Brussels Rural Development Briefings A series of meetings on ACP-EU development issues
Does Fair Trade contribute to sustainable development? Resources on Fair Trade
Compiled by Isolina Boto, Head of the CTA Brussels Office and Camilla La Peccerella, Researcher at the CTA Brussels Office Revised by Ronalee Biasca, Young Researcher at the CTA Brussels Office Does Fair Trade contribute to sustainable development?
Compiled by Isolina Boto, Head of Briefing no. 5: the CTA Brussels Office and Camilla La Peccerella, Researcher at the CTA Brussels Office
Does Fair Trade Revised by Ronalee Biasca, Young contribute to Researcher at the CTA Brussels Office sustainable The information in this document was compiled as background reading development? material for the 15th Brussels Briefing on Fairtrade and its contribution to sustainable development. Brussels 16 April 2008 The Reader and most of the resources are available at http:// brusselsbriefings.net
2 Does Fair Trade contribute to sustainable development?
Index
1. Introduction...... 4
Rationale...... 4
Historical background...... 4
Fair Trade in the ACP-EU cooperation...... 5
2. What is Fair Trade...... 6
2.1 Definition and definitional issues...... 6
2.2 Key players in Fair Trade...... 6
3. The routes of commercialisation of Fair Trade products...... 9
The integrated route...... 9
The Fair Trade labelling route...... 9
4. Standards and standards setting...... 10
4.1 International standards for Fairtrade labelled products...... 10
4.1.a Generic standards...... 10
4.1.b Product standards...... 10
4.2 International standards for Fair Trade organizations : what does Fair Trade mean for producers’ organizations?.11
5. Impact of Fair Trade...... 12
6. Fair Trade flows: how big is the Fairtrade market globally?...... 13
Some data on Fairtrade sales...... 13
The case of the United Kingdom...... 14
Fair Trade production...... 15
7. Some experiences in ACP countries...... 16
8. Consumer awareness of the Fair Trade products: awareness raising, campaigning and advocacy...... 18
9. The role of retailers...... 19
10. Arguments in support and against Fair Trade...... 20
Selected Documents Available Online...... 21
Websites...... 26
Glossary...... 28
Footnotes...... 34
3 Does Fair Trade contribute to sustainable development?
1. Introduction
Rationale Historical background During the 1960s and 1970s, NGOs and socially motivated individuals in The term “Fair Trade” (FT) has The fair trade concept has been many countries in Asia, Africa and various meanings. In this Reader, it developing in western nations Latin America perceived the need for is used to indicate the “Fair Trade throughout the past 40 years or so, fair marketing organizations which movement”, represented in particular in response to a growing recognition would provide advice, assistance and by Fairtrade Labelling Organisations that benefits accruing from trading support to disadvantaged producers. International (FLO) and its associate and trade growth are not necessarily Many such Southern Fair Trade organisations (and hence the use shared by all countries and all Organizations were established, of “Fair Trade” in this note is with layers of the population within each and links were made with the capital letters). These groups aim country in a comparable manner. new organizations in the North. to provide an alternative business These relationships were based on which attempts to redistribute It all started in the United States, partnership, dialogue, transparency returns to factors of production where Ten Thousand Villages and respect. The goal was greater in a manner that is “fairer” for (formerly Self Help Crafts) began equity in international trade. developing-country producers. In buying needlework from Puerto Rico this sense, conventional trading in 1946, and SERRV began to trade Parallel to this citizens’ movement, relations involving developing with poor communities in the South the developing countries were country producers are deemed in the late 1940s. The first formal addressing international political “unfair” insofar as the returns to “Fair Trade” shop which sold these fora such as the second UNCTAD those producers are abnormally low and other items opened in 1958 in conference (United Nations in an economic, environmental and/ the USA. Conference on Trade and or social sense. Hence, Fair Trade Development) in Delhi in 1968, to seeks to secure higher earnings for The earliest traces of Fair Trade in communicate the message “Trade developing country small-producers Europe date from the late 1950s not Aid”. This approach put the that will allow them to cover when Oxfam UK started to sell emphasis on the establishment production costs, earn higher returns crafts made by Chinese refugees of equitable trade relations with and address potential market failures in Oxfam shops. In 1964 it created the South, instead of seeing the such as environmental degradation the first Fair Trade Organization. North appropriate all the benefits and/or low labour standards2. Parallel initiatives were taking place and only returning a small part Fair Trade, therefore, seeks to in the Netherlands and in 1967 the of these benefits in the form of connect low-income producers and importing organization, Fair Trade development aid. consumers in large markets in more Original, was established. At the equitable and sustainable ways. same time, Dutch third world groups The growth of Fair Trade (or It originates in a growing interest began to sell cane sugar with the alternative trade as it was called in among consumers in large markets message “by buying cane sugar the early days) from the late 60s in the development of socially you give people in poor countries a onwards grew as a response to responsible traders, that would place in the sun of prosperity”. These poverty and sometimes disaster allow for a “social value added” in groups went on to sell handicrafts in the South and focused on the their commercial transactions. This from the South, and in 1969 the first marketing of craft products. Its value added is generated when “Third World Shop” opened. World founders were often NGOs, working the purchase of a product, besides Shops, or Fair Trade shops as they with their counterparts in countries in its intrinsic value, gives the final are called in other parts in the world, the South, assisting them to establish consumer the benefit of knowing have played (and still play) a crucial Southern Fair Trade Organizations that it contributes to improve the role in the Fair Trade movement. that organize producers and quality of life of a group of low- They constitute not only points production, provide social services to income producers3. of sales but are also very active in producers, and export to the North. campaigning and awareness-raising. Alongside the development trade
4 Does Fair Trade contribute to sustainable development?
there was also a branch of solidarity in 1999 by the “Communication from movement which has “been trade. Organizations were set up the Commission to the Council on setting the trend for a more socio- to import goods from progressive “Fair Trade”6. economically responsible trade.”8 countries in the South that were In 2005, in the EC communication both politically and economically In 2000, the ACP-EU Cotonou “Policy Coherence for Development marginalised4. Agreement made specific reference – Accelerating progress towards to the promotion of Fair Trade7. In attaining the Millennium 2001 and 2002, several other EU Development Goals”9, Fair Trade Fair Trade in the ACP- documents explicitly mentioned is mentioned as “a tool for EU context Fair Trade, most notably the poverty reduction and sustainable 2001 Green Paper on Corporate development”. Fair Trade has repeatedly been Social Responsibility and the recognized by the European 2002 Communication on Trade Finally, in 2006, the European Commission and EU member and Development. In 2004, the Parliament unanimously adopted a governments for its contribution to EU adopted the “Agricultural resolution on Fair Trade, recognizing poverty reduction and sustainable Commodity Chains, Dependence the benefits achieved by the Fair development. In 1998, the European and Poverty – A proposal for an Trade movement, suggesting the Parliament adopted the “Resolution EU Action Plan”, with a specific development of an EU-wide policy on Fair Trade”5, which was followed reference to the Fair Trade on Fair Trade10.
5 Does Fair Trade contribute to sustainable development?
2. What is Fair Trade?
2.1 .Definition and focuses on production methods and 2.2 Key players in definitional issues results, and has a corporate focus Fair Trade in that it attempts to ensure that Fair Trade is a particular type labour, environmental, and human The Fair Trade scheme involves the of relationship between ‘ethical rights standards are upheld within following three categories of actors: consumers’ and low-income a corporation’s supply chain. In producer households through particular, ethical trade promotes -- Fair Trade producers usually international trade. The accepted adherence to core labour standards represent co-operatives or definition of FT makes it clear: for employees and currently has no associations in developing specific concern with the terms of countries. To participate in the “Fair Trade is a trading trade or seeking to overcome the Fair Trade scheme, they have partnership based on dialogue, marginalisation of producers13. As to join Fair Trade membership transparency and respect, noted by the European Commission14, organisations e.g., Fairtrade which seeks greater equity the FT concept could be taken as Labelling Organisations (FLO), in international trade. It applying to trading situations and Fair Trade Federation (FTF) contributes to sustainable commodities where social and and International Fair Trade development by offering environmental standards are not, Association (IFAT). Participation better trading conditions to, or cannot be (because of the way commits producers to abide by and securing the rights of, in which production is organised), Fair Trade standards, pay annual marginalised producers and enshrined in law. Environmentally- fees and supply products at pre- workers – especially in the driven trade is concerned with determined prices. South. Fair Trade organisations ensuring that traded products are (backed by consumers) are produced using environmentally -- Traders are importers, exporters engaged actively in supporting sustainable techniques. or processors who deal in Fair producers, awareness raising Trade products, replacing so and in campaigning for There is a considerable overlap called middlemen. They are changes in the rules and of issues and attitudes between associated with Fair Trade practice of conventional different types of alternative trade. membership organisations international trade.”11 On the demand side, individuals and subject to the standards, and organisations sensitive to predetermined prices and FT, Ethical trade and environmental issues are also monitoring requirements of environmentally-driven trade likely to be concerned about social the organisations which they justice. On the supply side, there is a join. Prime traders include It is important to relate definitions significant level of overlap between Solidar’Monde (France), Oxfam of FT to other alternative trade the standards of different parts of (UK), Oxfam Wereldwinkels approaches. the alternative trade movement. (Belgium) and Claro In particular, FT labelling criteria (Switzerland), to mention a few. Fair Trade may be viewed as one relating to agricultural commodities part along a continuum of related produced on plantations (particularly -- Retailers interface with the end non-governmental activities, which tea) include stipulations regarding consumers of Fair Trade products. aim at promoting “sustainable labour standards. About two-thirds World Shops represent the most trade” and “ethical trade”12. of FT product lines are also certified common outlets for Fair Trade What distinguishes Fair Trade is as organic15. products. Recently, however, that this movement focuses on Fair Trade products have begun producer groups and involves Despite the close links and to make their way into general paying participating producers overlapping between these different retailers, such as supermarket a pre-determined price for their concepts, this Reader focuses chains16. labelled products. “Ethical trade” exclusively on the FT model.
