Tuesday, 16 October 2012

Fair trade… for some

Like many of us, I'm a hypocrite, especially when it comes to Fair Trade. I'm a hypocrite because I buy Fair Trade products without looking too closely at the question of whether such a thing is possible but also because I buy Fair Trade products from people who aren't being treated fairly at all.

Take my workplace. We've just started selling Starbucks coffee, which is apparently 'Fair Trade'. I wonder, of course, whether that means the growers have hard-nosed negotiators and lawyers just like the multibillion dollar corporation. I further wonder whether anything can be fairly traded when Starbucks has paid no tax at all in the UK since 2009, and only £3m in 14 years, despite doing £3bn of business here.

The secret, of course, is what I call the Branson-Vodafone Manoeuvre. You establish a brass-plate office with a secretary in a tax haven. You put the intellectual property there (i.e. the brand name). Then your subsidiaries in the countries where you really do business pay to licence the brand name. Your tax haven charges them an amount of cash not unadjacent to what the subsidiary would have made in profit. Or you generate fictitious debts between a network of offshore companies so it looks like you always owe more than you take in.

Accounts filed with Companies House, which must be a truthful reflection of the business, according to HM Revenue & Customs (HMRC), showed a 10th consecutive annual loss.
A year later, after filing a £26m loss in the UK, Starbucks' chief executive, Howard Schultz, told investors the business here was so successful he planned to apply the lessons to the company's biggest market in the US.
Chief financial officer, Troy Alstead, called the UK business "profitable" in 2009 after accounts revealed a record £52m loss. Last year, John Culver, the president of Starbucks international division, said: "We are very pleased with the performance in the UK." Accounts reported a £33m loss.

Bingo: instant losses, no tax paid, company continues to depend on the services (education, infrastructure, policing, healthcare etc) that taxes pay for.

But there's something revolting closer to home. I feel profoundly uncomfortable buying Fair Trade coffee from (mostly) women who are being paid minimum or low wages, and employed on Zero Hours contracts: a system which means they can't get other jobs because their hours are unpredictable and entirely flexible at the whims of the employer. They get dumped for the long summer months and in other places (Pizza Hut, acccording to one employee I know), they can be made to sit around - unpaid - at work in case enough customers come in to require them: time they could spend in another job, extending their education or whatever. My catering and cleaning colleagues are often invisible. They're not unionised because they're kept in fear that they may not be rehired (and perhaps some unions don't make enough effort). They deserve our respect too.

Fair Trade is a noble idea, to some extent. But I worry that it makes us believe that everything on the Home Front is lovely, that only smiling natives in Kenya or India need this special protection (and let's not forget: Fair Trade shouldn't be some lovely extra for which we pay a premium if we're rich: it should be the default position). The worst jobs in this country are done by an army of insecure, badly-paid, disposable people whose names we rarely learn. Let's Trade Fair with them.

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