Brussels Rural Development Briefings A series of meetings on ACP-EU development issues

Promoting Responsible and Sustainable Sourcing Through Fair Trade

This Reader was prepared by Lebo Mofolo, Junior Programme Associate, CTA Brussels Office Isolina Boto, Manager of the CTA Brussels Office June 2016 Promoting Responsible and Sustainable Sourcing Through Fair Trade

This Reader was prepared by Briefing n. 44 Lebo Mofolo, Junior Programme Associate, CTA Brussels Office With the assistance of Isolina Boto, Promoting Manager, CTA Brussels Office Responsible and Sustainable The information in this document was compiled as background Sourcing Through reading material for the 44th Fair Trade Brussels Development Briefing on Promoting Responsible and Sustainable Sourcing Through Fair Trade. The Reader and most of the resources are available at Brussels, 22 June 2016 http://brusselsbriefings.net Promoting Responsible and Sustainable Sourcing Through Fair Trade

Table of Contents

1. Introduction ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 4

2. What is Fair Trade: concepts and key players ������������������������������������������������������������������������������������������������������������������������ 9

3. Fairtrade as means to Responsible Agricultural Sourcing �������������������������������������������������������������������������������������������������� 17

4. Fairtrade in international supply chains: Issues and Implications for the ACP ��������������������������������������������������������������� 27

5. Fair Trade in ACP-EU Trade context: scale, opportunities, successes and Case Studies ��������������������������������������������� 29

Annexes ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������??

Glossary �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������40

Acronyms �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 47

Resources ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������49

Websites ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������60

(Endnotes)...... 62 Promoting Responsible and Sustainable Sourcing Through Fair Trade

1. Introduction

Rationale The range and functions of standards agencies were also involved and certification methods have in actively working to support The term “Fair Trade” (FT) has changed, to cover new areas of producers in the Global South to various meanings. In this Reader, commerce beyond those traditionally reduce inequality and poverty in it is used to indicate the “Fair concerned with FT, for example their livelihoods.4 Trade movement”, represented in public procurement or services. particular by Fairtrade Labelling This necessitates a broader analysis The commercialisation of fair trade Organisations International (FLO) of the trading regime between started in the United States, where and its associate organisations developing and developed countries Ten Thousand Villages (formerly (and hence the use of “Fair further to the activities of the FLO Self Help Crafts) began buying Trade” in this note is with capital and its associate organisations. In needlework from Puerto Rico in 1946, letters). These groups aim to this regard, equitable trade is not and SERRV began to trade with poor provide an alternative business in and of itself a specific standard communities in the South in the late which attempts to redistribute framework, but rather encompasses 1940s. The first formal “Fair Trade” returns to factors of production all the principles of a more balanced, shop which sold these and other in a manner that is “fairer” for fairer and sustainable trade items opened in 1958 in the USA. developing-country producers. In commercial relationship between this sense, conventional trading producers and consumers, the The retail development of Fair Trade relations involving developing former largely constituting farmers in Europe date from the late 1950s country producers are deemed or other service providers from when Oxfam UK started to sell “unfair” insofar as the returns to developing countries. This has crafts made by Chinese refugees those producers are abnormally changed, and there is a growing in Oxfam shops. In 1964 it created low in an economic, environmental recognition and validation in the EU the first Fair Trade Organization. and/or social sense. Hence, Fair at least, that considerations that are Parallel initiatives were taking place Trade seeks to secure higher not purely about trade can be taken in the Netherlands and in 1967 the earnings for developing country into account in commercial activities, importing organization, Fair Trade small-producers that will allow regulation and partnerships.3 Original, was established. At the them to cover production costs, same time, Dutch third world groups earn higher returns and address Historical background began to sell cane sugar with the potential market failures such as message “by buying cane sugar environmental degradation and/or The fair trade concept has been you give people in poor countries a low labour standards.1 Fair Trade, developing in western nations place in the sun of prosperity”. These therefore, seeks to connect low- throughout the past 40 years or so, groups went on to sell handicrafts income producers and consumers in in response to a growing recognition from the South, and in 1969 the first large markets in more equitable and that benefits accruing from trading “Third World Shop” opened. World sustainable ways. It originates in a and trade growth are not necessarily Shops, or Fair Trade shops as they growing interest among consumers shared by all countries and all are called in other parts in the world, in large markets in the development layers of the population within each have played (and still play) a crucial of socially responsible traders, country in a comparable manner. role in the Fair Trade movement. that would allow for a “social They constitute not only points value added” in their commercial Fair or equitable trading has its roots of sales but are also very active in transactions. This value added is in the Italian and British cooperative campaigning and awareness-raising. generated when the purchase of a movement of the 19th Century, which product, besides its intrinsic value, was then followed by religious and During the 1960s and 1970s, NGOs gives the final consumer the benefit political movements in the 1950s and and socially motivated individuals in of knowing that it contributes to 60s in Britain and the US, seeking many countries in Asia, Africa and improve the quality of life of a group alternative trade models. Religious Latin America perceived the need for of low-income producers.2 organisations and development fair marketing organizations which

4 Promoting Responsible and Sustainable Sourcing Through Fair Trade

would provide advice, assistance and and the need to respond to changing poverty reduction and sustainable support to disadvantaged producers. global commodity prices and trade development”. Finally, in 2006, the Many such Southern Fair Trade regimes. In this regard, severe price European Parliament unanimously Organizations were established, volatility and instability in coffee adopted a resolution on Fair Trade, and links were made with the trade which led to the dismantling of recognizing the benefits achieved by new organizations in the North. the International Coffee Agreement the Fair Trade movement, suggesting These relationships were based on 1989, necessitated a rethink in coffee the development of an EU-wide partnership, dialogue, transparency marketing and retail. In this context, policy on Fair Trade11. and respect. The goal was greater Solidaridad, the Dutch development equity in international trade. agency, spearheaded the foundation Two very notable developments of the first ever Fair Trade label and in the ACP-EU trade relations took Parallel to this citizens’ movement, FT organisation, Max Havelaar in place between 2010 and 2015. Firstly, the developing countries were 1988, whose first FT labelled product the second revision of the Cotonou addressing international political was coffee. Agreement, which was concluded fora such as the second UNCTAD in 2010, saw significant revisions conference (United Nations Fair Trade in the ACP- and new provisions being made Conference on Trade and for economic and trade provision Development) in Delhi in 1968, to EU context between the ACP and the EU (title communicate the message “Trade II Cotonou Agreement, 2010), not Aid”. This approach put the Fair Trade has repeatedly been which amongst other things now emphasis on the establishment recognized by the European recognises the dependence of ACP of equitable trade relations with Commission and EU member countries on “commodities and a the South, instead of seeing the governments for its contribution to few key products, including value- North appropriate all the benefits poverty reduction and sustainable added agro-industry products”. and only returning a small part development. In 1998, the European Furthermore, agriculture has for the of these benefits in the form of Parliament adopted the “Resolution first time been inserted as a target development aid. on Fair Trade”6, which was followed policy area for EU support under in 1999 by the “Communication from the economic sector development The growth of Fair Trade (or the Commission to the Council on article.12 Lastly, Policy Coherence alternative trade as it was called in “Fair Trade”7. In 2000, the ACP- for Development (PDC) was also the early days) from the late 60s EU Cotonou Agreement made made a legal obligation for ACP-EU onwards grew as a response to specific reference to the promotion cooperation under Article 12, which poverty and sometimes disaster of Fair Trade8. In 2001 and 2002, also states that “the [European] in the South and focused on the several other EU documents Union acknowledges that Union marketing of craft products. Its explicitly mentioned Fair Trade, policies, other than development founders were often NGOs, working most notably the 2001 Green Paper policy, can support the development with their counterparts in countries in on Corporate Social Responsibility priorities of ACP States in line with the South, assisting them to establish and the 2002 Communication the objectives of this Agreement”. Southern Fair Trade Organizations on Trade and Development. The Economic Partnership that organize producers and In 2004, the EU adopted the Agreements which the EU has production, provide social services to “Agricultural Commodity Chains, concluded with the Caribbean producers, and export to the North. Dependence and Poverty – A Region (EU-CARIFORUM EPA) Alongside the development trade proposal for an EU Action Plan”, and more recently, with a number there was also a branch of solidarity with a specific reference to the of African regions (EU-Central trade. Organizations were set up Fair Trade movement which has Africa, EU-Eastern and Southern to import goods from progressive “been setting the trend for a more Africa, EU-ECOWAS, EU-SADC, countries in the South that were socio-economically responsible EU-EAC EPAs) seek to liberalise both politically and economically trade.”9 In 2005, in the EC trade between ACP countries and marginalised5. communication “Policy Coherence the EU, and were mandated under for Development – Accelerating the Cotonou Agreement. In the As its name indicates, Fair Trade progress towards attaining the texts of the agreements which has always been closely linked to Millennium Development Goals”10, have been published (CARIFORUM, developments in international trade, Fair Trade is mentioned as “a tool for Central Africa and EAC), no explicit

5 Promoting Responsible and Sustainable Sourcing Through Fair Trade

reference is made to fair or equitable to trade liberalization, which is the working with local authorities in trade, and the extent to which the only objective provided in Article the EU via the possible launch of EPAs are bound by the reference 206 TFEU [Treaty on the Functioning an ‘EU City for Fair and Ethical in the Cotonou Agreement to fair of the EU] but include other trade- Trade’ award.15 trade is arguable. A key area of related objectives.”13 concern in this context has been Notwithstanding these the policy space which ACP and In 2015, the European Commission developments, preference erosion EU Member States will have to published a trade and investment continues to be a longstanding exercise if they wish to legislate strategy titled “Trade for All: area of concern for ACP producers, to promote or secure provisions Towards a more responsible trade especially those exporting produce which concern certain policy issues and investment policy”14 where it that is already subject to a associated with fair or equitable made commitments to promote substantial amount of FT certification trade, such as labour, health, fair and ethical trade schemes, such as banana or sugar. Whereas environment, education and so on. particularly in order to facilitate there is considerable recognition As FT and ET are inherently and connections between fair trade in the revised Cotonou Agreement essentially concerned with exports, producers and consumers, and more of the risks of preference erosion, and therefore also secure access to broadly to raise awareness on supply and furthermore, obligations are in export markets (in this case, the EU and demand side issues relevant place for it to be addressed in the market for ACP goods) it is arguable to fair trade. According to the context of ACP-EU cooperation, it that the EPAs present an attractive Commission, it will: is still a topic which creates a high proposition for ACP producers degree of uncertainty, notably in insofar as they ensure as stable and -- use the existing structure for the agricultural sector, as it can long-term market access regime. implementation of FTAs to undermine one of the key tenets promote fair trade and other of FT certification, namely the Furthermore, 2010 also saw changes sustainability assurance schemes, guaranteed price which producers to the EUs trade and development like the EU organic scheme; get based on FT premium. legal regime through the Lisbon Treaty, which for example granted -- address fair and ethical trade more The positive trajectory of FT and the EU exclusive competency with systematically in the upcoming its recognition in the EU context regards foreign direct investment review of the EU ‘Aid for trade’ suffered a blow as a result of the and for the first time made an strategy and report on fair trade- 2008 financial crisis, the subsequent explicit link between trade and related projects as part of its global economic recession and the development in EU external action. annual ‘Aid for trade’ report; resulting euro-crisis.16 The general A key provision is Article 3(1) which drop in consumer demand and states that in its relations with the -- promote through the EU shift in policy perspective, made wider world, the EU shall contribute delegations and in cooperation it imperative for the Fairtrade to sustainable development, free with the High Representative, institutions and commercial regime and fair trade and the eradication of fair and ethical trade schemes to to re-state their value-added for poverty. In this sense, the EU and its small producers in third countries, consumers as well as producers Member States are therefore obliged building on existing best practice in a context where generally EU to contribute to greater fairness initiatives; institutions, Member States and in EU-ACP trade. In this case, it is governments were arguing for a arguable that fairness can be taken -- step up support to work in decrease in support to developing to signify both trade that is fairer for international fora, such as the countries. Strong responses from EU partners, including developing International Trade Centre, to FT stakeholders in some Members countries and their producers, as well gather market data in relation to States, notably the Netherlands, as trade that is fairer in the sense fair and ethical trade markets, Belgium and the UK meant that that it reduces trade distortion and which could then serve as a basis not only did sales in FT certified measurers which promote unfair to follow the evolution of the products recover since the crisis, but trading practices. According to some markets; and with certain products the growth analysis, “[a] careful reading of these in sales is higher than at pre-crisis provisions indicates that the general -- develop awareness-raising levels. Furthermore, certain Member trade objectives are not only limited activities in the EU, in particular States, such as Belgium, maintain

6 Promoting Responsible and Sustainable Sourcing Through Fair Trade

a strong engagement within their and social rights, including for of procurement and sourcing. development cooperation portfolio labour, health, safety and education. to support FT, for example the Trade Fairtrade’s certification system A critical development for Fair Trade, for Development Centre, which is is particularly aligned to SDG 2’s and other VSS and eco labels is that part of the Belgian Development targets in that it also sets minimum they are now legally recognised in Agency (BTC) programme, and pricing and premium floors for all EU Member States through the promotes fair trade, sustainable produce that is sold as Fairtrade, EU Procurement Directive passed trade and organic farming in partner which ingrains within the Fair Trade in 2014 (Directive 2014/24/EU) as countries. value chain an understanding that acceptable instruments by which to farmers and producers should have define technical standards for public Fair Trade as a means a greater share in economic value of procurement tenders. According the goods that they produce. to paragraph 74 of the Directive to Responsible “contracting authorities that wish to Agricultural Supply Although they started out as a niche purchase works, supplies or services market, VSS certified goods have with specific environmental, social Chains now become mainstream, and in 2014 or other characteristics should be over USD 7.8 billion in retail sales was able to refer to particular labels, such The contribution of the global achieved by Fairtrade International, as the European Eco-label, (multi-) trading system to sustainable and as this figure doesn’t include national eco-labels or any other label development can only be realised the US market, the real value of provided that the requirements for if more people are lifted out of Fairtrade sales globally is likely to be the label are linked to the subject- poverty through trade,17 and the much higher.20 Europe, particularly matter of the contract, such as the private sector and consumers play the United Kingdom, Germany description of the product and its a critical role in transforming value and France continue to be leading presentation, including packaging chains and commercial behaviour markets for Fairtrade, but retail requirements.” As a result, public in favour of fairer and sustainable sales continue to expand. In terms authorities in the EU are for the first practices. Ending poverty is the of Fairtrade production, African, time ever, Fair Trade and other VSS first sustainable development goal, Caribbean and Pacific countries can directly contribute through a followed by SDG2 which is to end make a significant contribution to the legal framework to responsible and hunger, achieve food security and global volume of Fairtrade products, sustainable sourcing by third parties improved nutrition and promote particularly in respect to certain (public bodies). sustainable agriculture. Notably, commodities such as cocoa, bananas, the majority of the targets of SDG2 coffee, tea and sugar. ACP countries The scale of the public or specifically call for global agricultural were within the top five countries government procurement markets systems and trade which contribute with the highest shares of Fairtrade is very significant, and it presents an more towards fairer, sustainable area of total agricultural area in 2013, immense opportunity for both buyers growth; target 2.3 specifically calls and have experienced continued and producers of certified goods. for a doubling of smallholder farmers’ growth in Fairtrade production over In the EU alone, the total public income and productivity by 2030.18 the past decade. procurement spending (including The 12th SDG concerns ensuring state-owned enterprises) accounted sustainable consumption and Along with an increase in the for EUR 2.4 trillion, corresponding production patterns, with specific number of products for which to nearly 19% of EU GDP in 2011, targets dealing with companies Fairtrade certification has developed and it contributes to over 10% of and multinationals (target 12.6) and standards (increasingly non-food GDP in the United States.21 Whereas public procurement (target 12.7).19 agricultural products e.g. textiles, procurement for food and non-food and also minerals), there is a agricultural products and services Voluntary sustainability standards greater scope for the contribution has often been a matter of concern (VSS), such as Fair Trade, can act as of Fair Trade to sustainable and for development and aid agencies, important catalysts and vectors to responsible procurement through which have developed programmes promote sustainable development policy and legal developments that to increase local procurement,22 agriculture and trade, but setting are increasingly recognising the goods and services related to food and enforcing minimum standards role of VSS in sustainable trade and and other agricultural products relating to agricultural production development, particularly in the area also play a significant role in public

7 Promoting Responsible and Sustainable Sourcing Through Fair Trade

procurement – from catering for according to the UK Department for USD 3 billion or EUR 3.16 billion) on public institutions to food supporting Environment, Food and Rural Affairs public catering, which represents social programmes and so on.23 (DEFRA), the UK spends some approximately 5.5% of UK food Although global data is scant, GBP 2.4 billion per year (approx. service sector sales.24

8 Promoting Responsible and Sustainable Sourcing Through Fair Trade

2. What is Fair Trade?

2.1 Definition and Fair Trade may be viewed as one relating to agricultural commodities part along a continuum of related produced on plantations (particularly definitional issues non-governmental activities, which tea) include stipulations regarding aim at promoting “sustainable labour standards. About two-thirds Fair Trade is a particular type trade” and “ethical trade”26. of FT product lines are also certified of relationship between ‘ethical What distinguishes Fair Trade is as organic29. consumers’ and low-income that this movement focuses on producer households through producer groups and involves 2.2 Key players in international trade. The accepted paying participating producers definition of FT makes it clear: a pre-determined price for their Fair Trade labelled products. “Ethical trade” “Fair Trade is a trading focuses on production methods and The Fair Trade scheme involves the partnership based on dialogue, results, and has a corporate focus following three categories of actors: transparency and respect, in that it attempts to ensure that which seeks greater equity in labour, environmental, and human -- Fair Trade producers usually international trade. It contributes rights standards are upheld within represent co-operatives or to sustainable development by a corporation’s supply chain. In associations in developing offering better trading conditions particular, ethical trade promotes countries. To participate in the Fair to, and securing the rights of, adherence to core labour standards Trade scheme, they have to join marginalised producers and for employees and currently has their regional Fair Trade network. workers – especially in the no specific concern with the terms The three producer networks are: South. Fair Trade organisations of trade or seeking to overcome Fairtrade Africa, Coordinator of (backed by consumers) are the marginalisation of producers27. Fairtrade Latin America and the engaged actively in supporting As noted by the European Caribbean (CLAC) and Network of producers, awareness raising and Commission28, the FT concept could Asia and Pacific Producers (NAPP). in campaigning for changes in the be taken as applying to trading These producer networks generally rules and practice of conventional situations and commodities where constitute the first point of contact international trade.”25 social and environmental standards between smallholder farmers and are not, or cannot be (because producers, and the FT system. Equity lies at the core of what of the way in which production Producer networks are in turn FT seeks to achieve, and which is organised), enshrined in law. part of the international Fairtrade responds directly to the fact that Environmentally-driven trade is system, e.g. their producers are notwithstanding the contribution concerned with ensuring that certified by the Fairtrade Labelling made by producers in developing traded products are produced Organisation (FLO/FLOCERT), countries to global trade in goods, using environmentally sustainable and are also part of the Fair Trade and particularly smallholder farmers techniques. Federation (FTF) and the World in regards to agricultural produce, Fair Trade Organization (WFTO). the benefits they derive from this There is a considerable overlap Participation commits producers to volume of trade in pecuniary and of issues and attitudes between abide by Fair Trade standards, pay developmental terms has historically different types of alternative trade. annual fees and supply products at always been marginal in both On the demand side, individuals pre-determined prices. absolute and relative terms. and organisations sensitive to environmental issues are also -- Traders are importers, exporters FT, Ethical trade and likely to be concerned about social or processors who deal in Fair environmentally-driven trade justice. On the supply side, there is a Trade products, replacing so called significant level of overlap between middlemen. They are associated It is important to relate definitions the standards of different parts of with Fair Trade membership of FT to other alternative trade the alternative trade movement. organisations and subject to the approaches. In particular, FT labelling criteria standards, predetermined prices

9 Promoting Responsible and Sustainable Sourcing Through Fair Trade

and monitoring requirements federation to promote Fair Trade and of the organisations which a forum for exchanging information they join. Prime traders include to help members increase benefit Currently, FLO takes a very rigorous Solidar’Monde (France), Oxfam to producers. From the mid-1970s product-by-product approach to (UK), Oxfam Wereldwinkels onwards, a group of 30 ATOs met register development. The criteria (Belgium) and Claro (Switzerland), regularly to support each other are complex to develop for each to mention a few. and share ideas. A meeting of that sub-sector and the registers group in 1989 decided to formalize expensive to maintain—worth -- Retailers interface with the end the grouping and create an inclusive noting that Fairtrade labelling is the consumers of Fair Trade products. global network. It is the largest only labelling scheme in the world World Shops represent the most International Fair Trade Association where the consumer pays for the common outlets for Fair Trade for fair trade organizations with monitoring of the producers. products. Recently, however, Fair over 300 members. Southern Trade products have begun to make organisations began joining after From May 25th 2007, the Producer their way into general retailers, such the 1991 biennial IFAT conference, Networks CLAC (Coordinadora as supermarket chains30. and now represent more 60 per cent Latinoamericana y del Caribe de of the membership of the WFTO. It Comercio Justo), AFN (African Presently, (2014), the international allows accredited members to use Fairtrade Network) and NAP Fairtrade system includes three its FTO Mark—which it emphasises is (Network of Asian Producers) producer networks, 25 Fairtrade distinct from the FLO product label. officially became full members of organizations, Fairtrade International, The WFTO Fair Trade Organization FLO too32. and FLOCERT, the independent Mark was launched in January certification body of the global 2004. The Mark is available to NEWS—The Network of World Shops Fairtrade system. member organizations that meet the requirements of the WFTO NEWS coordinates the cooperation Moreover, there are five key monitoring system and identifies between World Shops all over networking or membership them as registered Fair Trade Western Europe. The network organizations that seek to bring Fair Organizations. WFTO is working consists of 15 national World Shops Trade organizations together. Each with FLO on a Quality Management associations in 13 different countries services a different group of Fair System for Fair Trade. and in total represents 2,500 World Trade organizations and therefore Shops.30 NEWS was established in takes a different perspective on the FLO/FLO-Cert—The Fairtrade 1994 and much of its focus is around nature of Fair Trade. Labelling Organisation maximizing the campaigning voice of the shops and their customers. The WFTO—World Fair Trade Following on from the successful European World Shops day is held Organisation (formerly IFAT launch of Max Havelaar coffees in May every year and focuses on – International Federation for in 1988, a number of independent shop-based activities ranging from Alternative Trade then International Fairtrade certification bodies product-tasting to campaigns. Fair Trade Association) were created. To coordinate the monitoring and standards of these EFTA—The European Fair Trade WFTO is the only worldwide Fair National labelling Initiatives (NIs), Association Trade networking organization that a common approach to monitoring brings producers and Alternative producers was agreed. Each agency EFTA was set up in 1990 as a trade Trade Organizations (ATOs) would monitor a list of producers association to enable cooperation together in a single organization. and share that information across between the European ATOs to The WFTO has three goals: market Europe. In 1997 this cooperation was be coordinated and effective. development, advocacy and building formalized through the creation of EFTA has 13 members who pay trust. WFTO aims to improve the FLO. There are now 20 NIs that use a significant membership fee livelihood of disadvantaged people the shared monitoring and standard (around $10,000) to resource a in developing countries by linking setting service that FLO offers. small secretariat headquartered in and strengthening organizations The NI then licence a local FLO Maastricht (Netherlands) with other that offer “just” alternatives to unfair endorsed mark to businesses in their staff based elsewhere in Europe. trade structures and practices. It is a geographic area31. There are three key ways that the

