Doing trade-doing good ITC’s Ethical Fashion Initiative
19 February 2015
Ladies and Gentlemen,
I want to thank the Anglo-Swiss Club of Locarno for extending this invitation to the International Trade Centre (ITC) to talk to you about our work in empowering small and medium-sized enterprises (SMEs) in developing countries to generate growth and jobs. Talking about SMEs at the end of the day is a bit ‘dry’. This why I thought I would use fashion to illustrate how trade, well targeted Aid for Trade and markets can be powerful allies in reducing poverty and improving the lives of people.
Let me first make a few introductory remarks about the organisation. ITC is a development agency jointly owned by the World Trade Organisation and the United Nations. Our mandate is to help SMEs in developing countries increase their participation in international business and trade successfully across national borders; work with policy makers to help them build a domestic environment conducive to entrepreneurship and trade; and with Trade and Investment Support Institutions to be the one-to-one-to-many multipliers of ITC’s capacity building on the ground.
We strongly believe that trade is a critical component of long-term sustainable development and poverty reduction. We strongly believe that trade and economic development should have a central role in the UN Post 2015 Development Agenda. A strong, inclusive and sustainable growth is the engine that will help to empower people’s lives and respect our planet.
Last year, we proudly celebrated our 50th anniversary of empowering developing country entrepreneurs through our practical technical support programmes.
ITC takes a unique approach to trade, in the sense that we start from markets. We look for sectors where there is a ready market that SMEs in developing countries can fit into. We then analyse the gaps in the existing supply chains. Together with development partners, we provide SMEs with the tools that will help them fill those gaps – whether this is through trade and market intelligence, through improvements in their competitiveness, supporting SMEs access finance and finally, by walking that last mile to connect to markets.
Now, I would like to come back to fashion. Of course, the idea of fashion usually invokes images of glamorous models walking down the catwalks of Milan and Paris in exquisite couture. And you may wonder what this has to do with issues like poverty reduction.
Recent catastrophes such as the Rana Plaza disaster in Bangladesh two year ago, when over 1000 garment workers died – and 2,500 more were injured – after the unregulated building they were working in collapsed, have highlighted the role that the global fashion industry can sometimes play in keeping people in poverty.
The Rana Plaza victims were paid poverty wages of under $2 a day, working over 14-hour shifts in inhumane conditions. The global outcry and increased consumer scrutiny that followed the disaster have placed the global fashion industry at a crossroads. One where brands either reform their supply chains, or risk mass reactions from increasingly conscious consumers. Already, some retail surveys are indicating that around 40% of consumers in developed countries actively boycott brands for reasons related to poor working conditions. This is the more sinister version of fashion.
But fashion can also be used as a vehicle out of poverty and this is why I want to talk to you about the Ethical Fashion Initiative (EFI), one of the ITC’s flagship initiatives.
The EFI is one of the operational arms of ITC’s Poor Communities and Trade Programme, which aims to reduce global poverty by increasing the participation of micro-enterprises in regional and global trade. It is a clear example of ITC’s approach to enhancing participation in trade through capacity building.
The success factor of EFI lies in the sustainability of its business model. It is a business. As our slogan says ‘not charity, just work’! Since 2008, the EFI has been at the forefront of the growing global movement to develop more ethical production chains for the fashion industry. I am proud that ITC has been a market leader and a social visionary in this respect
The programme connects designers from the top end of the fashion business – brands whose very foundations are built on quality, heritage and craftsmanship – with artisans from marginalised groups in the developing world. Artisans whose skills would not have been accessible to the market otherwise but who have traditional craftsmanship that are intimate components of the culture of these countries.
This is not the same as forcing brands to feel that they must help underprivileged people as a moral obligation. On the contrary, it is about a relationship built on mutual benefit. One where designers rely on artisans to give expression to their creative genius. And because the wellbeing of the workers dictates the quality of their craftsmanship, investments in working conditions that bring pride and dignity are not a burden. They are a very essential component of the success of this partnership.
Again- It is not charity, just work.
