Fair Trade applied as a Business Model in Vietnam

For most people when they think of charity, they think of goodwill towards those less fortunate; those in need of one form of help or another. I believe it is good to be charitable, especially during the holiday season. I encourage those of you who read this blog, be charitable this Christmas. I know of one woman who presented a list of local and international charities to all those on her Christmas list. Instead of purchasing gifts, she allotted them each $25 to donate in their name to any of the organizations listed. That was truly a memorable gift worth giving!  

Reflecting back over the past week of interviewing and observing the dedicated employees of Reaching Out, I have once again learned that charity is important, but so is empowerment. For those whom society deems as “less fortunate,” charity is a reflection of human kindness and recognition of their challenging situation, but what all people truly crave, regardless of physical or mental ability, is opportunity.  

Reaching Out is a locally owned and operated business with quality, heart and soul at its center. They provide much more than income opportunities to marginalized craftswomen and men; more than a business, it is a family. Fifty-five craftswomen and men are assiduously working on their crafts with the support, advice and encouragement of Binh and Quyen. Unlike the usual business, here the employees all have a say in their work environment; together they established their high standards and more often than not they exceed their own expectations. 

The official statement of Reaching Out is as follows: 

“As a social business adhering to Fair Trade principles we run paid work placement schemes for disadvantaged youth with disabilities from socially deprived communities. We offer real world training and development. Currently we achieve an 85% success rate with graduates going on to meaningful employment and leading independent lives. Our growing team of differently- abled people help us and our customers to demonstrably deliver on Corporate Social Responsibility values.

In addition, Reaching Out is getting involved into the global value chain, our high-end Vietnamese products are sold to the growing number of customers who seek unique quality in responsibly produced gifts and a responsibly delivered shopping experience. As you know, Reaching Out achieves this in part through our Fair Trade practices, so we continue our commitment to Fair Trade through the quality of our products and the social standards of our organisation."

 

Many of the employees I spoke with mentioned Binh not only as a manager, but as a mentor held in high regard. He has overcome many of his own challenges and broke through many social barriers in order to be successful in his mission to integrate people with disabilities in his community. I could not help but admire his strength and compassion. On many occasions during this past week I witnessed him take time to work closely with the staff and artisans in his shop, like he does in the photo above.  

When I began an inquiry into the origins of Reaching Out as a business rather than a non-profit organization, Mr Binh spoke on behalf of the disabled, "We want to be employed. Our employees get a salary and they are proud of that. That salary is what they receive from making quality products. They earn it.”

There is much to say about the pride that comes with regular employment, particularly when your community has traditionally been recognized as unemployable. As I spoke with him it became clear that Binh has been confronting many of social barriers over the past decades, directly challenging how Vietnamese society views the disabled. However, just as in the West, he admits there is much more work to be done to overcome the cultural and social barriers that still exists.

He went on to explain his decision to focus on a sustainable business model for empowerment, “I used to work with NGOs and charities. They rely heavily on  donations, but suddenly if the donations stop most of the people that rely on those funds, how can they manage? …We know well that if we just rely on donations, how can we stand on our own? It is not sustainable.”

“Financial sustainability was an important question when I began to set up Reaching Out. At that time the people said, ‘You should become a non-profit organization.’ Ten years ago the legal statutes for local NGOs in Vietnam was not easy. Secondly, I was looking for long-term financial sustainability. I believe a business must think to make a living for their staff and about the long-term sustainability.”

For Binh, starting a business which trained and hired highly skilled craftswomen and men with disabilities was the best way forward. “When we set up our business in the beginning we were searching for a good model or good way to work with our disabled producers.  We established two core objectives when we set up Reaching Out:”

1. Integration; help more local disabled to integrate into society through open employment 
2. Financial independence; we don’t want to rely on donations, but we want our organization to attain long-term financial independence. 

In short, Binh sought a means to empower the disabled community through Reaching Out.  It is estimated that 10% of the world population is disabled. In Vietnam, the percentage is estimated to be 15% following consecutive decades of crippling wars and disease. The  UN Convention of the Rights of Persons with Disabilities was signed by 147 nations to include Vietnam, the United States, and Japan since 2007. However only 90 nations have ratified the convention assuring national adherence and enforcement of its principles. For those who have never read the convention, click on the link above. The general principles are as follows:

1. Respect for inherent dignity, individual autonomy including the freedom to make one’s own choices, and independence of persons;
2. Non-discrimination;
3. Full and effective participation and inclusion in society;
4. Respect for difference and acceptance of persons with disabilities as part of human diversity and humanity;
5. Equality of opportunity;
6. Accessibility;
7. Equality between men and women;
8. Respect for the evolving capacities of children with disabilities and respect for the right of children with disabilities to preserve their identities.