10 Promoting Responsible and Sustainable Sourcing Through Fair Trade

cooperation has developed. First, the members, some bilateral broad themes: For Life - Social EFTA acting as trade association arrangements will help to pull the Responsibility Certification, air for represents the European ATOs in Fair Trade players more closely Life - Social & Fair Trade Certification various fora and seeks to agree a together. For example, the WFTO and Individual Performance common line on issues external to has a self-monitoring scheme Rating. The Social & Fair Trade the movement. Through a small to prove you are a Fair Trade Certification, which is supported advocacy office in Brussels, EFTA organization. The next step would by a Fair Trade Development Fund, has raised the profile significantly be introduce external monitoring— is concerned with the typical Fair of Fair Trade with the European a role that FLO could play. Although Trade values, such as fair trade Parliament and Commission. Second, by no means certain that these relationships, fair prices and direct through creating an environment for steps will be taken, if they are then support of marginalised groups working together, particularly in the FINE may need to become more of and also audits according to Social food sectors, the EFTA members institution to support this increased Responsibility standards like fair share manufacturing and importing cooperation33. working conditions, environmental of key commodities. For example, performance and community the Swiss Fair Trade organization, 2.3 Other fair trade relations. Claro, coordinates the production of chocolate for all of the EFTA certification schemes UTZ members. The economies of scale derived from this make the product With the increase in popularity of the Founded in 2002, UTZ Certified is a reasonably successful in all of the fair trade approach, there has been a multistakeholder initiative operating European markets. Finally, because replication of the approach operated in the food and agriculture sector FLO only monitors against the seven by non-FLO organisations. across 33 countries. Originally agricultural commodities that it has an idea of a Guatemalan coffee registers for, EFTA has developed a EcoCert Fair Trade grower and a Dutch coffee roaster, system called Fair Data that shares UTZ Certified has grown into an monitoring information among all The most well-known are EcoCert independent, nongovernmental, not- of the participants. This covers Fair Trade, which provides for-profit organization dedicated to hundreds of non-FLO producers certification through auditing and creating a world where sustainable enabling the cost of monitoring Fair vouching for fair trade operators. farming is the norm. Farmers who Trade suppliers to be shared. The ESR standard which it enforces work with UTZ Certified in the global and owns concerns Fairness, marketplace receive a premium for FINE Solidarity, Responsibility (Equitable, their crop and they don’t have to pay Solidaire, Responsable in French). for taking part in the program. In an effort to unite standards and This is the standard against which approaches the four key Fair Trade operators are certified. It applies 2.4 The routes of networking organizations began to its certification services broadly, meet together in an effort to unite covering foodstuffs as well as commercialisation of the movement around the things cosmetics and detergents and home Fair Trade products that could be readily agreed on. perfumes. EcoCert does not work The FINE—FLO, IFAT, NEWS and exclusively of Fair Trade, but is also Fair Trade products are EFTA—group was established to provides other certification services commercialised under two different build relationships and common based on sustainable agriculture routes. The traditional or integrated approaches. The key success so far is and production, including organic route is the route where products the FINE definition of Fair Trade that certification. (mainly crafts) are produced, was agreed by all of the participants imported and/or distributed by a in 1999. This definition has been Fair for Life Fair Trade Organisation. Another revised further and is to be agreed marketing route is through Fair among all the members during 2001. The Fair for Life Social & Fair Trade Trade labelling initiatives and Although short on radical action, Certification Programme is engaged certification. In this case, goods are FINE has created an environment of with producers in developing labelled by specialised Fair Trade trust and cooperation. As common countries to provide a range of certification agencies to testify that approaches are coordinated among certification services under three their production chains respect Fair

11 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Trade standards. The importers and to facilitate greater access to fair and monitoring costs and for the traders can be traditional commercial trade products. There is therefore, National Initiatives marketing companies, and the distribution no longer the confidence of the expenses. So the cost of the system channels can be regular retail outlets. close link between producer and is included in the retail price, making outlet as with the traditional fair Fair Trade labelling sustainable36. The integrated route trade movement. Here, the importers These organisations are all members and traders are normal commercial of FLO (Fairtrade Labelling Fair Trade products are made companies, and the goods are sold Organisations International), the available to consumers through through normal retail outlets, but Fair Trade standard-setting and Fair Trade Organisations which a fair trade label, awarded by a fair certification organisation. The identify and source products directly trade certification agency, signifies International Fairtrade Standards are from small producers and co- to the consumer that the goods and developed and regularly reviewed operatives, and import and market the marketing chain respect fair and monitored independently37. them in specialised outlets such as trade principles. The four fair trade Worldshops. labels used within the EU are “Max 2.5 The role of Havelaar”, “Transfair”, the “Fairtrade All aspects of their commercial Mark” and “Rättvisemärkt”. retailers operations are based on a Fair Trade ethos, and as much of the A fair trade symbol is displayed on Retailers will point to a commitment final price as possible is passed back the packaging, certifying that the to FAIRTRADE labelled (FT) goods to the producers. In many cases production and marketing processes that are certified against Fairtrade profits generated are devoted to respect fair trade criteria. The label standards as a sign of commitment development causes. The majority is additional to other labelling to fairness and justice in their of products marketed through information requirements, such as trading relationships. Worldshops are not labelled as quality classification and origin, such; the purchase is done on the which are governed by the normal ‘Getting’ Fairtrade has been part of basis of confidence. The “brand statutory rules35. a trend since the mid-1990s in which names” or Fair Trade Mark of these supermarkets and food companies organisations are in themselves In 1997, the various national FT have sought to de-commodify their a signal to consumers that the labelling initiatives formed an mainstream lines, with organic, products and business practices umbrella organization called Fairtrade Fairtrade and ‘local’ branding are in accordance with Fair Trade Labelling Organizations International offering both reputational and profit principles. Most of the Fair Trade (FLO). FLO is responsible for benefits. Major supermarket chains Organisations and producer certifying and monitoring producers, not only stock Fairtrade products organisations are members of the accrediting a single organization to but have introduced Fairtrade World Fair Trade Organization certify FT practices in each country lines amongst their own brands in (WFTO, formerly IFAT). The use and coordinating work among its products such as coffee, tea and of a Fair Trade Organisation (FTO) members. chocolate, contributing to both Mark is granted to a Fair Trade the growth in sales and increased Organisation which has successfully Under the FLO system, producers public awareness of the concept met the requirements of the WFTO do not pay for their certification. of Fairtrade. Similarly, some major Standards and Monitoring system34. Distinct from other schemes, branded food companies, both the consumer pays for the Fair processors and food service, offer The Fair Trade labelling route Trade system. Traders pass on to the consumer a fair trade choice. consumers the higher FT price and Under this route, national labelling premium that they pay producers. In northern Europe the range of fair initiatives monitor the compliance The financial resources flow all the trade products available continues with Fair Trade standards by way back from the consumer who to expand and more conventional producers or traders against a set of buys the product, to the producer. companies offer a product with a fair internationally harmonized standards. The national entity in each country trade label38. charges the Licensee a fee for The objective here is to follow using the Fair Trade label. This Fair Trade and the mainstream normal distribution patterns in order pays for all of FLO’s certification market

12 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Fair Trade is engaged in the design. Many products are likely to of the consumer price to a charity mainstream market both in terms of remain in a Fair Trade niche. or environmental group -- has also actively marketing products through created increased competition for mainstream outlets and encouraging There is a complex inter-relationship Fair Trade products. The increasing conventional companies to use between the positive influence number of ethical claims in the the Fair Trade label and thereby of Fair Trade on the behaviour of market place may cloud the Fair adopt Fair Trade practices. Whilst conventional companies on the one Trade message to consumers. this is becoming an increasingly hand, and the impact of the new important strategy for Fair Trade ethical approaches on the profile Some argue that competition in some markets, it should be of Fair Trade itself. It is frequently between an increasing number of recognised that not all Fair Trade argued that a major contribution of Fair Trade brands and the adoption products are appropriate for the Fair Trade has been to influence the of more ethical practices on the part mainstream market. To date, Fair behaviour of mainstream companies of conventional companies can only Trade products in the mainstream (e.g. Ethical Trading Initiative, be a good thing. The competitive have largely been commodity- adoption of “responsible business” process may encourage more firms based food products such as tea practices and codes of conduct). to adopt ethical practices, or even and coffee. This is largely because Whilst the more empowering Fair Trade practices. However, as we of the supermarket demand for elements of the Fair Trade approach noted above, the complex decision- large volumes and guarantee year- are not always taken on board, the making processes that lead to ethical round availability, which can only be different needs of smallholders in consumption and the influence that accommodated by sourcing from a terms of meeting ethical standards is this has on the sourcing strategies relatively large number of producers increasingly being considered. of companies is as yet incompletely that are well organised. Crafts have understood. Moreover, it is not clear faced many difficulties in accessing However, the increasing trend if there is in practice a competitive the mainstream home-ware and for conventional companies to process between ethical and interiors market, partly because espouse ethical principles --from conventional lines, which would of the short life-span of products ethical sourcing of supermarkets to drive non-Fair Trade companies (due to changing fashions) and the cause-related marketing whereby to consider ethical approaches. high up-front costs of professional companies donate a percentage Supermarkets tend not to stock more than one or two ‘ethical lines’ so that the whole range of Fair Trade brands are not necessarily on offer in particular chains or localities. This can make it less easy for the consumer to consistently choose a Fair Trade product39.

The Case of Fairtrade Bananas in the UK (Alvarez, A (2014) The inclusion of market-driven supermarkets in Fairtrade: concerns and implications for farmers)40

A person in the UK on average consumes about 100 bananas a year and the market for bananas in the UK is about £700 million (Fairtrade Foundation 2014), and the UK is the second largest market for FT bananas after Switzerland (Raynolds 2007). Fairtrade bananas make one- third of all bananas consumed in the Figure 1 UK (Fairtrade Foundation 2014).

13 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Highly concentrated food retailing minimum guaranteed price for all their bananas with FT bananas in industry bananas varies by region and is 2007 (Sainsbury’s). Furthermore in “based on the cost of sustainable 2007, Sainsbury’s established a £1 The point of sale of food in the UK production” (Fairtrade International). million Development Fund managed is highly concentrated in a handful The price variation can result in by the Comic Relief charity, with of supermarkets. Four supermarkets supermarkets sourcing their bananas the aim of helping marginalized dominate the banana chain: Tesco, from the cheapest place and producers enter the FT system (ibid). Asda, Sainsbury’s, and Morrison, leaving out those producers whose The Co-Op was the first supermarket which combined account for 76% of production costs are higher, causing to sell FT bananas in 2000 and since the UK grocery retail market (Kantar a race to the bottom (Smith 2010). 2012 all of their bananas are 100% Web 2014). This puts supermarkets For example, bananas produced in FT, and it also offer support to co- in a better bargaining position the Windward Islands, the Dominican operatives in Panama and Dominican relative to the suppliers, and makes Republic and Costa Rica have a Republic (The Co-Operative). These the suppliers dependent on them minimum price for every box of supermarkets investment in selling for sales since there are very few 18.14kg set at $9.65 USD, $9.60 and only FT bananas means that they places to sell their products other $9.25 respectively, while Ghana and will promote and create awareness than supermarkets. According to Cameroon’s minimum price is $8.30 of FT ideals in order to ensure that Smith (2010), and $8.50 respectively (Fairtrade the bananas sells and it also makes it International 2013). harder for them to go back to selling suppliers are forced to accept conventional bananas (Smith 2010). terms of supply that include last Furthermore, the four super markets These supermarkets’ commitment to minute changes to orders, giving engaged in a ‘banana price wars,’ FT bananas, symbolizes the potential retrospective rebates, and paying with ASDA lowering their price of FT to transform the trading for in-store promotions, as well as of bananas in 2002 and the other system in a way that is fair to the sudden change sin payment terms. three responded by lowering their poor and marginalized workers in prices as well, and then sending the the South. Supermarkets pass the costs down the production chain to responsibilities of production to the producers (Robinson 2009). In The European Commission has category managers (a small number 2002 a kilo of conventional bananas recognised the specific role played of first tier suppliers), which are cost £1.08, but today a kilo of by retailers in the Fair Trade system, responsible of ensuring that FT both conventional and FT bananas in the Communication Retail market standards are met as well as any costs a mere 68p in Tesco, Asda monitoring report “Towards more other demands of the supermarkets and Sainsbury’s (Blythman 2014). efficient and fairer retail services in (Barrientos and Smith 2007). At the Suppliers still get a guaranteed the internal market for 2020”: same time supermarkets add their minimum price and supermarkets store brand to the bananas, and paid the difference, but the problem An internal market in retail services therefore keep all the reputational is the extent of supermarkets willing which is more efficient and fairer benefits (ibid). Supermarkets do to continue to absorb this loss before for future generations must also not give FT banana producers demanding a lower minimum price, fully account for its environmental long-term contracts or any other as well as consumers perceiving that impacts. It must be a gateway to sort of guarantee which can result that 68p/kg is the actual “fair” price the offer of a wide range of more in some FT bananas being sold in of bananas (Balch 2013). environmentally-friendly and/or conventional markets and without fair trade products, allowing “fair” the FT benefits to the producers. A different approach to Fairtrade firms, including those based in non- bananas EU countries, to gain access to the Special pricing of Fairtrade bananas internal market. It must also be But not all supermarkets approaches based on lower energy consumption The minimum guaranteed price for to FT are bleak. Sainsbury’s, and on efficient logistics and waste FT banana differs from other FT Waitrose and the Co-Op are good collection and recycling systems. products in that it is not constant example of supermarkets taking FT Competition within the sector must across regions. The added premium ideals more seriously. Sainsbury’s not only be gauged on economic of $1 USD per 18.14 kilo-box is and Waitrose became the first factors but also on social, ethical and constant for all producers, but the supermarkets in the UK to replace environmental ones.41

14 Promoting Responsible and Sustainable Sourcing Through Fair Trade

The Commission Staff Working Figure 2: Eurobarometer Survey on consumer willigness to may more to Document (SWD) accompanying the support people living in developing countries Communication also recognises the diversity and asymmetry at the retail end of Fair Trade in the EU, whereby the Northern and Western European retailers are more strongly integrated into the value chain for Fair Trade and ethically sourced produce than those in other parts of Europe.42 In addition to variations in consumer expectations, the SWD notes that civil society and NGOs have also played a strong role in pressuring supermarkets and large retailers to address their ethical or environmental records when it comes to sourcing.43 2.6. The role of the

Consumer of European World Shops (NEWS!) A TNS Omnimas survey done in was formally established in 1994 2007 44 showed 57% of adults From the beginning, the Fair Trade and now represents approximately can identify the independent movement aimed to raise awareness 3.000 World Shops in close to 20 Fairtrade consumer label, up among consumers of the problems European countries. five points in just one year, and caused by conventional trade, and 53% of respondents correctly to introduce changes to its rules. The first World Fair Trade Day, which associated the symbol with a The sale of products always goes involves the worldwide Fair Trade better deal for producers in the alongside with information on the movement, was celebrated on May developing world.45 The 2009/ production, producers and their 4, 2002. Now World Fair Trade Day 2010 annual review revealed that conditions of living. It has become takes place every year on the second the FAIRTRADE Mark is now the role of World / Fair Trade Shops Saturday of May. recognized by almost three in four to mobilize consumers to participate British adults.46 A 2011 international in campaigning activities for more Another tool was the establishment consumer survey from GlobeScan global justice. of the FINE Advocacy Office found that Fairtrade is the most in Brussels, which focuses on widely recognized ethical label The first European World Shops influencing the (European) policy- in the world with almost 6 out of conference took place in 1984. makers. It is supported, managed every 10 (57%) people seeing the This conference set the beginning and funded by the whole movement, Fairtrade certification mark. For of close cooperation between represented in FLO, IFAT (now those stating they recognized the volunteers working in World Shops WFTO), NEWS and EFTA – hence its mark, 9 in 10 found it trustworthy from all over Europe. The Network acronym FINE. (Fairtrade International, 2011).47

Fairtrade: there are four EU Member States where more than 80% of respondents recognise the Fairtrade logo: Sweden (84%, +7pp), the United Kingdom (83%, no change), Luxembourg (81%, +7pp) and Austria (81%, +4) have the highest awareness levels. There are however, eight countries where less than 10% of the respondents recognise it for example, Spain (4%, no change) and Romania (5%, no change). Countries with largest increases of the awareness level of the Fair trade logo since 2013 are Slovakia (20%, +8pp), Sweden (84%, +7pp), Luxembourg (81%, +7pp) and Finland (60%, +7pp). Croatia has also increased by eight percentage points, however only 14% of respondents are aware of the Fair trade logo. Source: Special Eurobarometer 440 - Europeans, Agriculture and the CAP

15 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Most recently, in 2016 a recognised private standards label European and North American bases Eurobarometer Survey found that by consumers, with 37 per cent of and is now more pronounced in half of the respondents were willing consumers recognising the Fair emerging markets like Brazil, Russia, to pay more for groceries or other Trade logo.49 India, and China, as well as Saudi consumer products from developing Arabia and the United Arab Emirates countries if this supported people Emerging economy consumers are (U.A.E.). Datamonitor has also living in those countries. However, increasing featuring in the picture tracked consumer interest in paying this was almost equally matched of consumer awareness about more for Fair Trade and Fairtrade (47 per cent) by respondents who Fair Trade. An investigation by and has generally found that in the would not be willing to pay more.48 Datamonitor into consumer attitudes last two years there has been a In an earlier Eurobarometer Survey toward both Fair Trade and Fairtrade trend toward more agreement on from 2015, the Fairtrade Mark and found that its influence has this question in all countries, even in was found to be the most widely expanded beyond the traditional emerging markets.50

Figure 3: How much influence does the ‘Fairtrade’ Figure 4: To what extent do you agree or disagree with (or ‘Fair Trade’) claim have when making food and the following statement? “Fair trade or fair trade food beverage choices? and beverages are worth paying a little extra for.”

16 Promoting Responsible and Sustainable Sourcing Through Fair Trade

3. Fairtrade as means to Responsible Sourcing

Agricultural value chains are more the case in a significant number of social responsibility. Increasingly, global and integrated than ever, least developed countries producing governments are also beginning to and sourcing plays a critical role not important agricultural commodities. take strides towards commitments just for production and processing, Even in those countries which on the latter, particularly in Europe, but increasingly also for sustainable do have basic rights protection, where public bodies such as growth and marketing. As consumer a number of VSS also look to towns and communities, and even demand for information about address the inherent asymmetry whole countries, are committing the products they buy continues in power between the two ends of to source in accordance with VSS. to grow, greater scrutiny is being the sourcing relationship, i.e. the The McKinsey report on global placed on food and non-food producers on the one hand, and the agricultural trends captures this agricultural sourcing practices buyers, be they retailers, processors dynamic well with the case of by major retailers and brands. or manufacturers. Unilever, which in 2010 announced Sourcing has recently also grown plans to source all of its agricultural to become a point of differentiation It is estimated that the value of raw materials sustainably by 2020, or distinction between brands the global food and agricultural having had already reached 55% by which look to tap into the booming markets tops US$ 5 trillion, and the end of 2014. market of environmentally and is responsibel for 10 % of global socially responsible purchasing, consumer spending, 40 % of 3.1. Fairtrade Sourcing and also those that wish to improve employment.51 As the trajectory for their supply chain governance and global population goes up, matched Programme custody as the global economy looks also by increasing urban consumers to integrate sometimes high-risk, in emerging and developing Fairtrade is one of the VSS which fragile or post-crisis countries into economies, growth in niche food has recognised the opportunity value chains. Failure to do so can markets and a broader increase in to address this new dynamic by represent a major liability for brands caloric intake per person, it is no bridging the gap between buyers and retailers, resulting in significant surprise then that global investment who are looking to source in a reputational costs and occasionally into the sector has grown to over sustainable and responsible manner, have significant financial or legal USD$ 100 billion in 2013. These and producers in developing ramifications. emerging trends in agricultural trade countries who are certified Fairtrade and production represent challenges and thus meet minimum criteria that There is no universal approach to and opportunities for primary consumers value, relating to labour ensuring responsible and sustainable producers in developing countries as and social rights. In January 2014 sourcing, although more brands and well as manufacturers in developed Fairtrade International introduced retailers are beginning to recognise countries and retailers worldwide. the “Fairtrade Sourcing Programs” voluntary sustainability standards which cover cotton, cocoa and (VSS), such as that of Fairtrade, as A key development has been the sugar value chains, with the a means of assuring compliance behavioural changes of consumers objective of allowing business who with key standards and values (e.g. who are increasingly looking for want to source specific Fairtrade on labour rights, gender rights healthier and more sustainably commodities, such as cocoa and etc.), in specific commodity value produced goods. This has resulted sugar, to be able to do so, and to chains. This is particularly applicable in both the private and public communicate their commitments for consumer products for which sectors looking more closely at the through the Fairtrade Sourcing significant volumes or value of which role of standards as a means of Programs thus taking advantage is sourced from countries where responding to consumer concerns of the value proposition of the there is either low enforcement – on the side of the public sector, Fairtrade scheme, even if they do of, or no actual laws pertaining to mandatory standards on labelling, not source all the ingredients of the protection of basic rights or nutrition, production and on the their final products under Fairtrade rules related to employment or private sector, on standards for terms. The Fairtrade Sourcing agricultural production, as may be traceability, sustainability and Program is therefore a separate

17 Promoting Responsible and Sustainable Sourcing Through Fair Trade

The FAIRTRADE Program Mark

The new Sourcing Programs have the same high standards of Fairtrade. Producers will receive all the same Fairtrade benefits, including the protection of a Minimum Price (wherever relevant) and the Fairtrade Premium. So we have developed a new Mark that represent a different approach by the businesses involved and gives Fairtrade Sourcing Programs their own identity. The new FAIRTRADE Program Mark: - Supports businesses to communicate their Fairtrade sourcing commitment on pack, online and in corporate reports - Lets shoppers know that the brands they love are part of the new Fairtrade Sourcing Programs. There are some important rules about how businesses can communicate their commitment to the Fairtrade Sourcing Programs: - COCOA AND SUGAR: companies will only be able to use the FAIRTRADE Program Mark on-pack if 100% of the focus ingredient for that product is bought on Fairtrade terms. Companies can also talk about their commitment to the Fairtrade Sourcing Programs in off-pack communications such as websites. - COTTON: companies can use the new Program Mark once they’ve met an agreed volume of Fairtrade cotton. Companies can use the Program Mark on a swing-tag attached to items if they have sourced enough Fairtrade cotton to cover the equivalent of 100% of that product range or collection. They can also talk about their Fairtrade commitments in off-product communications.