We have set up highly organised social enterprises based around central hubs in several different places – Kenya, Mali, Burkina Faso, Ghana, Palestine and Haiti. These enterprises use impact sourcing to ensure that the most vulnerable members in society are able to benefit from opportunities to earn a decent wage and improve their livelihoods. While EFI does not discriminate against men, our target group is women because ITC firmly believes that promoting gender equality is one of the fastest routes to ending extreme poverty. It is a powerful tool for inclusive growth.
Women are more likely than men to invest in their families and communities, particularly in their children’s education, nutrition and health. Paid work for them means a multi-generational boost to economic growth, as those children grow up and contribute to a strong and better skilled workforce. Paid work for them means the ability to exercise their rights which are often ignored if not at times often violated when women do not have an income.
Over 90% of EFI’s workforce are women – many who live in slums or barren rural areas and head single-parent households. Their outstanding skills and commitment make the EFI system work.
EFI’s hubs oversee the production of small working communities of micro-artisans, and provide crucial capacity building so that they can meet the high standards of top brands. This includes training to help adapt their rich traditional skills to market requirements, as well as providing training to those who do not have any artisanal skills. Finally, assembly of our products, shipping and logistics are all organised at the hubs to the ensure quality control and standards that bring repeat orders to the business. Our next step is to help add more value locally.
In Ghana, EFI works with upcoming African designers to help them break into the mainstream fashion market, and give greater global visibility to the incredible design and production talent that has inspired top global designers for decades. We are pleased that many of these young designers showcase their creations at international fashion weeks including in New York and Milan.
Again, here we take a market-led approach that recognises the growing demand for authentic products, conceived by African designers, and not interpretations produced by Western fashion brands. We have now set up a manufacturing brand to bring these products to the international market.
EFI proves that you don’t need mass-market production to scale development impact. We have delivered scale by expanding our partnerships and now work with over 20 designers globally including Vivienne Westwood, Stella McCartney, Carmina campus which is a brand of Ilaria Fendi, Sass and Bide, Stella Jean, United Arrows in Japan and Osklen in Brazil to name a few. Today, our workers number over 8000, and we recognise that increasing demand for scarce artisanal skills, together with fashion’s desire to be fairer, is likely to drive that number up sustainably over the coming years. And these 8000 are just those that we work with directly. The indirect impact permeates communities and changes lives.
We are already expanding our initiative to new countries including Cambodia, India, Peru and Ethiopia, and forging new partnerships with brands such as Spain’s shoe manufacturer Camper. In this way, our training and capacity building programmes are providing the inputs for the future of fashion.
But above all, ITC judges its success as an organisation on the positive impact our work has on the lives of our clients. We already know that we provide a decent wage for our workers who earn at least up to two times the global average for garment workers in developing countries. But we also constantly monitor the impact of each of EFI’s orders on the lives of our workers and their communities. Our impact assessment covers factors such as:
• Women economic empowerment
• Health and nutrition
• Banking and capacity to save
• Access to education; and
• Social and psychological well-being.
We also ensure that we provide a dignified working environment through monitoring our compliance with fair labour standards.
As an example, we have just received the results of our latest assessment of an order of bags for Stella McCartney, which showed that wages for skilled personnel increased by an average of 275%, and up to 500% for semi-skilled and manual workers. This is far more than any of the workers would have been able to earn otherwise.
Our women have gained greater financial independence. Some have gone from a situation where they could not even cover basic needs such as regular, healthy meals and decent housing, to being able to meet all their own, and their families’ needs and even have money left over to save and invest. 74% of our workforce have contributed towards school fees for their dependents.
But there is one impact of the Ethical Fashion Initiative that is difficult to capture with facts and figures. The women have regained their dignity and the respect from their husbands and communities. The level of violence against the women is reduced. Behind the cold data of our agency’s result based management statistics appear the human impact of development aid. This is the message that I believe we much convey to the donor community who- through their solidarity- make this possible.
To close, I would like to show you some of the amazing products that our artisans create for EFI. The video features Stella Jean – who is fast becoming the face of ethical fashion – and the incredible work of our weavers in Burkina Faso.
I hope you enjoy the video and look forward to answering your questions at the end.