Paul Chandler started his career at Barclays Bank and for the last decade he's been a leading figure in battling for a fairer approach to world trade. John Hill finds out more about how Traidcraft's CEO hopes to change the world for the better.
IT’S not just about the money. Traidcraft’s chief executive Paul Chandler makes this point more than once on a warm weekday morning in Gateshead’s Team Valley Trading Estate, perched not far from a bowl of the company’s Fairtrade-labelled chocolates.
People know what that label means. Fairtrade sales shot up by 40% in 2010 to around £1.17bn on the strength of a solemn promise – that by buying a product for a few pence more, customers were backing a system that helped producers around the world to get a fair price for their efforts.
However, Chandler says the promise goes beyond that.
“It’s not just about providing extra money for poor people”, he says. “That’s a vital part of helping them to lift themselves out of the dire situation they’re in. But it’s also about how people are treated in work and how they’re held in the community.”
So how do you achieve a change like this in the world? When people talked about fair trade back in the 1960s, many looked upon it as a tool in the political backlash against a capitalist system peppered with aggressive corporations and a belief in the markets over people.
In the 21st Century, the fair trade movement in the UK draws many of its sales from its recent multinational converts. Nestle’s Kit Kat now carries the label, while some of Kraft’s Cadbury Dairy Milk also made the switch. Last week, Mars announced Maltesers would also shift production to fair trade.
Effectively, while the UK was late to the party when it came to fair trade, it’s become a leading international market due to its willingness to engage with large corporations while others may have been more hesitant.
Chandler says: “It’s all very well keeping yourself pure and if you do that you can help hundreds of thousands of people. We want to help millions and you can only do that with the help of people like Tesco and Nestle.”
Traidcraft is also an unusual mix of charity and business. It talks about sales and profits, while simultaneously carrying out projects to improve lives in the developing world. Tellingly, it’s run by a former Barclays manager with links to both the church and the world of figures.
“In the ’60s, fair trade was seen as part of a search for alternative marketplaces to the capitalist system”, Chandler says. “We’ve come increasingly to the realisation that businesses aren’t inherently, wicked or damaging. Business can have that impact if it’s done badly, but we believe it also has the potential to do good.
“We want to use business skills to create better opportunities for poor people; to create more responsible business practices that will be more sustainable in the long term. We’re not trying to subvert capitalism. We’re trying to bring out the positive benefits of enterprise instead.”
While the thousands of Traidcraft activists, buyers and employees often don’t need to be told about why fair trade is important, the movement can now also talk a language that’s more familiar to your average multinational.
“It’s not always about converting businesses to the moral case for fair trade”, Chandler says. “There are executives within many companies that share that belief, but companies like Tesco and Kraft wouldn’t be doing it if it wasn’t good for their bottom line as well. You can make a good return from Fairtrade now as you can charge a small premium.
“It’s not a silly business decision, but we’ve got to provide them with the economic and business argument for it rather than just say it would be nice.
“For us, Fairtrade is a tool. It gets consumers to send messages to the market that ethics are important. And they know that they could lose the loyalty of their customers if they don’t do it.”
When Chandler joined Traidcraft as chief executive in 2001 from Christian book publisher SPCK, he says there were around 100 products with the Fairtrade mark, 60 of which were offered by Traidcraft.
“Around 4,500 products carry the mark now”, he says. “If this was a pure business, I suppose you could say we’d lost a lot of market share there. But our role is to be a catalyst for change and the success of that has been beyond our wildest dreams.”
In its last AGM in mid-September, Traidcraft announced “utterly flat” sales of £18.5m and post-tax profits up from £60,000 to £482,000 thanks in part to the sale of its 10% stake in Cafedirect. Chandler admits being a catalyst for change doesn’t always make business straightforward.
“We’ve got a conundrum in that we’re set up to get other big players to adopt fair trade”, he says.
“That means that every time we have a big success in that respect, we’ve just created a major new competitor for ourselves.
“Having said that, we made a good level of profit last year and we’re very well capitalised. We’ve just got to stress the strengths of what we can do that no other company can do.”
One way Traidcraft separates itself is by ploughing new furrows for Fairtrade. It is trying to build the business case for Fairtrade rubber and is also offering co-branded Fairtrade charcoal in partnership with the Co-operative.
It does this in the hope other larger companies will follow suit, but also knows it’ll have a little while by itself in that market before these firms get the necessary stamps.
Chandler says: “Having development expertise allows us to ensure the impact of our trading is as effective as possible when dealing with producers, while this trading element enables us to avoid getting stuck in an NGO ivory tower.”
Chandler enjoys business and admits the Traidcraft job allows him to combine his passions for business and development work. At university he was keen to join the Foreign Office but decided at the last minute to take a different route. His nine years at Barclays gave him the business understanding that won him the SPCK chief executive job at the age of 30. The Christian publisher’s work included providing books to students training for the ministry in areas such as Africa, Latin America and Asia. Chandler visited every continent in the world within a few years.
“It was the first time I’d travelled outside the developed world”, he says.
“To see that situation and then come back to the affluence here, the injustice of it all can’t fail to touch you.”
Chandler used to sell Traidcraft products at a stall in his local church in London. He’d been doing that for three years before he noticed the Traidcraft CEO job advert in the church newsletter. Traidcraft’s supporter base is still overwhelmingly Christian and Chandler says it is this support that gives it the stability and profile to lobby businesses and politicians.
Despite holding the top job for a decade, Chandler, who lives near Durham with his GP wife Sarah and their three daughters, still runs his own stall in his church in the city. This understanding of the grassroots is balanced by his influential role in organisations such as the European Fair Trade Association.
Traidcraft was one of the six founding organisations behind the Fairtrade foundation in 1992 and Chandler says its role is still to challenge from within if it feels other organisations within the foundation are “not doing things properly”.
However, Traidcraft is also active in lobbying for changes outside the movement itself. It participated in a successful campaign to amend the 2006 Companies Act, requiring companies to reveal the social and environmental impact of their operations.
It hopes some of its concerns about the way major retailers “pass risks down the supply chain” will be addressed by the Government’s creation of a “supermarket adjudicator”, initially looking at domestic supply chains.
It is also pushing the USA to stop giving subsidies to its cotton farmers, an outlay of £15bn over the last decade which hands its cotton farmers a trade advantage over producers in Africa and other developing countries.
The World Trade Organisation has said some of these subsidies are illegal, but the USA has still not ceased the practice. However, it remains frustrated about the lack of political leadership on climate change.
Chandler says: “We’re talking to producers who are going through unseasonal droughts and floods, and temperatures that stop craft producers from making crafts because the wax is melting. We’ve always seen cases of natural disasters hitting producers, but that number has gone up. It leaves us in absolutely no doubt about the reality of climate change.”
This brings us to a question that’s weighed heavily on the minds of millions for decades, whether they’ve raised a placard against changes to the NHS or taken to the streets to challenge the avarice of City banks.
How do you convince those in power to change the world?
“There are three main things”, says Chandler. “You need to understand and analyse the situation and work out an alternative that will have the desired impact. You’ve got to have a convincing argument if you want to make change.
“Then you’ve got to model it yourself. You should be able to tell people things should work a certain way and show them how it works by doing it yourself.
“But just making an argument and modelling it won’t work unless you can build popular momentum. You can convince a business by showing them their customers feel a certain way and you can convince politicians by showing them they will gain votes from it.
“Once you’ve done all that, you’ve got to keep pushing for the change persistently. We’ve made some changes through Fairtrade, but unless we keep the popular pressure going it will all unravel.”