Ed Schultz interviews Florida Rep. Alan Grayson about Congress finally demanding more transparency from the Federal Reserve, and auditing their massive secret bank bailouts. The recently passed legislation will now allow the Government Accountability Office to independently audit the Fed, and their nefarious Wall Street deals.  Alan Grayson and Ron Paul co-authored the amendment, which also had a whopping 311 co-sponsors in the house.

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“We need to stop giving money to the bad banks, they just eat it, they don’t actually hand it out to people and do anything useful with it. We have to give money to the good banks. The fundamental strategy that has been followed since the Bush Administration to try to recover from this is flawed…the good banks will go and make good loans to people, to businesses, to small businesses in particular, and the economy will recover.”

—Rep. Alan Grayson

But it’s not about the decor — it’s what they carry that makes this place special.  Plan Toys.  HaPe.  Schylling.  Plastic toys made from recycled milk jugs.  Non-toxic wooden toys.  Toys intended to enrich the mind and body of your children, not just feed into consumerism and branding.

And for me, it is a local store, within driving distance, right here in Atlantic Canada.  Unfortunately for my American friends reading this, while they do take online orders, Hot Toads only delivers within Canada.  Sorry, eh?

One of the many cool items they have is a line of large toy cars called E-Racers, from HaPe’s Bamboo Collection.  I had a nice chat with the fellow working there, and learned that apparently these were the first toys to be made from bamboo.  I was surprised that, while bamboo has been used for clothes, cutlery and dinnerware, flooring and even wallpaper for some time, the idea of bamboo toys was still relatively new.

He also filled me in on a fact I had previously been unaware of.  Of course, bamboo is the new golden child of the eco movement: it grows easily and quickly without pesticides, and is therefore a readily renewable resource with low environmental impact.  Bamboo wood is attractive and sturdy, and bamboo cloth is soft and has natural antibacterial properties.  As worldwide consumer demand for bamboo has increased dramatically in recent years, some companies have taken to clear-cutting hardwood forests in order to make room for bamboo plantations.  And despite bamboo’s rapid growth, difficulty in seed propagation combined with over-harvesting has even threatened some species to near-extinction.

Ugh.

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Having looked at the various criteria for Fair Trade products (transparency, environment, wages and financial and technical assistance) the natural question is how do we monitor these? As Brady pointed out, one of the biggest failures in the Fair Trade movement occurs when only the initial producer is certified but subsequent steps are not. This is especially possible in products which require several steps, such as banana ripening and coffee roasting, and is one of the main reasons labeling organizations have been hesitant to certify the complex process of clothing production.

One group seeking a solution is the Fair Tracing Project. Their aim is to “support Ethical Trade by implementing IT Tracking and Tracing Technologies in supply chains to provide consumers and producers with enhanced information.” Developed as an extension of the Fair Trade movement, the Project is working towards technology that “enables each individual product to be both given a unique identity and tracked throughout the value chain from producer to consumer.” All information, from the producer's working conditions and pay to packaging to transportation, will be available at the point of sale, eliminating a consumer's need to delve into extensive research before shopping. This information will create not only an opportunity for consumers to purchase products which reflect their personal values, but create a competitive market in which companies are required to parallel their customers beliefs.

In sum, just as Fair Trade works on different levels, so too will Fair Tracing. It will (1) give producers a better overview of the value chain and price structures along it and valuable market information; (2) empower consumers by allowing them to trace the product’s origin and value chain on which they can base their ethical choice when shopping; (3) allow Fair Trade companies to demonstrate how to do business differently/they can prove the technical feasibility of tracing and demonstrate that these devices can be used not just for companies to gather information about consumers, but for consumers to scrutinize companies; (4) be used as an exciting new campaign tool to be used to lobby for a different kind of globalisation; and (5) offer an innovative idea to retail companies interested in improving their ethical sourcing and corporate responsibility guidelines.

