We’ve been familiar with fair trade products here at TriplePundit for ages, from chocolate to tea to fresh produce and even the occasional item of clothing. But when it comes to other products such as luggage or gear, fair trade sourcing is still at a very early stage. But don’t tell that to California-based Peak Design: The company has long been designing sleek, minimalist travel gear and other accessories that can take a punch, and now the brand is committed to fair trade standards. Fair Trade USA, which certifies farms, fisheries and now factories, worked with Peak Design to audit the company's Vung Tau factory in Vietnam. 3p recently caught up with Peak Design to get a handle on the brand's fair trade journey.
As Peak Design recently explained to 3p, the company a while back ran into compliance problems within its supply chain. The answer: a shift to fair trade sourcing in order to bring the company’s manufacturing and ethics into closer alignment with its values. The result is Vung Tau, which Peak Design says is a fully fair trade-compliant factory in the eponymous city in Vietnam. Annie Nyborg, Peak Design’s sustainability director, told 3p that securing a decent living for the factory’s employees was the driving factor in partnering with Vung Tau.
“We primarily wanted a mechanism for ensuring that our factory workers were earning a living wage. Ensuring that international factory workers are getting paid appropriately can be challenging if you don't have direct oversight of a factory,” Nyborg said. “Fair trade provides a third-party option for overseeing that certain environmental and social standards are met in a factory and that the factory workers are earning the higher premium that we as a brand pay.”
For companies seeking to invest in more responsible and sustainable sourcing, the name of the game is patience — with the added challenge that there’s a good chance your company may not get it right the first time. “We have been working with the same manufacturing partner in Vietnam for over seven years. Our partner had been subcontracting out factory space to manufacture our products and because they didn't have full control over those factories, the audit findings consistently came back very bad. We attempted to support those factories and invested in capacity building to bring them up to our standards but were unsuccessful,” explained Nyborg.
Peak Design’s journey was similar to many brands that contract with overseas factories: If your supply chain relies on subcontracting or leasing space in a factory that produces goods for other companies, there’s a very good chance that your company’s sustainability and ethics goals won’t be entirely met by that manufacturer. “Operating consistently out of factories that could not meet our environmental and social standards wasn't going to work for us,” Nyborg added, “so our Vietnam partner proposed building a brand new factory that they would manage directly and see to it that our standards were met.”
That patience paid off, as the factory’s construction was finished around three years ago. “Our partner knew our strict environmental and social standards — through our Code of Conduct and Environmental Compliance Standards — so they incorporated those standards into their physical space and operations from the get-go,” Nyborg continued. “When we engaged with Fair Trade [USA] to certify the factory, our partners were able to relatively quickly implement the few additional elements to qualify for certification.”
The benefits are starting to pay off, Nyborg noted. Fair Trade USA audits the factory annually, and part of that audit process is to ensure that factory employees are being treated well and fairly. The audit looks at hiring practices, overtime policies, safety conditions within the factory, compliance with worker wellbeing laws, and the proper tracking of hours worked and logged. “In addition, Peak Design pays an additional 1 percent FOB (freight on board) on all product coming from the factory,” Nyborg said. “That money goes directly into a bank account that is managed by the factory workers themselves — it never passes through factory management to ensure that workers receive the full amount.”
Workers can opt to divide the funds equally among themselves, harness them to build amenities like a childcare facility or invest in items such as bicycles. Nyborg added that after the first cycle of these fair trade premium payouts, the factory workers agreed to divide the money equally amongst themselves as a cash payout.
That extra step to pay an FOB is necessary, explained Nyborg, as some factories have encountered problems with management skimming from the funds; others have not adequately accounted for the paying hours compensated to their employees.
If it’s still not clear, investing in a fair-trade certified factory not only requires a commitment with money and time — brands must be willing to invest their trust in a manufacturing partner. “There are always a range of hurdles and certifications inevitably take time. It took us several years to achieve fair trade because we didn't have a factory space that could meet the social and environmental standards,” Nyborg told 3p. “So, it took working with and developing a strong relationship with our manufacturing partner to get to a point where they felt it warranted building a new facility.”
Those lines of communication are crucial, Nyborg said in wrapping up her chat with 3p. “We made it very clear over the course of several years that meeting environmental and social standards was a priority of ours, and that we wouldn't ultimately work with a partner that couldn't meet them. So, it made economic sense for our partners to invest in a new space.”
Peak Design’s plunge into fair trade sourcing certainly has resulted in a product line that is not only ethical, but high-performance. 3p recently tested out its 45-liter travel backpack, the shell of which is made from recycled plastics. Despite the pummeling it took during a couple recent road trips, the bag held its shape; the zippers never snagged; its plethora of pockets may require those who space easily to keep a spreadsheet to log what went where; the waterproof exterior is also stain-proof, based on an unfortunate run-in with a to-go coffee; and its padding made it comfortable to haul around, from shoulders to the lower back.
Image credit: Leon Kaye
Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.
Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.