Lotus Realm Traders
 

 

The Ethics

"In the name of making money, we do not wish to compromise our Ethics, for without these it becomes a game of exploitation and our happiness is undermined considerably"

Lotus Realm Traders Team

Ethical Trading is a relatively new field and it currently has no defined international standard like that of Fair Trade. The rules that make up Ethical Trade can therefore be determined by individual companies, industry sectors or countries. This lays it open to the dangers of manipulation, vagueness and gimmickry. There are however such bodies, as the Ethical Trade Initiative (ETI) that is an alliance of companies, non-governmental organizations (NGOs) and trade union organizations promoting ethical consumerism. These efforts, along with other such bodies, will hopefully establish a recognized standard and label. It is not an enviable task, as some of the processes will be long and drawn out, causing widespread debate. In the meantime trade continues.
There are a number of important questions to be answered so that we can gain a clear idea of what is meant by Ethical Trade at Lotus Realm Traders (LRT). We will go through them one by one and I invite you to contact us if you have any further questions or clarification for the subject at hand.

1. What is the difference between fair trade and ethical trading?
The fairtrade label is administered by the Fairtrade Foundation, which campaigns to get better prices for small primary producers (i.e. farmers) in poor countries. They are trying to extend the labeling to other things; only their Indian Soapstone is so far comparable to the kind of things that we sell. We are not dealing with farmers, and are not always dealing with impoverished producers. Instead, we aim to apply very high ethical standards to our trading, and to go further than fair trade in the sense of using part of our profits to give 'aid' to the communities of some of our producers, where there is a need. So it is clearer to talk about 'ethical trading' with respect to the products at Lotus Realm Traders. To help us with this we are being mentored by Windhorse Trading UK Ltd, who is starting to try out the use of the logo -- trade2aid -- with an explanation of what that means. It is our intention to use and promote this logo, once it has gone through its initial testing phase in the UK.

2. How much do the producers get? Are they being treated fairly?
We currently rely on the Windhorse Buying team’s expertise to guide us in this area as they have been dealing with some of their suppliers for over 20 years.
Vajraketu (Windhorse’s main buyer) says “I will accept the price that the producers ask if I know I can sell the item for that price (or perhaps more) plus the necessary markup. If I am dealing with individual craftsmen and craftswomen, for example relatively unsophisticated people in Bali or Thailand, and I think that their quote is too cheap, then I will give them some more.”
In Bali, Satyananda and Vajraketu travel with colleagues from Sumiati, our main supplier there, and they tell us whether the labour involved in making something is likely to leave the producers with an unreasonably low income. In these cases, we are happy to offer what we think is a higher, fair price. It is our preference to develop long-term relationships with our suppliers, so that they have a fairly predictable source of income. We try to pay the craft workers 50% of the cost of goods before they are made, to help them finance the raw materials etc. This is the kind of process we go through with each of our suppliers, whether based in Indonesia, Thailand, India or China.

3. How do you know it is ethically traded?
At present due to limited staff resources we rely on Windhorse’s knowledge in this area. In the past they have relied on their buyers and their personal contacts with the suppliers. The buyers would come to personal judgments as well as making tours of inspection of the production facilities. More recently, they have started using an independent firm to carry out very thorough inspections. We are given detailed reports, including recommendations for improvements. These recommendations are relayed back to the suppliers, ensuring that the improvements are carried out unless (with minor matters) there is a good reason not to.

4. What do you do with your profits?
Apart from what is needed for reinvestment in the company, the profits of Lotus Realm Traders are all donated to various worthwhile causes. The company was originally set up to raise money to support the building of the Sudarshanaloka Retreat Centre, and still the bulk of our donations will go into this area, as it is only 30% complete.
We hope to be able to give an increasing amount of money to enhance the social welfare of disadvantaged people living in the countries we trade with. We prefer to give money to projects that have some direct link with our producers, and Windhorse in this instance has been very successful in finding specific causes, such as education or health-related projects, that use the money very efficiently.
It is worth noting that because we are owned by a charitable trust none of the profits go to shareholders or directors.

5. How sustainable are the materials used? Are you destroying the rainforests to make your goods?
We have a policy of asking our suppliers only to use raw materials from sustainable sources. Thus, for example, wooden items from Thailand and Indonesia are made with softwoods grown in plantations, or from recycled hardwood from buildings, so the rainforests are pretty safe from us! We do not use any animal products apart from wool. Many of our fabric items are made in small-scale facilities in India, where the cotton is simply bought in a local market, with changing suppliers. In cases like this, our wish to support small-scale local production makes it more difficult to check the whole supply chain. With thousands of product lines, using many materials, it is possible that some environmentally damaging materials may have slipped through the net, but we do our best. If you have noticed anything that might concern you, I invite you to contact us at customerservices@lrt.co.nz

6. Is child labour involved?
'No child labour' is one of the criteria checked by our independent inspectors when they visit workshops where Lotus Realm items are made. Some items are not made in workshops, but by village-based artisans, who may sometimes allow their children to help with the work outside school hours. This is not something we would ever ask for, but it is the parents' decision. We want to help ensure that the children of our producers get as good as schooling as possible. To this end Windhorse’s example has been inspiring as they have been directly or indirectly involved with supporting education projects in Indonesia, India, Guatemala, China and Kenya.

7. Why do you buy from China?
A huge proportion of the gifts purchased in the NZ market are made in China; Lotus Realm’s figure is much smaller than this. Nevertheless, some kinds of gifts require reasonably good manufacturing facilities, and small independent firms in South China are very good at making them, and ask low prices. China has a pretty bad human rights record, Tibet being a particularly prominent case. We approached the Dalai Lama's office about this, and they said that the Tibetans have a quarrel not with the Chinese people, but with the Chinese government, and so they are not in favour of a trade boycott. Many of the workers who make our goods are migrants from the poor areas of northern China, who travel south for the well-paid jobs.
On his recent visit to NZ, the Dalai Lama also said the Tibetan people were much better off, under China, in economic terms, but this did not stop him from strongly opposing what he perceives as the persecution of the Tibetan Culture and religious freedoms.

8. Is it a gimmick?
One of our founding principles at Lotus Realm Traders is to trade ethically. Ethical trading stems naturally from the Buddhist values that inspire the directors and many of the staff.

Based on questions raised at the Ethical Trade and Product Knowledge training event, 21 February 2006, Cambridge UK. Prepared by Ratnaprabha and Vajraketu. Updated & Edited by Akasadaka. (2007)

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