Retailers, supply networks and changing articulations of ethicality: lessons from Flower Valley in South Africa

1. Introduction

This article shapes debate in the field of economic geography and the broader social sciences concerned with corporate retailer power, global production networks and private standards for ethical trade. Over the past 15 years, research has critiqued the developing role of voluntary ethical codes and standards in addressing working conditions and environmental issues in retailers’ supply chains within a context of neo-liberalization and globalization. Our article advances current debate by using the case of South African wildflower bouquets sold to domestic and UK retailers in order to illustrate three emerging developments in this area: an evolving relationship between ethical trading strategies and retailers’ brands; a growing role for institutions in the global South in shaping ethical standards and more explicit acknowledgement of the ethical trading challenges faced by producers in the context of retailers’ buying practices. These developments represent particular shifts in the orientation of ethical trading agendas and present challenges to the way they are theorized. The term ‘ethicality’ is adopted from the work of Neilson and Pritchard (2010) and is used throughout the article in order to capture not only the ethical codes and standards themselves but also the changing strategies and practices shaping what counts as ethical in global networks of supply.

The first development we address is strategizing ethicality, concerning the ways in which corporate programmes for ethical trade, increasingly combining social and environmental ethics in sustainability strategies, are connected to retailers’ brand identities. While the corporate connection between ethical trade and branding in mainstream retailing was once almost entirely about retailers’ defensive protection of their corporate images in light of negative media exposure and campaigning, cases of more proactive development and marketing of sustainability are also becoming increasingly significant. However, this development requires careful critique, avoiding both over-celebratory accounts of somehow ‘more ethical’ corporations on the one hand and overly simplistic criticisms of corporate green-wash on the other. Combining cultural and political-economic approaches develops a more nuanced perspective on this. Through the second theme of embedding ethicality we explore how the ‘rising powers’ of the global economy are increasingly shaping the terrain of corporate ethical trade, with specific reference to the growing role played by South African corporate actors and political institutions in actively defining the clauses and policies of ethical programmes. This challenges, both empirically and theoretically, an assumed unidirectional flow where ethical codes have been seen to originate in the global North and are then applied in the South. The third theme of practising ethicality deepens maturing debate on the challenges of executing ethical trading principles in the context of supply chains governed by intense, buyer-driven demands. Referred to by ethical trade practitioners as ‘marrying the commercial with the ethical’, the challenges experienced by producers when attempting to enforce environmental and labour standards amidst the pressures of large orders, tight lead times, pricing squeezes and strict product design specifications also challenge the conceptualization of ethical economic spaces given their often uneasy relationship with profit-maximizing imperatives.

These three trends are illustrated in turn through a case study of sustainably harvested wildflowers sourced from the Agulhas Plain in the Western Cape of South Africa, which are supplied as bouquets to UK and South African retailers. The Agulhas Plain is located within the Cape Floristic Region (CFR), the smallest and richest of the world’s six floral kingdoms and home to an estimated 9600 plant species known locally as fynbos (‘fine leaved bush’). Fynbos flower farming is one of the main components of the agricultural sector in the region, with both cultivated and wild flowers harvested for domestic and export markets. A significant stakeholder is the Flower Valley Conservation Trust (FVCT), which has driven the development and implementation of the Sustainable Harvesting Code of Practice¹ (Bek et al., 2010). The Trust manages the Flower Valley Farm near Gansbaai, which hosts its own wildflower harvesting team. ‘Flower Valley’ has become synonymous with the sustainable harvesting programme as a whole, but in reality the Flower Valley Farm is part of a local network of accredited, sustainable harvesting suppliers who deliver wildflowers to a local pack-shed owned by Fynsa. The latter supplies bouquets to a small number of retailers, including its major customer, the UK retailer Marks and Spencer plc, which sold some 400,000 luxury Cape Flora bouquets from Fynsa in its stores during 2011. Other customers are the UK supermarket chain, Sainsbury, and South African retailers, PicknPay and Checkers (owned by Shoprite). The case study is highly appropriate for exploring new developments in ethical trade, as South Africa is one of the ‘rising powers’ advancing participation in ethical policies for export industries, and Flower Valley and Marks and Spencer sit at the vanguard of ethical innovations.

This sustainable harvesting case study involved analysis of grey material (industry and conservation NGO reports, sales data, and so forth), participant observation in FVCT activities (meetings, sustainable harvesting training events etc.), and 62 in-depth, semi-structured interviews between August 2010 and December 2011 with stakeholders in wildflower harvesting and conservation, including trustees at the FVCT, environmental NGOs, commercial stakeholders including retailers, farmers and landowners, pickers and pack-shed workers. For the purposes of this article, we draw on interviews primarily with retailers and suppliers, and analysis of grey materials associated with the sustainable harvesting case study. Whilst a small number of selected quotes are used, the article's arguments and insights are shaped by the wider range of empirical materials deriving from the project. Developing the analytical themes of strategizing, embedding and practising ethical trade, respectively, the case study illuminates the following: (i) the complex ways in which the ‘Flower Valley story’ relates to the Marks and Spencer brand and its Plan A corporate sustainability strategy, as well as to the ethical trading programmes of other retail clients; (ii) the growing role played by South African organizations in shaping the ethical codes influencing sustainable harvesting in a context where European retail standards have tended to dominate and (iii) the challenges faced by suppliers and pack-sheds in the sustainable wildflower harvesting supply chain when retailers’ demands concerning bouquet design, pricing and delivery and the way that local organizations respond, sometimes lead to contravention of clauses of the Sustainable Harvesting Code of Practice and ethical labour codes. Each of these three themes explores different ways in which ethicality is articulated in an evolving political-economic context.

