Social & Fair Trade Certification

Bio-Stiftung CH-8570 Weinfelden, Weststr. 51 Fondation Bio phone 0041-(0)71-626 0 626 Bio-Foundation fax 0041-(0)71-626 0 623 e-mail [email protected]

FAIR FOR LIFE SOCIAL & FAIR TRADE CERTIFICATION PROGRAMME

Version December 2013

The programme, plus all its control modules, as well as further information on “For Life” - Social Responsibility and “Fair for Life” - Social & Fair Trade certification are published on www.fairforlife.org. In the subsection “certified operators” all companies certified according to this programme are listed with their standard performance and the evaluation of their social impact.

Comments and suggestions about the contents of this document can be sent by email to [email protected].

Fair for Life Certification Programme December 2013 © Copyright: Bio-Foundation Switzerland

Fair for Life – Programme 2013

Table of Content

0 OBJECTIVES, CONTEXT AND SCOPE...... 4 0.1 FAIR FOR LIFE OBJECTIVES ...... 4 0.2 SCOPE AND CERTIFICATION OPTIONS ...... 5 0.3 CONTEXT AND REFERENCE TO OTHER STANDARDS ...... 6 0.4 STANDARD SETTING AND GOVERNANCE ...... 7 0.5 FAIR FOR LIFE STANDARD STRUCTURE ...... 7 1 LABELLING AND CONTROL REQUIREMENTS ...... 8 1.1 LABELLING REQUIREMENTS ...... 8 1.2 CONTROL PROCEDURES ...... 8 1.2.1 FAIR FOR LIFE AND FOR LIFE PRODUCER COMPANIES ...... 8 1.2.2 FAIR FOR LIFE HANDLING OPERATIONS ...... 9

2 CRITERIA FOR HIRED LABOUR OPERATIONS ...... 10 2.1 BASIC RIGHTS OF ALL WORKERS ...... 10 2.2 CONDITIONS OF EMPLOYMENT ...... 11 2.3 SOCIAL RESPONSIBILITY AND COMMUNITY RELATIONS ...... 13 2.4 ENVIRONMENTAL ASPECTS ...... 14 2.5 FAIR FOR LIFE FAIRTRADE CRITERIA...... 14 3 CRITERIA FOR PRODUCER GROUPS ...... 16 3.1 ORGANISATION OF THE GROUP ...... 16 3.2 WORKING CONDITIONS ON PRODUCER FARMS ...... 17 3.3 LABOUR CONDITIONS FOR PRODUCER GROUP STAFF ...... 17 3.4 SOCIAL RESPONSIBILITY AND COMMUNITY RELATIONS ...... 18 3.5 ENVIRONMENTAL ASPECTS ...... 19 3.6 FAIR FOR LIFE FAIRTRADE CRITERIA...... 19 4 CRITERIA FOR HANDLING OPERATIONS ...... 21 4.1 FAIR FOR LIFE HANDLING CRITERIA (ALL HANDLERS) ...... 21 4.2 ADDITIONAL CRITERIA FOR BUYING FROM FAIRTRADE PRODUCER OPERATIONS ...... 22 4.3 SOCIAL RESPONSIBILITY (ALL CERTIFIED HANDLERS) ...... 23 4.4 REQUIREMENTS FOR INTERMEDIATE AND CONTRACTED HANDLING OPERATIONS ...... 23 5 CRITERIA FOR OTHER OPERATIONS ...... 24 TERMS AND DEFINITIONS ...... 25 ACRONYMS AND ABBREVIATIONS ...... 26

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Preamble

The Fair for Life Social & Fair Trade Certification Programme was developed by the Swiss Bio-Foundation for IMO in response to various customer requests concerning the lack of applicability and breadth of existing fair trade and social responsibility certification schemes to a wide range of products, production situations and trade relations. The programme is public and the input of various actors in the industry as well as other experts and stakeholders has been considered following the guidance of the ISEAL Code of Good Practice and Guidance for Setting Social and Environmental Standards. For Life - Social Responsibility certification confirms that workers enjoy fair and safe working conditions covering all key labour aspects from core ILO workers rights to good employment conditions. It also evaluates the operator’s overall environmental performance and its role and impact in the local community. For Life Certification confirms that a company is committed to act as a responsible employer and promoter of sustainable practices and that producer groups have transparent internal structures with fair relations to producers. Fair for Life Fair Trade certification includes all Social Responsibility standards with fair working conditions, environmental performance and community relations, but focuses additionally on fair trade relationships, fair prices and direct support of marginalised groups by means of a Fair Trade Development Fund. Fair for Life Fair Trade means long-term and trusting cooperation between partners, transparent price setting negotiations and prices, including a Fair Trade Premium, that allow for social development of the concerned communities. A Fair Trade Policy defines the beneficiaries of Fair Trade and confirms the social commitment of the production company. “For Life” and “Fair for Life” certifications are open to a wide field of operations and production systems that wish to demonstrate their outstanding Social Responsibility or Social & Fair Trade performance. Fair for Life certified products are fair for all. They are only handled by companies who demonstrate decent working conditions for all their staff. Fair for Life brand holder companies commit to fair sourcing practices and responsibilities towards their primary producers down the commodity chain. Fair for Life certification of products also confirms traceability of all certified products from production to sales.

Prologue to the 2013 Version of the Programme Since 2006, various producer groups, plantation operators, manufacturers and buyers world-wide have been audited and certified according to the Fair for Life Social & Fair Trade Certification Programme. The experiences gained during programme implementation in an increasingly wide field of companies and actors as well as feedback from many different experts in the field of fair trade, Corporate Social Responsibility and GAP analyses with other standards in the same field led to a complete revision of this programme in 2011. In respect of the principles of the ISEAL Code of Good Practice for Setting Social and Environmental Standards,(P005, Version 5.01 – April 2010), comments were invited and considered from a wide range of stakeholders through public consultation in two consultation rounds. Continued comments from stakeholders are welcome. Since 2011 onwards the programme is split into a main standard document (the Fair for Life Certification Programme) with separate control modules that contain the detailed compliance criteria and standard guidance for different types of operations. In 2013, the Fair for Life module 1 (Labelling and Control) and Module 4 (Fair for Life handling) were revised in a Minor Standard revision process, again in 2 rounds of public consultations. The Fair for Life programme was updated accordingly. The new version of the programme is valid from May 2014 onwards and will be used for all audits from that date onwards. Operations that are already certified will have a transition period of 1 year (until January 2015) to implement the new minimum requirements that have been introduced in this 2011 version.

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0 OBJECTIVES, CONTEXT AND SCOPE

0.1 FAIR FOR LIFE OBJECTIVES

The Fair for Life Certification Programme strives to achieve the following objectives:

1. Fair for Life aims to support marginalised producers and workers worldwide to market their products under Fair Trade conditions, in particular smallholder producers who do not yet have access to the existing Fair Trade market. Therefore, Fair for Life offers a Social & Fair Trade certification option for ALL types of production, manufacturing and handling operations world-wide that wish to demonstrate their commitment to good working conditions, improving the livelihoods of marginalised producers and workers, engaging in their local community and their care for the environment.

2. Real and sustainable change in fair working conditions, Fair Trade practices and environmental responsibility require long term commitment and are gradual. Fair for Life therefore seeks to provide incentives for continuous improvement beyond compliance with set minimum standard requirements by a performance rating system. Minimum criteria are stringent to ensure a consistent implementation of high standards world-wide. The rating approach shall also enable companies to develop their own priorities of fields where they wish to be leaders and demonstrate outstanding achievements while always meeting high international expectations with regard to all key aspects of Social Responsibility and Fair Trade.

3. Fair for Life endorses the values of sustainable production and Corporate Social Responsibility. For this reason, it also includes comprehensive performance criteria covering good community relations, environmental aspects, local and indigenous peoples’ rights and animal welfare.

4. Fair for Life goes beyond traditional fair trade by applying Fair Trade principles also to relevant domestic or regional trade and by requiring ethical working conditions along the entire trade chain – Fair Trade shall be “fair for all”. Fair for Life certification has originally focused on producers in so-called ‘developing countries’, but the programme’s scope has never been restricted to developing countries alone, because marginalisation in the respective local setting can also be found in the so-called “developed” world. Working conditions of workers and the survival of small traditional farming structures in these countries have become a matter of increasing concern. In addition, Fair for Life considers local sourcing efforts as an important contribution towards sustainable development and hence supports devoted Fair Trade companies that source at least a part of their raw materials from local Fair Trade small scale producers or entrepreneurs with outstanding ethical commitment. External verification of Fair Trade practices ensures a consistent implementation of expected Fair for Life Fair Trade practices in these local or regional supply chains.

5. In an increasingly large, complex and multi-interest fair trade movement, Fair for Life gives Fair Trade actors a choice of values. It allows for a combination of different initiatives and certification schemes in the overall ethical and Fair Trade sourcing programme of a company.

6. Fair for Life seeks to improve the accountability of fair trade claims by companies by offering external annual verification and the certification of products and supply chains that have previously been excluded from fair trade certification. As such these claims have relied upon the company’s own principles and were without any external control to ensure independent verification of the claims made. Fair for Life is flexible enough that it permits brands to externally validate and – if the requirements are met – confirm their fair production and trade claims.

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7. Fair for Life aims to ensure adequate transparency and makes all basic information on the performance and achievements of certified companies publicly available. This allows buyers and consumers to make an informed choice according to their own preferences and values. Every certified operation is published on the Fair for Life website with an overview of their rating results together with information on the companies’ particular achievements, use of the Fair Trade Development Premium and Social & Fair Trade activities.

8. For Life - Social Responsibility certification provides an option for companies world-wide to demonstrate to a variety of ethically responsible buyers their respect of labour rights, good working conditions and responsible environmental practices. Certification contracts demonstrate the companies’ continuous commitment to the standards. This is affirmed by complete annual external verification and confirmed with certificates of compliance. The detailed information provided in the audit report provides verified evidence of good social practices as relevant for different ethical sourcing schemes.

0.2 SCOPE AND CERTIFICATION OPTIONS

The Fair for Life programme as a generic Social & Fair Trade Certification Programme is applicable to a wide range of products and production systems.

It allows certification of companies as well as products. For product labelling the following product groups can be certified under the programme: • All agricultural products (plant or livestock based, including bee products) • Aquaculture products • All wild collected plants, fungus or lichen • Cosmetic and beauty products • Textiles • Artisanal products • Tourist services • Small scale mining products As the programme is generic for different operator types, it may also be applied to other products with minimal adaptations, if needed.

Certification applicants have two basic certification options:

For Life – Social Responsibility Certification Content • Basic labour rights as expressed in the ILO conventions • Safe working conditions • Good employment conditions for all workers • Commitment to Social Responsibility and a positive role in the local community • Efforts to monitor and improve environmental performance For producer groups: accountable structures, fair relations with producers

Scope For Life – Social Responsibility company certification is applicable to any operation worldwide that has hired labour and wishes to demonstrate good employment practices, independent of the source or certification status of the raw materials used. Company certification means that the company and its employment practices are certified, but its products are not. For Life product certification is possible if the raw materials used originate from socially responsible production.

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Fair for Life – Social & Fair Trade Certification Content Fair for Life producer certification: • All Social Responsibility principles such as workers rights, good employment conditions, community relations, environmental responsibility • Fair trade relations, pricing and a Development Premium for social change Fair for Life handler certification for traders of Fair for Life and other fair trade products • Confirms commitment to long-term trade relationship and cooperation with producers, fair prices and payment of a Fair for Life Development Premium. • Social Responsibility criteria such as good working conditions and commitment to good environmental performance.

Scope Fair for Life certification is offered to eligible operations worldwide. Any hired labour operations as well as producer groups in developed countries must demonstrate their commitment to social change and expected benefits for marginalised workers or other marginalised target groups during the application process. Fair for Life certification is only offered as product certification, i.e. an operation can only become certified if producing or handling Fair Trade certified products.

Comments Fair for Life – Social & Fair Trade producer certification is mainly designed for low- income producer groups and workers in developing and emerging countries, as Fair Trade clearly aims at the improvement of the social conditions of the most disadvantaged groups in production. The primary intended beneficiaries are groups of smallholder farmers in developing countries. Plantations and manufacturers with a commitment to worker empowerment and that focus on improving the lives of marginalised workers and their communities can also apply for Fair for Life certification. Fair for Life Fair Trade certification in developed countries is possible if a well developed and adapted Fair Trade project concept can be presented. A Fair Trade Policy defines the overall Fair Trade focus for the respective production situation, based on analysis of the social groups most in need of additional support through Fair Trade and a Fair Trade Development Premium. The Fair Trade focus and target beneficiaries of Fair Trade in different operational settings are explained in detail in the Fair for Life Fair Trade chapter in each module, e.g. Module 2 for hired labour operations or Module 3 for producer groups.

The programme has control modules which define the principles, criteria and performance indicators for different types of operators, e.g. producer groups, producers with hired labour, wild collection operations and handlers of Fair for Life certified products. The control modules for different operation types are presented as separate documents. The Principles and criteria of the core modules 1 to 4 are presented in sections 1 to 4 of this document with an overview on other control modules in chapter 5.

0.3 CONTEXT AND REFERENCE TO OTHER STANDARDS

The programme is based on existing baseline standards such as ILO conventions, FLO standards, SA 8000 and the ETI Base Code. It comprises the recommendations on social standards as elaborated by the ISEAL SASA project and the IFOAM Social Standard Verification Project. The Rainforest Alliance Sustainable Agriculture Standards, the Code of the Union for Ethical Biotrade, the World Fairtrade Organisation WFTO 10 Principles on Fairtrade, the International Labour Rights Forum’s 2009 Roadmap for Ethical Product Certification and Standard Setting Initiatives as well as the Soil Association Ethical Trade Programme and Ecocert Fairtrade Standards were also reviewed to develop balanced and harmonised positions on selected key issues. Detailed references to other standards used in the development of Fair for Life certification requirements are given in each module.

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Fair for Life adopts an equivalence approach towards other existing social and fair trade certification schemes, wherever the standards cover the same overall principles and the control measures applied are comparable. With regard to responsible production practices, Fair for Life accepts various schemes as adequate proof of organic or good agricultural practices.

0.4 STANDARD SETTING AND GOVERNANCE

The Fair for Life programme is owned by the Swiss Bio-Foundation, which is responsible for the coordination of all programme development and revision processes. The Bio-Foundation has mandated world-wide programme implementation through the certification services of the not-for-profit international certification service provider Institute for Marketecology (IMO). Like all other standards, the Fair for Life programme must be updated and revised at regular intervals to account for all new developments and requirements in the field of Social Responsibility, fair and ethical trading and environmental sustainability and sensitivity of production, processing and trade. For this purpose, the Bio-Foundation, in co-operation with IMO and the Fair for Life Standard Committee, carries out regular programme revisions. The revision process was based on public international multi-stakeholder consultation. In respect of the principles of the ISEAL Code of Good Practice for Setting Social and Environmental Standards,(P005, Version 5.01 – April 2010), comments were invited and considered from a wide range of stakeholders through public consultation in two consultation rounds. Standard setting procedures are detailed in a separate document.

0.5 FAIR FOR LIFE STANDARD STRUCTURE

The Fair for Life Certification Programme sets high requirements for Social Responsibility and Fair Trade performance. In section 1, control and labelling standards are presented. In section 2-4 of this document the principles and criteria for the three main operation types are listed: hired labour producer operations, producer group operations and handling operations. The separate control modules of this programme contain all applicable principles and criteria for each operation type with guidance texts that allow for the better understanding of the criteria. Performance indicators for all criteria allow the objective and consistent assessment of performance. They are the control points against which an operation will be assessed during the Fair for Life audit as the basis for certification. Each performance indicator defines the norm for good practice (rating level 2) and indicates also two levels of compliance below the norm (0 = very poor and 1 = rather poor performance), and two levels of performance beyond the norm (3 = very good and 4 = outstanding performance). Some criteria are minimum criteria (M) and must always be fulfilled for certification. Detailed information to understand the rating system is included in every control module.

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1 LABELLING AND CONTROL REQUIREMENTS

1.1 LABELLING REQUIREMENTS

The labelling requirements for products certified under the Fair for Life Certification Programme can be seen in the following table.

Labelling requirements for For Life and Fair for Life Certified Products Use of Label Use of the Fair for Life seal or the For Life seal and other references to Fair for Life and References certification on products is only permitted on certified products and by companies to Certification certified under the Fair for Life programme. There are two basic labelling categories under the Fair for Life programme: • Fair for Life / For Life certified products which consist entirely or predominantly of Fair Trade / Social Responsibility certified ingredients • Products made with Fair for Life certified ingredients which contain a substantial amount of certified materials but do not meet the minimum requirements for Fair for Life certified products. There is also the option to only indicate certified ingredients in the ingredient statement of a product. Detailed labelling rules and restrictions are indicated in Module 1.

Origin of Raw The agricultural ingredients are certified Fair Trade or Social Responsibility origin. Material Module 1 contains the minimum content composition rules for different product types (e.g. food products, cosmetics, textiles).

Processing and Fair for Life and For Life certified products are traded along the chain of custody by Handling certified or registered handlers. Certified handlers of Fair for Life Fair Trade certified products and For Life certified handlers ensure decent working conditions for their workers and adhere to the principles of Fair Trade sourcing. Chain of custody requirements for different labelling categories and labelling options (For Life, Fair for Life) are described in detail in Module 1.

Traceability Fair Trade or Social Responsibility certified ingredients are traceable and kept separate from non-Fair Trade / Social Responsibility certified products.

1.2 CONTROL PROCEDURES

All Fair for Life Fair Trade producers commit to an annual complete audit and certification of their activities against the applicable Fair for Life certification module. They also commit to grant the certification body unrestricted access to facilities, documentation and confidential interviews with workers and staff. Audit and certification procedures are described in detail in Module 1. The following summary provides an overview of the process:

1.2.1 Fair for Life and For Life Producer Companies

• Application for certification by submitting necessary details on operation, confirmation of the certification budget and transfer of required pre-payment. A Social and Fair Trade certification contract is signed.

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• The applicant prepares for certification by self-assessment against the standard requirements and correction of major shortcomings, development of required documentation, etc. The operator also has to complete an operator profile describing the working conditions and activities in detail. • Annual complete on-site audit of the production and manufacturing process, wherever possible in combination with audits for other schemes, e.g. organic or GOTS. • Audits are performed by specifically trained and experienced auditors. All information obtained is handled as strictly confidential. • The audit of a hired labour operation (estate, factory, etc.) includes a physical inspection of production facilities, interviews with management, confidential interviews with a substantial number of workers, review of staff files, production records and other documents. • The audit of a producer group includes visits to producers, interviews with their group representatives, visits to any group operation processing facilities and their workers, review of Internal Control System documentation and policies. • At the end of the audit, the audit report is completed and audit findings are discussed. The report is then further elaborated electronically by auditor and evaluated by another expert. The certification decision is communicated in a notification letter and a summary assessment. The company also receives the final official audit report and, in case of satisfactory performance, a certificate. The applicant has the right to appeal against the decision. • Certified operations are published on the website www.fairforlife.org including their overall performance rating and evaluation of social impact. All information as published on the website is included in the summary assessment and the certified operation has the right to request corrections in any information published. • After certification, certified operations are expected to continuously improve their performance and work on any deficiencies or conditions as outlined in the summary assessment. As a standard procedure, a new full audit is required each year for update of certification; see Module 1 for exceptions for long term well performing operations.

1.2.2 Fair for Life Handling Operations

Fair for Life Fair Trade buyers and brand holders; any other handlers seeking Fair for Life certification: • All Fair Trade buyers buying from Fair Trade producer operations and all Fair for Life brand holder companies who wish to market products as Fair for Life certified, must become certified as Fair for Life handling operations. See Module 1 for details and exceptions. • In the audit, compliance with the applicable Fair Trade handling requirements (Module 4) is evaluated by means of interviews with management and different employees, verification of the product handling data system, documentary checks of invoices, purchase contracts, Memorandums of Understanding or other agreements as well as communication with suppliers. • The audit furthermore comprises a verification of responsible employment conditions by means of a Responsible Labour Practices audit or a For Life – Social responsibility audit with a physical inspection of production facilities, interviews with management, confidential interviews with a substantial number of workers, review of staff files, production records and other documents. Alternatively, other proofs of fair working conditions are reviewed during the audit. See Module 4 for details. • At the end of the audit, the audit report is completed and audit findings are discussed. The report is then further elaborated electronically by auditor and evaluated by another expert. The certification decision is communicated in a notification letter and a summary assessment. The company also receives the final official audit report and, in case of satisfactory performance, a certificate. The applicant has the right to appeal against the decision. • Certified operations are published on the website www.fairforlife.org including their overall performance rating and evaluation of social impact. All information as published on the website is included in the summary assessment and the certified operation has the right to request corrections in any information published. • Intermediate and contracted traders are subject to registration and must demonstrate traceability as well as decent working conditions. See Module 1 for details.

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2 CRITERIA FOR HIRED LABOUR OPERATIONS

Module 2: Hired Labour Standards - Applicability Operations Any company with hired labour, e.g. plantation, processing company

Products Any agricultural product, apiculture products, aquaculture products

Certification For Life Social Any company worldwide for company certification (no products Options Responsibility certified). Agricultural producer companies, e.g. plantations for product certification. Handling companies trading Fair Trade or Social Responsibility certified products For other products to be certified, individual assessment of eligibility is required; raw materials used must originate from Social Responsibility certified origin.

Fair for Life Eligible primary production company with hired labour, e.g. Fair Trade Social & Fair plantations with their associated processing unit. Trade Certification is restricted to highly committed and dedicated hired labour companies that are interested in promoting social change and the empowerment of workers. They need to be able to demonstrate expected benefits of Fair Trade for marginalised workers or communities, beyond providing good working conditions – See Module 2. Processors of Fair Trade products further up the supply chains are covered as Fair for Life handling operations – See Module 4.

2.1 BASIC RIGHTS OF ALL WORKERS

Principle 2.1.1 There is no forced or bonded labour in line with ILO Convention 29 and 105. a) The company must not retain any part of workers’ salary, benefits, property or documents in order to force workers to remain on the operation. b) The company must also refrain from any form of physical or psychological pressure requiring workers to remain employed in the operation. c) Spouses and children of contracted workers are not compelled to work in the operation.

Principle 2.1.2 Workers have the right to organise themselves and bargain collectively. a) Workers, without distinction, have the right to join or form workers’ organisations of their own choosing and to bargain collectively unless restricted by law, as required by ILO Conventions 87 and 98. b) The employer adopts a neutral attitude towards the activities of workers organisations and their organisational activities. Workers representatives are not discriminated against and have access to carry out their representative functions in the workplace. c) Where the right to freedom of association and collective bargaining is restricted by law, the employer facilitates and does not hinder the development of parallel means for independent and free association and bargaining. d) Employers seek dialogue and regular communication with their workers and have procedures through which workers can raise grievances or complaints to the company as well as the certification body without fear of being penalised.

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Principle 2.1.4 Disciplinary measures are fair, adequate and do not violate human rights. a) Management does not engage in, support or tolerate corporal punishment, verbal or physical coercion or other forms of intimidation. Workers shall not be punished or disciplined as a group for mistakes of individuals. b) Disciplinary measures are clearly handled and transparent for the workers. c) Deductions from wages as a disciplinary measure are not permitted except as provided for by national law or with permission of the worker concerned.

Principle 2.1.6 A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. a) Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work. To the extent reasonably practicable, these steps minimise the causes of hazards inherent in the working environment and include precautionary measures such as fire drills. b) Workers shall receive regular and recorded health and safety training and such training shall be repeated for new or reassigned workers. The company shall assign responsibility for health and safety to a senior management representative. c) Free access to clean toilet facilities and to potable water and food consuming areas shall be provided. Accommodation, where provided, shall be clean, safe, and meet the basic needs of the workers.

2.2 CONDITIONS OF EMPLOYMENT

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c) The company keeps a complete register of workers and ensures that they are legally registered as required by law. Principle 2.2.2 Workers receive a fair remuneration for their work and are paid at least a wage that allows them to meet basic needs and have some discretionary income. a) Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher. In any event, wages should always be enough to meet the basic needs of the workers and their families including some discretionary income. b) The employer pays workers for any time spent in required meetings and training sessions and for other unproductive time due to conditions beyond their control (such as occupational health and safety measures). c) If payment is provided (e.g. partly) in kind, such as e.g. accommodation or food, the workers can choose freely between in-kind and cash payments and costs for the service provided are fair. d) Payments are well documented and the workers receive particulars of their wage every time they are paid.

Principle 2.2.3 The company supports adequate schemes to promote worker’s social security and welfare. a) The employer shall comply with all legal obligations regarding social benefits for its workers. b) Even if not required by law, Fair for Life companies must provide their workers’ access to adequate schemes to support the workers’ social security and welfare such as in particular a retirement plan / provident fund, health insurance / medical care, paid sick leave and maternity leave. c) Companies shall strive to provide further social security and benefits such as unemployment insurance / compensation in case they are made redundant, protection against permanent disability or death arising out of or in the course of employment and are encouraged to provide further benefits such as child care leave for men and women, etc. d) Also temporary workers shall have access to basic social security schemes wherever possible, in particular contribution to retirement schemes, protection in case of invalidity and access to medical care.

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contracting, or home-working arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment, nor shall any such obligations be avoided through the excessive use of fixed-term contracts of employment.

2.3 SOCIAL RESPONSIBILITY AND COMMUNITY RELATIONS

Principle 2.3.2 The operations play a positive role in the sustainable development of the communities and societies in which they operate. Companies are expected to make positive social and cultural contributions beyond legal obligations. a) The operation employs and trains staff from the local community. b) The operation strives to support social, cultural and environmental community projects and activities as well as international or local Social Responsibility or fair trade movements. c) The company’s activities and efforts in the local community do not have a negative impact on local / indigenous communities, on the environment or on local sustainable development.

Principle 2.3.3 Rights of local and indigenous peoples are respected. a) The operation must have a legitimate right to land use and legal tenure. Disputes on land must be resolved responsibly and transparently before certification can be granted. b) If biodiversity resources are used commercially, efforts are taken to ensure the use of biodiversity and traditional knowledge is recognised, transparently negotiated with local peoples and adequately compensated.

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is not practiced. Species listed in CITES Annexes II and III shall be traded according to the CITES regulations. b) Companies do not test their products on animals.

2.4 ENVIRONMENTAL ASPECTS

Principle 2.4.1 The operation takes care to ensure rational use of water and minimise consumption. Contamination of groundwater and surface water bodies as well as air pollution is minimised. a) The operation practices adequate water use and minimises water usage. b) Ground water contamination and contamination of surface water bodies is monitored and minimised. c) Air pollution is minimised.

Principle 2.4.3 Threatened or endangered species and habitats are protected and natural ecosystems are not destroyed. a) Endangered or rare habitats and near threatened, vulnerable, endangered or critically endangered species of fauna and flora are known and adequately protected. b) Natural land or aquatic ecosystems are not destroyed. c) Genetic diversity and biodiversity is promoted. Production of genetically modified products is not permitted.

Principle 2.4.4 Waste is reduced and managed responsibly with adequate efforts to compost and recycle. a) Waste is managed and disposed of in a responsible manner. b) The operation strives to compost, reuse and recycle as much waste as possible and reduce overall waste production.

2.5 FAIR FOR LIFE FAIR TRADE CRITERIA

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a) Fair Trade producer companies and their Fair Trade primary buyers should seek to establish a long term and stable relationship in which the rights and interests of both parties are mutually respected and prices are negotiated based on transparent communication. b) Fair Trade producer companies are accountable trade partners for their buyers and work continuously on meeting the quality standards requested by their buyers.

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3 CRITERIA FOR PRODUCER GROUPS

Module 3: Producer Group Standards - Applicability Operations Any group of agricultural producers either organized independently as a group (e.g. cooperative) or by a processor / trader (“contracted production”).

Products Any agricultural products, apiculture products, aquaculture products

Certification For Life Social Any agricultural producer group operation, world-wide. Options Responsibility

Fair for Life Agricultural producer groups with their own processing units. Social & Fair Smallholder producer groups in less industrialised countries can apply without Trade meeting specific eligibility criteria. Producer groups where most producers do not primarily depend structurally on family labour and all producer groups in highly industrialised countries must demonstrate a Fair Trade justification statement with expected Fair Trade benefits to marginalised social groups. Processors of Fair Trade products further up the supply chains are covered as Fair for Life handling operations – Module 4.

3.1 ORGANISATION OF THE GROUP

Principle 3.1.1 The group operator (producer group or contracting company) acts as responsible and fair trading partner for the producers in the group. a) The group operator maintains good business practices. b) The group operation respects and supports all producers in the group as long term trading partners, in particular it seeks to establish a fair system of purchasing. c) The group operation encourages and supports interaction and exchange between producers and the set up of a producer presentation organisation(s). d) Producer groups are democratically organised and producers are informed and participate in all key business decisions. e) While initially the contracted producer group operator (in this case the company or NGO contracting the producers) may be the organising instrument for the social and economic development of the contracted producers, a producer representation organisation shall be initiated which can represent the producers’ interests in negotiations with the contracting company. f) The contracting company may not misuse the contractual relationship as a means to lower purchase prices (without prior agreement by farmer organisation due to substantial reasons) nor to create economic dependency for the producers. Producer must be free to cancel their contracts. If the producer group wishes to gradually become an organised producer group, this positive development must be supported by the group operator.

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d) Prices paid to producers always cover the basic costs of production and allow farmers to continue production. They shall aim to cover the producers’ basic needs and to provide some discretionary income.

Principle 3.1.3 Membership to the group is as open as possible and does not contribute to discrimination. a) There is no restriction to group membership or to becoming contracted producer based on race, colour, religious beliefs, gender, political affiliation, national extraction, sexual orientation or social origin. Women producers are actively encouraged b) There are defined rules to membership or for selection of new producers and smallholder producers shall be encouraged and supported to be members. Producers (which grow the groups target crops and are in the group’s operational area) may request to become part of the group operation and if this is not possible, it must be explained and justified.

3.2 WORKING CONDITIONS ON PRODUCER FARMS

3.3 LABOUR CONDITIONS FOR PRODUCER GROUP STAFF

Principle 3.3.1 The group operation respects the basic labour rights of all its workers. a) There is neither child labour nor forced labour. b) There shall be no discrimination in hiring, compensation, access to training, promotion, termination, benefits or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, HIV / Aids, union membership or political affiliation. c) Workers, without distinction, have the right to join or form workers’ organisations of their own choosing. d) A safe and hygienic working environment shall be provided and the workers shall be trained in safety aspects.

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Principle 3.3.2 The group operation’s workers are ensured good working conditions. a) Workers have clearly defined employment conditions. b) Wages and benefits meet, at a minimum, national legal standards. Payments are documented. c) Working hours are not excessive and holidays as well as annual leave are granted as per national legal requirements.

3.4 SOCIAL RESPONSIBILITY AND COMMUNITY RELATIONS

Principle 3.4.1 The group operation defines, implements and communicates its commitment to Social Responsibility and Fair Trade principles. a) The company has a Social Responsibility Policy or Social & Fair Trade Policy (depending on certification scope) that details its commitment to empowerment of and fair relations to producers, good working conditions and its continuous improvement of performance. Ideally, the policy is developed in cooperation with producers and workers. Organised smallholder producer organisations have 2 years to develop a written policy. b) The Social Responsibility / Social & Fair Trade Policy covers the following aspects • Long-term commitment to good relations with producers and workers, to comply with For Life / Fair for Life group certification requirements (as applicable) and to continuous improvement. • Objectives and development targets of For Life or Fair for Life certification • Summary of rights and responsibilities of the management, producers and workers with regard to contracts between producers and the group operator, pricing, basic worker rights, conditions of employment, rights of indigenous people and community relations. References may be made to more detailed manuals, procedures or policies, but still the overall commitment shall be written down in all key aspects • The policy must be signed by top management and must be made known to all producers’ staff. Corporate Social Responsibility and workers’ welfare shall be embedded in the overall mission statement and company policy. • If the group applies for Fair for Life Fair Trade certification, the policy includes details on Fair Trade beneficiaries, administration of the Fair Trade Development Premium Fund, the decision process for Premium use and intended Premium use (rough description of types of projects to be possibly funded) in adequate detail to ensure smooth implementation of Fair Trade obligations described in Section 3.6 below. c) The Social Responsibility / Social & Fair Trade Policy is accessible in a comprehensive form to all producers and group operator personnel, including executives and supervisors. It also needs to be publicly available, preferably on the company’s website. The policy is reviewed regularly and revised when necessary. d) The group operation must plan and implement the necessary activities to comply with the Fair for Life certification requirements and applicable law and to effectively implement its Social Responsibility / Social & Fair Trade Policy.

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b) If relevant, the group operator respects the rights of indigenous people regarding the use of biological and other local resources and traditional knowledge (TK).

3.5 ENVIRONMENTAL ASPECTS

Principle 3.5.1 The group monitors and trains producers in good environmental practices. a) Basic environmental performance aspects shall be included in the group’s ICS / monitoring system.

Principle 3.5.2 Producers strive to apply responsible water and energy management practices and to preserve natural ecosystems. a) Producers use water responsibly and minimise ground or surface water contamination. b) Producers are supported and trained not to waste energy and to use sustainable renewable energy where possible. c) Threatened and endangered species should be protected and natural ecosystems not destroyed. d) Waste is handled as responsibly as possible and composting and recycling is encouraged.

Principle 3.5.3 During processing activities of the group, environmental criteria are respected.

3.6 FAIR FOR LIFE FAIR TRADE CRITERIA

Principle 3.6.1 The group operation has a defined Fair Trade Policy with identified beneficiaries of Fair Trade, based on a socio-economic analysis of potential target groups and adequate procedures to implement responsible administration of Fair Trade Development Premiums. a) The group operator’s Fair Trade Policy defines the intended beneficiaries of Fair Trade, with a short social analysis of several different potential target groups. b) The Fair Trade Policy or related documents describe the Fair Trade Development Premium decision processes and envisaged Premium use (scope of possible projects). c) In contract production projects the contracting company permits and supports producers to become a functional producer group selling to the company – if this is the producers’ wish.

Principle 3.6.2 There shall be a system of fair sharing of profits in the producer’s organisation or contracted production project. Prices paid cover at the very least the cost of production and shall result in producers earning a fair income from their production. a) The group operator and its Fair Trade buyers agree on a Fair for Life Sales Floor Price which is the minimum price to be paid for all Fair Trade sales of the Fair for Life group operation. b) Producers are paid a fair price that shall be at least slightly above local market rates for non-Fair Trade products of similar quality to account for the higher quality and compliance expectations (quality premium). In case of low market prices, the farmgate price never drops below the agreed Farmgate Floor Price. c) The Fair Trade group operator and its primary Fair Trade buyer(s) agree on a Fair Trade Sales Price by negotiation. The agreed Fair for Life Sales Price may not be lower than the agreed Fair for Life Sales Floor Price. d) Additionally a Fair for Life Fair Trade Development Premium is agreed and paid on top of the Fair Trade Sales Price. Calculation of the Fair Trade Development Premium must be documented. The Fair Trade Development Premium shall be stated separately in each sales contract and is channelled by the group operator into its Fair Trade Premium Fund (see chapter 3.6.3).

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4 CRITERIA FOR HANDLING OPERATIONS

Module 4: Fair for Life Handling Operation Standards - Applicability Operations Any company handling (trading, processing) Fair Trade certified products

Products Any product originating from Fair Trade certified primary production

Certification Fair for Life Any handling operation which trades or processes Fair for Life or Options Social & Fair other fair trade certified products may apply for Fair for Life handling Trade certification. Fair Trade buyers from producers and Fair for Life brand companies of Fair for Life certified products must become certified handlers if the final product is to be labelled as Fair for Life certified. For details on minimum control requirements for product labelling see Module 1.

4.1 FAIR FOR LIFE HANDLING CRITERIA (ALL HANDLERS)

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4.2 ADDITIONAL CRITERIA FOR BUYING FROM FAIR TRADE PRODUCER OPERATIONS

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Principle 4.2.2 Fair for Life Fair Trade producers always receive a fair price for their products which is higher than conventional market prices and which covers the costs of production. Additionally, a Fair Trade Development Premium is paid into the producer’s Premium Fund for meaningful development projects. a) Prices are discussed and mutually agreed between the Fair Trade buyer and the Fair Trade producer operation and are based on open and transparent communication of needs and expectations. b) To give Fair Trade producers the necessary security to plan ahead and invest in their communities, the Fair Trade producer operation agrees together with his Fair Trade buyers on a Fair for Life Sales Floor Price which is the minimum price to be paid for all Fair Trade purchases. c) The Fair for Life Fair Trade Sales Price for a specific sales contract is agreed by the Fair Trade producers and the handler by negotiation, and is confirmed in the respective purchase agreements. The agreed Fair for Life Sales Price shall not be lower than the Fair for Life Floor Price. d) In addition to the Fair Trade Sales Price, the buyer and the Fair Trade producer agree on a defined Fair for Life Fair Trade Development Premium to be paid for all Fair for Life certified sales. Calculation of the Fair Trade Premium must be documented. The Development Premium shall be defined separately in each sales contract and is channelled by the producer company directly into its Fair Trade Premium Fund.

4.3 SOCIAL RESPONSIBILITY (ALL CERTIFIED HANDLERS)

Principle 4.3.0 Fair for Life handlers demonstrate fair working conditions for their own staff.

4.4 REQUIREMENTS FOR INTERMEDIATE AND CONTRACTED HANDLING OPERATIONS

Principle 4.4.1 All handlers, including intermediate and contracted handlers of Fair for Life products, demonstrate compliance with the basic Fair for Life handling principles. a) Every handler of Fair for Life / For Life certified products, who is not obliged to be Fair for Life/For Life certified (e.g. intermediate trader, exempt Fair for Life brandholders), must demonstrate compliance with the criteria in this part by registration with the Fair for Life certification body. b) Contracted processors of Fair for Life certified products must register with the Fair for Life certification body, but contract processors handling less than 10% Fair for Life products can be exempted from this obligation.

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5 CRITERIA FOR OTHER OPERATIONS

On basis of the generic standards for hired labour operations (Module 2), producer groups (Module 3) and handling operations (Module 4), the following more specified standard modules have been developed in order to have suitably adapted technical control criteria at hand.

Module Operations Comments

5. Processing and Groups of micro-processors or • Based on Module 3 Producer Groups Artisan Operations artisans • Specific section on raw materials e.g. shea butter cooperative, group of used. Clarification of role and basket weaving artisans responsibilities of the processors and applicable control requirements.

6. Wild Collection Operations collecting wild plants, • Based on Module 3 Producer Groups Operations fungus or lichens • Adapted terminology and slight modifications to the specific situation of a company buying from collectors • Adapted environmental responsibility criteria. Stronger criteria regarding rights of local and indigenous peoples 7. Mining Operations Small-scale mining operations • Module 7A: Based on Module 3 e.g. gold, diamonds, stone quarries Producer Groups • Module 7B: Based on Module 2 Hired Labour • Adapted terminology and modifications to the specific situation of a mining operations • Adapted environmental responsibility criteria.

8. Touristic services Touristic service companies • Based on Module 2 Hired Labour e.g. hotels, tour operations • Added requirements on bought in products • Adapted environmental responsibility criteria.

The applicable full compilation of principles, criteria and performance indicators for these types of operations can be found in the respective separate module documents on the Fair for Life website.

Additionally, there is Module 9 Integrated Production Criteria which is an add-on module for any Fair for Life production operation that does not have any baseline certification of organic or good agricultural practices.

Module Operations Comments

9. Integrated Any producer operation without organic • Criteria and performance indicators for Production or Good Agricultural Practices baseline minimum good production practices certification such as e.g. responsible handling and e.g. shea butter cooperative, group of use of agrochemicals. basket weaving artisans

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TERMS AND DEFINITIONS

The following terms are defined in their meaning and use within the Fair for Life Social & Fair Trade Certification Programme only.

Agrochemical – A chemical substance used in agricultural production systems to maintain soil fertility (fertiliser), control weeds (herbicide) or combat pests (insecticide, fungicide, etc.) Child – In this standard “Child” shall refer to any person under the age of 15, unless local minimum age law stipulates a higher age for work or mandatory schooling, in which case the higher age would apply. ILO Definition of “Child”: Any person less than 15 years of age, unless local minimum age law stipulates a higher age for work or mandatory schooling, in which case the higher age would apply. If, however, local minimum age law is set at 14 years of age in accordance with developing-country exceptions under ILO Convention 138, the lower age will apply. Contract Production – Trader or manufacturer contracting farmers to produce or deliver crops in a certain defined quality (e.g. organic or Fair Trade). In this structure the trader or manufacturer acts as group operator who organises the producers and normally also manages the Internal Control System. Discrimination – The ILO definition is used: “Any distinction, exclusion or preference based on race, colour, gender, religion, political opinion, nationality or social origin (or any other motive determined by the afore-mentioned states) that causes equality of opportunity or treatment in employment or work to be lifted or reduced”. Economic Threshold – The level of infestation or pest attack at which the benefits received (for example in terms of yield or crops saved) cover the cost of the treatment or application. Ecosystem – A set or system of one or more biological communities (plants, animals etc.) along with the physical media within a determined zone. Examples: forests, wetlands, lakes. Erosion – Removal or displacement of soil caused by movement of water or wind. Fair for Life Floor Price – agreed minimum price to be paid for all Fair for Life purchases. Fair for Life Fair Trade Price – Fair base sales price for the Fair Trade certified product as negotiated between the Fair Trade producer company and the Fair Trade buyer. The Fair Trade price includes normally a differential for standard compliance and certification and considers the quality of the product (overall product quality, organic production, etc.). The Fair Trade price, however, normally does not include the Fair Trade Premium. Fair for Life Brand Holder - The company under whose brand / company name the final Fair for Life product is marketed to consumers. Fair Trade Buyer – The Fair Trade buyer is the handler who pays the Fair Trade producer operation the Fair for Life Fair Trade Price and the Fair Trade Development Premium and who markets the product as Fair for Life certified to consumers or into commodity trade chains. Fair Trade Development Premium – Extra amount paid on top of the Fair Trade price for all Fair Trade produce bought. The Fair Trade Premium has to be administered separately from all other revenues and its use is strictly confined to agreed social projects or higher producer payments. Fair Trade Producer Operation – Any company or organisation which effectively produces and markets an agricultural Fair Trade product. This is typically a producer group or plantation with processing and export units. Farmgate Price – Price payable to the individual producer when goods are delivered in accordance with agreed quality requirements and at the place agreed with group operator (e.g. at purchase centre, at farm). All risk, responsibility and costs that may accrue after acceptance of the goods are responsibility of the group operator. Integrated Pest Management (IPM) – A long-term prevention strategy to combat pests, involving a combination of techniques such as biological control (use of beneficent insects or microbes), use of pest- resistant varieties and the use of alternative agricultural practices in e.g. pruning, spraying or fertilizing. Internal Control System (ICS) – An ICS is a documented quality assurance and quality management system that allows an external certification body to delegate the annual inspection of individual group members to an identified unit within the certified producer group and which manages compliance with a

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standard (and internal quality expectations) by taking over some of the farmers quality management responsibilities. Medium Family Producer – Small to medium-size family owned farms with some permanent hired labour; bigger than smallholder producers. In this standard, only farms with less than app. 10 permanent workers are considered as medium-size family farms. Natural Water Body – Lakes, lagoons, rivers, streams, brooks or other bodies of surface water that exist naturally. Organised Producer Group – Group of producers organised in a formal kind of farmers’ association or cooperative. Old Growth Secondary Forest – Secondary forest (forest that has been logged and has recovered naturally or artificially) that has sufficiently developed the structures and species normally associated with old primary forest of that type to act as a forest ecosystem distinct from any younger age class forest (adapted from: www.cbd.int). Primary Forest – Forest that has never been logged and has developed following natural disturbances and under natural processes, regardless of its age (www.cbd.int). Producer – Primary producer such as farmer or collector. Term used in this programme only for smallholder producers and medium-size family producers. Record – Document that presents results obtained or provides evidence of activities carried out. Smallholder Producer – Producer who does not structurally depend on hired labour, managing his / her farm mainly with his / her own and the family’s labour-force. Threatened or Endangered species – Species of flora and fauna indicated as threatened or endangered in applicable laws or regulations or by the IUCN – The World Conservation Union’s Red List (http://www.iucnredlist.org). Worker – All staff working in an operation including employees, permanent, seasonal, temporary, migrant, foreign, casual and sub-contracted workers. The term “workers” shall also include others such as persons employed in the administrative branch of an organisation. Young Worker – A young worker is defined by age as being between 15 to 17 years. ILO Definition: Any worker over the age of a child as defined by ILO and under the age of 18.

ACRONYMS AND ABBREVIATIONS

ILO – International Labour Organisation (www.ilo.org). IMO – Institute for Marketecology (IMO) (www.imo.ch). ISEAL – ISEAL Alliance, global association for social and environmental standards (http://www.isealalliance.org) FLO – Fairtrade Labelling Organization (www.fairtrade.net). Forest Stewardship Council (FSC) – International standard for sustainable forest management and timber products (http://www.fsc.org/en/). GAP – Good Agricultural Practices. Global Organic Textile Standard (GOTS) – International standard for organic textiles (http://www.global- standard.org). SA8000 & SAI – Social Accountability 8000 Standard by SAI -Social Accountability International (http://www.sa-intl.org). WFTO – World Fair Trade Organisation, previously IFAT (www.wfto.com).

Fair for Life Programme. Version 2011 by Bio-Foundation. Main Author: F. Meinshausen. Approved by Fair for Life Standard Committee. Weinfelden. January 2011.

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FAIR FOR LIFE

SOCIAL & FAIR TRADE CERTIFICATION PROGRAMME

VERSION DECEMBER 2013 applicable from May 2014 onwards

CONTROL MODULE 1: LABELLING AND CONTROL CRITERIA

CONTROL MODULES OF THE FAIR FOR LIFE PROGRAMME

1. LABELLING AND CONTROL CRITERIA Presented in this section

2. CRITERIA FOR HIRED LABOUR OPERATIONS Module 2, see separate document

3. CRITERIA FOR PRODUCER GROUPS Module 3, see separate document

4. CRITERIA FOR HANDLING OPERATIONS Module 4, see separate document

5. CRITERIA FOR PROCESSING AND ARTISAN OPERATIONS Module 5, see separate document

6. CRITERIA FOR WILD COLLECTION OPERATIONS Module 6, see separate document

7. CRITERIA FOR MINING OPERATIONS Module 7, see separate document

8. CRITERIA FOR TOURISTIC SERVICES Module 8, see separate document

9. INTEGRATED PRODUCTION CRITERIA Module 9, see separate document

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Table of Content 1 LABELLING AND CONTROL CRITERIA ...... 4 1.1 FAIR FOR LIFE – SOCIAL & FAIR TRADE CERTIFICATION ...... 4 1.1.1 PRODUCT LABELLING ...... 4 1.1.2 CONTROL REQUIREMENTS FOR FAIR FOR LIFE PRODUCER OPERATIONS ...... 6 1.1.3 CONTROL REQUIREMENTS FOR CHAIN OF CUSTODY ...... 10 1.1.3.1 Basic Requirements for All Fair for Life Certified Handling Operations ...... 10 1.1.3.2 Fair Trade Buyers and Conveyors ...... 11 1.1.3.3 Fair for Life Brand Holders ...... 12 1.1.3.4 Intermediate Handlers and Contracted Processors ...... 13 1.1.4 USE OF CERTIFICATION SEALS AND OTHER REFERENCES TO CERTIFICATION ...... 14 1.2 FOR LIFE - SOCIAL RESPONSIBILITY CERTIFICATION ...... 15 1.2.1 INTRODUCTION TO SOCIAL RESPONSIBILITY CERTIFICATION ...... 15 1.2.2 LABELLING OF FOR LIFE PRODUCTS ...... 16 1.2.2.1 Control Requirements for For Life Production and Trade Actors ...... 18 1.2.2.2 Use of Seals and References to Certification...... 18 1.3 CONTROL AND CERTIFICATION PROCEDURES ...... 20 1.3.1 BASICS ...... 20 1.3.1.1 Quality Assurance ...... 20 1.3.1.2 No Discrimination ...... 20 1.3.1.3 Data Security and Confidentiality ...... 20 1.3.1.4 Costs and Services ...... 21 1.3.2 APPLICATION FOR CERTIFICATION ...... 21 1.3.3 PREPARATION OF AUDIT ...... 22 1.3.3.1 Preparation by the Certification Body ...... 22 1.3.3.2 Preparation by the Operator ...... 22 1.3.4 AUDIT AND EVALUATION ...... 23 1.3.4.1 Frequency of Audits ...... 23 1.3.4.2 Audit Procedures ...... 23 1.3.4.3 Evaluation ...... 27 1.3.5 CERTIFICATION ...... 28 1.3.5.1 Decision on Certification ...... 28 1.3.5.2 First Certification ...... 28 1.3.5.3 Procedures in Case of Re-Certification ...... 29 1.3.6 CONTINUATION OF CERTIFICATION ...... 29 1.3.6.1 Communication ...... 29 1.3.6.2 Amendment of Standards ...... 30 1.3.6.3 Annual Audit and Continuation of Certification ...... 30 1.3.6.4 Exceptional Withdrawal of Certification ...... 30 1.3.7 COMPLAINTS, APPEALS AND ALLEGATION PROCEDURES ...... 30 1.3.7.1 Complaints Handling Procedures ...... 31 1.3.7.2 Appeals Handling Procedures ...... 31 1.3.7.3 Allegations Handling Procedures ...... 32 1.3.7.4 Stages in dealing with Complaints, Appeals and Allegations ...... 33

ANNEX 1: LIST OF HIGH AND UPPER MIDDLE INCOME COUNTRIES ...... 35 ANNEX 2: LIST OF RECOGNIZED CERTIFICATION SCHEMES ...... 36 ANNEX 3: COMPOSITION RULES FOR FOOD PRODUCTS ...... 38 ANNEX 3.1 COMPOSITION OF FAIR FOR LIFE CERTIFIED FOOD PRODUCTS ...... 39 ANNEX 3.2 COMPOSITION OF PRODUCTS MADE WITH FAIR TRADE INGREDIENTS ...... 39 ANNEX 4: COMPOSITION RULES FOR COSMETIC AND BEAUTY PRODUCTS ...... 40 ANNEX 4.1 COMPOSITION OF FAIR FOR LIFE CERTIFIED COSMETIC AND BEAUTY PRODUCTS ...... 40 ANNEX 4.2 COMPOSITION OF COSMETIC AND BEAUTY PRODUCTS MADE WITH SPECIFIED FAIR FOR LIFE INGREDIENTS ...... 40

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ANNEX 5: LABELLING RULES FOR TEXTILES AND OTHER INDUSTRIAL OR ARTISANAL PRODUCTS ...... 41 ANNEX 6: EXTRA-ORDINARY SHORT-TERM EXCEPTIONS ...... 42 Annex 6.1 Disruptions in Fair Trade Supply Chains ...... 42 Annex 6.2 Exceptions Physical Traceability ...... 42

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1 LABELLING AND CONTROL CRITERIA 1.1 FAIR FOR LIFE – SOCIAL & FAIR TRADE CERTIFICATION 1.1.1 Product Labelling

Principle 1.1.1 Products labelled under the Fair for Life Social & Fair Trade programme are made from Fair Trade certified ingredients. The products need to be fully traceable and handled in a responsible way. a) Only products certified according to the Fair for Life Certification Programme by the Fair for Life certification body (CB) and indicated on a valid Fair for Life certificate may be labelled as Fair for Life Fair Trade certified. All consumer package product labels must be submitted to the CB for approval before printing. Fair for Life has two product labelling categories, “Fair for Life – Social & Fair Trade certified products” and “Products made with Fair for Life Fair Trade ingredients”. Additionally, indication of Fair Trade origin in the ingredient statement is possible. A product may be labelled as “Fair for Life - Social & Fair Trade certified by CB” (with or without the logo “Fair for Life“) if the following conditions are met:

A. Labelling Requirements Fair for Life - Social & Fair Trade Certified Products Origin of Raw a) In a Fair for Life certified product, the ingredients are Fair for Life certified or Material certified according to another approved fair trade certification scheme (Annex 2). See Annexes 3 - 5 for detailed minimum composition rules for different product types (e.g. food products, cosmetics, textiles)

Processing and b) Fair for Life certified products are traded along the chain of custody by certified or Handling registered handlers as defined in chapter 1.1.3 Traceability c) The Fair for Life certified product and its Fair Trade certified ingredients are traceable and kept separate from non-Fair Trade certified products or ingredients. Fair for Life accepts a maximum of 5% commingling in cases where processing technology does not allow for 100% separation during processing without substantial loss of products; extraordinary exceptions see Annex 6.