Source: Fairtrade International scheme with its own label (or mark, A notable commitment made under EU, some of the biggest value known as the Fairtrade Program this framework was Mars Chocolate agricultural imports. According to Mark) that operates in parallel UK which agreed to source Fairtrade the European Commission, “the top to the Fairtrade mark. Fairtrade certified cocoa for all its MARS bars ranking product in EU agri-food International hopes that this in the UK and Ireland by the end of imports in 2013 was coffee, although Fairtrade Sourcing Program will 2015. Fairtrade International hopes its share shrank to 7.2% (¤7.4 billion) encourage businesses to buy more that the new Fairtrade Sourcing down from 8.9% in 2012”.55 Figures Fairtrade certified products as it Program will not only introduce a new for 2014 showed a similar trend, presents a new channel or entryway avenue for manufacturers to enter with an increase in EU imports of into the Fairtrade market. into the Fairtrade market, but that it ‘tropical fruits, nut and spices’, will also deepen companies’ sourcing ‘coffee and tea’, cocoa products Over 15 new businesses contracts relationships with producers.53 (beans and paste and powders) and for Fairtrade cocoa have been preparations of vegetables.56Up concluded since the Fairtrade This is particularly relevant for the until 2014, import volumes of these Sourcing Programs were introduced, key commodities that Fairtrade is class of products reflecting positive which have contributed to a 24% most invested in, such as coffee, trends came off the back of lower increase in coca sales and a Premium cocoa bananas and sugar, as they prices in 2013,57 but by 2015, the to the farmers valued at ¤950,560. also constitute at least for the situation had reversed.58

18 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Commitments to the Fairtrade Sourcing Program The first companies to announce commitments today under the Fairtrade Sourcing Program include: - Mars will take a new step in their partnership with Fairtrade by sourcing all the cocoa for their Twix bar in the German market as Fairtrade. This builds on Mars’ existing commitment to Fairtrade farmers through their Fairtrade Mark-labelled Maltesers in UK and Ireland. Mars is working towards sourcing 100% certified cocoa by 2020. German Rewe Group will increase cocoa purchases under the Fairtrade Cocoa Program for their own-brand products, in addition to their existing products with the FAIRTRADE Mark. - German chocolate manufacturer Riegelein will work towards sourcing all the cocoa for their entire own-label ‘Riegelein’ assortment under the Fairtrade Cocoa Program by 2017, in addition to their existing Fairtrade certified Easter and Christmas chocolate assortments. - Coop, the retailer with the largest selection of Fairtrade products in Switzerland, aims to source Fairtrade cocoa for all own-label products by 2017 in addition to their current Fairtrade commitments. The biscuit ‘Chococroc’ will be the first product on shelf, with more products to follow later this year. - Japanese retailer AEON, which has been selling the Fairtrade coffee, chocolate and others under its own brand “TOPVALU” since 2004, will be the first in Asia to work with the Fairtrade Cocoa Program. They intend to increase their volumes of Fairtrade cocoa tenfold by 2020. - Swiss premium biscuit manufacturer Kambly, a new Fairtrade partner, has committed to purchase all the cocoa for their new ‘Knusper-Nuss’ and ‘Milch-Truffe’ biscuits on Fairtrade terms. - Retail chains Lidl and Kaufland will announce commitments under the Fairtrade Cocoa Program in Germany. - Swiss apparel brand Switcher, a long-time Fairtrade supporter, will scale-up their purchases of Fairtrade cotton to 35% of their total cotton under the new Fairtrade Program Mark.

Source: Fairtrade International54 Figure 5: Annual percentage change in volume and unit price for the 3.2. The role of Fair product categories with the largest import increases 2014 Trade Standards and standards setting in Sustainable Supply Chains

A significant number of the world’s poor live in rural areas, of whom 70 per cent on average rely directly on agriculture for income and employment (IFAD, 2011). The agricultural sector can therefore make a significant impact on poverty reduction – according to the World Bank, “overall GDP growth originating in agriculture is, on average, at least twice as effective in benefiting the poorest half of a country’s population as growth generated in non-agricultural sectors.”59 Subsequently, agricultural trade can act as an important pathway to lift farmers out of poverty and more broadly, to promote Source: European Commission sustainable development, but this

19 Promoting Responsible and Sustainable Sourcing Through Fair Trade

outcome can only be realised through a result of growing awareness by by the public sector. The recently the conscious efforts of the different consumers of the economic and published OECD-FAO Guidance actors at the various levels of the social circumstances of producers for Responsible Supply Chains agricultural supply and value chains. in developing countries that VSS represent a public, multi-stakeholder emerged in the second half of initiative to develop uniform, broadly Many African, Caribbean and the 20th century as a means to applicable recommendations for all Pacific countries have recognised introduce guarantees “fairer” trade, enterprises operating along supply agriculture as a critical sector and avoidance of exploitation chains, including domestic and for future economic growth and of producers by observance of foreign, private and public, small, sustainable development. This will minimum standards or practices, medium and large-scale enterprises.” require greater integration into and the agricultural sector has (OECD-FAO 2016). global agricultural value chains been at the forefront of VSS.62 As a but also improving standards result, a significant motivating factor In order to achieve Fairtrade in production, processing and for sourcing through VSS such as certification, the holder of the agricultural inputs and support Fair Trade for retailers and other certificate (a farmer, cooperative or services which ensure that producers downstream processors and buyers, producer company) will have to pass can capture greater profits from the is to strengthen governance in the an audit by the FLO-CERT (formerly value chain. supply chain and avoid incidents the Fairtrade Labelling Organisation, or risks that can lead to significant and owned by Fairtrade International Globalisation during the 20th costs for reputation and investment. members)66 which takes place and 21st century has led to the According to UNCTAD, “compliance annually and ensures that the formation of global value chains for with a given standard may offer a certificate holder is in compliance intermediary and final goods and strategy for managing reputational with a checklist standards (Fairtrade services, including for agriculture. risks or even supply risks.”63 compliance criteria) which concern According to the OECD (2012), for example, minimum pricing, labour agri-food value chains are deeper Responsible and sustainable conditions, production practices, and more economically valuable sourcing applies to different stages environment and so on. As a result, than ever before. Over half of the of the agricultural supply chain by sourcing through Fair Trade, USD 100 billion worth of agricultural to help overcome risks relating an enterprise ensures that the imports made by the United States to human, labour and land rights, goods procured meet minimum in 2012 came from developing health, environmental protection, standards to protect the welfare countries and the EU’s member animal welfare, education and so of producers in the country of states imported annually close to forth.64 These risks arise from a production. Certification is available Euro 60 billion worth of agricultural number of factors, including poor for different activities in the supply products from developing countries governance and enforcement chain, from production to onwards. between 2008 and 2010.60 These of fundamental rights in certain It has also led to different classes of trends in global agricultural value countries of production, but also certification, for example Fair Trade chains have significant implications with the growing demand for food Town initiative, which allows a town for developed and developing and non-food agricultural products meeting minimum criteria to use the countries alike, particularly least comes a willingness for investors to Fair Trade trademarks (name and developed countries, many of whom seek new markets in countries which logo), and promotes the Fair Trade are in the ACP, for which agriculture may have very limited capacity for principles and values in the activities contributed to more than 25% of oversight or regulation. Awareness of the town or city.67 GDP (FAO 2012)61. and appreciation of these risks in the global supply chains has Responsible and sustainable Along with the opportunities that increased significantly, and interest sourcing has also recently become globalisation of value chains brings, has reawakened after events such a specific focus and innovation of significant costs and risks have also as the collapse of the Rana Plaza Fairtrade International, as reflected emerged, particularly in developing factory in 201365; whereas the private in their 2014-2015 annual report. In countries where producers, farmers sector was the major contributor early 2014 Fairtrade International and labourers are often the weakest of VSS and corporate social introduced the Fairtrade Sourcing party in the value chain and most responsibility practices, these are Programs (FSP) for cocoa, sugar vulnerable to exploitation. It is as also increasingly being recognised and cotton, designed to enable

20 Promoting Responsible and Sustainable Sourcing Through Fair Trade

farmers to sell more of their crops guidelines or characteristics that been developed by FLO (Fairtrade on Fairtrade terms, meaning more can be used consistently to ensure Labelling Organizations International benefits for their communities. that materials, products, processes or Fairtrade International) and Since its launch, there have 15 and services are fit for their international standards for Fair Trade new business contracts to source purpose.”69 The WTO Agreement Organizations have been developed Fairtrade cocoa, contributing on Technical Barriers to Trade goes by WFTO (World Fair Trade towards a 24 percent increase further still and defines standards as Organization, formerly IFAT). in cocoa sales and ¤950,560 in document approved by a recognised Premium for the farmers. The most body, that provides, for common Both systems are based on the joint recent commitment was by Mars and repeated use, rules, guidelines Fair Trade definition and principles. Chocolate UK who will source or characteristics for products or Fairtrade certified cocoa for all related processes and production 3.2.a International MARS® Bars in the UK and Ireland methods, with which compliance is by autumn 2015. This means that not mandatory.70 Therefore, unlike Standards for Mars globally will be paying more rules or regulations, standards are not Fairtrade labelled than ¤1.6 million per year in Fairtrade mandatory and as such, are a suitable Premium to Fairtrade cocoa instrument for private certification. products cooperatives in West Africa by 2016. While the program is designed However, standards, whether FLO is the leading Fairtrade standard to expand market access for private or public, are not without setting body for labelled products. producers, it is also about deepening their critics and are an issue that Its affiliated company FLO-Cert companies’ sourcing relationships often raises contention between regularly inspects and certifies over with farmers. Extra funds generated countries, both developed and 500 producer organizations in more through FSP sales so far are enabling developing alike. The most frequent than 50 countries in Africa, Asia and us to invest in targeted programs contexts in which standards are Latin America.71 Fairtrade Standards for cocoa cooperatives, enabling questioned are at the WTO and are developed by the FLO Standards them to strengthen their businesses other trade-related fora, and then Committee which is composed of and provide their farmers with more also in the context of consumer FLO’s labelling initiatives, producer training and support. Additional field affairs, including consumer rights and organizations, traders and external staff in West Africa are beginning to protection. Some of the criticisms experts. roll out the program in 2015.68 which standards face include lack of transparency (in the development Producers and traders need to Standards in Fair Trade and application of standards), comply with the applicable Generic unfairness or discrimination (where Trade standards and Producer Compliance with standards is the standards apply to one group of Standards as well as Product primary means by which the Fair economic entities but not another), Standards. All standards are Trade certification is gained, and the legal uncertainty (in some cases, divided into core and development standards themselves are set by the where a voluntary standard overlaps standards. certifying body. As the certifying with a legal obligation, and parties bodies or organisations are private, may not be sure where a law ends Generic standards for Trade and their standards are also considered and a standard begins), acting as a Production private and are not publicly barrier to trade (where standards enforceable. Nevertheless, there put additional burdens beyond legal FLO stipulates three categories of is a strong public aspect to these obligations, for economic entities to generic producer standards, one standards as often they concern trade in goods or services). for small farmers72, one for hired the compliance with some existing labour,73 and another for contract domestic legal obligations (on The two aforementioned routes production.74 child labour and other illegal labour to market Fair Trade products practices). (traditional or integrated route and The first set applies to smallholders the Fair Trade labelling route) are organised in cooperatives or other A standard can be generally defined reflected in two sets of Fair Trade organisations with a democratic, as “a document that provides Standards: international Fair Trade participative structure. The second requirements, specifications, standards for labelled products have set applies to organisations that

21 Promoting Responsible and Sustainable Sourcing Through Fair Trade

employ hired labour to supply Standards for Small Farmer’s and sustainable livelihoods. particular Fairtrade products. Part Organisations Three issues are covered, non- of the standard also applies to the discrimination (4), democracy, companies that trade with them. Two principles are outlined by FLO participation and transparency (13) The final set applies to small- with regards this standard: and development potential (11). scale producers who are not yet democratically organised. As a -- Members must be small-scale Standards for Contract Production77 temporary measure, they can join producers. The majority of the Fairtrade if they have a partnership members of the organisation must The latest standards for contract with an organisation (such as an be smallholders who don’t depend production, in application since 1 exporter or NGO) who will assist on hired workers all the time, but March 2014, are cover two subjects them to form an independent run their farm mainly by using their of the Fairtrade contract production organisation. own and their family’s labour. approach – promoting bodies78 and producer organisations79. Part A In addition to these three producer -- Democracy: Profits should contains the requirements that the standards, FLO also stipulates generic be equally distributed among promoting body must comply with. trade standards (GTS), which apply the producers. All members Part B contains the requirements to those operators in the supply chain have a voice and vote in the that the registered producers who ‘trade (buy, sell or process) decision-making process of the and producer organisation must Fairtrade certified products, up to organisation. comply with, with support from the point where the product is in its and under the responsibility of the final packaging’ as well as Fairtrade These standards, which have been promoting body. It is structured into payers (being responsible for paying in application since 1 February 2014, the following sections (number of the Fairtrade Price and Fairtrade cover the following issues (number obligations in parentheses): Premium) and conveyors (receiving of obligations in parentheses): or handling the Fairtrade price and Part A: Fairtrade Premium). Operators who -- General Requirements, which -- General Requirements, which are part of the processing of FT defines what Fairtrade understands defines Fairtrade small producers goods and products are certified by small producers and their and lays out the prerequisites for against the GTS and their purpose organisations (4). promoting bodies (11). is to strengthen the relationship between producers and traders of -- Trade, which defines what -- Trade, which defines what FT products in the context of the FT producers can do to build fair promoting bodies can do to build principles and especially to ‘provide trading practices. It covers fair trading practices. It covers greater transparency of the flow of traceability (8), sourcing (1), traceability (7), sourcing (1), Fairtrade Premium and prices’.75 contracts (4), and use of the FT contracts (10), and use of the FT Trademark (2). Trademark (2). As Fairtrade is also about development, the generic standards -- Production, which defines what -- Production, which defines what distinguish between core standards, producers can do via production producers can do via production which are minimum requirements methods to better secure methods to better secure that producers must meet to be sustainable livelihoods. It covers sustainable livelihoods. There are certified Fairtrade, anddevelopment management of production provisions on monitoring systems standards which constitute practices (5), environmental (1), environmental development requirements for progress that development (28), and labour (26), and labour conditions (3). encourage producer organisations conditions (36). continuously to improve working -- Business and Development, which conditions and product quality, -- Business and Development, which defines the unique Fairtrade to increase the environmental defines the unique Fairtrade approach to development. It sustainability of their activities approach to development. It explains how, through social and to invest in the development explains how through social organisation, producers can of the organisations and their organisation producers can build a basis for empowerment producers/workers.76 build a basis for empowerment and sustainable livelihoods. This

22 Promoting Responsible and Sustainable Sourcing Through Fair Trade

covers development potential to join an independent union to environmental practices (7), democracy, participation collectively negotiate their working contribute to a more sustainable and transparency (7), non- conditions. production system. It covers discrimination (2), Fairtrade Price environmental management (2), (2) and Fairtrade Premium (8). -- Working conditions: Working pest management (15), soil and conditions are equitable for all water (13), waste (3), genetically Part B: workers. Salaries must be equal or modified organisms (1) biodiversity -- General Requirements, which higher than the regional average or (6), and energy and greenhouse defines Fairtrade small producers than the minimum wage in effect. gas emissions (2) and lays out the prerequisites for Health and safety measures must promoting bodies (1). be established in order to avoid -- Trade requirements define what work-related injuries. must be done when you produce -- Trade, (there are no trade Fairtrade products and then sell obligations). The standards for hired labour, them. Provisions are outlined which came into force on 1 February on traceability (6), sourcing (1), -- Production, which defines what 2014, and are structured as contracts (3), and use of Fairtrade producers can do via production follows (number of obligations in trademarks (2). methods to better secure parentheses): sustainable livelihoods. There Generic Trade Standards are provisions on environmental -- General Requirements set the development (15), and labour requirements related to the FLO defines a number of principles conditions (12). certification process and to the which underlie this standard, and scope of the standard (7). meaning that traders must: -- Business and Development, which defines the unique Fairtrade -- Social Development consists of -- Pay a price to producers that aims approach to development. It requirements that are unique to to cover the costs of sustainable explains how, through social Fairtrade and is intended to lay the production: the Fairtrade organisation, producers can foundations for empowerment and Minimum Price. build a basis for empowerment development to take place. The and sustainable livelihoods. This provisions relate to management -- Pay an additional sum that producers covers development potential of FT Premium (20), and capacity can invest in development: the (8), democracy, participation building (9) Fairtrade Premium. and transparency (5), non- discrimination (2), and Fairtrade -- Labour Conditions requirements -- Partially pay in advance, when Premium (2). are intended to ensure decent producers ask for it. working conditions. They are Standards for Hired Labour based on the 1998 ILO Declaration -- Sign contracts that allow for long- on Fundamental Principles and term planning and sustainable Organisations which use hired labour Rights at Work, as well as all other production practices. are informed, in the application applicable ILO Conventions as of this standard, by the following references for decent working The latest version of these standards principles elaborated by FLO: conditions. There are provisions on was amended in July 2014, and freedom from discrimination (9), covers the following issues (number -- Management of the Fairtrade freedom of labour (2), child labour of obligations in parentheses): Premium: The Joint Body, which and child protection (5), freedom includes workers and management, of association and collective -- General Requirements, which is responsible for the management bargaining (12), conditions of define requirements related to of the Fairtrade Premium in employment (28), and occupational certification, and to the labelling accordance with Fairtrade health and safety (31). and packaging of finished and standards. unfinished products (8). -- Environmental Development -- Freedom of association & collective requirements intend to make -- Trade, which define requirements bargaining: Workers have the right certain that agricultural and related to trading practices. It

23 Promoting Responsible and Sustainable Sourcing Through Fair Trade

concerns traceability (14), product was the introduction of gold and large cooperatives and from one composition (5), and contracts (7). associated precious metals, including person importers to retailers with silver and platinum as a Fairtrade turnover of several million Euros. -- Production, which may only apply product in 2013.84 This is the first Two thirds of WFTO members are to product specific requirements. time that mineral products can located in developing countries. There are no generic production receive Fairtrade labelling, and WFTO standards are developed requirements. the standard will be valid from in the Standards and Monitoring November 2014. According to the subcommittee with input from -- Business and Development, which FLO, the aim is for ‘Fairtrade to various stakeholders including defines requirements that make offer a small, but scalable solution producers, southern exporters, the unique Fairtrade approach to to companies looking to source gold importers, retailers and Fair Trade development more visible. They from artisanal and small-scale miners support organizations, and approved concern sustainable trade (3), pre- that can demonstrate conformance by the Annual General Meeting. finance (7), and pricing (7). with the OECD Due Diligence Guidance for Responsible Supply WFTO has developed 10 3.2.b Product Chains of Minerals from Conflict- international standards for Fair Trade 85 standards Affected and High-Risk Area’. Organizations (FTOs), namely: This initiative to develop fairly Creating Opportunities for Product standards have so far traded precious metals had also Economically Disadvantaged been developed for 17 classes food sought broad based partnerships Producers and non-food products, ranging to support the development of from coffee, tea, sugar, cocoa, rice, artisanal and small-scale miners i. Transparency and Accountability and fruit to flowers, cotton and through trade. Along with the ii. Fair trading practices sportballs.80 The product standards FLO, there are numerous regional, iii. Payment of a Fair Price specify the minimum price and international and multilateral iv. Ensuring no Child Labour and premium as well as other product- institutions, as well as NGOs, and Forced Labour specific requirements. Certification the private sector involved in v. Commitment to Non of compliance with these standards engaging with stakeholders and Discrimination, Gender is done by the independent to providing technical and non- Equity, Women’s Economic organization FLO-Cert GmbH.81 technical inputs, including Fairtrade Empowerment and Freedom of Africa, Environmental Women in Association The setting of standards or criteria, Action for Development (EWAD) vi. Ensuring good Working certification that those standards Uganda, Solidaridad East Africa, MTL Conditions have been met, and labelling to Consulting, Estelle Levin Ltd and the vii. Providing Capacity Building indicate that the producer has been Artisanal Gold Council.86 viii. Promoting Fair Trade certified are critical elements for the ix. Respect for the Environment operation of Fair Trade schemes. 3.3. International Fair Trade membership organisations Each standard is accompanied by certify and monitor producers, Standards for Fair a set of measurable indicators and traders and retailers based on these Trade Organizations: compliance criteria which differ standards and authorise them to use between “entry” and “progress” their labels or logos82. what does Fair Trade level. FTOs in compliance with mean for producers’ these standards can acquire the Finally, there are a few product- organizations? right to use the FTO Mark for their specific Fairtrade standards for organisation88. each product that determine such The World Fair Trade Organization things as minimum quality, price, and (WFTO) is the global network 3.2.a. Fair Price processing requirements that have to of Fair Trade Organizations, be complied with.83 with around 386 members in 71 The defining characteristic of Fair countries.87 The membership Trade in comparison to other private The most notable development is very diverse, ranging from and voluntary standards is that it in relation to Product standards small producer organizations to provides producers with a price