The article proceeds, first, by outlining perspectives on the developing role of ethical codes in governing social and environmental conditions in retailers’ global supply networks. It then sets the scene for the case study of sustainable wildflower harvesting in the Agulhas Plain before presenting the analysis of new articulations of ethicality concerning, in turn, branding, Southern participation and producer challenges in this particular ethical trading context. The article concludes by discussing how observations from this case resonate with broader debate on the changing strategies, geographies and politics of ethical trade.

2. Corporate retailer power, supply networks and ethical trade

Since the early to mid-1990s, the ‘new retail geography’, spearheaded by Neil Wrigley, has captured and theorized the dramatic rise in the economic and cultural significance of the retail sector in advanced capitalist economies, which has been part of a broader shift in economic power from the sphere of production to services and consumption (Wrigley and Lowe, 1996, 2002). In a wide range of national-institutional contexts within Europe, North America and Australasia the retail sector witnessed significant concentration of capital from the 1980s onwards (Wrigley, 1992; Harvey, 2007), with the trend being more recently mirrored in emerging market economies of Asia, Latin America and Africa (Coe, 2004; Wrigley et al., 2005; Tacconelli and Wrigley, 2009). This consolidation, along with the rising socio-economic influence of consumption and the increasing regulatory role of UK food retailers in particular, has translated into a shift in the balance of power in the supply chain from producers to retailers (Dixon, 2007; Harvey, 2007; Konefal et al., 2007).

Retailer buying power has been exercised in a wide range of contexts and sectors through the negotiation of increasingly favourable pricing and payment terms from suppliers, the strategic use of own-brand lines to compete with manufacturers’ brands on both price and quality, demands for product development according to strict specifications and the tight management of inventory and logistics often incorporating short lead times for producers (Barrett et al., 2004; Burch and Lawrence, 2005, 2007). Moreover, the increasing globalization of retailers’ supply chains within a political-economic context of neo-liberalization, liberalization of retail foreign direct investment and rapidly expanding transnational retail activity (Reardon et al., 2003; Wrigley et al., 2005; Neilson and Pritchard, 2007; Durand and Wrigley, 2009) means that this buying power is exercised by retailers frequently through globally stretched supply chains covering a wide range of industries and localities (Dolan and Humphrey, 2004; Coe and Hess, 2005; Konefal et al., 2005, 2007; Coe and Wrigley, 2007; Tokatli, 2008; Tokatli et al., 2008).

To understand the dynamics and articulations of retailer power in global supply networks, studies influenced by the new retail geography have connected to theoretical perspectives of commodity chains, with the global value chains (GVCs) and global production networks (GPNs) perspectives mobilized to understand the governance and spatial organization of supply networks driven by lead firms such as retail corporations (Coe et al., 2004; Coe and Hess, 2005; Gereffi et al., 2005; Wrigley et al., 2005; Neilson and Pritchard, 2009; Lund-Thomsen and Nadvi, 2010). It is against the backdrop of retailer power in the supply chain that ethical trading programmes have been developed.

As a result of the work of intermediaries such as the media, NGOs, labour unions and consumer groups who have challenged the power wielded by retailers in supply chains (Freidberg, 2004; Dolan, 2005; Clarke et al., 2007) and in the absence of state regulation of trans-national production networks (Jenkins, 2005), corporate responsibility in retailers’ supply chains has been implemented through voluntary labour and environmental codes of conduct (Christopherson and Lillie, 2005; Barrientos and Smith, 2007; Nadvi, 2008; Robinson, 2009). There is a wide range of private food retail standards and other initiatives influencing various sectors and supply chains, ranging from those focused on safety such as the International Food Standard, Safe Quality Food and The Global Food Safety Initiative, to those covering various elements of worker welfare and environmental protection including The Global Partnership for Good Agricultural Practice (GlobalGap) (Fuchs et al., 2011). In UK, the Ethical Trading Initiative (ETI) as a multi-stakeholder initiative significantly influences the codes and procedures used by many high-profile retailers and brand manufacturers in the governance of ethical supply chains using core International Labour Organization (ILO) conventions (Barrientos and Smith, 2007).

With this rise of voluntary ethical standards used by retailers in the governance of their supply chains, social scientists have traced their emergence and articulation through neo-liberal political programmes and campaigning contexts in advanced capitalist economies (Hughes et al., 2007; Blowfield and Dolan, 2008; Busch, 2011) and have critiqued their impact on producers and workers upstream (Barrientos, 2008; Neilson, 2008; de Neve, 2009; McEwan and Bek, 2009a, 2009b; Neilson and Pritchard, 2009, 2010; Riisgaard, 2009; Ouma, 2010; Ruwanpura and Wrigley, 2011; Tallontire et al., 2011). The importance of such critique concerning the genesis and impacts of ethical trade continues as private standards used in retailers’ supply networks evolve in the ways outlined in the remainder of the article. First, we examine the sustainable harvesting case study through which we explore these developments.