Product d) On Fair for Life certified products, use of the Fair for Life certification seal is Labelling permitted on the principal display panel (front label) and anywhere on the packaging. Use of the Fair for Life seal is optional. Other references to Fair for Life Fair Trade certification are permitted as text anywhere on the product label. Reference texts shall be worded as follows: • “Fair for Life Social & Fair Trade certified by CB” or “Fair for Life Fair Trade certified by CB” • “Fair Trade certified by CB” or “Social & Fair Trade certified by CB” may be used if the product label (front, side or back panel) indicates also the following statement: “This product is certified by CB according to the Fair for Life Programme”. Other wording may be approved on request. • In the ingredient list the Fair Trade certified ingredients must be asterisked and the indication “Fair for Life Fair Trade certified ingredient” or “* Fair Trade ingredient according to the Fair for Life Programme” displayed under the ingredient list. • The fair trade content (in % of all agricultural and botanical ingredients) shall be displayed on the label, e.g. under the ingredient list. • It may have the form of “this product contains at least XX% Fair for Life certified ingredients” or “Fair Trade certified content at least XX%” rather than indicating the exact percentage. • If using the Fair for Life seal on the front label of products which meet the Fair for Life composition requirements, but are below a fair trade content threshold of 80% (food) or 70% (cosmetics and other products), the Fair trade content must be displayed on the

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principal display panel, under the Fair for Life seal. Details see Annexes 3-5. It is permitted to indicate a Fair Trade percentage which is below the actual Fair Trade content of the product in order to avoid frequent adaptions on product labels The company may also indicate other truthful information, e.g. “made in a company that is Social Responsibility and Fair Trade certified” or “from Ethical and Fair Trade Production” as applicable.

For products which contain a substantial amount of Fair Trade ingredients but which do not meet the minimum labelling rules for Fair for Life certified products the labelling category “Products made with Specified Fair for Life Fair Trade ingredients” applies.

B. Labelling Requirements For Products Made with Fair Trade Ingredients Origin of Raw e) Products made with Fair Trade ingredients contain a substantial percentage of Material ingredients that are Fair for Life certified or come from another certified fair trade origin (see Annex 2) but the minimum requirements for labelling as Fair for Life certified product are not met. See Annexes 3-5 to this document for detailed minimum content composition rules for different product types (e.g. food products, cosmetics, textiles) and extraordinary exceptions in Annex 6.

Processing and f) Products made with Fair Trade ingredients are traded along the chain of custody Handling by certified or registered handlers as defined in chapter 1.1.3 Traceability g) In products made with Fair Trade ingredients, the certified ingredients are traceable and kept separate from non-Fair Trade certified products. Fair for Life accepts a maximum of 5% commingling in cases where processing technology does not allow for 100% separation during processing without substantial loss of products (continuous processing lines).

Product h) On products made with Fair Trade ingredients, the use of the Fair for Life Labelling certification seal is NOT permitted on the principal display panel (front label). A small version of the Fair for Life seal may be used on the back or side panel. i) The indication “XX % Fair Trade content” must be displayed visually close to the seal, according to the separate labelling guidelines. The indication may be “this product contains at least XX% Fair for Life certified ingredients” or “Fair Trade certified content at least XX%” rather than the exact percentage. j) Label claims of products made with Fair Trade ingredients are restricted: i. On the principal display panel, references may be made to the Fair Trade certified origin of specified ingredients. Such indications must take the form of - “made with Fair for Life Fair Trade certified […]” (e.g. “made with Fair for Life Fair Trade certified shea butter”) - or “made with Fair Trade certified […]” if the product label (front, side or back panel) indicates also the following statement: “This product is made with Fair Trade ingredients and is certified by CB according to the Fair for Life Programme”, other wording may be approved on request. ii. The indications must appear in a colour, size and style of lettering which is not more prominent than the sales description text of the product; in the indication the words “Fair for Life Fair Trade certified’ shall not be more prominent than the rest of the statement. iii. In the ingredient list the Fair Trade certified ingredients must be asterisked and the indication “* Fair for Life Fair Trade certified ingredient” or “* Fair Trade ingredient according to the Fair for Life Programme” must be displayed under the ingredient list. iv. The company may also indicate other truthful information, e.g. “made in a company that is Social Responsibility and Fair Trade certified” as applicable. v. The information anywhere on the label or in product advertising must state

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clearly that the product contains Fair for Life Fair Trade certified ingredients. It is not permitted to refer to the entire product to be “Fair Trade certified” or “Fair for Life certified”.

There is also the option to only indicate the Fair for Life Fair Trade quality in the ingredients statement of a product.

Rules for Reference to Fair for Life Fair Trade Ingredients in Ingredients Statement only Origin of Raw k) A small part of ingredients is Fair for Life certified and/or the other requirements for Material product labelling are not met. Processing and l) For indication of Fair for Life certified ingredients in the ingredient list, the Fair Handling Trade buyer of the respective Fair for Life ingredient who buys the product from the Fair Trade producer operation must be a Fair for Life certified handler. The company responsible for the final consumer packaging, and hence the reference to the Fair for Life certified origin of an ingredient, must register with the Fair for Life certification body. They must submit documentary proof that the ingredient used originates from a certified Fair for Life supply chain (producer and Fair Trade buyer). As an exception, Fair for Life certified handling companies which are selling directly to a brand holder company who wishes to indicate the Fair Trade quality in their ingredient statement to consumers, can offer their clients to cover this additional product labelling as part of their own Fair Trade handler verification. In this case the Fair for Life certified handler submits his customers’ final product label samples to the certification body for approval and demonstrates the product flow to the labelling company during the audit.

Traceability m) The registered handler of the product indicating Fair for Life certified ingredients in the ingredient statement must confirm traceability to Fair for Life production in the registration process. Use of Label n) Reference to Fair for Life certification on labels is strongly restricted: and References • to Certification Only permitted on the side or back label, directly under the ingredient statement. The Fair for Life ingredients must be indicated with a “*” and the indication “Fair for Life Fair Trade certified ingredient”. • The indication must appear in a colour, size and style of lettering which is not more prominent than the rest of the ingredient statement; in this indication the words “Fair for Life Fair Trade certified” shall not be more prominent than the rest of the statement. • No reference to Fair for Life certification is permitted in general advertising or product information text.

1.1.2 Control Requirements for Fair for Life Producer Operations

Principle 1.1.2 All Fair for Life Fair Trade producer operations commit to an annual complete audit and certification of their activities. All Fair for Life products must be fully traceable and labelled. a) Every Fair for Life producer operation commits by certification contract to a complete annual audit and certification of their activities against the applicable Fair for Life certification module. The audit and certification process (including involvement of producers/workers in the audit process) is described in chapter 1.3 of this document. The producer certification also includes any processing activities by the same operator on site, e.g. on a tea estate both the agricultural production and the crude onsite processing factory are covered by the same Fair for Life hired labour producer certification. With hired labour this normally means that both the workers on the estate as well as in the onsite factory are the intended beneficiaries of the Fair Trade Development Premium (unless a different setting is justified in the Fair Trade Policy) and that the full set of Fair for Life requirements (Module 2, section 2.1 to 2.5) apply to both the agricultural unit and the processing site. In producer groups, small to medium scale processing operations are included in the producer group module 3. Large processing factories (more than approximately 20 permanent workers or more than 70 workers in total for more than approximately 2 months per year) are subject to full additional Social Responsibility control of the processing unit (Module 2, sections 2.1 to 2.4).

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If the Fair for Life product is processed further in a processing unit at another location (e.g. a tea refining factory) and if this unit is owned by the same producer operation, the unit is considered part of the producer operation’s Fair for Life certification and must undergo For Life - Social Responsibility certification or equivalent. The unit and the final processed products will be listed on the producer operation’s Fair for Life certificate. Potentially, Fair for Life certification (with Fair Trade Premium also for workers in that unit) may be possible if justified in the Fair Trade Policy. If the product is processed further in a unit owned by the producer operation’s mother company, this unit can either be considered under part of the producer operation’s certification or as an “intermediate handler” and must hence be registered and be able to demonstrate traceability and decent working conditions – see Fair for Life handlers Module 4, chapter 4.4). If the unit is kept under the producer operation’s certification, the unit will need to undergo full Social Responsibility certification and the final processed product and the processing unit will be listed on the producer operation’s certificate. Specific rules apply if the producer operation subcontracts processing of their products – see control procedures in chapter 1.1.3.4 and the applicable requirements for subcontracted processors in Module 4, section 4.4. Once the Fair Trade producer company (or the producer company’s mother company) sells the product to a Fair Trade buyer, the Fair Trade handler criteria (Module 4) apply for the remainder of the supply chain. b) The operation commits to continuous compliance with the Fair for Life standards and to grant the certification body unrestricted access to facilities, documentation and confidential interviews with workers and staff and permits unannounced audits. c) The operation is aware of applicable Fair for Life certification requirements and has performed a basic risk assessment against all aspects of the standards During the application process the certification body will inform the applicant of all applicable control modules of the Fair for Life programme and how to download them. In preparation for the first audit, the operation is expected to carry out a basic self-assessment of present performance and potential risks in all applicable aspects of the standard. The Fair for Life programme can be used as a self-assessment form, or the company can use the chapters of the applicable control modules to prepare its own risk assessment and discuss initial ideas for improvement in any field of weak performance. This self-assessment raises awareness of any risks and as such helps in the preparation for an operation. d) Fair for Life producer organisations ensure traceability and separation of the Fair for Life products as well as correct product labelling of all products sold as Fair for Life certified. If the final consumer packaging and labelling is done by the producer operation (e.g. in case of fresh fruit), the producer can label only those products as Fair for Life certified that are sold to fair trade certified buyers and for which the fair price and fair trade premium is being paid. If the products are packaged as Fair for Life certified and sold to a Fair Trade buyer but a substantial part (more than 25%) regularly ends up being sold as non-fair trade in retail (no Fair Trade Premium and Fair Trade Price to producers for this sale), the Fair for Life reference has to be removed (e.g. removing the stickers) or these products should not be labelled in origin. Fair for Life accepts that in case of perishable products a small percentage of products each year (less than approx. 25%) will be waste products or may be donated to charities, or need to be spot-sold quickly due to inferior quality and that taking off the references is not practicable in such cases (but should be recorded and communicated to producer operation if it affects the amount of Premium the producer operations receives).

The following control points apply to all For Life (SR) and Fair for Life (FT) producer operations (including Handler operations who chose to be For Life - Social Responsibility certified as well):

General Requirements:

No Compliance Criteria Basic Control Requirements Producer Operations OK AC NF NA 1 The responsible manager or FT coordinator is present during the audit M from Yr2 = The opening meeting includes producer representatives (producer 2 groups) and worker representatives (hired labour operations) M= The inspector has unrestricted access to all premises, documentation and 3 staff M= The operation holds a valid Fair for Life certification contract with the Fair 4 for Life certification body

5 M= All production and handling steps of the certified products under the ownership of the operation are known, i.e. all project sites have been announced,

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all purchase centres are known, processing activities are known, etc. If not, has any certified production taken place in unannounced units? The operation is aware of Fair for Life certification requirements and has a 6 basic understanding of its performance against the standard. M from year 2 = Workers / producers are informed about the company’s 7 certification status and their right to discuss information with the auditor confidentially (e.g. pre-audit info displayed; or information meetings). M from year 2 = Company management has a process in place to inform 8 workers/producers of the outcome of the certification process, as a part of this process they can invite representatives to the exit meeting.

OK=requirement fulfilled; AC= acceptable with conditions; NF= not fulfilled; NA= not applicable; M= minimum requirement;

Traceability and Product Labelling:

No Compliance Criteria: Traceability and Product Labelling Producer Operations OK AC NF N.A 1 M= There is a complete SR/FT assortment list; producer’s production estimates are known. 2 If any multi-ingredient product is to be certified: there are complete recipe sheets or composition tables and the certification status of each ingredient is known. 3 M= If processor with certified products is to be certified: there is a complete list of suppliers of SR/FT certified raw materials with correct indication of certification status. Certification status is confirmed by certificates or similar documentation (e.g. FLO registration number and updated printout of active certification status). 4 M= Composition and labelling requirements of chapters 1.2 (FT) or 1.3 (SR) have been verified and results are reflected in proposed correct label categories (certification table). 5 M= SR/FT certified products are not commingled with any non-SR/FT certified products during handling, processing, storage or sales and are fully traceable from purchase to sales. If all products are FT/SR certified  OK. If there is commingling due to technical reasons, please indicate extent and reasons below. 6 Sales of Fair for Life certified products to Fair for Life Fair Trade buyers: FT quality is indicated on invoices. 7 All products sold as Fair for Life or For Life certified shall be packed in a way that the content cannot be replaced without manipulation or destruction of the packaging and shall be labelled with a clear designation of their Fair Trade nature – at least on accompanying documents. 8 M= Any final consumer labels have been approved by the CB and comply with the labelling rules and restrictions indicated in Module 1, section 1.1.1. and 1.1.2 (d) 9 M = If there is a subcontracted processing operation, it is either exempted from registration (processing less than 10% Fair for Life products) or registered and traceability and decent working conditions are confirmed (Module 4, chapter 4.4.). 10 M from year 3 (Fair for Life producer certification only): The Fair for Life producer operation shall have at least one fair trade buyer paying the agreed fair price and premium, or the producer operation must internally agree to pay a premium into the premium fund for a minimum part of production. (to be agreed between operation, FT beneficiaries and CB). If not met after 3 years  Continuation with For Life certification is possible OK=requirement fulfilled; AC= acceptable with conditions; NF= not fulfilled; NA= not applicable; M= minimum requirement

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The following table gives an overview of some basic types of different Fair for Life producer operations (with associated activities such as processing) with applicable standard sections and control requirements:

- 3.5)

Certification Procedures Type of Operation Remarks

„Fair for Life“ – Social & Fair Trade 2.4 Social Responsibility Responsibility Social 2.4 – 2.1 Labour Hired Aspects Trade Fair 2.5 Labour Hired (3.1 Groups 3 Producer Handler Life for 4. Fair

Full annual audit and Plantation, Estate, Farm certification of each unit X X * with processing on site (e.g. plantation and factory) Depending on overall Fair Trade Processing unit while Policy, Fair Trade focus may also product still owned by Fair Full annual audit and X (X) * be on processing workers. If this is for Life producer or certification the case then section 2.5 of Module producer mother company 2 also applies. Full annual audit and Smallholder Group or X * certification of group Contract Production operation Big farms in the group must be Full annual audit and Group of medium-size X * certified as individual Fair for Life certification of group farms farms. See Module 3. operation Working conditions included in Module 3. Included in group Producer Group operation audit and processing activities small X Depending on overall Fair Trade certification of group scale Policy, Fair Trade focus may only be on agricultural production or operation maybe on workers also. See details in Module 3 for what scale full hired labour certification is Full hired labour audit Producer Group required. and certification in processing activities large X (X) Depending on overall Fair Trade addition to audit and scale Policy, Fair Trade focus may only certification of group be on agricultural production and activities not on processing. Under the responsibility of the Registration as handler Contracted processor X contractor of Fair for Life products

*If the companies also act as buyers, i.e. buy from other certified companies, the criteria for Fair Trade handlers apply as well.

Please note that there are also specifically adapted control modules for wild collection operations (Module 6), processing and artisan groups (Module 5) and mining operations (Module 7) which follow the same principles and control requirements as producer groups. Modules for touristic services (Module 8) and hired labour mining operations (Module 7) are based on hired labour requirements.

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1.1.3 Control Requirements for Chain of Custody

Principle 1.1.3 Companies handling Fair for Life products apply fair sourcing practices and ensure product traceability as well as decent working conditions for their workers.

Overview Companies buying directly from Fair Trade producer operations (Fair Trade buyers) and Fair for Life brand holders must undergo Fair for Life handling certification. However, a few exceptions apply for companies with only a very limited range of Fair for Life products. This gives Fair for Life producers the chance to market their product to a wide range of buyers and commodity chains with different final consumer brands. Other intermediate traders may become certified Fair for Life handlers to demonstrate their fair sourcing practices and good working conditions, but as a minimum requirement they must become registered handlers of Fair for Life products and demonstrate separation, traceable product handling and decent working conditions.

Producer Certification Handler Certification

If any products from other fair trade certified origins are bought in to be sold under Fair for Life, the Fair for Life handler requirements apply to the first company that buys these products, e.g. a manufacturer buying ingredients from Fair for Life supply chains as well as FLO Fairtrade certified suppliers. In the sub-chapters below, generic requirements for all Fair for Life handlers are presented first. In the following sections, the three different handling operation types (Fair Trade buyer, brand holder, intermediate or contracted handling operation) and their respective control requirements are defined in detail. The requirements are presented with regard to the function a handling operation has in the chain of custody, e.g. in a very short Fair Trade supply chain, the company sourcing from different Fair for Life Fair Trade certified producer groups could act as Fair Trade buyer as well as Fair for Life brand company for the final consumer packaged product

1.1.3.1 Basic Requirements for All Fair for Life Certified Handling Operations

a) Every Fair for Life handling operation commits by certification contract to annual auditing and certification of their activities as set out in the Fair for Life handling operations Module 4. The audit and certification process is described in chapter 1.3 of this document. b) The company commits to continuous compliance with the Fair for Life handling standards. It grants the certification body unrestricted access to facilities, documentation and confidential interviews with workers and staff and permits unannounced audits.

The following control points apply to all Fair for Life handling operations:

No Compliance Criteria Control Requirements Fair for Life handling operations OK AC NF NA 0.1.1 The responsible manager or FT coordinator is present during the audit

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M= The inspector has unrestricted access to all premises, documentation 0.1.2 and staff. M= The company holds a valid Fair for Life certification contract with the Fair 0.1.3 for Life certification body M= All handling steps of the certified products under the ownership of the operation are known i.e. all operational sites have been announced, all 0.1.4 warehousing or subcontracted processing activities are known, etc. If not, has any certified production taken place in unannounced units? The operation is aware of Fair for Life certification requirements and has a 0.1.5 basic understanding of its performance against the standard.

OK=requirement fulfilled; AC= acceptable with conditions; NF= not fulfilled; NA= not applicable; M= minimum requirement;

Every Fair for Life handling operation has to ensure full traceability of Fair for Life products from purchase to sales and must demonstrate that any labelled product complies with the control and labelling requirements of this module. Detailed criteria and the related control points are included in the handler certification Module 4, chapter 4.1.3.

1.1.3.2 Fair Trade Buyers and Conveyors c) Fair Trade buyers who buy Fair for Life certified products from Fair Trade certified producer operations and pay the Fair Trade Development Premium and Fair Trade Price must undergo Fair for Life handler certification. (Module 4), See section (d) for possible exceptions in case producer labels the final consumer product. The Fair Trade buyer is the handler who pays the Fair Trade producer operation the Fair for Life Fair Trade Price and the Fair Trade Development Premium and who markets the product as Fair for Life certified into commodity trade chains (or to consumers – if the same company is buying the products and selling them to consumers as “brandholder”). The Fair Trade buyer commits to long term and fair trade relations with the Fair Trade producer and acts as the Fair Trade trade partner of the producer operation. The Fair Trade buyer is often the importer in the consumer country, but it may also be a manufacturer or exporter in the production country who buys the product from the Fair Trade producer operation, who negotiates the Fair Trade Prices, pays the Fair Trade Development Premium and fulfils all duties of a Fair Trade buyer (see Module 4, section 4.2 for specific requirements for Fair Trade buyers). Fair for Life Fair trade buyers may also buy in products certified under other Fair Trade certification programmes (see Annex 2). In some products, producer operations can sell in some cases directly to the retailer and negotiate prices and premiums with them. In this case the sourcing business section of the retailer company would need to become Fair for Life certified as first buyer. E.g. In case of fresh fruit, the fruit producer sometimes remains in ownership of the produce until final sales to consumers and receives a price & premium accordingly. If there is an intermediary trader (often importer) who negotiates the prices with retailers and sets the prices to producers, then this trader shall be certified as FFL handler. In case the producer operation negotiates directly with retailers and sells directly, the retailer needs to become a FFL certified handler, if the fruit are to be labelled as Fair for Life certified. Sometimes, there is an intermediary trader between the Fair Trade producer and the Fair Trade buyer which can either act as intermediary buyer from the producer (conveyor) or as contracted exporter or importer. Conveyors are in charge of conveying the Fair Trade Price and the Fair Trade Development Premium to the producer. Unlike the Fair Trade buyer, the conveyor does not set prices or pay Premiums for all purchases from the Fair Trade producer. The conveyor mainly acts as intermediate trader who buys Fair Trade products according to the quantities and prices agreed with the Fair Trade buyer. The conveyor may sometimes take over some responsibilities from the primary FT buyer, e.g. quality development support, as agreed with the primary buyer. Normally for conveyors, an annual Fair for Life handler certification (Module 4) is necessary, including the section on buying from Fair Trade producers. In very simple cases where the final Fair Trade buyer can demonstrate implementation of all buyer obligations and with a pricing system that can be well overseen by the certified Fair Trade buyer, registration of the conveyor may be sufficient. The conveyor’s clients, the final Fair Trade buyers (Price and Premium payers), still need to be inspected as Fair Trade Buyers. Contracted exporters or importers are considered like other contracted operators and must be registered as a minimum requirement; see section 1.1.3.4 on intermediary and contracted handlers.

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In exceptional cases the certification body may decide on a desk-based (remote) audit instead of a physical visit of very small Fair for Life Fair Trade buyers. In these cases, the Fair Trade buying practices of such buyers will be investigated in detail during the respective Fair for Life producer audit. d) Fair for Life certified producers can request that their direct buyers of final consumer packaged products are exempted from requirement (c) above if all of the following conditions are met: • The Fair for Life certified producer operation produces and labels the final consumer product, which is labelled in its own brand. • The Fair for Life certified operation includes a defined Fair Trade Premium in its sales price to the buyer (for all products that are labelled as Fair for Life certified), and administers the premium separately, as any other premium received from fair trade buyers. The defined Fair Trade premium is to be indicated in sales documentation – e.g. invoice or sales contract. If the final consumer packaged product is co-branded by the producer and the buying company, a Fair Trade premium has to be defined for all sales of this product and the buying company is considered as a Fair for Life brand holder and relevant control criteria for Fair for Life brand holders apply. In cases where a Fair for Life certified producer operations is producing consumer packaged products for a third party brand (“private labelling”), the company purchasing the Fair for Life labelled product from the producer company is considered as Fair for Life buyer and criteria (c) applies.

1.1.3.3 Fair for Life Brand Holders e) Fair for Life brand holders under whose brand / company the final product is marketed as Fair for Life certified to consumers, must undergo Fair for Life handling certification (Module 4), unless they are exempted by criteria g) or in case of retail private brands as described in section f). Fair for Life certified brand holder companies may buy products certified under different approved fair trade certification schemes and market them as Fair for Life Fair Trade certified. If the brand holder is also the first buyer from producer operations, the exemptions f) and g) do not apply, as first buyers have to become certified Fair for Life handlers to verify the fair trade practices towards producers, see 1.1.3.2. f) Retailers who market Fair for Life products under their own private brand do not need to undergo brandholder certification if all of the following conditions are met: • The products are processed and packaged by a Fair for Life certified handling company which has responsibility for the fair raw material sourcing (including price paid to suppliers), product composition and labels the products in the name of the retail brand • The private label product line is included in the handlers Fair for Life certification • The product label refers to the certified handler of the product with reference to its Fair for Life certification, e.g. “Produced for RETAILER XXX by a Fair for Life certified manufacturer in COUNTRY XX” The indication can also use the term “Packaged by a Fair for Life certified handler in COUNTRY XX”. In case of e.g. fresh fruit, the certified handler shall be referenced (not the primary producer), as the first buyer from the Fair for Life producer operation must always undergo Fair for Life handler certification. The sentence may be adapted to reflect the Fair for Life handler’s role. • The Fair for Life handler coordinates advertisement campaigns and other PR activities regarding the certified products with the retailer(s) and ensures that the Fair for Life seal is only be used in clear, unmistakable relation to the certified product and that in no way the impression should be given that the retail company and/or its other private brand products are Fair for Life certified. This is then verified during the annual Fair for Life audit of the handling operation. g) Small brand holders or those with only a very limited Fair for Life assortment may be exempt from the obligation to undergo handler certification, and may be authorized to use a “registered trader” version of the Fair for Life seal. They may become registered as intermediate handlers (see section 1.1.3.4) instead of full Fair for Life handler certification if they meet at least one of the following three conditions. • Brand holders with a small assortment of products sourced from one single Fair for Life certified supply chain may be exempted from handler certification if these products do not account for more than 5% of the brand holder’s total production (in volume) or turnover (in monetary terms). Brand holders who purchase products certified according to other fair trade certification schemes to be marketed as Fair for

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Life certified or who market Fair for Life products from several Fair for Life supply chains, cannot be exempted under this clause. • Brand holders that are small companies with a maximum of three full time employees can be exempted from being certified. They can similarly be exempted if the Fair for Life audit and certification costs are higher than 2% of their annual turnover. • Brand holders of full Fair for Life production chains: If the entire production chain (i.e. all producers, processors etc. and the FT buyer) is controlled and certified according to the Fair for Life Programme, then subsidiaries or sister brand companies acting as final consumer brand company can be exempted from the control requirements. Small brand holders or brand holders / retailers with very small FFL assortment as detailed above can be audited and certified upon their own request. Exempt brand holder operations are only authorized to use a specific registered traders version of the Fair for Life seal (“registered trader”). This new requirement must be implemented for all new packaging at the latest from May 2014 onwards. Existing labels may continue to be used until 31.12.2014. The application of the above exemption rules as well as additional exemptions are exclusively decided by the Fair for Life CB. h) Once Fair for Life products are packed in their final consumer packaging in the name of a certified or registered Fair for Life brand holder company, no further control requirements apply. It is expected that through application of the chain of custody requirements, Fair for Life keeps an overview on the product flow of Fair for Life certified products into different consumer markets. When a Fair for Life certification chain is very short, e.g. the producer company and its associated processors also act as Fair Trade buyers and brand holders of the final consumer packaged product, the CB reserves the right to require registration of the main distributors of the products in different markets and to be able to spot-check traceability and fair handling requirements of Fair for Life certified products.

1.1.3.4 Intermediate Handlers and Contracted Processors i) For labelling of the final product as Fair for Life certified, any intermediate handlers of Fair for Life certified products must be registered as authorised handlers of Fair for Life products or become certified as Fair for Life handler. The intermediate handler is any trading or processing company who purchases Fair for Life certified products from Fair for Life certified handlers (not directly from Fair Trade producers’ operations) and who sells not yet consumer labelled products to other traders as Fair for Life certified. Any company who labels and markets a Fair for Life final consumer product is considered a Fair for Life brand holder (see requirements in 1.1.3.3)). Retail of ready packed Fair for Life products is not subject of control under the Fair for Life programme If a company purchases not only Fair for Life certified products, but also products certified according to other fair trade schemes which the company intends to market as Fair for Life certified, it must undergo Fair for Life handling certification. Although intermediate traders do not have to become certified to label wholesale products as Fair for Life certified to Fair for Life handlers, any trader who buys Fair Trade products may chose to apply for Fair for Life handler certification to sell products (also products from equivalent fair trade origins) as Fair for Life Fair Trade certified and to use the Fair for Life seal. j) Registered intermediate handlers are neither audited nor certified, but they must ensure traceability and demonstrate decent working conditions according to the requirements defined in Module 4 Fair for Life Handling Operations, Part II. A registration fee applies. Depending on the type of proof submitted and the risk categorisation of the operation, the Fair for Life certification body may require spot-checks for decent working conditions. Registered intermediate handlers may buy and sell Fair for Life certified products into trade chains, but may not use the Fair for Life seal nor make any claims about their Fair for Life certification. k) Processors contracted by Fair for Life certified operations or registered handlers, must also become registered with the certification body and demonstrate compliance with the requirements defined in Module 4 Fair for Life Handling Operations Part II. Contract processing (or contract handling) means that the product is owned by the contracting Fair for Life certified/registered operation during processing and that the contracted processor only charges for the processing service provided. If a processor buys the products on behalf of the Fair for Life handler (or producer operation) and sells them to the Fair for Life handler, the processor would be considered as any other handler of Fair for Life

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products, i.e. they would need to become registered if they are intermediate handlers, or certified if buying directly from producer operations. Contracted processors and traders must demonstrate compliance with the same criteria as intermediate traders, but there are additional options for how the contracting company can take over part of this obligation (Module 4, chapter 4.4).

1.1.4 Use of Certification Seals and Other References to Certification

Principle 1.1.4 Use of the Fair for Life seal and references to Fair for Life Fair Trade certification is restricted. a) Use of the certification seal “Fair for Life” is optional. The seal may only be used on Fair for Life certified products and on certified products “made with Fair for Life certified ingredients”. It may only be applied to the product by Fair for Life certified producer operations and Fair for Life certified handlers. b) Exempt registered brand holders who have been granted written permission to label their products as Fair for Life certified (see chapter 1.1.3.3) may use a specific “registered trader” version of the Fair for Life seal only. c) Intermediate traders who have registered with the Fair for Life certification body as authorized processors / traders of Fair for Life certified products may indicate “Fair for Life certified product” on invoices and on bulk packaging to their buyers. Registered traders may NOT use the Fair for Life seal or make reference to Fair for Life certification for their operation. d) Only certified Fair for Life operations are permitted to make reference to their “Fair for Life - Social & Fair Trade certified by CB” certification (see criterion e) and use the certification seal in PR material such as brochures, company information, website, etc. The Fair for Life CB may permit use of the seal by other organisations (e.g. in standard comparisons, in consumer information by Fair Trade / Labour right promotion organisations, etc.) in individual cases and with respect to preventing any misleading claims. e) The following references to Fair for Life - Social & Fair Trade certification, may be used in PR materials and information texts about certified operations or products: • Fair for Life Fair Trade certified (with or without the added indication „by CB“) • Fair for Life - Social & Fair Trade certified (with or without the added indication „by CB“) • Social & Fair Trade certified by CB • certified according to the Fair for Life Social & Fair Trade Programme. • “Fair Trade certified”, only in combination with the Fair for Life seal or text indication of the Fair for Life Certification Programme and certification body. For details on product labelling, please see section 1.1.1 f) The certification seal “Fair for Life” may be applied as displayed here according to separate labelling guidelines. The seal may also be used in black & white (black font on white background or white font on black background) or in either black or white on a background of any colour.

The Fair for Life seal is available with text boxes in several languages.

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g) Any use of the seal and reference to Fair for Life certification on product labels, must be approved by the CB prior to printing. Statements about Fair for life certification to be used in product advertisements or promotions shall also be approved by the CB. h) Any operation certified according to the For Life - Social Responsibility criteria (Module 2, sections 2.1 to 2.5), i.e. all Fair for Life producers and all Fair for Life certified handlers who are also For Life - Social Responsibility certified, have the optional right to apply the For Life - Social Responsibility seal to any of their products that fulfil the labelling requirements, see section 1.2 i) If foreseen in the CB’s logo use policy, the CB’s corporate logo may be used additionally by all operators certified by the CB.

1.2 FOR LIFE - SOCIAL RESPONSIBILITY CERTIFICATION 1.2.1 Introduction to Social Responsibility Certification

For Life - Social Responsibility certification is applicable to the entire range of operations under the scope of the Fair for Life programme. It is suitable for companies world-wide that wish to demonstrate their fair labour practices and good working conditions to clients and other stakeholders. It may be used as a product certification scheme or as a company certification for business to business communication of Social Responsibility towards its workers and the society. If the raw materials used are from certified social origin, the product may be labelled as For Life - Social Responsibility certified. Social Responsibility certification does not only set clear minimum requirements for certification, but also assesses the operation’s overall performance beyond minimum compliance. As such it is also suitable for producers and manufacturers in regions with relatively good labour practices already in place. Companies in countries with a reputation of poor labour standards can use the certification to demonstrate to clients their good working conditions, fair labour practices and commitment to social development in their communities. Companies have the choice to apply for either: • Certification as a company (no certification of products). In this case there are no requirements regarding raw materials or certification of suppliers or trade partners. • Certification of production as well as for products, which allows labelling of products with reference to For Life - Social Responsibility certification and use of the “For Life” seal, see requirements in chapter 1.2.2.

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1.2.2 Labelling of For Life Products

Principle 1.2.2 Products labelled as For Life - Social Responsibility certified, are made from Social Responsibility certified ingredients, are traceable and are handled in a responsible way. a) Only products certified according to the For Life certification requirements and listed on the For Life certificate may be labelled as For Life certified. All consumer package product labels must be submitted to the CB for approval before printing.

If the product is to be labelled as “For Life - Social Responsibility certified” (with or without the logo “For Life”), the following conditions must be met:

A Labelling Requirements for For Life - Social Responsibility Certified Products Origin of Raw a) In a For Life certified product, the ingredients are For Life certified or from other Material certified Social Responsibility production (see Annex 2). See Annexes 3 - 6 to this module for detailed minimum content composition and specific labelling rules of different product types (e.g. food products, cosmetics, textiles).

Processing and b) Only a For Life certified producer/manufacturer/handler may label the products as Handling For Life certified and use the For Life seal. Brand holders who apply the For Life label to consumer products must therefore become For Life - Social Responsibility certified. In specific cases it may be agreed to waive the certification obligation for For Life brand holders if they do not manufacture the products themselves, as long as the manufacturer producing and labelling the final product is For Life certified. In this case the brand holder must become a registered For Life handler and may use a specific “registered trader” version of the For Life seal only. The For Life handler labelling the product as For Life certified must submit proof that the For Life certified ingredients (or ingredients certified under other Social Responsibility certification schemes) are traceable from the Social Responsibility certified producer and that any intermediate handler has ensured traceability and separation of the product. In case of buying in composite food ingredients, the Social Responsibility certified content must be known, as this is relevant for assessing the final product composition. c) For final product labelling as For Life certified, any intermediate handlers of For Life products must be registered as For Life handler (requirements in Module 4, Section 4.4) or become For Life certified. Fair for Life certified or registered handlers who trade Fair for Life as well as For Life products, can add For Life products to their certified / registered product assortment. d) Any trader who buys in products or ingredients certified under other Social Responsibility schemes and wishes to market the resulting products as For Life certified to other traders, must become a For Life certified company. Traceability e) Social Responsibility certified ingredients are traceable and kept separate from non-Social Responsibility certified products. The CB accepts a maximum of 5% commingling where processing technology does not allow for 100% separation during processing without substantial loss of products (continuous processing lines). See Annex 6 for extraordinary exceptions

Product f) On For Life certified products, use of the For Life certification seal is permitted on Labelling the principal display panel and anywhere on packaging. Use of the seal is optional. Other truthful references to For Life - Social Responsibility certification are permitted as text anywhere on the product label, including the term “Ethical Production certified by CB”.

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For products which contain a substantial amount of Social Responsibility certified ingredients but which do not meet the minimum labelling rules for For Life certified products, the labelling category “Products made with Social Responsibility certified ingredients” applies.

B Labelling Requirements for Products Made With For Life – Social Responsibility Certified Products Origin of Raw g) Products made with Social Responsibility certified ingredients contain a substantial Material percentage of For Life certified ingredients or of ingredients from other certified Social Responsibility origin (see Annex 2), but the minimum requirements for labelling the actual product as a For Life certified product are not met. See Annexes 3-6 to this document for detailed minimum content composition rules for different product types (e.g. food products, cosmetics, textiles).

Processing and See criteria b), c) and d) Handling

Traceability See criterion e) Product h) On products made with For Life certified ingredients, the use of the For Life Labelling certification seal is NOT permitted on the principal display panel (front label). A small version of the seal may be used on the back label. i) On products made with For Life ingredients, references to For Life certification are restricted: • On the principal display panel, references may be made to the For Life - Social Responsibility certified origin of selected ingredients in the form of the words ‘“made with Social Responsibility certified […]’.or “made with ethically produced […]. Other wording may be approved. • The indications must appear in a colour, size and style of lettering which is not more prominent than the sales description text of the product. • The company may also indicate other truthful information, e.g. “made in a company that is Social Responsibility certified”. • The information anywhere on the label or in advertising must state clearly that the product contains For Life - Social Responsibility certified ingredients. It is not permitted to refer to the entire product as being “Social Responsibility certified”

There is also the option to only indicate For Life - Social Responsibility quality in the ingredients list of a product.

Rules for Reference to For Life Ingredients in Ingredients List Only Origin of Raw j) Some ingredients are For Life - Social Responsibility certified but the labelling Material requirements for product labelling are not met. k) The company indicating on the final consumer packaging the reference to the For Processing and Life certified origin of an ingredient must register with the CB and must submit Handling proof that the ingredient used originates from For Life certified origin. The same exceptions apply as indicated in section 1.1.1.

l) The registered handler of the product labelled as containing some For Life certified Traceability ingredients must demonstrate traceability of the certified ingredients down to the For Life certified producer operation. Use of Label m) Reference on labels is strongly restricted: and References • to Certification Only permitted on back label, directly under the ingredient statement. The For Life ingredients must be asterisked with a “*” and the indication “”For Life - Social Responsibility certified ingredient” • The indication must appear in a colour, size and style of lettering which is not more prominent than the rest of the ingredient list; in this indication the words “For Life” or “Social Responsibility certified’ shall not be more prominent than the rest of the statement. • No reference to For Life certification permitted in general advertising or product information text.

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1.2.2.1 Control Requirements for For Life Production and Trade Actors

The control requirements for Fair for Life producer operations as indicated in chapter 1.1.2 apply to all For Life producer operations as well as any handlers certified as For Life operations. The following table summarises the control requirements and applicable standard sections of different (potential) actors in the production and trade chain of a product:

Certification Procedures Type of Operation Remarks „ For Life“ –

Social Responsibility Social Responsibility Responsibility Social 3.5 3.5

2.5 Social Responsibility Responsibility Social 2.5 – – 2.1 Labour Hired 3.1 Groups Producer

Full annual audit and Plantation, Estate, Farm X certification of each unit (e.g. plantation and factory) Smallholder Group or Contract Full annual audit and X Production certification of group operation Big farms must be certified Full annual audit and Group of medium-size farms X according to hired labour certification of group operation requirements Registration as contracted processor. Must demonstrate Contracted processor in traceability and decent working production country conditions – see Module 4, part II Included in group operation Producer Group processing Working conditions included in X audit and certification according activities small scale Module 3 to Module 3 Full hired labour audit and See details in Module 3 for the Producer Group processing certification in addition to audit X scale required for full hired activities large scale and certification of group labour certification activities Optional full own Social Registration with the CB and Intermediate traders or Responsibility certification regular update on trade processors (hired labour requirements, activities. Exceptions possible. Module 2) Traceability must be ensured. Brand holder Company labelling Full annual Social the consumer products as For X Responsibility audit and Life certification (some exceptions) Trade with consumer packaged No registration or certification certified products requirements.

1.2.2.2 Use of Seals and References to Certification a) Use of the “For Life - Social Responsibility” seal is optional. On products, the seal may only be used if the products are Social Responsibility certified by the Fair for Life Certification Body (CB). b) It may only be applied by companies who are Social Responsibility certified by the CB. A specific “registered trader” version of the For Life seal may be used by registered brand holders who are approved for consumer product labelling (see 1.2.2. Table A, section b). The CB may permit use of the seal in publications by other organisations (e.g. in standard comparisons,) in individual cases and with respect to preventing any misleading claims.

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c) For Life registered traders may indicate non-consumer packed goods as being For Life certified, but the use of the seal is not permitted. d) If only a company but not its products are Social Responsibility certified, use of the certification seal is restricted to the company’s PR material, brochures, etc. e) The following references to For Life - Social Responsibility certification may be used: • For Life - Social Responsibility certified (with or without the added indication “by CB”) • Social Responsibility certified by CB • certified according to the For Life - Social Responsibility programme • Ethical Production certified by CB f) The Social Responsibility seal “For Life”, as displayed here, may be applied according to separate labelling guidelines. It may be used in black and white (black font on white background or white font on black background) or in either black or white on a background of any colour. All use of the seal and other public references to For Life certification must be approved by the Certification Body prior to printing.

The For Life seal will be available with text boxes in several languages. g) If foreseen in the CB’s logo use policy, the CB’s corporate logo may be used additionally by all operators certified by the CB.

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1.3 CONTROL AND CERTIFICATION PROCEDURES 1.3.1 Basics

The Bio-Foundation approves certification bodies to certify according to the Fair for Life programme. At present, Fair for Life / For Life certification can only be granted by the Institute for Marketecology (IMO), but changes may be published on the Bio Foundation website. The Fair for Life certification body is abbreviated as “CB” in this section.

1.3.1.1 Quality Assurance

The CB ensures that a complete in-house quality assurance system, according to the norms of EN 45011 / ISO 65, is in place. This includes standard procedures for all important aspects of activities (incl. data handling and filing) and quality management of personnel. The CB has to ensure that all personnel involved in audits, evaluations or certification decisions has received appropriate training in the applicable standard requirements as well as social auditing techniques and has received all related procedures and quality manual documents. The CB takes all appropriate measures to prevent conflicts of interests. Any potential conflicts of interest of auditors and certification staff are kept on file in a staff database. Any relevant restrictions resulting from the declared and identified conflict of interest are outlined and considered in work assignments. Performance of staff and their impartiality (freedom of conflicts of interest) is regularly monitored in order to promptly recognise any shortcoming and improve performance continuously. The CB may invite external experts or qualified bodies to review and scrutinise its certification decisions and procedures (subject to confidentiality agreements). Auditors and certification officers are acting on duty for the CB and no verbal abuse or offense can be tolerated. In case of problems, the auditor must report to the CB for mediation or mitigation wherever possible. In severe cases an audit may need to be discontinued. Complaints against auditors performance can be raised to the CB, see 1.3.7.

1.3.1.2 No Discrimination

The CB will accept all production and handling applications that fall into the scope of the Fair for Life Social & Fair Trade Certification Programme and certify all qualified applicants to the extent of its administrative capacity. However, the CB reserves the right to refuse applicants or certification when there is reasonable suspicion that it may be misused to cover up un-fair and / or un-social practices.

1.3.1.3 Data Security and Confidentiality

In order to safeguard its objectivity and independence, the CB maintains a secure data handling system. All CB personnel, including those who render services on a freelance basis, have signed an agreement to keep all private information gained in the course of the audit and certification procedures, strictly confidential. Such information may only be passed on to named third parties on the specific request of the operator. Certain data may, however, have to be disclosed to the accreditation agency, which in turn are strictly bound to confidentiality. Operations certified under the Fair for Life programme agree that their performance rating will be published on the www.fairforlife.org website. The operator will be sent the information to be published for approval before publication (in the Summary Assessment) and any disagreements are settled by applying the appeals procedure described in section 1.3.7. Operations which have cancelled the certification contract, are suspended or de-certified will remain in the online register for at least 1 year with indication of their certification status, but without detailed rating. The following information is considered public information and may be disclosed by CB in publications or on request: A list of all certified operations including their name and address and certified products/ activities. In the course of dealing with a complaint or public allegations, the CB reserves the right to publish a public statement outlining the applied procedures and certification decision.

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If in the course of staff interviews confidential information is revealed, anonymity will be strictly granted in order to protect the informant from possible negative impact or punishment. The case of employees/ workers raising concerns to the CB about their employer’s compliance with Fair for Life Standards outside the regular audit process is dealt with as alleged violation against the social and fair trade standards - see procedures in the CB’s Fair for Life Complaint, Appeals and Allegation Procedure. As a principle, the CB does not engage in consultancy of certified operations or product development. The CB and its personnel are bound to remain strictly unbiased and brand neutral and will not engage in trading activities of any kind. Any personal engagement that could lead to conflicts of interest has to be declared to the CB and will be duly considered when assigning the person to a particular job.

1.3.1.4 Costs and Services

All expenses necessary to conduct the audits, evaluations and certification are charged to the client as indicated in the annual offer. In case of additional services requested by the client during the year (e.g. approval of labels and new products, requests for specific information) and unforeseen complications (e.g. allegation cases), the additional costs will also be charged to the mandator. The CB strives to minimize the costs and offers combined assignments for different customers where possible. All invoicing is done on the basis of the actual list of fees. Certification may be withheld until full payment of all invoices is received.

1.3.2 Application for Certification

Whenever the CB receives an oral or written request for its services, explanations on the Fair for Life programme are provided to the interested operation and if there is specific interest, further information is submitted depending on the planned scope of certification. The operator demonstrates concrete interest in the CB’s services by completing and submitting the Fair for Life application form or all information requested therein. The interested operator receives the following documents: • Fair for Life Social & Fair Trade Certification Programme with indication of applicable control modules to download from the www.fairforlife.org website. • The CB’s Social & Fair Trade certification contract. Based on the screening of the project’s application documents and preliminary selection of an auditor, the required time for the audit and certification(s) is estimated. For operations with pre-application eligibility criteria (e.g. all hired labour operations applying for Fair for Life certification, see Module 2 Hired Labour) the respective policies and data are requested as part of the application process. Any further questions on the scope of activities etc. are clarified with the applicant. The CB screens the application to ensure that the operation may, in principle, qualify for certification or at least for a performance rating. If the application can be accepted, the project will receive an offer (“budget” or “cost estimation”) for approval, which functions as prepayment invoice if approved. The applicant is informed on the applicable control modules for all operational units included in the certification. If Social & Fair Trade audits are combined with audits for other schemes, the respective additional audit time and certification costs may be presented in one combined budget. The CB’s fee table is available upon request. As part of the application process, the CB may also check that the application is in line with its fair washing policy. Confirmation of the cost estimate is considered as confirmation of the operator’s application. In due course the certification contract for Social & Fair Trade certification is signed, in which the applicant confirms that he will work according to the certification requirements (as per selected scope and level of certification / approval / performance rating) and will grant access to all information needed for evaluation of performance If the operator has already been certified by another agency according to social or fair trade standards, all certification documents from previous certification agencies are requested and the operator must submit information on possible corrective actions and further explanations had he been refused or if certification was withdrawn before. Once the application is confirmed the audit is planned. A project is only certified and thus entitled to market any of its produce as certified after the certification procedures have been successfully finalized.

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1.3.3 Preparation of Audit

1.3.3.1 Preparation by the Certification Body

If the application has been approved and the advanced payment has been received, the date of audit is set and the visiting programme defined. The audit cannot take place without prior prepayment. In proposing an auditor, the CB takes into account the auditor’s qualification with regard to specific knowledge and experience in social and fair trade auditing, knowledge of the sector, language, gender, national culture, etc. as well as time availability. The auditor will then receive all relevant documents for preparation, include previous certification documents, if any. He / she is bound by the confidentiality agreement signed for all private information gained in the course of this work. For quality assurance, auditors are normally changed after a maximum of 4 years, but exceptions can be decided by the CB. The time of audit will be chosen with regard to specific activity periods (e.g. harvest or processing time) and the availability of the auditor. Fair for Life audits verify fair working conditions and should hence take place during the normal production season, i.e. when a representative number of workers (including seasonal workers) are present to be interviewed. Exceptions for a single year can be approved on a case by case basis. If there are different labour intense periods (e.g. during weeding/pruning and later again during harvest) audits can be planned alternating between high seasons for the different activities. The duration of the onsite assessment is determined individually for each project, based on basic time requirements for worker or producer interviews (see audit procedure section below), visit of the premises and document review. The audit date and auditor is announced to the project at least 7 days in advance and the audit schedule agreed. The operation also receives following information for a due preparation for the audit: • list of key personnel to be met by the auditor. • list of documents to be kept ready for the audit • a workers information note to be displayed in the workplace. With the notification of the audit date or earlier, the operation will receive the operator profile to complete (update) and return to the CB within an agreed time frame. If audit and certification are required according to multiple standards, the CB will try to combine the audits wherever possible, however, restrictions may arise from audit qualifications. Organic inspections and Social & Fair Trade audits can in most cases be combined in one visit.

1.3.3.2 Preparation by the Operator

In order to perform an efficient and professional audit, the operator is requested to prepare the visit the best way possible. The company shall download and review the applicable modules of the Fair for Life programme and perform a basic self-assessment of performance and risks. The operator shall be aware of the applicable requirements of the Fair for Life Certification Programme and shall have taken appropriate measures to ensure, or at least be working towards, compliance. Of course these measures will also be discussed in detail during the audit. Operators should have a copy of the most important legal labour document on file (e.g. working time regulation, applicable minimum wage regulation). The company needs to complete the relevant Operator Profile(s) with all relevant data about its employment and/or trade practices and return them to the CB at the latest 1 week before the audit. The operator has to ensure that also the intended target group of the social and fair trade certification is informed about the certification principles and certification process, e.g. by displaying the social and fair trade policy (or summary thereof) and internal training/information sessions on the company commitment to good working conditions and fair trade, and the workers’ right to discuss their working conditions freely with the auditor. The people in charge (e.g. manager, factory supervisor, etc.) and the concerned staff / members of the operation (e.g. workers representatives, producer representative) shall be informed before the audit in order that they will be available to participate in the audit. If a trade union is active in the certified operation, the union representative should be informed by the company about the upcoming audit. Necessary transportation (e.g. to producer groups) should be organized.

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It has to be verified that all received questionnaires (operator profile) are duly completed; open questions can be discussed with the auditor during the visit but extra time due to incomplete profiles will be charged to the client. All documents concerning the socially relevant activities of the operation (workers contracts, payrolls to staff, staff lists, working hour / attendance sheets, social security records, statutes of organized groups and member lists, health and safety checks and certificates etc.) are to be kept ready for audit.

1.3.4 Audit and Evaluation

1.3.4.1 Frequency of Audits

As a standard procedure, a full announced audit of each certified operation will take place once per calendar year. In certain climatic zones the different inspection seasons may be specially defined. Additionally, the CB may at any time conduct unannounced spot checks or additional audits. After at least 3 audits and only in case of long-term excellent performance, Fair for Life certification body may, in due consideration of risks, adapt the audit frequency to a biennial physical audit (every 2 years), with an update desk review in between.

1.3.4.2 Audit Procedures

The overall aim of the audit is to assess the efficacy of the operation’s performance with regard to the Fair for Life Social & Fair Trade control points. In the frame of the audit it is checked whether or to what extent the operation meets the certification requirements. Thus, the audit is a cross-check between the operator’s description of activities and the reality found in the field / premises. The audit covers the following steps (as applicable to the type of operation and certification scope)

1. Opening Meeting • Initial meeting with senior management and managers responsible for key functions, • In case of Hired Labour audits Worker representatives shall be present; in case of producer group certification producer representatives shall participate1.(compulsory from Year 2 onwards) • The auditor confirms the purpose and scope of the audit as well as the audit schedule. S/he also explains the applicable standard requirements and the audit process incl. the principle that normally issues will be communicated to the operator as they arise, in order that s/he will be able to provide additional evidence as necessary or to address issues immediately. • Discussion of measures taken by the operation to ensure compliance with the applicable standard(s). This part is particularly important for first audits. • Screening and updating (if necessary) of all basic descriptions (operator profile). In case of producer operations this includes a brief overview of premium received and premium use. Detailed operational data in profiles should be reviewed in separate management interviews • Confirm participation of key informants during the audit (e.g. HR manager, safety manager, etc.) as well as organisation of workers interviews. • Collection of key documents needed for the audit (e.g. list of workers present during the day)

2. Verification of Employment Practices (Hired Labour audits, Producer Group Audits) • Site tour of the employment site (including all production, storage and office areas) in order to verify health and safety aspects, physical working conditions and implementation of procedures. The tour includes canteens and dormitory areas (if any). The site tour also helps to verify traceability and separation of certified products. Special focus:

1 See Module 2, chapter 2.1.2 Freedom of association for guidance on worker representation requirements. If there are no worker representation structures in place, the auditor may suggest random workers to be present and share with fellow workers afterwards. Module 3 outlines requirements for producer representation structures.