24 Promoting Responsible and Sustainable Sourcing Through Fair Trade

guarantee for their goods, by virtue Below are some of the definitions therefore means that the seller (the of the Fairtrade price premium.89 provided by the FLO in relation to certified producer entity) delivers Price premiums are a price which the the Fairtrade price: when they place the goods at producer of a FT good or product the disposal of the buyer at the received in addition to the price Fairtrade Minimum Price (where it premises of the seller. for the product or good itself. The exists) is the lowest possible price that premium is ultimately paid by the may be paid by buyers to producers -- Market price means the price consumer, on the price of the final for a product to become certified calculated under normal/ consumer good into which the FT against the Fairtrade standards. ordinary conditions (including any produce goes. differentials due to quality, variety Fairtrade payer means the buyer or other factors), with no reference Definitions and Procedures responsible for paying the Fairtrade to any additional Fairtrade Premium. Minimum Price and the Fairtrade FLO has established a specific table Premium Buyers must check their Additional considerations are also for the calculation of the Fairtrade potential status as Fairtrade payer stipulated by FLO for the calculation Premium which takes into account with the certification body. of the Fairtrade price which may go the product and its Fairtrade to the producer, and the costs which Minimum Price (where applicable), its -- Fairtrade Premium is an amount may be involved, in addition to the Commercial or market price, which paid to producers in addition to products specific premium price. is the price is a negotiated price the payment for their products. These include transport, specific between the seller and the buyer. The Fairtrade Premium is intended packing or processing, for which the Most of the products are assigned for investment in the producers’ parties to the contract (producer a specific Fairtrade Minimum Price business and community (for a and buyer in most instances), must (for some, this is the Commercial small farmers’ organization or stipulate who is responsible for such Price) and Fairtrade Premium which contract production set-up) or for costs in the contract.91 is calculated as either a share of the the socio-economic development Minimum or Commercial Price (10% of the workers and their community The rules are also clear as to how to 15% on average), or it is calculated (for a hired labour situation). the Fairtrade premium must be as ‘Currency / Quantity x Unit´ (for calculated for transformed or example, x US dollars or Euros per -- Fairtrade price means the total blended products, which, such as a metric tonne or kilos).90 price paid to producers and chocolate bar, may contain Fairtrade includes the Fairtrade Minimum produce (cocoa, sugar) and non- According to the FLO “For Fairtrade Price (or relevant market price FT produce (milk, stabiliser). Only products, a Fairtrade Minimum Price where applicable) and the the raw FT ingredient serves as (where it exists) and a Fairtrade Fairtrade Premium. the basis of the calculation of the Premium have to be paid. Wherever price and Fairtrade Premium.92 the market price or negotiated price -- Farm Gate price as used by FLO The Explanatory document for is higher than the Fairtrade Minimum refers to the gate of the certified the Fairtrade Trade Standard Price, the relevant market price producer entity (e.g., the Small provides an illustrated guide as to applies. In any case, the Fairtrade Producers’ Organization), and how the Fairtrade premium must Premium has to be paid on top of not the gate of the individual be transferred down various value the price.” producer’s farm. Farm Gate chains and finally to the producer:

25 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Fairtrade Payer and Conveyor Fairtrade payers are responsible for paying to producers the Fairtrade Minimum Price or the relevant market or negotiated price whichever is higher. Which operator acts as the Fairtrade payer depends on the supply chain and may be different in each case. It is usually the trader who buys from the producer organization. It is the exporter if the producers do not export directly and prices are set at ex works/ farmgate level. When producers export directly, the importer is the Fairtrade payer. When producers sell to the processor and prices are set at ex works/ farm-gate level, it is the processor. In contrast to the Fairtrade payer, the Fairtrade conveyor only receives the Fairtrade Premium money from the Fairtrade payer and passes it on to the certified producers. This can happen for example where the applicable price is at FOB level but producers do not export themselves. In this case, there is a processor or exporter between the producers and the importer. The operator in-between just passes the Fairtrade Minimum Price and Fairtrade Premium from the Fairtrade payer to producers. Box 1: Illustrating Fairtrade Premium transfer in the Product Value Chain (source: FLO)

Source: Fairtrade International54

26 Promoting Responsible and Sustainable Sourcing Through Fair Trade

4. Fairtrade standards in the Global Supply Chains: Issues and Implications for the ACP

4.1 Fair Trade in the From the consumer perspective, effects in the supply chain, creating a Global Supply Chains it is estimated that there are more positive feedback loop which looks to than 400 consumer facing eco- ensure that the principles that underpin There is a considerable volume of labels operating globally95, and the the standard are also reflected by the literature about Fairtrade in the European Commission’s Directorate certified producers. (See: International context of analyses and critiques for Agriculture estimated that in 2010, Trade Centre, 2011 97). of private or voluntary standards there were also over 400 private and their effects on local, global certification schemes in the EU.96 In this regard, several of the WFTO and regional markets. The study principles correspond strongly with of standards has also become an Within the broader scheme of responding to legitimacy, such as increasingly urgent issue in the food private standards, Fairtrade can Transparency and Accountability. The and agriculture sector, as growth of be categorised as a ‘market-based issues of inclusiveness or accountability standard-compliant production across private standard’ (International Trade of the Fair Trade organisations and key commodities for smallholders Centre (2011); Hiscox, M.J. 2007) the WFTO have been subject to has increased much more rapidly criticism and praise. For example, than for conventional commodity I. Fair Trade as a Means of in a comparison between Fairtrade markets (2012: 41% increased growth Improving Transparency, and the fifteen of the most important for standard compliant productions Accountability and In Supply Chains global standards initiatives currently vs. 2% growth for conventional covering the agriculture, forestry and commodity markets), across all The legitimacy of Fair Trade as a biofuels sectors, Fairtrade was only one commodity groups (sugar: 79%, private standard is a has spillover of two which only had civil society as cocoa: 69%, cotton 55% growth). As it stakeholders in their founding. Figure 7: Typology of Standards stands, standard compliant products Figure 8: Elements of Legitimacy have also seen a strong growth in their market share93, and constitute an ever increasing production system.94

Figure 6: Growth of standard-compliant production (2008–2012, hectares compliant).

Figure 9: Founding stakeholders by initiative

Source: SSI 2014

27 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Furthermore, in terms of the Lastly, looking at board The other evaluations comparing board representation by supply representation by geographical Fairtrade to other global chain, Fairtrade was found to location (developing/developed sustainability initiatives on have a positively even distribution countries), the same study also found inclusiveness, transparency and between producers, industry/ Fairtrade to have an approximate accountability found as follows: private sector, NGOs and civil balance of 50/50 from each region. society, and other groups.

Figure 10: Board representation by stakeholder role in Figure 12: Dispute settlement index for voluntary Supply Chain sustainability standards reviewed in the SSI Report

Source: SSI 2014 Source: SSI 2014

Figure 11: External participation in rule-making processes Figure 13: Availability of documents and decisions online for voluntary standards

Source: SSI 2014

Source: SSI 2014

28 Promoting Responsible and Sustainable Sourcing Through Fair Trade

5. Fair Trade in ACP-EU Trade context: scale, opportunities, successes and Case Studies

Fairtrade plays a strong role in the increase and ongoing push towards Figure 14: Estimated sales of EU and the ACP through different regional trade in the ACP, has the Fairtrade products by consumer contexts. The EU has the biggest result of opening new avenues country in 2014 (source: Fairtrade global retail and consumption rate for Fair Trade products to be International, 2015) of FT products, and the Fairtrade exported within the region or to Mark is one of the most widely used other developing countries (South- and recognised private standards. South trade) to satisfy the demand In African, Caribbean and Pacific of this expanding demographic. countries, Fair Trade is also well Secondly, the EU public sector has integrated into the key commodities increasingly become involved in as a voluntary productions approach, Fairtrade, as a consumer but also as particularly in key commodities such a stakeholder, whereas historically as cocoa, bananas, sugar, tea, coffee, Fair Trade has always been in the with further potential expansion for domain of the private consumer non-food commodities and products. and NGOs. Lastly, notwithstanding For the majority of ACP Fair Trade the Euro-crisis and the global producers, the biggest export market economic downturn since 2008, is the EU. consumers in the newer EU Member States from the Baltic, Central The scope and potential for and Eastern Europe (EU 25 to Fairtrade commerce in the context EU 28 group) have also led to a of ACP-EU trade has generally been strong increase in the demand for understated, as dialogue between Fairtrade and other sustainably two groups on the trade front has labelled products. more often than not centred around the reduction of tariffs (market 5.1 Fair Trade figures liberalisation), the elimination of non-tariff barriers, compliance with globally and in the EU mandatory standards and other forms of trade regulation (sanitary I. Data and phytosanitary measures in particular) and addressing According to the 2014-2015 Annual preference erosion as the EU adopts Report of Fairtrade International, changes to its generalised system global sales reached ¤5.9 billion in of preferences and phases out 2014, a 10 percent increase since preferential market access for the 2013. Furthermore, steady growth ACP Group. was seen in mature Fairtrade markets, with Swedish and German Other dynamics are also leading to shoppers significantly increased change for the Fair Trade system their ethical purchases, pushing in the context of the ACP-EU sales up by 37 and 27 percent relationship. First, the changes respectively. Figures for UK Fairtrade in demographics in developing sales suffered due to the impact of countries, particularly in Africa, intensified price competition and which is leading to a growing deflation in the mainstream grocery middle class, combined with the sector. This was made up by positive

29 Promoting Responsible and Sustainable Sourcing Through Fair Trade

growth in newer and emerging Germany100 While fair trade coffee currently markets: Canada and Hong Kong for has a market share of 2.5 percent, example experienced increases of 40 Certified products in Germany one out of every four roses sold in and 42 percent respectively. recorded revenue growth of 23 Germany and every other banana are percent last year, which translates into already being supplied by certified By comparison in 2013-2014 98, a rise in sales of 654 million Euros. Of businesses, and a new Fairtrade Fairtrade sales saw a steady this amount, 95 million Euros directly product is launched in the German growth within the EU, with the benefit producer countries. market every day. UK market breaking the ¤2 billion mark, reflecting a marked change Fair trade goods are perceived as But sales of cocoa beans fell slightly in the dynamics of the UK retail a viable alternative to conventional in 2013 and the market share stood sector. The total value of estimated production, despite the price. As a at just 0.2 percent. A “partnership” Fairtrade retail sales in twenty EU result, these products have found model is now expected to provide the countries in 2013 had amounted to a place on the shelves of large solution. The model was previously ¤4,682,221,317. Two EU countries discount retail chains such as Lidl, used in cases of sugar and cotton, posted phenomenal growth rates: Penny and Netto. where companies were obliged to the Czech Republic saw a 142% partially migrate to fair trade products. growth in estimated retail sales Last year, another retail outlet, between 2012 and 2013, and Estonia Aldi, also successfully incorporated Five major partners - Ferrero, Mars, the figure was 65%.Of the total Fairtrade bananas and coffee in its and the supermarket chains Lidl, global estimated retail sales which regular list of products. Now that the Rewe and Kaufland - have been stood at ¤5,500,317,789 in 2013, products are more visible, customers found for cocoa. In the meanwhile, European countries made up 85% are increasingly going for the good- these retail outlets have been of this value. conscience option: 50 percent of purchasing thousands of tons of bananas sold at Aldi are fair trade, 26 cocoa according to fair criteria, Belgium99 percent of flowers and 20 percent of leading to a sevenfold increase in all coffee products. sales in the first months of the year. The sale of Fairtrade products in Belgium, measured by volume, increased 7.5% in 2013, bringing the total estimated value of Belgium’s Fairtrade market up to ¤94 million. The Fairtrade products with the greatest volume on the Belgian market are fresh bananas, followed by flowers, sugar, juice and coffee. In terms of market value, Fairtrade coffee tops the charts, followed by bananas and chocolate. The positive trend is mainly attributed to increased sales at Delhaize, Colruyt, Oxfam, Ethiquable, Miko and Café Liegeois.

Awareness of the Fairtrade logo among Belgians has also increased, from 67% in 2011 to 78 % in 2013, which indicates that an increasing number of consumers recognise the logo and know that it stands for products that meet agreed environmental, labour, and developmental standards. Source: Fairtrade International (2015)

30 Promoting Responsible and Sustainable Sourcing Through Fair Trade

II. Policy on Fair Trade “Trade incentives arise not only from the most advanced programmes government action, but also from and policy uptakes on Fair Trade. Due to the status of Fair Trade a shift in the market place towards The private sector has also played as a voluntary private standard, more sustainable products. Private an increasingly important role in the EU and EU Member States sustainability-bound schemes (e.g. demonstrating the value of Fair do not have a specific legal or fair, ethical or organic) can be an Trade, although not all parties or regulatory framework that applies effective way to foster sustainable stakeholders in the debate – NGOs, to Fairtrade. However, as Fairtrade and inclusive growth in developing civil society, consumers, private has grown in both commercial and countries. Public authorities can sector such as producers and political importance, the EU, EU promote these initiatives. We retailers, government and public Members States and other public will strengthen our support for sector – see eye to eye on different institutions in Europe have begun developing country producers taking aspects of Fair Trade. to develop specific policy positions part in sustainable trade schemes on Fairtrade, initially in the context by further mobilising cooperation, It is further anticipated that the of their activities on development including AfT measures, improve European Commission 2015 trade cooperation, but increasingly also monitoring of related activities and investment strategy “Trade for with respect to the private sector as and continue to encourage our All: Towards a more responsible well as consumer affairs. partner countries to promote fair trade and investment policy” will and ethical trade. We also intend lead to the further action by the EU The cornerstone of the EU’s to further facilitate fair and ethical to promote fair trade, although the approach to Fair Trade is purchasing choices by public measures that are proposed target the European Commission authorities in Europe in the context research and communication rather Communication on Fairtrade101, of the upcoming review of public than providing any material support which outlines and clarifies the procurement directives.” that can be accessed by producers in Commission’s understanding of Fair ACP countries. Trade, and also discusses the EU’s More recently, the European support of Fair Trade in the internal Commission issues a Communication (a) EU Support of Fair Trade market and internationally. In the on the Private Sector and Communication, the Commission Developing Countries, which Following the Communication on rightly makes the link between the noted that “[a]dherence to social, Fair Trade, the EU has become more objectives of the Fair Trade system, environmental and fiscal standards strongly and directly engaged in and the role which preferential is also considered a precondition support of Fair Trade, either through market access could have in for any EU engagement with, or funding or collaboration. supporting FT and its outcomes, public support to, the private sector. both generally through the EU’s Responsible business practices “Handicraft and Business through Generalised System of Preferences, by companies will be reinforced Regional Integration and Fair Trade and more specifically, for ACP through the promotion of consumer Market” Countries in the context of the awareness concerning sustainable Cotonou Agreement. consumption and production Central Asia Crafts Support patterns and practices, and the Associations’ Resource Centre in Since 2009, a number of other promotion of fair and ethical Kyrgyzstan (CACSARC-kg) and EU policy documents have made trade.”104 Bishkek Business Club (BBC) were reference to Fair Trade, most the chief organizers of the Festival, notably those concerning trade and Many Member States have also whose main components were development. Furthermore, other included Fair Trade as a priority funded by the European Union under EU institutions such as the European issue in both their internal and the project “Handicraft and Business Parliament and the Committee of international affairs (in the through Regional Integration and the Regions have also included Fair context of trade and development Fair Trade Market”. The project has Trade and its support or promotion cooperation). Northern and a 2-year duration and, as part of the in their official documents.102 In Western European countries, where EU Central Asia Invest Program, will the 2012 Communication on Trade consumer awareness of, and civil reinforce the cooperation among Growth and Development,103 the society advocacy for Fair Trade Tajikistan and Kyrgyzstan in the European Commission states that: are the highest, also tend to have handicraft sector.105

31 Promoting Responsible and Sustainable Sourcing Through Fair Trade

European Business Awards for In line with its Plan A commitments, and sustainable trade as a means to the Environment: M&S delivers on M&S introduced a new clothes recycling decrease poverty.110 It works around Plan A commitments to become policy known as ‘Shwopping’. First three main themes: Responsible Retailer of the Year launched in April 2012, the Shwopping initiative encourages customers to -- Trade Support Thanks to the achievements of Plan bring any brand of unwanted clothing -- Awareness Raising A – an ambitious environmental to M&S clothes stores. The company -- Spreading and exchanging and ethical programme – the believes that unwanted clothes information. international retailer Marks & should be put to good use, not just Spencer (M&S) has continued to thrown away. It is therefore asking An example of one of their activities meet its commitment to become its customers to ‘shwop’ – donate an is the documentary in Fair Trade carbon neutral. In addition to unwanted piece of clothing every time coffee. The Trade for Development collecting the top prize in the they buy a new one.106 Centre commissioned a documentary management category of the EBAE about fair trade coffee from Kivu 2012, the company has been named The EU Horizon 2020 Work for TV5Monde. The documentary Responsible Retailer of the Year Programme for 2014-2015, also aims is now available, with English at the World Retailer Awards and to support Fair Trade under the subtitles. A camera crew visited three Company of the Year in the Business chapter on Food security, sustainable coffee organisations in Kivu: RAEK, Community’s Awards for Excellence. agriculture and forestry, marine and Sopacdi and COOPAC. It shows maritime and inland water research how fair trade coffee can positively M&S received the EBAE Management and the bioeconomy.107 The Call for impact the living conditions of the Award for its project ‘Marks & Sustainable Food Security ‘SFS-15- local population, even when the Spencer Plan A - Doing the Right 2014: Proteins of the future’ is expected circumstances are tough.111 Thing’, which outlined a strategy to have, as one of its impacts “A clear to reduce the company’s resource contribution to social innovation due DFID The British Department for impact by meeting 180 sustainable to Fair Trade/fairer trade, as well International Development provides commitments. Launched in as an increase in socio-economic financial support through grants to 2007, Plan A sets out objectives and environmental sustainability.” the Fairtrade Foundation (UK), which to be achieved in the areas of A budget of ¤128,000,000 was is the national Fairtrade Organisation green procurement, fair trade, allocated to this Call.108 of the UK. DFID has also signed a waste management, biodiversity Programme Partnership Agreement conservation, corporate social Members States are also part of the of £12 million with FLO from 2011 to responsibility, carbon emissions EU equation when it comes to Fair 2014112 to help scale up DFID’s work reduction and energy efficiency. Trade, and a number have increased supporting farmers in developing their support via official development countries to access better terms of The company has made significant assistance programmes through trade in global markets. DFIDs funding progress in terms of achieving their development cooperation has also helped support smallholders the Plan A objectives. A report institutions. This is in line with the directly in a number of ACP countries, published in June 2012 confirms shared competency between the such as Fintea Growers Co-operative that M&S is the first major retailer European Commission and Members Union in Kenya.113 to become carbon neutral. The ‘2012 States on development cooperation, How We Do Business Report’ states whereas the European Commission Fairtrade International lists among that 138 of the Plan A commitments has exclusive competency with its partners several other EU and have already been achieved, while a regards international trade in the European national development further 30 are currently on schedule. EU, which since the Lisbon Treaty, agencies and public institutions:114 According to the report, M&S now has also included the area of foreign recycles 100% of its waste – ensuring direct investment (FDI).109 -- Agence Française de nothing goes to landfill. It also states Developpement (AFD)115 that 31% of M&S products now have Belgium The Trade for Development A project financed by French a ‘Plan A attribute’ – meaning they Centre, which is a Belgian Development agency (AFD), are either free range, produced at Development Agency (BTC) the African Association of an ‘eco-factory’ or made from programme, supports Fair Trade Cotton Producers (AProCA), recycled material. through its work to promote fair an execution institution, and