3. Retailers and the sourcing of sustainably harvested flowers from South Africa

The CFR is known as a ‘biodiversity hotspot’ in which 70% of plant species are endemic (Privett, 2002). Nearly one-third of the original area of fynbos has been lost and 1200 species are critically rare, threatened or vulnerable. Fynbos has been harvested from the wild for many decades as the distinctive appearance of the flowers, such as the iconic proteas and foliage has proven popular with consumers, especially in Europe. Thus, large quantities of fynbos are exported every year from the Western Cape with much being harvested from the 270,000-ha Agulhas Plain. The fynbos industry has historically been loosely organized and weakly regulated. In environmental terms, this has led to excessive pressure being placed upon the resource base as marketable species have been exploited beyond their capacity to reproduce successfully. Other threats to the fynbos ecosystem include alien species infestation, agricultural conversion, property development and uncontrolled fires (Ashwell et al., 2006).

Concerted efforts to conserve the fynbos originated from a campaign to save the 580-ha Flower Valley Farm from possible conversion into a vineyard. UK-based conservation NGO, Fauna & Flora International (FFI), purchased the farm in 1999. The FVCT was established and, with financial backing from regional, national and international conservation organizations, this rapidly emerged as the standard bearer for fynbos conservation (Bek et al., 2010). Its approach has included linking conservation and social investment with market engagement (FFI, 2006). Under the auspices of the Agulhas Biodiversity Initiative (ABI), the FVCT has developed the concept of ‘sustainable wild harvesting’ and a Sustainable Harvesting Code of Practice, whereby wildflower picking can be both economically and environmentally sustainable.

The FVCT enjoyed the status of a cause celebre among the donor community, which enabled privileged access to influential networks. Through these networks, interest was gained from Marks and Spencer. In order to supply fynbos to Marks and Spencer, suppliers are required to attain sustainable harvesting accreditation, whereby members of their picking teams undertake training. A pilot programme involved eight suppliers based in the Agulhas Plain. In 2004, the Fynsa pack-shed operation was legally separated from the Trust in order to overcome actual and perceived conflicts of interest. Fynsa’s management believed that accessing niche markets via long-term relationships with retailers was essential if the project was to become self sustaining. In this sense, becoming part of a global supply network was crucial to achieving a set of interconnected goals concerning social and economic development and, perhaps paradoxically, conservation.

Fynsa’s bouquet production has grown from 314,000 bouquets in 2008, the vast majority of which were sold as ‘Cape Flora bouquets’ to Marks and Spencer, to 489,000 in 2011. Marks and Spencer still makes up >80% of Fynsa’s market. However, in 2009 South African retailer, PicknPay, agreed to stock Fynsa bouquets in their Western Cape (and now also Eastern Cape) stores. The UK supermarket chain, J Sainsbury plc, and Checkers in South Africa also became Fynsa customers in 2011. In economic terms, sustainable harvesting supply chains represent a development success story. Although small in scale relative to the size of the ‘mainstream’ wildflower harvesting industry, sustainable wildflower harvesting supports full-time employment for ∼130 workers, either picking on neighbouring supplying farms or working in the pack-sheds.

4. Changing articulations of supply chain ethicality: lessons from Flower Valley

4.1. Strategizing ethicality: sustainability strategies and entanglements with retailers’ brands

In what follows, we observe the central role played by brands and the branding of ethicality in the economic geography of the retailer–supplier relationship in the case of sustainable wildflower harvesting. While acknowledging and attending to the specificities of a very explicit and deliberate branding of environmental and social sustainability in the case of Cape Flora bouquets and their prime retail buyer, Marks and Spencer, the example nonetheless connects to a broader political-economic context in which forms of ethical trade associated with private codes and standards are related in increasingly complex ways to the brand identities of corporate retail buyers.

While ethical trading on the part of retailers has a long history in the case of some companies, the use of private standards as a pervasive tool for managing ethical trade gained significant momentum during the 1990s when critical media attention and campaigning directed consumers’ attention to poor labour conditions in the global supply chains of leading, high-profile brands such as Nike, Gap and Wal-Mart (Klein, 2000). This came at a time of an ‘intensified rise of branding during the 1990s’ (Pike, 2009, 624), when companies sought ever more sophisticated ways of not only labelling and marketing products and services but also selling lifestyles, ideals and values through brands to increasingly reflexive consumers (Jackson and Taylor, 1996; Hudson, 2005; Mansvelt, 2005). The glossy images of high-profile brands were attacked dramatically in very public media exposés of labour conditions in global supply chains during the 1990s and 2000s (Klein, 2000; Hughes et al., 2007). In a context of globalization and neo-liberalization, voluntary codes of labour practice and environmental standards were adopted to protect brand images and corporate reputations in the face of growing political pressure. This in turn has been part of a wider shift whereby, as Power et al. (2009) argue, the management of reputational risk has become a key organizational feature of the economy and society in the current period of late modernity. For retailers, occupying a pivotal position between worlds of production and consumption, the dual management of supply chains and consumer-facing brand identities is fundamental to maintaining profitability (Dixon, 2007).

