Out souvenir shopping in Phnom Penh, it can feel like the city consists solely of social enterprises and fair-trade evangelists. But what do the labels mean, and how can you gauge their sincerity? In the run-up to Christmas, four prominent retailers discuss the dos and do nots of crafting a brand that makes a difference, and the myriad trade-offs that go into making even the simplest decisions. Interviews have been edited for length and clarity

Rachel Faller, Founder of clothing retailer Tonle

Anyone who says we’re 100 per cent this or 100 per cent that, I immediately distrust them. There’s no hard and fast right or wrong – it comes down to what you value and how you rank the importance of those things.

With Tonle, the focus is on the environment. I came to the decision that recycled materials were actually more environmentally friendly than organic ones because you’re not creating waste. And organic cotton actually uses a lot of water, has a higher carbon footprint and would have to be imported. I also found there was little traceability – if we’re going to get organic cotton, can we guarantee it’s made ethically?

One of the biggest challenges I’ve seen within the handicraft sector in Cambodia is that many fair-trade companies work on a pay-per-piece model. It’s convenient for the organisation because they can buy the products when they have orders so they don’t have any waste, but if the organisation doesn’t have a guaranteed minimum order for the producers, there’s no consistency financially for them. Without consistent and clear income so that they can plan, can a person’s future really change?

Handicraft organisations with NGO status often pay little to no taxes, and receive grants and volunteer support, all of which subsidise their costs and allow organisations to stay afloat even if they cannot adapt to the market.

Sometimes buyers tell me they go to places with terrible conditions, but the organisations say it’s because they need more money to improve. And the buyers ask me, should I keep supporting them? And I say no. You should tell them you’re not going to buy from them unless they fix it, because otherwise they have no incentive to do so.

Ruth Elliott, Daughters of Cambodia founder

Daughters of Cambodia has several businesses and we run them as social enterprises for women looking to leave the sex trade. They’re registered as businesses although all the income goes back into the NGO.

We have a production centre, and the sewing room is where most of the girls are employed. One time we explored having people produce at home in their extra time – the girls bought sewing machines for themselves and were able to take work home if they wanted to top up their earnings. It didn’t work very well. They want to be in a community.

For me, the most important factor is actually helping the people we claim to help. If it’s a sweat shop that claims to have some ethical components but people are being forced to work 10 hours a day, six days a week, then they’re not going to be thriving.

It really doesn’t help anybody if you just hand them something on a plate and they don’t have to learn workplace ethics.

They need to be able to sustain their lives outside the NGO. So we don’t give them leeway in terms of being unreliable or sitting there falling asleep – absolutely not. They’re there to do a job and they have to do it, or at least show they’re making an effort.

The biggest struggle for us is the girls who come through other NGOs, because they’ve got such warped expectations of what help looks like.

They’ve been taught that all they have to do is beg and the NGO will give them everything. It’s so unhelpful. We are helping people, but we’re trying to help them in a way that’s realistic and sustainable.

Alan James, Flux Design partner of fashion label A.N.D.

Putting fair trade on the blind is like opening yourself for shooting season. We have people come in, walk straight past me and say where’s your workroom? How much do you pay your workers? People just say that to me before they even say hello. It’s crazy.

Our signature fabric is a pure hand-woven cotton ikat [a traditional woven textile], which comes from 60 to 70 farming families in Takeo who do weaving as a supplementary income.

They’re under what I’d call a loose contract, so we guarantee to buy every metre of ikat they weave for us. We don’t supply the dyes – and that is a bit of a grey area. We specify non-toxic chemical dyes, or vegetable dyes, and that’s what we hope we’re getting.

We have no idea how many hours they work, but they’re all farmers – they have a lot of other stuff to do as well – so we get less coming in during planting and harvesting time. We have thought about [building a] weaving shed – obviously it works for some people, but our producers have to be at home.

We don’t know if there are children working on the ikat. But you know, there are 10 tenets of fair trade and there’s a thing about child labour which isn’t always well known.

It says children can work as long as they get paid for their labour, as long as they get free time, and as long as they go to school. My father was a florist. I would be down there in the evenings after school wiring up flowers for wreaths. Now I didn’t get paid for that, so is that child labour? I have no idea.

Brendan Burke, Friends International Marketing and Sales and Nikolai Schwarz, Friends International International Coordinator

Brendan Burke: If you take a child from begging on the street, sometimes the family will be losing their primary source of income. Home-based training provides immediate economic support for their families. We don’t use the term ‘ethical products’. I generally frame our work through the lens of social impact, although that’s also big. It’s hard to get concretes.

Nikolai Schwarz: We want them out of our system. That’s our objective. To begin with, they might only be making paper beads, and only we can sell those – in their communities they’d laugh at them – but in the next phase, they’re learning more complex skills that they can transfer and use to find a job.

BB: What worries me in some shops is I do think they do a good job, but they’re teaching a very specific skill set that doesn’t lend itself to independence.

Something we’re still struggling with is that when we have an order from families and they deliver products that don’t meet our standards, where do we draw the line? They definitely need this money to survive, but we’re not adequately preparing them for life if we just give them a pass every single time.

NS: We never ever kick anyone out. Because we’re not a business, we’re a social program, so our objectives are to find a solution for the family.

BB: If I could tell people one thing it would be don’t buy stuff from kids or stuff made by kids. It really bothers me.

Too often organisations under the guise of social responsibility will get away with doing things that actually aren’t ethical, and I think people just need to be a bit more strict and apply a bit more scrutiny when they see this socially responsible label – who is making it and under what conditions?