Can Ethical Certification Prevent Food Fraud?
By Jade Lindley, Hannah Bongiovanni, and Dominique Eastwood.
As global trading increased, so too did pressure on companies to develop initiatives to embrace fair and ethical sourcing.
Ethical, sustainable, social, and environmental certification organizations endorse a vast range of industries and their specific products. These organizations ensure that food manufacturers meet various standards including fair pricing and safe working conditions.
Ethical certification organizations have a unique transnational regulatory role. These organizations’ capabilities and responsibilities transcend borders and may overlap with systems of governance, providing a necessary additional layer of control. These organizations must, however, be agile and continue to innovate to ensure they can regulate even if scaled up.
The increase in certification organizations corresponded with the rapid growth in sales of certified products. Combined with the rise of ethical consumerism, industries can rely on profits generated from products with ethical certifications as consumers are willing to pay a premium for them.
Although not formally defined, ethical production collectively refers to production that is free from child labor, pays fair and equal wages, and has safe working conditions. The industry-led ethical production movement has aimed to “put people and the planet over profits” and address systemic harm and injustice committed against vulnerable people involved in the global food supply chain.
The United Nations Food and Agriculture Organization, the International Labor Organization, and the U.N. Conference on Trade and Development support many of the international standards that guide sustainability goals that certification organizations operate within.
Building on the U.N. Millennium Development Goals of 2000, the Sustainable Development Goals advanced the conversation by acknowledging the important role of balancing environmental health and human security. A common thread connecting several Sustainable Development Goals is a push toward ethical trade.
Although certification organizations help industries meet and maintain these goals, no authoritative standards exist for ethical trade, only voluntary codes of conduct that commonly align with international laws and the Sustainable Development Goals. Unlike organic produce, formal regulatory oversight of ethical certification appears to be limited; instead, organizations self-regulate. Compared to the registered Fairtrade mark, ethical trade is not registered and has no legal status.
Globally defining ethical trade and agreeing on consistent standards would greatly assist certification organizations hoping to gain legal status to regulate and enforce certified standards. But research suggests that self-regulated corporate social responsibility efforts adopted within private and non-government organizations are more likely to be effective than government regulation.
To ensure the reputation of the certifying organizations, though, governments may need to regulate. Research indicates that consumers envisage a role for government in regulating certification organizations.
Furthermore, the lack of governmental oversight provides ample opportunity for criminal activity. The United Nations defines food fraud as activities to deceive intentionally, such as by food mislabeling, adulterating, misrepresenting, and repackaging. Notably, within an ethically certified industry, human rights abuses and corruption that defy certification standards equate to food fraud.
This novel approach would add an additional regulatory layer to prevent food mislabeling and the production of food that defies certification standards, including child and forced labor, use of banned pesticides, and fraud and corruption.
In addition, there is a strong relationship between developing countries and the existence of corruption and, as such, authorities in these jurisdictions may not prioritize these crimes. Given that the goal of ethical certification is to improve the working conditions of workers in developing countries and their standards of living, the potential for overlooking corruption in certification must be addressed.
Local law enforcement should be responsible for crimes such as forced labor and fraud; however, there are several reasons why these crimes go undetected, including the remote geographic location of farms, lack of law enforcement resources (both human and physical), and the normalization of crimes, such as child labor, within some communities.
Large companies such as Starbucks and Nestlé should also ensure that farmers in their supply chains comply with ethical trade certification requirements. By doing so, these companies can reduce the opportunity for crimes through increased monitoring and community engagement to change social attitudes around normalized criminal activity.
Government regulators may also have a role to play in sustaining the legitimacy of these organizations. Ultimately, ethical certification organizations are in a unique position to provide regulatory control over the global food supply chain and quell crimes that do not comply with ethical standards.
This article was originally published in the Regulatory Review on 16 November 2021.