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• work environment (space, temperature, tidiness) • work stations, machine protection and maintenance • emergency procedures, emergency lighting, emergency exits • use of personal protective equipment • first aid provision, presence of trained first aiders • fire and emergency equipment • hazardous substances storage, handling and disposal • waste management • toilets, sanitation, water • young workers, indications of discrimination, restriction of workers movements, indication of infringements of workers’ dignity, general atmosphere • selection of individual workers for interviews on the spot, at the production location or closeby, or for subsequent interview sessions • production records, product labelling & separation measures for certified products. • communication displayed to workers or information relating to trade unions, workers committee meetings etc. • canteen hygiene and safety; dormitory conditions, if applicable • In case of estates / factories, workers’ interviews are a key source of information to confirm / cross check information obtained from the management and to collect information on socially relevant aspects such as discrimination and harassment. The auditor selects the workers to be interviewed.

Guideline Worker Interviews Companies less than 1000 workers Minimum number of interviews:

Square root of total number of workers.

At least half of the interviews shall be individual interviews (minimum 5), rest may be in small groups Each workers category should be sampled i.e. the auditor should strive to interview roughly the square root of number of workers in each category (permanent, temporary, agency). This is particularly important in larger operations. Senior management interviews do not count as worker interviews. Companies more than 1000 workers Minimum number of interviews:

Square root of number of permanent workers + Square root of number of temporary workers + Square root typical number of agency workers

At least half of the interviews shall be individual interviews, rest may be in small groups • Workers shall be selected by the auditor from a variety of departments with a bias on higher risk operational fields or identified weak performance from other verification findings. The selection will consider shift patterns, worker contract types, gender balance, ethnical and other minorities and worker ranks and shall ensure a fair representation of workers. • The interviews shall include a workers’ representative if present, at least as part of an interview group. Workers may request that the workers’ representative is present during the interview. In case workers are organised in a trade union and the representative has not been interviewed in the course of the audit, the trade union will be contacted and invited to send additional feedback within 2 weeks • Interviews take place in formal (e.g. in meeting room) and informal setting (in the work place) and without any management or supervisory staff being present. Interviews can also be off site and this option should be considered especially in case of suspected serious infringements of workers’ rights and/or in investigation of substantial allegations. • Interviews and information given therein is confidential. Problems raised by workers are discussed with management in a non-attributable way and the auditor must make sure that any comments they report cannot be traced back to an individual worker • Estimated time per individual workers interview is app. 15 minutes if no serious issues are raised and up to 30 minutes if issues are raised or for group interviews

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• In countries with data protection requirements, the auditor should use the interview to gain written permission from the worker to review his/her staff files.

• Interview with relevant management functions (e.g. HR, production manager, QM manager). • Review of company policies and procedures (Social & Fair trade policy, Health and Safety policy, fire safety, grievance procedure, employee handbook, recruitment procedures, etc.). Interview with relevant management. • Review of staff files (contracts, personnel records, training records, disciplinary actions), payrolls and working hour records. Auditor selects the employee files to be reviewed. Interviews with HR department. • Review of safety related records in particular fire safety reports and fire drill logs, risk assessments, accident injury registers, emergency procedures, H&S committee meeting notes, etc.) and interviews with H&S manager. • A survey of surrounding areas or facilities may provide supplementary information about the employment site and its local context.

Specific Case: Audit of a company with several plantations/units Case A: all units under central management of personnel: in the first year all plantations/units must be visited, then sample of at least 60% of plantations under central management; Results summarized in one report Case B: all separate plantations/units but run by the same company  all plantations/units must be annually audited; Results of up to 4 units may be summarized in a joint Hired Labour audit report, if appropriate.

3. Producer Group Audits • In case of smallholder groups, a representative sample of producers is visited to verify the actual production situation with regard to social and environmental issues and to confirm / obtain information on group involvement and group management. Interviews with several producers and their workers (if any) are made on their production unit (e.g. farm), to see the actual impact of the Fair for Life Social & Fair Trade programme and the involvement of producers in group activities and decisions. Producer visits also confirm the efficiency of the groups’ internal control system with regard to social and environmental aspects. • Minimum number of producers to be interviewed about Social & Fair Trade issues:

Guideline Producer Interviews All groups Minimum number of interviews:

Square root (number of producers)

At least half of interviews should be individual interviews (minimum 5 interviews) with visit of the production site and interviews of casual labour (if any), rest may be in groups.

During the producer visit, the auditor • discusses relevant social and trade aspects with the producer and verifies the respective practices, in particular regarding involvement in group decisions, relation to the group operator, price setting and prices paid, training and support received, environmental issues, child labour & discrimination, safe working conditions. • In case of smallholder producers with some casual labour, the majority of producer visits should also include interviews with the producer’s workers to verify their working conditions. In case of medium size producers, workers should be interviewed during all producer visits and records of employment verified. The auditor may also interview producers or other people who are not registered in the group for additional reference.

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• The group operation audit includes an inspection of the Internal Control System (ICS) by screening the ICS records, interviews with ICS manager and internal inspectors/field advisors and may include shadow internal audits. • All documents related to group organization and management will be checked: list of members, group’s terms of references / statutes, member agreements, board members, minutes of general assemblies, prices paid to farmers, farmers’ trainings, information on community / social programmes, report on Fair Trade Development Premium use (if applicable) etc • Review of payment to producers, price setting, incl agreed floor price if Fair for Life certified, use of prepayments received.

4. Trading Practices, Product Flow Verification, Fair Trade Premium (all producers and handlers) • Check of purchase records and supplier certificates (from farmers or other suppliers if applicable), processing and sales documentation in order to follow up the product flow. • Follow up of product lots through the operation to test the traceability system; verification of in- house labelling and sales labels. • Fair for Life certified producers: Verification of Fair Trade premium (if applicable): decision process (e.g. committee meetings), agreed projects, incoming premium records, expenditure records, summary reports for trade partners • Fair for Life certified producers and handlers: Review of communication with trade partners, prompt payment of suppliers invoices, price agreements and trade contracts, promotion of fair trade, etc. • Check relationship and contracts to contracted processors that are not directly registered with the CB: traceability, decent working conditions. A spot-check audit may be required in high risk countries / industries

5. Reporting and Evaluation of Findings • During the audit the auditor completes the audit report(s) and documentation of findings. The performance for each compliance criterion of the applicable Fair for Life module is rated using the following scale: (0) – not compliant / very poor performance (1) – not yet sufficient, but already positive developments towards the norm for good social performance (2) – defined as norm for good social performance (3) – voluntary performance higher than norm, exceeding requirements (4) – exceptionally high performance, far beyond minimum performance M indicates a MUST / MINIMUM requirement for certification

Any not applicable control points are indicated as n.a. and do not count towards the respective totals of applicable Total Norm Points (TNP) and applicable Maximum (MAX) number of points

• Comments are added whenever the norm (level 2) is not reached or exceeded, or in case the assessment by the auditor requires additional argumentation. In particular any non-conformities shall be described in detail including their severity, evidence found and whether the issue seems of a systemic nature or on-off/isolated. • At the end of the report, the summary assessment summarizes the points reached. The auditor indicates the list of non-conformities (all Minimum criteria not met, and any criteria rated as 0 and hence needing improvement) and necessary corrective actions. The summary assessment also indicates the list of products to be certified. • In some cases the report cannot be completed fully during the onsite audit, but in this case the auditor should at least prepare a written summary of findings, and a list of identified non- conformities and corrective actions.

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6. Closing Meeting • Final discussion with the managers to confirm the overall findings of the audit and the rating. • In critical cases the auditor can decide not to disclose the complete audit report and all findings in detail to the management since it may contain critical information received from workers. • Key findings necessary improvements to correct fields of non-compliance are discussed and the list of planned corrective actions updated accordingly. The operator is informed on additional documents or information to be handed in. • If ready, the preliminary audit report is signed by the auditor and by the operator to confirm information is correct. At least, the audited operation receives a written list of non-conformities and proposed corrective actions. • Management shall have a process in place to communicate a summary of the certification outcome to key beneficiaries (workers in case of Hired Labour operations, and producers plus possibly workers in case of producer organisations); as part of the process representatives can be invited to the exit meeting.

7. Follow up and Other Sources of information • The auditor may also need to evaluate certain aspects in more detail after the audit (national labour right issues, prices, etc.). • After the visit, the auditor finalizes the audit reports with all necessary data and comments, and updates the operator profile if necessary. In case of substantial changes after the audit, the final preliminary report is sent to the audited operation afterwards with information to send any comments within 1 week. This step is not necessary, if the operation has already received the complete draft report during the audit. After this period the auditor submits the report and all related documents to the CB head office. • In addition to the onsite audit process, the auditor may contact local organizations and officials and conduct interviews with neighbours and third parties to further validate the findings of the audit. This is practiced particularly in case of substantial doubts or questions about the operations social/fair trade performance. For very big operations, a formal consultation of local stakeholders by the certification body may be required by the CB as part of the verification process.

1.3.4.3 Evaluation

The process of evaluation includes the evaluation of performance during and after the audit. The inspector starts his / her evaluation of the operation’s performance during the audit and continues after the audit when writing the complete preliminary report of the inspection report. This report is based on the report checklist completed during the audit, and review of any additional documentation collected during or after the audit. Once the inspectors’ final report is received in the certification office, the evaluator verifies that all procedures have been performed as required and that documentation is complete and sufficient. Based on all the information in the audit report, the operator profile and other related documents, it is evaluated to what extent the applicant fulfils the certification requirements. Additional CB policies for critical issues (may be country specific) are used as basis for evaluation where applicable. Compliance in each standard issue is evaluated and the rating finalized. If a control point is not applicable, it does not count in the totals. Based on the number of not applicable (n.a) control points, the applicable Total Norm Points and Maximum Points are calculated. For certification, an operation must reach a certain percentage of applicable norm points (e.g. 90% of applicable Total Norm Points in first year of certification) as indicated in each module. The operation must meet all Minimum requirements. If necessary, conditions and sanctions can be imposed in addition to the measures already agreed on between the auditor and the operator. If the operator fulfils the certification requirements, no corrective measures will be imposed, but certain control point ratings may yet to be confirmed by e.g. additional documentation to be submitted. Also, recommendations may be given to improve the operator’s performance.

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After finalizing the evaluation, the documents are submitted to the certification officer for the final certification decision. If certification cannot be granted or in case rating has only been applied for, the evaluator compiles a performance rating report and drafts a confirmation of performance. This confirmation indicates clearly the rating for all selected standard issues, as per request of the client. Additional comments of positive achievements may be added.

1.3.5 Certification

1.3.5.1 Decision on Certification

Certification is the final assessment and approval of the evaluation results with regard to an operation’s compliance with the certification requirements. Certification is strictly separate from the audit and is always done by the certification office. As a guideline for certification, an operator: • must fulfil all applicable MUST / MINIMUM requirements (either reach 1 or 2 rating, whatever the MUST / MINIMUM level is in respective year) AND • reach the minimum number of applicable Total Norm Points per chapter (rounded down to next full number). E.g. 90% of applicable TNP in first year of certification. Applicable Total Norm Points is the sum that would be reached if operator fulfils the norm (rating 2) in every control point that applies to the operation. The minimum points (MIN) serve as guidance for the actual certification decision only. The CB reserves the right to take individual certification decisions based on the overall performance evaluation of the operator. In case of complex or unclear findings the certification officer reverts the final decision to the Fair for Life certification committee.

1.3.5.2 First Certification

Positive Certification Decision If the activities are found to be in compliance with the Fair for Life Social & Fair Trade Certification Programme (see certification guideline rules above) certification will be granted. There may be certification conditions with indicated deadlines for corrective action and recommendations may be included for the improvement of the operator’s performance. The operator receives a certification notification from the CB, together with the summary assessment and the operation certificate valid for a minimum of one year. Normally, also the complete final audit report will be sent, however the CB reserves the right not to hand out the complete audit report and instead only a summarized version in critical cases (see “Procedures in Case Certification Cannot be Granted” for details, below). The summary assessment contains the rating including a text evaluation of the operations performance, which will be published on the Fair for Life website, unless changes are requested. Also the operator receives the invoice for the audit according to the current tariff.

Procedures in Case Certification Cannot be Granted In case the applicant is not able to comply with the minimum requirements, the applicant will receive a notification of non-compliance together with an indication of necessary fields of improvement. The operator then has to inform the CB of his planned next steps e.g, scheduling a follow-up audit at a time at which compliance can be ensured, or withdrawing the application for certification and choosing to receive only a performance evaluation confirmation and the performance evaluation report. The operator can also submit written proof to rebut the rating. The CB will then evaluate the situation again and, if possible, issue the certification or else a written notice of denial of certification.

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In critical cases, the CB may find it necessary not to reveal the full audit findings to the operator in order to protect e.g. workers who have given sensitive, critical information. In this case, the CB will prepare a justification and summary of findings for the operator in order to allow the operator to react to the non- compliances but without revealing any details that could allow the operator to identify the source of critical information. In this case, the CB will submit, upon the request of the operator, the complete audit report and related evaluation documents to a neutral third party that ensures confidentiality of the information but can crosscheck the CB’s audit findings and the resulting rating. If the operation does not agree, appeals procedures as described in chapter 1.3.7 can be initiated.

1.3.5.3 Procedures in Case of Re-Certification

Positive Certification Decision If the actual audit proves that the minimum requirements are still fulfilled, the operator receives an updated certificate, the certification notification, summary assessment and audit report(s).

Procedures in Case Certification Cannot be Granted If the operation has been certified before and requires continuation of certification, but the minimum certification requirements are no longer fulfilled, the operator is informed in a letter of non-conformity to take appropriate corrective measures. If correction of the non-conformity is not possible or correction of non-conformity is not completed within the prescribed time, the operation will be notified of the withdrawal of certification for a certain time (suspension) or for good (withdrawal). Depending of the severity of the violation, suspension of certification may be with immediate effect. If the certification is suspended the operator is informed in writing that they are no longer to make any reference to Fair for Life certification on any product labels or PR material and to inform its clients accordingly. The suspension will also be indicated on the Fair for Life website in the operation’s rating section. Suspended operations can submit proof of corrected non-compliances and, with or without an additional audit depending on the case, certification can be reinstated. If compliance is not reinstated within a maximum of 12 months, the certification is withdrawn. In certain cases of minor shortcomings, the CB may rule that the certification is only temporarily suspended, without any effect on marketing activities nor indication on the website, for a maximum of 6 months, within which time correction of non-compliances must be confirmed if certification is to be resumed. In this case the operator may market produce as certified, but may be required to inform all trading partners of the suspension and his plans to restore compliance within 6 months. If certification has not been granted or had to be withdrawn, the operation can request at any time to take up certification procedures again and hence schedule another audit to confirm that it is once more compliant with the certification requirements and can be granted certification. Depending on the time frame between the first audit and the follow-up and the fields of non-compliance, the CB can decide to focus the additional audit on selected issues only. Certification decisions can be appealed, as described in chapter 1.3.7.

1.3.6 Continuation of Certification

1.3.6.1 Communication

A certified operator must notify any substantial change in the activities or in the measures taken to ensure compliance with the Fair for Life Social & Fair Trade Certification Programme by submitting an updated version of the operator profile. This includes information on new suppliers or new recipes for processed products, major changes in labour policies, a new processing facility, etc. All these activities need to be approved / audited by the CB prior to considering them part of the certified operation. For small changes it is sufficient to highlight them in the annual updating of the operator profile before the audit. The operator is obliged to notify the certification body if ever there is any knowledge or suspicion of any major breach of the agreed Social & Fair Trade criteria, which may jeopardize the continuation of

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certification. In such case the operator describes the problem and suggests corrective measures. Depending on the severity, the CB will decide whether certification will be suspended for a certain period or must be fully withdrawn until e.g. another audit confirms compliance again.

1.3.6.2 Amendment of Standards

It is the operators’ obligation to ensure that the most up-to-date version of the applicable Fair for Life Social & Fair Trade programme is at hand. The programme is available on the Fair for Life website www.fairforlife.org. In order to facilitate the updating, the CB will notify important changes of the requirements to certified operators and include them in consultations for any standard changes.

1.3.6.3 Annual Audit and Continuation of Certification

As a standard procedure, each year a full on-site audit of all certified operations is conducted by the CB, but in due consideration of risks and overall performance, the CB may decide to decrease the audit frequency. The findings are evaluated in detail and the operation proposed for certification. The procedures for these steps are described in the chapter “Audit and Evaluation”. Then, certification is granted or withdrawn as described in the chapter “Certification”. The CB reserves the right to conduct additional unannounced audits or additional investigations at any time. Based on the results of these unannounced audits, the certification status of an operator may need to be reviewed and certification may be suspended as a result, as described in the chapter “certification”. A company is free to cancel the certification contract in line with the terms indicated in the contract.

1.3.6.4 Exceptional Withdrawal of Certification

Certification and the right to make claims of certified Social & Fair Trade production can be withdrawn at once or at a given deadline under any of the following conditions: • Cancellation of the contract by the operator or the CB • Refusal of audit • Refusal of information • Attempted fraud, bribery or willingly submitted false statement • Evidence that Fair for Life Social & Fair Trade certification is being misused to cover up unfair and/ or unsocial practices • The operator has not paid the applicable fees to the CB in due time In all the cases mentioned above the operator will receive a notification and deadlines. In order to be legally valid, cancellation of contracts must be done within the timeframe agreed in the contract. Immediate cancellations of contracts by the CB are always to be approved by the managing board of the CB and are subject to possible appeal. This applies also to decisions for suspension or withdrawal of certification due to outstanding payments.

1.3.7 Complaints, Appeals and Allegation Procedures

Any affected party can present complaints (objections) related to the audit and certification services provided by the Fair for Life certification body (CB) and its evaluation and certification decisions. The certification body aims to ensure effective resolution of such objections. The Fair for Life complaint, appeal and allegation procedures are based on principles of ISO/PAS 17003:2004, ISO 10002:2004, SA8000 guidance and the best practices as implemented by other social standard certification schemes.

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The resolution process to address any objections raised shall be credible, transparent and impartial. The person managing a complaint or appeal will be selected to be competent to assess the situation and unbiased. The CB may invite external experts or stakeholders to review its certification decisions as well as handling of complaints and allegations The entire process from receipt of the objection to resolution is duly documented. The confidentiality agreement between the certification body and the certified operation shall be respected regarding the disclosure of any detailed data about the operation and audit findings, All complaints, appeals and allegations are dealt with using an escalation approach; i.e. the received objections are handled in gradual steps, case by case, designating the responsible persons and resources according to the severity of each case. As far as possible, cases will be solved already in the initial stages, and they will be escalating further only in case a sound solution cannot be found on a certain stage and if the case is backed up by material evidence/support, See section 1.3.7.4.

Objections are categorized as follows:

Complaints: Dissatisfaction by the certified operator related to the manner that the certification body provides its services Appeals: Disagreement with the certification decision or decision making process by the certified operation. Allegations: Complaints or grievances raised against an operator certified by the CB because of alleged violation of the standards, e.g. by workers, trade unions, NGO’s, etc.

1.3.7.1 Complaints Handling Procedures

Complaints by the certified operation regarding the CB’s services (e.g. control procedures) are dealt with according to the CB’s complaint procedure, covering the following steps: a) All received complaints are preliminarily reviewed by the responsible manager to ensure that they are not evidently unfounded or crucial information is missing. The CB keeps a central register of complaints. b) The responsible complaint manager writes to the complainant to confirm receipt of the complaint and to provide an overview of follow up procedures and time frames. c) The complaint is duly investigated in consideration of facts provided, data in project file as well as additional information obtained of the staff members concerned and/or third party experts if relevant. Further information is requested from the complainant if necessary. d) Based on the findings, measures are proposed. The measures to be taken are based on the requirements of the case (incl. that they need to be reasonable with regard to necessary efforts/expenses as well as timely clarification of the matter). e) Complaints shall be resolved in a timely manner and the complainant shall receive a written answer to the complaint filed.

1.3.7.2 Appeals Handling Procedures

Any operation which has been audited against the Fair for Life programme can appeal the certification decision. The operation is informed about its right to appeal in the CB’s certification notification. The following procedures are followed: a) Within 14 days of receiving the certification letter, the operator submits a written rebut of the described facts to the control body by submitting new evidence or additional justification. b) On this basis the certification body re-evaluates the situation. All revision steps are duly documented. c) The result is communicated to the operation in writing, either as revised certification notification or explanatory letter. d) If no agreement can be found, the appeal can be taken to the next stage, as described in the escalation process in section 1.3.7.4.

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1.3.7.3 Allegations Handling Procedures

Allegations (grievances or “complaints”) raised by workers and external stakeholders regarding a certified operation’s alleged violation of the Fair for Life Standards shall be handled as follows:

Addressing workers / producer grievances within the company a) The Fair for Life certification body does not act as mediator between management and workers (nor between the group operator and the individual producers). Fair for Life requires all certified operations to implement an efficient “internal grievance procedure”, allowing any members of the structure to file their concerns regarding the functioning of the organization and social/fair trade performance without penalization, b) Workers / producers are encouraged to raise their grievances to management by means the grievance procedure and/or worker/ producer representation structures. During the audits, the handling of internal grievances is always carefully verified, and audits always include a substantial number of workers / producers interviews.

Information received from workers / producers during the audit a) Workers have the right to discuss all matters of their employment with the Fair for Life auditor during the audit and directly after audits (per email or phone) to notify the certification body of suspected breaches of social and fair trade standards. b) All information received is dealt with as a potential non-conformity, thoroughly investigated and cross- verified within the regular audit time. In the case of material allegations, the audit time may need to be increased accordingly, and the cost has to be covered by the operator. The informant’s identity is kept strictly anonymous in communication with the certified operation.

Information received after the audit a) If workers, producers, or external stakeholders with insights into a certified operation’s performance, contact the CB at other times about alleged violation of Fair for Life standards, the information provided will be duly considered and followed up by the CB according to a risk based approach. b) The allegation is pre-assessed to decide if it should be handled as a minor or a major allegation. • Minor allegations (raised only singularly, without substantial information or data and / or directly contradicted by audit findings), will be briefly investigated further and will be considered for the next regular audit. During that audit they will be followed up and cross-verified by means of workers’ interviews, site inspections and document reviews as applicable. • Major allegations (raised by several stakeholders or workers OR not substantially contradicted by audit findings and concerning minimum certification requirements, objective evidence of violation of the standards) will be always followed up in detail, with all investigations and findings fully documented. c) If the allegations are found to be substantial and cannot be verified remotely, an unannounced audit of the certified operation is performed, at the cost of the certified operation. Management of the company is informed of allegations (in general terms that do not give information on identity of informant) and is given the chance to respond. d) Based on the findings of the additional audit, the certification decision is reviewed as per standard procedures and certification suspended if necessary.

Information received in formal stakeholder consultation For very large operations (in number or workers, or part of a large corporation) the CB may require a formal stakeholder consultation in preparation of the audit as a standard procedure and will notify the applicant accordingly in course of the application process. Information received about an applicant’s or certified operation’s performance in this process are then included in overall assessment of the operation’s compliance with Fair for Life standards during and after the audit.

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1.3.7.4 Stages in dealing with Complaints, Appeals and Allegations

Complaints, appeals and allegations received by the CB will be handled in different stages, following an escalation process methodology outlined according to ISO 10002 principles. The escalation approach implicates that the CB will handle the received objections in gradual steps, case by case, designating the responsible persons and resources according to the severity of each case. The CB’s Quality Manager is in charge of handling complaints and allegations from 2nd Stage onwards and will designate the responsible person for dealing with the complaint according to its nature and severity. If required, external experts may be invited to help in resolution of the complaint or further investigation of the allegation. After each stage of the escalation process, the CB will contact the complainant for informing him about the outcome of the investigation and review of the complaint. If the complainant accepts the response provided, the procedure will end at that point.

The 5 stages of the Fair for Life escalation process are:

1st stage: Normal review The person receiving the objection will listen and understand the concern and will attempt to solve it directly, if he / she knows the matter and has the competence for doing it. To do so, he / she might ask for the assistance by a colleague with the required technical knowledge. The responsible person will inform the complainant about the resolution.

2nd stage: Management review: If the complaint is not solved at the first level, it will be presented to a managing staff. He/she will review the complaint and explore a resolution. He/she will conduct or assign the necessary investigations on the matter. The members of staff involved in the investigated case will be contacted for clarification purposes, but they will not assess the complaint.

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3rd Stage –Top Management Review Where the complainant does not accept the decision of the manager, the manager refers the complaint to the CB’s director. The director will conduct a formal review of the steps taken by the staff, from receiving the complaint to the final decision.

4th Stage –Review by the Bio-Foundation Where the complainant is dissatisfied with the decision of the certification body’s director, and if the complaint is supported by material evidence and backed by more than one individual’s allegation (e.g. workers plus workers right organisation after due research of the case) he/she can refer the complaint case to the Board of the Swiss Bio-Foundation, which is the standard holder of the Fair for Life programme. The board will conduct a formal review of the complaint case, and present the case to the Fair for Life Stakeholder Advisory Committee or refer it directly to the next stage.

5th Stage: External arbitration panel If no agreement can be found by the Bio-Foundation and the complainant, the complainant may invoke arbitration before an external arbitration panel, which will not be a standing body, but will be created at each invocation of arbitration under this system. The external arbitration panel will be constituted by different persons, according to the matter of the alleged violation of the FFL standard. It is expected that the persons participating in the panel will be reputed experts on the matter, and they shall be unbiased. They will be designated as follows: a) One representative will be named by the complainant by himself, or by an advocacy organization / NGO representative he/she chooses for this purpose. b) One representative will be named by the Bio-Foundation. c) The third member will be chosen by both representatives to serve as a Chair and neutral arbitrator (details and restrictions regarding the selection of the members of the board are stated in separate guidelines).

The panel will decide by majority vote whether the certifying body correctly or incorrectly certified a company as compliant to the standards, and this decision may be made public by the panel. When the panel finds that in fact the certification is not warranted, the certification body will suspend certification, until the operation will be able to demonstrate full compliance with the corresponding Fair for Life criteria. The cost of the arbitration system will be shared between the advocacy organizations invoking arbitration, the company seeking the FFL certification and the certification body. Where the Fair for Life standard system is found to be deficient, the related standard issues will be addressed in the course of the next standard revision process.

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ANNEXES TO CONTROL MODULE 1

Annex 1: List of high and upper middle income countries

Annex 2: List of equivalent certification schemes

Annex 3: Labelling and composition requirements for food products

Annex 4: Labelling and composition requirements for cosmetic and beauty products

Annex 5: Labelling and composition requirements for textiles and other industrial or artisanal products

Annex 6: Extraordinary short-term exceptions

ANNEX 1: LIST OF HIGH AND UPPER MIDDLE INCOME COUNTRIES

Fair for Life applicants in high income or some applicants in upper middle income countries must demonstrate their eligibility for Fair for Life as part of their application.

Fair for Life refers to the World Bank country rating for this purpose:

• Upper middle income countries: http://data.worldbank.org/income-level/UMC (in case of Hired Labour Fair for Life certification applications only)

• High income countries OECD: http://data.worldbank.org/income-level/OEC • High income Countries others: http://data.worldbank.org/income-level/NOC

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ANNEX 2: LIST OF RECOGNIZED CERTIFICATION SCHEMES

A. Recognized fair trade certification schemes

The following certifications of suppliers to Fair for Life handlers are recognized as fair trade certifications if the basic conditions listed in the table below are met. The CB reserves the right to assess the supplier’s fair trade audit report before approval as fair trade certified supplier to the Fair for Life operation.

Recognized Fair Trade Certification Schemes FLO certification Recognition of producer and trader certification by FLO- Cert. No mutual recognition. Soil Association Ethical Trade Programme Mutual recognition of fair trade certification. Additional conditions may apply (e.g. fair trade premium for international fair trade producer operations). Ecocert Fair Trade (ESR) standard Mutual recognition of fair trade certification. Some additional restrictions may apply (e.g. review of domestic fair trade projects, organic certification for acceptance by Ecocert). FT USA Recognition of FT USA trader certification for all products originating from producer operations certified under equivalent schemes (e.g. FLO-certified). No mutual recognition. Basic Conditions for accepting products from equivalent schemes (as indicated in Module 4) • The two trade partners agree on the terms of fair trade in a written agreement. • The product is traceable back to fair trade certified producer operations and the entire chain of custody and certification status declared (to the Fair for Life CB or the Fair for Life handler) • The final product to be labelled as Fair for Life certified will be assessed against the Fair for Life labelling and composition criteria based on the certification status of raw ingredients. For semi- processed / multi-ingredient products the FT certified ingredients and FT certified content must be specified. If this information is not provided, the products cannot be recognized as fair trade certified raw materials.

Status: 1.12.2013

Equivalence of products bought in from operations certified under other fair trade certification schemes can be assessed on behalf of a Fair for Life certified handling operation based on inspection reports and assessment results submitted by the applicant Fair for Life operation. This individual case by case assessment is only possible if: • the Fair for Life or for Life certified handler buys directly from a producer operation certified under the other (not generally recognised) fair trade scheme and is authorized to receive the results of the individual equivalence assessment • OR (if buying through intermediate traders certified by another well established fair trade schemes) in case the Fair for Life CB has an agreement in place with the other fair trade scheme to exchange audit documents, potentially verify additional aspects during the audit, and discuss equivalence matters if requested by their respective clients.

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B. Recognized Social Responsibility Schemes

The following certification of suppliers to For Life certified companies are recognized as Social Responsibility certification schemes. The CB reserves the right to assess the supplier’s audit report with regard to social practices before approving the supplier as social responsibility certified supplier to the For Life company. This right will be exercised in particular in case of the schemes listed as “recognized with restrictions” below. In either case the final product to be labelled as For Life certified will be assessed against the Fair for Life labelling and composition criteria based on the certification status of raw ingredients.

Recognized Social Responsibility Certification Schemes SA8000 Recognition of SA8000 company certification as equivalent Social Responsibility certification. No mutual recognition. Soil Association Ethical Trade Programme Mutual recognition

Ecocert Fair Trade (ESR) standard Mutual recognition

FLO certification Recognition of FLO producer certification. No mutual recognition. Social Responsibility Certification Schemes Recognized with Restrictions Sample audit reports of different certification bodies will be requested for review of audit depth with regard to social standards, and the CB reserves the right to not accept certification in case of lack of audit depth. Rainforest Alliance Sustainable Restricted recognition of RFA producer certification Agriculture No mutual recognition.

UTZ Certified Restricted recognition of UTZ Certified producer certification and if organic certification or other proof can be presented that products are not genetically modified. No mutual recognition.

Status: 01.12.2013

Equivalence of products bought in from operations certified under other Social Responsibility certification schemes can be assessed on behalf of a For Life certified handling operation based on inspection reports and certification results of the producer operation from which the product originates as well as certificates or registration of any intermediate traders. The applicant buying For Life operation is responsible to provide the reports to the CB and will receive the assessment results, including names of the involved producer/trader operations,

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ANNEX 3: COMPOSITION RULES FOR FOOD PRODUCTS

This section applies for Fair for Life as well as For Life certified products. In case of “For Life” certification, “certified Fair Trade quality” should be read as “certified Social Responsibility quality” and the labelling categories are “For Life certified” and “made with specified For Life ingredients”.

Product labelling categories and their respective permitted labelling claims, logo use and permitted references to certification on products are defined in Module 1, chapter 1.1.1 The two label categories with composition requirements are Fair for Life products and products made with specified Fair for Life ingredients:

Fair for Life certified products Product can be labelled as Fair for Life certified Fair Trade product Use of Fair for Life logo permitted on principal display panel (front of pack) Compulsory and permitted Label indications: see 1.1.1

Products made with specified Only specified ingredients can be labelled as Fair for Life certified Fair for Life ingredients Use of Fair for Life seal restricted to side or back panel Various restrictions of references to Fair Trade on pack, see 1.1.1

Intent: Fair for Life composition rules aim to maximise positive impact of Fair Trade to producers and workers in the supply chains. Companies are expected to analyse the potential Fair Trade impact of the ingredients they use and to select the most meaningful Fair Trade ingredients and strive to achieve as high levels of Fair Trade ingredients as possible, exceeding minimum composition requirements.

The following composition requirements recognise, however, that operators may, for a variety of reasons not always be able or intending to source all agricultural ingredients from fair trade certified sources. This applies in particular ingredients that are traditionally considered to be not fair trade certifiable (e.g. dairy products) or which are not yet available in fair trade certified quality but could be certified under Fair for Life standards.

Definitions: Single ingredient products Products composed of a single type of an ingredient. This may include a blend of several ingredients or cultivars of the same product type (e.g. olive oil) from one or more fair trade suppliers (e.g. a blend of fair trade olive oils) and may include use of processing aids or auxiliaries.

Multi-Ingredient products Consumer ready food product or food ingredient product composed (Composite products) of more than one type of ingredient

Fair Trade certified quality Fair for Life Fair Trade product certification or equivalent fair trade product certification schemes as listed in Annex 2

Available in certified Availability refers to the product being readily available in the fair trade quality required quality, quantity, technical specification, and provenance from producers certified under the Fair for Life programme or equivalent other fair trade certification schemes.

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Annex 3.1 Composition of Fair for Life Certified Food Products a) At least 80% of all agricultural ingredients (in weight, excluding added water) are certified Fair Trade quality. Companies are expected to analyse the potential Fair Trade impact of the ingredients they use and to select the most meaningful Fair Trade ingredients and strive to achieve as high levels of Fair Trade ingredients as possible. If ready-made composite fair trade certified food ingredients are used in the composition, only their fair trade components count as fair trade certified quantity. For drinks made from juice concentrates or reconstituted components, the reconstituted quantity (e.g. reconstituted orange juice or coconut milk) is counted for the calculation of fair trade content. b) Each type of Fair Trade ingredient in a Fair for Life certified product shall be used only in Fair Trade certified quality. For example in a Fair Trade chocolate with Fair Trade cocoa and Fair Trade sugar, the entire amount of cocoa used and the entire amount of sugar used shall all be Fair Trade, even if the cocoa is used from 2 different origins for quality reasons. In a single ingredient products (incl. blends of the same type of ingredient), 100% of the product shall be fair trade certified. In case blending is required and the respective ingredient not available in fair trade certified quality, an exception is required (see section c) c) For a temporary period, until the market for Fair Trade products has sufficiently developed, exceptions to rules (a) and (b) are possible for products containing at least 50% Fair Trade certified agricultural ingredients, subject to the following conditions: i) Written application for exception with detailed justification for lower fair trade content or blending of the same ingredient type in non-Fair Trade quality. ii) All ingredients that are readily available in certified Fair Trade quality are used in Fair Trade quality iii) The company presents a plan to reach the agreed target Fair Trade level within 3 years, i.e. 80% Fair Trade content and/or each ingredient used only in Fair Trade quality for single- ingredient products. Depending on product composition, ingredient origins and Fair Trade potential of the ingredients slightly lower minimum contents and target content levels or longer transition periods may be agreed. If lower temporary target levels apply generally for certain product categories (e.g. milk chocolate) these will be published in an Exception list on the Fair for Life website. iv) Application for exceptions will be reviewed by the Fair for Life certification body and in due consideration of each case granted for a maximum of 3 years, then the company has to re- apply providing new justification. Application for renewed exception will only be granted to companies that demonstrate efforts to source as many fair trade ingredients as possible in Fair Trade certified quality and supports fair trade producers and development of new fair trade supply chains. v) If the total Fair Trade content is under 80% and the Fair for Life Seal is used on the principal display panel, the Fair Trade certified content must be displayed front of pack underneath or visually close to the Fair for Life seal for all new product packaging labels from May 2014 onwards and for all product labels from January 2015 onwards.

Annex 3.2 Composition of Products made with Fair Trade Ingredients a) At least 20% of all agricultural ingredients (in weight, excluding added water) are certified Fair Trade. b) Single-ingredient products containing the same ingredient in fair trade quality (in quantities beyond 20%) and non-fair trade quality may be certified in this category, with additional label restrictions. In this case the reference to the fair trade ingredient on the principal display panel (front of pack) is not allowed nor as part of the main product description. The label text and position of seal on back or side panels needs to be carefully verified to ensure that the labelling claims are not misleading.

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ANNEX 4: COMPOSITION RULES FOR COSMETIC AND BEAUTY PRODUCTS

Note: Rules for product labelling for the different labelling categories are indicated in chapter 1.1.1

This section applies Fair for Life as well as For Life certified products. In case of “For Life” certification, “certified Fair Trade quality” should be read as “certified Social Responsibility quality” and the labelling categories are “For Life certified” and “made with specified For Life ingredients”.

Annex 4.1 Composition of Fair for Life Certified Cosmetic and Beauty Products

A cosmetic / beauty product may be labelled as Fair for Life Fair Trade product if EITHER condition a) OR condition b) is met as well as condition c): a) At least 50% of ALL ingredients (per weight, excluding added water) are non-aqueous non-juice Fair Trade certified ingredients (e.g. moisturizing ingredients, cleansing ingredients, essential oils or the dry weight plant fraction in plant gels, fruit juices or plant extracts). Example 1: A body lotion containing 60% Fair Trade certified coconut oil and shea butter and 40% other ingredients like emulsifiers and ethanol (60% total Fair Trade content). Example 2: A soap containing 40% Fair Trade soap made from Fair Trade oils and 40% non-Fair Trade Aloe Vera gel and 20% water would be a Fair for Life certified soap (excluding water, 50 % of the contents are Fair Trade certified non-aqueous, non-juice ingredients, in this case saponified oils ). However a soap containing 40% non-Fair Trade soap and 40% Fair Trade Aloe Vera and 20% water would not qualify as Fair for Life Fair Trade certified soap. Excluding water, the non-aqueous ingredients – the saponified oils- are not Fair Trade certified. Of the Aloe Vera only the non-water (dry weight) content counts as Fair Trade certified with the total non-aqueous Fair Trade content hence being much below 50%. This soap could, however, be labelled as “Soap made with Fair for Life Fair Trade Aloe Vera”. b) 90% of ALL ingredients (per weight excluding added water) are Fair Trade certified ingredients. This option is mainly relevant for products made from aqueous Fair Trade ingredients, e.g. Fair Trade certified Aloe Vera gel for cosmetic purposes, hair rinse based on Fair Trade fruit juices, etc. In this case the entire amount of Fair Trade certified fruit juices and fruit gels counts as Fair Trade content (even if reconstituted to natural concentrations). However, in watery herbal infusions only the plant fraction counts. c) In either case the Fair Trade certified content shall always be higher than 10% of the entire formulation including water. d) Companies are expected to analyze the potential Fair Trade impact of the ingredients they use and to select the most meaningful Fair Trade ingredients and strive to achieve as high levels of Fair Trade ingredients as possible e) If the total Fair Trade content is under 70% (per weight excluding added water) and the Fair for Life Seal is used on the principal display panel, then the Fair Trade certified content must be displayed front of pack underneath or visually close to the Fair for Life seal for all new product packaging labels from May 2014 onwards and for all product labels from January 2015 onwards.

Annex 4.2 Composition of Cosmetic and Beauty Products made with specified Fair for Life Ingredients a) At least 15% of ALL ingredients (in weight) excluding added water are certified Fair for Life Fair Trade quality. b) The total Fair Trade certified content including water shall always be higher than 5%. In plant infusions and liquid extracts, only the plant fraction counts as Fair Trade certified weight.

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ANNEX 5: LABELLING RULES FOR TEXTILES AND OTHER INDUSTRIAL OR ARTISANAL PRODUCTS

This section refers to labelling of products other than food or cosmetic products which may be made of materials from Fair for Life certified primary production, e.g. textiles, toys made from natural materials, jewellery made from Fair for Life certified gold or diamonds, etc.

Labelling of Textiles and Other Industrial or Artisanal Fair for Life Certified Products Origin of Raw a) The principal constituent of the product is from certified Fair Trade natural origin, e.g. Material the cotton fibre in jeans or the wool in Fair for Life certified knitwear. As a basic guideline it is expected that the Social & Fair Trade component(s) of the final product constitutes at least 80% of the total weight, for a temporary period however, a product can be certified as Fair for Life Fair Trade if at least 50% of components are Fair Trade quality according to the procedures and requirements to grant exceptions as described in Annex 6: For artisanal products, guidance on sourcing of raw materials is included in Module 5. The same requirements (Module 5, section 5.2) can also be used to assess artisanal products made in Fair for Life Hired Labour artisan enterprises. Each product composition will be assessed individually and the permitted labelling status determined. If FT content < 70% (or the artisanal product is not substantially made from fairly traded raw materials) then the FT content or equivalent information must be displayed front of pack - see Annex 4 (4.1 d)

Processing b) The most labour intense processing step must normally undergo full Fair for Life and Handling Social & Fair Trade producer certification according to the hired labour standards (Module 2) with Fair Trade pricing and Fair Trade Development Premium for workers, e.g. the sewing mill / Cut Make Trim unit in case of garment production. Based on the assessment of each chain of custody and on the specific product, this obligation may be waived, if the main Fair Trade focus and risk of labour right violation is in the primary production rather than in subsequent processing steps. c) Otherwise the same chain of custody requirements apply as for other Fair for Life certified products – see chapter 1.1.3: Fair Trade buyers from Fair Trade producers as well as final brand holders shall normally become Fair for Life certified handling operations (exceptions see chapter 1.1.3). Any intermediate traders and processors must be registered and demonstrate compliance with the requirements for intermediate traders (Module 4, part II) which include traceability and proof of decent working conditions. Based on a risk assessment along the chain of custody, the CB may decide to require full Social Responsibility certification of intermediate operations with high risk of labour right violations. Otherwise, adapted labelling such as “made with certified Fair Trade cotton” or similar may be possible.

Labelling of Textiles and Other Industrial or Artisanal Products Made With Fair for Life Components or made in a Fair for Life Artisan Group Origin of Raw a) A substantial constituent of the product is from certified Fair Trade origin, e.g. the Material cotton fibre in mixed fibre T-shirts. As a basic guideline it is expected that the Fair Trade component(s) of the final product constitutes at least 20% of the total weight,

Processing b) In this case only the Fair Trade buyer from producer as well as final brand holder and Handling must become Fair for Life certified handling operations. Any intermediate traders and processors must be registered and demonstrate compliance with the requirements for intermediate traders (Module 4, Part II)

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c) For artisanal products the supply and production chain will be individually analyzed and the category “made in a Fair for Life Artisan group” with restricted labelling claims may apply, e.g. if main focus is on artisanal production and raw materials are not from Fair Trade certified origin.

ANNEX 6: EXTRA-ORDINARY SHORT-TERM EXCEPTIONS

Annex 6.1 Disruptions in Fair Trade Supply Chains

In case of extraordinary disruptions in established fair trade supply chains due to serious political unrests, climatic disasters like hurricanes, tsunamis, hail storms or crop failure well beyond regular harvest fluctuations, the Fair for Life handler can apply for a short term extra-ordinary exception to use non-fair trade ingredients for a limited period without short term effect on product labels. This is subject to the following conditions:

a) The regular fair trade supplier confirms unavailability of fair trade certified supplies and the reason for the shortfall in writing. b) In a written application for extra-ordinary exemption, the Fair for Life handler can demonstrate efforts to find alternative fair trade certified suppliers of the product. c) If no fair trade certified suppliers can be found, suppliers with proven good production practices are chosen (e.g. organic, UTZ Certified, etc.) d) In case of short term other non-fair trade “emergency” suppliers, the handler shall operate a fair trade premium compensation scheme and continue to pay the respective fair trade premium into the regular fair trade supplier’s premium account. Depending on product composition, ingredient origins and Fair Trade potential of the ingredients, slightly lower minimum contents and target content levels or longer transition periods may be agreed. If certain important ingredients are unavailable due to extraordinary disruptions in supply chains, and this affects the composition of many fair trade products special instructions will be published in an exception list on the Fair for Life website.

Annex 6.2 Exceptions Physical Traceability

Fair for Life requires physical traceability and separation of fair trade certified ingredients and products with a permitted maximum level of commingling for technical reasons of 5%.

Exceptions to this requirement in form of a temporary permission to apply the mass balance approach or a higher percentage of commingling during processing will only be granted in exceptional circumstances and for a limited period to allow manufacturers a change of production and supply chain management.

Fair for Life Programme. Version December 2013 by Bio-Foundation. Main Author: F. Meinshausen. Approved by the Fair for Life Standard Committee. Weinfelden, December 2013. Applicable from 1st of May 2014 onwards

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FAIR FOR LIFE

SOCIAL & FAIRTRADE CERTIFICATION PROGRAMME

VERSION 2011

CONTROL MODULE 2: CRITERIA FOR HIRED LABOUR OPERATIONS

CONTROL MODULES OF THE FAIR FOR LIFE PROGRAMME

1. LABELLING AND CONTROL CRITERIA Module 1, see separate document

2. CRITERIA FOR HIRED LABOUR OPERATIONS Presented in this section

3. CRITERIA FOR PRODUCER GROUPS Module 3, see separate document

4. CRITERIA FOR HANDLING OPERATIONS Module 4, see separate document

5. CRITERIA FOR PROCESSING AND ARTISAN OPERATIONS Module 5, see separate document

6. CRITERIA FOR WILD COLLECTION OPERATIONS Module 6, see separate document

7. CRITERIA FOR MINING OPERATIONS Module 7, see separate document

8. CRITERIA FOR TOURISTIC SERVICES Module 8, see separate document

9. INTEGRATED PRODUCTION CRITERIA Module 9, see separate document

Fair for Life – Programme 2011 – Control Module 2: Hired Labour Operations

Table of Content

2 CRITERIA FOR HIRED LABOUR OPERATIONS ...... 5 2.1 BASIC RIGHTS OF ALL WORKERS ...... 5 2.1.1 FORCED LABOUR...... 5 2.1.2 FREEDOM OF ASSOCIATION AND RIGHT TO COLLECTIVE BARGAINING ...... 5 2.1.3 CHILD LABOUR AND PROTECTION OF YOUNG WORKERS ...... 7 2.1.4 DISCIPLINARY PRACTICES ...... 8 2.1.5 EQUAL TREATMENT AND OPPORTUNITIES ...... 9 2.1.6 HEALTH AND SAFETY ...... 10 2.2 CONDITIONS OF EMPLOYMENT ...... 13 2.2.1 CONTRACTS AND RELATIONS BETWEEN EMPLOYER AND WORKFORCE ...... 13 2.2.2 WAGES ...... 14 2.2.3 SOCIAL SECURITY AND SOCIAL BENEFITS...... 15 2.2.4 WORKING HOURS AND PAID LEAVE ...... 17 2.2.5 REGULAR EMPLOYMENT ...... 19 2.3 SOCIAL RESPONSIBILITY AND COMMUNITY RELATIONS ...... 20 2.3.1 COMMITMENT AND MANAGEMENT OF SOCIAL RESPONSIBILITY ...... 20 2.3.2 COMMUNITY RELATIONS ...... 21 2.3.3 RESPECTING RIGHTS OF INDIGENOUS AND LOCAL PEOPLES ...... 22 2.3.4 ANIMAL RIGHTS ...... 23 2.4 ENVIRONMENTAL RESPONSIBILITY ...... 24 2.4.1 WATER CONSERVATION AND WATER / AIR POLLUTION...... 24 2.4.2 ENERGY MANAGEMENT AND CLIMATE CHANGE ...... 25 2.4.3 ECOSYSTEM MANAGEMENT ...... 26 2.4.4 WASTE MANAGEMENT ...... 27 2.5 FAIR FOR LIFE FAIRTRADE CRITERIA ...... 28 2.5.1 ELIGIBILITY CRITERIA AND FAIRTRADE FOCUS ...... 28 2.5.2 ACCOUNTABLE TRADE RELATIONS WITH BUYERS ...... 30 2.5.3 FAIRTRADE POLICY AND WORKER EMPOWERMENT ...... 30 2.5.4 FAIRTRADE PRICING ...... 32 2.5.5 FAIRTRADE DEVELOPMENT PREMIUM ADMINISTRATION AND USE ...... 33

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Structure of Standard and Minimum Requirements for Certification

Principle : fundamental Fair for Life rule, serving as a basis for reasoning and action (a) Criteria: A state or aspect of a process or system, which should be in place as a result of adherence to a principle. The way criteria are formulated should help to assess degree of compliance in an actual situation

Guidance Texts provide additional background information and clarification to better understand the criteria and Fair for Life expectations

Following the criteria is a list of performance indicators (control points). Performance indicators further define the criteria and are the basis of compliance assessment and performance evaluation. For certification applicants they can also be used for self-assessment.

N° Control Points Forced Labour MAX Score 1 (0) Clear evidence (2=M) no indication of forced labour 2 M=2

Rating of performance indicators: 0= very poor performance / not compliant at all. Performance must be improved for continued certification 1= not yet sufficient, but already positive developments towards the norm for good social performance 2= defined as the norm for good social performance; 3= voluntary performance higher than norm, beyond minimum requirements 4= exceptionally high performance; outstanding, far beyond minimum requirements

M= indicates a “MINIMUM Requirement”, i.e. this requirement must always be fulfilled in the respective time frame. In the years before the respective requirement becomes a MINIMUM requirement (e.g. the first year of certification, if a requirement is MINIMUM from year 2 onwards), the company will be expected and reminded to demonstrate progress towards meeting the MINIMUM requirement in due time. MAX = Maximum number of points awardable for the respective control point; All rating levels up to the MAXIMUM may be chosen, even if not explicitly defined in the control point text ( comments necessary)

Total Norm Points (TNP) = Total number of points if all norm requirements were fulfilled, i.e. rated as “2”.

N.A.: If a control point is not applicable to the operation, it is indicated as n.a. and the respective norm and maximum points are not included in the calculation of applicable Total Norm Points and applicable Maximum points as assessed in the certification process and presented in the final rating.

Minimum Requirements for Certification: a) For certification, the following percentages of applicable Total Norm Points must be met: First year: 90%, Second year: 95%, Third Year: 100%. Continuous improvement is expected. b) All M= MINIMUM requirements must be fulfilled in the indicated time frame, e.g. (M=2 from year 2) means that for the first certification an operation may still be slightly below the norm as implementation of the requirement may take some time. For the 2nd certification, this norm requirement must be met, otherwise certification cannot be granted. c) If performance is rated as (0), a condition will be imposed to improve this aspect until the next update audit.

 see also Module 1, chapter 1.3. Certification procedures

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Applicability and Reference to Other Social Standards The Fair for Life Module 2 Hired Labour is based on the applicable ILO conventions, FLO Hired Labour standards and trader standards, SA8000 standards and guidance documents, the Ethical Trade Initiative (ETI) base code with SMETA auditing methodology and the recommendations of the SASA Project on Social Standards in Agriculture. Also the Rainforest Alliance Sustainable Agriculture Standard, the WFTO 10 principles of Fair Trade, the Code of Union of Ethical Biotrade (UEBT) were considered in developing the principles, criteria and performance indicators. The criteria and performance indicators in this chapter, sections 2.1 to 2.4, are the basis for certification of any kind of producer companies (plantations, estates, manufacturers) with hired labour world-wide according to both For Life – Social Responsibility and Fair for Life – Social & FairTrade criteria. Chapter 2.5 presents additional criteria that are only applicable to producer operations applying for Fair for Life Social & FairTrade certification.

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2 CRITERIA FOR HIRED LABOUR OPERATIONS 2.1 BASIC RIGHTS OF ALL WORKERS

The criteria apply to ALL hired labour operations and to all categories of workers. The term “workers” shall refer to all workers including employees, seasonal, temporary, migrant, foreign, casual, permanent, and sub-contracted workers. The term “workers” is not restricted to field workers only, but also includes others such as persons employed in the administrative branch of an organisation.

