Markets: The new consumer movement

Written by Grace Chin
Monday, 27 July 2009 00:00

Many consumers are puzzled when it comes to choosing an environmentally and sustainably manufactured item — is organic the same as fair trade, and is environmentally friendly the same as sustainable?So you’re standing at the checkout line of a shopping mall with a packet of coffee.

Now, before you pat yourself on the back for purchasing an item with a Fair Trade label, consider that the label does not necessarily mean organic, or environmentally friendly.For most people, the Fair Trade certification is probably perceived as reliable and trustworthy.

Although it is known to be primarily concerned with alleviating poverty through greater equity in international trade, some critics have pointed out that the certification does not have stringent standards on the environment, even though many assume so.

Studying the most recent documents on standards, it is learnt that small coffee producers who are Fair Trade certified do not necessarily produce organically grown coffee, nor do they need to show sensitivity towards the management of native and non-native species.The Fair Trade environmental standards are generic, containing only guidelines on promoting farm diversity, reforestation and justified use of herbicides — these are not strict certification requirements. As some have pointed out, the words “birds” and “wildlife” do not appear anywhere in the documents.

The Rainforest Alliance certification for coffee, on the other hand, requires that privately-owned coffee estates and large-scale farms meet a number of criteria, including water and ecosystem conservation and care for the environment in the production of coffee. The certification also focuses on farm management rather than trade as well as on workers’ welfare.

So, if you’re looking for coffee that is grown organically, environmentally friendly and produced with consideration for the welfare of farmers, the coffee packet should carry a variety of labels such as Fair Trade, Rainforest Alliance and Organic Certified.Yes, it’s a jungle out there where such labels are concerned.

There is no one international standard on eco-labelling as governments, certification bodies and trade organisations currently devise standards based on their own expertise, definition and criteria. Eco-labelling in Malaysia is also entirely voluntary.

Fresh and packaged produce have stickers and logos from international certification bodies. It needs to be pointed out that the “free range” label on beef does not necessarily mean that the animal went outdoors, and that labelling it “natural” does not mean it is free of artificial ingredients.

Malaysian Organic Scheme, a certification programme run by the Department of Agriculture based on the Government’s Malaysian Standard (MS1529:2001), is offered free to farmers. However, it is limited only to crop production, although there are suggestions to extend it to processing, repacking and retailing.

However, a brief survey of our markets reveals that organic produce carry certification labels from Australia and Japan, as some local certifications may not necessarily be recognised overseas.Although Sirim Qas International (a subsidiary of Sirim Bhd) offers eco-labelling certification for many products in Malaysia, including electrical items, only seven companies have signed up for it in the last five years.

For the consumer, the issue isn’t that there aren’t enough standards and labels. The problem is that there are too many and there is no regulatory body governing them.In Malaysia, consumer awareness about labels is generally poor.

The most recognisable label is probably the “recyclable” logo, says Piarapakaran Subramaniam, chief operating officer at Federation of Malaysian Consumers Associations (Fomca).Manufacturers are reluctant to spend on eco-labelling certification, unlike certification for management practices, for example.

It can be a very expensive process, especially as it requires a full life cycle analysis — from mining of raw materials to assembly and packaging of the end-product.But it may be a start for Malaysia if energy-efficiency labelling is made mandatory for all electrical items, says Fomca.

Currently, the only certifications are given by Sirim and Tenaga Nasional Bhd for product safety and quality. Energy-efficient logos on electrical products are not standardised. Thus, the average consumer has no way of knowing whether the claims are made by the manufacturers themselves, or whether an independent third-party testing was conducted.

In May, Fomca launched a consumer awareness campaign on energy efficiency, which also included education on reading labels. Fomca and its partners have set up a website (www.switch.org.my) with an online tool that can calculate the costs versus energy efficiency of electrical items. Shoppers will be able to compare claims made by manufacturers with the results shown in the calculator.

There are plans to include air-conditioning units in their list of electrical products as well as a report on inverter technologies and products that claim to be energy efficient.Eight years ago, Fomca had proposed some amendments be made to the Consumer Protection Act 1999.

One of the suggestions sought to make the seller liable for misrepresentation of warranty or product quality. Currently, if you pick up an electrical item with a counterfeit Sirim label, the retailer is absolved of all responsibility. The complaint is passed to the manufacturer or supplier. But things are changing in more mature markets overseas, where retailers are taking consumer expectations seriously.

For example, Wal-Mart, the US hypermarket chain, is taking social responsibility seriously. A few weeks ago, it announced on its website that it is working to create zero waste and sell sustainable products, among a host of other environmental items.It intends to achieve these goals by pushing its 100,000 suppliers to have eco-labels on all products.

According to news reports, Wal-Mart will also start asking suppliers to track their greenhouse-gas emissions, water usage and waste production. They will be asked a set of 15 questions relating to energy, climate and natural resources, among others. The data will be compiled into a Sustainablity Index.

This is Wal-Mart’s first step in its long-term plan to eventually come up with a consumer label that can tell shoppers how sustainable each product is.Although the complete index and labelling will only be ready by 2014 or 2015, this initiative is commendable for an industry leader, which is responding to consumer expectations.

Mike Duke, Wal-Mart’s president and CEO, says in a press statement: “They [consumers] want information about the entire lifecycle of a product so they can feel good about buying it. They want to know that the materials in the product are safe, that it was made well and that it was produced in a responsible way.

This is not a trend that will fade. We’re working to make sustainability sustainable, so that it’s a priority in good times and tough. An important part of that is developing the tools to help enable sustainable consumption.”