Category Archives: Social Business Network

Ético: An Alternative Trading Company

In this guest blog Social Business Network/Ético intern Nora Burkey applies the frameworks outlined in a classic text used in many business and development schools to form an analysis of Ético’s business model: 

In their newly revised book “Reframing Organizations: Artistry, Choice, and Leadership,” Lee Bolman and Terrence Deal maintain that people live their day-to-day lives as parts of many complex organizations, from schools to sports teams, from families to the working world, and more.  Cooperativization in Nicaragua is a very clear example of how people commit to organizations, and likewise Ético: The Ethical Trading Company provides another example of organization in the workplace, as it is a company 100 percent owned by organizations who work together.  As a very innovative company that at its core is promoting a fairer model for international trade, how can Ético show that managing so many organizations and interests is not only possible, it is better?

As the United States has ruled that corporations may be considered people, at least symbolically, perhaps it is not so strange to consider Bolman and Deal’s point that companies or organizations need ethics, or a soul, to survive.  They need a sense of identity.  Bolman and Deal write,

Many would scoff at the notion that organizations can have soul, but there is growing evidence that it is a critical element in long-run success.  A dictionary definition of soul uses terms such as “animating force,” “immaterial essence,” and “spiritual nature.”  For an organization, group, or family, soul can be viewed as a bedrock sense of identity, a deep confidence about who we are, what we care about, and what we deeply believe in….Growing evidence suggests that tapping a deeper level of human energy pays off (p. 396).

Quite possibly it is the very soul of Ético that makes it function so well.  Ethics, and giving voice to more people within an organization is not only moral, it is equally if not more efficient than power concentrated in the hands of one leader or one owner.

In their book, Bolman and Deal present four frames with which to look at and understand organizations.  Their purpose in doing so is to help organizations better manage themselves, as “modern mythology promises organizations will work splendidly if well managed,” (p. 8).  Although, they say, there exists book after book on how best to manage a company or organization, very few people understand the importance of joining solutions together and understanding organizations through many different lenses.  This is critical, as organizations are made up of individuals who all see differently.  Viewing Ético and the cooperatives they work with in light of the four frames outlined by Bolman and Deal gives a better sense of their function, mission, and effectiveness.

The structural frame emphasizes goals and roles for a unified strategy that produces output. The workplace can be viewed as a factory, whereby “the ethical imperative of the factory is excellence: ensuring work is done as well and as efficiently as possible to ensure high-quality output” (p. 400).  There are many examples of high-quality, unique and individual output in the work of the cooperatives and Ético.  The Body Shop (TBS) buys quality sesame oil from one of Ético’s shareholding cooperatives, Juan Francisco Paz Silva (JFPS).  When the price of sesame rose in 2008, The Body Shop and the JFPS Coop renegotiated what the new price was going to mean, and in doing so authored the unique “Recognition of the Unpaid Work of Women.”  As an additional example, cooperative members have created their own unique products, from sesame candy to hibiscus wine, all of it at a level of quality that both The Body Shop and small farming communities can be proud of.

In the human resources frame, the organization can be viewed as a family.  Bolman and Deal write,

Caring—one person’s compassion and concern for another—is both the purpose and the ethical glue that holds a family together….A caring family or community requires servant leaders who serve the best interests of its members and stakeholders.  This implies a profound and challenging responsibility for leaders to understand the needs and concerns of community members so as to serve the best interests of individuals and the community as a whole.  The gift of the servant leader is love” (p. 402).

Both authors acknowledge that it seems strange to talk about love in terms of organizations, but maintain that a successful leader of an organization is truly a servant, and serves out of self-less love for the family or organization.  The very structure of Ético relies on servant leadership.  Historically, The Body Shop had been buying from the JFPS Cooperative before Ético existed.  In fact, Ético was born when L’oreal bought The Body Shop to preserve the direct relationship between the JFPS Cooperative and the renowned cosmetics line.  What this demonstrates is that Ético was born out of service to the cooperative when the farmers needed a new type of leadership to be able to continue working with a large multinational company.