There are many different incarnations being developed to offer this information to customers at the point of sale. In Japan they are already using cell phones for food traceability. There is also a cart attachment that offers the customer information on a product while simultaneously giving advertising opportunities for the companies, which would help offset the cost of implementing this technology. The question is raised as to how much information consumers would be willing to sift through while on their typical shopping excursion. A simple solution that conveys ideas quickly would be a rating system, but there is the unfortunate potential for corruption in any such centralized system. Perhaps with the success of such applications as Wikipedia, we could take this to the next level and have a combined effort of third party raters, consumer ratings and producer input to create a system of different ratings that would appeal to customers unique values.

A quick look at a possible template for this tracing offers a quick visual reference that communicates the origin, fair trade & organic components, the money trail and supply chain of the product. The Project is still designing this interface so be sure to jump over and give suggestions. It is on our shoulders as consumers to ensure that companies conduct themselves honestly and faithfully by their proclaimed ideals, and Fair Tracing offers that tool.

The first of the major components of fair trade we will look at is transparency. In order to obtain Fair Trade certification, the producer must, among other requirements, be “organized into cooperatives or associations that are transparent, accountable and democratic.” IFAT defines transparency and accountability as “transparent management and commercial relations to deal fairly and respectfully with trading partners.” Transparency appeals to me as a consumer. If you need to cover your operations you have something to hide, right?

Wired magazine agrees that transparency has high potential commercial value. Wired used a very literal take on transparency in the March 2007 issue with their lead article “Get Naked and Rule the World” featuring a transparent cover that pulls away to reveal a naked Jenna Fisher from The Office… along with a strategically placed sign. While it is the image that garnered a lot of attention, it is the article that is truly controversial. It features a series of stories about "radical transparency, our notion that the next model of business success is laying your company bare to the world—sharing secrets with your rivals, blogging about ideas as you have them, and copping to fumbles and foibles as you make them.”

Sharing secrets (gasp), owning up to mistakes (no!), utter madness! What could possibly come from such openness? Perhaps consumer trust? Maybe innovation and advancement? Perhaps even ethical business?

The requirement that producer cooperatives be transparent and accountable has proven to benefit the Fair Trade movement greatly by establishing trust amongst members of the cooperatives and providing a means to account for the spending of Fair Trade social premiums, which are to be used only for community development purposes. One of Fair Trade's major shortcomings is that this requirement is not extended to the purveyors of the products in Western markets. Many Fair Trade retailers and wholesalers have chosen to emulate the transparent cooperative model (perhaps the best example is coffee roaster Equal Exchange), and all retailers and wholesalers who are members of the Fair Trade Federation are commited to transparency. However, since transparency is not strictly required, large retailers that offer Fair Trade certified goods are not living up to the same standard required of the producers of those goods. JustThings.info has a good example of this failing:

While 100% fair-trade roasters like Just Coffee are proud to post their producer contracts on their website and share solidarity stories of the relationships they’ve developed with communities from Chiapas to Ethiopia over the years, this is not the case for a player like Starbucks. Instead, one hears tales of price gouging, corruption, insider trading, racketeering, ghost buyers – all the worst hallmarks of corporate capitalism.

All of this is to say that despite the many successes of the Fair Trade movement, until it requires the same standard of transparency and accountability from retailers that is required of producers, the burden of holding all companies accountable still rests squarely on the shoulders of the consumer. There are plenty of retailers and wholesalers from which to choose that do meet this standard. As Fair Trade has moved into the mainstream, popping up everywhere from McDonalds to Wal-Mart, there is great oportunity for such companies to take advantage of the marketing edge available through the Fair Trade label without committing to the true purposes of the movement. Should these companies be forbidden from selling fair trade? Perhaps not, as we can seize this opportunity to get a foot in the door and demand that these companies commit 100% to the ideals and criteria of fair trade, transparency included. I want to see every business standing naked and proud before the world, their fair and just business practices stripped bare for the entire world to see and respect.