While getting ‘behind’ the fetish of the branded commodity to ‘unveil’ previously hidden social relations of production still resonates with NGOs, labour unions and critical journalists, supply chain ethicality today appears to have a rather more complex relationship with the brands of retailers. As ethical codes and standards for supply chains have become a more expected and integral part of retailers’ supply chain organization (Fox and Vorley, 2004; Lang et al., 2009; Busch, 2011), so they have become more intertwined with consumers’ understandings, expectations and imaginative geographies of commodities and their systems of provision (Moor and Littler, 2008; Jackson et al., 2009; Barnett et al., 2011; Hall, 2011). An albeit variable consumer awareness of supply chain ethicality means that companies are compelled to respond to sets of ethical expectations not only in their supply chain organization through the use of private standards but also in the management of their consumer-facing images. While there is of course marked differentiation in terms of how retailers implement and market ethical credentials (Hughes, 2005), the past decade has witnessed an overall mainstreaming of sustainability programmes incorporating both social and environmental responsibility as integral parts of retailers’ corporate strategies (Vorley, 2007; Fuchs et al., 2009; Lang et al., 2009). Thus, the majority of retailers are developing ever more detailed and careful programmes and policies for managing sustainability in their supply chains. The communication of these programmes to the consuming public, to shareholders and to influential governmental and non-governmental institutions has also become increasingly important.

This corporate mainstreaming and marketing of sustainability strategies demands careful critique, avoiding both over-celebratory and hyper-critical accounts. A more complex entanglement of supply chain ethicality and retailer branding demands conceptualization combining the political-economic frameworks of GVCs and GPNs on supply chain organization with those used in geography and cultural studies to capture the cultural politics of consumption, brands and identities (Cook and Harrison, 2003; Mather and Rowcroft, 2004; Hudson, 2005). Through the example of sustainably harvested wildflowers sold to UK and South African retailers, we draw on Pike’s (2009) nuanced approach to the geographical entanglements of branding in order to show how notions of ethicality and sustainability themselves become part of the product and retail brand, while also having organizational and material consequences across the supply chain. The term ‘entanglements’ is appropriate here as these relationships between branding and ethicality, along with their consequences, are not always predictable.

Marks and Spencer is one of the most high-profile UK high street retail chains, with a brand reputation for quality, affordability, trust and long-term supply relationships. Thus, the targeting of labour standards in its global supply chains from the mid-1990s onwards has had significant corporate consequences. Most significantly, Marks and Spencer was very quick to devise and implement voluntary ethical trading codes for its supply chains. This came at the same time as its traditional policy of sourcing garments only from UK suppliers was systematically dismantled in a context of rapid globalization (Crewe, 2004; Tokatli et al., 2008). Marks and Spencer was one of the early members of the UK’s ETI at its inception in 1997 and continues to be one of its most advanced and influential members. In very similar ways to other high-profile brands, such as Nike and Wal-Mart, whose supply chains were also placed under scrutiny at an early stage, Marks and Spencer has developed one of the most comprehensive ethical trading programmes in the UK, incorporating not only the ETI’s Base Code of labour practice and systems for monitoring its implementation but also extensive and innovative programmes of supplier training, remediation work and sustainability strategies integrating environmental and social elements of its business.

In a context where NGOs and the media continue to place pressure on corporations with respect to the treatment of workers in their supply chains, these extensive programmes of ethical trading work were outlined by Marks and Spencer’s Head of Responsible Sourcing in her letter to the Executive Director of the Africa Division of Human Rights Watch in 2011. This NGO wrote to the majority of UK food retailers, asking them about their ethical trading policies, at the time it launched its report on Ripe with Abuse: Human Rights Conditions in South Africa’s Fruit and Wine Industries. Illustrating the mainstreaming of corporate sustainability and its communication, Marks and Spencer’s response to the NGO highlighted its very high-profile sustainability strategy, Plan A, which was launched in 2007 with the objectives of improving energy efficiency, reducing waste and developing healthy product ranges, as well as improving sustainable sourcing (Beavis, 2012). Also emphasized in the letter was the retailer’s project work in South Africa initiated in 2006 with the FVCT. This signalled the positioning of Marks and Spencer’s relationship with the FVCT not only in terms of the worthiness of the Flower Valley project itself but also as a key element of its sustainability strategy and management of Marks and Spencer’s reputational risk.

Embodying elements of conservation, social upliftment² and economic empowerment, the FVCT and its commercial partner, Fynsa, represent ideal supply chain partners for Marks and Spencer as part of their Plan A sustainability programme. Moreover, FVCT and Fynsa also fit well with Marks and Spencer in terms of their dependability and ability to supply their luxury Cape Flora bouquets of wildflowers at appropriate price points³ to their customer base. Built on the foundation of Marks and Spencer’s strong support of FVCT and Fynsa, a very close supply relationship has been developed that fits with Gereffi et al.’s (2005) GVC category of relational governance. Close ties reflect the need for regular discussion about changing bouquet design, as well as payment terms and logistics. However, there are also strong supply chain links concerning the integration of FVCT into Marks and Spencer’s Plan A agenda, as the FVCT Enterprise Development Manager explains:

[The Head of Responsible Sourcing for Marks and Spencer] is coming over to meet all Marks and Spencer suppliers in Cape Town. Flower Valley will have its own private session with her to reinforce our social and environmental credentials. There’s lots of preparation to do. Marks and Spencer comes out once a year to talk to suppliers in a mini-summit. They explained how Plan A works last year … [The Head of Responsible Sourcing] and her teams also come to visit the farms. She has been to Flower Valley a few times. (Interview, 24 September 2010).

