Fair Trade and Social Economy : Like TwinsThe garden inside PFTC Fertilizer Center, Philippines. Aug. 2014

Hyungmi KimDirector, iCOOP Co-operative In-stitute Adjunct Professor, School of Management, Sungkonghoe Univer-sityhyungmikr@gmail.com

Social? • The English term, ‘social’ came from ‘socii’, a Latin word for ‘al-liance.’ The word was created when the cities allied against Rome dur-ing the Social War or the Allied War in B.C. 91 ~ 88. • A society may be created by a relationship between 3 or more persons.• Together, jointly, solidar-ity, equally, fairly… “To-gether with the many” • Contrasting concept: in-dividual, private, etc.

* Source: Wikipedia.-comSocial problem, social service, so-cial welfare, social enterprise, so-cial investment, social coopera-tives, social network service, social responsibility, social economy…

Social economyThe cooperation movement by French doers (é-conomie sociale) in the 19th century In the late 20th century, the social economy re-vived in Europe, as the economic movement and policy to overcome ‘exclusion.’Expanded into the Social Solidarity Economy In the early 21st century, it took the first step as an alternative movement in Korea, against the winner-takes-all economy and unethical eco-nomic practices.“A social economy consists of the “activities of organizations which possess democratic decision-making structures, and which op-erate on principles that limit the distribu-tion of income according to capital.” The concept may sound new, but the concepts already familiar to Koreans, such as those of Fair Trade, local exchange trading sys-tems (LETSs), consumer co-operatives, so-cial enterprises, and community enter-prises all engage in activities of Social Economy.”

Principles of Social Economy01 The primacy of the individual and the social objective over capital.02 Voluntary and open membership. 03 The combination of the interests of members/users and /or the general interest.04 The defence and application of the principle of solidarity and responsibility05 Autonomous management and independence of solidarity and responsibility 06 The autonomy and independence from public institutions must be maintained. 07 The essential surplus is used to carry out sustainable de-velopment objectives, services of interest to members or of general interest. * From European Social Economy Charter.

“A different type of en-trepreneurship“

Fair

*Images from Wikipedia.com

PFTC Headquarters. Aug. 15, 2014

Among many part-ners of PFTC (Panay Fair Trade Center), CTM, an Italian fair trade co-operative and iCOOP KOREA are ranked the 1st and 2nd in trade vol-ume.

Principles of Social Economy and Fair TradePerson and social goal first 01 Creating Opportunities for Economi-cally Disadvantaged Producers03 Fair Trading PracticesVoluntary and open mem-bership 02 Transparency and AccountabilityDemocratic control and opera-tion by the members

06 Commitment to Non Discrimination, Gender Equity and Women’s Economic Empowerment, and Freedom of Associa-tionCombination of benefits for the members, users and general publicPrinciples of solidarity and respon-sibility 04 Payment of a Fair Price07 Ensuring Good Working Conditions05 Ensuring no Child Labor and Forced LaborAutonomy and indepen-dence 08 Providing Capacity Building09 Promoting Fair TradeUse of surplus for the sustainable development 10 Respect for the Environment

Principles of Co-operative and Fair Trade 01 Voluntary and Open membership 06 Commitment to Non Discrimination, Gender Equity and Women’s Economic Empowerment, and Freedom of Associa-tion02 Democratic member Con-trol 02 Transparency and Accountability03 Member Economic Partic-ipation 03 Fair Trading Practices04 Autonomy and Indepen-dence 08 Providing Capacity Building09 Promoting Fair Trade05 Education, Training and Information 06 Co-operation among co-operatives 01 Creating Opportunities for Economi-cally Disadvantaged Producers

04 Payment of a Fair Price 07 Concern for Community 05 Ensuring no Child Labor and Forced Labor07 Ensuring Good Working Conditions10 Respect for the Environment

Advantages and Innovative Elements of Social Economy01 Awareness of self-help and self-reliance mutual aid02 Co-operatives and social economy are the training camps of democracy03 Harmony between the members, users and general public04 Economic participation by the members: ① Investment and borrowings from the members (the member bond) ② Limits on the distribution of profit (a portion of capital accumu-lated together must be returned to the society, for the next gen-erations) 05 Co-operation among the co-operatives: creating the scale of economy 06 Principle of contribution to the environment and local community

Social Economy and Fair Trade• 75% of the fair trade products worldwide are pro-duced by the producers’ cooperatives• The consumers’ cooperatives in Europe, Japan and Korea are the leaders of fair trade.

Images: the fair trade products at ANCC-COOP in Italy and the social development project

Combine with Financing (Emergency Loans and Patient Capital) The investments from European individuals, groups, churches, etc. are collected to finance the micro loans, fair trade and agricultural industries in the re-gions on the other side of the world: approximately 600 million euros had been invested. Of 26 million borrowers: 83% are females; 53% are producer co-operatives in the rural areas.Has 806 partner groups and 52,000 investors.

In Italy,A credit union (Banka Etica populare), a fair trade co-operative (Commercio Alternativo) and an Italian co-operatives business alliance (Coop Italia) allied to spread fair trade.

Broaden horizons: fair travel

iCOOP (consumer partner), Gongam Manse (social enter-prise, the operator) and PFTC-AFTC (producer partner) cre-ated a new business in the fair trade production areas in Panay Island that vitalizes the local area, develops human resources and creates related businesses.

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Thank for your listening!“Co-operatives are enterprises with a soul”