The Manufacturing Committee Dialogues’ Second Foundational Issue: Size of Factory
Introduction:
This post is the first of several regarding the issue of the size of the factory in the creation of exceptional manufacturing standards. Within the fair trade community, there is a vigorous debate as to whether fair trade should be for the small or large producer.
At the beginning of each section is the participant in our dialog who wrote the post. For a complete list of participants, previous posts and background information, visit https://fairjewelry.org/madison-dialogue-manufacturing-committee.
In this post, I introduce the subject in context to the document I produced which is available as a download off this link: https://fairjewelry.org/archives/3196
~ Marc Choyt, Publisher, Fairjewelry.org
Marc Choyt Wrote:
The second Foundational Issue concerns the size of the factory. I propose that we draft standards for small and large factories, and that for certain principles, the requirements for large and small factories varies. First, some background information.
To some degree, I based my entire document written for this discussion on the Association for Responsible Mining (ARM) draft proposal for Fair Trade Gold. I looked at their model as an example of “best practice” for a fair trade initiative in our industry. In that document, there were different standards for different size mining operations. I felt that the same approach would be beneficial for manufacturing as well.
Within the greater international fair trade community, there is vigorous debate about whether fair trade items should even be produced in large scale operations; and further debate about what constitutes large and what constitutes small. This is an important discussion, and I have an opinion about it, but I do not believe it would move us forward to have that discussion here. It is beyond the scope of our activity.
I have said in the document that large factories can be up to two hundred workers and that a small is up to ten workers. These numbers are my best guess at what might work. What is large and what is small can be determined later through careful study and consultation. It may even vary from country to country. I view the numbers I suggest as a placeholder for our discussions.
For the purpose of this document, I believe the best way forward at this point is if we could, as a group, simply agree that there are large and small manufacturers. Secondly, I propose that we not discuss as a group what constitutes large and what constitutes small. That discussion can be held at a later date by a subcommittee.
Thank you for your consideration of this issue. Below … is the section of the document that is under consideration.
Second Foundational Issue: Size of the Factory, page 9:
Our goal is to be widely inclusive and supportive of a wide range of manufacturing. The workshop that produces a niche market fair trade product, commonly sold today, is often a family business located in a small village. This is different from a factory that produces for mass markets. The cost for production equipment needed for mass market production is generally not affordable to the small producer.
Standards for the large and small factory overlap, but larger workshops need additional standards which are tied into issues related to production for the main steam jewelry sector, which is investment intensive. For the purpose of this working document, a small factory is under ten production workers and a medium size factory is under two hundred production workers.
Consequently, many of the standards have base minimum requirements that apply to all shop situations, and additional requirements for larger operations. Many standards also have progressive requirements that give a best practice target.
In context to both large and small facilities, another factor to consider is traceability of a product through its entire manufacturing process. Often, to satisfy a large order, a manufacturer will farm out part of the production to several smaller shops. In this case, the work cannot qualify as fair made, unless all individuals within the network apply for the rating.
Martin Rizzi wrote:
What about cottage industry production in the home workshops of traditional artisans? That would seem to be neither large nor small-scale according to these terms of definition.
Vivien Johnston wrote:
I agree with this approach, and think a sub-committee to define the details of the standards is a great way to keep things moving. My only addition is the wording to this sentence be made to reflect the sorts of marginalized, small workshops which could be considered under a ‘fair made’ label. (I hesitate to use Fairtrade as per comments previously made on certifications, etc.).
The reason I specify this is that my own products are made using fairly traded gold/gems, etc. but we produce in the UK so these would not be beneficially ‘fair made’; as would be the ideal to have them produced in the South America/African/marginalized communities where benefit could be maximized.
The London workshop is small (under 10); this will apply worldwide as we are a niche product and almost all jewellers working in this field are still small jewellery businesses themselves.
In the case of large scale production, investment would be required and thus I agree it colours our purpose to identify if this can work as Fair Trade. Can we then consider geographic location in our definitions (for example producers in the South; Fair Trade) or is this defeating the first aim of being inclusive?