These visits signal a close strategic interest in Flower Valley. As in the case of all long-term supply relationships based on trust, though, there are also relations of power at work, which reflect the uneven development and inequalities that Pike (2009) argues can be intimately connected to geographies of branding. FVCT, Fynsa and their suppliers all acknowledge in interviews that without the developmental support and custom of Marks and Spencer, they would not exist and their fynbos conservation programmes would likely be lost. Neither over-celebratory narratives of corporate sustainability, nor hyper-critical accounts of green-wash capture adequately this complex connection of dependency. Rather, the supply relationship requires the nuanced perspective called for by Pike (2009), which embraces the cultural politics of the branding process and at the same time recognizes material consequences involving inequalities. This is further illustrated through the ways in which the ‘Flower Valley story’ has been both selectively presented and yet also sometimes hidden, through heavily branded retail spaces.

While the Flower Valley story clearly fits with the dimensions of the Marks and Spencer brand concerned with product quality, difference and ethicality and the supply relationship has been used within a corporate defence of the retailer’s ethical reputation, the promotion of the Flower Valley story through retail spaces has been uneven. As with many other product lines explicitly labelled as ethical and/or sustainable (Bryant and Goodman, 2004), attaching images of the product and place of production to the label has become part of Cape Flora’s presence in UK markets. Since 2010, the bouquets sold in Marks and Spencer stores and delivered to customers through the online business have labels with an image of the fynbos landscape and a brief description of the FVCT project, in order that consumers can connect with the conservation and empowerment initiatives they are supporting through their purchases. However, the image on the label is quite blurred and the label itself can only be seen when a customer in a store picks the bouquet from the bucket. The Director of FVCT commented that the Flower Valley story is much more prominent when a customer receives the flowers as a gift delivered to their home and sees the label when the flowers are unpacked or when a customer ordering online clicks on the Flower Valley story under the retailer’s section on Plan A (Interview, 7 September 2010). In stores, the aesthetic qualities of the wildflower bouquets appear to matter more than the labelling of ethical credentials. This is, in part, linked to a deliberate management of products and in-store design, but might also be attributed to caution on the part of a retailer when communicating particular ethical credentials of their supply chains that might invite critical scrutiny.

In addition to the complexity of branding and communicating ethicality observed within the context of a single retailer, there is also marked differentiation in the ways that Cape Flora bouquets are marketed through different retail clients’ channels. For example, Fynsa’s presence in the Western and Eastern Cape stores of South Africa’s second largest supermarket chain, PicknPay,⁴ also fits with the sustainability narrative of this retailer (FVCT, 2011). However, the most notable contrast with UK retail buyers in terms of how the Flower Valley story is articulated through PicknPay’s retail spaces is that, for South African consumers, the ethical appeal of fynbos is not only that it represents a conservation success story but also that it is a local product and linked explicitly to empowerment in PicknPay’s product promotions (Interview with the Head of Sustainability, PicknPay, 30 November 2011). This is significant given that forms of local sourcing from within South Africa are viewed by corporate actors and the consuming public as central elements of sustainability in South African retail strategies. While more research is needed on this theme, it suggests that the same Cape Flora bouquets viewed by retailers and consumers in the UK as ‘exotically ethical’ are valued in somewhat different ways by South African consumers on account of the local meanings and short supply chains they embody. In terms of changing articulations of ethicality, this difference illustrates the importance of place to the construction and interpretation of what counts as ethical. We suggest that these arguably more entangled geographies of ethically inflected branding and retailers’ sustainability strategies for supply chains need to be acknowledged in further critical research on retailers and private ethical standards in GPNs.

4.2. Embedding ethicality: challenging the putative flow of ethical codes from global North to South

Although there has long been a crucial role for labour unions and civil society organizations at sites of production in the global South in both campaigning for more ethical workplace initiatives and shaping existing programmes (Prieto et al., 2002; Miller, 2004; Prieto-Carrón, 2006), ethical codes and standards have been frequently devised in the global North and are assumed to be universal and exportable to the global South. While responding to inequities and exploitative relationships in GPNs is desirable, these ethical interventions have a tendency to construct agencies within the global North as ‘ethical’ actors, while the terrain of production in the global South is constructed as ‘unethical’ and requiring external intervention and regulation (Freidberg, 2003). This ignores the fact that countries like South Africa, for example, have comprehensive labour laws (if not always the capacity to implement these, especially within the agricultural sector), plus a commitment (at least on paper) to more radical ethical issues, such as economic empowerment. In addition, ethical interventions are often driven by Northern ethical concerns with minimal consideration for socio-economic realities in the South (Neilson and Pritchard, 2009). However, there are recent examples of a more proactive role in ethical trade being played by actors in the global South. This is seen, for example, in the re-writing of Fairtrade rules in South Africa because of the requirement to include both land reform and Broad-based Black Economic Empowerment (BBBEE) (Kruger and Du Toit, 2007). Indeed, there is growing debate on the increasing participation of the global South in re-shaping the agenda of the Fairtrade movement as a whole (Wilkinson and Mascarenhas, 2007). Here, we focus on how different institutional actors in South Africa are actively influencing the ethical codes and standards applicable to suppliers like Fynsa in the Western Cape.

