A Critical Review of Davenport & Low, 2013, From trust to compliance: accountability in the fair trade movement, Social Enterprise Journal, vol. 9, no. 1, pp 88-101.
Davenport & Low (2013) conducted a study on the evolution of fair trade movement from trust-based relationships to standards-based systems. The research emphasized on the external and internal accountability approach adopted by Fair Trade Labelling Organization International (FLO) and World Fair Trade Organization (WFTO).
External accountability used by FLO focuses respectively. on standard-based certification in which the reliability of the products depends on the label and ‘rituals’ of auditing’ while WFTO acquires internal accountability through organizational self-assessment which is based on democracy and trust between the producer and the consumer. The findings revealed that the popularization of labeling and certification used by FLO has turned the trust relationship to a market-based relationship. Jahn et al.(2005) stressed that it will create a substantial ‘brand risk’ to Fairtrade labeling if monitoring anywhere in the value chain is suspect. On the contrary, WFTO monitoring system has succeeded in bringing about greater accountability to its internal stakeholders in mostly southern FTOs (Fair Trade Organization) such as India and Bangladesh. The study suggested that monitoring system is based on three core processes which are self-assessment, peer review and external verification. The organizations who meet the criteria will be recognized as WFTO members.
Based on this paper, we get behind the statement which stated that “Fair Trade labeling provided consumers an externally verified guarantee that the product met “independent” conditions of fair trade (a system of global governance; see Oosterveer, 2004), rather than looser, ad hoc,...