2.1.1 Forced Labour

No Control Points: Forced Labour MAX SCORE 1 (0) Clear evidence (2=M) no indication of forced labour. 2 M=2 2 Family and dependents of workers (0) are compelled to work in the organisation (1) are 3 expected to work in the operation (2=M) are free to seek employment elsewhere M=2 (without deductions for main worker) (3) are offered assistance in seeking work if this is sought or other very worker friendly arrangements. 3 Employer (0) retains (2=M) does not retain original legal workers documents (e.g. 2 identity card) for any period longer than demanded by law. M=2 4 Employer (0) does retain (2=M) does not retain any part of worker’s salary, benefits, 2 etc. M=2 5 (0) Restrictions (2) no restrictions on workers’ rights to terminate employment. 2 6 (0) Employment is linked to the fulfilling of an obligation or debt of a third party; large 3 loans to workers; disproportional to their income (2) no such implications (3) very positive schemes for workers, e.g. small loans at good conditions in case of need.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 14 12

2.1.2 Freedom of Association and Right to Collective Bargaining

Principle 2.1.2 Workers have the right to organise themselves and bargain collectively. a) Workers, without distinction, have the right to join or form workers’ organisations of their own choosing and to bargain collectively unless restricted by law, as required by ILO Conventions 87 and 98. “Workers Organisation” refers to any organisation of workers for furthering and defending the rights and interests of workers, the most common active workers organisations being independent trade unions. Workers organisations can play an important role in ensuring workers rights and interests and may also help dialogue and regular communication between management and workers. b) The employer adopts a neutral attitude towards the activities of workers organisations and their organisational activities. Workers representatives are not discriminated against and have access to carry out their representative functions in the workplace. Workers have the freedom to form or join workers’ organisation of their own choice, e.g. internal worker organisations or unions. In case workers wish to unionise the employer must permit open internal discussions on the advantages and possible disadvantages of unionisation. Management or labour consultants shall not hold one-to-one anti-union

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meetings with individual workers. The company may not hire consultants with the objective of persuading workers not to unionise. However the company may hold information meetings for all workers with the help of external consultants as long as all information provided is truthful and does not intimidate workers. In workplaces with unionisation, it is recommended to invite neutral external experts in to provide balanced information on the potential changes in employment conditions and other aspects in order to allow workers to make well informed decisions. The company must respect national law with regard to freedom of association. c) Where the right to freedom of association and collective bargaining is restricted by law, the employer facilitates and does not hinder the development of parallel means for independent and free association and bargaining. d) Employers seek dialogue and regular communication with their workers and have procedures through which workers can raise grievances or complaints to the company as well as the certification body without fear of being penalised. All operations shall have a grievance procedure that workers are aware of and even in the absence of a written procedure workers are effectively free to raise their concerns to the management without fear of penalisation. Workers must be free to discuss their working conditions with auditors openly. Where workers’ concerns have not been addressed through the internal grievance procedure or workers are fearful of such procedures for risk of discrimination, workers always have the right to contact the Fair for Life certification body at any time to raise their concern on fair working conditions. Workers must not be penalised for communicating directly with the certification body.

No Control Points: Freedom of Association and Right to Collective Bargaining MAX SCORE 1 Information on workers’ rights to organise is provided by employer: (0) no information at 3 all (2) workers rights to organise recognised in writing and available to workers (e.g. in Social Policy, or in employee handbook); workers know that they are free to organise in associations of their preference (3) information on workers’ rights by independent third parties OR detailed information as per local law is provided by the employer. 2 Employer (0) prohibits (2=M) permits associative activities and collective bargaining 4 (3) takes a positive attitude towards worker associations (4) is exceptionally active to M=2 promote / support associative activities OR worker owned organisation. 3 Management (0) clearly prohibits independent trade unions from visiting the facility or 3 talking to workers (2) does not restrict independent trade unions active in the respective industry and region from meeting with workers if they wish (3) invites a union representative to hold an information meeting for workers OR workforce is unionised OR very active and effective internal workers organisation. If no union was interested to visit  (2) 4 Workers’ representatives: (0) employer restricts workers meetings (1) no workers’ 4 representative (2) no indication that employer obstructs or controls worker representatives meeting workers during working hours (3) employer grants workers time within working hours for workers meetings and provides physical facilities (4) employer exceptionally supportive of the work of representatives. 5 (0) Management discriminates or punishes workers for exercising their right to join or 4 participate in workers associations of their preference (2=M) no such discrimination, M=2 intimidation or punishment (3) management supports / promotes workers’ associative activities in a positive way (4) management works very closely and positively with workers association or external union. 6 If workers wish to unionise, the company does not take unpermitted measures to 3 disencourage them, e.g. anti-union consultant for 1:1 meetings with workers, individual M=2 talks to workers about unionisation; information meetings with truthful information permitted; see guidance above (0) inacceptable practices; management violates workers rights to join associations of their preference (1) some shortcomings in the situation (2=M) company acts responsibly and does not coerce workers to abandon unionisation idea; union voting permitted if applicable and not interfered (3) very positive handling of the situation with good communication also with union. 7 Management (0) insists on always being present during meetings of worker 2 representatives (1) attends meetings sometimes (uninvited) (2=M from year 2) attends M=2 workers meetings only if invited by the workers. from Yr 2 8 Workers association: The management (0) obstructs or does not facilitate, where 3 freedom of association is restricted by law (2=M if the right to freedom of association M=2 and collective bargaining is restricted by law) facilitates and does not obstruct the formation of a workers’ representation organisation or other means of representing workers interests and joint negotiations (3) company supports development of an active workers association with help of competent NGO’s or facilitators.

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9 Workers are organised and discuss grievances and working conditions with the 4 management: (0) neither workers’ organisation nor open communication between workers and management (1) inactive internal workers organisation OR adequate informal communication between workers and management (2) active workers organisation or trade union that discusses working conditions, lack of compliance with legal obligations and addresses workers grievances together with the management (3) very active workers organisation and good spirit of cooperation (4) worker owned company OR exceptionally high degree of unionisation with positive relations between management and union OR very active workers representation with collective bargaining and agreements in other labour issues. 10 Workers’ awareness of freedom of association: (0) not aware (1) aware of the option but 3 feel hesitant to really join a union / organisation (2) aware and organised OR aware of the option but clearly not interested (3) workers are well aware of their freedom to organise and know their rights. 11 Regular meetings between workers’ organisation / workers’ representatives and 3 management: (0) no meetings, no exchange (1) some exchange, but not during scheduled, regular meetings (2) regular meetings scheduled with mutually signed minutes (3) regular meetings with demonstrated records to address workers’ grievances and close cooperation between management and workforce. 12 Written grievance procedures: (0) none (2=M from year 2) written document outlines a 3 fair and appropriate grievance procedure, available to the workers, e.g. in employee M=2 handbook or on notice board (3) all workers aware of grievance procedures and from procedures are effectively implemented, all grievance cases dealt with appropriately. Yr 2 13 Workers are not disciplined, dismissed or discriminated against for raising their concerns 2 through application of grievance procedure (0) some workers who raise grievance issue M=2 have been disciplined / discriminated (2=M from year 2) workers who follow the from grievance procedure are not disciplined, intimidated or discriminated against, their Yr 2 rights are protected in writing (e.g. in grievance policy). 14 (0) Workers who inform the Fair for Life certification body on labour related problems get 3 dismissed or disciplined (2=M) such workers are not discriminated, intimidated or M=2 penalised. A company with an established and well working grievance procedure may require workers to use the internal mechanisms first before informing the certification body (3) companies actively inform workers on their right to discuss their working conditions freely with the certification body. 15 Inviting workers’ feedback and comments: (0) no open attitude towards workers raising 3 concerns or suggestions for improvement (1) workers may raise their concerns to supervisors or management, but management does not react adequately (2) management encourages and supports workers’ feedback and suggestions for improvement even beyond grievance, e.g. suggestion box, open discussion culture where workers do not feel intimidated to raise their concerns (3) very good and inclusive company communication culture, very open to workers suggestions and problems; adequate action taken by the management to address the concern raised.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 47 30

2.1.3 Child Labour and Protection of Young Workers

Principle 2.1.3 No children under 15 years work in the operation. Young workers never perform any work that is hazardous or that could jeopardize their emotional, social or physical development. a) Children (<15 years) are not employed and shall not work in the operation. If there are or were children working in the company, the company is expected to present a remediation policy to responsibly phase out any form of child labour as soon as possible, at the latest within 1 year with regular updates on progress. Depending on the severity of the individual case, certification may not be granted until child labour has been responsibly phased out. Remediation shall prevent any children who are no longer working for the company from entering worse forms of child labour, and shall also ensure that the children are able to attend and remain in quality education until no longer a child. Children may under no circumstances be required to do work that is likely to jeopardize their health, safety or emotional development. The only exception to this rule can be granted on assessment of the individual situation for children older than 14 years who do light work for pocket money in their school holidays or for short term practical training – if the work

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is light and non-hazardous. This is in line with ILO 33 which permits that in non-industrial situations “National laws or regulations may determine work to be allowed and the number of hours per day to be worked during the holiday time of children referred to in Article 2 who are over fourteen years of age. Children over twelve years of age may, outside the hours fixed for school attendance, be employed on light work - (a) which is not harmful to their health or normal development; (b) which is not such as to prejudice their attendance at school or their capacity to benefit from the instruction there given; and (c) the duration of which does not exceed two hours per day on either school days or holidays, the total number of hours spent at school and on light work in no case to exceed seven per day; not on Sundays and legal public holidays nor during night.” The above provisions are in line with ILO conventions 138 and 182. If the national minimum age for employment is less than 15 years, the company may be granted a transition time to increase their minimum employment age to 15 b) Young workers (15-17 years) shall not perform work that is hazardous or dangerous to their health and safety or that could jeopardise their educational, emotional, social and physical development. c) Young workers who are attending school shall be limited to a total of 10 hours a day including school, work and transportation. Workers who are not attending school shall work for a maximum of eight hours a day. Total work hours must not exceed 42 hours per week and must include one rest day out of every seven.

No Control Points: Child Labour and Protection of Young Workers MAX SCORE 1 There is (0) child labour (1) some indication of child labour (2=M) no child labour 4 (including children assisting their parents) (3) active engagement in programmes to M=2 eliminate child labour in the local community (4) exceptional activity in the creation of awareness concerning the elimination of child labour. If there is child labour  see policy above; give details on scope and nature of employment and planned remediation; individual decision whether certification can still be granted 2 Young workers (0) are (2=M) are not engaged at night or in work that is hazardous to 3 their health, safety and that may jeopardize their development (3) are restricted in M=2 the work scope available to them; special safety precautions are in place in workplaces of young workers. If no young workers  (n.a.) 3 Young workers are (0) normally (1) occasionally (2) never engaged in work not 2 appropriate for their age (too complex / hard / etc.). If no young workers  (n.a.) 4 Working hours of young workers: (0) do not permit them to attend school (1) interfere only 3 slightly with education (2=M) do not interfere with education; normal school M=2 attendance (3) operator actively supports schooling or specific education and training of its young workers. If no young workers  (n.a.) 5 Daily working hours of young workers including school and travel thereto (0) do exceed 3 10 hours including transport and school OR 8 h working time if not attending school M=2 (2=M) are less than 10 hours if attending school, less than 8 h work per day, max. 42 h per week; 1 day off for every seven day period; sufficient rest periods (3) are 6 hours per day or less.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 15 10

2.1.4 Disciplinary Practices

No Control Points: Disciplinary Practices MAX SCORE 1 (0) Evidence (2=M) no evidence of corporal punishment (3) clear written policy that 3 prohibits any form of corporal punishment; policy made known to all staff. M=2

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2 (0) Clear evidence (1) some indication (2=M) no indication of disciplinary practices 4 violating dignity and basic human rights (3) very good understanding between M=2 management and workforce considering disciplinary issues; no real disciplinary actions necessary. 3 Disciplinary practices are (0) highly unfair / not transparent (1) ok, but a few problems (2) 3 fair and transparent. Clear written policy that prohibits any form of corporal punishment; policy made known to all staff (3) very good policy and no major discipline problems. 4 Deductions from wages as a disciplinary measure (0) are practiced (2=M) are never 2 done other than when provided for by national law or with the expressed permission of M=2 the worker concerned. All such deductions are recorded in the staff file. 5 Other strong disciplinary measures e.g. work ban for limited time, are (0) arbitrary, not 3 recorded OR unjustified compared to the workers offence (2) only done in extreme cases, documented and reasonable in relation to the mistake of offence committed by the worker (3) not done.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 15 10

2.1.5 Equal Treatment and Opportunities

Principle 2.1.5 The company ensures equal and respectful treatment of all workers in all matters. a) There shall be no discrimination in hiring, compensation, access to training, promotion, termination, benefits or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, HIV / Aids, union membership or political affiliation. “Positive discrimination” to overcome entrenched discrimination practices in the society can be useful in some settings and may be accepted if permitted by law and until entrenched discrimination has been overcome. In case of discrimination entrenched in cultural norms or traditions, companies shall have proactive policies and programmes aimed at distributing opportunities more equally. b) Discrimination against pregnant women is not accepted and the rights of pregnant women and new mothers must be respected. A company may not require women to be tested for pregnancy, force them to use contraception as a condition for employment, or pressurise workers to quit when their pregnancy is noticed. The workload during pregnancy shall be adequate and adjusted to the changed physical condition (no lifting of heavy weights, no heavy or hazardous work, sufficient rest periods). Working mothers must be granted the legally required postpartum benefits and shall be allowed to nurse after returning to work. Legally defined periods during which pregnant women cannot be dismissed must be respected. In lack of national legislation ILO P 89 will be used as guidance. Fair for Life expects employers not to dismiss women for any reason related to pregnancy or child birth. c) Sexual harassment is not tolerated. In order to ensure the safety and dignity of workers, management should promote a culture of respect and zero- tolerance for mistreatment and degrading attitudes or behaviour. Incidents of sexual harassment should be dealt with promptly and effectively, leaving no doubt about the willingness of management to discipline violators in a way that would deter future incidents. A discreet, effective complaint procedure should be in place. A trusted person, such as an appointed (preferably female for women and male for men) counsellor can encourage workers to report incidents without fear of being dismissed or penalized.

No Control Points: Equal Treatment and Opportunities MAX SCORE 1 Remuneration: (0) severe discrimination (1) some inequalities or suspected cases of 4 discrimination (2=M) no systematic discrimination (distinction, exclusion or preference) M=2  with respect to remuneration (wages and benefits). If not yet met M=plan to correct the situation within 1 year (3) clear policy, employer is actively involved in promoting mutual respect and harmony among the workers through cultural and educational activities (4) exceptional commitment; exceptionally equal working conditions within the specific local setting. 2 Opportunities: (0) clear evidence (1) some indication (2) no indication of systematic 3 discrimination (distinction, exclusion or preference) with respect to opportunities (training, promotion) (3) clear policy, high presence of potentially discriminated groups in good positions.

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3 Hiring practices: (0) clear evidence (1) hiring not balanced but no indication of systematic 4 discrimination (2) adequate, non-discriminatory hiring practices based on qualification and merits (3) company policy or quota regulation on how to avoid discrimination (4) mission to create employment for disadvantaged groups. 4 Dismissal and redundancies: If workers have been made redundant there is (0) clear 2 evidence of systematic discrimination (1) dismissal practices not balanced but no indication of systematic discrimination (2) adequate, non-discriminatory dismissal practices based on performance of workers. 5 Sexual harassment: (0) confirmed case of sexual harassment, not followed up (1= M) no 3 clear policy or company instruction on sexual harassment, but no case of sexual M=2 harassment (2=M from year 2) behaviour that is sexually coercive, threatening, from abusive or exploitative is not tolerated. Any cases of sexual harassment are followed Yr 2 up by management and resolved within a reasonable time frame (3) policies are available and effectively implemented with clear procedures to condemn and prevent behaviour that is sexually intimidating and the use of abusive language. 6 Discreet complaint mechanism and training of a counsellor for cases of sexual 3 harassment: (0) no contact person available for workers (2) discreet complaints mechanism with appropriate key person to hear workers’ concerns with regard to sexual harassment; counsellors are adequately trained (3) very good policies and staff training with regard to sexual harassment. 7 Protection of women workers: (0) female workers get dismissed or forced to quit if they 4 become pregnant OR pregnancy testing OR requiring birth control (2=M) pregnant M=2 workers enjoy all legally required protection as provided by national law. They are not dismissed for reasons related to pregnancy or child birth (3) company respects pregnant women’s rights beyond legal requirements (4) very good protection, support and good maternity provisions. 8 Additional points for voluntary commitment: employer has especially well adapted (4) working conditions for mothers or fathers with young children (e.g. part time positions, flexible hours, child care support, etc.) – Rating (0) no commitment or efforts to create suitable conditions to (4) outstanding efforts. No norm requirement. 9 Additional points for voluntary commitment: employer creates employment, special (4) training opportunities or especially adapted work places for particularly disadvantaged / discriminated groups, e.g. persons with disabilities – Rating (0) no commitment to (4) outstanding commitment and efforts. No norm requirement.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 31 14

2.1.6 Health and Safety

No Control Points: Health and Safety MAX SCORE 1 Risk areas and potential hazards are (0) not identified (1) partially identified (2) clearly 3 identified with signs in local language and / or pictorially (3) well controlled; Efforts have been made to reduce risk areas and to make all workplaces safe.

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If no real risk areas  (n.a.). 2 Fire fighting equipment: (0) not available (1) present but in poor condition / not accessible 3 (2=M) adequate equipment available, regularly inspected and functional for size of M=2 operation (3) well monitored and maintained (with records), advanced system. 3 Fire alarms and fire drills: (0) no alarm system, no fire drills (1=M in companies with 3 less than 50 workers) simple alarm system, no formal drills but workers know overall M=1 procedures (2=M in companies with more than 50 workers) adequate number of or working fire detectors and alarms at all relevant places, fire drills at least once a year or as per legal requirements, company monitors that every worker has attended at least M=2 one fire drill or fire safety training (3) good, well established system of regular fire safety trainings and fire drills, documented inspection and maintenance of detectors and alarms. 4 Emergency procedures: (0) not in place, not even orally (1) in place but not known to 3 workers OR not written but all workers fully aware of relevant emergency procedures M=2 (2=M) in place (written / signposted) and known by workers (3) advanced procedures including training of staff on evacuation procedures. 5 Emergency exits: (0) none (1) exits not entirely unobstructed (2=M) unobstructed and 3 clearly identified, door can be opened from the inside at any time by any worker. M=2 Sufficient for quick and safe evacuation in an emergency (3) well designed emergency evacuation system. 6 Workplaces, machinery and equipment are (0) unsafe (1) not dangerous, partially safe 4 (2=M from year 2) adequately safe and without major risks to health (as per good M=2 industry standard) (3) very safe, efforts have been made to make workplaces as safe as from possible (4) impeccable. All workplaces are designed according to highest safety and Yr 2 ergonomic standards. 7 Actual safety situation and accidents at work: (0) several accidents OR any severe 4 accidents in past 2 years (1=M) only minor accidents or injuries occasionally, with M=1 appropriate follow-up improvements taken (2) no substantial accidents or work-related health problems (3) high focus on safety issues, very good preventive measures and training (4) exceptionally high and actively implemented safety standards. 8 Records about accidents at work and work related sicknesses: (0) not recorded (1) some 3 records, incomplete or not followed up (2=M from year 2) recorded and adequately M=2 followed-up (3) recorded, analysed and preventive measures put in place OR no from accidents / work related illnesses in past 3 years. Yr 2 9 In cases of work related accidents the company (0) does not provide any financial 4 assistance (1) provides financial assistance on a recoverable basis (2) provides insurance cover OR full payment (3) provides comprehensive medical insurance cover for work and non work related illnesses (4) provides exceptionally good insurance cover fully paid by the company; insurance covers permanent disability / death. 10 Workers awareness of occupational health and safety: (0) not aware of the basic 4 requirements (1) aware but not systematically trained (2) informed and adequately trained on occupational health and safety risk management (as appropriate for their duties) (3) very good regular training (4) all workers exceptionally aware and well trained in safety issues. 11 Any workers carrying out high risk activities (fork lift, chemical handling, hazardous 3 machinery) have undergone (0) no training (1) some training on the job, but not done M=2 systematically (2=M) adequate, documented training. Training is renewed as required (3) very good regular staff training and monitoring. 12 Safety officer: (0) none although safety problems (1) no formal safety officer, but all 3 supervision staff adequately aware of safety aspects (2) one person trained as safety officer with sufficient qualification and management powers is assigned (3) safety committee with participation of workers. 13 Risk analysis of health and safety hazards: (0) not carried out (2) regular analysis done; 3 written safety policy (3) exceptionally high health and safety awareness in-house. 14 First aid equipment: (0) no first aid facility (1) first aid boxes are in place but not 3 adequately stocked with basic medicines (2=M) adequately stocked first aid boxes. M=2 Emergency medical care (as relevant for potential accidents) is available on site or close to workplace (3) very good first aid and medical care; also for health problems not directly related to work (on site or via nearby doctor, etc.). 15 First aid staff: (0) not available (1) properly trained staff appointed (2) well trained staff 3 appointed and always present during working hours (3) staff provided with refresher course annually. 16 Pregnant women, nursing mothers and young persons are (0) engaged in potentially 3 hazardous work (2=M) excluded from potentially hazardous work incl. handling of M=2

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chemicals. 17 Adequate protection of workers from exposure to chemicals: (0) missing although 3 necessary (1) provided in acceptable condition (2=M) suitable and adequate personal M=2 protection equipment provided and maintained in good condition OR not necessary (3) exceptionally good protection efforts. 18 Adequate protection of workers from noise, dust and light (0) missing although necessary 3 (1=M) provided in acceptable condition (2) provided, maintained and effectively M=1 followed / implemented OR not necessary (3) exceptionally good protection efforts. 19 Personal Protection Equipment (PPE) is (0) not used, workers not aware of equipment 2 (1=M from year 2) mostly used, but not consistently. Used for all critical / M=1 hazardous work (2) all workers are trained in effective use of PPE and use the from equipment consistently. Yr 2 20 Suitable (special) work clothes (if necessary) (0) not provided (1) provided but workers 3 are required to pay (2) necessary protective work clothes and gear provided free of charge, well maintained and replaced regularly (3) work clothes (even if not necessary for safety reasons) provided and maintained. 21 Washing facilities / showers and changing areas if workers handle toxic substances: (0) 2 no separate changing areas or washing facilities although toxic substances are handled M=2 (2=M from year 2) separate changing areas and washing facilities available; clothes from / gear worn during application / handling of toxic substances is not taken home for Yr 2 washing. If no toxic substances  (n.a.) 22 Separate changing rooms for the different genders: (0) not provided (1) no changing 2 rooms, but workers do not need to change clothes for work (2) adequate gender-specific changing areas with safe place for personal possessions. 23 Chemical storage: (0) in workers’ areas or together with household goods (2=M) 2 separate, well locked and clearly identified storage with access restriction. M=2 If no critical chemicals  (n.a.) 24 Workers who carry out or have carried out activities identified to be dangerous or with 3 high health risks (0) are not monitored in any health programme (2) are eligible to annual health examination paid by the operation. Workers get access to the examination results and are assigned to other activities if they are unfit for present duties (3) are all provided with good health screening programme. These programmes are implemented for all workers in medium or high risk tasks. 25 Light situation at work place: (0) not sufficient / strain on the eyes (2) sufficient for the 3 task (3) very good and agreeable for workers. 26 Ventilation at work place: (0) no ventilation (1) poor and ineffective (2) effective with 3 adequate flow of fresh or purified air (by local standards) (3) exceptionally good working environment (air and temperature). 27 Access to potable water: (0) no access (2=M) convenient access, free of charge (3) 4 high quality water or tea for free (4) also other drinks (coffee, juice, etc.) for free. M=2 28 Access to clean toilet facilities: (0) seriously restricted access (e.g. only one worker at a 2 time, insufficient number of toilet passes), insufficient numbers or very unhygienic toilet M=2 facilities (1) restricted access, or some issues with hygiene or number of toilets (2=M from from year 2) free, unrestricted access to clean toilet facilities in adequate numbers, Yr 2 separated by gender if required by law. 29 Facilities to heat / consume food: (0) no facilities (1) inadequate facilities (2) clean and 4 adequate facilities to consume food of their choice OR fairly priced canteen (3) subsidised meal provided (4) free quality meal provided. 30 If accommodation for workers is provided: (0) the standard of the accommodation is 4 unacceptable (1) sufficient but overall standard or cleanliness is relatively low (2=M) M=2 adequate, clean and safe according to local standards1, at reasonable costs. If not yet adequate: written plan to improve within 1 year after certification (3) very good accommodation at normal / subsidised rates (4) exceptional.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 92 60

1 Adequate accommodation: hygienic and healthy conditions (dry, day light access, appropriate lighting, ventilated / heated, clean sanitary facilities approximately 1 per 15 workers, sufficient space per person, dignified sleeping structures); some privacy ensured and storage of personal belongings possible; access to laundry place and kitchen facilities if necessary.

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2.2 CONDITIONS OF EMPLOYMENT

The following conditions of employment criteria apply to all hired labour operations. Size and complexity of the applicant operation will be considered in the evaluation of performance. In an operator profile, applicants for certification must give a detailed overview of the employment conditions for all different types of workers: permanent workers and temporary workers. These include short term contracts, seasonal / daily wage workers and piece rate workers. During the audit, the auditor will analyse the employment conditions for all workers in detail.

2.2.1 Contracts and Relations between Employer and Workforce

Principle 2.2.1 The relationship between employer and workers is well defined and efforts are taken to create a positive working atmosphere. a) There is a written contract or comparable type of written agreement on employment conditions such as job position, working hours, overtime regulation, social benefits entitlement and deductions, annual paid leave and sick days as well as provisions on termination of employment. Ideally, this is defined for each worker in a written employment contract, which is signed by the employer and worker; a copy is given to the worker. Alternatively only worker specific details such as position, tenure (with related sickness and paid leave allowance) and wages are given in a contract or similar document, while additional information, which is applicable to all workers, is published in separate general documents (e.g. employment manual, openly displayed working regulations, Collective Bargaining Agreement CBA, etc.). b) The employer shall develop a corporate self-understanding of partnership with the workers and do his / her best to create a positive working atmosphere. c) The company keeps a complete register of workers and ensures that they are legally registered as required by law. This protects workers to ensure that they all have legal social security and recognised rights. In exceptional cases individual solutions may be found for operations that provide very good working conditions to marginalised workers already in the country and who at the same time strive for legal registration wherever possible.

No Control Points: Contracts and Relations between Employer and Workforce MAX SCORE 1 There is a system of written contracts / agreements on employment conditions (see 4 guidance above): (0) no aspect of working conditions is defined in writing (1) written M=2 agreement on employment conditions only for permanent workers OR documents not from covering all above listed aspects OR only generic documents on working conditions, but Yr 2 no individual contract (2=M from year 2) written agreement on employment conditions for all workers, see guidance above (3) good and detailed contracts. Contract and related documents outline rights and duties of both sides and are signed by employer and worker; worker receives copy. 2 Contracts / agreements are effectively on file for all workers (if there is a system of written 2 contracts – otherwise check other employment records) (0) missing or very incomplete M=1 contract files or any case of suspected fraud (1=M from year 2) only minor problems from found: a few unsigned or incomplete contracts but worker effectively has all rights of Yr 2 written contract (2) complete and signed set of contracts / documents that outline employment conditions. 3 Workers are (0) not (1) sufficiently (2) adequately informed about their duties and rights 3 (3) very well informed about their working conditions, their legal entitlements and their rights as employees. 4 There is (0) no (1) little (2) adequate (3) very good interaction and understanding 4 between employer and workers and a positive working atmosphere (4) workers give the impression of working in a model company; social events / support for workers, etc. 5 Training by employer: (0) no training offered (1) basic on-the-job training (2) good 4 continuous on-the-job training (3) training for career advancement; certificates provided (4) good and generous study and advanced training options available for most categories of workers. 6 For verifying compliance with Social Responsibility requirements, the company provides a 3 complete register of ALL workers employed or contracted by the operator (0) no such M=2 register or list OR very incomplete (2=M) complete register of all workers employed or

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contracted in the operation – crosschecked with other worker related documentation and payments. The list shall include all workers employed in current calendar year – for new applicants the list must include all workers employed in 6 months prior to first audit (3) very good and complete official registration and documentation system of all workers. 7 Legally required registration of workers: (0) illegal workers (2=M) all workers who work 3 2 for more than 2 months / year are legally registered if required by law (3) even M=2 shorter term temporary workers always registered OR employer actively supports workers in obtaining working permits, etc before employment.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 23 14

2.2.2 Wages

Principle 2.2.2 Workers receive a fair remuneration for their work and are paid at least a wage that allows them to meet basic needs and have some discretionary income. a) Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher. In any event, wages should always be enough to meet the basic needs of the workers and their families including some discretionary income. Where the certification applicant uses payment by production (piecework) system, the established pay rate must permit the worker to earn the minimum wage during normal working hours and under normal operating conditions. “A wage that allows workers to meet the basic needs (“living wage”) enables a worker to support half the average- sized family above the poverty line, based on local prices near the workplace. Basic needs include essential expenses such as food, clean water, clothes, shelter, transport, education, a discretionary income, as well as legally mandated social benefits (which may include health care, medical insurance, unemployment insurance, retirement plan, and so on)”. (SA8000 Guidance Document 2004). In case of doubts, Fair for Life companies are expected to present a basic estimation of a basic needs wage for their workers including considerations of average household size and number of earning family members amongst the workers of the company. Special consideration shall be given to one parent families. b) The employer pays workers for any time spent in required meetings and training sessions and for other unproductive time due to conditions beyond their control (such as occupational health and safety measures). c) If payment is provided (e.g. partly) in kind, such as e.g. accommodation or food, the workers can choose freely between in-kind and cash payments and costs for the service provided are fair. d) Payments are well documented and the workers receive particulars of their wage every time they are paid.

No Control Points: Wages MAX SCORE 1 Wages of PERMANENT workers are (0) far below (1) slightly below (2=M) in line with 4 official minimum wages or official industry benchmark standards which ever is M=2 higher) (3) clearly above minimum wages for respective activities (or above wages in comparison with other companies if minimum wage not really applicable for the nature / level of work done (4) wages substantially higher than common for the specific task / region. These wages include realistic bonuses. (In case of payment-per-production, calculate income of an average production day without overtime). 2 Local comparison of wages paid to PERMANENT workers (operational staff) for the 4 respective type of work: (0) very poor wages in regional and industry context (2) good, adequate wages in local context for the respective fields of work (3) higher than wages offered by similar other companies in the region (4) substantially higher wages. 3 Wages of SEASONAL / TEMPORARY workers are (0) far below (1) slightly below (2=M) 4 in line with minimum wages (3) above official minimum wages (4) substantially higher M=2 than common for the specific task / region including received bonuses. In case of payment-per-production, calculate income of an average production day without overtime. 4 Local comparison of wages paid to TEMPORARY and SEASONAL workers (operational 4 staff) for the respective field of work: (0) very poor wages in regional and industry context (2) adequate wages in local comparison (3) higher than wages offered by similar other

2 Wherever provident fund / pension fund / social security fund subscription is available it can be accepted as ‘registration’ with the concerned government agency.

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companies in the region (4) substantially higher than typical wages. 5 Additional points for voluntary commitment: Incentives, bonus or allowances for workers (4) according to a transparent and fair system. Rate (0) to (4). No norm requirement. 6 Additional points for voluntary commitment: Worker ownership schemes, transparent (4) system in which workers can earn shares of the company they work for and profit from good results. Rate (0) to (4). No norm requirement. 7 The wages (including benefits and / or bonus) paid to PERMANENT workers: (0) clearly 4 not sufficient to meet even most basic needs like food and housing (1=M) most basic M=1 needs can be met (2=M from year 3) basic needs can be met by workers, even in M=2 single parent families (if any), including discretionary income OR in line with living from wage estimations (if available). In case of doubt the operation must provide basic needs wage estimations - see guidance texts above (3) very good wages (4) Yr 3 exceptionally high wages (including average bonus and social benefit contributions by employer), ensuring good living standard in local context. 8 The wages (including benefits and / or bonus) paid to TEMPORARY workers are (0) 4 clearly not sufficient to meet even very basic needs (1=M) meet most basic needs (2=M M=1 from year 3) in line with living wage estimations (if available), sufficient to meet the M=2 basic needs including some discretionary income. In case of doubt operator must provide basic needs wage estimations - see guidance above (3) wages clearly exceed from basic needs income (4) exceptionally high. Wages (including average bonus and other Yr 3 contributions by employer), ensure good living standard in local context. 9 Ratio between top management salary and wages of lowest paid worker category: (0) 4 higher than 20:1, (1) between 20:1 and 12:1, (2) between 12:1 and 6:1, (3) lower than 6:1 (4) lower than 4:1. 10 Training sessions, time lost due to machine stoppage and other events beyond the 3 control of the employee conditions are (0) not remunerated (1) remunerated at a reduce rate (2) paid at the normal daily rate for permanent workers (3) fully remunerated even for short-term / hourly paid labour. 11 If accommodation or other in kind remuneration is offered, worker (0) cannot choose 2 freely the type of remuneration preferred (i.e. cash instead of housing) (2) can choose freely. If no accommodation or other in kind remuneration  (n.a.) 12 Deductions for housing are (0) higher than 10% of prevailing local market prices (1) 4 slightly more than local prices (2=M) in line with local prices (3) less than local prices / M=2 subsidised (4) strongly subsidised or free. If no housing provided  (n.a.). 13 Payments are (0) not done, unduly delayed, very irregular (1) not on fixed days or 2 occasionally slightly delayed payments (2=M) regularly done and on fixed days. M=2 14 Payments are (0) not (1) poorly documented, some inconsistencies (2=M) well 2 documented and confirmed by cross checking with other documentation (e.g. time M=2 records, contract – wage, book keeping). 15 Particulars of wages (actual earnings as well as any deductions and contributions to 2 social benefits) are indicated to the employee every time payment is made (0) no such M=2 details indicated to worker (2=M from year 2) wage slips of ALL workers contain this from information, worker receives wage slip. Yr 2

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 50 26

2.2.3 Social Security and Social Benefits

Principle 2.2.3 The company supports adequate schemes to promote worker’s social security and welfare. a) The employer shall comply with all legal obligations regarding social benefits for its workers. For temporary workers all legally required benefits shall be ensured, benefits may be proportioned according to the time worked. b) Even if not required by law, Fair for Life companies must provide their workers’ access to adequate schemes to support the workers’ social security and welfare such as in particular a retirement plan / provident fund, health insurance / medical care, paid sick leave and maternity leave.

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c) Companies shall strive to provide further social security and benefits such as unemployment insurance / compensation in case they are made redundant, protection against permanent disability or death arising out of or in the course of employment and are encouraged to provide further benefits such as child care leave for men and women, etc. d) Also temporary workers shall have access to basic social security schemes wherever possible, in particular contribution to retirement schemes, protection in case of invalidity and access to medical care. If governmental systems do not work or are not accessible, individual solutions may be accepted. In this case cross-verification with NGO’s and trade unions (if present) will be required.

No Control Points: Social Security and Social Benefits MAX SCORE 1 Compliance with national labour legislation in regard to social benefits (sick leave, 2 retirement, medical insurance, maternity, unemployment benefits / compensation for loss M=2 of job) is (0) not at all achieved (1) not fully, but almost (2=M) achieved for all workers. 2 Basic coverage for retirement is guaranteed for permanent workers: (0) not at all (2=M 4 from year 3) basic coverage, legally required employer contributions paid (3) M=2 substantial part (more than workers share) contributed by employer OR employer from contributes more than is legally required (4) exceptionally high coverage and Yr 3 contributions. 3 Basic coverage for retirement is guaranteed for temporary workers: (0) not at all (2) basic 4 social security system, legally required employer contributions paid (3) employer contributes more than worker (even if legally required) OR higher employer contributions than legally required (4) exceptionally high coverage and contributions. 4 Basic coverage for permanent disability or death for ALL workers: (0) none (2) basic 4 social security system, legally required employer contributions paid (3) substantial part (more than workers share) contributed by employer OR employer contributes more than is legally required (4) exceptionally high coverage and contributions. 5 Basic coverage for maternity is guaranteed (0) not at all (1) some efforts / not yet 4 sufficient (2=M from year 3) basic maternity coverage for permanent workers (at M=2 least 8 weeks) (3) for all workers OR for permanent workers higher than required; at least from 12 weeks (4) exceptionally generous practice; substantial contributions by employer. Yr 3 6 Medical care or health insurance for ALL workers: (0) no health insurance nor minimal 4 support from employer in case of non-work related sickness (2) at least basic medical insurance for permanent workers OR good health service provided directly by company (3) coverage higher than normal and employer contributes at least equally towards insurance costs (4) exceptionally high coverage with unusually high contributions from employer in local context. 7 Unemployment insurance or compensation for loss of work: (0) none, even for long term 4 permanent workers (2) as legally required (3) for all workers OR contributions by employer are higher than legally required (4) exceptionally generous practice. 8 Paid sick leave for permanent workers: (0) no right to paid sick days (1) legally required 4 paid sick days sometimes granted but not guaranteed (2=M) paid sick days granted as M=2 per local legislation and in any case at least 5 paid sick days per year (3) better coverage than legally required; but only if at least 10 paid sick days per year (4) exceptionally generous sick days practices in local comparison; some protection for long term illness / absence due to health reasons. 9 Paid sick leave for temporary workers who work more than 3 months consecutively (even 4 if on shorter contracts): (0) no right to paid sick days at all (1) sometimes permitted sick days, as per individual decision of company (2) regularly attending temporary workers who work for the company more than 3 months / year get a suitable sick pay allowance – unless there is a clear case of misusing the allowance (3) good sick pay allowance even for temporary workers in local context (4) exceptionally generous sick days practices in local comparison. 10 Overall evaluation of social benefits for PERMANENT workers in local context: (0) clearly 4 below other comparable companies in the region (1) slightly below or same as other companies in the region (2) slightly higher than other comparable companies, and higher than legally required (3) substantially higher (4) exceptional. 11 Overall evaluation of social benefits for TEMPORARY workers in local context: (0) clearly 4 below other comparable companies in the region (1) slightly below or same as other companies in the region (2) slightly higher than other comparable companies, and higher than legally required (3) substantially higher (4) exceptional for the respective category of workers.

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12 Records on social benefits payments by employer and deductions from workers wages: 2 (0) no / very poor records (2=M) adequate records. M=2 13 Additional points for voluntary commitment: Extra social benefits beyond the above (4) mentioned benefits such as e.g. extra leave days (e.g. for wedding, bereavement, moving houses), paternity leave, death insurance, membership to a private retirement fund, etc. Rate extra benefits (beyond above) from (0) to (4) and give detailed comments below. No norm requirement. 14 Additional points for voluntary commitment: Extra support services for workers such as (4) e.g. subsidised child care, transportation to work, educational fund for workers’ children, support of worker in private hardship situations, educational fund for workers’ children, free work clothing etc. Rate extra benefits (beyond above) from (0) to (4) and give detailed comments below. No norm requirement.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 52 24

2.2.4 Working Hours and Paid Leave

Principle 2.2.4 Working hours are not excessive and workers get paid national holiday and annual leave. a) Working hours comply with national laws or benchmark industry standards, which ever offers higher protection. Usual working hours shall not exceed 48 hours per week and workers shall be provided with at least one day off for every 7 day period. If workers are paid by piece rate, working hours should still be monitored. Sometimes the time at work may include times for socializing rather than work and this can be considered as additional factor in the overall evaluation of working hours. b) Overtime shall be voluntary, with total working hours not exceeding 60 hours per week. Overtime must not be demanded on a regular basis and must be compensated at a premium rate. In agriculture and processing companies with a strong emphasis on seasonality it may be acceptable that working hours and rest days during peak periods (less than 12 weeks a year) are averaged over an 8 weeks period with adequate rest days in between. This must be agreed beforehand with workers in an overtime agreement and the workers must be in favour of the system. Health and safety aspects must be carefully monitored. Overtime is considered voluntary even if workers are requested occasionally (or during peak periods) to work overtime, but then do so out of their own will. They must be informed and aware that no disadvantage would result from not accepting to work overtime. If workers sign out of free will to the company occasionally requesting overtime from them, this is considered acceptable practice as long as the workers are informed and made aware that neither their employment nor their employment conditions are dependent on their signing up for requested overtime. Workers must be able to sign out of this obligation at reasonably short notice and must effectively be free to deny overtime without being discriminated against. If workers have the choice of adequate time compensation for working longer days instead of considering this time overtime, and if this practice is appreciated by the workers, then occasional longer working hours that are compensated by other days or accumulated to additional leave days are not considered overtime. Actual compensation must be proven. Overtime at night, on Sundays or public holidays must in this case be time- compensated at the applicable premium ratio. c) Working hour restrictions for women workers are respected (in line with ILO Convention 89 and Protocol 89 on Night Work of Women). d) Adequate rest breaks (for heavy or dangerous work allow longer and more frequent breaks) shall be given. e) Workers are entitled to paid national holidays and paid annual leave.

No Control Points: Working Hours and Paid Leave MAX SCORE 1 Weekly working hours are as a rule (0) far higher (1) slightly higher (2=M) in line with 4 national labour legislation – see guidance above on peak times (3) lower than required M=2 (for normal wage). 2 Usual weekly working hours are (0) far more than 48 hours (1) slightly more than 48 3 hours (2) not more than 48 hours (3) equal to or less than 40 hours.

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3 Documentation of working hours and overtime is (0) not trustworthy / not existing (1=M) 3 existing but relatively poor (2=M from year 2) adequate, trustworthy system; M=1 effectively implemented (3) very good documentation of hours worked. M=2 from Yr 2 4 Overtime is not obligatory: (0) fully at discretion of the employer / very regular (1) 3 whenever needed; more than 12 weeks / year (2=M from year 2) overtime is not M=2 obligatory – see guidance text above for details (3) very worker-friendly overtime from practices (very little / flexible overtime). Yr 2 5 Maximum working hours per week (including overtime) (0) exceed 60 hours / week by far 3 (2=M) do not exceed 60 hours / week – see guidance above for overtime during peak M=2 periods (3) equal or less than 46 h. 6 Overtime is (0) not remunerated extra (2=M) remunerated according to local 3 legislation; at least paid extra OR can be time-compensated (3) remunerated at M=2 premium rate of 150% (even if required by law  (3) if paid at premium rate). 7 Working time or overtime on Sundays (or equivalent weekly rest day), statutory holidays 2 or at night are remunerated at legally required premium rate: (0) not done (2=M) paid at M=2 legally required premium rate. If such hours are time compensated the respective premium rate is applied. 8 Women workers: (0) women’s working hours are not in line with applicable legal 2 restrictions (2) women do not work at night (22.00-7.00, or as specifically defined in the country) unless clear provision and restrictions have been defined in national law. 9 Rest breaks and rest days, even during peak times: (0) none (1) some efforts, but not one 4 day out of 7 guaranteed, e. g. during peak periods (2) one day in every 7-day period agreed and guaranteed. Adequate rest times during the day (3) two rest days per week (4) Two rest days per week plus exceptionally generous rest times. 10 Flexibility for workers (working days and hours): (0) no flexibility, even upon request (2) 4 reasonable minimal working times; flexibility also to meet needs of workers (3) special consideration is given to workers who need more flexibility in working hours (parents, young workers studying etc.) OR very flexible working hours scheme (4) exceptional flexibility. 11 There is (0) disagreement (1) some basic agreement, but e.g. not written OR no problem 2 with overtime at all (2) a written agreement between workers and employer regarding maximum and minimum normal weekly working hours, variation of working hours through the year and the periods during which these hours of variation may fall. 12 Statutory / national holidays for PERMANENT workers: (0) official holidays not always 4 granted (1) mostly granted but not guaranteed, workers do not know in advance whether or not they will get these days off (2) workers have the right to spend statutory holidays off work and receive their normal daily wages if holiday is on a regular working day (3) additional company specific holidays e.g. for specific religious or cultural festivals. 13 Statutory / national holidays for TEMPORARY WORKERS (0) official holidays not always 4 granted although legally required for temporary workers (1) some holidays granted but not guaranteed, workers do not know in advance whether or not they will get these days off or they are not paid for these holidays (2) temporary, seasonal and short term workers who work in the company for more than 2 months have a right to the statutory holidays days off work and receive their normal daily wages if the holiday falls on a regular working day and if the operation closes entirely for the holiday (3) additional company specific holidays e.g. for specific religious or cultural festivals. 14 Annual paid leave for PERMANENT workers: (0) none although legally required (1) 4 legally required annual leave normally granted but not guaranteed; workers are not sure M=2 whether (or to how many) they are entitles to paid days off work (2=M) official public holidays and annual leave granted as per local legislation (3) 1-3 annual leave days above legal requirement (4) exceptionally generous vacation practices in local context; at least 2 weeks paid leave. 15 Additional points for voluntary commitment: Temporary workers get paid leave allowance (4) in adequate proportion to their working time in the company and overall attendance performance. Rate efforts (0) to (4). No norm requirement. 16 Workers’ perception of working hours and rest days (including paid holiday and annual 4 leave entitlement): (0) very unhappy with working hours and rest days / paid leave (1) accept working hours and rest days practice, some minor concerns (2) working hours and rest days suit the workers and are considered fair (3) working hours and rest days are perceived as generous and good in local context (4) exceptionally good working time conditions.

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17 Information of temporary workers on work availability: (0) workers never know when they 4 will be able to work / have to wait in expectation of possible employment (2) clear information to workers, also temporary or daily wage workers know at least one week in advance whether they will be expected to work and can plan their employment activities accordingly (3) very good worker friendly practice in local context.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 57 32

2.2.5 Regular Employment

Principle 2.2.5 The operation strives to provide regular employment. a) The social focus and commitment to improved working conditions shall also specifically include any seasonal, migrant and temporary workers, who are often those with the weakest bargaining position and the most marginalised social group in the local setting. b) To the extent possible work shall be based on recognised employment relationship, i.e. regular, non- seasonal work shall be undertaken by permanent workers. Time-limited contracts and daily waged labourers shall only be used during peak periods, for special tasks or under special circumstances. If due to specific country circumstances temporary workers are employed all year round, the employer shall grant all workers the same rights and benefits, independent of their employment status; this includes seasonal and temporary labour. c) Obligations to employees under labour or social security laws and regulations arising from the regular employment relationship shall not be avoided through the use of labour-only contracting, sub- contracting, or home-working arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment, nor shall any such obligations be avoided through the excessive use of fixed-term contracts of employment.

No Control Points: Regular Employment MAX SCORE 1 With regard to wages there are (0) strong (1) some (2) little (3) no differences between 3 permanent and temporary workers (for work of equal value). 2 With regard to social benefits and working conditions, there are (0) strong (1) some (2) 3 little (3) no differences between permanent and temporary workers (for work of equal value). 3 If there are substantial differences between permanent and long-term temporary workers, 2 (0) no actions even after certification (1) some improvement considerations (2=M from M=2 year 2) a plan for gradual improvement is in place and followed. from Yr 2 4 Workers who are working basically all year (regular workers) are employed with same 4 benefits as permanent workers): (0) many regular workers working without the status of M=2 permanent workers (1) some regular workers still working without benefits of permanent from workers OR regular workers have most, but not all benefits of permanent workers (2=M Yr 3 from year 3) regular workers are employed or contracted with all core benefits of permanent workers: such as regular work guaranteed, social security payments, sick- days / paid leave entitlements and others; may be salaried or paid on daily wage (3) all regular workers have permanent status (4) in comparison to the industry norm, special effort is made to employ more workers as permanent workers, rather than temporary labour. 5 Employer (0) does (2=M) does NOT hire and fire workers on a continuous basis to 3 avoid implications of regular employment (e.g. social security payments) (3) all workers M=2 doing regular work are employed as permanent workers. 6 There is (0) substantial (1) some (2=M) no indication that sub-contracting, home- 2 working, apprenticeships etc. are used to avoid regular employment or direct M=2 contracting. If done, plan for improvement within 1 year. 7 Where work is sub-contracted: working conditions of subcontractor are (0) far below (1) 3 slightly below (2=M) basically the same as for directly contracted workers for similar M=2 tasks; clear agreements on working conditions between operation and the subcontractor; subcontractor’s working and employment conditions are internally supervised (3) working conditions of subcontractor are confirmed by third party.

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TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 20 14

2.3 SOCIAL RESPONSIBILITY AND COMMUNITY RELATIONS 2.3.1 Commitment and Management of Social Responsibility

Principle 2.3.1 The operation commits to fair working conditions and Social Responsibility and takes the necessary management steps to ensure continuous compliance with the Fair for Life standards and improvement of performance. a) The company has a Social Responsibility Policy or Social & FairTrade Policy (depending on certification scope) that details its commitment to complying with labour laws and the Fair for Life requirements indicated in this programme and its continuous improvement of performance. The policy shall confirm commitment to fair working conditions and good relations between workers. Ideally, the Social Policy is developed in close cooperation with workers. The policy should include the following: • Longterm commitment to comply with national labour laws and with Fair for Life certification requirements and to continuous improvement within these requirements. • A summary of the rights and responsibilities of the management and workers with regard to basic worker rights, conditions of employment, living conditions (if applicable), basic services, occupational health and safety, training opportunities and community relations. References may be made to more detailed employment manuals, but still the overall commitment should be written down in all key aspects of fair working conditions (e.g. as defined by the chapters of this programme) • The policy must be signed by top management and must be made known to all staff. Corporate Social Responsibility and workers’ welfare shall be embedded in the overall mission statement and company policy. • If there is also FairTrade certification, the policy includes details on FairTrade beneficiaries, administration of the FairTrade Development Premium funds, the decision process for Development Premium use and intended Premium use (rough description of types of projects to be possibly funded) in adequate detail to ensure smooth implementation of FairTrade obligations described in Section 2.6 below. b) The Social Responsibility Policy or Social & FairTrade Policy is documented, implemented and communicated. It is accessible in a comprehensive form (workers language) to all personnel, including executives, supervisors and all other workers. It shall also be made publicly available, preferably on the company’s website. The policy is reviewed regularly and revised when necessary. Informing workers means e.g. that the policy is presented at annual staff meetings or trainings, or published prominently on site, or distributed to all staff, etc. c) The company shall appoint a representative with sufficient management power who shall ensure that the Fair for Life certification requirements are met. The company shall encourage non-management staff to choose a representative from their own group to facilitate communication with company management on matters related to Fair for Life certification. This representative shall be involved during social audits. d) All labour and environmental performance related documentation must be kept available for at least 3 years. e) The company openly presents and communicates its activities to the community and society in which it operates. This may be through good regular information to the public, inviting the community to meetings and discussions of new developments where relevant for the community, public reports or through engaging actively in stakeholder dialogue with local and other relevant stakeholders. For large organisations stakeholder consultation is part of the certification process. f) The operation shall inform its workers - and the workers’ organisations that represent them - of any plans for changes in management activities or organisational structure with any potentially significant social, environmental and economic impact and shall strive to mitigate negative impact for workers. Workers who are replaced by the use of machines or for any other reason due to significant changes in management activities or organisational structure should be given assistance to find other work opportunities within the company and workers shall be trained in those new tasks.

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No Control Points: Commitment and Management of Social Responsibility MAX SCORE 1 Social Responsibility Policy or Social & FairTrade Policy (see above): (0) none, very low 4 management awareness of social issues, low commitment (1) no written policy, but clear M=2 social commitment (2=M from year 2) written basic Social Policy covering the key from commitments (3) well developed Social Policy, developed in close cooperation with Yr 2 workers. 2 The policy has been developed (and is being updated) (0) without any involvement of 3 workers, nor top management, as a documentation for certifier only (1) in small team including at least HR staff, not formally signed by top management (2) in discussion with HR as well as worker representatives and has been signed by top management (3) with active discussions and interaction amongst workers as well as HR and top management; policy firmly embedded in overall company values. 3 The policy and the commitment to externally certified Social Responsibility performance: 3 (0) is not made known to the workers at all (1) is made available on request or only formally available to workers (e.g. on 1-2 inactive notice boards) (2) workers are adequately informed of the company’s commitment to Social Responsibility (and FairTrade, if applicable) and of the availability and content of the Social Policy (3) workers are trained and well aware of the Social Policy commitments of their employer. 4 There is a senior management representative responsible for Social Responsibility and a 3 workers´ representative with regard to Social Responsibility or Social & FairTrade certification performance: (0) no clear responsible manager or coordinator (1) somebody responsible, insufficient management power OR no workers representative in this matter appointed (2) suitable Social Responsibility / Social & FairTrade coordinator appointed, an elected workers representative acts as special contact person to establish improved communication between management and workers (3) good, active management and workers representation with regard to standard performance, spirit of cooperation to reach / maintain certification and improve performance in social matters. 5 The company has adequate management in place to implement its Social Responsibility 3 Policy and ensure continued compliance with this standard (0) no quality management system nor social quality awareness in place at all (1) simple management system, responsible coordinator reasonably capable of coordinating implementation, but social issues not embedded in overall company management (2) adequate basic management in place to ensure continued compliance with the standard, and to address specific social issues of concern (3) social aspects firmly embedded in all company policies and overall management. 6 The operation informs its workers on any plans for changes in management activities or 3 organisational structure with potentially significant social, environmental and economic effects and strives to mitigate adverse effects on workers as far as possible (0) deliberately not done and history of sudden major negative changes for workforce (1) no formal mechanism of communicating such changes, but no drastic changes in past years nor to be expected (2) adequate communication and efforts to mitigate negative effects (3) very respectful and aware of its responsibility as employer, all management decisions are taken very careful to avoid overall negative impact on workforce. 7 The operation maintains good open communication with the local community and informs 4 it of important new developments that concern the local community (if any): (0) no communication although a history of various conflicts or strong impact on community (2) good public communication of company activities (3) good dialogue with community and stakeholders; very good public information on activities (4) outstanding efforts.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 23 14

2.3.2 Community Relations

Principle 2.3.2 The operations play a positive role in the sustainable development of the communities and societies in which they operate. Companies are expected to make positive social and cultural contributions beyond legal obligations. The company’s business activities should be accompanied with high social and cultural values. Companies are expected to make positive social and cultural contributions beyond legal obligations. a) The operation employs and trains staff from the local community.

