Return to Main
Fair Trade Organisatie (Website - www.fairtrade.nl) - formerly called S.O.S. Wereldhandel - is an idealistic professional organisation for development cooperation with 100 employees, 80 voluntary workers and an annual turnover of around 14 million ECU. The products, ranging from coffee, other food products such as tea, chocolate, honey and wine, to some 1500 handicrafts articles such as textiles, utensils and decorative items, are purchased from over 130 producer groups in Latin America, Africa and Asia. This article describes the history that has led up to the present situation, and evaluates the importance of fair trade.
In 1959, S.O.S. Wereldhandel was founded by a number of youth members of a Catholic political party in the Dutch town of Kerkrade. The foundation was initially named S.O.S., which stood for Support for Underdeveloped Regions. Later on, the name was changed into S.O.S. Wereldhandel while the abbreviation was given a new meaning (S.O.S. standing for Foundation for Development Cooperation, and Wereldhandel meaning World Trade).
Concepts such as developing countries or the Third World were unknown in 1959. The foundation's first activity was a milk powder campaign for Sicily. Fund-raising and providing financial support to projects in 'underdeveloped regions' were the main activities.
The young foundation focused on projects that would allow people to gain economic independence by teaching them to support themselves. Financial support was therefore mainly aimed at vocational training and small workshops. It soon became clear, however, that selling the manufactured products was a major problem. The sales potential of the small local market was insufficient.
This led S.O.S. Wereldhandel in 1967 to become a pioneer in purchasing products from producer groups in developing countries. The first imported products were wood-carvings from the slums of Port-au-Prince, Haiti. During the first few years, only crafts products - the majority of them from missionary projects - found their way to the Netherlands. Cactus pots, plant hangers, bamboo ashtrays and shell-decorated articles from the Philippines (Mati and Saffy), earthenware and straw products from Mexico (Exportadores de Michoacan), sandals from India (T.E.L.C./Palam) and wooden sculptures from Haiti (Salesian Missions/Cohan) were characteristic of the first range of fair trade products. These products were sold through (mission) exhibitions, mail order and Third World Groups. Sales were excellent and the turnover rose considerably every year. The fair trade model was also adopted in a number of other European countries: S.O.S. Wereldhandel established 'subsidiaries' in Germany, Austria, Switzerland and Belgium.
The UNCTAD conference concluded in 1968 that "no aid but trade" would be the best method of development assistance. However, this statement was not put into practice; the political will to apply the concept in reality was lacking. Third World Groups set a better example. The sale of cane sugar became a form of political protest, as appears from the slogan "By buying cane sugar, you increase the pressure on the governments of the rich countries ... to give the poor countries also a place in the sun of prosperity". The Cane Sugar Groups developed into "World Shops", which not only sold cane sugar but also handicrafts products imported by S.O.S. Wereldhandel. The first group to switch over from door-to-door selling to a real shop was the Third World Group in Breukelen in 1969. The "World Shop" idea became very popular: a National World Shops Foundation was founded in 1970; the National Association of World Shops in 1974.
In 1972 and 1973, the World Shops were actively involved in the successful boycott of Angola coffee.
In the Autumn of 1973, coffee was introduced in the fair trade circuit. S.O.S. Wereldhandel imported the first beans from Fedecocagua, an association of coffee cooperatives in Guatemala. The coffee led to an enormous acceleration of developments in fair trade, and coffee turnovers exceeded those of handicrafts shortly afterwards.
In the years 1974-1975, the fair trade movement went through a period of reconsideration of its ideology. The motto "no aid but trade" made way for the support of producer groups on their way to independence, based on the centre-periphery model. The poorest groups in developing countries were to be given the opportunity to determine their own future in a decent way. This would require major changes in our own society and attitude. The information accompanying the products was intended to awaken awareness among the Dutch people, thus creating a broad social basis for structural changes in society. It was necessary to build a hard core of people taking a different view: trade unions, the women's movement, environmental and anti-nuclear groups, religious groups and the Third World movement.
From the end of 1977, products were purchased not only from small-scale producers groups, but also from socialist countries.
