Southern Responses to Fair Trade Gold: Cooperation, Competition, Supplementation

Kristin   Sippl

Working Paper | HBS Working Paper Series | 2019

Southern Responses to Fair Trade Gold: Cooperation, Competition, Supplementation

Abstract

Artisanal and small-scale gold mining is a subsistence livelihood in the global South posing both challenges and opportunities for sustainable development. In 2011, Fairtrade International launched a voluntary sustainability standard (VSS) to address the low wages and pollution associated with the sector. Southern actors have responded in three ways: cooperation and complaint, competition and low uptake, condemnation and supplementation. Using original data and connecting to the literature on regimes, this paper explains the roles that material power, interests, and ideas played in Southern activists, producers' and retailers' decisions. It finds that the initial complementary capacities and aligned ideas and interests between Southern and Northern actors broke down when Southern activists developed divergent ideas about the best strategies for certifying gold. Three years of cooperation and mutual learning generated redundant capacities between Fairtrade and Southern activists, so Southern activists wanted and were able to form the Alliance for Responsible Mining, a competing VSS program. Yet interests were still not well aligned with Southern miners, so a weaker supplemental standard, the CRAFT Code, was launched in 2018. Overall, the paper helps balance the VSS literature by providing an account of Southern agency through an understudied but important commodity sector case.

Keywords: eco-labeling; extractive industries; emerging economies; Fair Trade; Environmental Sustainability; Standards; Programs; Governance Compliance; Competition; Adaptation; Mining Industry;

Language: English

Format: Print

16 pages

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Citation:

Sippl, Kristin. "Southern Responses to Fair Trade Gold: Cooperation, Competition, Supplementation." Harvard Business School Working Paper, No. 19-055, November 2018. (Revised April 2019. Revise and Resubmit.)

Working Paper | HBS Working Paper Series | 2019

Golden Opportunity? Voluntary Sustainability Standards for Artisanal Mining and the United Nations Sustainable Development Goals

Kristin Sippl

While much is known about voluntary sustainability standards' contributions to certain issues in certain sectors, less is known about their contributions to the realization of the United Nations Sustainable Development Goals (SDGs). This paper helps balance the literature via comparative analysis of the contributions of two voluntary sustainability certification programs for artisanal and small-scale gold mining (ASGM) run by Fairtrade International and the Alliance for Responsible Mining. Assessment of four indicators of contribution strength (SDG alignment, rule stringency, uptake patterns, indirect effects) suggest weak to moderate contributions to date. First, only the weakest versions of standards are being adopted, and only by miners above the poverty line prior to certification. Second, adoption levels are low, and rates of decertification quite high. Third, indirect effects on consumers and public actors are equally weak. Yet programs do align well with the SDGs. To improve, programs should consider uniting, becoming more ‘producer-friendly,’ and decide which role within SDG and ASGM governance regimes they are best-suited to play (which may be none at all). Findings contribute to debates on the merits of increasing global governance fragmentation and the role transnationalism in global problem-solving. The understudied ASGM case provides lessons about the diffusion of certification to new sectors, with the aim of guiding global resources towards their most efficient and effective ends.

Keywords: sustainability standards; gold; certification; eco-labeling; international law; luxury; extractive industries; Fair Trade; United Nations; sustainable development; Environmental Sustainability; Standards; Adoption; Governance; Global Range; Luxury; Mining Industry;

Citation:

Sippl, Kristin. "Golden Opportunity? Voluntary Sustainability Standards for Artisanal Mining and the United Nations Sustainable Development Goals." Harvard Business School Working Paper, No. 19-024, September 2018. (Revised April 2019. Revise and Resubmit.) View Details

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This paper probes extant theory on product diversification in the empirical realm of fair trade and eco-labeling organizations (i.e., certification organizations). While much is known about diversification in for-profit firms, less is known about the more complex choices faced by hybrid organizations that balance social and economic objectives and curate symbolic, values-based portfolios. By process-tracing original interview data from three leading certification organizations, the paper finds that certification organizations prefer to diversify into product categories with three features: high levels of fit with the organization’s current clients, campaigns, and strategies; appealing market features, defined as highly integrated, predictable, low-risk supply chains and non-luxury status; and skillful activists who deploy discourse and resources strategically. Organizational fit and market features often drive decisions, but a product lacking these can still become certified if the product activist is skillful enough. The data did not fully support hypotheses on the primacy of exogenous opportunity structures and consumer values in diversification decisions. The findings contribute to the broader literatures on institutional entrepreneurship, market categories, and social movements. They also help activists and managers appraising this business and policy tool understand its potential and limits, guiding certification’s trajectory towards the markets it’s best suited to serve.

Work in progress exploring the consumer demand for and conceptualizations of social, economic, and environmental ethics in the emerging cannabis industry, and the private sector’s and civil society’s response. Draws on interviews and fieldwork from Portland, OR, Denver, CO, and (primarily) Boston, MA. Project will likely involve hiring of research assistants to help with Boston-based fieldwork, and is unfolding in close partnership with Elizabeth Bennett and other leading scholars in this subject area.

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Southern Responses to Fair Trade Gold: Cooperation, Competition, Supplementation

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