For Fynsa and the sustainable harvesting supply network, as with all other South African producers, compliance with a wide range of overseas retail buyers’ standards has been a fundamental part of their business in a neoliberal context (Mather and Greenberg, 2003; Bek et al., 2007; McEwan and Bek, 2009a, 2009b). The ETI Base Code has been particularly influential given its adoption by the majority of UK high street retailers and supermarket chains and this has been a key tool used by these retail buyers to manage reputational risk associated with labour conditions in their supply chains. However, recently there has been acknowledgement by retailers that the implementation of these generic codes has to be more carefully managed in local contexts of supply. In response, most retailers sourcing from South Africa have pursued a strategy of setting up in-country ethical trading teams at sites of production in the global South, which mirrors the corporate retail strategy of developing buying teams and hubs in key production regions (Coe and Wrigley, 2007). Indeed, the local ethical trading managers often sit alongside these buying teams. These UK retail strategies represent one organizational mechanism for localizing ethical trading strategy (Interviews with retailers’ ethical trading managers, 29 November 2011, 2 December 2011). In South Africa, this corporate strategy is accompanied by the growing role of South African retailers in shaping the strategic agenda for ethical sourcing in the country. Award-winning programmes of PicknPay are a case in point, but Shoprite too runs corporate responsibility and sustainability programmes and the niche, high-value retailer, Woolworths, has a high-profile Good Business Journey strategy including codes and audits for ethical sourcing (Interview, 28 November 2011).⁵ Fynsa suppliers specifically referred to the increasing power of South African, as well as overseas, retailers in defining production standards (Interviews, 22 September 2010).

In addition to corporate retail strategies, the more political role of South African non-corporate institutions also reflects the growing participation of South African-based actors in driving changing spatial articulations of ethical code implementation. For example, WIETA (the Agricultural Ethical Trade Initiative, South Africa) receives considerable attention from ethical trading practitioners and academics (see McEwan and Bek, 2009a). During 2006, in order to ensure social standards, Marks and Spencer encouraged Fynsa’s supply network to become a WIETA member (Bek et al., 2007). While WIETA is accepted by overseas retailers and builds on core ILO conventions at the heart of the majority of ethical codes, it also incorporates social clauses of direct relevance to South Africa including joint worker–management participation in implementation (complementing BBBEE measures), elements of South African labour laws and issues such as security of tenure for farm workers. During 2009, Fynsa and four of its suppliers received full WIETA accreditation. Although the influence of Northern retailers and brands downstream in endorsing WIETA and requiring strict monitoring by suppliers is significant, WIETA’s ethical code is nonetheless firmly embedded in the South African context in which ‘being ethical’ requires both a commitment to empowering previously disadvantaged people and security of tenure for workers.

The role of WIETA in the national-institutional context of South African export production illustrates the kind of territorial and network embeddedness of GPNs theorized by economic geographers (Coe et al., 2004) and reflects how institutions in terms of both organizations and place-based norms and values shape the articulation of ethical trade through supply networks (Neilson and Pritchard, 2009). Another example of a South African institution re-shaping programmes of work on ethical trade is that of Fruit South Africa. This is an organization bringing together four key growers’ associations in the country’s fruit industry and the Fresh Produce Exporters’ Forum, representing 5000 producers and 400,000 workers. The body’s aim is to ensure a harmonized approach to improving labour conditions on South African farms, which ensures that international and local ethical trading standards are aligned not only in the fruit industry but also in other related sectors such as floriculture. Its stated goals also include the management of commercial risk related to ethical trade.

Fruit South Africa was established in 2008 to develop a single South African-based ethical standard and programme in order to provide retail buyers with assurance that working conditions are sound in their South African supply base and to ensure that South African suppliers need only undergo one ethical audit that meets with international and local labour standards, retailers’ requirements and national labour laws. The resulting ethical code represents an alignment of the international standards and tools developed in the prominent Global Social Compliance Programme with elements of South African law, the country’s Skills Development Act and BBBEE. The first edition of Fruit South Africa’s Ethical Trade handbook was launched in October 2011 with the endorsement and financial support of UK retailers including Sainsbury, Waitrose, Co-operative Food, Tesco and Marks and Spencer. The FVCT has been involved in this programme and, despite the contribution of retailers overseas, the agency of South African organizations is notable. As the Ethical Trade Manager for South Africa of one UK retailer explained, ‘… [I]t is not now the retailers dictating what the requirements are, it is Fruit South Africa saying, ‘We are here’. It is a change, a turnaround’ (Interview, 29 November 2011). This view is endorsed by the Ethical Portfolio Representative of Fruit South Africa:

[T]he whole principle was that we need to drive this ourselves. We must not just be in a position of reacting to pressures. We need to be more proactive. We need to be more positive about it as an industry … We are saying, let’s deal with things around the table rather than running off the newspapers. (Interview, 15 February 2011).

In addition to the applicability of WIETA and Fruit South Africa programmes informing the wider agricultural sector, the case of sustainable harvesting of fynbos also involves ethical codes originating more firmly from within the Western Cape and relating specifically to wildflowers. For example, regional conservation knowledge about fynbos informs FVCT’s Sustainable Harvesting Code of Practice, which lies at the heart of the NGO’s mission and which unsurprisingly goes much further than buyer-led and other institutional codes on the environmental governance of supply. The initial Code of Practice resulted from research and analytical input from a range of local stakeholders, including NGOs, landowners and botanical experts. Through links with fynbos scientists, more sophisticated understandings of the resilience of different species are emerging, which in turn facilitate refinements in the harvesting guidelines. This illustrates the addition of very locally driven ethical codes that interweave broader, national and international private standards in this particular case. This further implies not only a growing voice for South African actors in shaping the private ethical standards at sites of production but also a complex institutional hybridity requiring theorization through a combination of political-economic and cultural analytical frameworks.