Binh explained about his views on the prevalent business models in Vietnam. “A normal business just focuses on maximizing profits. As usual, the employers don’t want to employ disabled people. The disabled people here have low education; they don’t have life skills. A normal business asks, ‘how to deal with them, how they can become a good worker?’ They don’t believe the disabled worker is a good worker. The normal business model does not work for us. So, with this we try to look for a new model… It was so difficult for us to find a new way.”

I had to agree with Binh about the “normal business model” as it is applied in Vietnam. Businesses here are more interested in profits than providing opportunities for disadvantaged people. As for the concept of Corporate Social Responsibility (CSR), it has only been introduced recently, and to say the least there are not many takers, even if it is more about public relations than social responsibility.

However there is an interesting point to be made here. I asked Binh how he came to learn about Fair Trade and the principles it encompasses. 

“I got the Fair Trade information from foreign tourists when they visit us. At the beginning when we setup this business we didn’t have any products… We were at least a year away from starting a shop, so we focused on training and finding a suitable job for our workers. We didn’t have a business and didn’t go to business school, so we spent more time to learn about customer needs and how to meet expectations of foreign tourists. So the idea of Fair Trade came from the tourists. Then I looked on the internet where I found everything related to Fair Trade. I was very happy to see that most of the principles met our expectations.”

 

What he said next caught me off guard: “And we learn from you. You meet us; share with me the Vietnamese booklet about Fair Trade principles. I share it with all of our staff. Only I read about Fair Trade in English. So you can talk with anyone about Fair Trade because of your booklet. We still have several copies. We are very lucky to meet you. Some of our staff can read in English, but it is very important to share with everyone.” 

In 2007, I first heard of Reaching out and made a trip to visit this shop promoting Fair Trade. That same year I wrote a booklet on the principles and standards of Fair Trade and had it translated to Vietnamese. When I conducted the training for survivors of human trafficking and domestic violence in 2009, I sent several to Binh. It was refreshing to hear that my booklet made an impact here.

Binh listed out the principles and how he applied them:

“Fair Trade supports and values businesses that work with disadvantaged people like disabled people. That meets with our expectations.”

“And fairly; trade fairly is a good approach, it means sustainable for the long-term. To deal fairly, I believe it means dealing with people fairly so you can build a good relationship for the long-term with any stakeholder. Dealing fairly will ensure a good, long relationship.”

“Also, about Vietnamese culture, when we sell our products we really want to maintain the Vietnamese cultural values. We are proud of our traditional Vietnamese handicrafts. We don’t want to sell the Chinese products. You can see here the local workmanship and most of the Vietnamese materials. Fair Trade promotes maintaining local traditional and cultural values”

“Women with disabilities they are the “Hidden Sisters” in the Asia Pacific Region. It means they are the most vulnerable. In a normal family they are hidden, they hide girls with disabilities behind them. They cover their physical disabilities and often cannot access public services, particularly in the rural area where most disabled women live. They cannot get married and just rely on their family. So we think equality between men and women is a very, very good principle.”

Binh went on to show me his contract with his suppliers and home-based producers. It detailed each of the principles and he pointed out the provision on not using child labor. He explained, “In many traditional handicraft villages the kids work with their parents and their family is a supplier to many export companies.”

Admittedly, not all children working on crafts with their parents are viewed as child laborers. There is a fine line between passing on of cultural traditions and outright exploitation. To clarify where that line is in relation to Fair Trade principles, refer to the UN Convention on the Rights of the Child (CRC). I will go more into that in a future post, but this is why I can believe in Fair Trade – it follows the human rights conventions and integrates International Labour Organization  (ILO) standards. 

As consumerism peaks in the West this holiday season, be charitable. When you make your purchases, at least make an effort to ensure that no one was exploited in the name of corporate profit through your gift giving, or better yet, shop at your local Fair Trade store in the US or internationally. Learn more about the positive impacts you can make in your purchase. 

Happy Holidays,

Mitch Teberg