These were defined as countries wishing to function independently from the Western capitalist system and trying to make the whole population benefit from the country's resources. In particular Nyerere's 'self- reliance' policy in Tanzania - people deciding on their own development - was a source of inspiration. Coffee from Tanzania, wine and juices from Algeria and sweets from Cuba appeared in the World Shops.
The supporting function of the sale of products was clearly pushed into the background by information and instruction. The product was a symbol and a way of putting the political message across. If you did not take the leaflet, you should not buy the product either.
For the South, partner acceptance criteria were developed and the question of whether particular partners met them became a regularly recurring point for discussion.
Within this political framework, the import of handicrafts was seriously questioned. After all, the production of handicrafts did not entail structural economic changes in many cases. S.O.S. Wereldhandel decided to start looking for partners who consciously fought against their own oppression through, for instance, the production of handicrafts. Although this approach led to contacts with a number of interesting partners, it hardly resulted in any saleable products.
In the late 70s and the early 80s, S.O.S. Wereldhandel had a hard time keeping afloat. Indeed, trading while remaining faithful to the principles is not always easy. This became evident when the Abal fair trade organisation was forced to stop for financial reasons in 1984, after 10 years of activity. Also the bankruptcy of S.I.I. in 1991, after 15 years of operation, made this painfully clear again.
For S.O.S. Wereldhandel, the situation was not only affected by a number of business factors - losses on coffee, further reduction of exports to the 'subsidiaries' abroad which were becoming independent - but also by its own political principles. It had restricted itself considerably as regards the partners and methods aimed at. The overall attitude towards advising partners about their products was not very positive: the idea was that the producers should not be made dependent on our Western taste and market.
Nevertheless, a range of initiatives was taken to raise the turnover. For instance, the Soweto candles campaign (1980), the promotion of Christmas boxes (1980), the Novib catalogue (1981) and the coffee subscription campaign (1982) were launched in this period. But things were not to become too commercial. The conclusion was that a fair trade organisation should not pursue unlimited growth. The bigger it grows, the more it is faced with the limits of "fair trading". So if it really wanted to become a big coffee importer, it would have to use a big importer's strategies and policies, towards both its suppliers and its customers.
Throughout this period, the organisation was sometimes more concerned about keeping its own activities politically sound than about the actual results of fair trade.
The no-nonsense and professionalisation trends of the 1980s did not leave the trade movement untouched. In the second half of the 1980s, the tide turned and the sale of products started to be revalued. In the Summer of 1986, S.O.S. Wereldhandel was reorganised, shut down the five regional depots and concentrated all activities at a central location. In the showroom and the warehouse of the new premises in Culemborg, the products were displayed in an attractive way, white being the dominating colour. The World Shops started to concentrate as much on the sale of products as on awareness-raising and political action. Many shops moved to a more central location and/or made their design and presentation more attractive. In considering possible cooperation with partners, the context in which a producer group worked became an important criterion. Product quality was greatly improved: product development became an important activity to ensure continued cooperation with the partners.
It became clear that although fair trade is different from regular trade as regards its principles and starting points, this needs not necessarily always be evident from the presentation of the products. Commercial techniques may, and indeed must be used to sell both the products and the message. Why not beat the enemy with his own weapons?
Churches and other community organisations discovered fair trade and fair products as an effective way to deal with global problems in the field of, for instance, natural resources or trade. In the Autumn of 1986, a large national coffee campaign was conducted in cooperation with Solidaridad and the Lenten fund-raising campaign. In 1986-1987, the Dutch coffee roasters were tackled about their coffee purchasing policies by the I.O.W. (Interdenominational Talks on World Food Issues). In June 1987, the Dutch parliament switched over to the so-called Residence Coffee supplied by S.O.S. Wereldhandel. And in November 1988, the Max Havelaar labelling initiative was introduced successfully on the Dutch market.
At the end of the 1980s it became clear that consumers were not as powerless as they were assumed to be for some time. Consumer power could be mobilised to put pressure on companies and authorities. Again, use was made of existing rules and patterns to achieve the aim. By creating demand for particular positive products, businesses can be forced by the market to include these products in their product range.