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b) The operation strives to support social, cultural and environmental community projects and activities as well as international or local Social Responsibility or fair trade movements. E.g. supporting community cultural activities, engagement in social projects in the community (e.g. direct support, fundraising, management support), supporting the Corporate Social Responsibility and fair trade movement, educating the public and providing training in local businesses or within the operation’s supply chains, promoting environmental protection and improved environmental management (e.g. training in composting and recycling), or marketing own products locally at a reasonable price. Projects financed through FairTrade Development Premium may be mentioned – but in the performance rating it should be considered that the FairTrade Development Premium is usually a contribution paid by the FairTrade buyer of the products. Community support is evaluated with respect to size and position of the operation in local context. It is acknowledged that small, more marginalised hired labour operations will often have little capacity for community commitment beyond FairTrade Premium projects. c) The company’s activities and efforts in the local community do not have a negative impact on local / indigenous communities, on the environment or on local sustainable development.

No Control Points: Community Relations MAX SCORE 1 The company provides employment (incl. training if required) for people from nearby local 4 communities: (0) no employment opportunities for local communities provided (1) very M=2 few jobs provided for local communities (2=M from year 2) significant job from opportunities for local communities; If present workforce is not local, local Yr 2 employment should be positively encouraged (positive discrimination) for all new employment (3) job opportunities for local / indigenous communities include management positions (4) operation is predominantly run by the local / indigenous groups. 2 Additional Points for voluntary commitment: The company provides income and (4) employment to marginalised groups in the respective local setting. Rate from 0 to 4: (0) no employment (2) provides some employment to marginalised groups or provides employment in a region that generally lacks employment opportunities (3) provides work to many marginalised workers (4) mission to provide employment to particularly marginalised local people. No norm requirement. 3 The company supports the local communities through its engagement in social projects 4 (e.g. support of school or local health services, scholarship programmes). Rate performance from (0) no commitment although big operation (1) some commitment OR small / marginalised operator with limited means (2) good support according to means of operation (3) high engagement (4) outstanding engagement and support of local community development. 4 Additional points for voluntary commitment: The company supports the local communities (4) through its engagement in environmental projects (e.g. composting programmes, training of local farmers in organic production, supporting development of local recycling programme, etc.). Rate performance from (0) to (4) and provide comments. No norm requirement. 5 Additional points for voluntary commitment: The company is active in creating awareness, (4) educating and training in Social Responsibility and environmental protection / sustainable use of land and natural resources. Rate performance from (0) to (4) and provide comments. No norm requirement. 6 The company’s activities and efforts in the local community do not have a negative 4 impact on local / indigenous communities, on the environment or on local sustainable M=2 development (0) activities have a clear negative impact on local sustainable development, e.g. lobbying for weaker environmental legislation, active promotion of unsustainable practices (2=M) company’s overall activities are in line with sustainability principles (3) to (4) very good / outstanding overall efforts and contribution to sustainable development.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 24 6

2.3.3 Respecting Rights of Indigenous and Local Peoples

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If there are disputes on land rights, a committee is established to resolve them. In this committee all stakeholders must be adequately represented and have equal rights. b) If biodiversity resources are used commercially, efforts are taken to ensure the use of biodiversity and traditional knowledge is recognised, transparently negotiated with local peoples and adequately compensated. In the application of criteria a) and b) the rules outlined in ILO Convention 169 (Indigenous and Tribal Peoples Convention) must be respected at all times when the rights of indigenous or tribal peoples may directly or indirectly be affected by an operation.

No Control Points: Rights of Indigenous and Local Peoples MAX SCORE 1 The company holds valid, legal and undisputed land use and tenure rights (including 3 resource use rights such as water use): (0) significant, unresolved disputes OR no legal M=2 and legitimate land use rights (2=M) legal and legitimate land use and tenure rights. If there are any disputes, they are handled responsibly (3) mutually beneficial land use / tenure agreements with the local / indigenous communities, based on transparent communication and negotiation and mutually agreed terms OR long term property without history of disputes regarding tenure rights. 2 There are no unresolved disputes related to the use of biodiversity and traditional 3 knowledge (TK): (0) unresolved disputes with regard to the use of biodiversity and TK; no M=2 efforts to solve them (1) unresolved disputes with regard to the use of biodiversity and from TK; steps have been undertaken to resolve them (2=M from year 2) no unresolved Yr 2 disputes with regard to the use of biodiversity and TK OR all such disputes resolved in a transparent and mutually beneficial way, based upon written agreements including prior informed consent and mutually agreed terms (3) proactive company initiative that has resolved all potential disputes with regard to biodiversity use and TK as described in (2) before starting the operation. 3 Use of traditional knowledge is (0) neither recognised nor compensated (2) recognised, 2 promoted and adequately compensated.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 8 6

2.3.4 Animal Rights

Principle 2.3.4 Animal rights are respected. a) Hunting and trafficking of protected wild animals listed in the CITES Annex I and trafficking of animal parts originating from protected animals or products that are derived from such animals or animal parts is not practiced. Species listed in CITES Annexes II and III shall be traded according to the CITES regulations. Local ethnic groups may be allowed to hunt or collect protected fauna for subsistence purposes, in a controlled manner and in areas designated for those purposes under clear conditions3 : b) Companies do not test their products on animals. Additional control points on animal welfare apply to Fair for Life animal production – these must be either covered under an organic or Good Agricultural Practice standard that ensures basic animals rights, or must fulfil the Animal Welfare Criteria in Module 9 Integrated Production Criteria.

No Control Points: Animal Rights MAX SCORE 1 Hunting, capturing, extracting and trafficking protected wild animals are prohibited on the 3 operation: (0) evidence of illegal hunting or trafficking of protected animals (2=M) no M=2 such activities OR only permitted hunting, see guidance text above (3) awareness creation and active organisation in this field. 2 No production, commercialisation and trafficking of animal parts originating from 3 protected animals or products that are derived from such animals or animal parts: (0) M=2 animal parts originating from protected animals or products that are derived from such animals or animal parts are produced and / or traded (2=M) no such activities OR only

3 The activities do not involve species of precarious conservation status according to the IUCN (endangered; critically endangered; or threatened with extinction). There are established customs or laws that recognize the rights of indigenous / local groups to hunt or collect wildlife for subsistence purposes. Hunting and collection activities do not have negative impacts on the ecological processes or functions important for agricultural and local ecosystems. The long-term viability of the species’ populations is not affected. Commercialization of products from subsistence hunting is prohibited.

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permitted production for subsistence use (3) company actively supports animal rights and programmes to stop illegal production and trafficking of animal parts or products based on these. 3 The company does not test its products on animals nor does it require others to do so: (0) 4 clear proof of products based on animal testing (1=M) some indication that production M=1 involves animal testing OR confirmed animal testing, but written commitment of the M=2 company to phase out animal testing in the entire production chain within 1 year (2=M from from year 2) no indication of animal testing in production (3) to (4) production free of animal testing is part of the company philosophy; company actively supports initiatives Yr 2 against animal testing in production and manufacturing of products.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 10 6

2.4 ENVIRONMENTAL RESPONSIBILITY

The following general environmental aspects apply to ALL For Life - Social Responsibility and Fair for Life - Social & FairTrade certified operations world-wide. Additionally, agricultural production or industrial manufacturing operations must provide evidence of responsible production practices e.g. with regard to chemical handling and soil protection. The following certifications are accepted as sufficient proof of good production practices: Organic Certification (any organic standards, Global Organic Textile Standard and other organic textile standards) and other schemes that cover good practice: FSC, MSC, Rainforest Alliance, GlobalGAP, AquaGAP, UTZ certified, Operations without such a baseline certification must fulfil the IMO Integrated Agricultural Production Standards in addition to the environmental criteria included in this module. The Integrated Production Criteria are presented in Module 9 of this Certification Programme and deal with responsible use of agrochemicals and other aspects of good agricultural production. Exception: agricultural product processing companies (food processors, ginneries, etc.)  only general environmental criteria as listed below apply.

2.4.1 Water Conservation and Water / Air Pollution

No Control Points: Water Conservation and Water / Air Pollution MAX SCORE 1 Overview of water usage: (0) water usage not known (2) the company knows at least 4 roughly the source and quantity of all surface and ground water directly and / or indirectly used. Concessions / permits are available if required (3) very good overview of water usage. 2 Water conservation practices: (0) no water conservation practices / apparent waste of 4 water (1) still relatively poor water conservation, but no apparent wastage (2=M from M=2 year 3) adequate water use practices and rational use of water; no apparent waste of from water, e.g. through very inappropriate irrigation techniques, ineffective use in processing, Yr 3 or other loss of water (3) very good water conservation practices compared to regional standards (4) exceptional efforts. 3 Waste water treatment (processing waste water, domestic sewage water, farm waste 4 water): (0) no waste water treatment (1=M) basic waste water treatment with no M=1 substantial risk to environment or people (2) adequate treatment of all waste water generated in the operation; regular monitoring of water quality in case of own water treatment (3) very good water treatment; efficacy of own waste water treatment is

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professionally supervised OR no waste water produced (4) exceptional efforts; minimisation of waste water and high standard of water treatment. 4 Discharge of contaminated water into natural water bodies: (0) discharge of untreated 4 contaminated water (2=M from year 3) discharge only of water with physical and M=2 biochemical characteristics that do not degrade the receiving water body; no from organic or inorganic solids discharged into water body (3) no such discharge OR very Yr 3 good waste water management and continuous supervision. Waste water analysis done regularly. 5 Groundwater contamination: (0) no efforts to minimise contamination (2) adequate 4 awareness of contamination impact and efforts to minimise groundwater pollution (e.g. good septic systems, adequate storage of chemicals, appropriate fertiliser application techniques) (3) no ground water contaminating activities OR very good groundwater quality protection management (4) advanced environmental management system. 6 Air pollution: (0) no efforts to minimise air pollution, if relevant (2) adequate awareness of 4 air pollution impacts and efforts to minimise pollution (e.g. good air filters, use of better fuels) (3) very good air quality monitoring and efforts to minimise pollution (4) advanced environmental management system.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 24 12

2.4.2 Energy Management and Climate Change

Principle 2.4.2 The operation strives to minimise and mitigate climate change. Energy consumption is monitored and minimised with renewable energy sources being used where possible. a) Energy consumption is monitored and appropriate steps are taken to minimise consumption and use sustainable renewable energy sources wherever possible. Even beyond reducing energy consumption and the use of renewable energy sources, the operation is encouraged to become aware of its particular contribution to climate change and to engage in minimising its impact on climate change within the operation and community

No Control Points: Energy Management and Climate Change MAX SCORE 1 Overview of energy consumption: The operation (0) has no (1) has a rough idea of 4 energy and fuel use in terms of costs (2) is able to roughly quantify the electricity and fuel consumption associated with its production (3) has a very good overview and monitoring of energy consumption in different parts of operation. 2 Minimising electricity consumption: (0) no efforts (2=M from year 3) electricity is not 4 apparently wasted and reasonable efforts to minimise overall consumption (lights M=2 and machines are turned off after use, rational use of airconditioning, new machines / from facilities are optimised with regard to energy efficiency) (3) high efficiency with regard to Yr 3 electricity use OR very low overall consumption OR investment in alternative sources of electricity (solar, wind, water, etc.) (4) exceptional efforts to minimise electricity consumption and to use renewable energy sources. 3 Minimising fuel consumption: (0) no efforts (2=M from year 3) adequate fuel saving 4 practices (for new machines also fuel consumption considered in purchase decisions; M=2 minimising car / truck / tractor trips around operation, optimised operation schemes in from factories, adequate temperature setting if heating / cooling required) (3) investment in Yr 3 energy efficient equipment, high efforts to minimise fuel consumption, increased use of biogas, solar, wind or water power OR very low overall fuel consumption (4) exceptional efforts, e.g. low-energy buildings, advanced processing techniques, use of sustainable renewable fuel sources only. 4 Renewable energy sources: (0) no awareness of sustainability of energy sourcing; only 4 non-renewable or exploitive energy sources used (e.g. indiscriminately harvested wood from unmanaged forests) (1) some awareness but due to local situation only oil and gas are being used as sources of energy – but use minimised as much as possible (2) adequate efforts to increase percentage of renewable (own biogas from byproducts, solar, water, wind, etc.) and / or sustainably harvested energy sources and low carbon energy sources (e.g. natural gas instead of coal) (3) very good efforts and improvements to convert to renewable / low carbon energy sources (4) exceptional efforts OR all energy used is already sourced from renewable energy sources. 5 Additional points for voluntary commitment: Further efforts to mitigate climate change: (4)

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Assess operation’s overall awareness and engagement to minimise impact on climate change in its operation and community with rating from (0) to (4). No norm requirement. E.g.: training and information on energy management and climate change, active in reduction of greenhouse gases (CO2, NO2, methane). For farms, relevant aspects are (additional to other energy management efforts): reduction of CO2, NO2 and methane emissions by optimized livestock management, no burning of grassland / bushland, build up of organic soil fertility, appropriate composting methods, appropriate animal manure management (collection, storage, spreading) and efforts to reduce or avoid fertilisers that use nitric acid or ammonium bicarbonate.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 20 8

2.4.3 Ecosystem Management

Principle 2.4.3 Threatened or endangered species and habitats are protected and natural ecosystems are not destroyed. The following control points apply to both plantations and manufacturers, even though the ecosystem impact of manufacturers may be less apparent. However, many manufacturers also manage quite substantial areas and often have important ecosystems within or adjacent to their boundaries. In the case of manufacturers who are e.g. in an urban industrial zone, with no actual natural area, there still may be endangered species (even in urban ecosystems) that need to be protected, or the manufacturer could engage in conservation programmes elsewhere for performance beyond minimum requirements. Some points will not be applicable. a) Endangered or rare habitats and near threatened, vulnerable, endangered or critically endangered species of fauna and flora are known and adequately protected. In order to prevent any negative impact on these habitats and species, all natural and semi-natural ecosystems and threatened species on and in vicinity of the operation’s land must be identified and known. If operating in or in vicinity of protected areas, production shall be in accordance to the regulations and zoning of the area and operators must remain in close contact to the protected area authority. b) Natural land or aquatic ecosystems are not destroyed. No destruction may take place from the date of certification onwards. Destruction of natural ecosystems (e.g. deforestation of bushland, or destruction of mangroves for shrimp ponds) in the preceding 5 years before the application must be compensated by adequate ecosystem conservation practice. Any land which was made cultivable by clearing primary forests up to 10 years prior to application for certification cannot be accepted for Fair for Life production. c) Genetic diversity and biodiversity is promoted. Production of genetically modified products is not permitted.

No Control Points: Ecosystem Management MAX SCORE 1 Documentation of natural and / or semi-natural ecosystems and other areas of special 4 ecological value within and adjacent to the boundaries of the operation: The operation M=2 has (0) no knowledge (1) adequate knowledge and some documentation of key potential threatening conditions or threats to these ecosystems (2=M) good knowledge and documentation of ecosystems and key potential threatening conditions or threats to these ecosystems (3) made successful efforts to address these threats (4) a management plan or other advanced management programmes on ecosystem conservation and minimisation of impact on local ecosystems. Manufacturer without natural / seminatural areas  (n.a.) 2 Knowledge of endangered or rare habitats and near threatened, vulnerable, endangered 4 or critically endangered species of fauna and flora, as defined by the CITES, IUCN Red List and national red lists: The operation has (0) no (1) little (2) adequate knowledge of the species and habitats and key threats to their conservation (3) good documentation of any such species and / or habitats within and adjacent to its boundaries (4) a management plan or other advanced management programmes providing details on effective management measures to conserve endangered habitats and threatened species of fauna and flora. 3 Protection of threatened or endangered species of flora, fauna, fungi and threatened 4 habitats: Present operation (0) directly destroys such species and / or habitats (1) has M=2 some negative impact (2=M) no evidence that operation has substantial negative impact on such species and / or habitats; existing key threats are addressed. Operation does not process species or parts of such species (3) protects all near

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threatened, vulnerable, endangered or critically endangered species and threatened habitats within and adjacent to its boundaries OR is active in conservation outside of own boundaries (if no own land) (4) exceptional efforts. 4 Conversion or destruction of land ecosystems, e.g. clearings of primary or old-growth 4 secondary forests; introduction of potentially invasive species; conversion of natural M=2 grass- or bushland or of other ecologically valuable areas: The operation (0) carries out or is responsible for such land conversions / destruction of ecologically valuable areas (1) shows some shortcomings OR no longer practices such land destruction of ecosystems without compensation but has done so in the past few years (2=M) does not engage in any destruction of natural ecosystems. See guidance above on practices previous to certification; Key threats to the ecosystem have been addressed (3) is responsible for no such conversion or destruction and good awareness of conservation principles (4) practises management of land use according to acknowledged ecosystem conservation standards. Manufacturer without natural / seminatural area and no fauna / flora impact  (n.a.) 5 Major destruction of or adverse impact on aquatic ecosystems (e.g. regulation of water 4 courses, water bodies or wetlands; destruction of benthic ecosystems through intensive M=2 aquaculture or fisheries; introduction of potentially invasive species into water bodies, pollution of rivers): The operation (0) carries out or is responsible for such adverse impact or destruction (1) no longer applies such destructive practices, but has done so in the past years without having taken sufficient compensatory ecosystem conservation action (2=M) does not engage in such destructive practices OR has taken sufficient compensatory ecosystem conservation action; If M not met: the operator must provide a written declaration that they will stop such practices immediately and take compensation measures (3) no conversion or destruction at all and some awareness of conservation principles (4) operation practises active management of aquatic ecosystem use according to internationally acknowledged ecosystem conservation standards. If basically no aquatic ecosystem inside or adjacent to operation  (n.a.) 6 Major land clearing or conversion of land or aquatic ecosystems: (0) carried out without 4 necessary permits and / or not in accordance with national / local legislation; uncontrolled M=2 burning as means of land clearing (2=M) carried out in accordance with national / local legal requirements; and with the assistance of an environmental expert. Compensation measures are taken; no burning OR controlled smallscale burning only (3) exemplary efforts to minimise environmental impact. 7 Genetically modified organisms (GMOs) are excluded from the productive system and all 3 associated operations: (0) confirmed GMO production, for crop production, animal fodder M=2 or other applications (1) GMO-free status of some crops not confirmed (2=M) no GMO crops grown (3) GMO are excluded from the entire production system, including inputs. 8 Promotion of genetic diversity of managed species: (0) genetically uniform monoculture 3 (1) some genetic diversity, but not actively promoted (2) genetic diversity of managed species is promoted (3) high genetic diversity of managed species. 9 Biodiversity (diversity of habitats, flora, fauna, fungi and microorganisms) in and around 4 the managed areas shall at least be maintained and, wherever possible, increased (0) no efforts; intensively managed monocultures (1) some efforts to maintain or increase biodiversity (2) sufficient measures are taken to maintain or increase biodiversity, e.g. planting of indigenous non-target plant species in or around cultivated areas (3) considerable efforts to increase biodiversity through integrated agricultural management, e.g. by connecting fragments and remnants of natural vegetation to promote genetic exchange of species and create population (4) strong and effective measures to increase biodiversity, e.g. biodiversity analysis, action planning and implementation.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 34 18

2.4.4 Waste Management

Principle 2.4.4 Waste is reduced and managed responsibly with adequate efforts to compost and recycle. a) Waste is managed and disposed of in a responsible manner. Waste that is not collected by municipal waste collection shall be properly managed and not be disposed in surrounding landscape. It shall also not be transferred to other companies unless these confirm the same minimum good management practices. Any final or semi-final waste deposit areas on the land of the operation

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must be identified and designed in a way that they are suitable for responsible waste disposal that minimise negative impacts. Open burning only permitted for combustible materials without harmful emissions (e.g. no plastic) b) The operation strives to compost, reuse and recycle as much waste as possible and reduce overall waste production.

No Control Points: Waste Management MAX SCORE 1 Integrated waste management (clean operation; waste production, collection and 4 disposal is handled in an organised way): (0) no adequate waste management (1) very basic / insufficient active waste management (2) integrated waste management for continuous improvement in place (3) very good waste management plans (4) exceptionally good waste management (present practices and targets). 2 Composting, recycling and waste reduction: (0) no efforts at all (2) adequate efforts (3) 4 very good performance with regard to recycling, composting and reduction of waste production. 3 Waste disposal: (0) no structured waste disposal in place (1) open waste disposal dumps 4 and / or open air burning of waste (2=M from year 3) municipal waste disposal OR M=2 optimised waste disposal by means of burial of waste or proper incineration that from minimises impact on the environment and on human health (3) advanced / low Yr 3 emission waste disposal OR very low waste production (4) exceptional waste disposal management OR no waste at all.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 12 6

All requirements up to here apply to all hired labour operations certified under the Fair for Life Certification Programme either under the option For Life – Social Responsibility or Fair for Life – Social & FairTrade. The following section on FairTrade criteria applies as additional section to all hired labour Fair for Life – Social & FairTrade certification.

2.5 FAIR FOR LIFE FAIRTRADE CRITERIA

The following standard section applies to all Fair for Life Social & FairTrade producer companies, i.e. primary agricultural production with hired labour, e.g. plantations and their associated processing unit. However, also other companies further up the trade chain can apply for Fair for Life producer certification if they fulfil the minimum eligibility criteria of this section and wish to demonstrate FairTrade practices in their production facilities with specific FairTrade Premiums for workers or selected social target groups in the local community. This section does not apply to companies who apply for For Life Social Responsibility certification and it does not apply to any subsequent buyers of Fair for Life certified products. Criteria for such Fair for Life handling operations are outlined in Module 4 of this programme. If the FairTrade producer also buys products from other FairTrade certified producer companies, it acts as a FairTrade buyer as well and must therefore fulfil the same basic requirements as applicable to other FairTrade buyers (see Module 4 Handling Operations).

2.5.1 Eligibility Criteria and FairTrade Focus

Introduction to Fair for Life FairTrade “Fair trade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers (or workers) who have been economically disadvantaged or marginalised by the conventional trading system” (WFTO Fair trade Principle 1)

Fair for Life strives to improve the livelihood and wellbeing of particularly marginalised social groups. Smallholder producers are a particular focus of the programme. However, also workers are often a very

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important target group for FairTrade, in particular temporary workers whose workforce is often exploited and who do not have appropriate bargaining power.

In the case of hired labour operations, Fair for Life therefore aims at improving the livelihoods of marginalised workers, their families and local communities and at the empowerment of workers beyond fair working conditions (as covered in the Social Responsibility section 2.1 to 2.5.).

Fair for Life FairTrade certification is available for highly committed and dedicated hired labour companies world-wide, provided that they fulfil the required eligibility criteria and are committed to promoting social change and the empowerment of workers.

Fair for Life FairTrade certification is a suitable option for • Hired labour operations with workers who are clearly marginalised in the respective local setting • Hired labour operations with workers who are in need of additional protection and support through FairTrade • Any company that can demonstrate outstanding commitment to promoting social change and development through its employment and community projects.

Applicants should be aware that the benefits of FairTrade have to reach the workers and the communities and that any FairTrade Development Premium has to be administered separately and used for dedicated development projects only. It may never be used for complying with legal labour requirements or for business investment. Assets acquired as Development Premium money are not property of the company.

Therefore, Fair for Life sets eligibility criteria for Fair for Life Social & FairTrade certification. For companies wishing to demonstrate their Social Responsibility and very good working conditions, but who do not fulfil these eligibility criteria or do not wish to work according to the criteria listed in this section, For Life Social Responsibility certification is recommended.

Principle 2.5.1 Fair for Life certification applicants must demonstrate expected positive impact of FairTrade on marginalised workers or communities beyond providing fair working conditions before their application can be accepted. a) The applicant presents a basic FairTrade justification statement to outline the expected benefits of FairTrade for marginalised producers, workers or communities, beyond providing fair working conditions. • Brief socio-economic analysis of status and position of workers and their families in the local community (all types of workers). Brief description of social-economic situation and concerns in the region • Expected focus and impact of FairTrade on workers, their families and the communities. • History, mission and commitment of the company to social and community development. • Potential marketing links to buyers interested in buying FairTrade products including a FairTrade Development Premium, if any. In order to become a meaningful FairTrade chain, contacts with buyers interested in FairTrade should be in place at an early stage. This helps set up a full FairTrade trade chain with appropriate FairTrade Development Premiums being paid into the Fair for Life Development Premium Fund, so allowing for meaningful social development projects. b) The applicant operation confirms its commitment to continuously improve the working and employment conditions in his operation and to support the empowerment of workers.

No Minimum Eligibility Criteria for Fair for Life 1 The applicant presents a complete FairTrade justification statement which demonstrates that FairTrade can be expected to have positive benefits on marginalised workers or communities. 2 The applicant confirms his commitment to continuously improve the working and employment conditions in his operation and to support the empowerment of workers.

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2.5.2 Accountable Trade Relations with Buyers

Principle 2.5.2 The trading relationship between FairTrade producer and his FairTrade buyers are based on trust, transparency, equity, accountability and continuity. The trade relation should be long term and based on mutual advantage, including price stability. a) FairTrade producer companies and their FairTrade primary buyers should seek to establish a long term and stable relationship in which the rights and interests of both parties are mutually respected and prices are negotiated based on transparent communication. b) FairTrade producer companies are accountable trade partners for their buyers and work continuously on meeting the quality standards requested by their buyers. All primary buyers of Fair for Life producers must undergo FairTrade handler certification and their trading behaviour will be evaluated in detail. See Module 4 Fair for Life requirements for handling operations for details.

No Control Points: Accountable Trade Relations with Buyers MAX SCORE 1 The company has (0) not fulfilled its trade agreements at all (1) several delivery or quality 2 problems (2) fulfilled the agreements with FairTrade buyers OR if not, has found a mutually agreed solution with its clients. If no sales / first certification  (n.a.). 2 The company keeps good regular communication with its FairTrade buyers and 3 specifically also coordinates with them any need for adaptation of trade terms, e.g. delivery times in order to fulfil its responsibility of providing fair working conditions: (0) no good communication links (2) adequate regular communication as needed (3) very close relations and regular exchange, also on problems and challenges. 3 The company acts as responsible long-term trade partner (0) company often drops / 3 changes FairTrade buyers without warning or open communication (2) efforts to maintain long-term trade relation with committed FairTrade buyers, open communication in case the trade relation is threatened by higher demand etc. (3) very good and close cooperation with long-term FairTrade buyers. 4 The company provides its customers with truthful information about its organisation and 3 products and in which conditions they are made. Truthful information is given on working conditions during buyer visits or upon request: (0) wrong / misleading information given (2) truthful information given if requested (3) open and proactive communication with FairTrade buyers to address and solve identified deficiencies and problems, or other areas of concern. 5 The company uses honest marketing and advertising techniques and does not provide 3 misleading information about its activities and achievements with regard to Social Responsibility and FairTrade: (0) misleading information; wrong claims made (2) adequate (3) very good efforts to provide education of the public and raise awareness of FairTrade. 6 The company aims to achieve high standards of product quality and to fulfil all key 4 requirements of the market: (0) no efforts (1) some improvements (2) continuous, serious efforts (3) good efforts (4) exceptional efforts. 7 If there were / are substantial quality problems and quality claims: (0) no steps towards 3 improvement of situation (1) some compromises found with trade partner, some disagreements remaining (2) partners agreed on resulting consequences (e.g. return of produce) and took steps to improve the situation (3) exceptional efforts to immediately improve situation. If no substantial quality problems / quality claims  (n.a.)

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 21 14

2.5.3 FairTrade Policy and Worker Empowerment

Principle 2.5.3 The operation develops a FairTrade Policy which defines the intended beneficiaries of FairTrade and procedures to administer the FairTrade Development Premium responsibly. It confirms its commitment to FairTrade and empowerment of workers. a) The company develops a FairTrade Policy which addresses the following aspects: • The intended beneficiaries of FairTrade, based on a short social analysis in case of several different potential target groups. Note: most of this information will be already available from the justification statement, but may need to be adapted over time with changing focus and situation.

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In a hired labour company, the intended beneficiaries are typically the workers and their families, this should particularly also include seasonal or casual workers. In some cases, different target groups in the local community may be the FairTrade beneficiaries; this must be clearly stated and justified in the in the FairTrade Policy. • In the case of production chains with farm production as well as substantial processing, the FairTrade Policy defines the main beneficiaries and FairTrade target groups, depending on a social impact and needs assessment. Any primary production unit of Fair for Life certified products must undergo full Fair for Life producer certification. If there is a processing unit at the same site, it is considered one unit and the FairTrade producer certification concept is applied to the entire unit. If the production process involves two different entities at separate locations within the responsibility of the applicant (e.g. the plantation and a separate processing unit), the FairTrade Policy analyses the situation and proposes whether the processing unit also needs to apply for full Fair for Life producer organisation (including payment of FairTrade Development Premium). If not, the processing factory should undergo Social Responsibility certification (chapter 2.1 to 2.5 of this module). For any subsequent buyers of the FairTrade products, the Fair for Life handler requirements defined in Module 4 apply. Supervision of subcontracted processors is also covered in that module. • Justification of any compliance costs or other costs included in FairTrade Sales Price if higher than normal sales price (apart from FairTrade Development Premium money that is administered separately). • FairTrade Development Premium decision processes and projected Premium use (scope of possible projects). • Commitment to the empowerment of workers and to improving working conditions for all or at least the most marginalised workers; refers to related target plans for stepwise improvement of working and living conditions of workers and / or for social community projects in the region. Note: The FairTrade Policy can be combined with the social Policy as addressed in chapter 2.3 and must be made known to all workers. It should ideally be developed in close consultation with workers, or jointly by workers and management.

No Control Points: FairTrade Policy and Worker Empowerment MAX SCORE 1 The company has a FairTrade Policy (see details above): (0) no FairTrade Policy; not 3 even clear ideas (2=M) written FairTrade Policy, approved by top management (3) well M=2 developed FairTrade Policy documents. If M not met  FairTrade Policy must be submitted before certification. 2 The FairTrade Policy is made known to relevant groups: (0) workers not aware of any 3 FairTrade activities (2=M from year 2) workers and all supervision and management M=2 staff are informed about basics of overall FairTrade approach and possible from implications (e.g. workers attending Premium funds meeting during working hours) (3) Yr 2 workers (if relevant) fully involved in FairTrade Policy development; well aware of policy. 3 Implementation of the FairTrade Policy is monitored and the policy reviewed if necessary 3 (0) policy not used or known, principles not implemented (1) some informal implementation, management aware of principles, no monitoring (2) company reviews and monitors the implementation of its FairTrade Policy (3) good internal quality management system also with regard to FairTrade aspects. 4 There is an annual assembly of workers: (0) none (1) informal, only very few workers 4 involved (2=M from year 2) annual workers assembly of all workers with M=2 presentation and discussion of Social Responsibility and FairTrade relevant from aspects and election of workers’ representatives in Premium Fund Committee; Yr 2 discussions are documented (3) very good, active assembly (4) exceptionally high worker involvement in business decisions and addressing of workers’ problems. 5 Additional points for voluntary commitment: There are programmes for workers to obtain (3) ownership shares of the company at preferential conditions. Rate from (0) to (3). No norm requirement.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 16 8

Fair for Life – Programme 2011 – Control Module 2: Hired Labour Operations 31/34

2.5.4 FairTrade Pricing

Principle 2.5.4 The company agrees with its buyers on a FairTrade Sales Price as well as a Fair for Life FairTrade Development Premium for its products, based on open and transparent communication and exchange. a) The operation agrees with its buyers on a FairTrade Sales Price for the certified products. The FairTrade Sales Price shall include specific costs to comply with the requirements for Fair for Life FairTrade certification. Compliance costs are limited to 5% of market prices as a standard rule. Upon demonstration of adequate pricing analysis and with due communication of costing issues with the FairTrade buyer, the company is free to negotiate higher FairTrade Sales Prices with their buyers. If prices are more than 10% higher than typical market prices, the company has to provide its FairTrade buyers with an overview of additional income from FairTrade and what it has been used for. b) The FairTrade Sales Price shall always be at least the agreed Fair for Life Floor Price. The Fair for Life Floor Price: • shall ensure that the operation can always cover the costs of production • shall include the costs for specific compliance with Fair for Life requirements, e.g. certification costs, raising wages to living wage level beyond minimum wage - but not the costs for complying with statutory legal requirements. • applies to all sales to Fair for Life FairTrade buyers. A stable floor price should be negotiated; re-negotiations if required. • The FairTrade price differential (compared to average market price plus compliance costs) shall be for the sake of workers and their communities or other identified marginalised beneficiaries. A hired labour operation may chose not to apply a FairTrade Floor Price. c) Additionally, a Fair for Life FairTrade Development Premium shall be paid for all sales of Fair for Life certified products. If no Development Premium is paid, the buyer may not label the products as Fair for Life certified, even if they originate from a Fair for Life certified producer. The FairTrade Development Premium is normally calculated as a set premium price for at least one year, or even a two year period. It is expected that the FairTrade producer charges all Fair for Life and other fair trade buyers the same FairTrade Development Premium; the Premium shall not be discounted for individual customers unless agreed with the other buyers. The Premium may be part of the total sales price, but must be specified at least in each purchase contract. The FairTrade Development Premium for hired labour producer companies is recommended to be between 7- 10% of non-management labour costs4 , depending on expected FairTrade sales, the potential social impact of the FairTrade Development Premium and the expected additional FairTrade development contribution paid directly by the FairTrade producer company. In the case of large hired labour market players entering FairTrade, the FairTrade producer company is also expected to contribute directly into the FairTrade Development Premium Fund. If lower Development Premiums are negotiated, an adequate justification must be presented. This should include an analysis of FairTrade benefits and impact achieved with the overall Premium income. In exceptional cases, well established FairTrade suppliers may have sales prices without separately established Development Premiums (FFL-Price-Including-Premium): • In this case buyers must be informed that the certification body cannot follow up the exact use of a specific Premium. More detailed information on overall business activities done with the overall income from FairTrade sales must be provided to the buyer. • This is only possible for organisations who can demonstrate that they are as an entire organisation dedicated and committed to FairTrade, e.g. long-term WFTO members. The Fair for Life certification body has to authorise the use of a FFL-Price-Including-Premium in writing.

No Control Points: FairTrade Pricing MAX SCORE 1 In trade contract and price negotiations the supplier gives trade partners (0) clearly wrong 3 information (1) slightly inaccurate / not clear information (2) correct information (e.g. on workers remuneration or other compliance costs) if requested by trade partner (3) detailed and correct information about operation.

4 Annual non-management labour costs: The total amount charged to the profit and loss account of the company as wages of workers up to and including supervisory grade – this includes overtimes wages. Calculation of premium: annual labour costs / annual production in kg x 10%. Example: 70,000 $ labour costs, Annual production 40 tons  Premium is 70.000/40.000 x 0.10 = 0.175 $ / kg

Fair for Life – Programme 2011 – Control Module 2: Hired Labour Operations 32/34

2 The company negotiates a FairTrade Sales Price with its buyers: (0) exaggerated price 2 differentials; not at all related to FairTrade compliance costs (2=M from year 2) M=2 adequate FairTrade Price (see above) negotiated in reasonably open negotiations. from Yr 2 3 Pricing is based on an adequate overview of production costs as well as compliance 3 costs: (0) no overview of production costs (2) adequate basic overview of production costs including non-management labour costs, management costs and specific costs for Fair for Life compliance (3) very good cost analysis. 4 The company negotiates a Fair for Life FairTrade Development Premium with its buyers: 3 (0) no defined Premium OR insignificant Premium (2=M) adequate Development M=2 Premium defined; suggested 5 - 10% of non-management labour costs, see guidance above (3) higher Development Premium negotiated and actually invoiced to several buyers. 5 The company provides an annual Premium Fund report: (0) no overview or informal 3 information on Premium use provided (2=M) basic annual report of FairTrade 5 M=2 Premium Fund: total money received , use decision process, Premium use description (with justification if needed) and details of all expenditure, balance, overview on other Social & FairTrade related activities, brief work plan for coming year (3) detailed and good information of activities provided. 6 Summary of funds report is provided to all Fair for Life FairTrade Buyers: (0) no 3 information although requested (1) very basic, slightly inadequate information (2) good overall communication of Premium use to buyers; may be only regarding use of the money received from the specific buyer (3) very good flow of information; shares complete Premium report with buyer. 7 If the FairTrade Price paid is considerably higher (> approximately 10%) than normal 3 market prices for respective quality (not including the separate additional FairTrade M=2 Development Premium), the company prepares: (0) no summary (1) some very basic written information (2=M) accurate brief overview summary what this higher price is used for (or details of its costs structure) and sends this summary to clients every year (3) or (4) very good / exceptional overview.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 20 14

2.5.5 FairTrade Development Premium Administration and Use

Principle 2.5.5 The FairTrade Development Premium is administered separately and used only for social and environmental development projects as decided by an assembly of workers or a Premium Fund Committee. a) Premium money received is administered in a separate bank account, with appropriate signatory rights. Normally this is a joint signature by company and workers representative, or another appropriate setting that is practical while at the same time preventing misuse. If only the company holds signatory rights or if for specific reasons a separate bank account is not possible, a written confirmation signed by the executive management is required that the company acknowledges that the money in the Premium Fund is not its property and use can only be decided by a Premium Committee for social projects within the scope of the Fair for Life Certification Programme. b) The Premium money is only used for agreed projects. Any expenditure and use are well documented. The Fair for Life Development Premium Fund is intended to finance sustainable social or environmental community projects or social projects for the workers and their families. The Development Premium may not be used for business investments or for meeting the company’s regulatory obligations (compliance with applicable labour legislation). If any substantial assets are purchased with Premium money, a FairTrade funds legal entity must be established as owner of such assets. It may not normally be used for individual premium payments to workers, except in well justified cases, e.g. payments to migrant seasonal labourers who may not be present after the harvest and so would not benefit from any Premium funded community projects. c) Decisions on the use of the FairTrade Development Premium are taken either by the assembly of workers or by a Fair for Life Premium Fund Committee. Such a Committee must always include

5 If no separate premium is defined the report provides summary how the higher FairTrade Price is used (with details of the company’s costs structure).

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worker representatives and may include external experts or buyer representatives, not only company management. Normally it is expected that worker representatives account for half of the Committee members. The workers representatives in the Funds Committee must be chosen through a democratic process. Adequate gender representation and fair representation of different interest groups are very important. In Fair for Life operations, workers shall be actively informed and included in all efforts towards FairTrade and Social Responsibility. Therefore, an annual assembly of workers is required, with initial and updated information on the company’s commitments to Social Responsibility and FairTrade (as summarized by its Social Responsibility and FairTrade Policy) and on processes and ideas regarding Fair for Life Premium use. Workers’ feedback and open discussion of concerns shall be encouraged.

No Control Points: FairTrade Development Premium Administration and Use MAX SCORE 1 FairTrade Development Premium Fund administration (0) Premium amounts not 2 specified, not documented (1) Premium amount can be traced and is known but not in a M=2 separate account (2=M) Premium specified in sales contracts and separate bank account for the Fair for Life Development Premium. Signatory rights are documented and appropriate. Written procedures ensure that Premium money received is transferred to the Premium account in a timely manner (3) Premium funds organisation is a separate legal entity. 2 A Fair for Life Premium Committee is set up with elected workers’ representatives: (0) no 3 Committee although Premium expected very soon / already received (1) some idea about M=2 Committee, not formally set up (2=M) a balanced Funds Committee is established, with documented members and procedures. If not existing at first inspection: rate accordingly, set condition that the company has 6 months to set up Committee and inform IMO accordingly. The Committee has to be defined before any Premium money is used (3) well balanced, active Funds Committee. 3 Decisions on Premium use as well as any money spent for the agreed activities are well 2 documented (0) no documentation (1) some basic documentation (2=M) decision and M=2 use are documented. If no Premium yet received, assess procedures and capacity of future implementation. 4 The Premium Fund Decision Committee or board writes (0) no report (1) a summary or 4 overview about some activities, but incomplete (2=M) an annual report on all activities M=2 financed by Premium Fund money (with detailed budget) (3) a very good report. 5 The records of expenses paid from the Fund correspond (0) not at all (1) with minor 3 shortcomings (2=M) satisfactorily to the amount spent as per bookkeeping and the M=2 activities reported in the annual Fund report (3) with very good fully traceable records. 6 The effective use of the FairTrade Development Premium Fund money is (0) not for those 4 projects as agreed by Premium Fund Decision Body OR unacceptable projects (1) mostly M=2 for adequate projects, other use is justifiable (2=M) only for agreed projects and justified related expenses (3) or (4) very good / exceptional projects / activities. 7 The Premium funds use was (0) clearly not in line with Fair for Life requirements, used to 3 meet statutory requirements OR business investment (1) partly in line with Fair for Life M=2 requirements (2=M from year 2) overall in line with Fair for Life requirements and from guidance; In borderline cases: Fair for Life certification body was consulted before use of Yr 2 the money (3) very good projects. 8 Social and environmental impact from use of FairTrade Premium: (0) no particular social 4 impact although Premium received (1) some positive impact (2) ok social or environmental impact OR mediocre impact but due to the small amount of Premium received from buyers (3) good social impact (4) very good social impact achieved, ongoing projects. 9 The company supports social community programmes (e.g. schools, hospitals, education 4 scholarships, etc.): (1) no such activities beyond the agreed FairTrade Premium and related social projects (2) group is active in different fields of community development and initiates different approaches to promote development (3) very good programmes / activities (4) exceptional commitment.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 29 18

Fair for Life Programme. Version 2011 by Bio-Foundation. Main Author: F. Meinshausen. Approved by the Fair for Life Standard Committee. Weinfelden, January 2011.

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FAIR FOR LIFE

SOCIAL & FAIRTRADE CERTIFICATION PROGRAMME

VERSION 2011

CONTROL MODULE 3: CRITERIA FOR PRODUCER GROUPS

CONTROL MODULES OF THE FAIR FOR LIFE PROGRAMME

1. LABELLING AND CONTROL CRITERIA Module 1, see separate document

2. CRITERIA FOR HIRED LABOUR OPERATIONS Module 2, see separate document

3. CRITERIA FOR PRODUCER GROUPS Presented in this section

4. CRITERIA FOR HANDLING OPERATIONS Module 4, see separate document

5. CRITERIA FOR PROCESSING AND ARTISAN OPERATIONS Module 5, see separate document

6. CRITERIA FOR WILD COLLECTION OPERATIONS Module 6, see separate document

7. CRITERIA FOR MINING OPERATIONS Module 7, see separate document

8. CRITERIA FOR TOURISTIC SERVICES Module 8, see separate document

9. INTEGRATED PRODUCTION CRITERIA Module 9, see separate document

Fair for Life – Programme 2011 – Control Module 3: Producer Groups

Table of Content

3 CRITERIA FOR PRODUCER GROUPS ...... 5 3.1 ORGANISATION OF THE GROUP ...... 5 3.1.1 TRANSPARENT ADMINISTRATION AND RELATIONS WITH PRODUCERS ...... 5 3.1.1.1 Additional Requirements for Organised Producer Groups ...... 5 3.1.1.2 Additional Requirements for Contract Production Situations ...... 6 3.1.2 PRICING AND PRODUCER PAYMENTS ...... 7 3.1.3 NON-DISCRIMINATION AND GENDER ASPECTS ...... 8 3.1.4 INTERNAL CONTROL SYSTEM ...... 9 3.2 WORKING CONDITIONS ON PRODUCER FARMS ...... 11 3.2.1 CHILD LABOUR AND YOUNG WORKERS ON PRODUCER FARMS ...... 11 3.2.2 WORKING CONDITIONS ON PRODUCER FARMS ...... 12 3.3 LABOUR CONDITIONS FOR PRODUCER GROUP STAFF ...... 14 3.3.1 BASIC LABOUR RIGHTS FOR PRODUCER GROUP STAFF ...... 14 3.3.2 EMPLOYMENT CONDITIONS FOR PRODUCER GROUP STAFF ...... 15 3.4 SOCIAL RESPONSIBILITY AND COMMUNITY RELATIONS ...... 17 3.4.1 COMMITMENT TO AND MANAGEMENT OF SOCIAL RESPONSIBILITY ...... 17 3.4.2 COMMUNITY RELATIONS ...... 18 3.4.3 RESPECTING RIGHTS OF INDIGENOUS AND LOCAL PEOPLE ...... 19 3.5 ENVIRONMENTAL ASPECTS ...... 19 3.5.1 INTERNAL MONITORING OF ENVIRONMENTAL ASPECTS ...... 20 3.5.2 ENVIRONMENTAL PERFORMANCE OF PRODUCERS ...... 20 3.5.3 ENVIRONMENTAL PERFORMANCE OF PROCESSING GROUP ...... 22 3.6 FAIR FOR LIFE FAIRTRADE CRITERIA ...... 24 FAIRTRADE FOCUS ...... 24 ELIGIBILITY CRITERIA FOR FAIR FOR LIFE SOCIAL & FAIRTRADE CERTIFICATION ...... 25 3.6.1 FAIRTRADE POLICY AND PRODUCER EMPOWERMENT ...... 25 3.6.2 FAIRTRADE PRICING ...... 27 3.6.3 FAIRTRADE PREMIUM ADMINISTRATION AND USE ...... 29 3.6.4 ACCOUNTABLE TRADE RELATION TO BUYERS ...... 31

ANNEX 1: GUIDANCE FOR FAIRTRADE PRICING ...... 32

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Structure of Standard and Minimum Requirements for Certification

Guidance Texts provide additional background information and clarification to better understand the criteria and Fair for Life expectations

N° Control Points Forced Labour MAX Score 1 (0) Clear evidence (2=M) no indication of forced labour 2 M=2

Total Norm Points (TNP) = Total number of points if all norm requirements were fulfilled, i.e. rated as “2”.

 see also Module 1, chapter 1.3. Certification procedures

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Applicability and Reference to Other Social Standards This module only applies to groups of agricultural producers that are organised independently. They can either be organised independently as a group (e.g. cooperative) or by a processor / trader (“contracted production”). The group standards are primarily intended for use in groups of smallholder producers (structurally depending on family labour; marginalised producers with limited own marketing potential). The standard may also be applied to groups of medium family producers that no longer structurally depend on family labour alone (they typically have 1-5 permanent farm workers and some temporary / seasonal labour). Any plantation with a substantial number of workers (>15 permanent workers or more than 40 workers for more than 2 months per year) as part of a smallholder group needs to be inspected according to the complete Fair for Life hired labour standards (Module 2 of the Fair for Life Certification Programme). The control points regarding group organisation as listed in this standard are based on the FLO standards for producer groups and IMO’s experience with producer groups. Group operator: the producer organisation or company organising the producers and buying from them. In the case of organised farmers’ groups the group operator is the cooperative or registered farmers association. In the case of contract production, the group operator is the company or NGO contracting the individual farmers.

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3 CRITERIA FOR PRODUCER GROUPS 3.1 ORGANISATION OF THE GROUP 3.1.1 Transparent Administration and Relations with Producers

No Control Points: Transparent Administration / Relation with Producers (all Groups) MAX SCORE 1 The group operator has a regularly updated business planning and long-term strategic 3 policy, which includes considerations of how profits / benefits can be shared with the farmers (0) no planning or written policies (1) ok planning, but no / few written documents (2) ok basic business planning, including benefit sharing aspects (3) very good planning, important business information accessible to all growers in the group. 2 The group operator has (0) no (1) poor (2) good official book keeping (3) which is audited 3 annually by a qualified external audit company. 3 When the operator is not able to purchase the entire production of the producers in the 4 group: The operator (0) does not have a clearly defined system of purchasing (1) gives preference to the larger producers in the group (2) gives preference to smallholders but no defined system (3) a written system for purchasing is in place (4) purchase system ensures that purchases are made primarily from small holders. 4 Additional points for voluntary commitment: Special support schemes for producers (e.g. (4) loan schemes, community projects) paid directly by group / company (not from FairTrade Premium)  comment and give points depending on level of support (1) occasional small community support (2) emergency loans available e.g. in cases of family hardship (3) well established loan / microfinance scheme for producers or good ongoing community support or producer support schemes (4) several support schemes. No norm requirement. 5 If producers’ depend mainly on a single product, the supplier is making (0) no (1) some 3 (2) reasonable (3) exceptional efforts to promote product diversification. (TNP / Maximum points are summed up in subchapters 3.1.1.1 and 3.1.1.2 respectively)

3.1.1.1 Additional Requirements for Organised Producer Groups

Organised Producer Groups: farmer cooperatives, formal farmer associations etc, which collect the products from their members and sell them as a group. d) Producer groups are democratically organised and producers are informed and participate in all key business decisions. It is acknowledged that in some settings a classic democratic structure may not be the organisational form of choice for producers. In such a case the group must demonstrate to the certifier how every producer has a voice in key group decisions and how representatives for the group’s board are selected in a transparent way that reflects the producers’ will adequately.

No Control Points: Additional Requirements for Organised Producer Groups MAX SCORE 1 An organisational structure which enables participation and control by the members (0) 4 not in place (1=M) very basic OR in set up phase (2=M from year 3) functioning M=1 group organisation in place (3) well established and already successfully functioning M=2 for > 2 years (4) exceptional commitment and active participation of members. from Yr 3

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2 There is (0) no general assembly (1) a general assembly with limited voting rights (2=M 4 from year 2) an annual, well announced general assembly with voting rights for all M=2 members (3) a well attended general assembly / producers really participating well in from group decisions (4) exceptional participation. Yr 2 3 Producers are informed about the group’s overall business policy and new developments 4 and feel part of the group (0) very low producers’ involvement and information (2) good overall involvement of producers (3) producers feel very involved and support the organisation strongly (4) exceptional; organisation really run and managed by producers. 4 Regular meetings / exchange in group / sub-groups / village centres, etc. (0) no such 4 active subgroups (2) moderately active subgroups; group members know each other (3) committed and active subgroups; good exchange and interaction between members (4) outstanding exchange and interaction.

TOTAL 3.1.1 PLUS Additional Requirements 3.1.1.1 MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 33 16

3.1.1.2 Additional Requirements for Contract Production Situations e) While initially the contracted producer group operator (in this case the company or NGO contracting the producers) may be the organising instrument for the social and economic development of the contracted producers, a producer representation organisation shall be initiated which can represent the producers’ interests in negotiations with the contracting company. Ideally, producers are organised in one or several associations or cooperatives working very closely with the contracting operator, who often provides the ICS and organises the purchasing directly. Alternatively the contracting operator works with the producers individually and initiates the set up of a representation organisation to facilitate communications and negotiations with the producers. If more suitable, several producer representations can be set up (e.g. for different independent regions). The main purpose of the representative organisation is for producers to elect their representatives who in turn can have more regular and in depth discussions with the group operator and act as communication link between the operator and the producers. The representatives shall facilitate farmers’ meetings to understand the producers’ needs and to maintain good communication on key issues in both directions. The producer representation organisation shall ensure that the producers are informed and have a say in all aspects that directly concern their trade relations with the contracting company. This concerns in particular price setting and purchase practices, internal production standards / production requirements, as well as all aspects concerned with the FairTrade Development Premium (in the case of Fair for Life FairTrade certification). Producers can also choose to delegate responsibilities to the group operator if they do not wish to get involved in certain aspects as a joint group - in these cases it will be cross-checked during producer interviews that the producers are confident that their interests are effectively represented. Decisions on the use of the FairTrade Premium, e.g. election of producer representatives in FairTrade Development Premium Committee, can not be delegated to the operator but must be addressed by the producers themselves. If democratic election of producer representatives by means of voting at an assembly is not commonly practiced in the region and explicitly not wanted by producers, in exceptional cases alternative transparent mechanisms to elect / nominate representatives may be accepted if verification confirms that the producers are adequately informed and every producer has a voice in selecting their representation. In the case of very scattered individual producers with very limited communication with fellow producers in the group and hence very low practicability of a joint representation, the producers may opt out of having a formal representation organisation. In this case particular focus will be on communication between producers and the group operator, e.g. by means of open discussions during extension visits with feedback to management, discussions in small nucleus groups, joint trainings etc. If the contracted producers are medium-size family farms with reasonable bargaining power of their own, part of the evaluation focus is still on transparent and fair relations between contractor and producers; a representation organisation also has to be initiated. The second focus of evaluation is activities with regards to sustainability of production (e.g. trainings) and on efforts to improved labour conditions on the participating farms. If the group is also applying for Fair for Life FairTrade certification the FairTrade focus is expected to be more on farm workers or marginalised groups in the local community rather than on FairTrade benefits for the medium size producers directly. f) The contracting company may not misuse the contractual relationship as a means to lower purchase prices (without prior agreement by farmer organisation due to substantial reasons) nor to create economic dependency for the producers. Producer must be free to cancel their contracts. If the producer group wishes to gradually become an organised producer group, this positive development must be supported by the group operator.