4.3. Practising ethicality: addressing tensions between commercial demands and ethical codes

In addition to exploring the strategizing and branding of what counts as ethical and the geographies concerning where and through which institutions this takes place, understanding the politics of putting ethical standards into practice in the context of retailers’ extant supply networks is also significant. Of particular importance is the conundrum facing ethical trading practitioners regarding the implementation of ethical codes in the context of global supply networks governed by intense, buyer-driven demands. This conundrum shows that while organizations and initiatives at sites of production in the global South are more proactively shaping ethical trading agendas, these agendas are not always easily aligned to retailers’ commercial demands in practice (see Hughes et al. (2010) for discussion of the ETI’s projects on purchasing practices).

For FVCT and Fynsa, there have been clear examples of challenges experienced whereby the commercial demands of UK retailers have placed pressure on fynbos suppliers. In the following analysis, we illustrate this by attending to issues where retailers’ demands in the areas of bouquet design, pricing pressure and ordering lead times put pressure on suppliers’ ability to comply with FVCT’s Sustainable Harvesting Code of Practice and accompanying labour standards represented by WIETA and Fruit South Africa codes. Although FVCT and Fynsa have made significant strides in establishing the Sustainable Harvesting Code of Practice, there is some digression from this code caused in part by commercial pressures.

Regarding bouquet design, interviews revealed that product development managers and buyers representing UK retailers continue to exert far more influence than their South African retail counterparts. In the flower industry, this role for retailers in product design has been a key part of corporate strategies to gain market share from traditional florists, to exert control over growers through more direct supply chains and to capitalize on the alignment of bouquet production with tastes and trends in the sphere of consumption (Hughes, 2000; Barrett et al., 2004). Such emphasis on bouquet aesthetics and design, although not fundamentally in contradiction to the model of sustainable harvesting for wildflower bouquets, presents some clashes of interest in practice. For example, species availability is seasonal in the wild and prone to variations driven by minor, but commercially significant, annual and other climatic vagaries. Also, the Enterprise Development Manager for FVCT acknowledges the challenges of meeting both commercial and ethical standards for wildflower bouquets in the context of export markets preferring long, straight stems and unmarked flowers, for example (Interview, 7 September 2010). The following extract from an interview with a supplier reflects the difficulties this presents for wildflower harvesting:

Last month I had a big reject from [a pack-shed] on product where the leaves had brown spots and they rejected it for this reason … They rejected a huge amount and I told them I don’t want to pick them anymore, but they said the line is running, we must pick. So, rejection is more than cutting the wrong way. One of the other reasons [for rejection] is stem length, but if you cut shorter then you are cutting more sustainably than long. It is all on appearance as things sit on the shelf. (Interview, 22 November 2011).

Retailers’ demands for minimum stem lengths can mean that re-sprouting species are cut too short and many other species are precluded from usage, putting greater pressure on a small number of species. Another example where the power of buyers downstream is equally problematic for sustainable harvesting and labour codes concerns pricing pressures. One supplier reflected on this pressure and its implications for wages in the context of particular market pressures associated with global economic recession in 2009 (Interview, 22 September 2010). The following extract from an interview with another supplier articulates a more general and recent downward pressure on prices exerted through the organizational intermediaries of the sustainable harvesting supply chain:

They [the pack-shed] now put more stems into their bouquets and the way to get more stems is they take from our price. We are nearly on the boundary with [them]. All the suppliers feel the same. We need the volume because [the pack-shed] is taking a lot of product that we cannot sell through the wholesale line … [Their] prices for three or four years have been the same. (Interview, 22 November 2011).

The Head of Technical for the UK-based supplier of Fynsa flowers notes, however, that in the context of Marks and Spencer’s supply chains, the corporate focus on high-quality goods rather than lowest-cost product lines has at least allowed it to avoid some of the ‘race to the bottom’ strategies common to other retailers’ supply chains (Interview, 14 September 2011). What has arguably been a more chronic issue for wildflower harvesting are the demands exerted by large orders and short lead times, which place pressure on suppliers attempting to comply with the FVCT Sustainable Harvesting Code of Practice. As one supplier summarized, despite supporting the Sustainable Harvesting Code of Practice, ‘The only way to do this fynbos is to pick a high volume, pick a lot of it. We must expand, we need more orders’ (Interview, 27 September 2010). Suppliers explain that they often receive orders from the pack-shed the night before or sometimes on the day the order is due, despite the fact that the retailers tend to place their orders a week ahead. They therefore have little time to plan the most effective use of their resources in ecological terms, which in turn puts pressure on workers who have to deliver the orders. Thus, negative impacts upon the environment and labour standards cannot be purely understood as inevitable outcomes of unidirectional pressures imposed by retailers, since local agency in business management, whether within a supplying team or a pack-shed, can also exert an influence upon outcomes for the environment and workers. It is certainly the case that some local operators have been better able to manage downward pressures than others. This supports the applicability of a more relational notion of power in supply networks, as suggested by Tokatli et al. (2008).