In the political frame, the workplace can be seen as a jungle where there is a constant battle and the routine seeking-out of self-interested gains.  “In a world of competing interests and scarce resources, we are continually compelled to make trade-offs.  We cannot give everyone everything they want, but we can honor a value of fairness in making decisions about who gets what” (p. 403).  Bolman and Deal maintain that leaders can ensure this type of justice in the workplace by putting power in the hands of employees.  “People with a voice in key decisions are far more likely to feel a sense of justice than those with no seat at the table” (p. 403).  In the cooperative model, members gets one vote no matter how much land or money they have, and no matter how much they supply to the cooperative.  By working with cooperatives, Ético ensures that it works with the most marginalized groups, the smallest of farmers, giving them as much as say as those better off, creating a sense of justice in being a cooperative member.

Finally, in the symbolic frame , “An organization, like a temple, can be seen as a sacred place, an expression of human aspirations, and monument to faith in human possibility.  A temple is gathering place for a community of people with shared traditions, values, and beliefs” (p. 405).  Above all, workers must feel that the organization is doing something worth doing, that there is some significance to their work.  As the founder of Ético has been with the cooperatives from the beginning, instrumental in their creation, Ético is an outgrowth of the existing family.  Together, that family has many traditions.  For example, each year the cooperatives and Ético share traditions, such as putting on an annual music festival, and so far these traditions have not been broken.  There is a very real sense of community, and based on conversations with cooperative members, there is the belief that the cooperatives, as well as Ético, are there to help.  The cooperatives believe in what they do and therefore members believe in them too.

Source: Bolman, L. G. & Deal, T. E. (2003).  Reframing Organizations: Artistry, Choice, and Leadership.  San Francisco, CA: Jossey-Bass.

Nora Burkey is currently a candidate at SIT Graduate Institute for a Master’s in Sustainable Development.  She became involved with Social Business Network in August 2013 after connecting with Dean’s Beans Organic Coffee Company, a trading partner of ÉTICO.  She currently lives in León, Nicaragua, and plans to continue working with Dean’s Beans and Social Business Network on development projects into 2014.

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Coaxing a Phoenix to rise from the Ashes of La Roya

This year, in the face of the leaf rust blight that has devastated coffee farmers across Latin America and the added insult that the coffee price on the international market have taken a sharp dive over the past year, Social Business Network has joined forces with The Community Agroecology Network and a farmer’s cooperative outside of Matagalpa called the UCA San Ramon to try to turn the onslaught of this double disaster into a turn for the better.  

One of the small member cooperatives of the UCA has been hard hit by the leaf rust, losing up to 85% of their harvest this year.  A walk through the coffee parcelas reveals not only the damage of the fungus but also signs of underlying stress and neglect – vines cover the coffee trees in certain areas, and in others the forest floor is bare and eroding.  The farmers recount the difficulties they face – first among them, the rising cost of fertilizers and fungicides, and difficulties securing financing.  Then the increased intensity of the diseases, which mean even more financing needed to purchase larger amounts of fungicides, narrowing even farther their profitability margin.

Historically this community has grappled with “organic” farming.  After a bad experience with poor technical assistance and costly certifiers, mentioning the word to any of the coop members sets off a tirade of a million reasons why “organic farming” doesn’t work.  Lack of quality organic fertilizers on the market and strict certification standards that rely heavily on verifying what farmers are NOT doing (NOT applying any agrichemicals, NOT using any non-certified off-farm inputs, not even their neighbor’s cow manure) have left many farmers frustrated and with the impression that organic farming means doing nothing and leaving everything up to mother nature.

Our new collaboration has kicked off by organizing a series of workshops bringing together the coop members, a local succesful bio-dynamic coffee farmer, and an agronomist.  For two days, we transformed a local school into a laboratory complete with microscopes and a centrifuge.  Even though the farmers have had their soil tested before, the samples are sent away to a laboratory and no one learns how the tests work.  Using a type of soil test called chromatography which reveals mineral content but also the microbial life of the soil, farmers were able to perform the entire soil test in their own community.  The agronomist, after a straightforward presentation on several different types of beneficial and detrimental fungi that either attack coffee plants or contribute to the plant’s better absorption of nutrients, went with the farmers to gather soil samples from around their farms and then used the microscopes to identify and see the different physical structures of different fungi.  Demystifying the invisible biological world that impacts so directly farmer’s livelihoods will hopefully not only empower them in this moment of crisis by giving them a new understanding of part of the crisis, but also impact how they manage their land.  Although it is common knowledge that the leaf rust virus travels by spores through the air, seeing the millions of tiny round balls on each leaf (see the image header on this post) revealed clearly how this fungus has been able to cause such devestation in the region.  Examples of beneficial fungi that were found locally were isolated using the microscopes and then used to innoculate seeds in sterilized soil to reproduce them and use them in a fertilizer that can be elaborated on-farm, improving the coffee plants absorption of minerals and nutrients in the soil.