6 Does Fair Trade contribute to sustainable development?
Moreover, there are five key a common approach to monitoring shop-based activities ranging from networking or membership producers was agreed. Each agency product-tasting to campaigns. organizations that seek to bring Fair would monitor a list of producers Trade organizations together. Each and share that information across EFTA — The European Fair Trade services a different group of Fair Europe. In 1997 this cooperation was Association Trade organizations and therefore formalized through the creation of takes a different perspective on the FLO. There are now 20 NIs that use EFTA was set up in 1990 as a trade nature of Fair Trade. the shared monitoring and standard association to enable cooperation setting service that FLO offers. between the European ATOs to IFAT — International Federation for The NI then licence a local FLO be coordinated and effective. Alternative Trade endorsed mark to businesses in their EFTA has 13 members who pay geographic area17. a significant membership fee IFAT is the only worldwide Fair (around $10,000) to resource a Trade networking organization that Currently, FLO takes a very rigorous small secretariat headquartered in brings producers and Alternative product-by-product approach to Maastricht (Netherlands) with other Trade Organizations (ATOs) register development. The criteria staff based elsewhere in Europe. together in a single organization. are complex to develop for each There are three key ways that the IFAT aims to improve the livelihood sub-sector and the registers cooperation has developed. First, of disadvantaged people in expensive to maintain—worth EFTA acting as trade association developing countries by linking and noting that Fairtrade labelling is the represents the European ATOs in strengthening organizations that only labelling scheme in the world various fora and seeks to agree a offer “just” alternatives to unfair where the consumer pays for the common line on issues external to trade structures and practices. It is a monitoring of the producers. the movement. Through a small federation to promote Fair Trade and advocacy office in Brussels, EFTA a forum for exchanging information From May 25th 2007, the Producer has raised the profile significantly to help members increase benefit Networks CLAC (Coordinadora of Fair Trade with the European to producers. From the mid-1970s Latinoamericana y del Caribe de Parliament and Commission. Second, onwards, a group of 30 ATOs Comercio Justo), AFN (African through creating an environment for met regularly to support each Fairtrade Network) and NAP working together, particularly in the other and share ideas. A meeting (Network of Asian Producers) food sectors, the EFTA members of that group in 1989 decided to officially became full members of share manufacturing and importing formalize the grouping and create an FLO too18. of key commodities. For example, inclusive global network. Southern the Swiss Fair Trade organization, organizations began joining after the NEWS — The Network of World Claro, coordinates the production 1991 biennial IFAT conference, and Shops of chocolate for all of the EFTA now represent more 60 per cent of members. The economies of scale the membership. NEWS coordinates the cooperation derived from this make the product between World Shops all over reasonably successful in all of the FLO — The Fairtrade Labelling Western Europe. The network European markets. Finally, because Organization consists of 15 national World Shops FLO only monitors against the seven associations in 13 different countries agricultural commodities that it has Following on from the successful and in total represents 2,500 World registers for, EFTA has developed a launch of Max Havelaar coffees Shops.30 NEWS was established in system called Fair Data that shares in 1988, a number of independent 1994 and much of its focus is around monitoring information among all Fairtrade certification bodies maximizing the campaigning voice of of the participants. This covers were created. To coordinate the the shops and their customers. The hundreds of non-FLO producers monitoring and standards of these European World Shops day is held enabling the cost of monitoring Fair National labelling Initiatives (NIs), in May every year and focuses on Trade suppliers to be shared.
7 Does Fair Trade contribute to sustainable development?
FINE far is the FINE definition of Fair Fair Trade players more closely Trade that was agreed by all of together. For example, IFAT has a In an effort to unite standards and the participants in 1999. This self-monitoring scheme to prove approaches the four key Fair Trade definition has been revised further you are a Fair Trade organization. networking organizations began to and is to be agreed among all the The next step would be introduce meet together in an effort to unite members during 2001. Although external monitoring—a role that the movement around the things short on radical action, FINE has FLO could play. Although by no that could be readily agreed on. created an environment of trust means certain that these steps The FINE—FLO, IFAT, NEWS and and cooperation. As common will be taken, if they are then FINE EFTA—group was established to approaches are coordinated among may need to become more of build relationships and common the members, some bilateral institution to support this increased approaches. The key success so arrangements will help to pull the cooperation19.
8 Does Fair Trade contribute to sustainable development?
3. The routes of commercialisation of Fair Trade products
Fair Trade products are are in accordance with Fair Trade is additional to other labelling commercialised under two different principles. Most of the Fair Trade information requirements, such as routes. The traditional or integrated Organisations and producer quality classification and origin, route is the route where products organisations are members of the which are governed by the normal (mainly crafts) are produced, International Fair Trade Association, statutory rules21. imported and/or distributed by a IFAT. The use of a Fair Trade Fair Trade Organisation. Another Organisation (FTO) Mark is granted In 1997, the various national FT marketing route is through Fair to a Fair Trade Organisation labelling initiatives formed an umbrella Trade labelling initiatives and which has successfully met the organization called Fairtrade Labelling certification. In this case, goods are requirements of the IFAT Standards Organizations International (FLO). labelled by specialised Fair Trade and Monitoring system 20. FLO is responsible for certifying and certification agencies to testify that monitoring producers, accrediting their production chains respect Fair The Fair Trade labelling route a single organization to certify Trade standards. The importers and FT practices in each country and traders can be traditional commercial Under this route, national labelling coordinating work among its members. companies, and the distribution initiatives monitor the compliance channels can be regular retail outlets. with Fair Trade standards by FLO is the only certification system producers or traders against a set of in the world where producers do not The integrated route internationally harmonized standards. pay for their certification. Different from other schemes, the consumer Fair Trade products are made The objective here is to follow pays for the Fair Trade system. available to consumers through normal distribution patterns in order Traders pass on to consumers the Fair Trade Organisations which to facilitate greater access to fair higher FT price and premium that identify and source products directly trade products. There is therefore, they pay producers. The financial from small producers and co- no longer the confidence of the resources flow all the way back from operatives, and import and market close link between producer and the consumer who buys the product, them in specialised outlets such as outlet as with the traditional fair to the producer. The national Worldshops. trade movement. Here, the importers entity in each country charges the and traders are normal commercial Licensee a fee for using the Fair All aspects of their commercial companies, and the goods are sold Trade label. This pays for all of operations are based on a Fair through normal retail outlets, but FLO’s certification and monitoring Trade ethos, and as much of the a fair trade label, awarded by a fair costs and for the National Initiatives final price as possible is passed back trade certification agency, signifies marketing expenses. So the cost of to the producers. In many cases to the consumer that the goods and the system is included in the retail profits generated are devoted to the marketing chain respect fair price, making Fair Trade labelling development causes. The majority trade principles. The four fair trade sustainable22. These organisations of products marketed through labels used within the EU are “Max are all members of FLO (Fairtrade Worldshops are not labelled as Havelaar”, “Transfair”, the “Fairtrade Labelling Organisations such; the purchase is done on the Mark” and “Rättvisemärkt”. International), the Fair Trade basis of confidence. The “brand standard-setting and certification names” or Fair Trade Mark of these A fair trade symbol is displayed on organisation. The International organisations are in themselves the packaging, certifying that the Fairtrade Standards are developed a signal to consumers that the production and marketing processes and regularly reviewed and products and business practices respect fair trade criteria. The label monitored independently 23.
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4. Standards and standards setting
The two above mentioned routes set applies to organised workers, the company to bring social rights to market Fair Trade products are whose employers pay decent wages, and security to its workers. Some reflected in two sets of Fair Trade guarantee the right to join trade of the core elements are: training Standards: international Fair Trade unions and provide good housing opportunities, non discriminatory standards for labelled products have where relevant. On plantations and in employment practises, no child been developed by FLO (Fairtrade factories, minimum health and safety labour, no forced labour, access Labelling Organizations International) as well as environmental standards to collective bargaining processes and international standards for Fair must be complied with, and no child and freedom of association of the Trade Organizations have been or forced labour may occur 24. workforce, condition of employment developed by IFAT (International Fair exceeding legal minimum Trade Association). As Fairtrade is also about requirements, adequate occupational development, the generic standards safety and health conditions and Both systems are based on the joint distinguish between minimum sufficient facilities for the workforce Fair Trade definition and principles. requirements, which producers to manage the Fairtrade Premium. must meet to be certified Fairtrade, and progress requirements that 2. Economic Development, including 4.1 International encourage producer organisations the Fairtrade Premium - For all Standards for continuously to improve working products Fairtrade Standards Fairtrade labelled conditions and product quality, require the buyers to pay a Fairtrade to increase the environmental Minimum Price and/or a Fairtrade products sustainability of their activities and Premium to the producers. The to invest in the development of the Fairtrade Minimum Price allows FLO is the leading Fairtrade organisations and their producers/ the producer to cover the costs standard setting body for labelled workers25. of sustainable production. The products. Its affiliated company Fairtrade premium is money for FLO-Cert regularly inspects 4.1.a.1 Generic Standards for both the farmers or for the workers on and certifies over 500 producer small farmers’ organisations and for a plantation to invest in improving organizations in more than 50 hired labour cover: their livelihood. Premium money countries in Africa, Asia and Latin in this sense is meant to improve America. Fairtrade Standards are 1. Social Development, including the situation of local communities developed by the FLO Standards democracy, participation, in health, education, environment, Committee which is composed of transparency and non-discrimination economy etc. The farmers or FLO’s labelling initiatives, producer - For small farmers Fairtrade workers decide themselves on what organizations, traders and external Standards require an organizational are the most important priorities experts. Producers and traders structure that allows the farmers for them and manage the use of the need to comply with the applicable to actually bring a product to Fairtrade Premium. Generic and Product Standards. the market. All members of the organization need to have access Also, Fairtrade Standards require 4.1.a Generic standards to democratic decision-making buyers to give a financial advance processes and as far as possible on contracts, called pre-financing, FLO stipulates two sets of generic participate in the activities of the if producers ask for it. This is to producer standards, one for small organization. The organization help producers to have access to farmers and one for workers on needs to be set up in a transparent capital and so overcome what can plantations and in factories. way for its members and must not be one of the biggest obstacles to discriminate any particular member their development. This promotes The first set applies to smallholders or social group. entrepreneurship and can assist the organised in cooperatives or other economic development of entire organisations with a democratic, For hired labour situations the rural communities. participative structure. The second Fairtrade Standards require from
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3. Environmental Development food products, ranging from coffee, organizations to large cooperatives - Fairtrade Standards include tea, sugar, cocoa, rice, and fruit and from one person importers to requirements for environmentally to flowers, cotton and sportballs. retailers with turnover of several sound agricultural practises. The The product standards specify million euros. Two thirds of IFAT focus areas are: minimized and the minimum price and premium members are located in developing safe use of agrochemicals, proper as well as other product-specific countries. IFAT standards are and safe management of waste, requirements. Certification of developed in the Standards and maintenance of soil fertility and compliance with these standards Monitoring subcommittee with input water resources and no use of is done by the independent from various stakeholders including genetically modified organisms. organization FLO-Cert GmbH 28.The producers, southern exporters, However, Fairtrade Standards do setting of standards or criteria, importers, retailers and Fair Trade not require organic certification as certification that those standards support organizations, and approved part of its standards. Higher costs for have been met, and labelling to by the Annual General Meeting. organic production are considered indicate that the producer has been though, by higher Fairtrade Minimum certified are critical elements for the IFAT has developed 10 international Prices for organically grown operation of Fair Trade schemes. standards for Fair Trade products. Fair Trade membership organisations Organizations (FTOs), namely: certify and monitor producers, 4. Standards on Labour Conditions, traders and retailers based on these 1. Creating Opportunities for including compliance with the ILO standards and authorise them to use Economically Disadvantaged core labour rights (applicable if the their labels or logos29. Producers organization employs a significant number of workers) 26. Finally, there are a few product- 2. Transparency and Accountability specific Fairtrade standards for 4.1.a.2 Generic standards for each product that determine such 3. Trading Practices traders. things as minimum quality, price, and processing requirements that have to 4. Payment of a Fair Price Trading standards stipulate that be complied with30. traders have to: 5. Child Labour and Forced Labour
-- pay a price to producers that 4.2 International 6. Non Discrimination, Gender Equity covers the costs of sustainable Standards for and Freedom of Association production and living; Fair Trade 7. Working Conditions -- pay a premium that producers Organizations: can invest in development; what does Fair 8. Capacity Building
-- partially pay in advance, when Trade mean 9. Promotion of Fair Trade producers ask for it; for producers’ organizations? 10. Environment -- sign contracts that allow for long- term planning and sustainable Each standard is accompanied by production practices27. The International Fair Trade a set of measurable indicators and Association (IFAT) is the global compliance criteria which differ 4.1.b Product standards network of Fair Trade Organizations, between “entry” and “progress” with over 300 members in 70 level. FTOs in compliance with these Product standards have so far been countries. The membership is very standards can acquire the right to use developed for 17 food and non- diverse, ranging from small producer the FTO Mark for their organisation 31.