According to WIETA audits and a linked socio-economic study conducted in 2009, pickers interviewed on the Flower Valley farm and other neighbouring farms involved in sustainable harvesting reported relatively good working conditions and wages are often substantially higher than the mainstream wildflower industry. However, a review of the Sustainable Harvesting Code of Practice conducted in March 2011 found that, among other factors such as communication challenges for migrant workers and a need for further training, pressure to meet orders occasionally results in digression from elements of the code concerned with off-take limits and the length of stem cutting. On a positive note, though, FVCT is working to ensure that retailers’ demands become more commensurate with sustainability targets. The review exercise held in 2011 and a growing emphasis on training for pickers illustrates this objective and is also supported by a deepening role for FVCT’s Enterprise Development Manager to ensure that retailers’ requirements are more effectively managed through the pack-shed and communicated more efficiently to farmers in order to increase lead times for them and to reduce any unnecessary uncertainty concerning orders. It is interesting to note here that the drive to improve business practice is coming via the NGO.

To complement these developments within sustainable harvesting supply chains, Fruit South Africa is also beginning to engage with the purchasing practices debate; working in part through the ETI and its project work (Interview, Ethical Portfolio Representative, Fruit South Africa, 15 February 2011). While these Fruit South Africa and FVCT initiatives are in their infancy and face considerable challenges, they nonetheless show how the more prominent role for South African organizations in defining ethicality promises to influence the developing debate around retailers’ purchasing practices and the problems they pose for putting ethical standards into practice. Tying together the themes of embedding and practising ethicality, the tensions between mainstream corporate targets of profit maximization and objectives of sustainability are, therefore, not simply experienced passively at sites of production in South Africa, but are also being acknowledged and challenged by local actors in this particular context.

5. Conclusion

This article has used the specific case of a sustainable harvesting supply chain for wildflower bouquets, linking the Western Cape with UK and South African retail spaces, to highlight some significant developments in the field of corporate retailer power and the use of private standards for ethical trade. First, on the theme of strategizing ethicality, the case study illustrates the complex ways in which the ‘Flower Valley story’ relates to the Marks and Spencer brand and its Plan A corporate sustainability strategy, as well as to the ethical trading programmes of other retail clients. We argue that a combination of political-economic and cultural theorization, in line with Pike’s (2009) approach to geographies of brands, is required to understand the arguably more entangled relationship between corporate sustainability strategies and retailers’ brand identities.

Second, the growing role played by South African organizations (producers, retailers, NGOs, governmental institutions, unions and consultancy firms) in shaping ethical standards is illustrated in the case of Cape Flora in a context where European retail standards have tended to dominate. This embedding of ethical standards in the South African context highlights not only retailer strategies of localizing their ethical trading policies but also more radical shifts through which national South African institutions and the local initiatives of the FVCT are more proactively re-defining the ethical codes themselves. This demands a recognition of more spatially hybridized networks through which ethical standards are constructed than currently dominates the literature on retailers and ethical trade.

Third, we discuss the challenges faced by suppliers in the sustainable wildflower harvesting supply chain when retailers’ demands concerning bouquet design, pricing and delivery sometimes induce contraventions of clauses of the sustainable harvesting and ethical labour codes. These contradictory requirements illustrate the ways in which ethical economic spaces are often problematically intertwined with the logics of capital. However, we suggest that such contradictions are not the inevitable result of structural and competing rationalities, but rather are constructed through sets of ongoing practices in the operationalization of buying processes and sustainability initiatives as they touch down in particular localities. Such a view is aligned to practice-based and relational notions of alternative and conventional economic spaces (Lee and Leyshon, 2003).

Taking a geographical approach, we acknowledge the specificities of this case study that are informed, for example, by the materiality of the wildflower commodity, the geographical particularities of the Western Cape and the networks linking this site of production with UK retail spaces. However, in linking this case study to broader debate on retailer power, GPNs and ethical trade, we have drawn some lines of connection to wider issues of ethical strategizing and brands, ethical interventions by institutions in the global South and arenas of debate concerning purchasing practices, which suggest that our case study fits with broader-level shifts in the orientation of ethical trading agendas. Furthermore, we emphasize the importance of this case study in drawing attention to the role that Southern agency can play in shaping ethical codes within supply chains even where power relations remain unequal. Although internal contestations exist between South African stakeholders, they are collectively influencing the content and delivery of ethical codes and practices. Precisely how these shifts will benefit producers, workers and the environment is as yet unclear, although the Flower Valley story offers some encouraging signs. What this reflects is the growing strategic significance of national-institutional contexts in the case of ‘rising powers’ in terms of private ethical standard-setting. We suggest there is a need for further research on each of the three developments highlighted in this article and the links between them, in order to capture the changing landscape of ethical standards and supply networks. Economic geography, embracing a combination of political-economic and cultural approaches, together with its sensitivity to place, offers a set of perspectives to advance understanding of this rapidly changing landscape.

Funding

The sustainable harvesting case study is part of a wider research project entitled “Ethical production in South Africa: Advancing a cultural economy approach.” We are grateful to the Leverhulme Trust (F/00128/BE) for funding this research. The funding source had no involvement in the, study design, the collection, analysis and interpretation of data, preparation of the article, writing the report, or in the decision to submit the article for publication.

Acknowledgements

We would like to express our thanks to the participants in the research, especially to the Executive Director and Conservation Co-ordinator at FVCT, without whom the research at Flower Valley would have been impossible. We thank also the many people involved in sustainable harvesting, associated NGOs and businesses who gave freely of their time. Thanks are also due to the local field assistants who helped with the project. And we are grateful to Padraig Carmody, Stefan Ouma and two anonymous referees for their constructive comments on the article.

References