The local farmer leading the soil chromatography process was very clear that this was not a workshop to promote organic agriculture, it was a workshop to promote better agriculture.  His own farm has only suffered a 15% decrease in production due to the leaf rust, well below the 50% national average.  In any other year he might have been met with glazed looks and disinterest from this group of farmers.  But this year, when the management systems they use have failed to mitigate the impact of this blight, their interest was keen, everyone participated, and they requested another workshop to continue deepening their understanding of soil life and assistance in using beneficial fungi to innoculate the new coffee seeds they will be planting to replace the portion of their farms that have perished due to the leaf rust.  Studies have shown that in small farmer cooperatives where management of the coffee and soil is tended to more carefully, there is less presence of rust.  Revealing the direct relationship between management and soil biology cuts through the layer of faith in purchased inputs that disempowers producers.  With the right approach, the double crisis hitting small coffee farmers right now could be transformed into an opportunity to reinforce better management practices that will help protect farmers and their livelihoods over the long term.

Reclaiming Fair Trade – A Reflection

Presenting our first guest blog by Nora Burkey, who Social Business Network has the honor of hosting for her Master’s research in Sustainable Development: 

While fair trade enthusiasts are quickly dropping their affiliations with certifying bodies, explaining it is because they are still committed to original standards whereas new members are not, the confused reader, inundated with information about poor farmers just getting poorer—fair trade or not—might wonder why fair trade ought to be defended at all.  Remember that income accounting does not create the whole picture.  Fair trade has contributed to increased access to credit at lower interest rates, more childhood education, a greater degree of food-security, and more.  Fair trade premiums to cooperatives also benefit farming communities as a whole, such as greater access to healthcare for the whole village.  But fair trade wasn’t just about poverty, it was about revolution, and its successes and failures ought to be looked at in that light.

Fair Trade offered the cooperative structure as a solution to privately-owned farms that have an unfair system of wage labor.  This allows farmers ownership of their land, not just their labor, and provides a democratically governed body to oversee social projects and communicate with buyers without being owned by them, leaving decision-making with the farmer.  So when large coffee plantations can become certified as fair trade, as Fair Trade USA recently decided to allow—breaking off from Fair Trade International in order to do so—what we have is a private system that has nothing to do with what fair trade ever meant to imply, and what fair trade ends up meaning is something like minimum wage with a social premium benefit.  And whereas before 20% of a product had to be fair trade to receive the label, now just a mere 10% is required by Fair Trade USA, so it’s not even minimum wage for all.

Under current standards, to sell fair-trade certified products, only 5% of a company’s sales must be fair trade, and there is no obligation to increase this percentage over time.  Nor are large producers required to slowly become more cooperative in structure by giving each farmer a vote and ownership over their own production.  The presence of large multinationals and large plantations at the table only limits a small farmer’s access to the market and ensures the largest piece of the pie goes to the largest producer or buyer.

The most damaging of all is that the weakening of standards has forced the founders of fair trade out.  No longer do the truly committed want to be associated with the term they created, as to many consumers, it denotes something so tame the only impact it makes is a bad one.  It seems anyone can create their own label these days and certify it independently, allies and enemies alike.  Some have stricter standards and some have weaker, but if consumers are not educated, it is impossible to know which label is which.  And since fair trade depends on consumers rather than the state to ensure it continues to be a part of commerce—it only exists as long as people are willing to buy fair trade products—creating so many labels, and so much confusion, is a lot like playing with fire.

The struggle is whether to reclaim the name that has been co-opted or admit that it’s already been stolen.  In my own life I choose to reclaim it, because I believe it is important that people understand fair trade was and is not a failure, it can only be failed.  I choose not to be someone that fails it, to be someone who fails to support all that fair trade has done.  The commitment still feels pretty radical to me, in all senses of the word.

Nora Burkey is currently a candidate at SIT Graduate Institute for a Master’s in Sustainable Development.  She became involved with Social Business Network in August 2013 after connecting with Dean’s Beans Organic Coffee Company, a trading partner of ÉTICO.  She currently lives in León, Nicaragua, and plans to continue working with Dean’s Beans and Social Business Network on development projects into 2014.

UK Nicaragua Embassy teams up with Social Business Network

The UK Embassador meets with the Juan Francisco Paz Silva board of directors, representatives of organized groups of rural women, and SBN in October 2013.