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No Control Points: Additional Requirements for Contracted Production Situations MAX SCORE 1 There is a producer representation organisation with democratic structure: (0) no 4 producer representation (1) some basic group structures in development OR group M=2 operator supports set up (2=M from year 2) a constitutionally democratic structure from with rights for all members to elect their representatives OR exceptional case that Yr 2 farmers opt out, see guidance above (3) active democratic structure (with at least annual assembly on which critical issues are discussed) (4) formal active democratic organisation, e.g. cooperative of producers. 2 The farmers representation organisation is (0) still not existing / no effort (1) informal 4 discussions between group members (2=M from year 3) effectively in place and M=2 meeting regularly; if not yet in place, a development plan must be presented and if from necessary external experts must be included to support group development with positive Yr 3 participatory methods (3) active farmers’ representation (4) cooperative OR exceptionally active farmers’ representation organisation with effective bargaining power for producers. First 2 years of certification: assess actual situation, including defined plans (0)–(4); no M. 3 The group operator and the farmers’ representation organisation(s) have regular and 3 open communication on new developments, relations between operator and the producer and group activities: (0) no communication at all (1) irregular, or only very limited interaction and communication (2) adequate and regular communication with at least 2 meetings a year (3) close cooperation and communication. 4 The group operator facilitates and supports basic administrative running costs of the 4 farmer group representation – until the producer group is a fully independent registered legal entity and can fully negotiate prices which include these costs in addition to fair farm gate prices (0) no support although substantial communication costs for producers (1) very little support (2) adequate support of costs for farmer representation organisation communication costs and basic support for meetings (room, drinks) (3) good support (financial and organisational) (4) cooperative association of producers with own budget. 5 Interaction and exchange of producers with each other to support the development of a 3 group feeling (0) no efforts, producers don’t know even other registered producers in their own village (2) adequate efforts by the group operator; reasonably active producer subgroups or exchange between producers (3) very committed and active subgroups or overall group; very good exchange and interaction between members (4) active cooperative OR formal association with general assembly. 6 Producers feel: (0) misused (1) contractual relationship not good, but acceptable (2) fairly 3 well treated in the contractual relationship, if group operator takes over responsibilities of the farmers organisation, producers are ok about this (3) exceptionally well treated. 7 Cancellation of contract by the producer: (0) not possible (1) by contract free to cancel 3 (2=M from year 2) effectively free to cancel the contract within an appropriate and fair M=2 time frame and fair conditions. from Yr 2 8 The contracting company gives (0) no (1) very little (2) sufficient basic (3) very detailed 3 information about market prices or its cost / profit calculations in order to allow open discussion on prices paid to the producers.

TOTAL 3.1.1 PLUS Additional Requirements 3.1.1.2 MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 44 24

3.1.2 Pricing and Producer Payments

Principle 3.1.2 Producers receive a fair price and are paid in a convenient, timely and well documented way. a) The group operator has and follows clear rules to set farmgate prices b) Producers are promptly paid after collection or delivery of the product and in a manner convenient to them. Payments are documented. c) Quality grading is done in a transparent manner and any group services or inputs provided by the group operator are not charged above market rate. d) Prices paid to producers always cover the basic costs of production and allow farmers to continue production. They shall aim to cover the producers’ basic needs and to provide some discretionary income.

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For FairTrade producer groups, see also additional requirements in chapter 3.6 of this module. Basic costs of production: typical costs for land, farming materials, inputs and farm labour (including all family labour), in an ideally efficient farm of a size typical for the producer group.

No Control Points: Pricing and Producer Payments MAX SCORE 1 Farmgate price fixing methods are (0) arbitrary and there is no uniformity (different 4 producers receive different prices) (1) no rules but there is uniformity (prices of producers in the same area do not differ) (2) rules on price fixing are available, followed and not changed without warning (3) rules are drawn up with participation of producers (4) rules as well as actual prices are always fixed in consultation with the farmers or their representatives. 2 Producers receive payment for products delivered (subject to meeting quality 4 requirements) (0) in instalments or not at all / very late (1) more than two weeks after M=2 delivery (2=M) within 10 days of delivery (3) immediately upon delivery (4) an advance payment of at least 20% of the value and the balance on delivery is possible if requested by producer and if justified as providing intermediate income during the year. 3 Method of payment (0) in kind or in a very inconvenient way (1) per cheque (2) cash or 3 bank transfer (3) group operation supports producers to set up bank accounts. 4 Payments to producers (0) are not documented (1) only total paid is documented (2) the 3 payment documentation clearly indicates the quantity, price per unit, total value and deductions of any detail but producers are not issued a copy (3) complete documentation with producers being issued a copy of payment documentation. 5 Quality requirements and grading procedures: (0) not defined and arbitrary (1) 3 specifications and grading rules in place but not followed (2) specifications are in line with industry norms and followed (3) quality and grading procedures always done with the farmer being present. 6 Deductions for inputs supplied and or services provided by the group operator are (0) 4 much higher (> 10%) than the actual cost incurred by the operator (1) at market price (2) benefits (such as quantity or volume discounts) of large volume purchases are passed on to the producers (3) at subsidised rate (4) free seedlings, inputs or services provided. 7 Producer prices paid cover basic production costs: (0) prices clearly do not cover 4 production costs / producers forced out of production due to low prices (2=M from year M=2 2) prices paid to farmers cover at least basic costs of production and allow farmers from to continue production (3) very good prices and basic production costs are known (4) Yr 2 exceptionally high prices (even if due to market levels). 8 The group operator prepares a summary of total money paid to each producer: (0) no 3 summary would even be possible from documentation (1) no summary done (but would be possible to calculate) (2) producer receives information on total quantity delivered and total money paid to producer in the respective season / year (3) this information is made known to the family of producer. 9 Additional Points for voluntary commitment: The organisation (0) does not have (3) programmes to educate producers on cash management, budgeting and allocation of resources (1) has basic programs to educate producers on cash management budgeting and allocation of resources (2) provides regular counselling on cash management, budgeting and allocation of resources (3) helps individual producers in managing their income. No norm requirement.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 31 16

3.1.3 Non-Discrimination and Gender Aspects

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No Control Points: Non-Discrimination and Gender Aspects MAX SCORE 1 Statutes and / or rules of membership (0) clearly restrict (1) impose some discriminatory 3 conditions (e.g. only unmarried persons, minimum educational qualifications, etc.) (2=M) M=2 do not restrict access to membership based on race, colour, religious beliefs, gender, political affiliation, national extraction, sexual orientation or social origin. 2 There are defined rules and practices for assessing new membership applications or 3 group extensions: (0) clear exclusion of certain groups or people or clearly personal preferences in selecting new members (1) no systematic exclusion or preference practiced but no clear procedures (2) basic, clear procedures on group extensions or dealing with new applications. Contract group operators can justify if small producers in the project area who apply cannot be considered (3) efforts demonstrated to identify new potential producers according to marginalisation and need criteria. 3 Disadvantaged groups (other than women) are (0) systematically excluded (2) not 4 systematically excluded, even if not present (3) encouraged to participate actively in the group (committee members, staff, become full members) (4) strongly supported. Encouragement of disadvantaged groups. 4 Women group members: (0) excluded (1) not excluded but not present (2) not excluded, 4 some women members, wives of members are free to also attend group meetings (3) women are actively encouraged to participate in the group and become full group members / many women members (4) special support and adapted organisation of meetings etc. to encourage and include women. 5 Trainings and group activities for registered farmers adequately include all family 4 members who are involved in production: (0) clear exclusion of e.g. wives of members (2) active promotion of group participation, appropriate organisation of trainings to also include the wives, etc. (3) high efforts to include women. 6 Producers and workers are always paid directly (e.g. for woman farmer payment to 2 woman, not her husband): (0) no direct payment (2=M) payment only directly to M=2 producer or to his / her authorised recipient of payments. 7 Additional points for voluntary commitment: The group is active to strengthen the overall (4) social and economic role of women (or men, if disadvantaged) in the communities and in the group by specific programmes, trainings, adapted procedures for e.g. group meetings. – Rating (0) to (4). No norm requirement. 8 Additional points for voluntary commitment: The group creates specific and particularly (4) beneficial opportunities (e.g. as producers, workers, micro entrepreneurs) for disadvantaged / discriminated ethnic (e.g. minorities) or social (e.g. handicapped) groups. – Rating (0) to (4), No norm requirement.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 28 12

3.1.4 Internal Control System

Principle 3.1.4 The group operation develops an Internal Control System that monitors implementation of Social Responsibility / FairTrade and environmental principles on producer farms. a) A basic Internal Control System (ICS) monitors the implementation of the requirements of this standard on farm level and ensures that only produce from registered farmers is bought. The ICS also ensures close contact with the farmers and the understanding of their needs e.g. of extension and training. An ICS comprises an internal production standard, monitoring the implementation of this internal standard by the producers, and appropriate procedures to deal with producers who do not show any efforts or improvements in dealing with key identified problems. Often the SR / FT ICS is combined with e.g. the organic ICS. b) An Internal Social and Environmental Standard is developed together with farmers which summarises relevant key aspects that producers in the group commit to work towards and this standard is communicated. Farmers in the group are made aware of their obligations (as well as rights) as socially responsible / FairTrade farmers. The Internal Social and Environmental Responsibility Standard is usually part of the overall internal standard which includes e.g. also organic production rules for the farmers in easy and clear terms. The Internal Social and Environmental Standard summarises all core aspects that are relevant for each producer in the group, e.g. fair treatment of farm labour, safety aspects and children assisting in the fields. The Internal Social Standard may

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contain specific FairTrade aspects (if applicable). The environmental content in the internal standard is covered in section 3.5 of this module when assessing the environmental performance. For social aspects the standard should contain minimum requirements as well as progress objectives. The bigger and more labour intensive the farms, the more details will be expected in the standard. The internal standards are made known to all producers. All producers need to have a copy of the Internal Social Standard written in a language they can understand and / or using pictorials.

No Control Points: Internal Control System MAX SCORE 1 The group has a list of all registered farmers: (0) no list or register (1=M) paper register 3 or electronic, slightly incomplete list (2) complete electronic list with names, place, M=1 farm area or area under cash crop, year of registration (3) very well maintained list. 2 The group has (0) no (1=M) basic overview even if no formal ICS yet; external 3 inspection confirms overall picture (2) written up to date overview information on M=1 working conditions on the group’s farms (sufficient if well described in 13.1 Operator profile). 3 Any larger farm with contracted labour as members of a group: (0) bigger farms are not 2 yet known; no knowledge of labour situation at all (1=M) farmers and overall labour M=1 situation is known (2=M from year 2) bigger farms are listed / marked in farmers list M=2 and all relevant labour aspects are monitored for each farm; targeted in improvement plans. from Yr 2 If no bigger farms.  (n.a.). If group of medium producers and no actual monitoring yet  surveying and monitoring of labour situation must be confirmed to be done within 6 months. 4 Internal Social Standard (see guidance): (0) no standard; no clear understanding of social 3 aspects on farms (2=M from year 2) internal standard includes relevant social M=2 aspects as basis for internal control, adequate for producer farms’ situation with from regard to social standards (3) social standards well developed, with farmers’ participation. Yr 2 5 Producers are aware of (internal) social standard requirements and progress objectives 3 as relevant for their farms (0) no awareness at all (2) adequate awareness created through training and group discussions – as far as changes in practice are required (3) farmers very committed to also improve the situation of their workers OR no workers. 6 A basic ICS that also covers social aspects is in place within 1 year after certification (included in organic ICS, if also certified organic). For group of medium-size farms: 6 months after first audit. First Certification: assess plans / capacity for each aspect  (2) if good plan and capacity, otherwise (1). -a Basic general and social / labour relevant data for each farmer: (0) none (1) very basic 3 (2=M from year 2) ok (3) very good, detailed data on farm and social issues. M=2 from Yr 2 -b Risk-based internal inspection of social and environmental aspects in internal standard: 3 (0) none (1) very basic, not one per year (2=M from year 3) 1 inspection per year (3) M=2 very good inspection / supervision of social issues. from Yr 3 -c Improvement system for non-compliant farmers: (0) none (1) very basic (2) ok (3) very 3 good. -d Qualified ICS staff: (0) no staff (1) very basic qualification (2) ok (3) very good staff. 3 7 Farmers receive training on sustainable and good quality production: (0) none at all, 3 although urgently needed (1) none / very little, but low demand (2) good training opportunities, as needed (3) very good training. 8 If there are critical labour issues on farm level, there is (0) no (1) some ideas, but no plan 3 (2=M) a written improvement plan which is implemented (3) a very good, annually M=2 reviewed plan to achieve social improvements also for this labour group. 9 The purchase system ensures in principle that only produce from registered farmers is 3 bought and that it is kept separate from non-certified produce: (0) no such system (1) some basic system in place (2) good system (3) very good traceability system.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 35 24

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3.2 WORKING CONDITIONS ON PRODUCER FARMS

Workers on smallholder or medium producer farms also have a right to fair labour conditions and shall be included in the Social / FairTrade development planning of the group. In medium producer farms, agricultural workers may often be the most marginalised group and therefore the focus of FairTrade activities (if FairTrade certification is envisaged). They may be the main target group for FairTrade Premium use. Note: For any larger producers (more than approximately 15 permanent workers or more than 40 workers in total for more than 2 months per year) within the group, the hired labour standards (Module 2 of this programme) apply. Such operations must be inspected and certified according to these standards. Workers = employed or contracted workers, including temporary, seasonal or casual labour. Neighbouring farmers helping each other on their farms (mutual exchange of work) are not considered as workers

3.2.1 Child Labour and Young Workers on Producer Farms

Principle 3.2.1 The participation of children in the production process is minimised and any work done by children on their family farms does not compromise schooling, is supervised and non- hazardous to the children’s’ physical and mental health. a) Children (<15 yrs) are not employed / contracted as workers, but children older than 12 years may be permitted to light work for limited times after school or during school holidays to earn pocket money, provided that work does not compromise schooling and is non-hazardous to the children’s physical and mental health. ILO convention 33 permits that in non-industrial situations “Children over twelve years of age may, outside the hours fixed for school attendance, be employed in light work (a) which is not harmful to their health or normal development; (b) which is not such as to prejudice their attendance at school or their capacity to benefit from the instruction there given; and (c) the duration of which does not exceed two hours per day on either school days or holidays, the total number of hours spent at school and on light work in no case to exceed seven per day; not on Sundays and legal public holidays nor during night.”. Children older than 14 can be permitted to work up to 7 hours during school holidays. b) Children may help on their family farms doing only light, non-hazardous work for limited times a day: In line with ISEAL SASA project recommendations, children are allowed to do light work for a limited time per day on their family’s farm provided that: Such work is not hazardous or dangerous to their health and safety, it does not jeopardise the children’s educational, emotional, social and physical development, children are supervised by their parents or have the authorisation of a legal guardian, children are receiving appropriate training according to the type of work they are performing, and school education is not jeopardised by farm work.

No Control Points: Child Labour and Young Workers on Producer Farms MAX SCORE 1 Children under 12 years EMPLOYED / CONTRACTED: there are (0) some children 2 (2=M) no children under 12 years CONTRACTED on the farms. M=2 If there are still contracted child workers  group has a plan and is active to responsibly phase out any child labour; children do no hazardous work. Members with contracted child labour are suspended. 2 Children between 12 and 15 years EMPLOYED / CONTRACTED: children of this age 3 group (0) work considerably on farms as contracted workers (2=M) if sometimes M=2 working for pocket money, they only do light and non-hazardous work during non- school hours; not more than approximately 2 hours / day. 14 year olds less than 7hrs / day during school holidays, otherwise also max. 2h / day (3) no children 12-15 years as contract workers. If there are still contracted child workers (12-15 years) to a greater extent  group has a plan and is active to correct the situation AND children do not carry out any hazardous work. In severe cases the producers are suspended. 3 Young workers (15-18 years) as contracted workers: (0) do (1) do occasionally (2=M) do 3 not engage in work that is dangerous to their health or safety and that may M=2 jeopardise their development. Do not work more than maximum 8 h a day, less than 10 hours daily for school, work and transport. If M not fulfilled  plan for improvement. Farmers with severe infringements are suspended.

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4 Children of contract workers assisting their parents: (0) children assist the contract worker 2 considerably (2=M) no work carried out by children of contract workers on the farm, M=2 if occasionally helping: always non-hazardous, max. 2 h a day, not interfering with schooling. If M not fulfilled  plan for improvement. Farmers with severe infringements are suspended. 5 Children < 12 years working on their own family farms: (0) very common; children < 12 do 4 considerable OR very heavy / hazardous work (1=M) occasionally some farms M=1 children do substantial work, but not very hazardous, accidents not common (2=M M=2 from year 2) not common OR children do only very light and appropriate work for from less than 2 hours / day under their parents’ supervision; farm work does not Yr 2 compromise school attendance (3) children < 12 do no actual farm work at all and high awareness about child labour / need for education (4) very good school attendance, no farm work. If M not fulfilled  a plan for immediate improvements is presented, implemented and the situation resolved within a maximum of 2 years. Farmers with severe infringements (level 0) are suspended. 6 Children between 12 and 15 working on their own family farms (or neighbouring farms if 3 farming is done as community): (0) very common; children work regularly for several M=1 hours / day OR very hazardous (1=M) sometimes / on some farms; children work for M=2 several hours / day, not hazardous (2=M from year 2) no SUBSTANTIAL work (more from than approximately 3 hours / day regularly); work is non-hazardous and Yr 2 appropriate to their age (3) children between 12 and 15 do no regular farm work at all (but may accompany certain activities for training) AND high awareness about child labour / need for education. If M not fulfilled  plan for immediate improvements is presented and the situation resolved within a maximum of 2 years. Farmers with severe infringements are suspended. 7 Young workers (15-18 years) on their own family farms (0) do (1) do occasionally (2=M) 2 do not engage in work that is dangerous to their health, safety and that may M=2 jeopardise their development. Do not work regularly more than maximum 8 h a day, less than 10 hours daily for school, work and transport. If not fulfilled  plan for improvement.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 19 14

3.2.2 Working Conditions on Producer Farms

Principle 3.2.2 Any workers on producer farms have a right to fair and safe working conditions. a) All farm workers (usually occasional seasonal labour, but in case of medium size farms also permanent or other temporary labour) have fair and safe working conditions. Permanent worker: Any worker working for a major part of the year (more than approximately 8 months) is considered as “Permanent worker” in the following control points. In the assessment of whether the conditions applied are fair, the producers’ level of security, benefits and income from farm production is considered.

No Control Points: Working Conditions on Producer Farms MAX SCORE 1 Forced or involuntary labour on farms: (0) evidence (2=M) no indication of forced 2 labour, spouses of workers not obliged to also work on the farm, farmers do not keep M=2 workers’ identity papers or parts of wages of their workers and workers are free to leave. 2 Producers (0) clearly do not allow (2=M) allow associative activities and collective 2 bargaining of workers and do not discriminate against organised workers. M=2 3 Disciplinary practices: (0) violate human dignity OR are not transparent (2) fair and 2 transparent; no deductions from wages without agreement of worker OR no disciplinary actions. 4 Discrimination: (0) evidence (2) no indication of systematic discrimination of workers 3 (based on gender, race, caste, origin, religion, etc.); no sexually coercive / intimidating / abusive behaviour (3) good opportunities for disadvantaged social groups.

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5 Farm machinery and equipment (including farm processing equipment) are (0) very 3 unsafe / in dangerous condition (1=M) not dangerous for worker or farmers (2) M=1 adequately safe for workers or farmers; work accidents not common (3) very good practice and equipment. 6 Handling of agrochemicals / farm inputs by farmer and / or worker: (0) no protection / very 4 unsafe handling although inputs are toxic (2=M) adequately safe handling procedures M=2 and protection of workers and producers, as required for specific type of inputs used. If not ok  improvement / training plan for member producers (3) good handling practice (4) very advanced handling procedures in local context OR no toxic / irritating substances used at all. 7 Storage of agrochemicals / farm inputs: (0) highly toxic inputs stored openly or in kitchen / 2 bedrooms. Containers reused for water, etc. (2=M) toxic agrochemicals not stored in M=2 living quarters; adequately locked away to prevent accidental use by children. Empty containers not re-used for water or food. If not ok  improvement / training plan compulsory. If no toxic / irritating inputs  (n.a.) 8 Workers and family members are informed about major safety risks and safe working 3 practice: (0) not informed (1) sufficiently aware of existing risks (2) workers well trained OR no major safety risks. 9 First aid equipment: There is (0) no (1) some incomplete (2) sufficient basic first aid 3 equipment (as needed for potential work accidents) (3) good and complete first aid kit and knowledge in first aid. 10 Adequate protection from noise, dust, light (0) missing although necessary (2) adequate 2 protection from substantial health or accident hazards OR not necessary. 11 Defined employment conditions for permanent workers (job position, wage, benefits if 2 any, working times, leave entitlement, housing if any): (0) employment conditions not M=1 defined, not even orally (1=M) clearly defined and known to worker, even if not written (2) contract or official registration of worker or other documents indicating at least the basic employment conditions. If no permanent worker (working for more than 8 months / year)  (n.a.). 12 Defined employment conditions for casual / seasonal workers: 2 (0) employment conditions not clear, not even orally (1) wage and working times agreed and known to worker, even if not written (2) contract or official registration of worker or other documents indicating at least wages and working times. If smallholder producer  (n.a.). 13 Permanent workers are paid (0) less than local average (1) local average (2=M) at least 4 1 applicable minimum wages OR typical local rates – (if higher or if no minimum wage M=2 defined); If not: improvement plan with activities to comply within 1 year (3) paid more than local average (including benefits, if any) (4) paid substantially more. 14 Casual or seasonal labour are paid (0) less than local average (1) local average (2=M) at 4 least typical local rates; If not: improvements planned and implemented within 1 year, M=2 extension to 2 yrs may be granted on justification (3) paid more than local average (including benefits, if any) (4) paid substantially more. 15 Payments of all workers are (0) not done or unduly delayed (1) no fixed days, or a few 2 delays (2=M from year 2) done promptly and as agreed. M=2 from Yr 2 16 Payments are (0) not (1) poorly (2=M) documented, at least for permanent workers (3) 3 documented for all workers. M=2 17 Weekly working hours and rest days of permanent workers: (0) not at all in line with legal 3 requirements (1) working hours are slightly above maximum hours OR occasionally rest days not respected (2) basically in line with national labour legislation. 18 Overtime of permanent workers is (0) compulsory, not remunerated extra (1) voluntary 3 but not paid extra OR not voluntary but paid extra (2) voluntary (may be obligatory for short known peak times) and at least paid as extra time or time compensated (3) voluntary and remunerated at premium rate. 19 Permanent farm workers time off: (0) no paid leave / holiday (2=M from year 3) official 4 holidays are granted and paid leave as legally required (3) holidays plus annual paid M=2 leave (4) very generous leave provisions. from Yr 3

1 In case of pay-per-production, calculate income of an average production day without overtime.

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20 Permanent workers provident funds / basic coverage for retirement / basic social security: 3 (0) no such cover, although local system would permit registration of workers (2=M from M=2 year 3) basic coverage for permanent workers if legally required. If not: improvement from plan to correct situation (3) cover for all workers Or cover for employed workers is better Yr 3 than required. 21 If workers are given housing on the farm: (0) not acceptable in comparison to local 3 conditions (1=M) acceptable (2) safe and adequate housing conditions in local context; M=1 reasonably priced (3) very good housing in local context. 22 Farm workers are included in social development plan of the group: (0) not included, 3 although many producers have contracted labour (2) gradual improvement of working conditions of farm workers included in development plan / FairTrade Policy (3) demonstrated efforts to increase awareness in labour issues and work towards improvement of labour conditions.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 62 44

3.3 LABOUR CONDITIONS FOR PRODUCER GROUP STAFF

Workers in producer organisations (companies contracting producers), i.e. field staff, office staff and workers in group-operated processing units have a right to fair working conditions. At least the most marginalised workers’ groups shall be included in the Social or FairTrade development plan of the group. Note: For any larger processing workshops / factories (more than approximately 20 permanent workers or more than 70 workers in total for more than approximately 2 months per year) operated by the group, the hired labour standards (Module 2 of this programme) apply. Such operations must be inspected and certified according to these standards – and this section is then only completed with regard to group operation staff (e.g. field officers, office staff in export office). For subcontracted processing units, please see Module 4, chapter 4.4 for requirements. Workers = All staff working in an operation including employees, permanent, seasonal, temporary, migrant, foreign, casual and sub-contracted workers. They can be working in the fields, in production and also in office administration, etc.

3.3.1 Basic Labour Rights for Producer Group Staff

Principle 3.3.1 The group operation respects the basic labour rights of all its workers. a) There is neither child labour nor forced labour. b) There shall be no discrimination in hiring, compensation, access to training, promotion, termination, benefits or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, HIV / Aids, union membership or political affiliation. In case of discrimination entrenched in cultural norms or traditions, companies are encouraged to have proactive policies and programmes aimed at distributing opportunities more equally. c) Workers, without distinction, have the right to join or form workers’ organisations of their own choosing. d) A safe and hygienic working environment shall be provided and the workers shall be trained in safety aspects.

No Control Points: Basic Labour Rights for Producer Group Staff MAX SCORE 1 Child workers EMPLOYED / CONTRACTED: There are (0) some children (2=M) no 2 children below 15 CONTRACTED as workers. M=2 If there are still contracted child workers  see section 2.1.3 for policy details. 2 Children of contract workers assisting their parents: (0) children assist the contract worker 2 considerably (2) no work by children of contract workers. 3 Young workers (15-18 years) (0) do (2=M) do not engage in work that is dangerous to 2 their health, safety and that may jeopardise their development. M=2 If no young workers  (n.a.) 4 Forced labour: (0) evidence (2=M) no indication of forced labour. 2 M=2

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5 Associative activities and collective bargaining of workers (0) clearly not allowed (1) 4 discouraged but not forbidden (2=M) allowed, no discrimination against unionised M=2 workers (3) workers are unionised or effectively organised (4) very active workers organisation, collective bargaining. 6 Disciplinary practices: (0) Violate human dignity OR are not transparent (1) some minor 3 problems with disciplinary practices (2) fair and transparent; no deductions from wages without agreement of worker (3) low need for disciplinary actions (4) very positive relation between employer and workers. 7 Discrimination: (0) Evidence (2) no indication of systematic discrimination of workers 4 (based on gender, race, caste, origin, religion, etc.); no sexually coercive / intimidating / abusive behaviour (3) employer active in promoting mutual respect and harmony between workers OR policies against discrimination written and implemented (4) actively supporting discriminated groups. 8 Processing machinery and equipment (0) very unsafe / in dangerous condition (1) not 4 dangerous (2=M) adequately safe for workers; no serious work accidents. If safety is M=2 a problem  improvement plan (3) very safe, very few accidents (4) special efforts have been made to make workplaces as safe as possible. 9 Adequate protection from chemicals, noise, dust, light (0) missing although necessary 4 (1=M) provided in acceptable condition (2) provided, maintained and used (3) high M=1 protection efforts OR no risks at all. 10 Workers are informed about major safety risks and safe working practices: (0) not 4 informed (1) sufficiently aware of existing risks (2) workers adequately trained OR no major safety risks (3) workers very well informed and trained (4) exceptionally well trained in health and safety practices. 11 First aid equipment: There is (0) no (1) incomplete (2) sufficient basic first aid equipment 3 (as needed for potential work accidents) (3) very good first aid equipment and emergency medical care. 12 Pregnant or nursing women and other risk groups are (0) engaged in potentially 2 hazardous work (2=M) excluded from potentially hazardous work, do not work at M=2 night. 13 Adequate light and ventilation: (0) very poor (2) adequate by local standards (3) very 4 good (4) exceptional efforts. 14 Emergency procedures: (0) not in place, not known at all (2) known by all staff (even if 4 not written) (3) good written safety procedures and signs (4) very good safety system. 15 Emergency exits: (0) evacuation in emergency not possible (2=M) quick and safe 2 evacuation in an emergency possible. M=2 16 Fire fighting equipment: (0) not available (1) in poor condition / not accessible (2) 3 available and functional (3) well maintained, adequate and sufficient for size of operation.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 49 32

3.3.2 Employment Conditions for Producer Group Staff

Principle 3.3.2 The group operation’s workers are ensured good working conditions. a) Workers have clearly defined employment conditions. There should be a written contract or comparable type of written agreement on employment conditions. This covers such subjects as job position, working hours, overtime regulation, social benefits entitlement and deductions, annual paid leave and sick days as well as provisions on termination of employment. b) Wages and benefits meet, at a minimum, national legal standards. Payments are documented. c) Working hours are not excessive and holidays as well as annual leave are granted as per national legal requirements.

No Control Points: Employment Conditions for Producer Group Staff MAX SCORE 1 Defined employment conditions for permanent workers (job position, wage, benefits if 3 any, working times, leave entitlement, housing if any): (0) employment conditions not M=1 defined, not even orally (1=M) clearly defined and known to worker, even if not written

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(2) contract or official registration of worker or other documents indicating at least the basic employment conditions (3) good contract system. 2 Defined employment conditions for casual / seasonal workers: (0) employment conditions 3 not clear, not even orally (1=M) wage and working times agreed and known to M=1 worker, even if not written (2) contract or official registration of worker or other documents indicating at least wages, working times (3) good contracts 3 Permanent workers are paid (0) less than local average (1) local average (2=M) at least 4 2 applicable minimum wages OR typical local rates (if no minimum wage defined); If M=2 not: improvement plan is required and action towards compliance is demonstrated (3) paid more than local average or applicable minimum wages, if minimum wage is higher (including benefits, if any) (4) paid substantially more. 4 Casual or seasonal labour are paid (0) less than local average (1) local average (2=M) 4 applicable minimum wages OR (if higher or not defined) typical local rates; If not: M=2 improvement plan and demonstrated action (3) paid more than typical local wages OR applicable minimum wages, if minimum wage is higher (including benefits, if any) (4) paid substantially more. 5 Training sessions, time lost due to machine stoppage and other events beyond control of 2 worker are (0) not remunerated (2) paid at normal rate. 6 Payments of all workers are (0) not done or unduly delayed (1) not paid on any fixed 2 days, or with a few delays (2) regular and prompt. 7 Payments are (0) not (1) poorly (2=M) adequately documented. 2 M=2 8 If accommodation or other in-kind remuneration is offered: (0) workers cannot choose 3 freely (1) workers can opt out of in-kind remuneration in some cases (2) can chose freely the type of remuneration preferred (e.g. cash instead of housing) (3) subsidised accommodation or food, rates charged are substantially lower than typical local rates. 9 If staff is given housing by the company: (0) not acceptable in comparison to local 4 conditions (1=M) acceptable (2) safe and adequate housing conditions in local context; M=1 reasonable rates (3) very good housing; very good / subsidised rates (4) very good and included as benefit in workers’ remuneration package. If no housing  (n.a.). 10 The ratio of weekly working hours and rest days of permanent workers are normally (0) 3 far higher (1) slightly higher (2) weekly hours in line with national labour legislation; at least 1 rest day out of seven (3) weekly working hours lower than legal maximum hours OR working hours < 42 hours / week. 11 Overtime is (0) compulsory, not remunerated extra (2) voluntary and at least paid as extra 3 time or time compensated; total working time not > 60 hours, including typical overtime (3) all overtime remunerated at premium rate. 12 Holidays / paid leave: (0) no paid leave / holidays (2) holidays and paid leave granted as 4 per legal requirements (3) generous paid leave allowance, paid sick days (4) exceptionally generous paid leave and sick days allowance. 13 Basic coverage for retirement / provident fund: (0) none at all (2=M) for all workers as 4 legally required (in many cases only for permanent workers) If not  plan for correction M=2 within 1 year for all permanent workers, and 2 years for all temporary workers-as far as legally required (3) better than legally required OR for all workers with adequate contributions from employer (even if legally required) (4) exceptionally high coverage with contributions by employer. 14 Basic coverage for maternity is guaranteed: (0) none at all (1) some efforts / not yet 4 sufficient (2) basic coverage for permanent workers as per legal requirements (3) for all workers OR for permanent workers higher than required OR at least 12 weeks (4) exceptionally generous practice; substantial contributions by employer. 15 Regular employment for regular workers (working basically all year): (0) regular workers 4 don’t have the status of permanent workers (2) regular workers are employed with all benefits of a permanent worker: regular work guaranteed, social security payments, sick- days / paid leave entitlements, etc.; may be salaried or paid on daily wage (4) special effort to provide more workers than industry normal with regular employment rather than contract labour. 16 If (some) workers are clearly marginalised  included in social development plan of the 3 group: (0) not included (2) gradual improvement of working conditions of workers included in development plan / Social Policy (3) demonstrated commitment to improve OR consistently provide good labour conditions of workers.

2 In case of pay-per-production, calculate income of an average production day without overtime.

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TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 52 32

3.4 SOCIAL RESPONSIBILITY AND COMMUNITY RELATIONS 3.4.1 Commitment to and Management of Social Responsibility

Principle 3.4.1 The group operation defines, implements and communicates its commitment to Social Responsibility and FairTrade principles. a) The company has a Social Responsibility (SR) Policy or Social & FairTrade (SFT) Policy (depending on certification scope) that details its commitment to empowerment of and fair relations to producers, good working conditions and its continuous improvement of performance. Ideally, the policy is developed in cooperation with producers and workers. Organised smallholder producer organisations have 2 years to develop a written policy. b) The Social Responsibility / Social & FairTrade Policy covers the following aspects • Long-term commitment to good relations with producers and workers, to comply with For Life / Fair for Life group certification requirements (as applicable) and to continuous improvement. • Objectives and development targets of For Life or Fair for Life certification • Summary of rights and responsibilities of the management, producers and workers with regard to contracts between producers and the group operator, pricing, basic worker rights, conditions of employment, rights of indigenous people and community relations. References may be made to more detailed manuals, procedures or policies, but still the overall commitment shall be written down in all key aspects • The policy must be signed by top management and must be made known to all producers’ staff. Corporate Social Responsibility and workers’ welfare shall be embedded in the overall mission statement and company policy. • If the group applies for Fair for Life FairTrade certification, the policy includes details on FairTrade beneficiaries, administration of the FairTrade Development Premium Fund, the decision process for Premium use and intended Premium use (rough description of types of projects to be possibly funded) in adequate detail to ensure smooth implementation of FairTrade obligations described in Section 3.6 below. c) The Social Responsibility / Social & FairTrade Policy is accessible in a comprehensive form to all producers and group operator personnel, including executives and supervisors. It also needs to be publicly available, preferably on the company’s website. The policy is reviewed regularly and revised when necessary. d) The group operation must plan and implement the necessary activities to comply with the Fair for Life certification requirements and applicable law and to effectively implement its Social Responsibility / Social & FairTrade Policy.

No Control Points: Commitment and Management of Social Responsibility MAX SCORE 1 Social Responsibility / Social & FairTrade commitment (see above): (0) none, very low 4 management awareness of social issues, low commitment (1) no written policy, but clear M=2 social commitment (2=M from year 2) written basic policy covering the key from commitments. For organised smallholder producer groups (2=M from year 3) (3) Yr 2 well developed policy, developed in cooperation with producers and workers. or 3 2 The policy and the commitment to externally certified Social Responsibility performance 3 is made known to the producers and workers (0) not at all (1) made available on request M=2 or formally available to producers and workers without really informing them (e.g. on from inactive notice boards) (2=M from year 3) producer and workers are being adequately Yr 3 informed of the company’s commitment to Social Responsibility (and FairTrade, if applicable) and key aspects of the Social Responsibility / FairTrade Policy, e.g. the policy is presented at annual producer meetings or staff trainings, or published prominently on site, etc. (3) producers and workers are trained and are aware of the policy commitments of their employer. 3 There is a senior management representative responsible for Social Responsibility or 3 Social & FairTrade certification and performance: (0) no clear responsible manager or coordinator (1) somebody responsible but with insufficient management power (2) suitable Social Responsibility / Social & FairTrade coordinator (3) good, active

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management and producer representation with regard to standard performance, spirits of cooperation to reach / maintain certification and improve social impact for identified target groups. 4 The company has adequate management in place to implement its Social Responsibility / 3 FairTrade Policy and ensure continued compliance with this standard: (0) no quality management system or social quality awareness in place at all (1) simple management system, responsible coordinator reasonably capable of coordinating implementation, but social issues not embedded in overall company management (2) adequate basic management in place to ensure continued compliance with the standard, to set objectives, develop procedures and define activities to address specific social issues of concern – if any (3) Social Responsibility / FairTrade aspects firmly embedded in all company policies and overall management.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 13 8

3.4.2 Community Relations

Principle 3.4.2 Fair for Life group operations incorporate high social and cultural values and take an active role in the sustainable development of the communities and societies in which they operate. a) Group operators are expected to make positive economic, social and cultural contributions beyond legal obligations, in particular they are expected to reach out to remote and marginalised producers and provide local employment. Other examples of positive contributions: active training of workers from the local community, supporting community cultural activities, preserving local traditions which are in line with the principles of social and ecological responsibility, engagement in social projects in the community (e.g. direct support, fundraising, management support), supporting the Corporate Social Responsibility and FairTrade movement, educating the public and providing training in local businesses or within the operation’s supply chains, raising awareness on environmental problems and improved environmental management practices (e.g. training in composting and recycling), or marketing own products locally at a reasonable price. Projects financed through FairTrade Premium may be mentioned – but in the performance rating it should be considered that the FairTrade Premium is usually a contribution paid by the FairTrade buyer of the products. In particular in contract production situations the evaluation should specifically consider contributions and efforts by the contracting company itself (not only Premium projects).

No Control Points: Community Relations MAX SCORE 1 The group operation reaches out to producers in remote and marginalised regions (0) no 4 marginalised producers included although present in project region and producing relevant crops (1) some marginalised producers, lower than other comparable group operations in the region (2) group also includes producers from more remote and marginalised regions, at least at similar levels as comparable group companies in the region (3) clear efforts (4) outstanding efforts to identify and include particularly marginalised producers OR entire group is based in particularly marginalised region. 2 The group operator provides employment (incl. training, if required) for people from 4 nearby local and / or indigenous communities (0) no employment opportunities for local / M=2 indigenous communities provided (1) very few jobs provided to local / indigenous communities (2=M) operation provides job opportunities for local / indigenous communities (3) job opportunities for local / indigenous communities include management positions (4) operation is predominantly run by the local / indigenous groups. 3 Additional Points for voluntary commitment: The group operator provides income and (4) employment to marginalised workers in the respective local setting. – Rate commitment (0) to (4). No norm requirement. 4 Additional Points for voluntary commitment: The group operator as business entity (4) supports the local communities through its engagement in social, cultural or environmental projects (e.g. support of school or local health services, scholarship programmes) – Rate activities beyond FairTrade Development Premium projects from (0) to (4) and provide comments. No norm requirement. If organised producer groups: include rating of producers’ empowerment through the organisation in rating. 5 Additional Points for voluntary commitment: The group operator is active in awareness (4) creation, producer empowerment, education and training in Social Responsibility and

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environmental protection / sustainable use of land and natural resources. – Rate performance from (0) to (4) and provide comments. No norm requirement. 6 The group operator’s activities and efforts in the local community do not have a clearly 4 negative impact on local / indigenous communities, on the environment or on local M=2 sustainable development (0) activities have a clear negative impact on local sustainable from development, e.g. lobbying for weaker environmental legislation, active promotion of Yr 2 unsustainable practices (2=M from year 2) operation’s overall activities are in line with sustainability principles (3) to (4) very good / outstanding overall efforts and contribution to sustainable development.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 24 6

3.4.3 Respecting Rights of Indigenous and Local People

Principle 3.4.3 Fair for Life group operators have legitimate land use rights for production premises and respect the rights of indigenous people with regard to use of local resources and traditional knowledge. a) The group operator must have a legitimate right to land use and legal tenure of its operation premises. Disputes on land must be resolved responsibly and transparently before certification can be granted b) If relevant, the group operator respects the rights of indigenous people regarding the use of biological and other local resources and traditional knowledge (TK). In the application of criteria a) and b) the rules outlined in ILO Convention 169 (Indigenous and Tribal Peoples Convention) must be respected at all times when the rights of indigenous or tribal peoples may directly or indirectly be affected by an operation.

No Control Points: Respecting Rights of Indigenous and Local People MAX SCORE 1 The group operation holds valid, legal land use and tenure rights (including resource use 4 rights such as water use) (0) significant, unresolved disputes OR no legal and legitimate M=2 land use rights (2=M) legal and legitimate land use and tenure rights. If there are any disputes, they are handled responsibly (3) to (4) mutually beneficial land use / tenure agreements with the local / indigenous communities based on transparent communication and negotiation and mutually agreed terms. 2 There are no unresolved disputes related to the use of biodiversity and traditional 3 knowledge (TK) (0) unresolved disputes with regard to the use of biodiversity and TK; no M=2 efforts to solve them (1) unresolved disputes with regard to the use of biodiversity and from TK; steps have been undertaken to resolve them (2=M from year 2) no unresolved Yr 2 disputes with regard to the use of biodiversity and TK OR all such disputes resolved in a transparent and mutually beneficial way, based upon written agreements including prior informed consent and mutually agreed terms (3) proactive company initiative that has resolved all potential disputes with regard to biodiversity use and TK as described in (2) before starting the operation.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 7 4

3.5 ENVIRONMENTAL ASPECTS

All applicants for For Life Social Responsibility producer certification or Fair for Life Social & FairTrade producer certification must either: • Confirm their responsible production practices by certification according to an acknowledged organic, ecological or Good Agricultural Practices (GAP) minimum standards (Organic Textile GOTS, FSC, Rainforest Alliance, GLOBALGAP, AquaGAP, Utz Certified). • OR fulfil the Fair for Life Integrated Production Standards (Module 9) which deal with responsible handling of agrichemicals and other basic aspects of good production practices. Exception: agricultural product processing companies (food processors, ginneries, etc.)  only general environmental criteria as listed in this chapter apply.

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Additionally the following general environmental criteria apply to ALL producer group operations:

3.5.1 Internal Monitoring of Environmental Aspects

Principle 3.5.1 The group monitors and trains producers in good environmental practices. a) Basic environmental performance aspects shall be included in the group’s ICS / monitoring system. Since there are only very few MUST requirements for the producers and full compliance (rating 2) in every single control point is not required for certification, groups have some flexibility to set their own specific targets and development criteria in the fields of water conservation, energy use, ecosystem conservation and waste management.

No Control Points: Internal Monitoring Environmental Aspects MAX SCORE 1 Internal standards for producers: (0) very poor environmental aspects on farms, but not 4 included in standards (1) no environmental in internal standard, but no major problems M=2 (2=M from year 2) all relevant environmental requirements that are not yet well from implemented on the farms are included in the internal standards in the form of Yr 2 progress requirements adapted for specific production situation (3) good and detailed environmental requirements included. 2 ICS: Progress in environmental aspects is: (0) not checked although problematic (1) not 4 evaluated explicitly but there are no problems (2) evaluated during internal inspections or during normal extension visits; environmental performance is documented in farmer files (3) inspectors are well aware of environmental issues and good inspection.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 8 4

3.5.2 Environmental Performance of Producers

The following control points assess the typical situation on the producer farms. If there are huge differences between different producers, please provide details. Medium family producer farms are expected to demonstrate better performance in environmental issues to be evaluated as fulfilling the norm adequately. Principle 3.5.2 Producers strive to apply responsible water and energy management practices and to preserve natural ecosystems. a) Producers use water responsibly and minimise ground or surface water contamination. b) Producers are supported and trained not to waste energy and to use sustainable renewable energy where possible. c) Threatened and endangered species should be protected and natural ecosystems not destroyed. d) Waste is handled as responsibly as possible and composting and recycling is encouraged.

No Control Points: Environmental Performance of Producers MAX SCORE 1 Water conservation practices: (0) apparent waste of water (2=M from year 3) adequate 2 water use practices and rational use of water; no apparent waste of water, e.g. M=2 through defective irrigation pipelines, ineffective use in processing, or other loss of water from (3) very good water conservation practices compared to regional standards OR very low Yr 3 water usage (4) exceptional efforts. 2 Waste / sewage water management (processing waste water, domestic sewage water): 4 (0) pollution of waterbodies by untreated wastewater (2) basic adequate waste water handling; no substantial risk to environment or people by sanitary facilities (3) good waste water management OR no negative impact at all on ground and surface water (4) exceptional efforts; minimisation of water use and very good water treatment. 3 Programmes to minimise energy consumption and mitigate climate change: (0) no efforts 4 although high consumption (2) no apparent waste of energy OR training programmes / activities to minimise overall energy consumption (3) very low overall consumption OR efficient use of electricity OR promotion of renewable sources of electricity (biogas, solar,

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wind, water, etc.) (4) exceptional efforts to minimise energy consumption / use renewable energy sources. 4 Protection of threatened or endangered species of flora and fauna and threatened 4 habitats: (0) evidence that producers directly destroy such species and / or habitats (1) production has some negative impact (2) no evidence of substantial active negative impact on such species and / or habitats nor are such animals held in captivity (3) producers protect all near threatened, vulnerable, endangered or critically endangered species and threatened habitats within the farm. 5 Destruction / clearing of primary or old growth secondary forest: (0) producers are 4 commonly responsible for clearings or produce is grown on land that has been cleared in M=2 past 10 years (1) show some shortcomings (2=M) producers do not engage in such clearing or commonly operate on land that has been cleared in past 10 years. For clearing of secondary forest in the past, sufficient compensatory ecosystem conservation action may be accepted as compensation (3) minimal OR no land conversion, good conservation management of land use (4) exceptional efforts. If M not fully met – practices must stop immediately and all producers trained accordingly. Farmers with infringements after training must be suspended. 6 Conversion or destruction of other valuable ecosystems, e.g. introduction of potentially 4 invasive species; conversion of natural grass- or bushland or of other ecologically valuable areas: (0) producers are commonly responsible for such land conversions / destruction of ecologically valuable areas without any compensatory measures (1) show some shortcomings (2) producers do not engage in such conversion or destructions. In case of conversion of grass and bushland it may be accepted if producers take sufficient compensatory ecosystem conservation action (3) minimal OR no land conversion, good conservation management of land use (4) exceptional efforts. 7 Destruction of or adverse impact on aquatic ecosystems (e.g. regulation of water 4 courses, water bodies or wetlands; destruction of benthic ecosystems through intensive M=2 aquaculture or fisheries; introduction of potentially invasive species into water bodies, from pollution of rivers): Producers commonly (0) are responsible for such adverse impact or Yr 2 destruction (1) some shortcomings (2=M from year 2) do not engage in such destructive practices OR have taken sufficient compensatory ecosystem conservation action; If M not met: the operator must provide a written declaration that they will stop such practices immediately and take compensation measures (3) minimal OR no impact on aquatic ecosystems; good conservation management (4) exceptional efforts. 8 Land clearing or conversion of land or aquatic ecosystems: (0) uncontrolled burning as 4 means of land clearing (2) acceptable land clearing practices (3) exemplary efforts to minimise environmental impact OR no land clearing commonly practiced (4) good awareness creation on minimising and optimising land clearing. 9 Genetically modified organisms (GMOs) are excluded (0) GMO crops very common for 4 the certified crop (1=M from year 2) certified products are not genetically modified M=1 varieties (2) no GMO crops grown or used as animal fodder (3) GMO are excluded from from the entire production system, including inputs (4) active education of producers in the Yr 2 region about the risks of GMO production. 10 Programmes for composting: (0) no efforts at all (2) adequate efforts (3) very good 4 performance with regard to composting (4) exceptionally good performance. 11 Programmes for recycling and waste reduction: (0) no efforts at all (2) adequate efforts 4 (3) good performance with regard to recycling and reduction of waste production (4) exceptionally good performance. 12 Waste disposal: (0) unacceptable waste disposal in local context, e.g. plastic all over the 4 fields (2=M from year 3) communal waste disposal OR adequate waste disposal M=2 dumps on farms and / or controlled open air burning of waste with efforts to minimise from negative impact on people and environment (3) very good / low emission waste Yr 3 management (4) exceptional waste management efforts.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 46 24

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3.5.3 Environmental Performance of Processing Group

The following control points assess the environmental performance of the group operation’s central processing or packing sites (unless so big that the processing is evaluated according to full hired labour standards, which include environmental criteria as well – chapter 2.4). Larger, more professional units are expected to demonstrate better performance in environmental issues in order to be evaluated as fulfilling the norm adequately. Principle 3.5.3 During processing activities of the group, environmental criteria are respected.