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5. Impact of Fair Trade
The impact of Fair Trade has been out by research centres, government capacity building and technical studied in many different ways, e.g. bodies and universities. assistance, income security, direct by measuring the economic and trade and credit provision, etc. Many financial benefits to the producers, The financial and economic benefits studies found also an improved by assessing the impact on women, of Fair Trade can be measured level of education, the preservation by studying the indirect impact and relatively easily: In 2003, the extra of indigenous cultures and other spill-over effects on the communities, benefits for coffee farmers, for social benefits. etc. Fair Trade Organisations instance, taking the World market monitor the impact of their activities price as defined for Arabica by the Apart from these direct impacts regularly: IFAT requires all its NY and for Robusta by the London there is a wide range of spill-over member organisations to report stock exchange, compared with effects and indirect impacts to non- their achievements in relation to the Fair trade minimum price and Fair Trade producers. The presence Fair Trade standards every two premium, amounted to over 23 of Fair Trade intermediaries can years, and sets targets for further million euros. bring changes in weighing practices improvements. FLO carries out and price information which annual inspections of producers on However, research has shown that ultimately benefits all producers its registers and audits trade flows. the impact is even more significant in the area. The organisation of Additionally, there is a series of in non-economic areas, such as the producers helps to break monopolies independent impact studies, carried empowerment of producers through on prices and transportation32.
12 Does Fair Trade contribute to sustainable development?
6. Fair Trade flows: how big is the Fairtrade market globally?
In 2010, the estimated retail sales GBP 18.6 million of Fairtrade new producer organizations selling value of Fairtrade marked products premium payments to producers’ to the UK market, to a total of 560 reached GBP1.17 billion, an increase communities. The reach was organizations, involving 915,244 of 40% from 2009, generating broadened with the addition of 64 individuals.33
Retail Sales in Selected EU Countries3
COUNTRY 2009 (in EUR) 2010 (in EUR) Growth Rate
Austria 72,000,000 87,000,000 21%
Belgium 56,431,496 60,243,537 7%
Denmark 54,436,609 61,837,026 14%
Finland 86,865,284 93,001,210 7%
France 287,742,792 303,314,314 5%
Germany 267,473,584 340,000,000 27%
Italy 43,382,860 49,400,006 14%
Luxembourg 5,327,122 6,200,000 16%
Netherlands 85,818,400 119,000,000 39%
Spain 8,030,724 14,886,675 85%
UK 946,540,300 1,343,956,837 40%
TOTAL 1,914,049,171 2,478,839,605
The Case of the United Kingdom an estimated retail value of GBP493 Fairtrade than anywhere else. Around million. It is one of the world’s 20% of roast and ground coffee, and The UK market is doubling in value leading Fairtrade markets, with more 20% of bananas sold in the UK are every two years, and in 2007 reached products and more awareness of now Fairtrade.35
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Estimated UK retail sales by value 2010 – 2011 (GBP million)36
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Coffee 18.6 23.1 34.3 49.3 65.8 93 117 137.3 160 179.8 194.3
Tea 5.9 7.2 9.5 12.9 16.6 25.1 30 64.8 70.3 82.6 86.7
Cocoa products** 3.3* 3.9* 7.3* 9.6* 13.2* 16.4* 25.6* 25.6* 44.5* 162 217.1
Sugar products** 4.5 5.7 8.7 14.3 19.5 23.7 50.6 107.7 164.6 384 464.1
Honey products** 3.2 4.9 6.1 3.4 3.5 3.4 2.7 5.2 3.6 6.8 4.1
Bananas 14.6 17.3 24.3 30.6 47.7 65.6 150 184.6 215.5 206.6 208
Flowers n/a n/a n/a 4.3 5.7 14 24 33.4 30 27.6 26.3
Wine n/a n/a n/a 1.5 3.3 5.3 8.2 10 18.1 18.5 20.7
Cotton n/a n/a n/a n/a 0.2 4.5 34.8 77.9 73.2 51.7 41
Fresh Fruit n/a 0.1 1 5.9 8.5 17.6 28 32.2 24.3 15.5 12.1
Fruit Juices 0.4 0.8 1.1 2.3 4.6 7.7 13.8 21.1 13.1 15.2 16.5
Other*** n/a n/a n/a 6.7 6.4 10.1 8.3 21.8 26.2 23.5 12.1
TOTAL 50.5 63 92.3 140.8 195 286.3 493 712.6 843.4* 1173.8 1319.3
Year-on-Year Growth 53% 25% 47% 53% 38% 47% 72% 45% 18% 39% 12%
* *After review, the 2009 and historical cocoa figures have been reviewed and the sales values updated. The figures against these products represent the cocoa part of all products containing cocoa, the honey part of all products containing sugar.
***These figures cover all Fairtrade commodities not covered by other categories. These include vegetables, dried fruit, pulses, rice, quinoa, sesame seeds, nuts and oils, sports balls and spices.
The figures show the increase in for honey products, flowers, were particularly seen for coffee sales for most Fairtrade products cotton, fresh fruit and ‘other’ (8%), cocoa products (34%), sugar between 2010 and 2011 (except products). Significant increases products (20%), wine (11%).
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Fairtrade Production
After coffee, the food range was other non food products such as -- Commodities: sugar, coffee, expanded and it now includes flowers and cotton have been added cocoa, bananas products like tea, cocoa, sugar, wine, to the Fair Trade assortment. fruit juices, nuts, spices, rice, etc. -- Agricultural non-food product: Food products enable Fair Trade The main Fair Trade products cotton Organizations to open new markets, that we can find in the Northern such as institutional markets, supermarkets exported from ACP -- Handicrafts supermarkets and bio shops. In countries are: addition to these food products, -- Cosmetics
Global Retail Estimates for Selected Fairtrade Products37
Product Total 2009 (in MT) Total 2010 (in MT) Growth Rate
Bananas 335,893 325,210 -3.18%
Sugar (cane sugar) 89,628 126,810 41,49%
Coffee (roasted, instant) 73,781 87,576 18.70%
Fresh fruit 20,091 17,307 -13.86%
Cocoa (cocoa beans) 13,898 35,179 153.12%
Tea 11,524 12,356 7.22%
Rice 5,052 5,036 -0.32%
Herbs and spices 578 407 -29.62%
Quinoa 556 1,288 131.60%
TOTAL 551,001 611,169
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7. Some experiences in ACP countries
Networking between Fair Trade the living standards of its members is the umbrella organisation for 73 Organizations is crucial to their through the production of cotton. village co-operatives that grow success. All over the world, networks The co-op has grown from 81 to organic Fairtrade cotton and have been established. Regional 169 members. The average farm is mangoes. Originally a federation of networks include the Asia Fair Trade 7 hectares in size with 1.3 hectares 16 co-operatives with a membership Forum (AFTF), Co-operation for under cotton, producing around of 174 farmers, MOBIOM has grown Fair Trade in Africa (COFTA), the 1,000 kg of cotton a year. That to 73 co-operatives with 6,547 Association Latino Americana de farmers grow and harvest seed members, of which 30% or almost Commercio Justo (IFAT LA) and cotton – the cotton boll which 2,000 are women. Their mission is IFAT Europe. National networks consists of seeds with the fibre to promote Fairtrade and organic include Ecota Fair Trade Forum in attached. Cotton is the only cash cotton production and to represent Bangladesh, Fair Trade Group Nepal, crop in the area and farmers also and protect the interests of its Associated Partners for Fairer Trade grow millet, sorghum, maize and members. The strategy includes the Philippines, Fair Trade Forum India, peanuts on a subsistence level. following objectives: Kenya Federation for Alternative Trade (KEFAT), etc. The cooperative was inspected and -- Improve the organisation’s certified by Fairtrade in 2004. It operational performance Experience of WINFA in the now exports part of its production Windward Islands - The Caribbean under the conditions guaranteed by -- Increase the production capacity The first FT bananas shipment in international Fairtrade standards: of its member cooperatives for July 2000 started with 466 growers organic cotton, mangoes, sesame, organized in 12 groups in 3 islands: -- A guaranteed Fairtrade minimum shea butter and fonio (a type of Dominica, St. Lucia and St. Vincent. price paid to producers covers millet) In January 2002, there were 584 production and living costs growers registered in 18 groups in -- Ensure that the added value all 4 Windward Islands. By February -- Additional Fairtrade Premium brings maximum benefits to the 2007, it had reached 3376 growers is for investment in agreed organisation’s members registered in 47 Fairtrade Groups in community development 4 Windward Islands.38 In 2009, the projects such as drilling wells and -- Improve the socio-economi and percentage of Windward Islands constructing or improving schools political position of women. bananas had grown to over 90%, and clinics as opposed to 30% in 2004. Today MOBIOM’s production of seed more than 90% of banana growers in -- Sustainable agricultural cotton was organically certified the Islands are members of Fairtrade production methods by ECOCERT in 2002, followed by groups.39 are employed, including mangoes. These products were then environmental protection and Fairtrade certified in September Experience of Fair Trade Cotton in ongoing reduction in the use of 2004, but MOBIOM does not West Africa agrochemicals currently have a Fairtrade buyer for Mali, Burkina Faso, Senegal and their mangoes.42 Cameroon have produced 1300 -- Non-discrimination and equality tonnes of fibres in 2005, 5076 in of opportunity for all members The UC-CPC union in Mali brings 2006 and 8000 in 2007 40. Fair trade and workers together small, village-level certification concerns more than 300 c-operatives (Coopératives de producer groupings (more than 23 -- Democratic and transparent Producteurs de Coton or CPC) 000 producers). management structures are in whose member spool the cotton place41 they grow in order to strengthen The Dougourakoroni Cotton their position in the market and share Producer Co-operative was founded MOBIOM (Mouvement Biologique expertise. The co-operative in the in 1996 and the aim was to improve Malien or Malian Organic Movement) village of Dougourakoroni was one
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of the four original Fairtrade certified of wells for access to clean drinking farmers who were barely able to organisaitons in UC-CPC, which now water and the building of a storage grow enough food to eat. The project numbers 37. It was founded in 1996 facility for grain.43 extends to a 1,150-hecatare block of with the aim of improving the living land leased from the government and standards of its members through Sugarcane in Malawi divided into cane fields of between the production of cotton. The co- 10 and 70 hectares. Although farmers operative provides access to loans, Kasinthula Cane Growers Association are allocated individual plots of 2-3 technical advice and agricultural (KCG) is a smallholder sugar cane hectares the project is run on a co- training. It supplies agricultural inputs project located in the inhospitable operative basis. and oversees commercial activities. Shire River Valley District if Around 10% of the Fairtrade Chikhwawa in the south of Malawi. KCG was Fairtrade certified in 2002 Premium is used by UC-CPC, whose KCG was a joint venture set up in and is now supplying sugar on first project was to build a meeting 1996 by the Malawi Government and Fairtrade terms to a growing number room so that members could come the Sugar Corporation of Malawi, a of companies in the UK, Europe together to make decisions and private company that at the time and the US. On top of the contract for social activities. The remaining owned the nearby sugar mill. The price for the sugar cane, Fairtrade 90% of the Fairtrade Premium KCG project involved converting an sales attract an additional Fairtrade is distributed to the village co- area of largely unproductive land to Premium of $60 per tonne of sugar. operatives according to the amount sugar cane production in order to KCG’s total production is now sold of cotton each of them has sold. The increase the supply of raw cane to to Fairtrade buyers. They include priority projects in every village in the mill and at the same time provide companies from Belgium, Germany, the regions were the construction an income for 292 subsistence Norway and the US.44