“Our goal is to be widely inclusive and supportive of a wide range of manufacturing. The workshop that produces a niche market fair trade product, commonly sold today, is often a family business (yes) located in a small village (not necessarily?).”
This is different from a factory that produces for mass markets. The cost for production equipment needed for mass market production is generally not affordable to the small producer”.
Mart Choyt Wrote:
Martin, thank you for your comment– you raise an important point. When I wrote the document, I intended that the small scale include home workshops and traditional artisans. But perhaps that language specifically needs to be added into the document so it would read:
“Standards for the large and small factory overlap, but larger workshops need additional standards which are tied into issues related to production for the main stream jewelry sector, which is investment intensive. For the purpose of this working document, a small factory is under ten production workers and a medium size factory is under two hundred production workers. ADDING TO THIS: A small factory would include cottage industry production in the home workshop of traditional artisans.”
Marc Choyt Wrote:
I did not mean to impose any limitation when I used the term “small village,” as Vivien pointed out in her post. Certainly small workshops could be in a community from rural to urban, so I’ll just strike that from the document. Thanks for pointing it out.
Greg Valerio Wrote:
I would draw our attention to my earlier point;
In my experience fair trade, and I include fair made as a sister to the idea, is in top level terms,
‘An economic response to a development requirement’.
Fair trade offers a development outcome, therefore western business by definition falls outside the scope of fair trade. Vivien’s point about geography is a standard framework in fairtrade that includes Asia, Africa & Latin America.
This normally means ‘for the benefit of the small producer, manufacturer, artisan etc. I appreciate this needs clarification and definition but I always see it as primarily excluding the large operators. In short I support an initiative that promotes the small over the big and maximises returns to small business and or workers/coop owners.
Given the huge range of manufacturers out there I think at some point in the near future we may need to do some work on bringing greater definition to what we mean by small, medium and large. For the sake of the preliminary document I think the outline below is ok to proceed with.
Stephen Metcalf wrote:
Greetings from Vancouver,
Maybe this has already been long established (I am new to this discussion), but I am wondering if it might be helpful if we clarify whether we are discussing principals/standards for mainstream manufacturers, or for manufacturers in developing countries (or both):
According to Marc’s introduction in the FT Jewellery Manufacturing Principals and Standards Working Draft, the focus of this working group is to establish principles and standards for fair trade manufacturing for the mainstream jewellery sector, recognizing that “fair trade mined product ultimately needed to end up in a fair trade manufactured product.” I understand this to mean establishing principals and standards (and probably a certification/labeling scheme) that helps “mainstream” jewellery manufacturers (largely based in the developed world) market their products that contain fair mined/traded precious metals and gems. Yet the chapter in the Working Draft, “Principle Document,” concerns itself with what largely seems to be issues relevant to jewellery manufacturers operating in developing countries (because most of the Draft Principles are likely already met by jewellery businesses operating in the developed world).
If the focus is on standards for operations in the developing world, I wonder if there is sufficient ‘grass-roots’ participation to insure eventual ‘buy-in’. Furthermore, the principals as they stand (while perhaps setting an equal ‘global’ standard) infer a greater leap for manufacturers in the developing world to clear the bar.
Ultimately creating a label that certifies adherence to good manufacturing practice without entering into the official FT discourse/process might be enough to support mainstream manufacturers and at the same time, provide enough flexibility to help “value added” jewellers in the developing world access the emerging eco-ethical market in the North.
Marc Choyt wrote:
You raise some very good issues here that call for clarification. What I’m writing below is an explanation that goes into the thinking behind my creating my proposed document.
Right now, if you google fair trade jewelry, you will see that it is being made and produced as a niche handicraft product and sold by companies such as Ten Thousand Village, World of Good, etc.
Jewelry is a recognized category in the larger fair trade movement. https://fairjewelry.org/archives/63. This categorization is not third party certified and exists outside of FLO. (There are many different fair trade organizations.) My research into this niche fair trade market is that it is operates on lofty principles but is very week on standards, such as, do the fluxes the jewelers are using in their manufacturing have cadmium, and if so, is there ventilation? I actually posed this question to one of the big fair trade jewelry sellers a while back and they could not answer.
