March 2001 Insights Issue #36

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Who benefits from ethical trade? The South African experience

South Africa is now committed to a constitutional democracy whose labour laws exceed ILO conventions, yet little improvement has been made in the quality of life of farm workers. Given that relationships between producers and workers are traditionally exploitative and paternalistic, where public regulation internationally and nationally has failed to shift this power imbalance, how can private regulation benefit farm workers? How can ethical trade in agricultural goods improve employment conditions?

Research by the Centre for Rural Legal Studies (CRLS) in the Western Cape Province, shows that private regulatory systems can be inflexible in relation to local agricultural need. This could undermine their ability to make a positive impact. Working with the UK Ethical Trade Initiative (ETI) and the farmers' union, Agriculture Western Cape (AWC), it is becoming clear that the challenge for the agricultural sector is to find a symbiosis between public regulation and the 'overload' of private regulation. Indeed, what is an appropriate model of ethical trade for South Africa?

The ETI set up a pilot project in the Western Cape wine industry. The need for local ownership led to the establishment of the Ethical Trade Forum (ETF) a local offshoot of the ETI. The ETF co-ordinates local inspections of pilot farms. It also considers issues such as how local conditions should comply with the ETI baseline code; the appropriateness of improvement plans; and how to ensure progress towards compliance. Although multi-stakeholder groups, different levels of power and leverage, of resources and capacity mean that partnerships and joint ownership between the ETF and the ETI are problematic. Further problems have been identified:

• The ETF has no power to take pro-active steps to ensure compliance with the baseline code

• Several farms in the pilot have no trade union involvement or worker representation - common in the agricultural sector. Workers are thus marginalised, reducing the prospects of the pilot being part of a constructive process of change.

• Many workers have little knowledge of the ETI process - participation is limited to being 'objects' for inspection.

• Workers are excluded from monitoring the code and developing improvement plans.

The AWC, representing white farmers, has developed its own code of conduct focusing on worker welfare, best practices in agriculture, economic development and land reform. The AWC code is still to be endorsed by all stakeholders, and it is still too early to evaluate its impact. Yet, the potential exists to address needs specific to agriculture such as improved working conditions and better accountability between employers and employees. The process has not been smooth, however:

• Although a consultation process is in place involving all stakeholders, unions representing farm workers are sceptical, viewing the process as mere 'window dressing' intended for buyers, retailers and consumers.

• The AWC code is voluntary with no punitive measures for non-compliance.

How can the relationship between workers, trade unions and producers be strengthened? Changes are needed in the power relations between northern and southern partners and between producers and workers if private codes are to succeed on a collaborative basis. Only then will they begin to improve working conditions. The potential for commitment and stakeholder support from producers and workers will increase if:

• incentives, such as market access, are provided for compliance

• punitive measures are instituted for non-compliance

• responsibility for monitoring and enforcement of codes is shared by all stakeholders.

Karin Kleinbooi
Centre for Rural Legal Studies (CRLS)
9 Helderberg Street
Stellenbosch 7600
South Africa
T +21 8838032/3
F +21 8865076
karin@crls.org.za