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8. Consumer awareness of the Fair Trade products: Awareness raising, campaigning and advocacy
From the beginning, the Fair Trade Another tool was the establishment This concern of consumers for fair movement aimed to raise awareness of the FINE Advocacy Office trade, more common in western among consumers of the problems in Brussels, which focuses on European Member States than in the caused by conventional trade, influencing the (European) policy- rest of the EU, has been relayed by and to introduce changes to its makers. It is supported, managed civil society, local authorities, and rules. The sale of products always and funded by the whole movement, also echoed at EU level by the EU goes alongside with information represented in FLO, IFAT, NEWS and institutions, notably the European on the production, producers and EFTA – hence its acronym FINE. Parliament. Public authorities in their conditions of living. It has the EU can play an active role in become the role of World / Fair TNS Omnimas survey done in 2007 sustainable development through Trade Shops to mobilize consumers 45 showed 57% of adults can identify their purchasing decisions, by to participate in campaigning the independent Fairtrade consumer promoting fair trade in their activities for more global justice. label, up five points in just one year, procedures, while respecting the The first European World Shops and 53% of respondents correctly fundamental principles of EU law. conference took place in 1984. associated the symbol with a better Some public authorities are already This conference set the beginning deal for producers in the developing putting fair trade procurement into of close cooperation between world 46. The 2009/2010 annual practice, by introducing fair trade volunteers working in World Shops review revealed that the FAIRTRADE considerations into the different from all over Europe. The Network Mark is now recognized by almost stages of public procurement of European World Shops (NEWS!) three in four British adults.47 procedures. was formally established in 1994 and now represents approximately However the EU legal framework 3.000 World Shops in close to 20 Fair trade in public lacks clarity as the European European countries. procurement in the EU Parliament has repeatedly pointed out. As a result various The first World Fair Trade Day, which A growing proportion of European interpretations of the legal involves the worldwide Fair Trade citizens care more and more about framework exist, creating legal movement, was celebrated on May contributing towards sustainable insecurity for contracting authorities 4, 2002. Now World Fair Trade Day economic and social development in and inhibiting expansion of fair-trade takes place every year on the second developing countries through their public procurement. The ongoing Saturday of May and has its own purchasing preferences, notably revision of EU public procurement Website: www.wftday.org buying fair trade. directives could help bring clarity.48
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9. The role of retailers
Retailers will point to a commitment Trade products in the mainstream Fair Trade products. The increasing to FAIRTRADE labelled (FT) goods have largely been commodity- number of ethical claims in the that are certified against Fairtrade based food products such as tea market place may cloud the Fair standards as a sign of commitment and coffee. This is largely because Trade message to consumers. to fairness and justice in their trading of the supermarket demand for relationships. large volumes and guarantee year- At the same time, many mainstream round availability, which can only be brands have been reluctant (and ‘Getting’ Fairtrade has been part of accommodated by sourcing from a even hostile) to support Fair Trade a trend since the mid-1990s in which relatively large number of producers values and activities – it is invariably supermarkets and food companies that are well organised. Crafts have smaller scale companies that have have sought to de-commodify their faced many difficulties in accessing a Fair Trade labelled product as mainstream lines, with organic, the mainstream home-ware and part of a wider product range. Fairtrade and ‘local’ branding interiors market, partly because of An independently verified label offering both reputational and profit the short life-span of products (due offers smaller manufacturers a benefits. Major supermarket chains to changing fashions) and the high relatively easy way of demonstrating not only stock Fairtrade products up-front costs of professional design. responsible practice which may be but have introduced Fairtrade Many products are likely to remain in less attractive to a larger company lines amongst their own brands in a Fair Trade niche. that has invested more in its own products such as coffee, tea and brand profile and consumer message. chocolate, contributing to both There is a complex inter-relationship the growth in sales and increased between the positive influence Some argue that competition public awareness of the concept of Fair Trade on the behaviour of between an increasing number of of Fairtrade. Similarly, some major conventional companies on the one Fair Trade brands and the adoption branded food companies, both hand, and the impact of the new of more ethical practices on the part processors and food service, offer ethical approaches on the profile of conventional companies can only the consumer a fair trade choice. of Fair Trade itself. It is frequently be a good thing. The competitive argued that a major contribution of process may encourage more firms In northern Europe the range of fair Fair Trade has been to influence the to adopt ethical practices, or even trade products available continues behaviour of mainstream companies Fair Trade practices. However, to expand and more conventional (e.g. Ethical Trading Initiative, as we noted above, the complex companies offer a product with a fair adoption of “responsible business” decision-making processes that trade label49. practices and codes of conduct). lead to ethical consumption and Whilst the more empowering the influence that this has on the Fair Trade and the mainstream market elements of the Fair Trade approach sourcing strategies of companies are not always taken on board, the is as yet incompletely understood. Fair Trade is engaged in the different needs of smallholders in Moreover, it is not clear if there is mainstream market both in terms of terms of meeting ethical standards is in practice a competitive process actively marketing products through increasingly being considered. between ethical and conventional mainstream outlets and encouraging lines, which would drive non-Fair conventional companies to use However, the increasing trend Trade companies to consider ethical the Fair Trade label and thereby for conventional companies to approaches. Supermarkets tend not adopt Fair Trade practices. Whilst espouse ethical principles --from to stock more than one or two ‘ethical this is becoming an increasingly ethical sourcing of supermarkets to lines’ so that the whole range of Fair important strategy for Fair Trade cause-related marketing whereby Trade brands are not necessarily on in some markets, it should be companies donate a percentage offer in particular chains or localities. recognised that not all Fair Trade of the consumer price to a charity This can make it less easy for the products are appropriate for the or environmental group -- has also consumer to consistently choose a mainstream market. To date, Fair created increased competition for Fair Trade product50.
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10. Arguments in support and against Fair Trade
Arguments in support of Fair Trade -- The movement has positive -- Inefficient means of transferring include: “corporate social responsibility income from consumer to -- Opportunity to target specific externalities” producer; a direct transfer would groups for aid (e.g. most economically be more efficient marginalized groups) -- Facilitates access to credit -- Probably does not reduce price -- Preserves traditional handicrafts -- Can lead to general quality volatility, as producers are and ways of living improvements which are valuable uncertain how much Fair Trade in conventional markets as well product can be sold at the Fair -- “Tool for philanthropic marketing” Trade price – e.g. creates aid funds that would Among the arguments against Fair not otherwise exist Trade are: -- More market-friendly options -- Distorts incentives by setting exist (such as promoting products -- If effective, provides a means minimum prices in home markets, making market to increase producer incomes information more accessible to significantly -- “Temporary crutch” – prolongs producers, moving into higher- economic dependence of value product markets)51 -- Producers establish more direct producers by reliance on a niche personal contacts with importers market of socially-conscious An increasing number of public and processors consumers institutions are serving Fair Trade products and local authorities -- Social and environmental -- Some consumer surveys suggest include fair and sustainable criteria benefits that contribute to local limited willingness to pay a in their public tenders. Thousands sustainability and stability premium for “causes” of towns, universities and churches have applied for Fair Trade status, -- Community and organizational -- Gives certain groups advantages committing to promote Fair Trade development benefits; better over others (is not a universally and to contribute to overcoming organization increases producer accessible scheme) poverty and exclusion. Increasingly, representatives from developing -- bargaining power -- Specialty producers are most countries promote Fair Trade because likely to participate but are least it enables small and marginalized -- Encourages diversity of affected by low commodity prices producers in their countries to live competing market channels; and work in dignity. Fair Trade is provides producers with more -- A truly significant effect on increasingly on the agenda of policy choices producers requires much broader makers throughout the world. efforts
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Selected Documents Available Online