No Control Points: Environmental Performance Group Processing MAX SCORE 1 Water conservation practices: (0) apparent waste of water (1) some shortcomings (2) 4 adequate water use practices and rational use of water; no apparent waste of water, e.g. through ineffective use in processing or other loss of water (3) good water conservation practices compared to regional standards OR very low overall use (4) exceptional efforts. 2 Waste water management (processing waste water, domestic sewage): (0) pollution of 4 waterbodies by untreated wastewater (1) some shortcomings (2=M) handling ensures M=2 that there is no substantial risk to environment or people e.g. by sanitary facilities, adequate treatment of processing waste water (3) good waste water management (4) exceptional efforts; minimisation of water use and high standard of water treatment. 3 Minimising electricity consumption: (0) no efforts (1) normal practice with some aspects 4 needing improvement (2) electricity is not wasted and reasonable efforts to minimise overall consumption (lights and machines are turned off after use, rational use of airconditioning, new machines / facilities are optimised with regard to energy efficiency) (3) efficient use of electricity OR very low overall consumption OR investment in alternative sources of electricity (solar, wind, water, etc.) (4) exceptional efforts to minimise electricity consumption and use of renewable energy sources. 4 Minimising fuel consumption: (0) no efforts (1) most practices adequate but some 4 shortcomings (2) adequate fuel saving practices (for new machines also fuel consumption considered in purchase decisions; minimising car / truck / tractor trips around operation, optimised operation schemes in factories, adequate temperature setting if heating / cooling required) (3) investment in energy efficient equipment, high efforts to minimise fuel consumption, increased use of biogas, biodiesel, solar, wind or water power) OR very low overall fuel consumption (4) exceptional efforts, e.g. low-energy buildings, advanced processing techniques. 5 Renewable energy sources: (0) no awareness of sustainability of energy sourcing; only 4 very problematic non-renewable or exploitative energy sources used (e.g. indiscriminately harvested wood from unmanaged forests, coal) (1) most energy used is from high / medium emission sources like oil and gas due to lack of alternatives and in spite of adequate awareness of the issues (2) adequate efforts to use some renewable (solar, water, wind, etc.) and / or sustainably harvested energy sources and more low carbon energy sources (e.g. natural gas instead of coal) (3) very good efforts and improvements to convert to renewable / carbon efficient energy sources (4) exceptional efforts OR all energy used is already sourced from renewable energy sources. 6 Additional Points for voluntary commitment: Further efforts to mitigate climate change: (4) Assess group operator’s overall awareness and engagement to minimise climate change in its group operation and community with rating from (0) to (4). No norm requirement. E.g. targeted training and information on energy management and climate change, active in reduction of greenhouse gases (CO2, NO2, methane). Relevant aspects for farm production are (additionally to other energy management efforts): reduction of CO2, NO2 and methane emissions by optimised livestock management, no burning of grassland / bushland, build up of organic soil fertility, appropriate composting methods, appropriate animal manure management (collection, storage, spreading) and efforts to reduce or avoid fertilisers that contain nitric acid or ammonium bicarbonate. 7 Protection of threatened or endangered species of flora and fauna and threatened 4 habitats: Present operation (0) directly destroys such species and / or habitats (1) has M=2 some negative impact (2=M) no evidence that operation has substantial negative impact on such species and / or habitats (3) producers protect all near threatened, vulnerable, endangered or critically endangered species and threatened habitats within the farm. 8 Conversion or destruction of land ecosystems by processing operation, e.g. clearings of 4 primary or old-growth secondary forests; introduction of potentially invasive species; M=2

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conversion of natural grass- or bushland or of other ecologically valuable areas: Group operation (0) is responsible for such land conversions / destruction of ecologically valuable areas (1) some shortcomings or destruction in the past few years (2=M) does not engage in such conversion or destruction from date of certification onwards. Clearing of primary or secondary forest not acceptable up to 10 years before beginning of certification (3) no conversion / destruction plus some conservation awareness (4) minimises land conversion and practises management of land use according to acknowledged conservation standards. If basically no land ecosystem inside or adjacent to operation  (n.a.) 9 Destruction of or adverse impact on aquatic ecosystems (e.g. regulation of water 4 courses, water bodies or wetlands; destruction of benthic ecosystems through intensive M=2 aquaculture or fisheries; introduction of potentially invasive species into water bodies, pollution of rivers): Group operation (0) is responsible for such adverse impact or destruction (1) some shortcomings or destruction in the past few years (2=M) does not engage in such destructive practices or has taken sufficient compensatory ecosystem conservation action; If M not met: the operator must provide a written declaration that they will stop such practices immediately and take compensation measures (3) no conversion / destruction plus some conservation awareness (4) practises active management of aquatic ecosystem use according to internationally acknowledged ecosystem conservation standards. If basically no aquatic ecosystem inside or adjacent to operation  (n.a.) 10 Land clearing or conversion of land (0) uncontrolled burning as means of land clearing (2) 4 acceptable land clearing practises, burning only with justification of ecological benefits (3) exemplary efforts to minimise environmental impact OR no land clearing practices (4) good awareness of minimising land clearing. 11 No hunting, production and trafficking of animal or plants originating from protected or 4 threatened species (as per CITES, IUCN and red list designations) or products that are M=2 derived from them: (0) animal / plant parts originating from protected species or products that are derived from such animals / plants are produced and / or traded (2=M) no such activities by group operator. If practiced by producers only permitted if production is for subsistence use. Plan for improvement is necessary, see guidance in Module 2 Hired Labour (3) in addition, awareness creation is supported by the company (4) company actively supports animal rights and plant protection and has programmes to stop illegal production and trafficking of protected animal / plant parts or products based on these. 12 Composting, recycling and waste reduction: (0) no efforts at all (2) adequate efforts (3) 4 very good performance with regard to recycling, composting and reduction of waste production. 13 Waste disposal: (0) no structured waste disposal in place (1) open waste disposal dumps 4 and / or open air burning of waste (2) municipal waste disposal OR optimised waste disposal by means of burial of waste OR proper incineration that minimises impact on the environment and on human health. Open burning only of compostable materials without harmful emissions (e.g. no plastic) (3) advanced / low emission waste disposal (4) exceptional waste disposal management.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 52 24

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3.6 FAIR FOR LIFE FAIRTRADE CRITERIA

This section of the standard only applies to Fair for Life Social & FairTrade producer group operations and all processing under the group operator’s ownership. It covers the group operator’s relationship to registered producers and all FairTrade Price setting and buying from the registered producers as well as the administration and management of the Fair for Life FairTrade Development Premium. It does not apply to producer groups who apply for “For Life - Social Responsibility” certification and it does not apply to Fair for Life companies who buy in or manufacture Fair for Life certified products. For such trading companies further up the supply chain, the criteria for Fair for Life handlers outlined in Module 6 of this programme apply. If the FairTrade producer also buys products from other FairTrade certified producer companies, it acts as a FairTrade buyer as well and must therefore fulfil the same basic requirements as applicable to other FairTrade handlers (see Module 4).

FairTrade Focus

“FairTrade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers (or workers) who have been economically disadvantaged or marginalised by the conventional trading system” (WFTO Fairtrade Principle 1).

Fair for Life strives to improve the livelihood and wellbeing of marginalised social groups, most of all smallholder producers. However, workers are often another very important target group for FairTrade, in particular temporary workers whose workforce is often exploited and who do not have appropriate bargaining power.

Since the Fair for Life FairTrade focus strongly depends on the specific local situation and project setting, an overall FairTrade Policy analyses the socio-economic situation, marginalisation and needs of producers, their workers (if any) and workers in the groups’ processing operation(s) in order to come up with a suitable FairTrade focus for the Fair for Life group operation.

In the case of organised producer groups Fair for Life aims at: • Empowerment of and better trading conditions for producers and their marketing organisation. • Support for sustainable development projects in the local communities. • Depending on the producers’ socio-economic situation, seasonal workers on the producers’ farms may be an additional FairTrade focus, as may be workers in the groups processing operation.

In the case of contract smallholder producer group operations, Fair for Life aims at: • Empowerment of the producers and a fair relation between the group operator / buyer and the individual farmer. • Better income, income security and overall benefits from production for the group’s producers with related improvements in the livelihoods of the farmers, their families and communities. • Depending on the producers’ socio-economic situation, temporary workers on the producers’ farms may be an additional FairTrade beneficiary. • Depending on the socio-economic situation of the producers versus workers, the workers in the group’s processing operation may also be an important FairTrade focus group, especially in case of groups of medium sized farm groups.

For groups of medium size producers who depend on some hired labour in their family farming operation, the focus for Fair for Life is always on workers on producer farms and in the group’s processing unit. Depending on the analysis of the overall socio-economic setting, additional focus may be on empowerment of the producers’ cooperative or on social projects in the wider community.

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Applicants should be aware that the benefits of FairTrade have to reach the producers, workers and the communities and that any FairTrade Development Premium has to be administered separately and used for dedicated development projects only. It may never be used for complying with legal labour requirements or for business investment.

In order to become a meaningful FairTrade chain, contacts with buyers interested in FairTrade should be in place at an early stage, because this helps setting up a full FairTrade trade chain with appropriate FairTrade Development Premiums being paid into the Fair for Life Premium Fund to allow meaningful social development projects.

Eligibility Criteria for Fair for Life Social & FairTrade Certification

There are no pre-requirements or applicable eligibility criteria for organised groups or contract production operations buying mainly from marginalised smallholder producers in developing and emerging countries.

The following eligibility criteria for Fair for Life Social & FairTrade certification apply to • Groups or contract production projects with a majority of producers who no longer structurally depend on family labour only, i.e. for groups of farms who cannot be considered smallholders. • Groups with mixed size producers if less than 50% of volume is bought from smallholder producers and • For all producer groups in high or upper middle income countries, see Module 1, Annex 1.

No Eligibility Criteria for Fair for Life Groups with Applicable Eligibility Pre-Requirements 1 The applicant presents a basic FairTrade justification analysis with the following elements • Brief socio-economic analysis of status and position of the producers and of their workers in the local community (all types of workers). Brief description of social-economic situation and concerns in the region • Brief socio-economic situation of workers in processing unit and / or other intended beneficiaries of FairTrade • Expected focus and impact of FairTrade on producers, workers, their families and the local communities • History and commitment of the company to social and community development • Potential marketing links to buyers interested in buying FairTrade products and paying a FairTrade Development Premium, if any The company must be able to justify the benefits of FairTrade for marginalised social groups beyond providing fair working conditions or better prices.

2 The applicant confirms his commitment to continuously improve the working and employment conditions in his operation and to support the empowerment of workers.

Based on the above presented criteria, the certification body assesses the Fair for Life application and informs the applicant accordingly. Group operations that are not eligible for Fair for Life FairTrade certification are encouraged to apply for For Life – Social Responsibility certification instead.

3.6.1 FairTrade Policy and Producer Empowerment

Principle 3.6.1 The group operation has a defined FairTrade Policy with identified beneficiaries of FairTrade, based on a socio-economic analysis of potential target groups and adequate procedures to implement responsible administration of FairTrade Development Premiums. a) The group operator’s FairTrade Policy defines the intended beneficiaries of FairTrade, with a short social analysis of several different potential target groups. In a producer group, the benefits of FairTrade shall reach the producers, their families and communities as main target groups and shall strengthen the group’s overall marketing capacities.

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In contract production, the beneficiaries shall be the producers, their workers, or workers in the central processing unit(s). In some cases, different target groups in the local community may be the FairTrade beneficiaries; this must be clearly stated and justified in the FairTrade Policy. In the case of production chains with farm producers as well as substantial processing under the ownership of the group operator, the FairTrade Policy defines the main beneficiaries and FairTrade target groups, depending on social impact and needs assessment. Any Fair for Life certified producer operation must undergo full Fair for Life producer certification. The group operator’s central processing unit is considered the same operation and the FairTrade certification concept is applied to the entire operation – however it depends on the FairTrade analysis of needs as to which groups are to be the focus for FairTrade Premium benefits. E.g. in some groups, only the smallscale marginalised producers will be targeted FairTrade beneficiaries, while in other settings both the producers and the workers in the central unit and warehouse are FairTrade target beneficiaries. If the Fair for Life product is processed further in a processing unit at another location (e.g. a refining factory) and if this unit is owned by the same group operation, the unit is considered part of the producer group operation’s Fair for Life certification and must normally undergo For Life Social Responsibility certification or equivalent. For details and guidance on certification requirements for product processing by the certified Fair for Life operation before the product is sold to FairTrade buyers see Module 1, Chapter 1.1.2 (a). b) The FairTrade Policy or related documents describe the FairTrade Development Premium decision processes and envisaged Premium use (scope of possible projects). c) In contract production projects the contracting company permits and supports producers to become a functional producer group selling to the company – if this is the producers’ wish.

No Control Points: FairTrade Policy and Producer Empowerment MAX SCORE 1 The group operation’s FairTrade Policy (see details above) or related documents provide 3 adequate analysis of the socio-economic situation of different potential target groups of M=2 FairTrade and define meaningful FairTrade beneficiaries: (0) no analysis, some relevant marginalised target groups, e.g. workers not included in present FairTrade focus at all (1) some information available, but not complete or acceptable for respective project setting (2=M) adequate analysis and overall FairTrade focus for respective group operation setting (3) well developed FairTrade analysis and well developed policy. 2 The group operator presents adequately detailed procedures for responsible 3 administration of FairTrade Development Premiums including decision process on M=2 Premium use and envisaged scope for the use of the FairTrade Development Premium: (0) no procedures or clear ideas (1) some procedures planned but not yet written down OR needing refinement (2=M) adequate written procedures (3) exceptionally well developed and meaningful procedures in place. 3 The group operator presents progress in empowerment and capacity building of 3 producers (0) very poor level of empowerment, low capacity (2) adequate activities to slowly promote empowerment and increase producers responsibility and capacities (3) very good programmes and support for participatory decision processes, group organisation and training in good production practices. 4 Contracted Production: If wished so by the farmers, the farmers group (0) may not (1) 3 may to some extent (2) is permitted (3) is supported to gradually take over more and more responsibilities of an independent smallholder organisation company. 5 Annual products: Farmers are implicitly or explicitly required to grow the certified cash 2 crop each year: (0) strong requirements, farmers immediately dropped if not growing the crop; no alternative crops (1) requirement exists; but growers not immediately dropped (2) no such requirements OR producer has a choice of products to grow to remain in the group. Limited restrictions may be acceptable, e.g. that the target crop must be grown e.g. for 2 years out of 3 to remain in the group. 6 Additional Points for voluntary commitment: (0-3) There are programmes for workers or (3) producers to obtain ownership shares of the group operator company at preferential conditions – Rate activities from (0) to (3) and provide comments. No norm requirement.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 17 10

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3.6.2 FairTrade Pricing

Principle 3.6.2 There shall be a system of fair sharing of profits in the producer’s organisation or contracted production project. Prices paid cover at the very least the cost of production and shall result in producers earning a fair income from their production. Overview: FairTrade shall ensure that producers and workers receive fair prices for their products / services and thus can meet all basic needs of their families and have some discretionary income. Producers can invest in their families’ or in their workers’ welfare and contribute to the wellbeing of their communities. In the Fair for Life system, sales prices are discussed and mutually agreed between the Fair for Life group operator and its primary FairTrade buyers, based on open and transparent negotiations. In order to ensure that even in times of very low market prices producers recover their costs, a Floor Price is agreed that ensures that producers can always cover all costs of production, including their own work. The Floor Price is a safety net only, not the targeted FairTrade Sales Price. On top of the FairTrade Sales Price, a FairTrade Development Premium is agreed and paid.

FairTrade Sales Price Agreed sales prices slightly above market price to cover compliance costs. In case of low market prices at least equivalent to the agreed FairTrade Floor Price.

FairTrade Floor Price a) FairTrade Sales Floor Price: Minimum price the FairTrade buyer pays to the group operator for FairTrade products; as safety net for producers who in turn receive a Farmgate Floor Price in case of low prices. b) FairTrade Farmgate Floor Price: Minimum price to be paid by the group operator to individual producers. Compulsory for contract production situations. Costs of production (including income for farmer family’s work) are covered.

FairTrade Development Premium A fixed FairTrade Development Premium is paid by the buyer on top of the FairTrade Sales Price to allow for social and other development in the producer operation’s community. The Premium is administered separate from sales income and used for agreed purposes. a) The group operator and its FairTrade buyers agree on a Fair for Life Sales Floor Price which is the minimum price to be paid for all FairTrade sales of the Fair for Life group operation. The Sales Floor Price is a safety net that shall ensure that even in times of very low market prices the Fair for Life FairTrade Price paid always covers the producers’ cost of production (including farmers’ working time). It is expected that the same Floor Price applies to all FairTrade buyers of the group operator; The Fair for Life Floor Price is determined in an openly discussed, negotiated and justified approach and normally remains valid for a period of 2 years or until reviewed and re-negotiated. The price calculation is documented. The Sales Floor Price shall most of all ensure that smallholder producers are paid a fair price that, at all times, at the very least covers their production costs and that the organisation’s overhead costs for transport, processing, packaging and organisational costs are covered. If the costs of certification are paid by the organisation, these are accounted for as well. Therefore group operations shall set a Farmgate Floor Price, i.e. a safety price that is applied for purchases from producers in low market price situations to ensure that at the very least producers always cover their costs of production. This is recommended for all types of group operations, but only compulsory for contract production projects. Guidance on calculation of the Sales Floor Price and Farmgate Floor Price is given in Annex 1 to this module. b) Producers are paid a fair price that shall be at least slightly above local market rates for non-FairTrade products of similar quality to account for the higher quality and compliance expectations (quality premium). In case of low market prices, the farmgate price never drops below the agreed Farmgate Floor Price. In times of very high prices well above the Floor Price, farmgate prices at local market level may be acceptable with justification of costs of production and compliance efforts. c) The FairTrade group operator and its primary FairTrade buyer(s) agree on a FairTrade Sales Price by negotiation. The agreed Fair for Life Sales Price may not be lower than the agreed Fair for Life Sales Floor Price.

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It is expected that Fair for Life FairTrade Prices will normally exceed market prices for the respective commodity (world market prices, if defined) and the respective product quality (e.g. organic and respective quality grade). This will enable the costs for compliance with the requirements of this standard to be covered. For smallholder producer companies, prices at least 5% higher than normal market prices (for respective quality) are recommended. In very low market price situations the Fair for Life Floor Price may be substantially higher than current market prices. If market prices are high it is acceptable for the FairTrade Price to be at market price level, provided that overall compliance costs, efforts and support of the supplier and additional benefits are considered and the price can be justified. d) Additionally a Fair for Life FairTrade Development Premium is agreed and paid on top of the FairTrade Sales Price. Calculation of the FairTrade Development Premium must be documented. The FairTrade development Premium shall be stated separately in each sales contract and is channelled by the group operator into its FairTrade Premium Fund (see chapter 3.6.3). The FairTrade Development Premium is normally calculated as a set premium price for at least a year, or even two year period, and calculation must be documented. It is expected that the FairTrade producer charges all Fair for Life and other FairTrade buyers the same FairTrade Development Premium. The Premium shall not be discounted. The FairTrade Development Premium for smallholder producer companies is recommended to be 10% of average farmgate prices and shall not be lower than 5% of average farmgate prices; other guidance on setting the FairTrade Development Premium is given in Annex 1 to this module. As an exception, it may be permitted that an experienced traditional FairTrade organisation with a wide range of social activities rather than specific FairTrade Premium Fund activity, charges an overall “FairTrade-Quality- Including-Premium-Sales-Price” without a specified Premium to their FairTrade buyers. In this case the company must provide its buyers with an overview of its total income and overall costs and give detailed account of all social and development projects funded with the FairTrade Quality Price. Buyers must be informed that the certification body can only verify the accuracy of the report provided but cannot follow up any specified FairTrade Premium in detail. The exception is applied to companies who have been active FairTrade Organisations for at least 5 years and are entirely dedicated to FairTrade (e.g. confirmed by membership in WFTO). The exception must be confirmed by the certification body in writing.

No Control Points: FairTrade Pricing MAX SCORE 1 In trade contracts and price negotiations the group operator gives its trade partners (0) 3 clearly wrong information (1) slightly inaccurate / not clear information (2) correct information (e.g. on producer prices or other compliance costs) if requested by trade partner (3) detailed and correct information about operation. 2 The group operator negotiates a FairTrade Sales Price with its buyers: (0) exaggerated 2 price differentials; not at all related to FairTrade compliance costs (2) adequate FairTrade Price negotiated in reasonably open negotiations. 3 Costs of production are known as basis for price negotiations; these costs include 3 producer prices and all incurring costs from collection to sales: (0) no overview of production costs (2) adequate basic overview of production costs including farmgate prices, collection and transport costs, costs for extension and ICS, processing costs, group operator costs and other specific costs for Fair for Life compliance (3) very good cost analysis. 4 Prices for farmers are based on a clear system: (0) pricing not transparent at all; prices 4 vary between farmers; not based an objective quality (2) transparent pricing system; same prices for same quality; clear pricing rules or set prices (3) good market price information for farmers; open communication on costs and overheads OR producers own the group operation company (4) exceptionally open communications OR farmers have high effective control over the group’s finances and the price paid. 5 The group operation presents a basic calculation for a fair Farmgate Floor Price (0) for 4 contract production projects: no Farmgate Floor Price is defined (1=M from year 2) for M=1 contract production: rough estimation of a Farmgate Floor Price is offered. For from producer groups: no Farmgate Floor Price, but Sales Floor Price is defined (2) Yr 2 adequate basic estimation of a Farmgate Floor Price according to IMO guidelines (3) good analysis of fair farmgate prices (4) very good overview of basic needs of farmers’ and production costs under fair conditions. 6 Farmers receive fair farmgate prices: Farmgate prices are higher than local prices for 4 conventional products (0) no higher prices OR below Farmgate Floor Price (1) slightly M=2 higher prices (2=M contract production CP) at least 5% higher prices for non- (CP) organic, 10% higher prices for organic produce; never lower than Farmgate Floor Price. If prices not higher than local level: detailed justification is required; acceptable mainly in times of high market prices (3) clearly more than 5% / 10% higher prices plus FairTrade Premium money or Premium projects (4) exceptionally high prices or additional benefits for farmers. First certification  (2) if such prices are planned.

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7 Group or contracting company’s overhead costs for collection, processing, marketing and 4 profit: (0) not transparent at all; totally out of scale compared to similar organisations / M=2 companies (2=M) roughly known and seem justifiable / at least within normal range; no exceptionally high management costs compared to local typical situation (3) well known and presented to clients upon request; relatively low overheads / proven efforts to keep overheads small in favour of higher producer prices (and fair workers wages, if applicable) (4) exceptionally low overheads for management / exceptionally high percentage of sales price used for raw products, workers or other social projects. 8 If the FairTrade Sales Price paid is considerably higher (> approximately 10%) than 3 normal market prices for respective quality (not including the separate additional M=2 FairTrade Development Premium), the group operator prepares: (0) no summary (1) some very basic written information (2=M) accurate brief overview summary detailing what this higher price is used for (or details of its costs structure) and sends this summary to clients every year on request (3) to (4) very good / exceptional overview.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 27 16

3.6.3 FairTrade Premium Administration and Use

Principle 3.6.3 The FairTrade Development Premium is intended to finance sustainable social community projects and must be administered responsibly. Decisions on Premium use are taken according to defined democratic procedures which always include the identified FairTrade beneficiaries. a) FairTrade Premium Fund money is generally intended to finance sustainable social community projects or as added income to marginalised low income farmers. Primarily the FairTrade Development Premium is intended for sustainable social and environmental community projects as decided by the Premium Funds Committee. Alternatively, in the case of marginalised smallholder producers with very low income or very scattered producers where community projects are not very meaningful, the Premium may be distributed as additional Premium payment to producers; often this is paid at the end of the year, once it is clear how much Premium has been received. Organised smallholder producer groups may also invest the Premium money into necessary business investment such as joint warehouse or livestock purchasing programmes, organic fertiliser production facilities, etc. However, the money is clearly not intended for maintaining normal business operations (paying market prices to farmers, paying ICS staff, paying workers the legal minimum wage, etc.). Contract production projects are not permitted to use the Premium for business investments (such as e.g. a new packing station), unless the investment is then owned by the farmers as a group, nor can it be used for meeting regular legal minimum requirements (local labour legislation). If any substantial assets are purchased with Premium money, a FairTrade Funds legal entity must be established as owner of such assets. b) The Fair for Life Development Premium must be specified in all invoices and sales contracts. Once received, the Premium money is administered separately and can be followed up by the control body. While organised producer organisations may keep internal accounts of the Premium, in the case of contract production operations, the Premium shall be administered in a separate bank account, with appropriate signatory rights. Appropriate signatory rights for contract production projects are normally joint signatures by contracting company and a producer representative. Other appropriate settings may be used as long as they are both practical and prevent misuse, e.g. two members of the cooperative board. If only the group operator director holds signatory rights or if for specific reasons a separate bank account is not possible, a written confirmation signed by the executive management is required affirming that the contract group operator acknowledges that the money in the Premium Fund is not the operator’s property. c) FairTrade Development Premium Fund decisions are taken by a designated Premium decision body, which can be the assembly of producers or a mixed Fair for Life Premium Fund Committee, according to defined procedures. A mixed Premium Fund Committee must always include producer and worker representatives (if workers are identified as FairTrade beneficiaries) and may include group operator’s management, external experts or buyer representatives. The intended FairTrade beneficiaries shall, at least after the initial phase, hold the majority of votes in the Committee. When Premium use decisions are made by the producer assembly but there are also workers e.g. in central processing unit, who are intended beneficiaries, it should be considered how their interests can be represented in

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the process; e.g. by allocating some part of the Premium to be decided by workers assembly, or by a mixed Premium Committee. Producer and worker representatives shall be elected in a democratic process. Adequate gender representation and fair representation of different interest groups are very important. d) The Premium money is only used for projects decided by the designated Premium decision body. The decision any expenditure and use is well documented.

No Control Points: FairTrade Premium Administration and Use MAX SCORE 1 FairTrade Development Premium Fund financial administration: (0) Premium amounts not 3 specified in contracts / invoices and not documented (1=M organised producer groups M=1 PG) Premium amount can be traced and is known but not in a separate account PG (2=M contract production CP) Premium specified in contracts or invoices and

administered in a separate bank account for the Fair for Life Premium (or alternative confirmation by company, see guidance above). Signatory rights are documented and M=2 appropriate (3) Funds organisation is separate legal entity. CP 2 Functioning FairTrade Premium decision body: (0) no decision body although Premium 3 expected very soon / already received (1) some idea about decision body, not formally M=2 set up (2=M) functional Premium decision body (assembly of intended beneficiaries OR a Premium Funds Committee) with documented members and procedures. If M not met at first inspection  Rate according to present situation, set condition that the company has to set up Committee and inform IMO before any Premium money is used (3) active Funds Committee OR producer assembly as decision body. 3 Balance in FairTrade Development Premium decision body: (0) no producer 3 representation or indications that Committee member selection is misused to dictate M=2 Premium decisions (1) mixed Premium Committee with producers and other intended from beneficiaries in minority (2=M from year 3) assembly of intended beneficiaries (e.g. Yr 3 producers and factory workers) or balanced Funds Committee in which

representatives of the intended beneficiaries are in the majority (3) very balanced and well established Premium decisions. 4 Decisions on Premium use as well as any money spent for the agreed activities are well 2 documented: (0) no documentation (1) some basic documentation (2=M) decision and M=2 use are documented. If no Premium yet received, assess procedures and capacity of future implementation. 5 The Premium Fund decision body writes (0) no report (1) a summary or overview about 4 some activities, but incomplete (2=M from year 2) an annual report with total Premium M=2 received, Premium use decisions, all activities financed by Fund money (with from detailed budget) (3) a very good report. Yr 2 6 The records of expenses paid from the Fund correspond (0) not at all (1) with minor 3 shortcomings (2=M) satisfactorily to the amount spent as per bookkeeping and the M=2 activities reported in the annual Fund report (3) exactly. Very good records, easy to trace. 7 The effective use of the FairTrade Development Premium Fund money is (0) not for the 4 projects as agreed by Premium Fund decision body OR unacceptable projects (1) mostly M=2 for adequate projects, other use justifiable (2=M) only for agreed projects and justified related expenses (3) or (4) very good / exceptional projects / activities. 8 The Premium Funds use was (0) clearly not in line with Fair for Life requirements, used to 3 meet statutory requirements or business investment (1) partly in line with Fair for Life M=2 requirements (2=M) overall in line with Fair for Life requirements and guidance. In borderline cases, Fair for Life was consulted before money was used (3) invested in very good projects. If no Premium yet received  (n. a.) 9 Social and environmental impact of FairTrade Premium use: (0) no particular social 4 impact although Premium received (2) ok social or environmental impact, but rather small amount of Premium (3) good social impact (4) very good social impact with ongoing projects in local community.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 29 18

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3.6.4 Accountable Trade Relation to Buyers

Principle 3.6.4 FairTrade producer companies and their FairTrade purchasers seek to establish a long term and stable relationship in which the rights and interests of both trading partners are mutually respected. FairTrade producer companies are accountable trade partners and work on continuous quality assurance. a) The group operation company acts as accountable and responsible trade partner, entertaining good and open communication with its FairTrade buyer(s). b) Smallholder producer groups can request pre-finance of up to 50% of the contract value in order to finance the buying operations from member producers and agree on terms and use of the prepayment with their buyers. The FairTrade buyer or any external pre-finance initiated by the buyer is permitted to charge interest for the pre- finance provided according to interest rates applicable to him / her. Pre-finance is intended to ensure timely payment to producer when the product is collected. Different uses of pre- finance have to be explicitly agreed with the primary buyer.

No Control Points: Accountable Trade Relation to Buyers MAX SCORE 1 The company acts as responsible long term trade partner: (0) company often drops / 3 changes FairTrade buyers without warning or open communication (2) efforts to maintain long term trade relation with committed FairTrade buyers, open communication if the trade relation might be threatened by higher demand etc. (3) very good and close cooperation with long term FairTrade buyers. 2 The group operation has (0) not fulfilled its trade agreements at all (1) several delivery or 2 quality problems (2) fulfilled the agreements with FairTrade buyers or, if not, has found a mutually agreed solution with its clients. If no sales / first certification  (n.a.). 3 The group operation keeps good regular communication with its FairTrade buyers and 3 specifically also coordinates with them on any need for adaptation of trade terms, e.g. delivery times in order to fulfil its responsibility of providing fair working conditions: (0) no reliable communication links (2) adequate regular communication as needed (3) very close relations and regular exchange, also concerning any problems and challenges. 4 The group operation provides its customers with truthful information about its organisation 3 and products and in which conditions they are made. Truthful information is given on prices and services to producers as well as working conditions during buyer visits or upon request: (0) wrong / misleading information given (2) truthful information given if requested (3) open and proactive communication with FairTrade buyers to address and solve identified deficiencies and problems, or any other areas of concern. 5 The group operation provides its FairTrade trade partners with an annual Premium Fund 3 summary report: (0) no overview or informal information on Premium use provided (2) basic annual summary of FairTrade Fund activities: overviews provided on the decision process, the use of the Premium from the respective buyer, and also on other Social & FairTrade related activities, brief work plan for coming year (3) detailed and good information of activities provided. 6 The group operation uses honest marketing and advertising techniques and does not 3 provide misleading information about its activities and achievements with regard to Social Responsibility and FairTrade (0) misleading information; wrong claims made (2) adequate (3) very good efforts to provide education of the public and raise awareness of FairTrade. 7 The group operation aims to achieve high standards of product quality and to fulfil all key 4 requirements of the market: (0) no efforts (1) some improvements (2) continuous, good efforts (3) serious efforts (4) exceptional efforts. 8 If there were / are substantial quality problems and quality claims: (0) no steps were 3 taken towards improvement of situation (1) some compromises found with trade partner, some disagreements remaining (2) partners agreed on resulting consequences (e.g. return of produce) and took steps to improve the situation (3) exceptional efforts to immediately improve situation. 9 Prepayments: If any prepayment has been received: (0) use cannot be justified, farmers 2 have been paid late in spite of prepayment (1) justified use, even if not directly for M=2 farmers’ payment (2=M from year 2) used to pay farmers in time or any other from measure agreed with trade partner. Yr 2

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 26 18

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ANNEX 1: GUIDANCE FOR FAIRTRADE PRICING

Note: This Annex is a new document and may need to be revised earlier than the next regular Fair for Life Programme Revision.

FairTrade Sales Floor Price The FairTrade Sales Floor Price ensures that producers always, at the very least, receive a price that covers their cost of production and that the group operation’s costs for central services, collection, processing and export are covered. The group operation has three basic options for how to calculate its Sales Floor Price: 1. Calculation of the Sale Floor Price based on a Farmgate Floor Price according to the guidance outlined below. 2. Use of established sustainable cost of production calculations, if available. 3. Use of long term average market prices plus 2% compliance costs as Floor Price. However, contract production operations must still always calculate a Farmgate Floor Price.

The calculated FairTrade Sales Floor Price (option 1) consists of • The Farmgate Floor Price – normally producers’ cost of production including their family labour and investments • Plus all added costs of the group operation for collection, processing, storage, export as well as other group operator costs (producer support, ICS, Quality assurance, certification, office etc.)

The following section provides basic guidance for calculation of the Farmgate Floor Price as basis for the calculated FairTrade Sales Floor Price.

FairTrade Farmgate Floor Price Two approaches for arriving at a Farmgate Floor Price are accepted: a) Producers’ costs of production, including their labour and investment b) Calculation based on living wage for the farmer family

Option a) Producer Costs of Production Producers’ typical costs of production are calculated, based on collection of data from at least 4 different producers. The following aspects should be discussed with the respective sample producers in a group: • Size of a representative farm • Crop life cycle if applicable as costs of production must be reported over a longer production cycle • Costs of production related to field operations and harvest / post harvest activities • Yields

The cost for labour, inputs and capital / investment are collected and calculated into data per kg of product in question based on average production figures • Costs of Labour: family labour, regular hired labour, seasonal / casual labour. • Inputs: use actual costs • Capital and investment: machinery, land costs should be included, e.g. at bank interest rate (land value times typical saving interest rate) or rent equivalent The calculation considers all production steps under responsibility of the producer:

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• Establishment (initial investment): e.g. land preparation, planting of trees, production expenses– this cost shall be taken pro rata over typical lifecycle of the crop. • Field operations: labour, irrigation water, fertilisers, other farm inputs, seeds, fuel, machinery, costs of land. • Harvest and post harvest: harvesting but also sorting, grading, etc. if machinery – fuel and investments

A simple basic calculation sheet will be provided. Ideally the resulting costs of production are cross-checked with living wage estimations to ensure that the resulting Farmgate Floor Price covers at least the basic needs of the producers.

Option b): Calculation Based on Fair Wages The group operation calculates the Farmgate Floor Price based on the assumption that overall the producer family shall earn a living wage, i.e. shall be able to cover all basic needs like food, housing, clothes and education and is able to have some discretionary income. At the very least the minimum wage or typical local rates (if higher) shall be used as the basis for the calculation. It is recommended that the group operations also cross checks these wage levels with living wage estimations or collects basic data on living wage level to cover basic needs plus discretionary income. In this calculation it is common to start with the target income for an average producer family and then to account for the percentage of income derived from agriculture and specifically from the crop in question. Additional farm production costs such as inputs and seasonal labour shall be added. Then this target family income plus costs is divided by average good yields to arrive at a minimum fair price per kilo.

Pricing expectations in case the Sales Floor Price is applied in low market times If producer operations are paid the Sales Floor Price in times of low market prices, they must demonstrate that higher income from the Floor Price effectively reaches the producers. As part of their price setting calculations they should estimate their FairTrade sales volumes and apply the Farmgate Floor Price accordingly. Contract production groups shall always ensure a Farmgate Floor Price. However in exceptional situations, eg if only a small percent of production could be sold at Floor Price level and the contracting operation is too small to buffer the difference, then the contract production operation might be unable to pay the full Farmgate Floor Price. In these circumstances the same basic principle is applied for assessment whether or not the farmers have received all possible benefits from the FairTrade sales. Assessment of fair farmgate prices if the Sales Floor Price is applied (if market levels are lower than the Sales Floor Price) If 100% of sales are according to the agreed Sales Floor Price, it is expected that all producers will have received at least the Farmgate Floor Price. If only a part of the production could be sold at Sales Floor Price level, it is expected that at the very least the producers benefit from the additional income from the FairTrade sales at Floor Price level. Sample Calculation: Example: if only 50% of production was sold at Sales Floor Price level during times of low market price • 50% of sales were FairTrade sales with agreed FairTrade Sales Floor Price of 1$, 50% were sold at market rate of 0.8$ • Sales Floor Price is 1$ based on Farmgate Floor Price of 0.6$ (60%) and 0.4$ group operator costs (40%) • Then it is expected that producers have received at the very least the respective part of the Farmgate Floor Price. Average sales price was 0.9$ minus 40% group operator costs (0.36$) = 0.54$ minimum farmgate price.

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FairTrade Development Premium

FairTrade Premiums are either calculated or an operation may chose to apply established fair trade premiums if available. The FairTrade Development Premium for smallholder producer companies is recommended to be 10% of average farm gate prices and shall not be lower than 5% of average farm gate prices, or premiums defined by standards as acknowledged as equivalent by Fair for Life.

Sample Calculation of FairTrade Premium: Farmgate price averaged over 2 years x 10% Premium = FairTrade Premium per kg final product Example: 1$ / kg primary processed x 10% = 0.1$ / kg When farmgate prices are very much above 3 year average prices and costs of fair production, the group may set a theoretical maximum farmgate price as basis for Premium calculation. Example: A group has a set percentage (10% of farmgate prices, prices fluctuate and the Premium is recalculated periodically), average market prices are 2$ / kg, costs of production 1.5$, present farmgate prices are 3.5$ / kg this season and fluctuating  the company may decide to apply a percentage Premium (10%) only up to a maximum farmgate price of 2.5 $, i.e. maximum 25 ct / kg It is however recommended to set a fixed Premium amount, based on percentage of market prices averaged over the last 1-3 years. If the group also operates a hired labour processing unit and the workers have been identified as additional FairTrade beneficiaries, the Premium guidance rules for hired labour apply: 5- 10% of non- management labour costs , depending on the potential social impact of the FairTrade Premium and the overall FairTrade focus of group plus processing. Annual non-management labour costs: The total amount of wages of workers up to and including supervisory grade charged to the profit and loss account of the company. – this includes overtimes wages Calculation of 10% Premium: annual labour costs / annual production in kg x 10% Example: 70’000$ labour costs, annual production 80 tons  Premium is 70.000 / 80.000 x 0.10 = 0.057 $ / kg

Fair for Life Programme. Version 2011 by Bio-Foundation. Main Author: F. Meinshausen. Approved by the Fair for Life Standard Committee. Weinfelden, January 2011.

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FAIR FOR LIFE

SOCIAL & FAIR TRADE CERTIFICATION PROGRAMME

VERSION DECEMBER 2013 applicable from May 2014 onwards

CONTROL MODULE 4: CRITERIA FOR HANDLING OPERATIONS

CONTROL MODULES OF THE FAIR FOR LIFE PROGRAMME

1. LABELLING AND CONTROL CRITERIA Module 1, see separate document

2. CRITERIA FOR HIRED LABOUR OPERATIONS Module 2, see separate document

3. CRITERIA FOR PRODUCER GROUPS Module 3, see separate document

4. CRITERIA FOR HANDLING OPERATIONS Presented in this section

5. CRITERIA FOR PROCESSING AND ARTISAN OPERATIONS Module 5, see separate document

6. CRITERIA FOR WILD COLLECTION OPERATIONS Module 6, see separate document

7. CRITERIA FOR MINING OPERATIONS Module 7, see separate document

8. CRITERIA FOR TOURISTIC SERVICES Module 8, see separate document

9. INTEGRATED PRODUCTION CRITERIA Module 9, see separate document

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Table of Content

4 CRITERIA FOR HANDLING OPERATIONS ...... 7 PART I: FAIR FOR LIFE CERTIFIED HANDLING OPERATIONS ...... 7 4.1 FAIR FOR LIFE HANDLING CRITERIA (ALL HANDLERS) ...... 7 4.1.1 FAIR TRADE SOURCING ...... 7 4.1.2 SUPPORT AND PROMOTION OF FAIR TRADE PRODUCERS AND PRODUCTS ...... 9 4.1.3 TRACEABILITY AND PRODUCT HANDLING ...... 10 4.2 ADDITIONAL CRITERIA FOR BUYING FROM FAIR TRADE PRODUCER OPERATIONS ...... 12 4.2.1 PARTNERSHIP AND FAVOURABLE TRADING TERMS ...... 13 4.2.2 FAIR FOR LIFE PRICING AND FAIR TRADE DEVELOPMENT PREMIUMS ...... 15 4.3 SOCIAL RESPONSIBILITY (ALL CERTIFIED HANDLERS) ...... 18 PART II: REGISTERED HANDLING OPERATIONS ...... 19 4.4 REQUIREMENTS FOR REGISTERED HANDLING OPERATIONS ...... 19 4.4.1 REGISTRATION OF INTERMEDIATE AND CONTRACTED HANDLERS ...... 19 4.4.2 BASIC FAIR FOR LIFE HANDLING REQUIREMENTS FOR REGISTERED HANDLERS ...... 20

Annex 1 to Module 4: CRITERIA FOR RESPONSIBLE LABOUR PRACTICES FOR FAIR FOR LIFE HANDLERS

1 RESPONSIBLE LABOUR PRACTICES FOR FAIR FOR LIFE HANDLERS ..... 23 1.1 BASIC RESPONSIBLE LABOUR PRACTICES ...... 23 1.2 SAFE WORKING CONDITIONS ...... 24 1.3 WAGES AND SOCIAL SECURITY ...... 25 1.4 WORKING HOURS AND REGULAR EMPLOYMENT ...... 25

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Structure of Standard and Minimum Requirements for Certification

Guidance Texts provide additional background information and clarification to better understand the criteria and Fair for Life expectations

N° Control Points Forced Labour MAX Score 1 (0) Clear evidence (2=M) no indication of forced labour 2 M=2

Total Norm Points (TNP) = Total number of points if all norm requirements were fulfilled, i.e. rated as “2”.

 see also Module 1, chapter 1.3. Certification procedures

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Applicability

Part I of this module applies to all handling operations of Fair for Life certified products who wish to undergo Fair for Life handling certification. Part II, (Section 4.4) applies for subcontracted operations as well as companies registering as Fair for Life or For Life intermediate traders. Fair for Life handling operation: Any operation or portion of an operation (except final retailers of products that do not process the products further) that receives or otherwise acquires Fair for Life certified products and then processes, packages, stores and/or markets such products (adapted from USDA NOP definition).

Overview Fair for Life Control Requirements

Producer Certification Handler Certification

Every operation that handles Fair for Life certified products must adhere to the basic handling principles of traceability and responsible employment practices. Both the Fair Trade buyer companies, (who pay the Fair Trade Price and Development Premium to Fair Trade producer organisation) and the Fair for Life brand holders of the final consumer products, hold a key role to ensuring fair trading relationships with Fair Trade producers. Therefore they must undergo full Fair for Life handling certification according to this control module (certain exceptions for brand holders with a minimal Fair for Life assortment apply). Intermediate handlers or contracted processors of Fair for Life products may become certified, but must at least become registered in order to sell the products as Fair for Life certified. Handlers who buy in products certified under other equivalent certification schemes need to become Fair for Life certified handlers in order to sell these products as Fair for Life certified. If a product is bought in from other accepted fair trade certification schemes (see Annex 2 in Module 1, e.g. FLO-certified products) the Fair for Life handling requirements apply from the point of purchase into Fair for Life commodity chains. Control requirements apply only up to the point of final consumer packaging in the name of the certified or registered Fair for Life brand holder.

Minimum control requirements for handling products that shall be labelled as Fair for Life are described in detail in Module 1 section 1.1.3. The following table provide a brief overview:

What does Fair for Life Fair Trade Who Comments and Control Requirements Handler Certification cover?

Fair for Life - • The Fair Trade buyer is the handler who pays • Fair Trade relations and traceability the Fair Trade producer operation the Fair for Fair Trade Buyer • Life Fair Trade Price and the Fair Trade Additional Fair Trade buyer criteria Development Premium and who markets the (paying a fair price and Fair Trade product as Fair for Life certified. Development Premium, cooperation

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• This may be an importer / manufacturer in the contracts, pre-financing) consumer country or trader / manufacturer in • the country of origin. Social Responsibility of company

• Inspection and certification as Fair for Life Fair Trade handler. • Fair for Life certified handlers may buy in products certified under different fair trade certification schemes and market them as Fair for Life Fair Trade certified.

Fair for Life – • The company under whose brand / company • Fair Trade relations and traceability name the final Fair for Life product is marketed Brand holder • to consumers. Social Responsibility of company • Inspection and certification as Fair for Life handling operation necessary. A few exceptions apply for brand holders who only market Fair for Life products to a minimal extent. • Fair for Life certified brand holders may buy products certified under different fair trade certification schemes and market them as Fair for Life Fair Trade certified.

Other Intermediate Fair for Life certified handler Fair for Life certified handler Processors and • Traders Any trader who buys Fair for Life Fair Trade Fair for Life handler responsibilities products or products from equivalent fair trade certification schemes can apply for Fair for Life • Traceability and labelling handler certification to sell products as Fair for Life • Social Responsibility of company Fair Trade certified.

Registered trader of Fair for Life products Registered trader of Fair for Life products As a minimum, any intermediate trader who buys a Fair for Life product and wishes to market it as • No inspection, no certificate, no certified to other traders must become registered claims regarding being Fair for Life and must also submit proof of decent working Fair Trade certified, no use of Fair conditions – see section 4.4 for Life seal Similar rules apply to subcontracted processors -see • Registration form for annual section 4.4. registration (fixed fee applies). Proof of decent working conditions must be provided • May only buy and sell Fair for Life certified products (not from other fair trade certification schemes); • no final consumer labelling with reference to Fair for Life • not sufficient in case of buying directly from Fair for Life producers operations.

Wholesale and • Wholesale Retail of final consumer packed Fair for Life brand products is not covered under Retailers the programme. • Retailers with own Fair for Life certified brands are considered Fair for Life brand holders unless a Fair for Life certified handler company produces the products on their behalf and indicates relevant minimum information on pack  see details in Module 1, 1.1.3.3.

Reference to Other Standards The guidance texts and performance indicators for Fair Trade aspects were developed in respect of the FINE consensus on definition of Fair Trade, the 10 World Fair Trade Organisation Fair Trade principles and the Trade Standards set by the Fair Trade Labelling Organisation (FLO) as well as all basic principles of the Fair for Life programme for other certified operations.

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Introduction “Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalised producers and workers – especially in the South. Fair Trade organisations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade” (FINE consensus Fair Trade definition agreed by WFTO, FLO, EFTA, 2001). The Fair for Life Fair Trade Certification Programme endorses these principles and requires a long-term and trustful cooperation between partners, transparent setting of fair prices, open negotiations and a Fair for Life Fair Trade Premium for producers that allows for social development of the concerned communities. Fair for Life handler certification goes beyond traditional fair trade with sole focus on producers in developing and emerging countries by also applying Fair Trade principles for relevant domestic or regional trade and by requiring ethical working conditions along the entire production and processing chain – Fair Trade shall be “fair for all”. Fair for Life Fair Trade aims to support and strengthen the market position of marginalized producers and workers worldwide, in particular smallholder producers who do not yet have access to the fair trade market. Fair for Life certification has originally focused on producers in so-called ‘developing countries’, but the programme’s scope has never been restricted to developing countries only, because marginalization in the respective local setting can also be found in the ‘developed’ world. Working conditions of workers and the survival of small traditional farming structures in these countries has become a matter of increasing concern. In addition, Fair for Life considers local sourcing efforts as an important contribution towards sustainable development and hence supports devoted Fair Trade companies that source at least a part of their raw materials from local Fair Trade small scale producers or entrepreneurs with outstanding ethical commitment. External verification of Fair Trade practices will ensure a consistent implementation of expected Fair for Life Fair Trade practices in these local or regional supply chains, too. In line with these considerations, Fair for Life requires ‘fairness for all’, including all workers in companies along the production and processing chain of Fair for Life certified Fair Trade products. Therefore, Social Responsibility requirements have been introduced for all Fair for Life Fair Trade handlers.

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4 CRITERIA FOR HANDLING OPERATIONS

PART I: FAIR FOR LIFE CERTIFIED HANDLING OPERATIONS

4.1 FAIR FOR LIFE HANDLING CRITERIA (ALL HANDLERS)

This section applies to ALL applicants seeking Fair for Life handler certification.

4.1.1 Fair Trade Sourcing

Principle 4.1.1 A Fair for Life handler commits to long-term trade relations, based on trust, transparency, accountability and continuity. a) Every Fair for Life handler must demonstrate his commitment to Fair Trade sourcing and long-term relations with Fair Trade producers through a Fair Trade sourcing policy or similar documents. This can be a company Fair Trade Policy for all suppliers or individual Fair Trade partnership plans for every Fair Trade supply chain. It can also be incorporated in the company’s ethical or social sourcing policy, if suitable. The following aspects must be covered: • Fair Trade approach and focus of the company • Fair Trade beneficiaries of the company’s Fair for Life Fair Trade product assortment – even if buying through intermediate traders. Fair Trade certified primary producers must be specified with a brief description. In the case of hired labour, Fair Trade producers and contract production operations, a brief analysis of Fair Trade focus and achievements of the supplier is required. • Commitment of the company towards its Fair Trade producers and the clarification of the role of trade intermediaries, e.g. long-term trade relations, support of producers in quality improvement and product development, regular and open communication, commitment to stable and / or increasing volumes (as far as possible), promotion of Fair Trade and of the suppliers, etc. • For handlers who are direct buyers from Fair Trade producers more details will be expected than from traders up the supply chain. • Development objectives with regard to the company’s Fair Trade programme (e.g. sourcing product directly from smallholder producer groups wherever possible, sourcing all key ingredients from fair trade certified origin, working on new product supply chains to give marginalized producers who do not yet have direct market access a chance for social change, increasing social impact by higher turnover with Fair Trade products, etc.). • A summary of the Fair Trade sourcing policy (without details on producers, if preferred) must be made available to the public, at least on request. b) Fair for Life handlers shall trade with respect for the social, economic and environmental wellbeing of marginalized producers and do not maximise profit at their expense. Specifically, handlers shall apply similar margins as for comparable non-Fair Trade products and aim to reaching similar gross margins as comparable to non-Fair Trade products. c) Fair for Life handling operations further up the trade chains shall acknowledge the responsibility of the Fair Trade buyer towards Fair Trade producers. Fair Trade producers get favourable terms of trade. In particular, they shall receive advance notice of expected volumes to allow planning. Lead times must be respected. They must be paid on time, and more tolerance in quality problems is expected, so facilitating the producers to find a suitable solution and initiate improvements (see chapter 4.2).

No Control Points: Fair Trade Sourcing MAX SCORE 1 The company has a Fair Trade sourcing policy covering the above listed aspects: (0) no 4 Fair Trade sourcing policy, no clear understanding of Fair Trade focus (1) basic M=2 knowledge of Fair Trade supply chains and Fair Trade target groups (2=M from year 2) from defined Fair Trade sourcing policy (3) well developed policy (4) outstanding Yr 2 commitment to Fair Trade sourcing, very good understanding of supply chain, direct

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contact with producers. 2 The company’s Fair Trade sourcing policy favours marginalized social groups, in 4 particular smallholders: (0) no policy; not buying from any producer organization with high social impact (2) buying at least partly from smallholder production projects or suppliers who can demonstrate high social impact for marginalized workers, including intermediate traders with ethical trading approach (3) mainly buying from smallholder groups and high impact Social & Fair Trade suppliers (4) company only trades Fair Trade commodities, focusing on high social impact Fair Trade suppliers. 3 The Fair Trade buyer regularly assesses its performance against its agreed Fair Trade 4 objectives and obligations towards Fair Trade producers, and develops medium term development strategies to improve its Fair Trade performance and social impact: (0) no awareness of Fair Trade principles, no review (1) very basic review (2) Annual review with brief summary of Fair Trade performance, efforts, challenges and achievements (3) very good review mechanism (4) good review including peer reviews (e.g. WFTO system), Fair Trade progress report published. 4 The company (0) changes primary producer suppliers constantly (1) changes primary 4 suppliers regularly (2) plans / implements a long-term relation with the Fair Trade primary producer suppliers (3) demonstrates strong commitment to work with suppliers over the long term (4) is working with Fair Trade suppliers for more than 5 years. If changing intermediaries but not the suppliers, please comment and consider impact on producers. 5 If not buying directly from producer operations: Fair Trade handlers remain in regular and 3 open communication with their suppliers and, if required, adapt their terms to allow Fair Trade buyers from producers to fulfil their duty of care: (0) no open communication at all, several problems in Fair Trade supply chain (2) adequate good communication about problems (if any) and flexible solutions found if required (3) close contact and communication between handlers and suppliers. If directly buying from Fair Trade producers  (n.a.) detailed criteria in section 4.2 instead 6 Invoices for Fair Trade products are always paid promptly: (0) payment delays are 2 frequent (2) standard payment term is 30 days, invoices are paid on time. 7 Information on Fair Trade or Social Responsibility certified suppliers: (0) no information or 3 documentation on Fair Trade suppliers (2) company knows all Fair Trade producers supplying the Fair for Life assortment and is familiar with the suppliers’ organisational structure and Fair Trade focus (3) very close relation to Fair Trade suppliers with regular visits, exchange, support, etc. 8 Number of trade intermediaries between Fair Trade producer company and brand 3 company: (0) many intermediaries (1) 2 or more intermediaries, no efforts to minimise (2) as few intermediaries as possible, depending on the position of handler within the supply chain (3) exceptionally short trade chains; brand holder has direct relations to primary producer operation. 9 Trade margin rates are transparent and difference to the margins applied to comparable 3 non-Fair Trade products are justified: (0) very high margins without valid justification (2) margins are not substantial higher (10% higher) than those applied to comparable non- Fair Trade products except if the trader provides proof that the difference is necessary to ensure the viability of the supply chains (3) efforts to challenge and minimize own margins wherever viable for the company. 10 Additional points for voluntary commitment: The company closely supports or initiates (4) production projects that create market access for producers who would not have market access without the company’s support / without Fair Trade. Rating from (0) only buying from very well established producers to (4) outstanding efforts to reach out to very remote, marginalised producers without good market access. No norm requirement. 11 Additional points for voluntary commitment: The company is committed to apply its ethical (4) buying principles to all suppliers (Fair Trade producer operations), whether Fair Trade certified or not: (1) special procedures for Fair Trade suppliers (2) similar approach in all buying relations (3) ethical or Fair Trade sourcing programme for all suppliers (4) Company entirely dedicated to Fair Trade. No norm requirement.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 38 18

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4.1.2 Support and Promotion of Fair Trade Producers and Products

Principle 4.1.2 Fair for Life handlers support and promote the Fair Trade producers from whom they source and raise awareness on Fair Trade. a) Fair for Life handlers support and promote the Fair Trade producers with whom they cooperate, with the aim of increasing their independence and strengthening their capacity in management and marketing as well as sustainable production methods (if needed). Fair Trade chains of custody vary in length. Ideally, Fair for Life brand holders act also as buyers and buy directly from Fair for Life Fair Trade producer operations. In longer Fair Trade chains, support of the Fair Trade producers is the core responsibility of the Fair Trade buyer who buys the product from the producer operations). Subsequent traders, however, can also demonstrate their commitment by supporting the producers from whom they source. Targeted support of Fair Trade producers by Fair Trade buyers is assessed in more detail in section 4.2 with additional requirements for Fair Trade buyers. b) Fair for Life handlers raise awareness of Fair Trade and participate in the Fair Trade community. They provide their customers with information about their Fair Trade products, their relations with Fair Trade producers and the impact of their Fair Trade activities. The information provided to customers is honest and truthful to the best of their knowledge. Fair for Life handlers are expected to provide public information about the Fair Trade producers from whom they source. This does not need to include the suppliers’ name, but their location, organisational form, fair trade certification, brief characterisation and overview on Fair Trade Premium activities. If not directly provided, the company shall link from their website to the respective operational profile of the Fair for Life certified operation on the Fair for Life website.

