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Report on Fair Trade in Bali by

The key objectives of Fair Trade are to empower low-income balinese artisans and farmers to better their conditions

A Report on Fair Trade

This Report was compiled by Meghan Pappenheim, founder of, co-proprietor of CV. Tegun Galeri export and Ubud's newest restaurant, Kafe. This report, a compilation from a variety of sources, gives a background on Fair Trade and its relevance to the handicraft industry in Bali. More specifically this report is to give an idea of what the Bali Cares organization, might want to represent to the public regarding this subject and how Fair Trade practices can be applied to Bali based SMEs.

Data below is collected from the Fair Trade Trends Report for USA, Canada and the Pacific Rim as well as other resources mentioned in appendix A.

What is Fair Trade?

The key objectives of Fair Trade are toempower low-income balinese artisans and farmers to better their conditions, and to promote understanding between them and people of developed regions through transparency and mutual respect. Fair Trade's rules guarantee a living wage in the local context, offering employees opportunities for advancement, providing equal opportunities for all people, particularly the most disadvantaged, engaging in environmentally sustainable practices, being open to public accountability, building long-term trade relationships, providing healthy and safe working conditions within the local context, providing financial and technical assistance to producers whenever possible

Types of Organizations dealing in Fair Trade:

Alternative Trade organizations (ATOs) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade. Fair Trade groups can be non-profit or for-profit organizations (reports show that the majority of them world-wide are for-profit organizations) and come in a selection of shapes and sizes such as:
  • producer co-operatives and associations
  • export marketing companies
  • importers
  • retailers
  • national
  • regional Fair Trade networks
  • financial institutions
There are four main types of Fair Trade organizations that perform various roles along the trading chain linking producers to consumers in the North and South.
  • Producer Organizations
    Producer organizations may be village or community groups or cooperatives, and often may have joined together under export marketing umbrellas.
  • Fair Trade Importers and Wholesalers
    Fair trade importing organizations are importers and wholesalers that source from Fair Trade Producer Organizations, and are committed to providing fair wages and employment opportunities to these producers. Fair Trade importers and wholesalers provide a range of services and assistance directly to these producers.
  • Fair Trade Retailers (This could be Bali Cares)
    Fair trade retailers are stores, either brick and mortar or Internet-based, or mail order catalogs, that carry fairly trade items, bought directly from Fair Trade Producer Organizations or from Fair Trade Importers and Wholesalers. Fair Trade Retailers often import and wholesale as well.
  • Fair Trade Labeling Initiatives
    Fair Trade Labeling Initiatives certify the chain of supply of certain commodities in order to guarantee adherence to fair trade practices.
The key principles of Fair Trade, that should be considered by export buyers when doing business in Bali, include:
  • Transparency and accountability Fair Trade involves transparent management and commercial relations in order to deal fairly and respectfully with trading partners and customers.
  • Creating opportunities for economically disadvantaged producers Fair Trade is a strategy for poverty alleviation and sustainable development
  • Gender Equity & Equal Opportunity Emphasis is often placed on ensuring that women's work is properly valued and rewarded as it is for men. Ensures no exploitation of children or Indigenous people.
  • Respect for Producers Cultural Identity Fair Trade encourages producers to produce and develop product based on their cultural traditions and natural resources. Helps producers to hone their local knowledge base to preserve and develop their cultural identity.
  • Capacity building Fair Trade assists in developing producer independence through sustained relationships with trading partners that provide continuity, and often include management skills development, improved access to markets, and financial and technical assistance.
  • Payment of a fair price Paying a fair price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production that is socially just and environmentally sound. Fair Traders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-production financing.
  • Working conditions Fair Trade means a safe and healthy working environment for producers. The participation of children (if any) does not adversely affect their well-being, security, educational requirements and need for recreation, and conforms to the UN Convention on the Rights of the Child as well as the law and norms in the local context.
  • Environmental Sustainability Fair Trade encourages producers to engage in production practices that manage and use local resources sustainably. Fair traders often work directly with producers in regions of high biodiversity in order to develop products based on sustainable use of their natural resources, giving communities incentive to preserve their natural environments for future generations.
  • Promoting Fairer Trade Fair Trade organizations educate the public about the importance of purchasing fairly traded products, highlight the need for change in the practices of conventional trade, and publicly demonstrate how fair trade is a successful model that emphasizes social justice and environmental sustainability, over the endless drive for increased profits. By providing information about producers' history, culture and living conditions, Fair Trade enhances cross-cultural understanding and respect between consumers and communities in the developing world.

Current Trends in the Bali Retail & Export Market that will effect how the above international Fair Trade principles apply to business development in Bali.
  • Exports from Indonesia of Handicrafts, 2-D art, textiles and furniture have been in decline since approximately the year 2000, resulting from the devaluation of the Indonesian Rupiah, Indonesia's high rate of inflation, and because of the Free-Trade Pact made between China and United States of America.
  • The one Export commodity that is rallying a bit, and is perhaps on the increase, is the hand-made silver jewelry industry.
  • The cost of Shipping/cargo from Indonesia to developed nations has increased with the implementation of a terrorism tax and other inflated charges. It is no longer economically viable to ship from Indonesia. The cost of a 40ft container from Bali to La is roughly two times the price of the same container load from China to LA.
  • Eight years after the Bali Bombing it seems as though tourism is on the rise and that the retail gift-shop industry on the island of Bali has a second chance to flourish.
For further info on International Fairtrade, see here:

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