COMMITTEE OF THE REGIONS http://register.consilium.europa.eu/ Commission to the Council and pdf/en/07/st14/st14470.en07.pdf the European Parliament and the Opinion of the Committee of European Economic and Social the Regions on Contributing to UNCTAD XII – The European Union’s Committee on Policy Coherence Sustainable Development: the Role Key Objectives and Priorities, as for Development – Accelerating of Fair Trade and Non-Governmental adopted by the General Affairs and progress towards attaining the Trade-related sustainability External Relations Council on 15 Millennium Development Goals, Assurance Schemes, 10 – 11 October 2007, 29 October 2007 COM(2005) 134, 12 April 2005 February 2010 http://register.consilium.europa.eu/ http://eur-lex.europa.eu/ http://www.fairtrade- pdf/en/07/st14/st14209.en07.pdf LexUriServ/LexUriServ. advocacy.org/images/stories/ do?uri=COM:2005:0134:FIN:EN:PDF coropinionfairtradefinal.pdf Conclusions of the Council and the Representatives of the Governments Communication from the COUNCIL OF EUROPE of the Member States meeting within Commission to the Council and the the Council, on Aid for Trade, 15 May European Parliament on Agricultural Recommendation “Towards 2007 Commodity Chains, Dependence responsible food consumption”, 26 http://register.consilium.europa.eu/ and Poverty – A proposal for an January 2007 pdf/en/07/st09/st09555.en07.pdf EU Action Plan, COM(2004) 89, 12 http://assembly.coe.int/main. February 2004 asp?Link=/documents/adoptedtext/ Petersberg communiqué on http://eur-lex.europa.eu/ ta07/erec1786.htm European Development Policy, 13 LexUriServ/LexUriServ. March 2007 do?uri=COM:2004:0089:FIN:EN:PDF Report of the Committee on the http://www.eu2007.de/en/News/ Environment, Agriculture and download_docs/Maerz/0312- Communication from the Local and Regional Affairs, Doc. RAA1/080Abschlusskommunique.pdf Commission to the Council and the 11010, “Towards responsible food European Parliament on Trade and consumption”, 7 July 2006 Review of the EU Sustainable Development – Assisting developing http://assembly.coe.int/Main. Development Strategy (EU SDS), 26 countries to benefit from trade, asp?link=/Documents/WorkingDocs/ June 2006 COM(2002) 513, 18 September 2002 Doc06/EDOC11010.htm http://register.consilium.europa.eu/ http://eur-lex.europa.eu/ pdf/en/06/st10/st10917.en06.pdf LexUriServ/LexUriServ. COUNCIL OF THE EUROPEAN do?uri=COM:2002:0513:FIN:EN:PDF UNION EUROPEAN COMMISSION Green paper on promoting a Joint Africa-EU Strategy and its First Communication from the European framework for Corporate Action Plan (2008-2010), 3 March Commission to the Council, the Social Responsibility, COM(2001) 2008 European Parliament and the 366, 18 July 2001 http://register.consilium.europa.eu/ European Economic and Social http://eur-lex.europa.eu/ pdf/en/08/st07/st07204.en08.pdf Committee. Contributing to LexUriServ/LexUriServ. Sustainable Development: the Role do?uri=COM:2001:0366:FIN:EN:PDF EU Strategy on Aid for Trade: of Fair Trade and non-governmental Enhancing EU support for trade- trade-related sustainability assurance Communication from the related needs in developing schemes, COM (2009), 5 May 2009 Commission to the Council on Fair countries – Conclusions of the Trade, COM(1999) 619 final, 29 Council and of the Representatives http://trade.ec.europa.eu/doclib/ November 1999 of the Governments of the Member docs/2009/june/tradoc_143373.pdf http://eur-lex.europa.eu/LexUriServ/ States meeting within the Council, 29 LexUriServ.do?uri=COM:1999:0619:FI October 2007 Communication from the N:EN:PDF
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EUROPEAN ECONOMIC AND Huisman,Elmy Sarrucco- 0320+0+DOC+PDF+V0//EN SOCIAL COMMITTEE Fedorovtsjev,Terya Sarrucco,umers.. April 2011 Report on Fair Trade and Opinion of the European http://www.european-fair-trade- Development, (2005/2245(INI)), Economic and Social Committee association.org/efta/Doc/FT-E-2010. Rapporteur: Frithjof Schmidt, on the Communication from the pdf Committee on Development, 06 Commission to the Council, the June 2006 European Parliament and the A report on Fair Trade in 33 http://www.europarl.europa.eu/ European Economic and Social consumer countries. Jean-Marie sides/getDoc.do?pubRef=-// Committee: Contributing to Krier. A survey prepared on behalf EP//NONSGML+REPORT+A6- Sustainable Development: the Role of DAWS – Dutch Association of 2006-0207+0+DOC+PDF+V0// of Fair Trade and non-governmental Worldshops, Netherlands EN&language=EN trade-related sustainability http://www.european-fair-trade- assurance schemes, COM (2009), association.org/efta/Doc/FT-E- European Parliament Resolution on 20 January 2010 2007.pdf Fair Trade, A4-0198/98 (OJ C 226, http://www.fairtrade-advocacy. 20 July 1998) org/images/stories/Final_EESC_ EU LAW http://eur-lex.europa.eu/LexUriServ/ opinion_on_the_role_of_FT_20_ LexUriServ.do?uri=CELEX:51998IP01 January_2010.pdf Directive 2000/36/EC of the 98(01):EN:HTML European Parliament and of the Opinion of the European Economic Council of 23 June 2000, relating European Parliament Resolution on and Social Committee on Fair trade to cocoa and chocolate products promoting fairness and solidarity in Food Products: Self-regulation or intended for human consumption, OJ North South trade, A3-0377/93 (OJ Legislation? 1 October 2009 L 197, 03 August 2000 C 44, 14 February 1994) http://www.fairtrade-advocacy.org/ http://eur-lex.europa.eu/LexUriServ/ http://www.fairtrade-advocacy. images/stories/EESC_opinion_on_ LexUriServ.do?uri=OJ:L:2000:197:001 org/documents/EU%20official%20 FT_food_products_1_October_2009. 9:0025:EN:PDF papers%20related%20to%20FT/ pdf Official%20texts/A3-0373-93.pdf Partnership Agreement ACP-EC, EUROPEAN PARLIAMENT signed in Cotonou, 2000 (See art.23, FAIR TRADE ADVOCACY OFFICE letter g) Fair trade in public procurement in http://ec.europa.eu/development/ Fair Trade Standards and their the EU icenter/repository/agr01_en.pdf Verification in Brief, April 2007 http://www.europarl.europa. http://www.fairtrade-advocacy.org/ eu/RegData/bibliotheque/ Compendium on cooperation documents/FairTrade standards and briefing/2012/120334/LDM_ strategies (See para 2.6.3) their Verificationin Brief.pdf BRI(2012)120334_REV1_EN.pdf http://ec.europa.eu/development/ icenter/repository/compendium_ Unpeeling the banana trade, 2000 EUROPEAN FAIR TRADE en.pdf http://www.fairtrade-advocacy.org/ ASSOCIATION (EFTA) documents/unpeeling_the_banana_ EUROPEAN PARLIAMENT trade.pdf Researches on the impact of fair trade, Per October 2006 European Parliament Resolution on Spilling the bean on the coffee trade, http://www.european-fair-trade- Fair Trade and development, (P6_ 2002 association.org/Efta/Doc/Impact- TA(2006)0320), 06 July 2006 http://www.fairtrade-advocacy.org/ studies-10-2006.pdf http://www.europarl.europa.eu/ documents/Spilling_Beans_Trade.pdf sides/getDoc.do?pubRef=-//EP// Mark Boonman,Wendela NONSGML+TA+P6-TA-2006-
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FAIR TRADE FOUNDATION http://www.fairtrade.org.uk/what docs/2012/M/Monitoring%20the%20 scope%20and%20benefits%20of%20 Fairtrade sales reach half a billion is_fairtrade/facts_and_figures.aspx Fairtrade%202011%20PUBLIC%20 pounds, February 2008 FLO%20Dec11.pdf http://www.fairtrade.org.uk/ Making international supply chains press_office/press_releases_and_ work for smallholder farmers: A Institute of Development Studies. statements/feb_2008/fairtrade_ comparative study of six fair trade December 2011. Fairtrade in the fortnight_launch.aspx value chains. A Fairtrade Foundation Banana Sector. Report. May 2012 http://www.fairtrade.org.uk/ Thriving in a Hostile Environment: http://www.fairtrade.org.uk/ includes/documents/cm_ Fairtrade’s Role as a Positive Market includes/documents/cm_ docs/2011/F/Fairtrade%20in%20 Mechanism for Disadvantaged docs/2012/M/Making_international_ the%20Banana%20Sector_IDS%20 Producers, 2007 supply_chains_work_for_ Final%20Report%20December%20 http://www.fairtrade.org.uk/ smallholder%20farmers.pdf 2011.pdf includes/documents/cm_ docs/2008/a/alex_nichols.pdf Fairtrade Foundation. June 2010. Fairtrade Foundation. December Fairtrade Tea: Early Impacts in 2011. Summary and Fairtrade Is Fairtrade a subsidy that Malawi. Response to Fairtrade in the Banana encourages farmers to grow more http://www.fairtrade.org.uk/ Sector. coffee and therefore contribute to includes/documents/cm_ http://www.fairtrade.org.uk/ global oversupply and low prices? docs/2010/f/ft_malawi_tea_report_ includes/documents/cm_ http://www.fairtrade.org.uk/ aw2_small.pdf docs/2011/F/FT_Banana_Summary1. includes/documents/cm_ pdf docs/2008/F/1_Fairtrade_and_ Fairtrade Foundation. June 2010. oversupply.pdf Impacts of Fairtrade in South Africa. Fairtrade Foundation. May 2012. http://www.fairtrade.org.uk/ Impact of Fairtrade Cotton – Annual Report and Financial includes/documents/cm_ Fairtrade Foundation Response. Statements for the year docs/2010/f/finalimpactreport.pdf http://www.fairtrade.org.uk/ ended 31 December 2010 includes/documents/cm_ http://www.fairtrade.org.uk/ Fairtrade Foundation. April 2011. docs/2012/F/2_FTF%20Cotton%20 includes/documents/cm_ Taking Root: Fairtrade in Malawi. summary%20and%20response%20 docs/2011/2/1_2010%20Report%20 http://www.fairtrade.org. May%202012.pdf and%20Accounts%20FINAL.PDF uk/includes/documents/ cm_docs/2012/T/Taking_Root_ NRI and IDS. May 2012. Impact of Annual Review 2009/2010. Fairtrade_in_Malawi.pdf Fairtrade Cotton. http://www.fairtrade.org.uk/ http://www.fairtrade.org.uk/ includes/documents/cm_ Fairtrade Foundation. August 2011. includes/documents/cm_ docs/2010/f/ft_annual review_2010 Cocoa Commodity Briefing. docs/2012/I/1_Impact%20of%20 amend.pdf http://www.fairtrade.org.uk/ Fairtrade%20Cotton%20-%20 includes/documents/cm_ main%20report%20-%20final%20 FAQs – About Fairtrade products in docs/2011/C/Cocoa%20Briefing%20 Apr2012.pdf the UK. 2012. FINAL%208Sept11.pdf http://www.fairtrade.org.uk/what_ Fairtrade Foundation. May 2012. is_fairtrade/faqs.aspx Fairtrade International. December Coffee Commodity Briefing. 2011. Monitoring the scope and http://www.fairtrade.org.uk/ Sales of Fairtrade certified products benefits of Fairtrade. Third Edition. includes/documents/cm_ in the UK. Facts and figures on http://www.fairtrade.org.uk/ docs/2012/F/FT_Coffee_Report_ Fairtrade. 2012. includes/documents/cm_ May2012.pdf
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Coffee commodity briefing (full Report 2007 ftp://ftp.fao.org/docrep/fao/007/ briefing) (May 2012) http://www.fairtrade.net/fileadmin/ y5445e/y5445e00.pdf user_upload/content/FLO_AR2007_ Cocoa commodity briefing (full low_res.pdf ILO report) (Aug 2011) http://www.fairtrade.org.uk/ Shaping Global partnership. FLO Creating Market Opportunities for resources/reports_and_briefing_ International Annual report 2006- Small Enterprises: experiences of the papers.aspx 2007 Fair Trade Movement, 2002. http://www.fairtrade.net/uploads/ http://www.ilo.org/dyn/empent/ Fairtrade Foundation. 2011. media/Final_FLO_AR_2007_01.pdf docs/F1057768373/WP30-2002.pdf Windward Islands Farmers’ Association. Explanatory Document. Introducing INTER AMERICAN DEVELOPMENT http://www.fairtrade.org.uk/ Fairtrade and its organisations BANK (IADB) producers/bananas/winfa_2/default. http://www.fairtrade.net/uploads/ aspx media/Explan_Doc_Introducing_ Brazil, Promotion of socially Fairtrade.pdf responsible market opportunities – Fairtrade Foundation. 2011. Donors Memorandum Dougourakoroni Cotton Producers Explanatory Document for the http://idbdocs.iadb.org/wsdocs/ Co-operative, Mali. Generic Fairtrade Standard for Small getdocument.aspx?docnum=1041483 http://www.fairtrade.org.uk/ Farmers’ Organisations, 2006 producers/cotton/dougourakoroni_ http://www.fairtrade.net/uploads/ INTERNATIONAL INSTITUTE FOR cotton_producers.aspx media/Explan_Doc_Small_Farmers_ ENVIRONMENT AND DEVELOPMENT Mar_2006_EN_01.pdf (IIED) Fairtrade Foundation. 2011. MOBIOM, Organic Cotton Co-operative, Mali, Generic Fairtrade Standards for Agricultural Commodities, Trade and West Africa. Small Farmers’ Organizations, Sustainable Development, 2005 http://www.fairtrade.org.uk/ December 2007 http://www.iied.org/pubs/ producers/cotton/mobiom_mali_2. http://www.fairtrade.net/fileadmin/ pdfs/16500IIED.pdf aspx user_upload/content/Generic_ Fairtrade_Standard_SF_Dec_2007_ Challenging preconceptions about Fairtrade Foundation. 2011. UC-CPC EN.pdf trade in sustainable products. de Djidian ‘Danaya Ton’. Towards win-win-win for developing http://www.fairtrade.org.uk/ FAIRTRADE INTERNATIONAL countries, 2005 producers/cotton/uccpc_de_djidian/ http://www.iied.org/pubs/ default.aspx Challenge and Opportunity. pdfs/15500IIED.pdf Supplement to Annual Review 2010 Fairtrade Foundation. 2011. -11. 2010 Financials and Global Sales Sustainable Products and the PPMs Masauko Khembo, General Figures. 2010 Dilemma: how the international Manager, Kasinthula Cane Growers http://www.fairtrade.net/fileadmin/ community can help in resolving (KCG), Sugar Cane Co-operative, user_upload/content/2009/ developing countries’ concerns, Malawi. about_us/FLO_Annual-Financials- Sustainable Development Opinion, http://www.fairtrade.org.uk/ Sales_2010.pdf 2004 producers/cosmetics/kasinthula_ http://www.iied.org/pubs/ cane_growers_kcg_sugar_cane_ FOOD AND AGRICULTURE pdfs/11042IIED.pdf cooperative_malawi_2.aspx ORGANIZATION (FAO) Standards and sustainable trade, FAIR TRADE LABELLING FAO, The market for non- 2000 ORGANIZATION (FLO) traditional agricultural exports, FAO http://www.iied.org/pubs/pdfs/ Commodities and trade technical G02162.pdf An inspiration for change. Annual paper, 2004
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INTERNATIONAL TRADE CENTRE LexUriServ.do?uri=CELEX:21997P022 http://www.adamsmith.org/pdf/ (ITC) 7(29):EN:HTML groundsforcomplaint.pdf