No Control Points: Support and Promotion of Fair Trade Producers and Products MAX SCORE 1 The handling operation supports its Fair Trade producer suppliers down the supply chain: 4 (0) no assistance at all (1) some basic communication and support (possibly through intermediate buyer, if mutually agreed, e.g. in MoU) (2) regular communication and support in particular through providing market information and assistance with quality issues; can be provided by intermediate handlers if this is agreed in writing (3) very good additional support e.g. in marketing, attending trade fairs, providing advanced training, etc. (4) exceptional support, confirmed by excellent supplier feedback. 2 The handling operation supports its Fair Trade producer suppliers, encouraging them to 3 sell to other buyers to minimize dependence: (0) producer is not permitted to sell to other traders (1) producer may sell to others, handler does not promote producer suppliers (2) some promotion of supplier and support to find other buyers for the Fair Trade product(s) (3) active support and promotion of producer to access new marketing opportunities, e.g. support to attend trade fairs. 3 The company promotes Fair Trade and provides information about its Fair Trade supply 3 chains: (0) wrong or misleading public information or advertising, with regard to Fair Trade activities (1) some promotion activities for own Fair Trade product, no misleading information on supply chains (2) public information about the company’s Fair Trade commitment and Fair Trade suppliers (e.g. by link to Fair for Life website) is truthful and transparent regarding its role as Fair Trade handler and the impact and scope of its Fair Trade activities (3) very good and detailed information. 4 Additional points for voluntary commitment: Rate the company’s role as promoter of Fair (4) Trade in all its diversity, including membership in Fair Trade promotion organisations, attendance of relevant fairs or meetings, consumer information. Rate commitment: (0) no promotion activities to (4) very active and well-known as fair trade promoter, informing consumers on fair trade, active member of WFTO or other fair trade promoter bodies - and give comments. No norm requirement.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 14 6

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4.1.3 Traceability and Product Handling

Principle 4.1.3 Fair for Life products are traceable and are kept separate from any non-Fair Trade certified products at all stages of production and handling. a) Fair for Life products must be traceable in the company’s documentation system from purchase to sales. Fair for Life certified products must be kept separate from any non-Fair Trade certified qualities at all stages. While physical traceability is required, cleaning of production lines before processing Fair for Life Fair Trade products is recommended but not compulsory (as in organic). Minimal commingling of up to app. 5% due to technical reasons is accepted, e.g. in case of continuous processing lines. Details see Module 1. b) The Fair Trade quality shall be indicated on invoices if the products are sold to handlers who are Fair for Life certified or registered1. c) When buying Fair for Life products or equivalent fair trade certified products (as defined in Module 1 Annex 2), the Fair Trade quality must be confirmed in each trade contract or general Memorandums of Understanding (MoUs). Template MoUs are available on request. Alternatively the required information can be included in sales contract or other agreements. The Fair for Life Guidance “Sourcing from Suppliers Certified under Other Fair Trade Schemes” provides added guidance for purchases from different fair trade schemes.

Table 1: Specifications in contracts with suppliers certified under equivalent schemes Fair for Life handler buys from: Specification in purchase contracts or MoU’s:

Handlers certified under other • Proof of trader certification under the other scheme, e.g. Fair Trade product certification certificate, certifier´s online data base, etc. schemes • Supply chain information (origin and certification) of the products, (see list in Module 1, Annex 2 for including intermediate traders. Only products originating from equivalent schemes) producer operations certified under schemes recognised by Fair for Life can be accepted as equivalent. • Fair trade content and certified ingredients must be disclosed. Information can be provided separately directly to the CB. For details and options see Fair for Life Guidance • Obligation to inform the buyer in case the products are no longer fair trade certified. • Confirmation of traceability and separation of fair trade products from production to final sale unless a temporary extraordinary exception has been granted by the CB. • In case of schemes without mutual recognition (FLO, Fair Trade USA): confirmation that the products

o originate from the agreed Fair Trade producer operations certified under a recognised scheme

o and have been traded according to the respective fair trade standard (prices, premiums, payment conditions) For some equivalent schemes (See Annex 2), a specific template MoU shall be used which may specify scheme specific additionally required information

Please note that rules for directly purchasing from producer operations certified under other schemes are listed in chapter 4.2

1 The Fair for Life handler may indicate the Fair for Life quality of the products in invoices to a buyer who does not wish to label the final product as Fair for Life certified, but must inform the buyer that for product labelling or any other reference to Fair for Life certification on any product the buyer must contact the Fair for Life certification body to clarify the necessary control requirement (Fair for Life certification or registration as trader of Fair for Life products) – see also Module 1 on Scope and Control Requirements for details.

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d) The Fair for Life handler has to keep an updated list of all fair trade certified suppliers (including fair trade certifier, certification status and supplied fair trade products). The Fair for Life handler must also keep an updated Fair for Life assortment list and provide a list of clients of Fair for Life certified products. e) For every multi-ingredient product (including blends) a composition sheet must be provided with details of composition, including percentages of all Fair Trade certified ingredients. The applicable composition rules for Fair for Life products can be found in the Annexes to Module 1 – the rules differ according to each product category. f) All products sold as Fair for Life certified shall be packed in a way that the content cannot be replaced without manipulation or destruction of the package. They shall be labelled with a clear designation of their Fair Trade nature. g) Any product to be labelled Fair for Life fulfils the chain of custody requirements up to the point of labelling (see chapters 1.1.3.1 to 1.1.3.4) and the composition requirements as indicated in Annexes 3 to 6. All Fair for Life consumer package labels must be submitted to the CB for approval prior to printing. Please note that for any products labelled as Fair for Life, the Fair for Life composition rules apply, i.e. if multi- ingredient fair trade certified food products are bought in, their composition and fair trade content will still need to be verified according to the Fair for Life requirements and labelling might need to be adjusted accordingly. h) The Fair for Life seal and references to certification are only used in line with section 1.1.4, Module 1. Seal and other references to Fair for Life certification used in PR materials, website etc are used in correct context (i.e. in relation to certified products), and the correct version of Fair for Life seal is used. Statements about Fair for Life certification to be used in product advertisements and PR shall be approved by the CB. i) If the handler has contracted processors who handle the certified products on its behalf, the handler must have adequate procedures and policies in place to ensure traceability and separation of the certified product during the processing Decent working conditions must be demonstrated. Contracted processors who handle more than 10% Fair for Life products (10% of turnover) must be registered and must demonstrate separation, traceability and decent working conditions. The contracting company may coordinate the registration. For details see Module 4, chapter 4.4.

No Control Points: Traceability and Product Handling MAX SCORE 1 Fair Trade purchases are traceable in the company’s trade documentation or book 3 keeping: (0) no indications, not traceable for auditor (2=M) Fair Trade quality indicated M=2 on purchase invoices and in internal accounting / product flow documentation or data base (3) exceptionally well managed and documented product flow; Fair Trade quality is part of product code. 2 Fair Trade products are kept separate from non-Fair Trade certified products at all 3 stages: (0) clear commingling (1) insufficient separation measures (2=M) adequate M=2 separation measures; minimal commingling due to technical reasons during processing acceptable (3) very good separation system OR all lots of a certain product are Fair Trade. 3 Product flow from incoming goods to finally sold certified products is adequately 3 consistent and traceable: (0) not traceable (1) minor shortcomings (2=M) Fair Trade lots M=2 are traceable (3) advanced traceability and product handling. 4 There is an up to date list of fair trade certified suppliers with products, name of 2 certification body and certification status and an assortment list with correct certification M=2 status.: (0) none (1) some minor shortcomings (2=M) complete up to date lists, any changes during year have been communicated. 5 The Fair trade supply chain requirements are met for all fair trade certified raw materials: 2 producer operation is certified, intermediate traders certified/registered and known (0) M=2 not even basic information on supply chains (1) basic information available (2=M) complete information available in operator profile, for equivalent schemes complete supply chain information (Annex 1 MoU) available. If MoU not available  if according to all information available the products are certified, the operation has 6 months to agree on MoUs and provide full origin declaration 6 For each fair trade certified supplier, the buyer holds a valid certificate (in case of FLO 2 producers or traders: FLO-ID number and regular check of certification status) on file: (0) M=2 no knowledge or monitoring of certification status (1) incomplete or out of date records (2=M) adequate documentation. 7 For each purchase from equivalent certification schemes, MoUs or sales contracts 3 confirm the fair trade certified nature of the products sourced as fair trade (see guidance

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above) (0) no confirmation of fair trade nature in writing (1) fair trade certification status is M=2 confirmed in writing, but no details of producer sources (2=M) complete sales contracts or MoUs for such purchases before the products can be confirmed as Fair for Life certified (3) very transparent sourcing. 8 If any multi-ingredient products are certified: There are complete recipe sheets or 2 composition tables; origins and certification status of Fair Trade ingredients are known (0) M=2 not available, composition unclear (1) information readily available, but not well documented (2=M) complete and correct composition documents for all certified products. 9 There is a list of buyers of the Fair for Life certified products with an indication of whether 2 the company intends to label the products as certified or not: (0) none (2) buyer list available, e.g. in operator profile. 10 All products sold as Fair for Life certified shall be packed in a way that the content cannot 2 be replaced without manipulation or destruction of the package and shall be labelled with M=2 a clear designation of their Fair Trade nature at least accompanying documents (0) products not labelled at all (1) minor short comings (2=M) adequate packaging and labelling. 11 All final consumer labels have been approved by the CB and comply with the labelling 2 rules and restrictions indicated in Module 1, section 1.1.1 (0) unauthorized incorrect M=2 labels have been used (1) a few cases of not authorized but correct labels (2=M) all labels have been approved and are in line with Fair for Life labelling requirements. 12 Other references to FFL certification in PR materials (also of retail own brand products 2 packaged by the company if applicable) - in line with Module 1 section 1.1.4 (0) misleading / wrong claims (1) minor short comings (2) in line with labelling requirements 13 If the handler has contracted processors: (0) no clear contracts, no supervision of 3 traceability or of social conditions at contract processing operation (1=M) basic M=1 contractual agreements on traceability and separation of Fair for Life certified M=2 products. No suspicion of serious workers rights violation at contracted processor site (2=M from year 2) contracted processor is registered or exempted (less than from Yr 2 10% of turnover is Fair for Life); Fair for Life requirements regarding separation / traceability as well as decent working conditions are met – see guidance text above (3) very good traceability approach and close cooperation / supervision of subcontractor.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 29 24

4.2 ADDITIONAL CRITERIA FOR BUYING FROM FAIR TRADE PRODUCER OPERATIONS

The following additional criteria and performance indicators apply only to Fair for Life handlers who buy the Fair Trade certified products from Fair for Life or other fair trade certified producer operations and pay the Fair for Life Fair Trade Price and Fair Trade Development Premium. (“Fair Trade buyers”). It does not apply to handlers of Fair for Life Fair Trade products further up the trade chain, e.g. intermediate processors or Fair for Life brand holders. The Fair for Life Fair Trade buyer buys the Fair Trade product from the Fair Trade producer operation for processing into a Fair for Life consumer product or for marketing into Fair Trade ingredient supply chains. It is the company that sets the demand for the Fair Trade product and pays the Fair Trade Price and Premium to be absorbed in his sales prices to further-on customers. The Fair Trade buyer is also responsible for ensuring good communication with the producer operation and providing support for the Fair Trade producer. In many cases, the Fair Trade buyer is the importer in the consumer country. If there are conveyors who act as intermediaries between Fair Trade buyers and the Fair Trade producer (see Module 1, chapter 1.1.3), the requirements for Fair Trade buying are normally verified at the conveyor stage as well as the Fair Trade buyer with special focus on: • Transparency of information between the producer, the conveyor and the Fair Trade primary buyer (e.g. the contract between Fair Trade primary buyer and conveyor must be made available to producers on request) • Ensuring an adequate flow of information / benefits and Fair Trade Prices as well as the agreed Fair Trade Development Premium.

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• Primary buyers must be given full information about the Fair Trade producers they are sourcing from and direct contact must be permitted. In certain cases, registration of the conveyor may be sufficient to ensure fair trading relations. Contracted exporters, importers or agents are considered “intermediate traders”, see part II of this module.

4.2.1 Partnership and Favourable Trading Terms

Principle 4.2.1 Fair Trade primary buyers ensure that Fair Trade producers get favourable and clearly defined terms of trade and commit to a long term cooperation, regular communication and support of the producer. a) Fair for Life Fair Trade primary buyers agree with the producer operation to long-term cooperation and trade relations, which shall be mutually beneficial. The commitments of both sides are expressed in a partnership framework agreement or Memorandum of Understanding. If there is a conveyor in the trade relation, his role and responsibilities are clearly expressed in the agreement. If the Fair Trade producer operation is a subsidiary company of the Fair Trade buyer, the obligation of a written agreement may be waived if focus on long term fair trade is evident from the project setting. If the buyer company also pays for the certification of the producer operation, the Memorandum outlines the expectations and duties of both sides with regard to using the certification. Fair Trade buyers must permit producers to also sell to other traders as Fair for Life certified, but they may charge the producer a justifiable proportion of certification costs if substantial quantities are sold also to other Fair Trade buyers. The buyer also commits to share all certification documents in full with the producer operation. In the case of purchase from producers certified under other accepted fair trade certification schemes (see Annex 2) the following information shall be clearly expressed in the MoUs or trade agreements in addition to the requirements indicated in 4.1.3: • Agreement on the applicable fair prices and social premium as defined by the fair trade scheme that the Producer operation is certified to (i.e. FLO minimum prices if market price is below minimum price, plus FLO social premium). The agreed premium and floor price/minimum price shall be specified in the agreement (or reference to e.g. FLO minimum price tables) or related documents. • The payment of the Fair Trade Premium is done according to the applicable trading standard requirements of the producer operation (e.g. FLO Trader Standards: separate fair trade premium account for hired labour and contract production; for producer groups, the premium is paid directly to the group) and this is defined clearly in the agreement or related documents • In case of certification of the supplier by a scheme without mutual recognition agreement with Fair for Life (e.g. FLO): The producer operation must submit an annual report on the use of the premium paid by the Fair for Life buyer. This report will be reviewed as part of the Fair for Life handling audit. The buyer must have the right to request copies of receipts for use of the money as the Fair for Life certification body may request to verify these receipts. b) Fair for Life handlers entertain good, open and regular communication and exchange with their Fair Trade producer operation suppliers and support them in marketing, product development and other necessary areas of improvement. If there is a conveyor in the trade relations, the primary buyer and the conveyor agree with the Fair Trade producer on the nature of the support given by each party. The conveyor will also be in charge of communication. If the producer operation is a subsidiary company of the Fair Trade buyer, this aspect is assessed with regard to communication and exchange, down to the primary producers, through the subsidiary structures. c) Smallholder Fair Trade producers (organized groups and contract production) get favourable terms of trade: payment terms are agreed as suitable for producer operation; in the handling of problems concerning quality, support is provided. Support and tolerance in the handling of problems concerning product quality is expected, especially when buying from organised producer groups. The cause and financial damage is assessed and discussed with supplier in detail, and if adequate improvement measures are taken, the producer is not automatically expected to bear all costs. d) Terms of trade for buying from Fair Trade producer operation are clearly defined. Trade contracts cover at least agreed volumes, quality, Fair Trade Price and Premium, payment terms, pre-payment (if applicable), delivery terms and procedures in case of quality problems. Instead of defining all required aspects in every sales contract, some general requirements may also be agreed in writing in a Memorandum of Understanding (MoU) to which the individual contracts refer.

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e) Organized smallholder producer groups have a right to request up to 50% pre-financing, either provided directly or through an independent harvest pre-finance provider. The terms of pre-financing (e.g. interest rate charged) must be equal or better than the terms the Fair Trade handler would receive if financing the money himself. The purpose of pre-financing is to enable groups to purchase the products from their members and pay them within a few days of delivery. Pre-financing for smallholder contract production operations is also encouraged, but it depends on the particular organisational setting and size of the contract production company. f) Fair Trade producer operations receive a sourcing plan or volumes forecast to plan their production and sales accordingly. The plan gives an indication of planned / intended volumes and does not constitute a binding contract for either side. g) The Fair Trade buyer demonstrates efforts to keep or increase volumes to a meaningful level to achieve the intended social impact in the producer operation. This includes careful planning of orders to provide continued business/production and not overstretch suppliers capacity, e.g. during peak seasons. In evaluation of above aspects, the bargaining powers and capacity of both sides will be considered. h) If Fair Trade relations have to end, this is handled with dutiful care. Producer operations shall receive advance warning about the possible or likely end of the trade relation. If trade relations are ended without any warning, or existing trade agreements cannot be valued, the buyer is expected to make a contribution to the producer operation to buffer shortfall of income – especially if buying from smallholder producer groups.

No Control Points: Partnership and Favourable Trading Terms MAX SCORE 1 A partnership framework agreement or MoU defines the Fair Trade relationship and 3 commitment of both sides (see above): (0) no such agreements (1) only vague / M=2 incomplete agreements (2=M from year 2) clear agreements with every Fair Trade from supplier – if not a subsidiary company of the buyer (3) very well developed agreements, Yr 2 reflecting the needs of both trade partners. 2 If the handler company pays for and owns the Fair Trade certificate of the supplying 3 producer: The producer company is permitted to sell its products to other buyers directly M=2 if the contracting buyer cannot buy all products; possibly the producer company has to from bear part of certification costs if selling as certified to other traders: (0) no such freedom Yr 2 to sell to other buyers (1) limited freedom (2=M from year 2) good / fair agreements OR not an issue from producer side (3) exceptionally tolerant / buyer company shows high flexibility or supports sales to other buyers. 3 The handler communicates openly and regularly with his Fair Trade suppliers: (0) very 4 poor communication, various communication or cooperation problems, e.g. raised by the supplier (2) good and regular communication (3) good personal relations, problems and challenges openly discussed and suitable ways found forward (4) very close relations and very open communication on all relevant aspects, regular visits. 4 Competence of buying personnel: (0) no training in / or awareness of Fair Trade matters 3 (2) buying personnel are familiar with the principles of Fair Trade and can communicate with producers adequately (3) buying personnel very competent and dedicated to Fair Trade. 5 The buyer supports the suppliers with information on market requirements and price 4 developments (see guidance above if producer is subsidiary company of buyer): (0) no M=1 assistance at all (1=M) some basic information and support (2) good support in providing market information and assistance with quality issues (3) very good additional support e.g. in marketing, attending trade fairs, providing advanced training, etc. (4) exceptional support, confirmed by excellent supplier feedback. 6 Visits of suppliers: (0) handler never visits any suppliers in spite of obvious 3 communication or quality problems (1) some direct contact (e.g. at trade fairs) but no / very rare visits, overall good relations (2) handler has visited each Fair Trade supplier at least once (3) regular visits with focus on supporting the Fair Trade producers’ ability to meet market challenges or further develop the Fair Trade focus. 7 Terms of trade are clearly defined for all Fair Trade purchases from producers: 3 • Agreed volumes and quality M=2 • Price for the Fair Trade product and Fair for Life Development Premium, if any ( see section on fair pricing and Fair Trade Premium payments)

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• Payment terms and pre-financing (if applicable). • Delivery terms and procedures in case of quality problems • With regard to purchase of products certified under equivalent fair trade schemes: explicit confirmation of origin of fair trade product and compliance with fair trade trading standards as specified above: (0) no trade agreements (1) purchase agreements do not fully include Fair Trade aspects (2=M) system of written purchase agreements covers above Fair Trade aspects. If not yet implemented  to be introduced within 6 months (3) very well developed agreements, reflecting the needs of both trade partners. Note: content of contract issues, e.g. prices, pre-finance, is assessed in separate CPs. 8 Fair Trade pricing is not avoided by linking Fair Trade sales contracts to unfavourable 3 conditions for “normal” sales contracts, e.g. discount prices expected for non-Fair Trade M=1 sales from the same supplier (0) strong indication of such deals (1=M) if there are some non-Fair Trade purchases from Fair Trade partners they are under standard market conditions (2) all purchases from Fair for Life suppliers are under Fair for Life Fair Trade terms (3) handler buys substantial quantities and thus enables producer to sell all, or at least a substantial proportion of, production under Fair Trade conditions. 9 In case of quality problems and quality claims: (0) no compromises, e.g. suppliers had to 3 pay full costs although did not agree with claims / no steps towards improvement of situation (1) some compromises, some disagreements remaining (2) partners have found agreement on the consequences (e.g. return of produce) and have taken steps to improve the situation (3) exceptionally tolerant agreements and quality improvement assistance. 10 Favourable terms of trade: (0) substantial delays in payments OR orders are frequently 3 given at short notice (2) fair, favourable terms of trade with good payment terms and suitable order lead times (3) well established fair terms of trade in position for at least 2 years. 11 The buyer pays the supplier(s): (0) delayed / no payment (1) some delays / payment 2 issues (2=M) fully and on time / as agreed in purchase agreements. M=2 12 If buying from smallholder operations and if requested by supplier, the buyer provides (0) 3 no pre-financing (2=M) smallholder suppliers with up to 50% pre-financing – unless M=2 history of unfulfilled contracts. For contract production suppliers – no M (3) exceptionally good pre-finance support of the product to be delivered. 13 Sourcing plan / volume forecast: (0) buyer does not inform the suppliers at all on 3 expected quantities (1) occasional informal discussion of expected volume developments (2) buyer provides the suppliers with sourcing plans with projected quantities at least at the beginning of the year / season. If fresh produce, regular updating of projected volumes is expected (3) very good, established, forecasting system. 14 Agreement of supplied quantities: (1) partner thinks the quantities bought are too low (2) 3 reasonable annual quantities / well accepted by suppliers; efforts by buyer to ensure reasonable order levels and continued/agreed order placement (3) exceptionally high efforts to buy substantial quantities each year / acknowledged by the supplier. 15 Fair Trade relationships ended by the Fair Trade buyer: (0) Fair Trade supply 3 relationships are ended at short notice and without support (2) if relationships are ended it is done with dutiful care: announced in advance to allow producers to adapt accordingly; if at short notice due support is provided (3) no Fair Trade supply relation has been ended yet.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 46 30

4.2.2 Fair for Life Pricing and Fair Trade Development Premiums

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Fair Trade shall ensure that producers and workers receive fair prices for their products / services and thus can meet their basic needs and have some discretionary income. Producers can invest in their families’ or in their workers’ welfare and contribute to the wellbeing of their communities. b) To give Fair Trade producers the necessary security to plan ahead and invest in their communities, the Fair Trade producer operation agrees together with his Fair Trade buyers on a Fair for Life Sales Floor Price which is the minimum price to be paid for all Fair Trade purchases. The Sales Floor Price shall ensure that the producers’ cost of production including family labour can always be covered, even in times of very low market prices. It is expected that the same Floor Price applies for all Fair Trade buyers buying from the producer operation. The Fair for Life Sales Floor Price is set in a justifiable and transparent fashion and is agreed with the Fair Trade buyer. It normally remains valid for a period of 2 years or until reviewed and renegotiated. For producer groups the Sales Floor Price shall ensure that small scale producers are paid a fair price that covers their production costs and that the organisation’s overhead costs for transport, processing, packaging and organisational costs are covered. If the costs of certification are paid by the organisation these are accounted for as well. If, in times of low market prices, the producer group operations are paid the Floor Price, they must demonstrate that the extra income granted by the Floor Price effectively reaches the producers. A Farmgate Floor Price for producers should be defined as the basis for the Sales Floor Price to buyers. For contract production projects the definition of a Farmgate Floor Price is compulsory. For guidance on definition and calculation of the Floor Price in producer groups see Module 3, Annex 1. For hired labour operations, the Floor Price shall allow commitment to long term improvement of employment conditions and improvement of overall benefits for workers. In times of low market prices and the minimum Floor Price being received, the operation must demonstrate clearly that the price differential is mainly used for specific Fair Trade related work. In case of hired labour situations the operation may chose not to apply a Floor Price. c) The Fair for Life Fair Trade Sales Price for a specific sales contract is agreed by the Fair Trade producers and the handler by negotiation, and is confirmed in the respective purchase agreements. The agreed Fair for Life Sales Price shall not be lower than the Fair for Life Floor Price. It is expected that Fair for Life Fair Trade Prices will, in most market situations slightly exceed market prices for the respective commodity (world market prices, if defined) for the respective product quality (e.g. organic and respective quality grade) in order to cover costs of compliance with the requirements of this standard. As a general guideline compliance costs of hired labour Fair Trade that are charged on top of normal market prices are restricted to 5% of market prices; depending on the market position and social impact of the supplier, they may be lower than that. For smallholder producer companies, prices of at least 5% higher than normal market prices (for respective quality) are recommended. In very low market price situations the Fair for Life Floor Price may be substantially higher than current market prices. If market prices are high it may be acceptable for the Fair Trade Price to be at market price level, provided that overall compliance costs, efforts and support of the supplier and additional benefits are all considered, as well as both trade partners agreeing on the price being fair. d) In addition to the Fair Trade Sales Price, the buyer and the Fair Trade producer agree on a defined Fair for Life Fair Trade Development Premium to be paid for all Fair for Life certified sales. Calculation of the Fair Trade Premium must be documented. The Development Premium shall be defined separately in each sales contract and is channelled by the producer company directly into its Fair Trade Premium Fund. The Fair Trade Development Premium is normally calculated as a set Premium for at least a year, or even a two year period, based on average prices (see guidance below). It is expected that Fair Trade producers charge all Fair for Life and other fair trade buyers the same Fair Trade Development Premium. The Premium can not be discounted. The Fair Trade Development Premium for smallholder producer companies is recommended to be 10% of farmgate prices and shall not be lower than 5% of average farmgate prices or other established premiums as appropriate, see guidance in Annex 1 of Module 3. The Fair Trade Development Premium for hired labour producer companies is recommended to be between 7 - 10% of non-management labour costs2, depending on the potential social impact of the Fair Trade Premium and the expected additional Fair Trade Development contribution paid directly by the Fair Trade producer company. Premium Fund money must be administered transparently; the targeted beneficiaries of Fair Trade (farmers, workers or their communities) decide on the use of this money, possibly with some initial assistance by the

2 Annual non-management labour costs: The total amount charged to the profit and loss account of the company as wages of workers up to and including supervisory grade – this includes overtimes wages. Calculation of Premium: annual labour costs / annual production in kg x 10%. Example: 70’000$ labour costs, annual production 80 tons  Premium is 70.000 / 80.000 x 0.10 = 0.057 $ / kg

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organising company and / or the buyer. The Fair Trade Development Premium is restricted in use. It may only be used for agreed social or environmental community and development projects or paid as additional income to smallholder producers, organised producer group may also decide to use it for business investments. The Fair Trade buyer can request annual summary reports on use of Fair Trade Development Premium Funds from the Fair for Life producer operation. ( see requirements for Fair Trade producer companies in Module 2 for hired labour situations and in Module 3 for producer groups for further details). In exceptional cases, Fair Trade suppliers may have Sales Prices without clearly defined Development Premiums (FFL-Price-Including-Premium). In this case, the certification body must approve in writing beforehand. Handling operations should make sure that the supplier has written approval of a FFL-Price-Including-Premium payment before FFL invoices without separate Fair Trade Premium indication are accepted.

No Control Points: Fair for Life Pricing and Fair Trade Development Premiums MAX SCORE 1 FFL Floor Prices are agreed in order to avoid prices for producers falling below the costs 4 of production, for the producers: (0) no Minimum Floor Price established, although below M=1 average prices of the past 3-5 years (1=M) no Floor Prices agreed but no indications M=2 that the paid producer farmgate prices are below cost of production (2=M from year from 2) Floor Price agreed (3) good justification of Floor Price calculation OR Floor Price was entirely proposed by Fair Trade supplier (4) well agreed Floor Price on basis of a good Yr 2 analysis of fair production costs. 2 FFL Floor Price is in line with above standard criteria (0) far below average market prices 4 plus 5% OR calculated costs of living are well below official costs of living / not realistic M=2 (1) roughly at average market prices and sufficient to cover costs of living (2=M from from year 2) in line with FFL requirements (3) above FFL requirements. Yr 2 3 The FFL Fair Trade Price (without Development Premium) paid is (0) never (1) 4 sometimes (2=M) always at or slightly above market price, as mutually agreed by Fair M=2 Trade producer and buyer in consideration of compliance costs and overall support given (see above) (3) always clearly above normal market price (4) exceptionally high. 4 Fair Trade Price (without Premium) paid for organic Fair Trade products is (0) 4 conventional price / no premium for organic (1) 1-9% higher than conventional price (2) at least 10% higher (3) >15% higher than normal market price for the respective non- organic product (4) even higher. 5 Fair Trade Price seems appropriate for respective Fair Trade supplier situation (see 4 policy above): (0) unacceptable (2=M) within range of above pricing policy or based M=2 on detailed discussion incl. view of supplier (3) very good price; indications that the high price actually serves the intended social purpose (4) exceptionally high price. 6 FFL Development Premium: In addition to the agreed Fair Trade Price for the product, 4 the buyer pays (0) nothing (1) only very minimal amount extra (2=M) an agreed M=2 reasonable Fair Trade Development Premium (see guidance above) (3) a high Fair Trade Development Premium (4) an exceptionally high Fair Trade Development Premium. Alternatively the agreed “FFL-Price-Including-Premium” prices are uniformly substantially higher than normal market prices for respective quality. 7 The Fair Trade Development Premium is defined in invoices (or contracts): (0) no 2 definition of Premium or any information on use of higher market prices (1) Premium M=2 agreed and paid but not specified in each contract or invoice (2=M from year 2) from definition of Premiums in invoices and trade contracts. Yr 2 8 Additional points for voluntary commitment: The buyer shows efforts to understand actual (3) production costs and to adapt the pricing policy as much as possible to this understanding – Rating (0) to (3). No norm requirement. 9 Documentation on open price negotiations: (0) no evidence of open communication on 3 prices; buyer deliberately does not inform suppliers on market developments, etc. (2) adequate evidence of open communication on prices between buyer and Fair Trade producer (3) very positive interaction and communication on prices; buyer is open to accept suppliers’ prices and needs.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 32 16

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4.3 SOCIAL RESPONSIBILITY (ALL CERTIFIED HANDLERS)

Principle 4.3.0 Fair for Life handlers demonstrate fair working conditions for their own staff. Fair for Life handlers must demonstrate responsible employment practices also towards their own employees. Handlers can choose between the following options (a, b or c): a) For Life Social Responsibility certification to confirm their good employment practices. In this case they are evaluated against the social and environmental standard criteria for Hired Labour labour operations of Module 2, sections 2.1 to 2.4. The company will receive an additional For Life certificate and a detailed audit report against all Hired Labour requirements. Its social performance will be indicated on the Fair for Life Website. b) Responsible Labour Practices Verification by the CB according to the responsible labour requirements in Annex 1. As part of the handler audit, the CB will verify core labour rights and decent employment conditions in line with the audit procedures described in Module 1 section 1.3.4.2. The company is not certified and only receives a short audit report. After the first 2 years, provided there have been no major non-conformities, a biennial report frequency may be agreed upon. c) As an alternative proof of responsible employment practices, the following is accepted: • SA8000 certification • ETI (Ethical Trading Initiative) audit report performed by the CB or another qualified external control body following the Sedex Member Ethical Trade Audit (SMETA) procedure Audit report shall not be older than 18 months. The implementation of the agreed corrective action plan will be cross-checked during the annual Fair for Life handler audit, based on ETI audit results. After the first 2 years, provided there have been no major non-conformities or in low risk countries and industries, a biennial report frequency may be agreed upon. • BSCI audit report performed by a qualified external control body Audit report shall not be older than 18 months. The implementation of the agreed corrective action plan will be cross-checked during the annual Fair for Life handler audit, based on BSCI audit results. After the first 2 years, provided there have been no major non-conformities or in low risk countries and industries, a biennial report frequency may be agreed upon. • In companies with only 5 full time employees or less, only the Fair for Life handler report is completed, with a brief assessment of responsible employment practices included in that report (if applicable). • Detailed social standard report section as part of an IFOAM accredited organic certification scheme with social principles or Global Organic Textile Standard Certification (GOTS). The social section of the audit report must be submitted to the CB and will be only be accepted if the reports confirms an appropriate depth of investigation of decent working conditions Additionally to a detailed report, the company must have a public Social Responsibility Policy (see section 2.3 in Module 2 of this programme) or similar public commitment to fair working conditions signed by top management. The implementation of this policy will be cross-checked during the annual Fair for Life handler audit. • Other trustworthy third party fair labour verification reports may be accepted on a case by case basis.

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PART II: REGISTERED HANDLING OPERATIONS

4.4 REQUIREMENTS FOR REGISTERED HANDLING OPERATIONS

Fair for Life Products: While brand holders of Fair for Life labelled final consumer products and Fair Trade buyers who buy from Fair Trade certified producer operations must be certified handlers, intermediate traders of Fair for Life certified products and contracted processors may chose to only become registered as traders of Fair for Life certified products. In some cases, brand companies may be exempt from the need to become certified (see Module 1, Section 1.1.3.3) and may be only registered handlers instead. For Life Products: Only For Life certified companies can label products from Social Responsibility certified production as For Life certified. Any other intermediate traders must become For Life registered handlers. Registration is based on completion of a registration form (with annual updates) and does not involve an audit, or a certification. A registered trader receives confirmation that he is entitled to buy and sell Fair for Life / For Life certified products to other traders, and is free to display the Fair for Life / For Life quality on invoices and transport or wholesale packaging. The Fair for Life / For Life seal may not be used (see Module 1 section 1.1.4) Intermediate trader: an intermediate trader is any trading or processing company who purchases Fair for Life / For Life certified products from Fair for Life / For Life certified handlers (not directly from Fair Trade producer operations) and who sells the products to other traders as certified or to be Fair for Life / For Life labelled by the receiving brand holder company. Contracted processor: handles certified products on behalf of a Fair for Life or For Life producer or handler. The product is owned by the contracting company.

4.4.1 Registration of Intermediate and Contracted Handlers

Principle 4.4.1 All handlers, including intermediate and contracted handlers of Fair for Life or For Life products, demonstrate compliance with the basic Fair for Life handling principles. a) Every handler of Fair for Life / For Life certified products, who is not obliged to be Fair for Life/For Life certified (e.g. intermediate trader, exempt Fair for Life brand holders), must demonstrate compliance with the criteria in this part by registration with the Fair for Life certification body. If a trader also buys in products certified under other fair trade / Social Responsibility certification schemes to be sold as Fair for Life / For Life, a full Fair for Life / For Life certification is necessary. Registered traders are also subject to spot-check monitoring by the Fair for Life certification body, see criteria d). b) Contracted processors of Fair for Life/ For Life certified products must register with the Fair for Life certification body, but contract processors handling less than 10% Fair for Life/ For Life products can be exempted from this obligation. Contracted processors may be exempt from being fully registered and having to demonstrate fair working conditions if the contract processing of Fair for Life products is less than 10% of the company’s total turnover. Hence the contracting company has very limited leverage to require registration and decent working conditions. In this case the contracting company must still require and demonstrate traceability of products during processing. In mid to high risk industries in non-industrialized countries the CB may request an initial spot check of responsible labour conditions (minimum requirements listed in Annex 1 of Module 4) or alternative proof of working conditions to assess the risk level. High risk operations must become registered handlers and submit annual proof of decent working conditions. Also in industrialized countries the certification body reserves the right to require proof of decent working conditions in the case of contract production in high risk industries. If registration is required, the contracting company can chose to coordinate the registration with the contracted processor and the time needed for assessment of the registration / spot check of fair working conditions can be included in the contracting company’s inspection budget. However, the contracted processor must sign the registration form so affirming his obligation to ensure decent working conditions.

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4.4.2 Basic Fair for Life Handling Requirements for Registered Handlers

Principle 4.4.2 Registered handlers of Fair for Life / For Life products demonstrate separation and traceability of the certified products as well as decent working conditions for their staff. a) An intermediate or contracted handler of Fair for Life / For Life certified products must demonstrate separation and traceability of all certified products while under custody of the company. While physical separation and traceability is required, Fair for Life accepts minimal commingling due to technical processing reasons, but the process and limitations of the separation process must be specified in the registration form. In the case of contract production, the company must have made sufficient arrangements with the contract processors to ensure the monitoring of separation, the prevention of commingling and traceability of all certified products. Registered companies are expected to report Fair for Life handled quantities, periodically. They must describe and confirm physical separation measures and traceability of all lots sold as Fair for Life products to other traders from incoming goods control to final sales. b) A registered handler of Fair for Life / For Life certified products must demonstrate separation and traceability of all certified products while under custody of the company. c) A registered handler of Fair for Life / For Life certified products must demonstrate decent working conditions for all its workers. The following proofs are accepted: • For Life – Social Responsibility certification of the company • Responsible Labour Practices Verification (see section 4.3. (b) by the CB • SA8000 certification • Third party audit report on decent working conditions, report may not be older than 18 months, see list in section 4.3.0 (c) In low and medium risk countries and following good performance, frequency of two years may be agreed for update reports. • Endorsement letter of good working conditions by a trade union. • The company is a cooperative or worker-owned. • For small companies with 5 full time employees or less the commitment to provide responsible employment practices in the registration form is sufficient. • The company assigns the Fair for Life certification body to monitor decent working conditions according to the ETI Base Code in a risk based approach:

o The company completes the CB’s self -assessment against the ETI code and confirms its commitment to work in line with the code principles.

o Based on the information provided and a risk assessment of the size, activity, country of operation, and percentage of Fair for Life certified products within the operation, the certification body assigns a risk category for external monitoring of minimum decent working conditions as expressed by the ETI Base code

o The control body reserves the right to do spot checks against the Code clauses by means of a physical audit.

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ANNEX 1 TO CONTROL MODULE 4: CRITERIA FOR RESPONSIBLE LABOUR PRACTICES FOR FAIR FOR LIFE HANDLERS

Table of Content 1 RESPONSIBLE LABOUR PRACTICES FOR FAIR FOR LIFE HANDLERS ..... 23 1.1 BASIC RESPONSIBLE LABOUR PRACTICES ...... 23 1.2 SAFE WORKING CONDITIONS ...... 24 1.3 WAGES AND SOCIAL SECURITY ...... 25 1.4 WORKING HOURS AND REGULAR EMPLOYMENT ...... 25

Scope As defined in Section 4.3 of the Fair for Life programme Module 4, all Fair for Life certified handlers with hired labour must demonstrate responsible employment practices towards their own employees and workers.

Handlers have the choice to demonstrate this by either

1. Full Social Responsibility certification of their activities – Fair for Life Module 2, section 2.1 to 2.4  Social Responsibility certificate  Social performance is indicated on Fair for Life website  Detailed audit report and rating beyond minimum performance 2. Responsible employment practices verification – as defined in this Annex  verification of core labour rights and decent employment conditions as part of the FFL handler audit  Short audit report only, no certificate 3. Other accepted social audit reports, as outlined in Module 4, section 4.3

This Annex to Module 4 indicates the procedures and control points used for verification of Responsible Labour Practices (RLP).

Verification Procedures For verification of responsible employment practices as part of the Fair for Life Handler audit the procedures described in Module 1, Section 1.3 with the following modifications apply:

1.3.3 Preparation of the audit: No obligations to inform workers and key stakeholders about the certification process in detail, but workers should be made aware of their right to talk to the auditor.

1.3.4.1 Audit frequency: as described - once a year (as for all Fair for Life certified operations) as part of the handler audit, may be changed in low risk countries to biennial frequency after 2 years of good performance.

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1.3.4.2 Audit procedures: as described for hired labour operations (“estates and factories”), including the standard number of employee interviews. Auditor may adapt audit procedures and may slightly reduce the number of workers interviews according to risk considerations. No obligation to always have workers representatives present during the opening meeting or to inform workers in detail about the audit results.

1.3.4.3 Evaluation: brief evaluation and finalisation of report and summary assessment. The handler receives a Responsible Labour Practices Verification summary assessment in addition to handler summary assessment. Conditions (if any) must be met as part of the Fair for Life handler certification obligations.

1.3.5 Certification and 1.3.6 Continuation of certification do not apply.

1.3.7 Complaints Allegations and Appeals Procedures: apply

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1 RESPONSIBLE LABOUR PRACTICES FOR FAIR FOR LIFE HANDLERS 1.1 BASIC RESPONSIBLE LABOUR PRACTICES

No Control Points: Basic Responsible Labour Practices MAX SCORE 1 No Forced or bonded labour: (0) Evidence (2=M) no indication of forced or bonded 2 labour. M=2 2 Employer does not retain any part of workers’ salary, benefits, property or documents in 2 order to force workers to remain on the operation: Employer (0) retains (2=M) does not M=2 retain original legal workers documents (e.g. identity card), wages, etc for any period longer than demanded by law. 3 Workers are free to leave after reasonable notice: (0) Restrictions (2=M) no restrictions 2 on workers’ rights to terminate employment. M=2 4 Freedom of association and right to collective bargaining is respected: Employer (0) 4 prohibits (2=M) respects the workers right to join workers organisations of their M=2 preference and to bargain collectively (3) takes a positive attitude towards worker associations; workers are actively organised (union or active workers representation body) (4) is exceptionally active to promote / support associative activities OR worker owned organisation. 5 Union representatives / workers representatives or organised workers are not 4 discriminated against: (0) Management discriminates or punishes organised workers or M=2 workers representatives (2=M) no such discrimination, intimidation or punishment (3) management supports / promotes workers’ associative activities in a positive way; active workers representation (4) management works very closely and positively with workers association or trade union. 6 Good communication between management and workers; grievances adequately 4 addressed: (0) No open attitude towards workers raising concerns (1) workers may raise their concerns to supervisors or management, but no adequate reaction; no defined procedure to address serious workers grievances or disciplinary problems (2) management encourages workers’ feedback and responds adequately; defined grievance procedures (3) very good open door company communication culture, open to workers suggestions and problems; adequate action taken by the management to address the concern raised. 7 There is no child labour: (0) Some children (2=M) no children below the legal 2 minimum age (15 unless defined otherwise) working in the company. M=2 8 Protection of Young Workers: Young workers (15-18 years) (0) do (2=M) do not work at 2 night or in hazardous conditions and do not work excessive hours. M=2 If no young workers  (n.a.) 9 Fair Disciplinary practices: (0) Violate human dignity OR are not transparent (1) some 4 minor problems with disciplinary practices (2=M) fair and transparent; no deductions M=2 from wages without agreement of worker, serious disciplinary actions are recorded (3) low need for disciplinary actions (4) very positive relation between employer and workers. 10 Sexual harassment: (0) confirmed case of sexual harassment, not followed up (1= M) no 3 clear policy or company instruction on sexual harassment, but no case of sexual M=1 harassment (2=M from year 2) behaviour that is sexually coercive, threatening, M=2 abusive or exploitative is not tolerated. Any cases of sexual harassment are followed from up by management and resolved within a reasonable time frame (3) policies against sexual harassment are available and effectively implemented Yr 2 11 Equal treatment and opportunities: (0) Evidence (2=M) no indication of systematic 4 discrimination of workers (based on gender, race, caste, origin, religion, etc.); no M=2 sexually coercive / intimidating / abusive behaviour (3) employer active in promoting mutual respect and harmony between workers OR policies against discrimination written and implemented (4) actively supporting discriminated groups.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 33 22

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1.2 SAFE WORKING CONDITIONS

No Control Points: Safe Working Conditions MAX SCORE 1 Safety Management and Risk Analysis: (0) none although safety problems (1) no formal 3 safety officer, but supervision staff adequately aware of safety aspects (2=M) one M=2 person trained as safety officer with sufficient qualification and management powers; safety risk analysis done regularly (3) safety committee with participation of workers, high health and safety awareness 2 Fire Protection and Management: (0) not available (1) present but in poor condition / not 3 accessible (2=M) major fire hazards are known and minimized; adequate equipment M=2 available, regularly inspected and functional for size of operation (3) well monitored and maintained (with records), advanced system. 3 Fire alarms and fire drills: (0) no alarm system, no fire drills (1=M in companies with 3 less than 50 workers) simple alarm system, no formal drills but workers know overall M=1 procedures (2=M in companies with more than 50 workers) adequate number of or working fire detectors and alarms at all relevant places, fire drills at least once a M=2 year or as per legal requirements (3) good, well established system of regular fire safety trainings and fire drills, documented inspection and maintenance of detectors and alarms. 4 Emergency procedures: (0) not in place, not even orally (1) in place but not known to 3 workers OR not written but all workers fully aware of relevant emergency procedures M=2 (2=M) in place (written / signposted) and known by workers (3) advanced procedures including training of staff on evacuation procedures. 5 Emergency exits: (0) none (1) exits not entirely unobstructed (2=M) unobstructed and 3 clearly identified, door can be opened from the inside at any time by any worker. M=2 Sufficient for quick and safe evacuation in an emergency (3) well designed emergency evacuation system. 6 Adequate steps are taken to prevent accidents, injuries or work related health problems: 4 (0) workplace is unsafe (1) some minor shortcomings (2=M from year 2) workplaces M=2 and equipment adequately safe and without major risks to health (as per good from industry standard) (3) very safe, efforts have been made to make workplaces as safe as Yr 2 possible (4) impeccable; workplaces according to highest safety and ergonomic standards. 7 Records about accidents at work and work related sicknesses: (0) not recorded (1) some 3 records, incomplete or not followed up (2=M from year 2) recorded and adequately M=2 followed-up. (3) recorded, analysed and preventive measures put in place OR no from accidents / work related illnesses in past 3 years. Yr 2 8 Adequate protection of workers from exposure to chemicals, dust, noise, light and other 3 hazards: (0) missing although necessary (1) provided in acceptable condition (2=M) M=2 suitable and adequate personal protection equipment provided, maintained in good condition and used OR not necessary (3) exceptionally good protection efforts. Office company  n.a. 9 First aid equipment: There is (0) no (1) incomplete (2=M) sufficient basic first aid 3 equipment (as needed for potential work accidents) (3) very good first aid equipment and M=2 emergency medical care. 10 Chemical storage: (0) in workers’ areas or together with household goods (2=M) 2 separate, locked and clearly identified storage with access restriction; MSDS at M=2 hand. If no critical chemicals  (n.a.) 11 Workers are informed about major safety risks and safe working practices: (0) not 4 informed (1) sufficiently aware of existing risks (2=M) workers adequately trained for M=2 their respective tasks OR no major safety risks (3) workers very well informed and trained (4) exceptionally well trained in health and safety practices. 12 Pregnant or nursing women and other risk groups are (0) engaged in potentially 2 hazardous work (2=M) excluded from potentially hazardous work, do not work at M=2 night. 13 If staff is given housing by the company: (0) not acceptable in comparison to local 4 conditions (1=M) acceptable, but clear deficits (2=M) safe and adequate housing M=1 conditions in local context; reasonable rates; workers can chose the type of M=2 remuneration (e.g. cash instead of housing) (3) very good housing; very good / from subsidised rates (4) very good and included as benefit in workers’ remuneration package. If no housing  (n.a.). Yr 2

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TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 43 28

1.3 WAGES AND SOCIAL SECURITY

No Control Points: Wages and social security MAX SCORE 1 Written definition of employment conditions: (0) no aspect of working conditions is defined 4 in writing (1) written agreement on employment conditions only for permanent workers M=2 OR documents not covering all above listed aspects OR only generic documents on from working conditions, but no individual contract All workers shall be (2=M from year 2) Yr 2 provided with written and understandable information about their employment conditions in respect to wages, social benefits and probation period (3) good and detailed contracts. Contract and related documents outline rights and duties of both sides and are signed by employer and worker; worker receives copy. 2 Wages of PERMANENT workers are (0) far below (1) slightly below (2=M) in line with 4 official minimum wages or official industry benchmark standards which ever is M=2 higher) (3) clearly above minimum wages for respective activities (or above wages in comparison with other companies if minimum wage not really applicable for the nature / level of work done) (4) wages substantially higher than common for the specific task / region. These wages include realistic bonuses. (In case of payment-per-production, calculate income of an average production day without overtime). 3 Wages of SEASONAL / TEMPORARY workers are (0) far below (1) slightly below (2=M) 4 in line with minimum wages (3) above official minimum wages (4) substantially higher M=2 than common for the specific task / region including received bonuses. In case of payment-per-production, calculate income of an average production day without overtime. 4 On –time Payments: (0) not done, unduly delayed, very irregular (1) not on fixed days or 2 occasionally slightly delayed payments (2=M) regularly done and on fixed days. M=2 5 Payments are documented (0) not (1) poorly documented, some inconsistencies (2=M) 2 well documented and confirmed by cross checking with other documentation (e.g. M=2 time records, contract – wage, book keeping). 6 Particulars of wages (actual earnings as well as any deductions and contributions to 2 social benefits) are indicated to the employee every time payment is made (0) no such M=2 details indicated to worker (2=M from year 2) wage slips of ALL workers contain this from information, worker receives wage slip. Yr 2 7 Compliance with national labour legislation in regard to social benefits (sick leave, 2 retirement, medical insurance, maternity, unemployment benefits / compensation for loss M=2 of job) is (0) not at all achieved (1) not fully, but almost (2=M) for all workers. (3) slightly better than legally required (4) much better than legally required. 8 Additional points for voluntary commitment: extra benefits to workers beyond legal (4) requirements Rate extra benefits, incentives, bonuses (beyond above) from (0) to (4) and give detailed comments below. No norm requirement.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 31 16

1.4 WORKING HOURS AND REGULAR EMPLOYMENT

No Control Points: Working hours and regular employment MAX SCORE 1 Regular weekly working hours and rest days (0) far higher (1) slightly higher (2=M) in line 3 with national labour legislation; at least 1 rest day out of seven. Equal or less than M=2 48hrs (3) weekly working hours lower than legal maximum hours OR working hours < 42 hours / week. 2 Overtime is (0) compulsory, not remunerated extra (2=M) voluntary, not demanded on 3 regular basis and remunerated as per legal requirements (3) all overtime M=2 remunerated at premium rate.

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3 Maximum working hours (including overtime) (0) exceed 60 hours / week by far or 3 workers work without rest days (2=M) do not exceed 60 hours / week; one day off in M=2 every 7-day period (3) equal or less than 46 h. 4 Holidays / paid leave: (0) no paid leave / holidays (2=M) holidays and paid leave 4 granted as per legal requirements (3) generous paid leave allowance, paid sick days M=2 (4) exceptionally generous paid leave and sick days allowance. 5 Employer (0) does (2=M) does NOT hire and fire workers on a continuous basis to 3 avoid implications of regular employment (e.g. social security payments) (3) all workers M=2 doing regular work are employed as permanent workers. 6 There is (0) substantial (1) some (2=M) no indication that sub-contracting, home- 2 working, apprenticeships etc. are used to avoid regular obligations to workers M=2 under labour law. If done, plan for improvement within 1 year.

TOTAL MAX TNP SCORE Maximum Points / Total Norm Points / Effective Points 22 14

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