Fair Standards for Fair Trade

For Scott James (MBA '99), the passion for human rights permeates everything. For instance, he and his wife named their 7-year-old son, Justice, and their 2-year-old daughter, Mercy. This spring, James, founder of Fair Trade Sports, the first North American distributor of eco-certified fair trade soccer balls and footballs, brought his considerable knowledge about the Fair Trade movement to an MBA Interterm Intensive course.

Fair Trade certification is done by a third-party watchdog group that sends teams around the world for unannounced spot checks. The organization ensures that workers— from the supply chain through the manufacturing process—are paid what their economists deem to be a living wage in that very specific region of the world, says James. In addition, they confirm that the work environment is healthy and safe.

But as the students found out, Fair Trade certification is not without controversy. "Not everyone is happy with the Fair Trade speci­fications as they are written," James says. "Each product that is Fair Trade Certified has very detailed specifications regarding wages rates and working conditions. The spec for bananas is very different from the one that's written for coffee or soccer balls."

James elaborated on industry-wide problems stemming from opposition by some industry groups to certain Fair Trade specifications. "The challenge for MBA-level thinkers is how to effectively move these competing industry groups from competition to ‘co-opetition.' The groups still compete, but at the end of the day, they are about the same thing—human rights." The students were challenged to think through that complexity, noting how it affected the public relations and marketing strategies of their Interterm projects.

MBA student Matt Collins was attracted to the course because he wanted to learn the basics of running a sustainable business. "It's challenging to do the right thing and pay people the appropriate amount and still make a competitive margin," he says. "The take-away for me is we have to be really smart about all of our decisions. We have to make sure we're running a very efficient organization." Collins, whose long-term goal is to own a renewable energy development company, says he'd like to take these fair trade practices into his business. "I think it's essential," he says. "A no-brainer."