Fair Trade, International Trade ORGANISATION FOR ECONOMIC Adam Smith Institute, Unfair Trade, Forum – Issue 2/2006 CO-OPERATION AND London, 2008 http://www.tradeforum.org/news/ DEVELOPMENT (OECD) http://www.adamsmith.org/images/ fullstory.php/aid/1031/Fair_Trade_. pdf/unfair_trade.pdf html Fair Trade and the Multilateral Trading System, OECD Papers, The Economics of Fair Trade: a guide Fair Trade as a business model, Volume 5, Number 2, July 2005 , pp. in plain English International Trade Forum – Issue 1-14. Downable for free at http:// http://www.udbs.dur.ac.uk/ 2/2006 www.ingentaconnect.com/ fairtraderesearch/The%20 http://www.tradeforum.org/news/ Economics%20of%20Fair%20 fullstory.php/aid/1025/Fair_Trade_ UNIVERSITY OF QUEBEC – Chair of Trade%20plain%20guide.pdf as_a_Business_Model.html Social Responsibility and Sustainable Development (CRSDD) House of Commons of the Who’s who in Fair Trade, United Kingdom - International International Trade Forum – Issue Fair Trade and the Solidarity Development Committee Fair Trade 2/2006 Economy: the Challenges Ahead, and Development, 2007 http://www.tradeforum.org/news/ Les cahiers de la Chaire – collection http://www.publications.parliament. fullstory.php/aid/1030/Who%92s_ recherché, n. 05-2006 uk/pa/cm200607/cmselect/ Who_in_Fair_Trade.html http://www.crsdd.uqam.ca/Pages/ cmintdev/356/356i.pdf docs /pdfCahiersRecherche /2006/ FT has limits as a model for 05 - 2006.pdf UK Food Group Briefing, Achieving development, International Trade fairness in trading between Forum – Issue 2/2006 The Institutionalization of Fair Trade: supermarkets and their agrifood http://www.tradeforum.org/news/ More than a Degraded Form of Social supply chains, 2005 fullstory.php/aid/1029/Fair_Trade_ Action, Les cahiers de la Chaire – http://www.eldis.org/fulltext/UKfood_ Has_Limits_as_a_Model_for_ collection recherché, n. 12-2006 brief_fairsuplychains_0905.pdf Development.html http://www.crsdd.uqam.ca/Pages/ docs/ pdfCahiersRecherche/ UNEP, The Trade and Environmental JOINT PARLIAMENTARY ASSEMBLY 2006/12-2006.pdf Effects of Ecolabels: Assessments EU-ACP (JPA) and Responses, UN Environment Other sources Programme, 2005 JPA Resolution on trade based on http://www.unep.ch/etb/ fairness and solidarity, OJ C_062, 27 Adam Smith Institute, Grounds for publications/Ecolabelpap141005f.pdf February 1997 complaint? “Fair trade” and the http://eur-lex.europa.eu/LexUriServ/ coffee crisis, 2004.
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Websites
Africa Fairtrade Network (AFN) www.divinechocolate.com http://www.fscus.org/ http://www.2can-consult.com/afn EcoLogic Finance Global Exchange Altereco www.ecologicfinance.org www.globalexchange.org www.altereco.com EL PUENTE, Germany International Fair Trade Association Befair www.el-puente.de (IFAT) http://www.befair.be/ http://www.ifat.org/ Equi’Sol, France Canadian Student Fair Trade www.equisol.org International Federation of Organic Network Agriculture Movements (IFOAM) http://www.csftn-recce.org/english/ European Fair Trade Association - EFTA http://www.ifoam.org/ index.html http://www.european-fair-trade- association.org/ International Organic Accreditation Catholic Relief Services Service (IOAS) http://www.crsfairtrade.org/index. Fair Trade Action Network http://www.ioas.org/ cfm http://www.fairtradeaction.net/ International Social and Conacado, Dominican Republic Fair Trade Advocacy Office Environmental Accreditation and http://conacado.com.do/ http://www.fairtrade-advocacy.org/ Labelling (ISEAL) http://www.isealalliance.org/ Conservation Agriculture Network Fair Trade Federation (CAN) www.fairtradefederation.org Lutheran World Relief http://www.rainforest-alliance.org/ www.lwr.org/fairtrade/index.asp index.cfm Fair Trade Foundation http://www.fairtrade.org.uk/ Marine Stewardship Council (MSC) Consumers International - CI http://www.msc.org/ http://www.consumersinternational. Fair Trade Institute – Documents org/ Gateway Max Havelaar Foundation http://www.fairtrade-institute.org/ http://www.maxhavelaar.nl/pages/ Co-op America database/publications.php?lang=en template.asp?rID=107 www.coopamerica.org Fairtrade Labelling Organizations Network European Worldshops - Cooperation for Fair Trade in Africa (FLO) NEWS! - COFTA http://www.fairtrade.net/ http://www.worldshops.org/ http://www.cofta.org/en/index.asp Fair Trade Original, the Netherlands Oikocredit – Fair finance, Fair trade Coordinadora Latinoamericana y del www.fairtrade.nl http://www.oikocredit.org/ Caribe de Comercio Justo - Latin fairtrade/en/Organic Consumers American and Caribbean Network of Fair Trade Resource Network Association Small Fair Trade Producers (CLAC) www.fairtraderesource.org www.organicconsumers.org http://www.claccomerciojusto.org/ english/profile/aboutus.html FINE Oxfam/Make Trade Fair http://www.fairtrade-advocacy.org/ http://www.maketradefair.org/ De Evenaar, the Netherlands www.de-evenaar.nl FLO-CERT People Tree, United Kingdom http://www.flo-cert.net www.peopletree.co.uk Divine Chocolate Ltd (UK), United Kingdom Forest Stewardship Council (FSC) Plate-Forme pour le Commerce
26 Does Fair Trade contribute to sustainable development?
Équitable Social Accountability International United Students for Fair Trade http://www.commercequitable.org/ (SAI) www.usft.org http://www.sa-intl.org/ Savanna Farmers Marketing Weltladen-Dachverband, Germany Company Limited, Ghana Ten Thousand Villages, Canada www.weltladen.de www.acdep.org www.tenthousandvillages.ca
27 Does Fair Trade contribute to sustainable development?
Glossary
Certification Committee Child Labour Continuous Improvement
Certification Committee (CC) is a Child labour means any work carried Continuous Improvement is, as a body which controls and advises on out by a child. management concept, a system of the quality of certification decisions, constant or ongoing incremental policies and procedures of a Code of Practice/Conduct improvements to a process or certification body. product based on constant or Code of practice/conduct means, in ongoing examination and evaluation Certification of Trade the context of ethical trading, a set of the process or product. of rules concerning labour practices Certification of Trade (Or Trade adopted by a company and meant Contract Production transactions): the process by which to apply internationally, and, in a certification body determines particular, to the labour practices of Contract Production (CP) means operator’s compliance with Fairtrade its suppliers and subcontractors. unorganised farmers who are Standards for traders and related contracted for performing specific certification policies and contracts. Collective Bargaining Agreement production tasks to sell their (CBA) products to a service provider. In the Certification system Fairtrade context, CP also means the Collective Bargaining Agreement partnership between the promoting Certification System is a system (CBA) means the right for workers’ body and the Fairtrade Producers. with its own rules, procedures organisations to negotiate and management for carrying out with employers or employers’ Conventional Product certification. organisations on behalf of their members to determine working Conventional product is any product Certification Unit conditions and terms of employment. not produced or traded according to the requirements of Fairtrade Certification Unit (CU) is the Conformity Standards. unit which evaluates operator’s compliance with Fairtrade Standards Conformity is the fulfilment of a Corporate Social Responsibility and certification policies and requirement. (CSR) contracts. There are two Certification Units in FLO-CERT: Producer Consensus Corporate Social Responsibility Certification and Trade Certification. (CSR) is a concept of business ethics Consensus is an agreement based on the idea that companies Chain of Custody supported by all parties concerned have stakeholders who are broadly without using the rule of majority, defined as anyone or a group Chain of Custody are the steps from but by taking into account the affected by the activities of the the start of the primary production, views of all parties concerned and company. The idea of CSR is that including the growing, handling, by reconciliation of any conflicting a company should by accountable processing and retailing up to buying arguments. to its stakeholders. For this reason, by the consumer. the subjects of CSR focus on how Constitution companies should identify and Child “engage” stakeholders and how Constitution is a legally binding they should determine, measure and Child means any person less than document that defines how the report the impact of their activities 15 years of age, unless otherwise power and authority are distributed on others. defined by local legislation. and limited within an organisation or company.
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Corrective Action Evaluation Fairtrade benefits
Corrective Actions are measures Evaluation means interpreting Fairtrade benefits are those means taken to address existing non- and analysing the monitoring data created through the Fairtrade system conformance or to prevent against requirements of Fairtrade that allow small farmers and workers recurrence of non-conformance. Standards. to improve their standard of living.
Cost of Sustainable Production Fair Trade Fairtrade benefits include amongst (COSP) others facilitated market access, Fair Trade is a trading partnership, long-term trade relationships, better Cost of Sustainable Production based on dialogue, transparency and trading conditions and, in most (COSP) are the costs related to respect, that seeks greater equity cases, a Fairtrade minimum price for sustainably producing a product in a in international trade. It contributes the product as well as a Fairtrade social, economic and environmental to sustainable development by premium. way in conformity with Fairtrade offering better trading conditions Standards. to, and securing the rights of, Fairtrade Bodies marginalized producers and workers Criterios Fairtrade Standards – especially in the South. Fair Trade Fairtrade Bodies is a term referring organisations, backed by consumers, to any unit, organisation or decision- Fairtrade Standards (Fairtrade are engaged actively in supporting making body in the Fairtrade system; Generic Standards and Fairtrade producers, awareness raising and comprising, for example, the FLO Product-specific Standards) are the in campaigning for changes in the Board, the Standards Committee, set of requirements that producers rules and practice of conventional PBU, FLO CERT, LIs. and traders have to meet to be international trade. (FINE’s certified as Fairtrade Producers or definition). Fairtrade Certification Traders. Fair Trade’s rules guarantee: a Fairtrade Certification is the process Distributor living wage in the local context, by which a certification body offering employees opportunities determines operator’s compliance Distributor means any operator for advancement, providing with relevant Fairtrade Standards and or entity that purchases certified equal opportunities for all people, certification policies and contracts. products for sale and does not particularly the most disadvantaged, transform that product in any way. engaging in environmentally Fairtrade Certified sustainable practices, being open to Draft Standards public accountability, building long- Fairtrade Certified means that a term trade relationships, providing determination against Fairtrade Draft Standard is a proposed healthy and safe working conditions Standards has been made and standard that is available generally within the local context, providing that an operator/a product is in for comment, voting or approval. financial and technical assistance to compliance with Fairtrade Standards. producers whenever possible. Empowerment Fairtrade Certified Producer Fairtrade Empowerment means increased Fairtrade Certified Producer opportunity for women and men to Fairtrade (FT) means all or any is a Fairtrade Producer which control their life. It gives power to part of the activities, standards and has been certified against the make decisions, to have your voice certification systems (in particular Fairtrade Standards relevant to that heard, and/or put things on the products or operators) of FLO e.V., organisation. agenda. FLO-CERT and its Labelling Initiatives.