As was mentioned earlier, S.O.S. Wereldhandel set up 'subsidiaries' in a number of European countries in the early 1970s. These organisations gained their independence at the end of the 1970s and were from then on called Gepa (Germany), EZA (Austria) and OS3 (Switzerland).
The collaboration between these organisations and S.O.S. Wereldhandel has resulted in the foundation of EFTA (European Fair Trade Association). At the moment, EFTA has 11 member organisations in 9 European countries. The secretariat of EFTA is established in Maastricht.
EFTA is concerned with the exchange of information, coordination of activities and improved specialisation and division of tasks between the members. This allows them to provide better and more expert advice to their partners and to operate more efficiently. For example, Oxfam Wereldwinkels in Belgium is in charge of the contacts with the wine producers in Algeria; OS3 in Switzerland has specialised in chocolate from El Ceibo in Bolivia; and S.O.S. Wereldhandel takes care of the coffee imports from Guatemala and Tanzania, among other things.
In 25 years, fair trade has developed into a serious 'business' which is of vital importance to tens of thousands of producers in the South.
The World Shop movement in the Netherlands has expanded into a chain of 340 shops with a total annual turnover of around 7 million ECU, and involving over 5000 voluntary workers. S.O.S. Wereldhandel has grown into a medium-sized development cooperation organisation with a turnover of almost 14 million ECU. In 1994, its name was changed into Fair Trade Organisatie. Besides selling to the World Shops, it also supplies fair Residence Coffee to the Dutch parliament, the European Parliament, 235 municipalities en four provincial governments.
Fair trade - i.e. trade starting from small-scale local initiatives and seeking to make an equal exchange - is a concrete form of development cooperation. The experiences of numerous producer groups are showing that fair trade is effective and allows the partners to improve both their economic and social position. In the Netherlands, fair trade now attracts increasing numbers of critical consumers, as is evidenced by the rapidly increasing turnover rates.
All trade between North and South is to become fair. In practice, however, the awareness has grown that not all trade may be expected to become fair trade. It is therefore important that fair trade principles are adopted in regular trade. This may be achieved by the introduction of the label, which allows regular traders to participate in fair trade on a commercial basis. Companies selling coffee under the Max Havelaar label buy this coffee from specific partners at a fair price.
In my opinion, two issues should be emphasized in the five years to come: 1. First of all, it is essential for fair trade to be further expanded and strengthened. There is still a considerable gap between actual turnover and potential turnover. This requires the further professionalisation of fair trade, applying techniques offered by marketing, information and PR, business economics and management science. It should focus on the introduction of fair trade labels for products other than coffee (1988) and cocoa (1993) - and the fair trade movement should take active steps to respond to these developments. Commercial participants in a labelling initiative can merely be expected to trade their products in an economically sound way; giving information and conducting campaigns will largely remain the responsibility of the fair trade movement. It will have to ensure that it keeps the fire burning, adheres to its principles and explores the opportunities for new products and markets.
Regarding the South, it is important to provide intensive guidance for the partners - where necessary. Trade is of vital importance, but for weaker partners trade alone is often not sufficient to develop towards independence. Fair Trade Organisatie therefore intends to further improve its Assistance Programme to be able to provide better guidance to the partners as regards product development, quality improvement, efficient production organisation, and to transfer knowledge on administration, cost control, marketing and management.
2. Second, greater weight should be attached to the political function: mobilising the supporters of fair trade and making use of the power of consumers. From the developments in the past five years, it is evident that politicians and businesses are highly sensitive to the viewpoints of large groups of voters or consumers. The starting point should be the combined efforts of as many like-minded national organisations as possible, directed at particular key issues and connected to intensive campaigns. International cooperation with other similar organisations and networks is also a precondition. In addition to setting the example, providing information, initiating action and cooperating in networks, other serious objectives are exerting political pressure and lobbying.
Through the impact of its own activities, by setting an example and by introducing fair trade principles in regular trade - by means of labels, lobbying and (political) pressure - the fair trade movement makes an active and structural contribution to the fight against poverty.
Stefan Durwael
General Director of Fair Trade Organisatie
(Translated by Ineke Groot, EFTA)
[Other Fair Trademarks] [Resources] [Campaign Material]