Posted by: Frangipani | January 20, 2012

Fair Trade Oil?

I have been thinking for a few years about the concept of ‘Fair Trade Oil,’ similar to the Fair Trade Coffee concept. If it existed, buyers of Oil, Gas and related products would have independent assurance that the products they were buying were produced under an agreed set of human rights and environmental standards. Pretty much every country touched by the Arab Spring produces and exports Oil and/or Gas: Libya, Tunisia, Egypt, Iraq, Saudi, Bahrain, Yemen, Oman and Syria. Every country touched by the Arab Spring desperately needs to create meaningful employment, especially for young people. Marketing ‘Fair Trade Oil’ could be a powerful way to increase inward investment, and thus substantially increasing employment.

How would it work?  Rather than the end customer paying (as in Fair Trade Coffee), Fair Trade Oil could be administered by governments spending a fraction of a percent from the 90% plus government  take (a quite normal government share) from oil and gas revenues.  Marketing ethical oil and gas improves the country’s image, their Brand, and thus foreign investment into other industries. It demonstrates acceptance of international human rights, anti-corruption and a respect for environmental standards: a good place to do business. The publicity and transparency around oil and gas production, an important factor in the economy e.g. in Iraq it provides 95% of the GDP) could increase diverse investment into the country, to then stimulate thousands of meaningful jobs. As this is part of  a Kurdish blog, and as an important example, many Kurdish people living in the region would benefit from every angle of Fair Trade Oil: improved human rights, environmental protection, reduced corruption and increased employment opportunities.

Who else is thinking about it? This is a pretty new concept. A Google search only showed up a student, David Poritz, that was thinking along similar lines. His start on the certification concept was reported early 2011 in Equador, and is discussed on the GOOD site. A summary of what the Gaia certification is trying to achieve: “The mission of Gaia Certification Ltd. is to create a market-driven process that will reward and distinguish world-class oil and gas producers for outstanding social and environmental performance through the active engagement of consumers, civil society, NGOs and the oil industry.” “There’s real market value here for energy producers, …… It takes time to move to all renewables. We’re in transition, and that transition has to feel good.” I believe that oil and gas resource holders themselves are in the best position to take the lead and implement; civil society, NGOs and the oil industry can then provide the necessary support. The consumer could then make the choice to buy Fair Trade oil and gas products, but it would not come at an increased price.

And I discovered by happy coincidence recently that this is a line of thinking being actively pursued by Open Oil.

If it cost the same, would you prefer ‘Fair Trade Oil’ in your car?


Responses

  1. And then there was Fairtrade Gold. So WHY NOT Fairtrade Oil?

    Rio Tinto et al said it couldn’t be done, but they were bought to the table — at least to hear the idea, the plans and the results once they were indisputable — essentially through the efforts of one man, Greg Valerio, (an activist jeweller no less) and the Alliance for Responsible Mining, a pro-active grouping of miner collectives in-country.

    And so it is that as of last February (2011) we have Fairtrade Gold — from artisanal mine to artist studio. Not much of it. Not enough of it. But the people involved are working towards being ‘investment ready’ (with another 4-hour seminar happening this Saturday, 11/02/12)

    The market is certainly ready, strengthning and widening.

    So ‘Fran G’ please do let me know (via personal email) if you want/need contacts at the Fairtrade Foundation who can talk this through with you, and/or if there is an article you’d like me to pitch to the FT/Guardian/trade press

    http://blog.gregvalerio.com/fairtrade-gold/
    http://www.fairtrade.org.uk/gold/

    • Encouraged to hear about Fair Trade Gold. Their web address is FairTrade/Gold, but is there a link on the main Fair Trade website?
      I will show them as a recommended link.
      Sad to read the negative press about the Kimberley Process Certification Scheme for diamonds.
      Lessons to be learnt as I think about birthing Fair Trade Oil.
      Would be great to email. Fran G


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