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Fairtrade Certified Trader FLO-CERT and all Labelling Initiatives. may not be used for expenditure for which the company is legally Fairtrade Certified Trader is an Fairtrade Standards responsible, nor may it be used to exporter, importer, manufacturer or support the company’s running processor which has been certified Fairtrade Standards (Fairtrade costs or costs of compliance with against the Fairtrade Standards Generic Standards and Fairtrade Fairtrade standards. relevant to that organisation. Product-specific Standards) are the set of requirements that producers Faitrade Producer Fairtrade Explanatory Documents and traders have to meet to be certified as Fairtrade Producers or Fairtrade Producer means any entity Fairtrade explanatory documents are Traders. located in a producing country documents which further detail how that has been certified under the the Fairtrade Standards need to be Fairtrade Premium Generic Standards for Small Farmers’ interpreted and put into practice. Organizations, Generic Standards for This is the main economic benefit Hired Labour Situations or Contract Fairtrade Generic Product Standards of Fairtrade for workers, their Production standards of FLO. families and the community. The Fairtrade Generic Product Standards Fairtrade Premium is an additional FLO-CERT are the set of requirements that amount of money paid to Fairtrade producers or traders must meet organizations by the buyers of FLO CERT/FLO-CERT GmbH is irrespective of the product produced Fairtrade products. The Fairtrade the wholly-owned subsidiary of or traded to be certified as Fairtrade Premium is paid in addition to the FLO (including any body partly Producers or Traders. product price which is paid to the or wholly owned by FLO-CERT/ company (either the FLO minimum FLO-CERT GmbH or contracted to Fairtrade Generic Standards price or the market price, whichever provide services to it) responsible is higher). The level of the Fairtrade for the Fairtrade inspection and/or Fairtrade Generic Standards are the Premium is set by FLO Standards certification of producers and traders. set of requirements that producers Unit (SU) for each specific product or traders of any Fairtrade Products and is available in the FLO product Forced Labour have to meet to be certified as standards (see http://www.fairtrade. Fairtrade Producers or Traders. net/product_standards.html for Forced Labour means work or more details). The amount of service undertaken by a person Fairtrade Import Fairtrade Premium that a Fairtrade under duress or menace of penalty in organization receives will depend on circumstances where the person has Fairtrade Import is the first purchase the quantity of Fairtrade products not offered him/herself voluntarily. of a Fairtrade Product from the that have been sold. The Fairtrade original producing country. Premium is not paid to the company, Freedom of association but instead is paid directly into a Fairtrade Label separate bank account, managed Freedom of association is the right by the Joint Body. The Fairtrade of all workers to join or form a Fairtrade Label means any product Premium is paid separately from trade union of their own choosing certification label owned by FLO payments for the product and the and carry out trade union activities or one or more of its members that company does not own the Fairtrade without interference from their is used to denote compliance with Premium. The Fairtrade Premium employer or from public authorities. Fairtrade Standards.. is intended to be used for the benefit of the workers, their families Hired Labour Fairtrade Labelling and their communities, within the framework of Fairtrade Premium Hired Labour (HL) means employed Fairtrade Labelling means FLO e.V., projects. The Fairtrade Premium workers who work for somebody
30 Does Fair Trade contribute to sustainable development?
else, for example a commercial farm of the workers and their families as marketing, promoting sales of or a factory. and communities, the FLO Generic Fairtrade Products and education in Standards for Hired Labour require respect of Fairtrade. International Fairtrade Certification that the Fairtrade Premium is Mark owned by a separate legal body Liaison Officer representing all the workers. The International Fairtrade Certification Joint Body is an elected group Liaison Officer (LO) is a consultant Mark (ICM) is a trademark owned of worker representatives and working for FLO e.V. and carrying by FLO and used by all Labelling management representatives who out information and support Initiatives except for Max Havelaar are responsible for ‘jointly’ managing, functions with Fairtrade Producers. Switzerland, Transfair Canada and investing and spending the Fairtrade Liaison officers assist Fairtrade Transfair USA. The mark identifies Premium on behalf of this legal body. Producers in understanding and the related product as being In other words, the workers and meeting requirements (certification) Fairtrade Certified. management of the company work and are involved in supporting together to achieve improvements market access and development. International Labour Convention in the workers’ lives using the Fairtrade Premium. The Joint Body License fee International Labour Convention has has two main responsibilities: firstly the force of international law, and to inform and consult all the workers License fee is the fee which states that ratify them are required of the company about the Fairtrade Licensees pay to a Labelling Initiative to incorporate the principles in standards and the Fairtrade Premium for the use of the International national law and to ensure the and its use; and secondly to manage Fairtrade Certification Mark on a implementation of the law. In and invest the Fairtrade Premium Fairtrade Product. addition, all ILO member states, transparently and responsibly. regardless of ratification, are obliged Licensee to respect, promote and realise the Labelling principles contained in the core Licensee is an organisation licensed ILO Conventions, which address Labelling means any words, by a Labelling Initiative to use a freedom of association and the right particulars, trademarks, brand names, Fairtrade label on Fairtrade Products. to collective bargaining, forced pictorial matter or symbol placed on labour, discrimination and equal any packaging, document, notice, Minimum Requirements remuneration. label, ring or collar accompanying or referring to a product referred to as Minimum Requirements are Fairtrade International Labour Organisation a certified product. Standards requirements which all producers must meet from the International Labour Organisation Labelling Initiative moment they join Fairtrade. (ILO) is the UN specialised agency which seeks the promotion of social Labelling Initiatives are national Monitoring justice and internationally recognised organizations which license human and labour rights. It formulates companies to use the FAIRTRADE Monitoring means measuring a set of international labour standards Mark on consumer products and indicators that are tracked over time in the form of Conventions and promote Fairtrade in their countries. to identify trends Recommendations setting minimum Labelling Initiative shall mean full standards of basic labour rights. member organisations of FLO with Producer an exclusive, defined geographical Joint Body territory whose main purpose is Grower or farmer of Certified to licence a Fairtrade label and Fairtrade products To ensure that the Fairtrade which are responsible for local Premium is managed for the benefit licensing of a Fairtrade label as well Producer Bussiness Unit
31 Does Fair Trade contribute to sustainable development?
Producer Business Unit (PBU) is intermediary organisation, either an organisation to take responsibility the FLO business unit that advises a trader (exporter/trader) or non- for the impacts of its activities producers on compliance with trader (NGO or private) forming a on society and the environment, Fairtrade Standards and assists in partnership with the producers it where these actions are consistent market access and development. contracts with. The promoting body with the interests of society enables the individual producer and sustainable development; Producer certification to gain autonomy and to organise are based on ethical behaviour, itself. It is responsible for the current compliance with applicable law and Producer Certification (PC) is the management of the Fairtrade intergovernmental instruments and certification of producers against the Premium to individual producers. are integrated into the ongoing Fairtrade Standards relevant to them. activities of an organisation. Requirement Producer Executive Body Socio-economic development Requirement is a provision that Producer Executive Body (PEB) in conveys criteria to be fulfilled. FLO considers socio-economic the context of contract production development to be a process comprises elected representatives Review resulting in changes which improve of the individual contract production the capacity of a community to producers. The PEB is the Review is an activity of checking a fulfill its aspirations. The aim is to intermediary between the individual document or process to determine empower individuals and groups with producers and the promoting body. whether it is to be reaffirmed, the skills they need to identify their It also represents the producers’ changed or withdrawn. needs and priorities and to develop interest versus the buyers of the plans and projects to address these. produce and ensures that the Revision The Fairtrade Premium is intended to Fairtrade Premium is handled be used both for the empowerment properly. Revision is an introduction of all of workers, and also for investing necessary changes to the substance in plans and projects for social and Progress Requierements and presentation of a document or economic improvement in the wider process. community. The Fairtrade Premium For companies: these are cannot solve all the social and requirements against which certified Small Farmers economic problems and needs of the companies must demonstrate workers and the community. But if performance or efforts towards long- Small Farmers (SF) are producers it is invested wisely and builds the term improvement and which should who are not structurally dependent capacity of workers to change their be developed according to a plan on permanent hired labour and who own lives, the Fairtrade Premium can agreed by the management of the manage their production activity have long-lasting benefits. company, some within a specified mainly with own and family labour. period of time. Standards Small farmers Organisation For Small Farmers: these are Standard is a set of defined criteria requirements on which certified Small Farmer Organisation (SFO) giving the requirements which must producers must show permanent is a group primarily consisting of be attained. A standard provides, improvement. organised small farmers who work for common and repeated use, for themselves, for example a co- rules, guidelines or characteristics Promoting Body operative or association. for products or related processes and production methods. It may Promoting Body (PB) in the Social Responsibility also include terminology, symbols, context of contract production packaging, marking or labelling can be any legally established Social responsibility means actions of requirements. Standard requirements
32 Does Fair Trade contribute to sustainable development?
are meant to comply with and are Trade Certification which is entitled to join unions and based on stated objectives. therefore normally excludes middle Trade Certification (TC) is the and senior management. Standards Body certification of traders against the Fairtrade Standards relevant to them Workers Committee Standards Body is a recognised body at national, regional or international Trader Workers Committee (WC) is a level that has as a principal function, committee of representatives of by virtue of its statutes, the Buyer, seller, manufacturer, transformer workers of a company dealing preparation, approval or adoption of of a Certified Fairtrade product with workers’ rights and working standards that are made available to conditions. the public. Transformer World Shop Standards Committee Transformer means any operator or entity that alters the characteristics A World Shop is defined as: Standards Committee (SC) is a of a Fairtrade Product through the committee created by the FLO Board use of physical or chemical or similar -- A shop that endorses, through and made up of representatives processes. its own mission or values of the stakeholders for Fairtrade statements, publicity material Standards. It acts as a decision Verification and actions, the definition and maker and provides guidance in the principles of Fair Trade. development of Fairtrade Standards. Verification is the confirmation through the provision of evidence -- The primary purpose for existing Standards Unit that specified requirements have been as a shop is to promote Fair Trade. fulfilled. Verification can be first party/ Fairly traded products therefore Standards Unit (SU) is the FLO internal (self assessment), second take up the most important share business unit that manages the party (by an entity of the supply chain of the shop’s stock. development of Fairtrade Standards. leading to approval) or third party/ external (by an independent party -- The shop reinvests the profits Sustainability leading to certification). from its sale of products into the Fair Trade system. Sustainability means the capacity Worker of economic, social, institutional -- The shop informs the public about and environmental aspects of Worker refers to all workers its aims, the origin of the products, human activity, and the non-human contracted by a company or the producers and about world environment, to continue into the producer organisation including trade. It supports campaigns long-term. migrant, temporary, seasonal, sub- to improve the situation of contracted and permanent workers. producers, as well as to influence Traceability It is not limited to field workers national and international and but includes all other hired labour international policies. Traceability is the ability to trace the personnel, e.g. employees working history, application and/or location in the administration. The term, of a product. however, is limited to personnel