32 Promoting Responsible and Sustainable Sourcing Through Fair Trade

implementation partners like on Fairtrade gold. This work will development through their Fairtrade International, Max conclude in 2015. purchasing decisions, by promoting Havelaar France and Helvetas, Fair Trade in their procedures, work together to assist West -- UK’s Department for International while respecting the fundamental African cotton producers Development (DFID)120 principles of EU law. Some public to as they improve their DFID provides longer-term authorities are already putting fair competitiveness and access funding for selected civil trade procurement into practice, by to markets. society organisations through introducing Fair Trade considerations its Programme Partnership into the different stages of public -- German Development Bank Arrangements (PPAs). Fairtrade procurement procedures. (KfW)116 International currently receives KfW, the German Development PPA funding for 2011-2014, part of The EU legal framework had been Bank together with Incofin the Strategic Funding Consortium. criticised for its lack of clarity and Grameen Foundation and An extension for the PPA funding as the European Parliament has Fairtrade International work until 2016 has been granted. repeatedly pointed out. As a result jointly to improve access to various interpretations of the legal finance for Fairtrade certified (b) Fair Trade and Public framework exist, creating legal producers through the Fairtrade Procurement in the EU insecurity for contracting authorities Access Fund. and inhibiting expansion of fair Perhaps the most concrete example trade public procurement. This -- German International Development of the inroads that Fair Trade has resulted in the revision of EU public Cooperation (GIZ)117 made into EU policy has been the procurement directives could help Fairtrade collaborates with GIZ inclusion of Fair Trade in the EU bring clarity.122 to provide certification advice to Public Procurement Directive in cocoa farmers in Liberia. 2014121. This development followed Some examples of the challenges years of wrangling between EU that Member States faces are -- Irish Aid118 / Solidaridad institutions, Members States, public explored by Fisher, E. and Sheppard, Fairtrade partnered with Irish bodies and even led to a Member H. (2012), in their overview of the Aid and Solidaridad to enhance State being taken by the Commission case that the European Commission the capacities of producer before the European Court of Justice. brought against the Netherlands organizations in Central America concerning the terms of a tender (Guatemala, Honduras, Nicaragua As a growing proportion of European brought by province in the and El Salvador) and East Africa citizens care more and more about Netherlands which made reference (Kenya, Tanzania, Uganda, contributing towards sustainable to Fair Trade:123 Ethiopia). The main emphasis economic and social development in of the partnership has been in developing countries through their An example of legal dynamism the coffee sector supporting purchasing preferences, notably relates to a 2012 ruling from the sustainable production for both buying Fair Trade, this concern has Court of Justice of the European Fairtrade and Utz certified also transferred to preoccupation Union (CJEU), which is the first producers. about sourcing of goods and piece of European case law on fair services by public bodies. trade (Fairtrade Foundation, 2012).8 -- Swiss State Secretariat for In May 2010 the EC referred the Economic Affairs (SECO)119 This concern of consumers for Fair Netherlands to the CJEU over a SECO has supported Fairtrade Trade, more common in western call for tender for the supply and International since 2008 European Member States than in management of automatic coffee in the framework of the the rest of the EU, has been relayed machines by Noord-Holland Province Strategic Funding Consortium by civil society, local authorities, (EC, 2010b), due to a complaint to alongside DFID, IrishAid, ICCO and also echoed at EU level by the EC by Douwe Egberts (Scholten and NORAD. SECO has now the EU institutions, notably the Verheijen, 2011). The Province extended its funding to Fairtrade European Parliament. wanted to procure sustainably with International, in particular regards to environmental and socially assisting us in developing new Public authorities in the EU can responsible methods of production. markets and in the ongoing work play an active role in sustainable The EC argued that it was infringing

33 Promoting Responsible and Sustainable Sourcing Through Fair Trade

EC procurement regulations because Social: A Guide to Taking Account using energy-efficient machines. In the notice for tenders requested of Social Considerations in Public accordance with the case-law of the bidders to supply beverages with Procurement”124. According to this Court of Justice of the European specific labels: EKO and/or Max publication, the existing Public Union, this also includes award Havelaar (EC, 2010b). Although Procurement Directive 2004/18/ criteria or contract performance equivalent labels were acceptable, the EC125 allowed a contracting authority conditions relating to the supply Province did not specify substantive which wished to purchase goods or utilisation of fair trade products criteria regarding which labels would which make a contribution to in the course of the performance be considered equivalent. sustainable development (hereafter of the contract to be awarded. referred to as “ethical trade goods”) Criteria and conditions relating to Passing judgement on the 10 May to do so, provided it complied with trading and its conditions can for 2012, the CJEU concluded that the certain rules. Such an authority instance refer to the fact that the Province had not respected the was allowed to take appropriate product concerned is of fair trade current EU Public Procurement considerations into account in origin, including the requirement Directive by requiring products the tender specifications, but it to pay a minimum price and price to bear a specific label and for could not require the products to premium to producers. Contract the way it required bidders to bear a specific ethical trade label/ performance conditions pertaining to prove suitability requirements certification because this would limit environmental considerations might and minimum capacity levels. access to the contract for products include, for example, the delivery, However, the Court clarified that it which are not certified but meet package and disposal of products, is compatible with the current EU similar sustainable trade standards. and in respect of works and services Public Procurement Directive to contracts, waste minimisation or define the minimum requirements The revision of the Public resource efficiency. of products in the technical Procurement Directive in 2014 led to specifications plus to give extra a specific recognition that: This finally established under EU points in the award criteria based law that Fair Trade could constitute on considerations of environmental [...]with a view to the better a legal criteria or condition in EU or social nature and to products ‘of integration of social and public procurement provided it fair trade origin’ (CJEU, 2012). It also environmental considerations in the is framed in accordance with the gave advice that to incorporate an procurement procedures, contracting decision of the EU Court of Justice. ethical trade label, the underlying authorities should be allowed to Namely, the social conditions criteria should be identified and use award criteria or contract concerned with the process by the label used as means of proof. performance conditions relating to which the goods being procured This ruling is the subject of SMO the works, supplies or services to be was produced could be defined advocacy for incorporation of a more provided under the public contract in in a public tender, provided the progressive position on fair trade any respect and at any stage of their conditions apply to specific goods, into procurement law (Fairtrade life cycles from extraction of raw as opposed to being of a general Foundation, 2012), assuming no legal materials for the product to the stage nature.126 A number of EU Member appeal is successful. of disposal of the product, including States, such as Belgium, Germany, factors involved in the specific the Netherlands, Sweden and the Fisher and Sheppard (2012) also process of production, provision UK have included some aspects provide the examples of other or trading and its conditions of of Private Certification System, initiatives where EU public bodies or those works, supplies or services particularly relating to sustainability, governments had tried to promote or a specific process during a later in their public procurement and Fair Trade without falling foul of stage of their life cycle, even where tenders127. In the case of the UK, procurement rules, for example the such factors do not form part of Sweden and the Netherlands, the Welsh Government’s initiative on Fair their material substance. Criteria criteria have included Fair Trade Trade procurement. and conditions referring to such a obligations. production or provision process are In 2010, the first major recognition of for example that the manufacturing Fair Trade is also included in the new Fair Trade in EU public procurement of the purchased products did not Directive on concession contracts,128 came through the European involve toxic chemicals, or that the which also includes a paragraph Commission publication “Buying purchased services are provided permitting award criteria or

34 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Figure 15: Fairtrade International: Top 10 countries with the highest shares of conditions based on Fair Trade. EU Fairtrade area of the total agricultural area, 2013 Member States have until April 2016 to transpose the new rules into their national law. 5.2. Fair Trade in the ACP

Fair Trade has had a long presence in the ACP region as far as certification of producers and production of FT goods are concerned. Furthermore, some of the NGOs and other institutions which have played a strong role in advocating in favour of Fair Trade at national, regional Source: Fairtrade International / ITC and international levels have come from Africa, the Caribbean and the Pacific. Needless to say, in the context (a) Fair Trade Production the relative proportions in 2011130. In of global commodities trade, the fact, East Africa alone has 652,900 balance of power has often not been According to Fairtrade International, Fairtrade farmers and workers, the on the favour of producers or even there are a total of 37 ACP countries most of any sub-region in Africa or countries in the ACP region, and so which have certified FT production the rest of the world. Fair Trade has presented an attractive out a total of 79 countries in the opportunity for the producers and Group, which constitutes almost half The Report also noted that Fairtrade increasingly even for governments of the ACP. in Kenya grew further in 2012, with to leverage the critical role that the several large smallholder coffee ACP region plays in the production The figures from the Fairtrade organizations entering Fairtrade. of agricultural and non-agricultural Monitoring Report129 show that Combining all farmers and workers, commodities. The unique and very there are more Fairtrade farmers 19 percent of all farmers and workers asymmetrical relationship between in Africa than in any other region in the Fairtrade system are now the ACP and the EU in trade terms in the world. Their data for 2012, found in Kenya. Côte d’Ivoire is a has also been recognised by Fairtrade shows that 61 percent of all farmers new entrant into the top ten lists in International, which has launched and workers within the Fairtrade 2012, while numbers in Ghana also a number of initiatives to support system lived in Africa and the grew significantly, reflecting the ACP FT producers in the face of Middle East. Latin America and the rapid growth of certification within preference erosion and the changing Caribbean accounted for 21 percent the cocoa industry in West Africa. trade dynamics with the EU. of all farmers and workers within India continues to have the largest the Fairtrade system, and Asia and number of workers among Fairtrade I. Data Oceania for 18 percent—similar to hired labour organizations, though Ethiopia showed strong growth in worker numbers since the 2012 report. The growth in certification of flower plantations makes Ethiopia the fourth most important country in the Fairtrade system in terms of worker numbers.

Africa also registered the fastest growth in the rate of Fairtrade certification in 2012, which increased by 23% as 74 new producer

35 Promoting Responsible and Sustainable Sourcing Through Fair Trade

organisations were certified. Latin in the top ten, with the Dominican -- 2012, May - All coffee based America and the Caribbean has Republic boasting a 12% share of the beverages sold at Woolworths the greatest number of certified entire region’s Fairtrade Premium. cafes are Fairtrade certified. organisations, at 588 or just over half Woolworths also launches a range (52%) of the global figure, followed (b) Fair Trade Consumption in of Fairtrade coffees in-store. by Africa and the Middle East (390 the ACP or 34%) and lastly Asia and Oceania -- 2012, Dec - The list of Fairtrade (161 or 14%) The ACP region is emerging a products available to consumers consumer of Fair Trade products, in has grown. South Africans can In the Asia and Oceania region, to line with the growth of the middle now choose between a variety of which the ACP Pacific countries class in select ACP countries, and wines, teas, coffees and some food belong, there are three countries also growing awareness of and products. which have Fairtrade certified consumer action in response to farmers organisations (FOs), namely concerns about food production and -- 2013, May - The sales report Papua New Guinea (5), Fiji (3) the conditions of farmers and rural for 2012 is ready: in 2012 South and Timor Leste (1). Despite their communities in their own or other Africans bought R234m worth limited numbers, these FOs are developing countries. of Fairtrade products - a 220% strong performers in the region. For growth from 2011. example in terms of the five top South Africa represents the biggest premium receiving countries with consumer market in the ACP -- 2013, July - Protea Hotels switch to FOs in this region between 2011 and region131, with a Fairtrade retail sector Fairtrade coffee - the first African 2012, Fiji and Papua New Guinea worth approximately ¤23 million in hotel chain to make a Fairtrade performed well, with19% and 7%of 2013. After five years in operation, commitment. the regional share respectively, Fairtrade Label South Africa (FLSA), putting them in second and third. the national Fairtrade Organisation -- 2014, Sep - One of South Africa’s Timor Leste and Fiji were also in the of South Africa, has led to the must loved wine company top-five countries with Fairtrade following milestones: Fairview, owned by Charles Back, farmers and workers in 2012. becomes Fairtrade certified. -- 2010, May - FLSA starts actively Latin America and the Caribbean is promoting Fairtrade to local -- 2014, Mar - Fairtrade leads the most successful region in terms consumers. The first products to the research on sustainable of FT Premium, receiving 66% of all become available are some locally consumerism and shows that 70% Fairtrade Premium flows for their produced Fairtrade wines and one of South Africans are potential Fairtrade coffee, bananas, sugar, and coffee brand made with Fairtrade consumers of Fairtrade and other fine-flavour cocoa. In total, there beans from East African co- sustainable products. are eight ACP Caribbean countries operatives. which have Fairtrade certified small Kenya joined South Africa in 2012 producer organisations: Belize ( 2) -- 2011, June - Kraft Foods SA to become the second retail market Cuba (18), Dominican Republic (21, announces that their Cadbury for Fairtrade in Africa, and along with an additional 12 Hired Labour Dairy Milk [plain chocolate] is to with India (which also became a Organizations), Guyana (7), Haiti achieve Fairtrade certification. The new market in 2012) and Brazil, (5), Jamaica (2), Saint Lucia (1) and chocolates will appear in store in these four countries represent Saint Vincent and the Grenadines November 2011. the emerging and growing South- (1). From the ACP Group, Dominican South production and consumption Republic is sixth and Haiti eighth -- 2011 - Over 15 South African markets, namely countries that both in the rankings of the top ten Latin companies are selling Fairtrade produce and consume a substantial American and Caribbean countries labelled products locally. Local amount of Fairtrade produce. The Fairtrade farmers and workers 2012. Fairtrade sales increase fourfold, potential of South-South Fair Trade In terms of FT Premium receipts for from ZAR 18.4m in 2010 to ZAR has also been explored in a report 2012, Dominican Republic, Belize and 73m as South African consumers by BTC (a Belgian Development the Windward Islands all features choose Fairtrade. Agency (BTC) programme )132

36 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Figure 16 : Estimated Fairtrade retail sales by country 2013

Country 2012 (in ¤) 2013 (in ¤) Growth rate

Kenya - 51,064 n/a South Africa 22,263,619 22,573,605 22%* Total 22,263,619 22,624,669 2%

* Growth rate is based on the percentage increase reported in the local currency, not the value converted into Euros.

5.4. Case studies of the EU and numerous other OECD Public Procurement – i.e. the Fair Trade sourcing in and middle income countries). purchase of goods and services This development goes some way by public sector bodies – accounts the ACP – EU Context towards breaking the historical for nearly one fifth of GDP in “one or the other” dichotomy the European Union (European The case studies in this section that marked concept and goals Commission, 2012). In Germany, are taken directly from articles, of Fair Trade vis-à-vis the reality public procurement by general journals, notes, presentations and of the global multilateral trading government and state-own utilities is other sources. They are structured framework, and reinforces that estimated to account for about 17% in order to give an overview the pursuit of Fair Trade is not a of GDP (OECD, 2011). Until the reform of the context, opportunities, priori contrary to global multilateral of 2004 European regulations were challenges and lessons learnt on the trade rules or systems. As such, largely characterized as neoliberal application of Fair Trade in various EU governments at national and and focused on competition and the contexts – at the producer, local, state levels are free to influence the creation of the single market without national or even regional level, and purchasing choices made with tax- focussing on social criteria (Rolfstam, with regards specific commodities payer money in favour of Fair Trade, 2009). In the beginning of the 20th or markets. Although neither bringing this concept to a broader century – and especially during the comprehensive nor definitive, they audience, and likewise Fair Trade negotiations of a new Directive on do provide a glance into some of producers may now consider how public procurement, a debate on the potential avenues for Fair Trade to broach and pursue a new market social standards in the economically to develop within the ACP-EU trade which may demand the supply of based process of tendering gained and cooperation framework. Fair Trade products for extended momentum (Rolfstam 2009; Scherrer periods of time. et al., 2010); this resulted in an 5.4.1 Fairtrade in EU intrusion of social criteria in Directive Case Study 2: Fair Trade in EU Public 2004/18 (Scherrer et al., 2010: 118). Public Procurement Procurement – the approach of Also at the national level, social Bremen (Germany) criteria became more important Public procurement represents the (Kahlenborn et al., 2011; Schulten new frontier in Fair Trade, where Sources: Sarter E.K., Sack D. and et al., 2012; Sack, 2012). Seeing the dynamic has changed from Fuchs S. (2014) “Public Procurement that public procurement is based one of private consumer purchase as Social Policy? An introduction to in competition and market building choices, to one of public spending social criteria in public procurement these goals, however, are only and the role of public authorities in Germany” Working Paper No. 1 taken into account up to a certain and bodies as consumers. A key Working Paper Series Comparative point and if they are treated rather outcome of this debate has been Governance‘ August 2014 restrictively. whether private standards are or Universität Bielefeld can be compatible with global trade In brief, public procurement is – rules such as those concerning Dr. Wiese, K. and Schmidt, T. (2014) as every purchase – based on a Government Procurement in the “Bremen on its way to socially succession of decisions and choices: WTO (notwithstanding that the GPA and ecologically responsible The first decision, which also lays is not obligatory to all WTO Member procurement” LANDMARK Bremen, ground for the purchase, is the States, only signatories such as Freie Hansestadt Bremen decision to purchase a certain good

37 Promoting Responsible and Sustainable Sourcing Through Fair Trade

or service. Secondly, the specific exceeds Federal States’ laws]. Next to the specific criteria used characteristics of that good or in the distinct public procurement service to be purchased have to be According to the stipulations of § 97.1 laws, their specific design varies. decided. Thirdly, the criteria on which and §97.2 GWB the general principles Thus, while some criteria tend to be the choice between different options of public procurement are defined as mandatory requirements (e.g. the will be based have to be decided on: competition, transparency and non- compliance with minimum wages), thus, how important will the price be discrimination. Within this framework, others (such as integration or and which other criteria will be taken tenders are awarded to the “most reconciliation of work and family) into account and to which extend? economically advantageous tender” tend to be optional for the procurer. (§97.5 GWB). Since the reform of The criteria of public purchasing are 2009, the GBW (which already had Furthermore, variance can be found of great interest not only to business been in place since 1958), allows regarding the type of proof of but also politically: Due to the high social and ecological criteria in public compliance with a certain stipulation; volumina spent, public procurement tendering are explicitly admitted as this differs heavily between different can be used to influence economic criteria in public tendering: §97.4 types of criteria and the different and social outcomes. By purposefully states that the criteria used may Federal States” laws. If specified, as a and strategically choosing and include ‘social, environmental or general line, four modes of proofs are purchasing, the authority can foster innovative aspects as long as these to be found: employment opportunities for are related to the subject matter and distinct groups, distinct sorts of made explicit in the specifications.’ A third way to show compliance businesses (e.g. SMEs or minority run [authors’ translation] While the GWB is to use labels and certificates. businesses) or societal goals. Public does not specify these criteria, today, Given the fact that labels and procurement thereby can be used as specifications are to be found in the certificates only exist for certain “a powerful tool for policy making.” Federal States’ public procurement areas (e.g. Fairtrade), the use (Bovis, 1998: 226) laws and the specific Federal of labels is already structurally States’ decrees. restricted. Therefore, it comes as no Being placed in the context of surprise that labels and certificates competition law [legal regulation In Germany, the inclusion of are mainly used in order to proof regarding the economy are (with Fairtrade as a criterion in public compliance with ILO Core Labour the exception of certain areas) procurement is relatively new. It Standards and Fairtrade, despite part of what is commonly referred was first introduced in North Rhine- the fact that the implementation to as “competitive legislation Westphalia (§18.1 TVgG NRW) in of this principle differs in the (‘konkurri-erende Gesetzgebung‘)], 2012. The only other Land that holds single states: Bremen, for example, public procurement is regulated at a stipulation on Fairtrade in its defines certain certificates that national as well as at subnational public procurement laws until now can be used in a dedicated decree level. At national level the Anti- is Schleswig-Holstein, where it was (BremKernV) whereas Saxony- Trust Law (Gesetz gegen Wett- introduced one year later, in 2013 Anhalt only regulates, that “suitable bewerbsbeschränkungen, GWB) (§18.1 TTG). certificates or self-declarations” can regulates public purchasing. At the Federal level as well as in some Figure 17: Types of proofs States, statutory decrees regulate public purchasing or specific aspects therefore even further. At sub-national level, the Federal States (Länder) are also entitled to adopt Federal State laws on public procurement, which, in 2014, 15 out of 16 Länder did. However, next to the GWB and the public procurement laws of the Länder, further regulations exist. Furthermore, in some Länder, decrees exist. [note: the Federal law is superior and

38 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Figure 18: Expansion of social criteria in German procurement law on Public Procurement, the overall framework of public procurement in the EU has been clarified, insofar as it has made it explicitly clear that fair trade criteria can be included in a public tender, but the Directive does not go so far as to outline the way these criteria are to be set and evaluated. In Germany, the situation is made even more complex by the fact that both national and state (Federal States) authorities can legislate on public procurement.

Germany has demonstrated that Fair Trade has a strong potential in public procurement and that for certain tenders, for example those involving food and drinks, as well as textiles, ACP producers can now gain access to a potentially lucrative market. Some public authorities have approached social and environmental public procurement be used as a proof of compliance regulation are similar. Rather, the proactively, such as Bremen with with the ILO Core Labour Standards stipulations in the Federal States’ the Landmark Project. In this case, (§12.2 LVG LSA). This use of self- laws are highly divergent regarding a lot of effort has gone into not declarations or other not specified the number of social criteria as well only establishing sustainability proofs is an alternative in all states as the specific criteria and their criteria into the tender process, but with ILO or Fairtrade stipulations mode of regulation. a substantial amount of outreach if no label exists for a group of and events with stakeholders such products or if an independent proof (c) Lessons on Fair Trade in public as NGOs. cannot be found. procurement Sustainable public procurement Today, 15 out of 16 German Federal The case study demonstrates clearly also provides an incentive for both States have public procurement that there is little uniformity in the the private sector bidders and the laws; 14 of these included social social and environmental dimension producers of Fair Trade goods to criteria. However, it seems important of public procurement in the EU, let enter into supply agreements for the to stress that this does not mean alone one country such as Germany. purposes of delivering the services that the specific criteria or their As a result of the latest Directive or goods under the tender.

