Fair Trade and Sustainability-- Former Jackson legal services attorney helps group in Ecuador

Editor's Note: Paulette Stenzel previously worked as an attorney for what was then called Legal Services of Southeastern Michigan in Jackson and Adrian and has played violin in the Jackson Symphony Orchestra since 1997.

By Sheila Pursglove

Legal News

Nine hundred bars of soap made the difference between success and failure of a tiny business in the mountains of Ecuador.

In 2008, Paulette Stenzel, professor of International Business Law at Michigan State University, visited six women in El Rosal, Ecuador who run a Fair Trade business making soaps, body creams, and shampoo with edible and organic ingredients.

"They developed the business as a way to promote economic development that is an alternative to unwanted copper mining and mining for limestone used to make cement," Stenzel says. "Their stories of perseverance are wonderful!

"Ten women worked for two years to develop their soaps - over time, four women dropped out. They did it all with a $700 loan and their own investments, sometimes selling chickens and other products to gather cash they needed. While they worked long hours for no pay, all of their husbands supported them by helping with cooking, childcare, and housekeeping."

These women overcame incredible odds, Stenzel says. They used a kitchen mill to pulverize palm oil, later acquiring a more sophisticated piece of equipment. To install a telephone for access to the Internet, a telephone company provided 350 meters of line but the women had to purchase an additional 2,500 meters to reach the line up the mountain.

When they eventually ran out of money, they were rescued by someone from Spain who was interested in their soaps.

"It felt like their last chance to finally make it," Stenzel says. "They traveled to meet the Spaniard, and they were overjoyed to get an order for 900 bars of soap, at 60 cents each, with 15 days to deliver them. Working long, long hours, they did it. And, with the proceeds they paid off half of their loan and paid for the tile for a room in their little shop. What a victory!"

Fair Trade, where purchases help provide fair wages for workers, better working conditions, and environmental sustainability, has been a passion for Stenzel since she started leading study abroad programs to the Yucatan of Mexico in 1997.

She has visited entrepreneurs in Puerto Rico, Nicaragua, Costa Rica, and Caribbean countries. She monitors and analyzes Fair Trade in Central and South America, reporting back to international scholarly, legal, and business communities, and also helping to monitor standards.

In 2008, she visited the Unión de Organizaciones Campesinas e Indígenas de Cotacachi, representing more than 40 groups of people including indigenous, mestizo, and Afro-Ecuadorian communities from the Andean region of Ecuador. UNORCAC works on agrarian reform, livestock programs, micro-loans, markets for agricultural products, and others, and developing infrastructure including roads, potable water, and electricity.

She also shopped for hand-knit bags in Ecuador's local markets, and also visited several stores operated by Comari, a nation-wide chain that sells vegetables, meat, fish, coffee, chocolate, and grains, skin care products, and art and handicrafts such as handmade baskets and paper. She also enjoyed a Fair Trade store in Cotacachi offering jams, aji sauces, coffee, chocolate, cheese, sunflower seeds, and dried gooseberries; grains; cheeses; quality handicrafts including hats, bags, necklaces and regional specialties such as pineapple liqueurs. The town of Cotacachi has won international awards for its sustainability efforts including microfinance, Fair Trade, and other programs.

In 2007 she traveled to Nicaragua to learn from managers and producers with Esperanza en Acción -- "Hope Through Action" -- that offers technical assistance to artisans and helps connect producers to local and international markets.

It is difficult or impossible for individuals and small businesses in Nicaragua and Ecuador to obtain loans for their operations - and when they can get loans, the interest rates are shockingly high because there are no usury laws limiting the amount of interest that banks or other lenders can charge, she says.

"In the informal marketplaces, individuals take advantage of those in need by charging as much as 100 percent per month on a small loan," she says.

In the marketplace in Managua, an entrepreneur told her of paying $100 interest for a $100 loan extended for one month - and the collector came around nearly every day asking for a payment.

"The fact that loans are prohibitively expensive for people trying to run small businesses in Nicaragua and Ecuador shows the need for micro-loan programs such as those run by Grameen Bank, KIVA, and various other organizations," she says.

Stenzel puts her money where her mouth is, through small steps that can make a difference in the lives of others. For example, instead of spending money on Christmas cards and postage, each year she donates $2 for each emailed greeting to sponsor micro-loans to Fair Trade businesses in Peru and Nicaragua, through KIVA.

"This saves resources, paper and energy, and is sustainable," she explains. "When I'm repaid, I can lend the funds to someone else."

Ecuador, with its diversity of geography, climate, and people, is one of her favorite places. The country provides a microcosm of habitats and species that are affected by unsustainable development.

Stenzel was impressed by the sophistication of the Ecuadorian people in Intag and El Rosal and how highly conscious they are that human actions - like mining of limestone to make cement - damage the earth. In its 2008 constitution, Ecuador was the first country to give legal rights to nature, although how legal action can be brought to enforce those rights and how courts will define them, remains to be seen.

"The people of Intag work hard to find sustainable ways to develop their economy," she says. "Everyone I talked with spoke of the need to protect the madre tierra -- Mother Earth -- from more harm."

Ethical business practices and sustainable development are closely connected, she says. Developing countries, welcoming new industries to provide desperately need jobs, are forced to allow development that destroys natural resources.

An example is cement mining in the Andes by several international companies that despoils the beautiful mountains.

Businesses must take responsibility for their actions, she says. Sustainability efforts have a Triple Bottom Line - Economy, Social Equity, and Environment. Fair Trade and micro-finance are important tools in the challenge.

Stenzel writes, teaches and lectures on Fair Trade, maintains a website and blog at tradeandsustainability.com and serves on the editorial board of the Global Fair Trade Reader, from the Fair Trade Institute.

In March she will lead and speak on a panel in Chicago, on "Bringing Sustainability into the Business Law Classroom" and will present a paper, "Mainstreaming Fair Trade."

In November she spoke at a Fair Trade conference in Coventry, England, and was a delegate to a Fair Trade Conference at Oxford University.

She enjoyed visiting the United Kingdom and Europe, where Fair Trade began as a grassroots effort after World War II when organizations, such as the Sales Exchange for Refugee Rehabilitation and Vocation (SERRV) and Oxfam, purchased handmade wares from countries recovering from the war, primarily in Eastern Europe.

The idea expanded to help other developing countries. Fair Trade principles evolved -- respect for the producer and for cultural identity and, when possible, removal of the "middle person" so more of the price goes to the producer.

More than 2,000 Fair Trade products are now available. While Fair Trade is popular within Europe, the United States lags behind, Stenzel says.

At MSU, she is guiding the next generation, as advisor to two student organizations. The Spartan Global Development Fund (SGDF), that raises funds for micro-loans for small entrepreneurs in developing areas, started with four loans last July, and as of December 1, 2009, exceeded 120 loans.

MSU Students for Fair Trade is active in educating students and Lansing-area residents about Fair Trade.

Green is not just the college color of the MSU Spartans - it's a way of life. Stenzel helps the university "Go Green," finding ways to make teaching, research, and life on campus more sustainable.

She enjoys shopping at Kirabo and the East Lansing Food Cooperative (ELFCO) in East Lansing, two stores in a growing network of businesses and organizations that sell Fair Trade products such as handmade jewelry, home décor, gifts, foods, clothing and more.

"People often mistakenly think Fair Trade means a charity," she says. "It's simply a type of trade, a business practice."

Published: Fri, Feb 19, 2010