their success in shifting this contested
‘ideational space’ has, in turn, presented those opposing contemporary forms of corporate power
with some challenging strategic dilemmas. As the corporate responsibility and fair trade agendas
mature, they have been running aground against a seemingly intractable set of new problems,

leading to increasing frustration, cynicism and uncertainty about how to proceed. For example,
the commercial success of fair trade has meant that the Fairtrade Labelling Organization (FLO)
recently faced the dilemma of whether to license Nestlé, a company that has been the subject of a
number of erce social justice campaigns (see Hutchens in Chapter 4 of this volume; see also Baby
Milk Action 2009). In such cases, popularity brings with it new strategic and moral quandaries.
Other practical problems have resulted from the increasing complexity and pace of change within
globally dispersed supply chains. Within supply chains new power brokers are emerging who
are willing to employ previously untried tactics as means of resisting pressure from corporate
responsibility activists (see Maksimovic, Chapter 13 of this volume).
5 Presentations made at the International Labour Organization MultiForum 07: Better Business:
Managing Labour Relations for Productivity and Growth, Geneva, 15–16 November 2007 and the European
Union Conference on Corporate Social Responsibility: CSR at the Global Level: What Role for the EU?,
Brussels, 7 December 2007.