The UK Embassador meets with the Juan Francisco Paz Silva board of directors, representatives of organized groups of rural women, and SBN in October 2013.

Social Business Network is thrilled to have the support of the UK Nicaraguan Embassy, who recently awarded us a grant to deepen the impact of the Recognition of the Unpaid Work of Women in agricultural cooperatives.  The grant will be used to pilot the next phase of development in the women’s empowerment initiative with the Juan Francisco Paz Silva Cooperative, focussing on cultural and entrepreneurial education for women.  The initiative began three years ago and the ongoing funding, generated entirely through incorporating the unpaid work contribution of rural women into the costs of the cooperatively produced sesame oil and coffee, has largely been invested in savings incentives and technical assistance so that rural women have access and support to participate more fully in the local economy.  The support of the UK Embassy provides the cooperative with the means to push the initiative forward in its development, providing a core educational course in cooperativism, entrepreneurship and gender equality; additional skills-based workshops; marketing support; and the creation of a mural in the center of town recognizing the unpaid contribution that women make to community and family well-being.  This initiative has already become a model for other agricultural cooperatives, who adapt the principles to their own communities and contexts.  We are excited to see this initiative move forward and know that many other communities will also benefit from seeing the results of the additional support of the UK Embassy.  You can follow the Juan Francisco Paz Silva Cooperative’s achievements and other great initiatives in Nicaragua on the UK Embassy in Nicaragua’s facebook page.  Adelante!

Closing the Gender Gap

Image courtesy of the BBC, www.bbc.co.uk

Image courtesy of the BBC, http://www.bbc.co.uk

Last week the World Economic Forum published the 2013 Gender Gap report.  The report began in 2006 and since then has attempted to annual review the accessibility of each nation’s resources to men and women.  The report focusses on 4 areas of equality – health and survival, educational attainment, political empowerment and economic participation and opportunities.  The scores are then averaged to create an overall ranking of countries.

In Latin America, a relatively small region of the world with closely neighboring countries, there is a large discrepancy in the WEF report’s finding.  While Nicaragua just slips in to the highest ranking countries in the world at overall 10th place, Guatemala ranks 114th – the lowest in the entire Western Hemisphere after Suriname in 110th.  Nicaragua’s 10th place ranking has made national news and earned it a place on many summary reports such as this one from the BBC on par with the European countries at the very top of the list – like Iceland, Norway, and Ireland.  But a glance at the breakdown by area shows that Nicaragua’s scores are disparate:  While a law passed two years ago requiring all political parties to support 50% women candidates in local and national elections is most likely responsible for the 5th place rank in political empowerment, the country lags behind in other areas, most notably in Economic Participation and Opportunities where it ranks 91st.  In these productive yet still resource-tight countries, there’s no question that closing the gender gap every year overall marks important advancements in the quality of life for its citizens.  But there’s still a lot of work to be done, which is why this report supports the relevancy of Social Business’s work with economic empowerment like the Recognition of the Unpaid Work of Women.  In fact, across Latin America the rankings for equality of Economic Participation and Opportunities fall in the 90th and 110th percentile, yet another reason to support equitable trade and trading organizations like cooperatives that uphold gender equality as central principles in their work.

Wales Solidarity Campaign report on Human Development conference

Our friends at the Wales Nicaragua Solidarity Campaign also attended the recent Human Development and Capability Association conference, held in Managua in September. Here is their report –

wales nicaragua cymru

More good news from Nicaragua, at least if you’re one of the millions of ordinary people in the country. A conference in Managua in September, organised by the Human Development and Capability Association, heard that Nicaragua would meet all its Millennium Development Goals by 2015. The HDCA is the brain-child of Amartya Sen, the Nobel Prize winning development Economist. Attending the event, Sen emphasised the need for policies that combined growth with investment in public services – health and education – leading to greater re-distribution.

8mdg_en

Nicaragua drew praise from the World Bank (a common occurrence these days) for the way that incomes of the poorest 40% have grown four times as fast as for the entire population. But anyone who is familiar with Nicaragua’s struggle to achieve the Millennium Goals – a distant prospect under a succession of neo-liberal governments – will be glad to hear the words of the…

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Women from the Juan Francisco Paz Silva cooperative in Achuapa, Nicaragua

Press Release – Successfull Celebration of Women’s Empowerment Initiative in Nicaraguan Supply Chains

First-ever initiative to count the unpaid work of women in agricultural commodity production is successful in Nicaragua 

Ético: The Ethical Trading Company Ltd., British NGO Social Business Network, and Nicaraguan farmer cooperatives celebrate the ground-breaking innovation to Recognise the Unpaid Work of Women in Ethical Supply Chains.