39 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Glossary

Aid for Trade - Aid for Trade is of the primary production, including Example of a contract: a private an initiative that aims to assist the growing, handling, processing company builds and manages a developing countries, particularly and retailing up to buying by the motorway for a fixed price. least-developed countries, in consumer. Example of a concession: building their supply-side capacity a private company builds and and trade-related infrastructure to Child - Child means any person less manages a motorway and is expand their trade opportunities, than 15 years of age, unless otherwise remunerated through tolls, running and to integrate better into the defined by local legislation. the risk that the revenue generated multilateral rules-based trading will not cover its investment and system. Launched at the World Child Labour - Child labour means other costs incurred. Trade Organization’s (WTO) Hong any work carried out by a child. Kong Ministerial Conference in Conformity - Conformity is the December 2005, Aid for Trade has Code of Practice/Conduct - Code fulfilment of a requirement. four pillars (Aid for Trade Agenda): of practice/conduct means, in the trade policy and regulations, context of ethical trading, a set of Consensus - Consensus is an trade development, trade-related rules concerning labour practices agreement supported by all parties adjustment and infrastructure, and adopted by a company and meant concerned without using the rule of building productive capacity. to apply internationally, and, in majority, but by taking into account particular, to the labour practices of the views of all parties concerned Certification Committee - its suppliers and subcontractors. and by reconciliation of any Certification Committee (CC) is a conflicting arguments. body which controls and advises on Collective Bargaining Agreement the quality of certification decisions, (CBA) - Collective Bargaining Constitution - Constitution is a policies and procedures of a Agreement (CBA) means the legally binding document that certification body. right for workers’ organisations defines how the power and authority to negotiate with employers or are distributed and limited within an Certification of Trade - Certification employers’ organisations on behalf organisation or company. of Trade (Or Trade transactions): of their members to determine the process by which a certification working conditions and terms of Continuous Improvement - body determines operator’s employment. Continuous Improvement is, as a compliance with Fairtrade Standards management concept, a system of for traders and related certification Commercial Price - For some constant or ongoing incremental policies and contracts. products, no Fairtrade Minimum improvements to a process or Price exists. The paid price is a product based on constant or Certification system - Certification negotiated price between the seller ongoing examination and evaluation System is a system with its own and the buyer. of the process or product. rules, procedures and management for carrying out certification. Concession - A concession is a Contract Production - Contract kind of partnership between the Production (CP) means unorganised Certification Unit - Certification public sector and a (usually) private farmers who are contracted for Unit (CU) is the unit which evaluates company whereby the company is performing specific production tasks operator’s compliance with Fairtrade remunerated mostly through being to sell their products to a service Standards and certification policies and permitted to run and exploit the provider. In the Fairtrade context, contracts. There are two Certification work or service and is exposed to a CP also means the partnership Units in FLO-CERT: Producer potential loss on its investment. between the promoting body and Certification and Trade Certification. It differs from a public contract, the Fairtrade Producers. where a company is paid a fixed Chain of Custody - Chain of amount for completing the required Conventional Product - Conventional Custody are the steps from the start work or providing a service. product is any product not

40 Promoting Responsible and Sustainable Sourcing Through Fair Trade

produced or traded according to the preference-receiving country, have your voice heard, and/or put requirements of Fairtrade Standards. which must also be the country things on the agenda. where the finished products are Corporate Social Responsibility manufactured. Cumulation, however, Ethical Trade – Ethical trade is (CSR) - Corporate Social permits beneficiary countries to trade that contributes to sustainable Responsibility (CSR) is a concept of consider inputs from other countries development. business ethics based on the idea as originating content, and the that companies have stakeholders European Union GSP rules of Ethical trade label/ certification who are broadly defined as anyone origin allow several possibilities for - ethical trade label/certification’ or a group affected by the activities cumulation. There are three types of means any non-governmental trade of the company. The idea of CSR cumulation rules: bilateral, diagonal, related sustainability assurance is that a company should by regional and full cumulation. Bilateral scheme (for example, Fair Trade, accountable to its stakeholders. cumulation applies to trade between Fairtrade, Max Havelaar, UTZ, For this reason, the subjects of CSR two partners, allowing country A to Rainforest Alliance, etc.). focus on how companies should use inputs from country B without identify and “engage” stakeholders the final good’s originating status Evaluation - Evaluation means and how they should determine, being affected, provided that the interpreting and analysing measure and report the impact of inputs themselves originate in the monitoring data against their activities on others. country B (i.e. they satisfy the area’s requirements of Fairtrade Standards. Rules of Origin). Under diagonal Corrective Action - Corrective cumulation, producers can use Fair Trade - Fair Trade is a trading Actions are measures taken to materials originating in any member partnership, based on dialogue, address existing non-conformance country of the PTA as if those transparency and respect that or to prevent recurrence of non- materials originated in the country seeks greater equity in international conformance. where the processing is undertaken. trade. It contributes to sustainable Regional cumulation is a form of development by offering better Cost of Sustainable Production diagonal cumulation, which only trading conditions to, and securing (COSP) - Cost of Sustainable exists under the GSP and operates the rights of, marginalized producers Production (COSP) are the costs between members of a regional and workers – especially in the South. related to sustainably producing a group of beneficiary countries Fair Trade organisations, backed by product in a social, economic and (e.g. ASEAN). Finally, under full consumers, are engaged actively in environmental way in conformity cumulation, all stages of processing supporting producers, awareness with Fairtrade Standards. or transformation of a product raising and in campaigning for within the PTA can be counted as changes in the rules and practice Criterions Fairtrade Standards - qualifying content regardless of of conventional international trade. Fairtrade Standards (Fairtrade Generic whether the processing is sufficient (FINE’s definition). Standards and Fairtrade Product- to confer originating status on the Fair Trade’s rules guarantee: a specific Standards) are the set of materials themselves. living wage in the local context, requirements that producers and offering employees opportunities traders have to meet to be certified as Distributor - Distributor means any for advancement, providing Fairtrade Producers or Traders. operator or entity that purchases equal opportunities for all people, certified products for sale and does particularly the most disadvantaged, Cumulation - Cumulation allows not transform that product in any way. engaging in environmentally producers from a Preferential Trade sustainable practices, being open to Agreement country to import non- Draft Standards - Draft Standard public accountability, building long- originating materials from other is a proposed standard that is term trade relationships, providing member countries without the final available generally for comment, healthy and safe working conditions product’s originating status being voting or approval. within the local context, providing affected. The EU’s GSP rules of financial and technical assistance to origin are, in principle, based on the Empowerment - Empowerment producers whenever possible. concept of single-country origin, means increased opportunity for that is, the origin requirements must women and men to control their life. Fairtrade - Fairtrade (FT) means be fully met within one exporting It gives power to make decisions, to all or any part of the activities,

41 Promoting Responsible and Sustainable Sourcing Through Fair Trade

standards and certification systems Fairtrade Explanatory Documents - payer may pay to the producer. (in particular products or operators) Fairtrade explanatory documents are When the relevant market price for a of FLO e.V., FLO-CERT and its documents which further detail how product is higher than the Fairtrade Labelling Initiatives. the Fairtrade Standards need to be minimum price, then at least the interpreted and put into practice. market price must be paid. Fairtrade benefits - Fairtrade benefits are those means created Fairtrade Generic Product Fairtrade Premium - Fairtrade through the Fairtrade system that Standards - Fairtrade Generic Premium is an amount paid to allow small farmers and workers to Product Standards are the set of producers in addition to the improve their standard of living. requirements that producers or payment for their products. The Fairtrade benefits include traders must meet irrespective of use of the Fairtrade Premium is amongst others facilitated market the product produced or traded to restricted to investment in the access, long-term trade relationships, be certified as Fairtrade Producers producers’ business, livelihood and better trading conditions and, in or Traders. community (for a small producer most cases, a Fairtrade minimum organization or contract production price for the product as well as a Fairtrade Generic Standards - set-up) or to the socio-economic Fairtrade premium. Fairtrade Generic Standards are the development of the workers set of requirements that producers and their community (for a hired Fairtrade Bodies - Fairtrade Bodies or traders of any Fairtrade Products labour situation). Its specific use is is a term referring to any unit, have to meet to be certified as democratically decided by organisation or decision-making Fairtrade Producers or Traders. the producers. body in the Fairtrade system; The level of the Fairtrade Premium comprising, for example, the FLO Fairtrade Import - Fairtrade Import is set by FLO Standards Unit (SU) for Board, the Standards Committee, is the first purchase of a Fairtrade each specific product and is available PBU, FLO CERT, LIs. Product from the original producing in the FLO product standards (see country. http://www.fairtrade.net/product_ Fairtrade Certification - Fairtrade standards.html for more details). The Certification is the process by which Fairtrade Label - Fairtrade Label amount of Fairtrade Premium that a a certification body determines means any product certification label Fairtrade organization receives will operator’s compliance with relevant owned by FLO or one or more of depend on the quantity of Fairtrade Fairtrade Standards and certification its members that is used to denote products that have been sold. The policies and contracts. compliance with Fairtrade Standards. Fairtrade Premium is not paid to the company, but instead is paid Fairtrade Certified - Fairtrade Fairtrade Labelling - Fairtrade directly into a separate bank account, Certified means that a determination Labelling means FLO e.V., FLO-CERT managed by the Joint Body. The against Fairtrade Standards has and all Labelling Initiatives. Fairtrade Premium is paid separately been made and that an operator/a from payments for the product and product is in compliance with Fairtrade Minimum Price - Fairtrade the company does not own the Fairtrade Standards. Minimum Price (where it exists) is Fairtrade Premium. The Fairtrade the minimum price that must be Premium is intended to be used Fairtrade Certified Producer - paid by buyers to producers for a for the benefit of the workers, their Fairtrade Certified Producer is a product to become certified against families and their communities, within Fairtrade Producer which has been the Fairtrade Standards. The FMP is the framework of Fairtrade Premium certified against the Fairtrade a floor price which covers producers’ projects. The Fairtrade Premium may Standards relevant to average costs of production and not be used for expenditure for which that organisation. allows them access to their product the company is legally responsible, markets. The FMP represents a nor may it be used to support the Fairtrade Certified Trader - formal safety net that protects company’s running costs or costs of Fairtrade Certified Trader is an producers from being forced to sell compliance with Fairtrade standards. exporter, importer, manufacturer or their products at too low a price processor which has been certified when the market price is below Fairtrade Producer - Fairtrade against the Fairtrade Standards the FMP. It is therefore the lowest Producer means any entity located relevant to that organisation. possible price that the Fairtrade in a producing country that has

42 Promoting Responsible and Sustainable Sourcing Through Fair Trade

been certified under the Generic Procurement (GPA) is a “plurilateral” identifies the related product as Standards for Small Farmers’ WTO agreement and only binds being Fairtrade Certified. Organizations, Generic Standards for signatory states. The GPA has Hired Labour Situations or Contract currently 15 Parties, mainly major International Labour Convention - Production standards of FLO. industrialised economies: Armenia, International Labour Convention has Canada, European Union, Hong the force of international law, and Fairtrade Sourcing Programs (FSP) Kong, Iceland, Israel, Japan, Korea, states that ratify them are required to is a commodity-sourcing program Liechtenstein, the Netherlands with incorporate the principles in national applicable to cocoa, sugar and respect to Aruba, Norway, Singapore, law and to ensure the implementation cotton which offers a model for using Switzerland, Chinese Taipei and of the law. In addition, all ILO member the FAIRTRADE Program Mark which the United States. The GPA lays states, regardless of ratification, are is focused on raw commodities down rules guaranteeing fair and obliged to respect, promote and rather than finished products. non-discriminatory conditions for realise the principles contained in Licensees for FSP are offered a range international competitive tendering. the core ILO Conventions, which of communication options including Participating governments are address freedom of association and on-pack or off-pack labelling and / required to put in place domestic the right to collective bargaining, or communications. procedures by which aggrieved forced labour, discrimination and private bidders can challenge equal remuneration. Fairtrade Standards - Fairtrade procurement decisions and obtain Standards (Fairtrade Generic redress in the event such decisions International Labour Organisation Standards and Fairtrade Product- are found to be inconsistent with the - International Labour Organisation specific Standards) are the set of rules of the agreement (ILO) is the UN specialised agency requirements that producers and which seeks the promotion of social traders have to meet to be certified Hired Labour - Hired Labour (HL) justice and internationally recognised as Fairtrade Producers or Traders. means employed workers who work human and labour rights. It formulates for somebody else, for example a international labour standards FLO-CERT - FLO CERT/FLO- commercial farm or a factory. in the form of Conventions and CERT GmbH is the wholly-owned Recommendations setting minimum subsidiary of FLO (including any Horizon 2020 - Horizon 2020 is the standards of basic labour rights. body partly or wholly owned by financial instrument implementing FLO-CERT/FLO-CERT GmbH or the Innovation Union, a Europe 2020 Labelling - Labelling means any words, contracted to provide services to flagship initiative aimed at securing particulars, trademarks, brand names, it) responsible for the Fairtrade Europe’s global competitiveness. pictorial matter or symbol placed on inspection and/or certification of It is the biggest EU Research and any packaging, document, notice, producers and traders. Innovation programme ever with nearly label, ring or collar accompanying or ¤80 billion of funding available over 7 referring to a product referred to as a Forced Labour - Forced Labour years (2014 to 2020). Europe 2020 is certified product. means work or service undertaken the European Union’s ten-year growth by a person under duress or menace and jobs strategy that was launched Labelling Initiative – Labelling of penalty in circumstances where in 2010. Five headline targets have Initiatives are national organizations the person has not offered him/ been set for the EU to achieve by the which license companies to use herself voluntarily. end of 2020. These cover employment; the FAIRTRADE Mark on consumer research and development; climate/ products and promote Fairtrade in Freedom of association - Freedom energy; education; social inclusion their countries. Labelling Initiative of association is the right of all and poverty reduction. shall mean full member organisations workers to join or form a trade union of FLO with an exclusive, defined of their own choosing and carry International Fairtrade Certification geographical territory whose main out trade union activities without Mark - International Fairtrade purpose is to licence a Fairtrade interference from their employer or Certification Mark (ICM) is a label and which are responsible for from public authorities. trademark owned by FLO and used local licensing of a Fairtrade label as by all Labelling Initiatives except for well as marketing, promoting sales of Government Procurement – Max Havelaar Switzerland, Transfair Fairtrade Products and education in The Agreement on Government Canada and Transfair USA. The mark respect of Fairtrade.

43 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Liaison Officer - Liaison Officer (LO) applies to the organic product, Standards relevant to them. is a consultant working for FLO e.V. unless stated differently. and carrying out information and In the case of Fairtrade coffee Producer Executive Body (PEB) support functions with Fairtrade for example, buyers pay the - The producer executive body Producers. Liaison officers assist Fairtrade Minimum Price or the comprises elected representatives Fairtrade Producers in understanding market price, whichever is higher, of all the registered producers. and meeting requirements and a Premium for conventional It is the intermediary between (certification) and are involved coffee. For organic coffee, an the registered producers and the in supporting market access and organic differential needs to be paid promoting body until the producer development. on top of price and Premium. organization can adequately Conventional coffee: Minimum represent the producers’ interest License fee - License fee is the Price or market price + Premium and manage the Fairtrade Premium fee which Licensees pay to a Organic coffee: Minimum money. Once the producer Labelling Initiative for the use of the Price or market price + organic organization has developed these International Fairtrade Certification differential + Premium capacities, the producer executive Mark on a Fairtrade Product. body can, if so wished, assume the Outgrowers - Outgrowers are function of a structure similar to an Licensee - Licensee is an understood as all small producers executive committee. organisation licensed by a Labelling not yet certified under the Fairtrade Initiative to use a Fairtrade label on Generic Standard for Small Producer Producer Organization - Fairtrade Products. Organizations from whom Fairtrade The producer organization is a Fresh Vegetables are being sourced group of registered producers Mass balance - Principle means that by the certified Hired Labour operator. contracted and/or supported by certified produce may be mixed with the promoting body. Its purpose is conventional produce. At any stage Policy Coherence for Development to enable the registered producers of the supply chain, certification – Policy Coherence for Development to democratically decide on systems require the respective actors (PCD) is a principle which obliges the Fairtrade Premium use and to keep administration of the volume the EU to take into account of negotiate with the promoting body going in and out of the unit. the objectives of development over terms of trade. The producer cooperation in all policies that organization is expected to become Membership fee - Fixed fee paid by it implements which are likely stronger over time and become a buyer in the supply chain on an to affect developing countries, an autonomous small producer annual basis. and that these policies support organization which can comply with development objectives. It has three the Fairtrade Standard for Small Minimum Requirements - Minimum legal bases: Treaty of Maastricht Producer Organizations. When Requirements are Fairtrade (1992), Art. 130v. ‘The 3 Cs’; the producer organization is referred to Standards requirements which all Lisbon Treaty (2009), Art. 208; and in the text, it can mean one or more producers must meet from the the Cotonou Agreement (2000; than one producer organization. moment they join Fairtrade. revised 2010), Art. 12. Progress Requirements - For Monitoring - Monitoring means Producer - Grower or farmer of companies: these are requirements measuring a set of indicators that are Certified Fairtrade products against which certified companies tracked over time to identify trends must demonstrate performance Producer Business Unit - Producer or efforts towards long-term Organic Differential - For some Business Unit (PBU) is the FLO improvement and which should certified organic products, a business unit that advises producers be developed according to a plan minimum organic differential is set. It on compliance with Fairtrade agreed by the management of the is the lowest possible differential that Standards and assists in market company, some within a specified producers must receive in addition access and development. period of time. to the Fairtrade Minimum Price or For Small Farmers: these are market price, whichever is higher. If Producer certification - Producer requirements on which certified a Premium is set for the conventional Certification (PC) is the certification producers must show permanent product variety, this Premium also of producers against the Fairtrade improvement.

44 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Promoting Body (PB) - The Registered producers - Registered is a group primarily consisting of promoting body is the intermediary producers refer to all the small organised small farmers who work organization that either contracts producers contracted and/or for themselves, for example a co- and/or supports small producers supported by the promoting body operative or association. in producing and marketing one and participating in Fairtrade. or more crops. It is responsible for The registered producers form Social Responsibility - Social supporting these producers to get the membership of the producer responsibility means actions of an organized. The promoting body organization once it is established. organisation to take responsibility can either be a trader (exporter/ for the impacts of its activities processor), or non- trader (NGO Requirement - Requirement is a on society and the environment, or private) which is a legal entity provision that conveys criteria to where these actions are consistent forming a partnership with the be fulfilled. with the interests of society producers it contracts and/ and sustainable development; or supports, i.e. the registered Review - Review is an activity of are based on ethical behaviour, producers. The promoting body is checking a document or process compliance with applicable law and the holder of the Fairtrade certificate to determine whether it is to be intergovernmental instruments and and is responsible for supporting the reaffirmed, changed or withdrawn. are integrated into the ongoing registered producers in complying activities of an organisation. with this standard. Revision - Revision is an introduction of all necessary changes to the Socially responsible public Public procurement - Public substance and presentation of a procurement (SRPP) - ‘SRPP’ means procurement is the purchase of document or process. procurement operations that take goods and services by governments into account one or more of the and state-owned enterprises. Segregation - Principle implies that following social considerations: It encompasses a sequence of certified produce may not be mixed employment opportunities, decent related activities starting with the with conventional produce at any work, compliance with social and assessment of needs through award stage of the supply chain. labour rights, social inclusion to the contract management and (including persons with disabilities), final payment. Smallholder farmer - The term equal opportunities, accessibility ‘smallholder’ refers to the limited design for all, taking account of Quick Entrance - Quick Entrance resource endowments of certain sustainability criteria, including ethical is the name of a procedure farmers relative to other larger scale trade issues and wider voluntary allowing new products in existing and more commercial farmers. The compliance with corporate social categories to enter Fairtrade without precise definition differs among responsibility (CSR), while observing Fairtrade minimum price, only with countries with variations in farm the principles enshrined in the Treaty a Fairtrade premium, during one size, allocation of resources, use for the European Union (TFEU) and full annual production and trading of external inputs and proportion the Procurement Directives. season. Meanwhile the paid price of food crops that are marketed. is a negotiated price between the Smallholder farmers characteristically Socio-economic development - seller and the buyer. The Fairtrade have limited business skills, low FLO considers socio-economic premium is paid in addition of the financial literacy and financial development to be a process negotiated price. Sellers and buyers management skills, little knowledge resulting in changes which improve are explicitly asked to ensure that management and risk aversion. the capacity of a community to the negotiated price covers the costs fulfil its aspirations. The aim is to of sustainable production (COSP). Small Farmers - Small Farmers empower individuals and groups with After one full annual production (SF) are producers who are not the skills they need to identify their and trading season thanks to structurally dependent on permanent needs and priorities and to develop the Quick Entrance, producers hired labour and who manage their plans and projects to address these. are asked to feedback data to production activity mainly with own The Fairtrade Premium is intended to the pricing unit of Fairtrade and family labour. be used both for the empowerment International. Currently, for almost of workers, and also for investing all Herbs and Spices, this rule is Small farmers Organisation - in plans and projects for social and extended without time limit. Small Farmer Organisation (SFO) economic improvement in the wider

45 Promoting Responsible and Sustainable Sourcing Through Fair Trade

community. The Fairtrade Premium manages the development of or producer organisation including cannot solve all the social and Fairtrade Standards. migrant, temporary, seasonal, sub- economic problems and needs of the contracted and permanent workers. workers and the community. But if Sustainability - Sustainability means It is not limited to field workers it is invested wisely and builds the the capacity of economic, social, but includes all other hired labour capacity of workers to change their institutional and environmental personnel, e.g. employees working own lives, the Fairtrade Premium can aspects of human activity, and the in the administration. The term, have long-lasting benefits. non-human environment, to continue however, is limited to personnel into the long-term. which is entitled to join unions and Standards - Standard is a set therefore normally excludes middle of defined criteria giving the Traceability - Traceability is the and senior management. requirements which must be ability to trace the history, application attained. A standard provides, for and/or location of a product. Workers Committee - Workers common and repeated use, rules, Committee (WC) is a committee guidelines or characteristics for Trade Certification - Trade of representatives of workers of products or related processes and Certification (TC) is the certification a company dealing with workers’ production methods. It may also of traders against the Fairtrade rights and working conditions. include terminology, symbols, Standards relevant to them packaging, marking or labelling World Shop - A World Shop is requirements. Standard requirements Trader - Buyer, seller, manufacturer, defined as: are meant to comply with and are transformer of a Certified Fairtrade based on stated objectives. product -- A shop that endorses, through its own mission or values Standards Body - Standards Body Transformer - Transformer means statements, publicity material is a recognised body at national, any operator or entity that alters and actions, the definition and regional or international level that the characteristics of a Fairtrade principles of Fair Trade. has as a principal function, by virtue Product through the use of physical -- The primary purpose for existing of its statutes, the preparation, or chemical or similar processes. as a shop is to promote Fair Trade. approval or adoption of standards Fairly traded products therefore that are made available to the public. Verification - Verification is take up the most important share the confirmation through the of the shop’s stock. Standards Committee - Standards provision of evidence that specified -- The shop reinvests the profits from Committee (SC) is a committee requirements have been fulfilled. its sale of products into the Fair created by the FLO Board and Verification can be first party/ Trade system. made up of representatives of internal (self assessment), second -- The shop informs the public about the stakeholders for Fairtrade party (by an entity of the supply its aims, the origin of the products, Standards. It acts as a decision chain leading to approval) or third the producers and about world maker and provides guidance in the party/external (by an independent trade. It supports campaigns development of Fairtrade Standards. party leading to certification). to improve the situation of producers, as well as to influence Standards Unit - Standards Unit Worker - Worker refers to all national and international and (SU) is the FLO business unit that workers contracted by a company international policies.