When I specified that the document was to develop standards for the mainstream jewelry sector, I meant only to distinguish our efforts from the cottage handicraft industry. The standards we create, however, will be applicable to those small producers who create goods for that niche market.
On a very practical level, one issue that concerns me, having worked with international manufactures, is that the manufacturing for the jewelry sector has certain criteria that are potentially difficult to achieve for the small cottage manufacturer, such as: financing for metals; quality control, equipment investment; on time delivery, etc. These are not insurmountable issues- I’m just saying they are difficult in the context of diamonds, gold and large numbers. Financing and cash flow are huge issues for any business– never mind those that operate in environments where loans are not possible. It is difficult to create systems that work in businesses once you scale up.
To create that bridge between the small producer in the developing world and the mainstream jewelry sector is not easy. The best example of it can be found in a project in South Africa. http://www.vukani.co.za/. (Mari Lee, the Project Director of Vukani Ubuntu, is on our steering committee for this group.) This project has received wide spread support from governments and corporations: https://fairjewelry.org/archives/56 . I don’t think it would be easy to duplicate in other countries.
In the niche market fair trade jewelry and handicraft world, the issue of large companies working with small cottage industries is solved through distributors who consolidate and ship to larger retailers. My issue with this is that this supply chain is not transparent and we do not know how much money the distributor is making versus the producer working in their home. The best possible solution for producers is to sell directly to the public, which is what the New World Mexican Woman do.
In the jewelry industry, a larger company might work within the context of ethical manufacturing with transparency in regard to worker wages and conditions, such as Kapitmas. (Ben Morice, the Director, is part of our list serve.). I personally favor this model over the distributor model as “ethical” because it has the possibility of being far more transparent.
Whether we think that fair trade manufacturing (if that is what we choose to call it) should be exclusively for the small scale or not, we can still see how FLO handled this question. They support large and small. Even though the European FLO seems to favor smaller producers, FLO still certifies coffee and banana plantations with many workers, and ARM in their recent document, works with large and small mining operations.
In regard to the “buy-in” issue, we do have some representatives that are involved with grass roots initiatives; specifically, Martin Rizzi’s work in Mexico and there are others who have had lots of experience. But we could use more participants. Yet at this point, I’m not necessarily trying for a huge “buy in” at least initially. Rather, I anticipate starting small with a few companies that want to step forward be part of the mainstream jewelry sector’s “best practice” or “ethical” manufacturing supply chain. We can build slowly and make appropriate adjustments along the way.
I agree with your statement: “Ultimately creating a label that certifies adherence to good manufacturing practice without entering into the official FT discourse/process might be enough to support mainstream manufacturers and at the same time, provide enough flexibility to help “value added” jewellers in the developing world access the emerging eco-ethical market in the North.”
But not this statement: “Draft Principals are likely already met by jewellery businesses operating in the developed world.” I have interviewed bench jewelers for my company even recently that are working under very toxic conditions. My wife, a bench jeweler and the Creative Director of my company, was poisoned because the company she apprenticed in twenty years ago had no ventilation. But this is outside the scope of our discussion.
Part of my objective behind this initiative is simply to become a resource in support of safer work places. In many instances, even very together factories do not know what they are doing in terms of worker safety. Nailing down some principles and standards could seriously prevent ill health to some bench jewelers in the developing world. A document could also serve as a foundation, possibly, for a diversity of initiatives, that give economic support to a ethical manufacturing supply chain that is transparent.
I agree with Greg Valerio, who commented earlier that, fair trade is: “An economic response to a development requirement… for the benefit of the small producer, manufacturer, artisan.” However, I do feel that we should also not limit ourselves at this point by only creating standards for small cottage industries. We may not call the larger factories “fair trade.” The naming issue can be sorted out later.
I hope that this helps to clarify my position on these foundational issues. For a broad overview of fair trade jewelry issues, this post might interest you: https://fairjewelry.org/archives/1936
Cheers,
Marc