 Ético: The Ethical Trading Company and British NGO Social Business Network are pioneering the first ever initiative to Recognise the Unpaid Work of Women in Ethical Supply Chains. Traditionally, the price for commodity products include only direct input and labour costs, and fail to recognize or take into account the supporting unpaid work which is done mainly by women.  This is the first time that rural women’s unpaid work has been recognized as a necessary input into production and one that should be valued and remunerated. This initiative was presented on July 3, 2013 to a group of 100 invitees, including representatives from Fair Trade companies Twin, Equal Exchange, and Liberation Nuts, the Nicaraguan Embassy, UK Government officials and Tesco.  The event was organized by Ético and Social Business Network, with support from Hoare’s Bank, the Bulldog Trust, and Raleigh International.  The speakers explained the pilot stages and preliminary evaluation of the initiative with small-farmer sesame and coffee Cooperatives in Nicaragua.

The initiative developed in 2008 during a visit of the Body Shop with the Juan Francisco Paz Silva Cooperative in Achuapa, Nicaragua.  Ético gender advisor Catherine Hoskyns conducted a pilot study of women’s labour in sesame production.  Her initial findings revealed that when women’s indirect labour (eg. cooking food for field labourers) and more general domestic work are included, this counts for around 22% of the total labour input in sesame.  The results of the study were used to apply an additional cost to the price of the sesame oil for cosmetics, and has since been used to apply similar costs to the sales of coffee from Nicaraguan Cooperatives.  The Cooperatives use the increase in price margin to organize women’s empowerment activities in their communities, such as education, savings and loans schemes and labour organisation, which bring women together and strengthen the cooperatives.

Left to Right: (Back row) Liberty Pegg, Felicity Butler, Albert Tucker, Nick Hoskyns, Christina Archer (Front Row) Catherine Hoskyns, Rachel Lindsay, Julia Perez.  Photo Credit: George Selwyn

Left to Right: (Back row) Liberty Pegg, Felicity Butler, Albert Tucker, Nick Hoskyns, Christina Archer (Front Row) Catherine Hoskyns, Rachel Lindsay, Julia Perez. Photo Credit: George Selwyn

The event on July 3 demonstrated the transformative power of integrated supply chains.  It was held at 2 Temple Place and chaired by Albert Tucker, Director of Social Business Network.  The opening speech was given by Fiona Woolf, Lord Mayor Elect of the City of London and Trustee of Raleigh International, whose inspiration to support the event came from a visit to Nicaragua in 2012 where she was present at a meeting of women participating in the initiative.  She spoke of the impact that listening to the women’s experiences working with the program of the cooperative, and concluded, “That’s why… I will also be a champion for the unpaid work of women.  I think it has huge applications across the developed world as well as in the developing world.”  A vivid account of the different types of unpaid work which women do in Nicaragua was given by Julia Perez, of Achuapa Nicaragua, and Liberty Pegg, a former volunteer with Raleigh International. Catherine Hoskyns explained the initial calculation of women’s unpaid labour in sesame production and its significance, and Felicity Butler gave her first findings about the impact of the initiative. She is researching this through her Ph.D. at Royal Holloway University, which funded by the Economic and Social Research Council (ESRC) and The Body Shop.   Rachel Lindsay, representative of Social Business Network in Nicaragua, gave an overview of how this concept has been piloted in coffee sales and the support it has generated from the entire supply chain.  Christina Archer, Senior Buyer for Community Fair Trade Ingredients at the Body Shop, gave a testimony, emphasising that “This initiative does also make really good business sense, and strengthens the sustainability of supply chains… Our brand is about building self-esteem and empowering women, be they the women who use our products or the women in our supply chains”.  The event was concluded by Nick Hoskyns, Founding Director of Ético, who emphasised that when you bring together committed partners, you can use business to effect real change.   He emphasised that it was not easy to get this far but “with such good collaborators, many of whom are present, we have shown that we can still make trade fairer, just as we did with the establishment of Fair Trade”.  He also credited the cooperative organisations with being instrumental in the implementation of this initiative and using the additional funds so effectively for women’s empowerment.