Mediaglobal: Fair Trade Industry Exploits Millions In The Tea Trade

By Eric Miller more

2 May 2009 [MEDIAGLOBAL]: The United Nations adopted a catchy slogan in 1968 to initiate a bottom-up approach to development. “Trade Not Aid” was supposed to increase trade between developed and developing countries while simultaneously decreasing conflict, poverty, and the exploitation of workers.


The motto from the 1960s was the beginning of the fair trade movement, the world’s first market-based approach to providing economic sustainability to the countries of the South. Americans’ and Europeans’ steadfast commitment to such a seemingly noble cause has allowed fair trade to expand immensely, especially within the tea industry.

However, the tea industry continues to be more manipulative and exploitative than most people realize. Millions of tea workers are exploited, discriminated, abused and kept under inhuman conditions, Tom Heinemann, an award winning Danish journalist and co-director of the documentary Flip the Coin-The Bitter Taste of Tea, explained to MediaGlobal.

Fair trade operates by raising the prices of third-world goods and selling them in first-world markets. The increased cost is supposed to go to the workers to increase their income and improve working conditions. But the reality is that tea workers rarely see any benefits of fair trade, and the manager of the estate often controls the money that is supposed to be shared by the employees.

The increased price of tea and the unequal distribution of revenue reduce the amount of tea production needed for the managers to earn their desired level of income. Subsequently, workers are often restricted to only working four days per week, which leads to a devastating loss of wages for an already impoverished people. In some cases, the workers are unaware they are involved in a fair trade agreement, effectively allowing the cycle of exploitation to continue.

At the Needwood Bio Tea garden in Sri Lanka, a fair trade tea estate, workers are fired after three months of employment, only to be rehired immediately thereafter. In doing so, Needwood does not have to distribute the social benefit provisions guaranteed by full employment, but the company is able to retain nearly all of its workers year-round, Heinemann explained.

The problem is that tea estates in India, Sri Lanka, and Kenya “are still managed under a colonial system, where field officers, superintendents and staff officers are running the tea-estates like small kingdoms,” Heinemann said. This structure reduces business transparency and disempowers the workers.

The structure of the tea estates reminds locals of their history with colonization. “A system like that can’t be changed by fair trade…no matter how much you overprice a bag of tea. It’s a 150-year old social problem that has to be changed by governments, not from private consultants flying in to ‘save the world,‘” Heinemann added.

But not all of the blame needs to be placed on the estate managers. The only reason the fair trade industry exists is because there is a large market for the products in the developed world. “First-world consumers do not want to see the cruel reality in third world countries. And when they do, they turn to fair trade or other labels that will make their sleep easier,” Heinemann said.

Obviously, fair trade is not exploitative in all industries in all countries. Millions of workers have benefited from socially-conscious consumers in the first world. But the ten million tea workers stuck in the colonial system are not fair trade’s beneficiaries.

At the very least, the exploitation of tea workers should generate discourse on the issue. The inability to change the system raises the question of whether fair trade should be involved in the tea industry whatsoever. “They should rethink their whole strategy in doing this,” Heinemann concluded.

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