46 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Acronyms

ACP African, Caribbean and Pacific group FLO-CERT Fairtrade Labelling Organizations of States International Certification Body

AfT Aid for Trade FLSA Fairtrade Label South Africa

ATOs Alternative Trade Organizations FSC Forest Stewardship Council

BCI Better Cotton Initiative FSP Fairtrade Sourcing Programs

BTC Belgian Development Agency FT Fair Trade

CARICOM Caribbean Community and Common GIZ Deutsche Gesellschaft für Internationale Market Zusammenarbeit GmbH (German Agency for International Cooperation) CARIFORUM Forum of the Caribbean Group of African, Caribbean and Pacific (ACP) States GMO Genetically Modified Organism

CDE Centre for the Development of Enterprise GPA Government Procurement Agreement (ACP-EU) (WTO)

CmiA Cotton made in Africa GPP Green Public Procurement

CSR Corporate Social Responsibility GSP Generalised System of Preferences

DFID British Department for International GTS generic trade standards Development IADB Inter American Development Bank EAC East African Community IFAT International Federation for Alternative EBAE European Business Awards for the Trade and International Fair Trade Environment Association

ECOWAS Economic Community of West IFOAM International Federation of Organic African States Agriculture Movements (“Organic”)

EDF European Development Fund (ACP-EU) IIED International Institute for Environment and Development EFTA European Fair Trade Association IISD International Institute for Sustainable EPA Economic Partnership Agreement Development ET Ethical Trade ILO International Labour Organisation ETI Ethical Trade Initiative ISEAL International Social and Environmental ETP Ethical Tea Partnership Accreditation and Labelling Alliance

EWAD Environmental Women in Action for ISO International Organization for Development, Uganda Standardization

FAO Food and Agriculture Organization of the ITC International Trade Centre United Nations NEWS Network of World Shops FINE FLO, IFAT, NEWS and EFTA group NGO non-governmental organization FLO Fairtrade Labelling Organizations OECD Organisation for Economic Co-operation International (“Fairtrade” or “Fairtrade and Development International”)

47 Promoting Responsible and Sustainable Sourcing Through Fair Trade

PDC Policy Coherence for Development (EU) SRPP Socially Responsible Public Procurement

PPM production and processing method SSI State of Sustainability Initiatives

PSR Producer Services and Relations TFEU Treaty on the Functioning of the EU

RA Rainforest Alliance UNCTAD United Nations Conference on Trade RSB Roundtable on Sustainable Biomaterials and Development

RSPO Roundtable on Sustainable Palm Oil VSS voluntary sustainability standard

RTRS Round Table on Responsible Soy WFTO World Fair Trade Organization (formerly IFAT) SADC Southern African Development Community WTO World Trade Organisation Agreement SAN Sustainable Agriculture Network

SDGs Sustainable Development Goals TBT Technical Barriers to Trade

SPS Sanitary and Phyto-Sanitary Agreement ZAR South African Rand

48 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Resources

COUNCIL OF related needs in developing European Commission (2016) countries – Conclusions of the Special Eurobarometer 441 – “The EUROPE Council and of the Representatives European Year for Development of the Governments of the Member - Citizens’ views on Development, Recommendation “Towards States meeting within the Council, 29 Cooperation and aid” http:// responsible food consumption”, 26 October 2007 ec.europa.eu/europeaid/sites/ January 2007 http://register.consilium.europa.eu/ devco/files/sp441-devco-report- http://assembly.coe.int/main. pdf/en/07/st14/st14470.en07.pdf final_en.pdf asp?Link=/documents/adoptedtext/ ta07/erec1786.htm UNCTAD XII – The European Union’s European Commission (2015) Special Key Objectives and Priorities, as Eurobarometer 440 – “Europeans, Report of the Committee on the adopted by the General Affairs and Agriculture and the CAP” http:// Environment, Agriculture and External Relations Council on 15 ec.europa.eu/COMMFrontOffice/ Local and Regional Affairs, Doc. October 2007, 29 October 2007 PublicOpinion/index.cfm/ResultDoc/ 11010, “Towards responsible food http://register.consilium.europa.eu/ download/DocumentKy/69756 consumption”, 7 July 2006 pdf/en/07/st14/st14209.en07.pdf http://assembly.coe.int/ European Commission (2015) ASP/Doc/XrefViewHTML. Conclusions of the Council and the “Trade for All: Towards a more asp?FileID=6750&Language=en Representatives of the Governments of responsible trade and investment the Member States meeting within the policy “http://trade.ec.europa. EUROPEAN UNION Council, on Aid for Trade, 15 May 2007 eu/doclib/docs/2015/october/ http://register.consilium.europa.eu/ tradoc_153846.pdf (EU) pdf/en/07/st09/st09555.en07.pdf European Commission (2014). Trade Committee of the Regions Petersberg communiqué on for all Towards a more responsible European Development Policy, 13 trade and investment policy. 2014. Opinion of the Committee of March 2007 http://trade.ec.europa.eu/ the Regions on contributing to http://www.eu2007.de/en/News/ doclib/docs/2015/october/ Sustainable Development: the role download_docs/Maerz/0312- tradoc_153846.pdf of Fair Trade and non-governmental RAA1/080Abschlusskommunique.pdf trade-related sustainability assurance Commission européenne. Le schemes (2010/C 175/03) Review of the EU Sustainable commerce pour tous Vers http://eur-lex.europa.eu/legal- Development Strategy (EU SDS), 26 une politique de commerce et content/EN/TXT/PDF/?uri=CELEX:5 June 2006 d’investissement plus responsable. 2009AR0214&qid=1414505703823& http://register.consilium.europa.eu/ 2014.http://trade.ec.europa. from=EN pdf/en/06/st10/st10917.en06.pdf eu/doclib/docs/2015/october/ tradoc_153879.pdf Council of the European Union European Commission European Commission “Public Joint Africa-EU Strategy and its First European Commission (2016). Procurement reform fact sheet no Action Plan (2008-2010), 3 March Report from the Commission to the 8: Social Aspects of the New Rules”, 2008 European parliament and the Council Directorate General for the Internal http://register.consilium.europa.eu/ on unfair business-to-business Market (2014) pdf/en/08/st07/st07204.en08.pdf trading practices in the food supply http://ec.europa.eu/internal_ chain. January 2016. market/publicprocurement/docs/ EU Strategy on Aid for Trade: file:///C:/Users/boto/Downloads/1_ modernising_rules/reform/fact- Enhancing EU support for trade- EN_ACT_part1_v5.pdf sheets/fact-sheet-08-social_en.pdf

49 Promoting Responsible and Sustainable Sourcing Through Fair Trade

European Commission (2015) schemes, COM (2009), 5 May 2009 European Court of Justice “Monitoring Agri-trade Policy http://trade.ec.europa.eu/doclib/ MAP 2015 – 1” http://ec.europa. docs/2009/june/tradoc_143373.pdf Judgment of the Court (Third eu/agriculture/trade-analysis/ Chamber) of 10 May 2012 — map/2015-1_en.pdf Communication from the European Commission v Kingdom of Commission to the Council and the Netherlands (Case C-368/10) European Commission (2014) “MAP the European Parliament and the http://eur-lex.europa.eu/legal- 201 4 – 1: Monitoring Agri-trade European Economic and Social content/EN/TXT/PDF/?uri=CELEX:6 Policy Agricultural trade in 2013: EU Committee on Policy Coherence 2010CJ0368&qid=1414505703823&f gains in commodity exports” http:// for Development – Accelerating rom=EN ec.europa.eu/agriculture/trade- progress towards attaining the analysis/map/2014-1_en.pdf Millennium Development Goals, European Economic and Social COM(2005) 134, 12 April 2005 Committee European Commission Working http://eur-lex.europa.eu/ document on standards & trade LexUriServ/LexUriServ. Opinion of the European Economic of agricultural products (2013) do?uri=COM:2005:0134:FIN:EN:PDF and Social Committee on the http://ec.europa.eu/agriculture/ Communication from the Commission consultations/advisory-groups/ Communication from the to the Council, the European international/2013-01-28/working- Commission to the Council and the Parliament and the European document-standards_en.pdf European Parliament on Agricultural Economic and Social Committee: Commodity Chains, Dependence Contributing to Sustainable Communication from the European and Poverty – A proposal for an Development: the Role of Fair Trade Commission to the European EU Action Plan, COM(2004) 89, 12 and non-governmental trade-related Parliament, the Council and February 2004 sustainability assurance schemes, European Economic and Social http://eur-lex.europa.eu/ COM(2009), 20 January 2010 Committee “Trade, growth and LexUriServ/LexUriServ. http://www.uni-mannheim.de/edz/ development Tailoring trade and do?uri=COM:2004:0089:FIN:EN:PDF doku/wsa/2010/ces-2010-0108-en.pdf investment policy for those countries most in need” 27.1.2012 COM(2012) Communication from the Opinion of the European Economic 22 final Commission to the Council and the and Social Committee on Fair trade http://trade.ec.europa.eu/doclib/ European Parliament on Trade and Food Products: Self-regulation or docs/2012/january/tradoc_148992. Development – Assisting developing Legislation? 1 October 2009 EN.pdf countries to benefit from trade, http://www.uni-mannheim.de/edz/ COM(2002) 513, 18 September 2002 doku/wsa/2009/ces-2009-1461-en. European Commission “Buying http://eur-lex.europa.eu/ pdf Social: A Guide to Taking Account LexUriServ/LexUriServ. of Social Considerations in Public do?uri=COM:2002:0513:FIN:EN:PDF European Parliament Procurement” (2010), Directorate- General for Employment, Social Green paper on promoting a European Parliament. Briefing. Unfair Affairs and Equal Opportunities, European framework for Corporate Trading Practices in the Business-to- Directorate-General for the Internal Social Responsibility, COM(2001) Business Food Supply Chain. 2015. Market and Services http:// 366, 18 July 2001 http://www.europarl. ec.europa.eu/social/BlobServlet?doc http://eur-lex.europa.eu/ europa.eu/RegData/etudes/ Id=6457&langId=en LexUriServ/LexUriServ. BRIE/2015/563430/IPOL_ do?uri=COM:2001:0366:FIN:EN:PDF BRI(2015)563430_EN.pdf Communication from the Commission to the Council, the Communication from the European Parliament Library Briefing European Parliament and the Commission to the Council on Fair Fair trade in public procurement in European Economic and Social Trade, COM(1999) 619 final, 29 the EU 17/07/2012 Committee. Contributing to November 1999 http://www.europarl.europa. Sustainable Development: the Role http://eur-lex.europa.eu/LexUriServ/ eu/RegData/bibliotheque/ of Fair Trade and non-governmental LexUriServ.do?uri=COM:1999:0619:FI briefing/2012/120334/LDM_ trade-related sustainability assurance N:EN:PDF BRI(2012)120334_REV1_EN.pdf

50 Promoting Responsible and Sustainable Sourcing Through Fair Trade

European Parliament Resolution on http://eur-lex.europa.eu/ http://www.european-fair-trade- Fair Trade and development, (P6_ legal-content/EN/TXT/ association.org/efta/Doc/FT-E-2007. TA(2006)0320), 06 July 2006 PDF/?uri=CELEX:02004L0018- pdf http://www.europarl.europa.eu/ 20090821&from=EN sides/getDoc.do?pubRef=-//EP// FAIR TRADE NONSGML+TA+P6-TA-2006- Directive 2000/36/EC of the 0320+0+DOC+PDF+V0//EN European Parliament and of the ADVOCACY OFFICE Council of 23 June 2000, relating (FTAO) Report on Fair Trade and to cocoa and chocolate products Development, (2005/2245(INI)), intended for human consumption, OJ FTAO Position Paper. Power to Rapporteur: Frithjof Schmidt, L 197, 03 August 2000 West African cotton farmers. Committee on Development, 06 http://eur-lex.europa.eu/LexUriServ/ Recommendations to the European June 2006 LexUriServ.do?uri=OJ:L:2000:197:001 Union, G7 and West African http://www.europarl.europa.eu/ 9:0025:EN:PDF governments in support of fairer sides/getDoc.do?pubRef=-// and more sustainable textile supply EP//NONSGML+REPORT+A6- Partnership Agreement ACP-EC, chains. March 2016. http://www. 2006-0207+0+DOC+PDF+V0// signed in Cotonou, 2000 (revised fairtrade-advocacy.org/images/ EN&language=EN 2010) FTAO_CottonPositionPaper.pdf http://www.europarl.europa.eu/ European Parliament Resolution on document/activities/cont/201306/2 FTAO. Document de Position. Plus Fair Trade, A4-0198/98 (OJ C 226, 0130605ATT67340/20130605ATT67 de pouvoir pour les producteurs 20 July 1998) 340EN.pdf de coton d’Afrique de l’Ouest. http://eur-lex.europa.eu/LexUriServ/ Recommandations à l’Union LexUriServ.do?uri=CELEX:51998IP01 Compendium on cooperation européenne, au G7 et aux 98(01):EN:HTML strategies (See para. 2.6.3) gouvernements d’Afrique de l’Ouest http://ec.europa.eu/development/ pour soutenir des filières textiles plus EU Law icenter/repository/compendium_ équitables et plus durables. Mars en.pdf 2016 Directive 2014/24/EU of the http://www.fairtrade-advocacy.org/ European Parliament and of the EUROPEAN FAIR images/FTAO_CottonPositionPaper_ Council of 26 February 2014 on VF public procurement and repealing TRADE ASSOCIATION Directive 2004/18/EC (EFTA) FTAO Briefing Note Sugar reform http://eur-lex.europa.eu/legal- in CAP post-2013 and impacts on content/EN/TXT/PDF/?uri=CELEX:3 Researches on the impact of fair marginalised producers and workers 2014L0024&from=EN trade, Per October 2006 in ACP/LDC countries 16/04/2012 http://www.european-fair-trade- http://www.fairtrade-advocacy. Directive 2014/23/EU of the association.org/efta/Doc/Impact- org/images/FTAO_Briefing_Note_ European Parliament and of the studies-10-2006.pdf on_Sugar_in_the_Single_CMO_ Council of 26 February 2014 on the Regulation.pdf award of concession contracts Boonman M., Huisman W., Sarrucco- http://eur-lex.europa.eu/legal- Fedorovtsjev E., and Sarrucco, T. FTAO Submission New EU trade & content/EN/TXT/PDF/?uri=CELEX:3 “Fair Trade Facts and Figures: A development policy: what role for 2014L0023&from=EN Success story for Producers and Fair Trade? 15/02/2011 Consumers” April 2011 http://www.fairtrade-advocacy. Directive 2004/18/EC of the http://www.european-fair-trade- org/images/upcoming_EU_trade__ European Parliament and of the association.org/efta/Doc/FT-E-2010. dev_strategy_Fair_Trade_note_15_ Council of 31 March 2004 on the pdf Feb_2011.pdf coordination of procedures for the award of public works contracts, Krier, J.-M. “Fair Trade 2007: new FTAO Note Consultation input for EC public supply contracts and facts and figures from an ongoing Green Paper: EU development policy public service contracts (OJ L 134, success”, DAWS – Dutch Association in support of inclusive growth and 30.4.2004, p. 114) of Worldshops, Netherlands sustainable development17/01/2011

51 Promoting Responsible and Sustainable Sourcing Through Fair Trade

http://www.fairtrade-advocacy. Fairtrade Foundation (2014) international%20supply%20 org/images/Fair_Trade_input_ “Britain’s Bruising Banana Wars”, chains%20work%20for%20 EC_Consultation_Development_ Fairtrade Foundation(UK) Report smallholder%20farmers%20final.ashx policy_17_Jan_2011.pdf http://www.fairtrade.org.uk/~/ media/fairtradeuk/what%20is%20 Fairtrade Foundation ‘Making FTAO Submission to Making the fairtrade/documents/policy%20 international supply chains work for retail market in Europe fair for all and%20research%20documents/ smallholder farmers: A comparative 10/09/2010 policy%20reports/britains%20 study of six fair trade value chains’. http://www.fairtrade-advocacy.org/ bruising%20banana%20wars.ashx May 2012 images/Fair_Trade_movement_ Fairtrade Foundation FAQs – About http://www.twin.org.uk/sites/ submission_fairness_in_retailing_v_ Fairtrade products in the UK. 2014. default/files/images/Making_ Sept_2010.pdf http://www.fairtrade.org.uk/what_ international_supply_chains_work_ is_fairtrade/faqs.aspx for_smallholder%20farmers.pdf FTAO’s submission to the EU trade strategy consultation, 27/07/2010 Fairtrade Foundation ‘Fairtrade Facts Fairtrade Foundation “Impact http://www.fairtrade-advocacy.org/ and figures’. 2014. of Fairtrade Cotton – Fairtrade images/FTAO_submission_to_EU_ http://www.fairtrade.org.uk/en/ Foundation Response”. May 2012. trade_strategy_consultation_27_ farmers-and-workers/facts-and- http://www.fairtrade.net/fileadmin/ July_2010.pdf figures user_upload/content/2009/ resources/2012_Impact_of_ Fair Trade Standards and their The Fairtrade Foundation Annual Fairtrade_Cotton_Fairtrade_ Verification in Brief, April 2007 Report And Financial Statements for Foundation_summary_and_ http://www.fairtrade-advocacy.org/ the year ended 31 December 2013 response.pdf images/Fair_Trade_standards_and_ http://www.fairtrade.org.uk/~/ their_Verification_in_Brief.pdf media/fairtradeuk/what%20is%20 Nelson, V. and Smith, S. (2012) fairtrade/documents/policy%20 “Impact of Fairtrade Cotton” Natural Spilling the bean on the coffee and%20research%20documents/ Resources Institute, (NRI) University trade, 2002 general%20briefing%20papers/ of Greenwich (UoG), Institute http://www.fairtrade-advocacy. annual%20reports/2013%20 of Development Studies, (IDS) org/documents/Spilling_Beans_ annual%20report%20and%20 University of Sussex. Trade.pdf financial%20statements%202013. http://server-e9-11.hosting.imerja. ashx com/includes/documents/cm_ FAIR TRADE docs/2012/I/1_Impact%20of%20 Fairtrade Foundation ‘Annual Review Fairtrade%20Cotton%20-%20 FOUNDATION (UK) 2012-2013’, 2013. main%20report%20-%20final%20 http://www.fairtrade.org.uk/~/ Apr2012.pdf Faitrade Foundation. A seat at media/fairtradeuk/what%20is%20 the table? Ensuring smallholder fairtrade/documents/policy%20 Fairtrade Foundation “Coffee farmers are heard in public-private and%20research%20documents/ Commodity Briefing”. May 2012. partnerships. September 2014. general%20briefing%20papers/ http://www.fairtrade.net/fileadmin/ http://www.fairtrade.net/fileadmin/ annual%20reports/2012-2013.ashx user_upload/content/2009/ user_upload/content/2009/ resources/2012_Fairtrade_and_ resources/1409-FairtradeUK-A_seat_ Fairtrade Foundation ‘How coffee_Briefing.pdf at_the_table_-_Full_report_v2.pdf businesses are going further to make international supply chains work for Smith, S. (2011) “Fairtrade in Fairtrade Foundation ‘Annual Impact smallholder farmers’, February 2013 the Banana Sector”, Institute of Report 2013–2014 :Unlocking the http://www.fairtrade.org.uk/~/ Development Studies power together’, 2104 media/fairtradeuk/what%20is%20 http://server-e9-11.hosting.imerja. http://www.fairtrade.org.uk/~/ fairtrade/documents/policy%20 com/includes/documents/cm_ media/fairtradeuk/what%20is%20 and%20research%20documents/ docs/2011/F/Fairtrade%20in%20 fairtrade/documents/annual%20 general%20briefing%20papers/ the%20Banana%20Sector_IDS%20 impact%20reports/asir_2013_ how%20businesses%20are%20 Final%20Report%20December%20 spreads_links.ashx going%20further%20to%20make%20 2011.pdf

52 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Fairtrade Foundation “Summary and http://server-e9-11.hosting.imerja. farmers-and-workers/coffee/ Fairtrade Response to Fairtrade in com/includes/documents/cm_ gumutindo-coffee-cooperative- the Banana Sector”. December 2011. docs/2008/F/1_Fairtrade_and_ enterprises-ltd http://server-e9-11.hosting.imerja. oversupply.pdf com/includes/documents/cm_ ‘KDCU, Tanzania’, 2014. docs/2013/F/FT_Banana_Summary_ Fairtrade Foundation Farmers: http://www.fairtrade.org.uk/en/ FINAL%20TO%20UPLOAD_V2.pdf farmers-and-workers/coffee/kdcu Bananas Pound, B. and Phiri, A. (2011) “Taking ‘KPD, Tanzania’, 2014 Root: Fairtrade in Malawi”. Fairtrade ‘WINFA, St Lucia’, 2014. http://www.fairtrade.org.uk/en/ Foundation and Natural Resources http://www.fairtrade.org.uk/en/ farmers-and-workers/coffee/kpd Institute, University of Greenwich farmers-and-workers/bananas/ http://s3-eu-west-1.amazonaws. dorothy-agard ‘MZUZU Coffee Planters Co- com/maxhavelaar.nl/keplarcms/ Operative Union, Malawi’, 2014. items/imagevalues/000/000/383/ http://www.fairtrade.org.uk/en/ http://www.fairtrade.org.uk/en/ original/2011_Taking_Root_ farmers-and-workers/bananas/ farmers-and-workers/coffee/mzuzu- Fairtrade_in_Malawi.pdf?1383843714 sandra-joseph coffee-planters-cooperative-union

Fairtrade Foundation “Cocoa Cocoa: ‘Neknasi Coffee Growers Cooperative Commodity Briefing”. August 2011 Society, Papa New Guinea’, 2014. http://www.fairtrade.net/fileadmin/ Fairtrade cocoa in West Africa. 2014 http://www.fairtrade.org.uk/en/ user_upload/content/2009/ http://www.fairtrade.net/fileadmin/ farmers-and-workers/coffee/neknasi- resources/2011_Fairtrade_and_ user_upload/content/2009/ coffee-growers-cooperative-society cocoa_briefing.pdf resources/Fairtrade-cocoa- WestAfrica-report_2014.pdf ‘Oromia Coffee Farmers Co- Fairtrade Foundation. “Fairtrade Tea: Operative Union, Ethiopia’, 2014. Early Impacts in Malawi”. June 2010 ‘CONACADO, Dominican Republic’, http://www.fairtrade.org.uk/en/ http://www.fairtrade.net/fileadmin/ 2014. farmers-and-workers/coffee/oromia- user_upload/content/2009/ http://www.fairtrade.org.uk/en/ coffee-farmers resources/2010_Fairtrade_Tea_ farmers-and-workers/cocoa/ Early_Impacts_in_Malawi.pdf conacado Cotton:

