VEJA - Fair trade from cotton fields to shipping and financing
Before and during #fashrev week we will take a look at some of our brands, the changemakers. In this blog we will focus on fair trade and Veja. Fair trade is one of the three fundamental pillars VEJA is build on. Cotton and rubber are purchased directly from producers in Brazil and Peru. VEJA signs 1-year contracts with them and set a market-decorrelated price. According to the company, it's one of the ways to ensure more equitable and dignified commercial transactions.
VEJA has strong commercial bonds with different partners, based on dialog, transparency and respect. The goal is: to forge a new path where exchanges between producers and consumers become more balanced.
For VEJA, it means working directly with producers and thus cutting out the middleman. It also means pre-financing harvests as much as 40%. In practise it means that VEJA buys organic cotton a year before it's transformed into sneakers.
At the beginning of the year VEJA agrees on the price of cotton signing an annual contract with the producers. That way, the producers know how much they will earn from the harvest before planting a single seed. The company also sets a market-decorrelated price per kilo of organic cotton or rubber to make sure producers can live decently and reinvest in their farm. This way VEJA increases efficiently the producer income.
Since the price is completely decorrelated from the market and its fluctuations, the contracts therefore ensure the producers a greater financial security. This security is all the stronger since they know how much they are going to earn from the cotton before they even plant it.
In 2004, VEJA started this kind of partnership in the Northeast region of Brazil with ADEC (Associação de Desenvolvimento Educacional e Cultural de Tauá), now a long-standing partner in organic and agro-ecological cotton farming.
Farmers are organized into associations who share their cotton harvests and transformation costs. On top of that, VEJA pays a 2,50 R$ collective premium per kilo of harvested cotton. This premium is pooled and allows associations to finance their operations.
VEJA sneakers cost 5 times more to produce than big brand sneakers. This is because VEJA uses fair trade and organic raw materials, because the company is more economically equitable for all parties involved in the production chain, because they invest in research and new technologies.
The whole stock of the VEJA is handled by ASF employees. Atelier Sans Frontières promotes the professional integration of people who are excluded from the labour market, by offering them a suitable paid job, personalized social support, and helping them develop a career plan. They are responsible for receiving the sneakers shipped from Brazil, organizing their warehousing, preparing orders and shipping them.
Banning child labour, forced labour, discrimination, ensuring work safety, wages respect and decency, right to union-trade… the VEJA team spends its days on field to control and make sure those basic rules are respected. Years after years, through external social audits and internal reporting, the team makes sure that the partners evolve to more socially and environmentally balanced workplaces. VEJA gather all their requirements in their own code of conduct : VEJA : A DIFFERENT PATH
To go beyond laws, VEJA asks their agricultural and industrial partners to calculate their environmental impact and to respect social laws and regulations to publish and reduce their use of chemical products.
Since VEJA started, they have always tried to stick to banks that don't have branches in tax havens: "Therefore, NEF has always been our partner of choice to finance our operations, and we also work with Crédit Coopératif."
VEJA is an LLC; the 2 founders are the sole shareholders. In terms of governance, they have chosen to remain organized in a way that may seem old-fashioned for a growing company, since they believe democracy can become diluted under the pressures of capitalism: thus, bringing outside investors into VEJA's capital could risk undermining the projects integrity.