33 Does Fair Trade contribute to sustainable development?
Footnotes
1 Most text in this Reader has been directly countries. 33 The Fairtrade Foundation. 2010. Annual Report and taken from the original documents or websites and Financial Statements for the year ended 31 December is intended not to exhaustively cover the issue of 18 FLO, Shaping Global partnership. FLO International 2010. http://www.fairtrade.org.uk/includes/documents/ Fair Trade but to provide for a brief overview and Annual report 2006-2007, http://www.fairtrade.net/ cm_docs/2011/2/1_2010%20Report%20and%20 information resources. For any input, kindly contact uploads/media/Final_FLO_AR_2007_01.pdf Accounts%20FINAL.PDF, p. 3 at CTA Isolina Boto ([email protected]) or Ronalee Biasca ([email protected]). The Reader and most of the resources 19 Source ILO, Creating Market Opportunities for 34 Fairtrade International. 2010. Challenge and are available at http://brusselsbriefings.net/. Small Enterprises: experiences of the Fair Trade Opportunity. Supplement to Annual Review 2010 -11. Movement, 2002, http://www.ilo.org/dyn/empent/ 2010 Financials and Global Sales Figures. Available 2 OECD, Fair Trade and the Multilateral Trading docs/F1057768373/WP30-2002.pdf at: http://www.fairtrade.net/fileadmin/user_upload/ System, OECD Papers, Volume 5, Number 2, July content/2009/about_us/FLO_Annual-Financials- 2005 , pp. 1-14. Downable for free at http://www. 20 Source, European Parliament, Report on Fair Trade Sales_2010.pdf , Adapted from table on p. 2 ingentaconnect.com/ and Development, (2005/2245(INI)), Rapporteur: Frithjof Schmidt, Committee on Development, 06 June 35 Fairtrade Foundation. 2012. FAQs – About Fairtrade 3 Inter-American development Bank, Brazil, 2006, http://www.europarl.europa.eu/sides/getDoc. products in the UK. Available at: http://www.fairtrade. Promotion of socially responsible market opportunities do?pubRef=-//EP//NONSGML+REPORT+A6-2006- org.uk/what_is_fairtrade/faqs.aspx – Donors Memorandum, http://idbdocs.iadb.org/ 0207+0+DOC+PDF+V0//EN&language=EN wsdocs/getdocument.aspx?docnum=1041483 36 Fairtrade Foundation. 2012. Sales of Fairtrade 21 Communication from the Commission to the certified products in the UK. Facts and figures on 4 IFAT, 60 years of Fair Trade, http://www.ifat.org/ Council on Fair Trade, COM(1999) 619 final, 29 Fairtrade. Available at: http://www.fairtrade.org.uk/ index.php?option=com_content&task=view&id=10&Item November 1999 what_is_fairtrade/facts_and_figures.aspx id=12&limit=1&limitstart=1 http://eur-lex.europa.eu/LexUriServ/LexUriServ. 37 Fairtrade International. 2010. Challenge and 5 European Parliament, Resolution on Fair Trade, A4- do?uri=COM:1999:0619:FIN:EN:PDF Opportunity. Supplement to Annual Review 2010 -11. 0198/98, OJ C 226/73, 20.07.1998. 2010 Financials and Global Sales Figures. Available 22 Inter American Development Bank (IADB), Brazil - at: http://www.fairtrade.net/fileadmin/user_upload/ 6 Communication from the Commission on Fair Promotion of socially responsible market opportunities content/2009/about_us/FLO_Annual-Financials- Trade, COM (1999) 619 final, 29.11.1999. – Donors Memorandum, http://idbdocs.iadb.org/ Sales_2010.pdf , Adapted from table on p. 3 wsdocs/getdocument.aspx?docnum=1041483 7 Art. 23 (g) Partnership Agreement ACP-EC, signed 38 Source: R. Renwick (WINFA), Fairtrade in Cotonou on 23 June 2000. 23 Source, European Parliament, Report on Fair Trade Development in the Windward Islands, paper prepared and Development, cit. for the 16th April 2008 Brussels Development Briefing. 8 Communication from the Commission, Agricultural Commodity Chains, Dependence and Poverty – A 24 Source: Fair Trade Advocacy Office, Fair Trade 39 Fairtrade Foundation. 2011. Windward Islands proposal for an EU Action Plan, COM (2004) 89, Standards and their Verification in Brief, April 2007 Farmers’ Association. http://www.fairtrade.org.uk/ 12.02.2004. producers/bananas/winfa_2/default.aspx http://www.fairtrade-advocacy.org/documents/ 9 Communication from the Commission, Policy FairTradestandardsandtheirVerificationinBrief.pdf 40 Source: M. Ouattara (AProCA), Le coton issu du Coherence for Development – Accelerating progress Commerce Equitable : quand le Commerce Equitable 25 Source, UK Food Group Briefing, Achieving fairness towards attaining the Millennium Development Goals, soutient les produits transformés et à plus grande in trading between supermarkets and their agrifood COM (2005) 134, 12.04.2005. valeur ajoutée (Fair Trade cotton: when fair trade supply chains, 2005, http://www.eldis.org/fulltext/ supports processed products and greater value added), UKfood_brief_fairsuplychains_0905.pdf 10 European Parliament, Resolution on Fair Trade and paper prepared for the 16th April 2008 Brussels development, P6_TA (2006)0320, 06.07.2006. 26 Fair Trade Advocacy Office, Fair Trade Standards Development Briefing and their Verification in Brief, cit. 11 This is the definition produced by FINE, an 41 Fairtrade Foundation. 2011. Dougourakoroni Cotton informal network that involves the Fairtrade Labelling Producers Co-operative, Mali. http://www.fairtrade. Organizations International (FLO), the International For more information on Generic Fairtrade Standards for Small Farmers’ Organizations see FLO, Generic org.uk/producers/cotton/dougourakoroni_cotton_ Federation for Alternative Trade (IFAT), the Network of producers.aspx European World Shops (NEWS!) and the European Fair Fairtrade Standards for Small Farmers’ Organizations, December 2007, http://www.fairtrade.net/fileadmin/ Trade Association (EFTA). 42 Fairtrade Foundation. 2011. MOBIOM, Organic user_upload/content/Generic_Fairtrade_Standard_SF_ Cotton Co-operative, Mali, West Africa. http://www. Dec_2007_EN.pdf and 12 The term “sustainable” trade has been linked to fairtrade.org.uk/producers/cotton/mobiom_mali_2. the definition of sustainability used in the Brundtland aspx Report and confirmed at the Rio and Johannesburg Explanatory Document for the Generic Fairtrade Standard for Small Farmers’ Organisations, 2006 World Summits on Sustainable Development. 43 Fairtrade Foundation. 2011. UC-CPC de Djidian http://www.fairtrade.net/uploads/media/Explan_Doc_ ‘Danaya Ton’. http://www.fairtrade.org.uk/producers/ 13 A group of FT NGOs participating in the ETI is cotton/uccpc_de_djidian/default.aspx currently lobbying for a broadening of the ethical Small_Farmers_Mar_2006_EN_01.pdf trade concept to pay more attention to these issues 27 UK Food Group Briefing, Achieving fairness in 44 Fairtrade Foundation. 2011. Masauko Khembo, (information supplied by Fair Trade Foundation). trading between supermarkets and their agrifood General Manager, Kasinthula Cane Growers (KCG), supply chains, 2005 Sugar Cane Co-operative, Malawi. http://www.fairtrade. Fair Trade: Overview, Impact, Challenges. org.uk/producers/cosmetics/kasinthula_cane_growers_ kcg_sugar_cane_cooperative_malawi_2.aspx 14 See Communication from the Commission http://www.eldis.org/fulltext/UKfood_brief_ fairsuplychains_0905.pdf to the Council on Fair Trade, COM(1999) 45 The survey interviewed a nationally representative 619 final, 29 November 1999, p. 4http:// 28 Fair Trade Advocacy Office, Fair Trade Standards quota sample of 1.947 adults throughout Great Britain eur-lex.europa.eu/LexUriServ/LexUriServ. and their Verification in Brief, April 2007 in 121 sampling points. The survey asked people to do?uri=COM:1999:0619:FIN:EN:PDF identify the Fairtrade symbol, excluding the text which http://www.fairtrade-advocacy.org/documents/ is only used in the UK. This symbol (without the text) 15 Source: Fair Trade: Overview, Impact, Challenges. FairTradestandardsandtheirVerificationinBrief.pdf is used by FLO labeling initiatives. The survey found Study to Inform DFID’s Support to Fair Trade, 2000 that 53% of adults correctly associate the FAIRTRADE 29 See OECD, Fair Trade and the Multilateral Trading http://www.agtradepolicy.org/output/resource/Fair2. symbol excluding the text box with “a better deal for System 2005, cit. pdf third world producer”. Source: FLO website http:// www.fairtrade.org.uk/what_is_fairtrade/facts_and_ 30 UK Food Group Briefing, Achieving fairness in 16 See OECD, Fair Trade and the Multilateral Trading figures.aspx. trading, cit. System, OECD Papers, Volume 5, Number 2, July 46 Source: FLO website http://www.fairtrade.org.uk/ 2005 , pp. 1-14. Available for free at http://www. 31 Fair Trade Advocacy Office, Fair Trade Standards what_is_fairtrade/facts_and_figures.aspx. ingentaconnect.com/ and their Verification, cit. 47 Fairtrade Foundation. Annual Review 2009/2010. 17 Labelling Initiatives are national organizations 32 Source, European Parliament, Report on Fair Trade Available at: http://www.fairtrade.org.uk/includes/ which license companies to use the FAIRTRADE Mark and Development, cit. on consumer products and promote Fairtrade in their documents/cm_docs/2010/f/ft_annual_review_2010_
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amend.pdf, p. 3 trading, cit. 51 Source OECD, Fair Trade and the Multilateral Trading System 2005, cit. 48 Fair trade in public procurement in the EU. 50 A. Tallontire, Challenges facing Fair Trade: which European Parliament. 17/7/2012 http://www. way now? Paper for the DSA conference 2001, Different 52 Source: FLO-CERT, http://www.flo-cert.net/ europarl.europa.eu/RegData/bibliotheque/ Poverties, Different Policies, IDPM, Manchester 10-12 flo-cert/main.php?id=20 and http://www.fairtrade.net/ briefing/2012/120334/LDM_BRI(2012)120334_REV1_ September 2001, Natural Resources and Ethical Trade uploads/media/Explan_Doc_Fairtrade_Premium_and_ EN.pdf programme, NRI, http://www.greenbeanery.ca/bean/ Joint_Body_Dec_2007_EN.pdf documents/conf01tallontire.doc 49 UK Food Group Briefing, Achieving fairness in
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