Fairtrade Foundation. “Impacts of ‘ECOOKIM, Ivory Coast’, 2014. Fairtrade International. Fairtrade and Fairtrade in South Africa” . June 2010 http://www.fairtrade.org.uk/en/ cotton. March 2015 http://www.fairtrade.net/fileadmin/ farmers-and-workers/cocoa/ http://www.fairtrade.net/fileadmin/ user_upload/content/2009/ ecookim user_upload/content/2009/ resources/2010_Impact_of_ resources/Cotton_Commodity_ Fairtrade_in_South_Africa.pdf ‘KUAPA KOKOO, Ghana’, 2014. Briefing_2015.pdf http://www.fairtrade.org.uk/en/ Nicholls, A. (2007) “Thriving in a farmers-and-workers/cocoa/kuapa- ‘MOBIOM, Mali’, 2014. Hostile Environment: Fairtrade’s Role kokoo http://www.fairtrade.org.uk/en/ as a Positive Market Mechanism for farmers-and-workers/cotton/ Disadvantaged Producers”, Fairtrade Coffee: massatoma-mounkoro Foundation, http://www.fairtrade.at/fileadmin/ ‘Gikanda Farmers Cooperative Flowers: user_upload/PDFs/Fuer_ Society, Kenya’, 2014. Studierende/FL_alex_nichols.pdf http://www.fairtrade.org.uk/en/ ‘Bigot Flowers Ltd, Kenya’, 2014. farmers-and-workers/coffee/ http://www.fairtrade.org.uk/en/ Fairtrade Foundation “Is Fairtrade gikanda-farmers-cooperative-society farmers-and-workers/flowers/bigot- a subsidy that encourages farmers flowers-ltd to grow more coffee and therefore ‘Gumutindo Coffee Co-Operative contribute to global oversupply and Enterprises Ltd, Uganda’, 2014. ‘Primarosa Flowers Ltd, Kenya’, 2014. low prices?” 2008 http://www.fairtrade.org.uk/en/ http://www.fairtrade.org.uk/en/

53 Promoting Responsible and Sustainable Sourcing Through Fair Trade

farmers-and-workers/flowers/ FAIR TRADE FLO ‘Fairtrade Standard for Hired primarosa-flowers-ltd LABELLING Labour’, 2014. http://www.fairtrade.net/fileadmin/ ‘Ravine Roses, Kenya’, 2014. ORGANIZATIONS user_upload/content/2009/ http://www.fairtrade.org.uk/en/farmers- (FLO)/ FAIRTRADE standards/documents/generic- and-workers/flowers/ravine-roses INTERNATIONAL standards/2014-07-16_HL_EN.pdf Sugar: FLO, ‘Fairtrade Standard for Fairtrade International. Sustainable Contract Production’, 2014. Fairtrade Foundation. Sugar crash. Development Goals and Fairtrade: http://www.fairtrade.net/fileadmin/ May 2015. http://www.fairtrade. the case for partnership. October user_upload/content/2009/ net/fileadmin/user_upload/ 2015. standards/documents/generic- content/2009/resources/FT_ http://www.fairtrade.net/fileadmin/ standards/2014-02-28_CP_EN.pdf Foundation_Sugar_Crash_report.pdf user_upload/content/2009/ ‘BSCFA, Belize’, 2014. resources/15-10_Sustainable_ FLO ‘Composite products’ (accessed http://www.fairtrade.org.uk/en/ Development_Report.pdf October 2014) http://www.fairtrade. farmers-and-workers/sugar/bscfa net/composite-products.html Fairtrade International (2015) FLO ‘Explanatory Document for ‘Kasinthula Cane Growers “Global Change, Local Leadership: the Fairtrade Standard for Small Association, Malawi’, 2014. Annual Report 2014 – 2015” Producer Organizations’, 2014 http:// http://www.fairtrade.org.uk/ http://fairtrade.se/wp-content/ www.fairtrade.net/fileadmin/user_ en/farmers-and-workers/sugar/ uploads/2013/07/2014-2015-FI- upload/content/2009/standards/ kasinthula-cane-growers-association Annual-report.pdf documents/2014-01-15_EN_SPO_ Explan_Doc.pdf Tea: Fairtrade International “Fairtrade Sourcing Programs - An Overview” FLO ‘Fairtrade International ‘Fintea Growers Co-Operative Union http://www.fairtrade.net/about- Monitoring the Scope and Benefits Ltd, Kenya’, 2014. fairtrade/fairtrade-sourcing- of Fairtrade, fifth edition’, 2013. http://www.fairtrade.org.uk/en/ programs/fsp-overview.html http://www.fairtrade.net/fileadmin/ farmers-and-workers/tea/fintea- (accessed June 2016) user_upload/content/2009/ growers-cooperative-union-ltd resources/2013-Fairtrade- Fairtrade International “Breakthrough Monitoring-Scope-Benefits_web.pdf ‘Iriaini Tea Factory Ltd, Kenya’, 2014. for Fairtrade Farmers” http://www.fairtrade.org.uk/en/ http://www.fairtrade.net/new/ FLO ‘Fairtrade International farmers-and-workers/tea/iriaini-tea- latest-news/single-view/article/ Monitoring the scope and benefits of factory-ltd breakthrough-for-fairtrade-farmers. Fairtrade, fourth edition’ 2012 html (accessed June 2016) http://maxhavelaar.be/sites/ ‘Satemwa Tea Estates Ltd, Malawi’, default/files/fairtrade_monitoring_ 2014. FLO ‘Fairtrade consultation to align report_2012_internal.pdf http://www.fairtrade.org.uk/en/ Standard for Gold with international farmers-and-workers/tea/satemwa- regulations on conflict-minerals, FLO, ‘Fairtrade and Sugar tea-estates-ltd 15/09/2014, Fairtrade International’ Commodity Briefing’, January 2013 (accessed October 2014) http://www.fairtrade.net/fileadmin/ ‘Sireet OEP, Kenya’, 2014. http://www.fairtrade.net/single- user_upload/content/2009/ http://www.fairtrade.org.uk/en/ view+M5f883191e7a.html resources/2013_Fairtrade_and_ farmers-and-workers/tea/sireet-oep Sugar_Briefing.pdf FLO ‘Fairtrade Standard for Small ‘Sukambizi Association Trust, Producer Organizations’ 2014. FLO ‘Fairtrade and Sugar Malawi’, 2014. http://www.fairtrade.net/fileadmin/ Commodity Briefing’, January 2013 http://www.fairtrade.org.uk/en/ user_upload/content/2009/ http://www.fairtrade.net/fileadmin/ farmers-and-workers/tea/sukambizi- standards/documents/2014-07-16_ user_upload/content/2009/ association-trust SPO_EN.pdf resources/2013_Fairtrade_and_ Sugar_Briefing.pdf

54 Promoting Responsible and Sustainable Sourcing Through Fair Trade

FLO’ Fairtrade Product FOOD AND Pay, E. (2009) “The Market for Classification’, 2013. AGRICULTURE Organic and Fair-Trade Cotton and http://www.fairtrade.net/fileadmin/ Fibre Products: Increasing incomes user_upload/content/2009/ ORGANIZATION and food security of small farmers standards/documents/2013-12-10_ (FAO) in West and Central Africa through Product_Classification_.pdf exports of organic and fair-trade FAO “Impact of international tropical products” FAO FLO ‘Explanatory document for voluntary standards on http://www.fao.org/fileadmin/ the Fairtrade Trade Standard’, 2011. smallholder market participation templates/organicexports/docs/ http://www.fairtrade.net/fileadmin/ in developing countries – A review Market_Organic_FT_Cotton.pdf user_upload/content/2011-12-29_ of the literature”, 2014. Food and Explan_Doc_GTS_EN.pdf Agriculture Organization, Rome. Pay, E. (2009) “The Market for http://www.fao.org/3/a-i3682e.pdf Organic and Fair-Trade Mangoes FLO ‘Geographical Scope policy and Pineapples: Increasing incomes of Producer Certification for FAO (2012), Statistical Year and food security of small farmers Fairtrade International’, 2011. http:// Book 2012, Food and Agricultural in West and Central Africa through www.fairtrade.net/fileadmin/ Organisation. http://www.fao.org/ exports of organic and fair-trade user_upload/content/2009/ docrep/015/i2490e/i2490e01c.pdf tropical products” FAO standards/documents/ http://www.fao.org/fileadmin/ generic-standards/2014-07-16_ Liu, P. (2009) “Private standards templates/organicexports/docs/ Geographical_Scope_policy_EN.pdf in international trade: issues and Market_Organic_FT_Pineapple_ opportunities”, Food and Agriculture Mango.pdf FLO ‘Annual Report 2007: An Organization, WTO Workshop inspiration for change’, 2007. http:// on Environment-related Private Fay Bell, W. (2009) “Organic www.fairtrade.net/fileadmin/user_ Standards, Certification and Agriculture and Fair Trade in Pacific upload/content/FLO_AR2007_low_ Labelling Requirements http://www. Island Countries”, FAO res.pdf fao.org/fileadmin/templates/est/ http://www.fao.org/3/a-ak356e.pdf AG_MARKET_ANALYSIS/Standards/ FLO ‘Annual report 2006-2007: Private_standards___Trade_Liu_ Hallam D., Liu P., Lavers G., Shaping Global partnership’, 2007. WTO_wkshp.pdf Pilkauskas P., Rapsomanikis G. and http://www.fairtrade.net/uploads/ Claro J. (2004) “The market for non- media/Final_FLO_AR_2007_01.pdf Pay, E. (2009) “The Market for traditional agricultural exports”, FAO Organic and Fair-Trade Coffee: Commodities and trade technical FLO ‘Explanatory Document. Increasing incomes and food security paper, FAO Introducing Fairtrade and its of small farmers in West and Central ftp://ftp.fao.org/docrep/fao/007/ organisations’, 2006. Africa through exports of organic and y5445e/y5445e00.pdf http://www.fairtrade.net/uploads/ fair-trade tropical products” FAO media/Explan_Doc_Introducing_ http://www.fao.org/fileadmin/ INTERNATIONAL Fairtrade.pdf templates/organicexports/docs/ Market_Organic_FT_Coffee.pdf INSTITUTE FOR Challenge and Opportunity. ENVIRONMENT AND Supplement to Annual Review 2010 Pay, E. (2009) “The Market for -11. 2010 Financials and Global Sales Organic and Fair-Trade Cocoa: DEVELOPMENT (IIED) Figures. 2010 Increasing incomes and food security http://www.fairtrade.net/fileadmin/ of small farmers in West and Central Frank, J. and Penrose Buckley, C. user_upload/content/2009/ Africa through exports of organic and (2012) “Small-scale farmers and about_us/FLO_Annual-Financials- fair-trade tropical products” FAO climate change. How can farmer Sales_2010.pdf http://www.fao.org/fileadmin/ organisations and Fairtrade build templates/organicexports/docs/ the capacity of smallholders?”, Market_Organic_FT_Cocoa.pdf IIED, London http://pubs.iied.org/ pdfs/16518IIED.pdf?

55 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Potts J., van der Meer J. and International Trade Centre ‘The Fair Trade, International Trade Daitchman J. (2010) “The State of Interplay of Public and Private Forum – Issue 2/2006 Sustainability Initiatives Review 2010: Standards (Literature Review Series http://www.tradeforum.org/Fair- Sustainability and Transparency” on the Impacts of Private Standards Trade/ IIED, London – part III)’ 2011 http://www.intracen. org/uploadedFiles/intracenorg/ Fair Trade as a business model, Agricultural Commodities, Trade and Content/Publications/The%20 International Trade Forum – Issue Sustainable Development, 2005 Interplay%20of%20Public%20 2/2006 http://www.iied.org/pubs/ and%20Private%20Standard.pdf http://www.tradeforum.org/Fair- pdfs/16500IIED.pdf Trade-as-a-Business-Model/ Fairtrade: New business model taps Challenging preconceptions about markets in the South, International Who’s who in Fair Trade, trade in sustainable products. Trade Forum - Issue 3/2010 International Trade Forum – Issue Towards win-win-win for developing http://www.tradeforum.org/ 2/2006 countries, 2005 Fairtrade-New-Business-Model-Taps- http://www.tradeforum.org/Whos- http://www.iied.org/pubs/ Markets-in-the-South/ Who-in-Fair-Trade/ pdfs/15500IIED.pdf Voluntary standards in developing FT has limits as a model for Sustainable Products and the PPMs Countries: The potential of development, International Trade Dilemma: how the international voluntary standards and their role Forum – Issue 2/2006 community can help in resolving in international trade, International http://www.tradeforum.org/Fair- developing countries’ concerns, Trade Forum - Issue 3/2010 Trade-Has-Limits-as-a-Model-for- Sustainable Development Opinion, http://www.tradeforum.org/ Development/ 2004 Voluntary-Standards-in-Developing- http://www.iied.org/pubs/ Countries-The-Potential-of- ORGANISATION pdfs/11042IIED.pdf Voluntary-Standards-and-their-Role- in-International-Trade/ FOR ECONOMIC Standards and sustainable trade, CO-OPERATION 2000 Cadbury Goes Fairtrade, http://www.iied.org/pubs/pdfs/ International Trade Forum - Issue AND DEVELOPMENT G02162.pdf 4/2009http://www.tradeforum.org/ (OECD) Cadbury-Goes-Fairtrade/ INTERNATIONAL International Trade Centre ‘Fair trade OECD and FAO (2016) “OECD- ‘will survive’ economic crisis’ World FAO Guidance for Responsible TRADE CENTRE (ITC) Export Development Forum, 2008 Agricultural Supply Chains” http:// http://www.intracen.org/WorkArea/ mneguidelines.oecd.org/OECD-FAO- Lernoud J., Potts J., Sampson DownloadAsset.aspx?id=43688 Guidance.pdf G., Voora V., Willer H. and Wozniak B, (2015) “The State of Fair Trade: What’s Behind the Label?, OECD and WTO (2013) ‘Aid for Sustainable Markets – Statistics International Trade Forum - Issue Trade and Value Chains in Agrifood’ and Emerging Trends 2015”. ITC 1-2/2008 https://www.wto.org/english/ Geneva http://www.intracen.org/ http://www.tradeforum.org/Fair- tratop_e/devel_e/a4t_e/global_ uploadedFiles/intracenorg/Content/ Trade-Whats-Behind-the-Label/ review13prog_e/agrifood_47.pdf Publications/2014_2015_365%20 -%20The%20State%20of%20 Lost in labels, International Trade Song, Y. (2010) “Fair Trade Labelling: Sustainable%20Markets_Low-res.pdf Forum - Issue 1-2/2008 http://www. Will This Work?” Policy Responses tradeforum.org/Lost-in-labels/ to Societal Concerns in Food and International Trade Forum Magazine Fair Trade on ITC’s Radar Screen, Agriculture: Proceedings of an OECD ‘Ethical Trade’ (accessed October International Trade Forum – Issue Workshop, OECD 2010 2014) 2/2006 http://www.oecd.org/tad/ http://www.tradeforum.org/ http://www.tradeforum.org/Fair- agricultural-policies/46838106.pdf themes/?taxids=1101 Trade-on-ITCs-Radar-Screen/

56 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Johansson, H. (2010) “The Global%20agricultures%20 Dammert, A.C. and Mohan, S. (2014) Development of Fair Trade Labels many%20opportunities/Global%20 ‘A Survey of the Economics of — A Market Solution to A Societal agricultures%20many%20 Fair Trade’, Forschungsinstitut zur Concern?” Policy Responses to opportunities.ashx Zukunft der Arbeit, Institute for the Societal Concerns in Food and Study of Labor (IZA) Agriculture: Proceedings of an OECD Cernat, L. and Kutlina-Dimitrova, http://ftp.iza.org/dp8167.pdf Workshop, OECD 2010 Z. (2015) “International public http://www.oecd.org/agriculture/ procurement: From scant facts Hoebink P., Ruben R., Elbers W. agricultural-policies/46838097.pdf to hard data” Chief Economist’s and van Rijsbergen, B. (2014) “The Note (Issue 1, April 2015) European Impact of Coffee Certification on OECD ‘Promoting Sustainable Commission DG Trade http://trade. Smallholder Farmers in Kenya, Consumption: Good Practices in ec.europa.eu/doclib/docs/2015/ Uganda and Ethiopia”, Centre OECD Countries’, 2008. http://www. april/tradoc_153347.pdf for International Development oecd.org/greengrowth/40317373.pdf Issues Nijmegen (CIDIN), Radboud Kuit, M. And Waarts, Y. (2014) University Nijmegen, The Vihinen, L. and Lee, H.J (2005) ‘Fair “Small-scale farmers, certification Netherlands For Solidaridad Trade and the Multilateral Trading schemes and private standards: https://www.google.com/url?sa=t& System’, OECD Papers, Volume 5, Costs and benefits of certification rct=j&q=&esrc=s&source=web&cd=1 Number 2, July 2005, pp. 1-14. http:// and verification systems for small- &cad=rja&uact=8&ved=0CB0QFjAA www.ingentaconnect.com/ scale producers in cocoa, coffee, &url=http%3A%2F%2Fwww.ru.nl%2 cotton, fruit and vegetable sectors”. Fpublish%2Fpages%2F721725%2Ffin http://trueprice.org/wp-content/ Technical Centre for Agricultural al_report_solidaridad_impact_study_ uploads/2016/04/TP-Tea.pdf and Rural Cooperation, Wageningen. east_africa_290114.pdf&ei=th8-VLW http://publications.cta.int/en/ qO5PeaIbkgLgM&usg=AFQjCNHf4d TRUE PRICE publications/publication/1823/ SF7nmB7N True Price. The True Price of Tea from Kenya. Joint report by IDH and Bonfield, P. (2014) “UK Department De Schutter, O. (2014) “The Power True Price. 2016. http://trueprice. for Environment, Food and Rural of Procurement Public Purchasing in org/wp-content/uploads/2016/04/ Affairs” https://www.gov.uk/ the Service of Realizing the Right to TP-Tea.pdf government/uploads/system/ Food” Briefing Note 08 - April 2014 uploads/attachment_data/ http://reliefweb.int/sites/reliefweb. True Price. The True Price of cocoa file/332756/food-plan-july-2014.pdf int/files/resources/20140514_ from Ivory Coast. Joint report by procurement_en.pdf IDH and True Price. 2016. Alvarez, A (2014) “The inclusion http://trueprice.org/wp-content/ of market-driven supermarkets in Nindl, E. (2014) ‘An empirical uploads/2016/03/TP-Cocoa.pdf Fairtrade: concerns and implications assessment of Fairtrade: A for farmers” Evolving Globalisation perspective for low- and middle- OTHER SOURCES http://evolving-globalisation.org/ income countries?’ University of category/international-trade/ Vienna Department of Economics Rie Makita . A Role of Fair Trade Working Paper No. 160 http://epub. Certification for Environmental Gerhard Reese & Fabienne wu.ac.at/4069/1/wp160.pdf Sustainability. Journal of Agricultural Kohlmann. Feeling Global, Acting and Environmental Ethics. April Ethically: Global Identification and Potts J., Lynch M., Wilkings A., 2016, Volume 29, Issue 2, pp 185-201 Fairtrade Consumption. 2014. Huppé G., Cunningham M., and First online: 23 January 2016. http:// http://www.tandfonline.com/doi/abs Voora V. (2014) ‘The Sustainability link.springer.com/article/10.1007%2 /10.1080/00224545.2014.992850 Initiatives Review 2014: Standards Fs10806-016-9604-0 and the Green Economy’, State of Handbook of research on Fair Tarde. Sustainability Initiatives McKinsey (2015) “Global agriculture’s Edited by Laura T. Raynolds and http://www.iisd.org/pdf/2014/ many opportunities” http:// Elizabeth A. Bennett. 2015. ssi_2014.pdf www.mckinsey.com/~/media/ http://www.elgaronline.com/ McKinsey/Industries/Private%20 abstract/9781783474608. Equity%20and%20Principal%20 xml?rskey=nImdnn&result=1 Investors/Our%20Insights/

57 Promoting Responsible and Sustainable Sourcing Through Fair Trade

Sarter E.K., Sack D. and Fuchs S. Fisher, E. and Sheppard, E. (2012) BTC (2010) ‘South South Fair Trade’, (2014) “Public Procurement as “Pushing the Boundaries of the BTC Belgian Development Agency, Social Policy? An introduction to Social: Private Agri-food Standards Brussels social criteria in public procurement and the Governance of Fair Trade http://www.befair.be/sites/default/ in Germany” Working Paper No. 1 in European Public Procurement” files/South-South_Fair_Trade.PDF Working Paper Series Comparative Int. Jrnl. of Soc. of Agr. & Food, Vol. Governance‘ August 2014 Universität 20, No. 1, pp. 31–49 http://ijsaf.org/ Dimopoulos, A. (2010). The effects of Bielefeld http://www.uni-bielefeld. archive/20/1/fisher_sheppard.pdf the Lisbon Treaty on the principles de/soz/powi/pdf/WPCG01_Sarter_ and objectives of the Common Sack_Fuchs_Public_Procurement_ Jaffee, D. (2012) “Weak Coffee: Commercial Policy. European Aug14.pdf Certification and Co-optation in Foreign Affairs Review, 15(2), 153-170 the Fair Trade Movement” Social https://pure.uvt.nl/portal/ UNCTAD (2014) ‘Evolution Problems, Vol. 59, Issue 1, pp. 94–116 files/1361591/Dimopoulos_ of the international trading http://cftn.ca/sites/default/files/ The_Effects_of_the_Lisbon_ system and its trends from a AcademicLiterature/Weak%20 Treaty_111104_publishers_check_ development perspective’ United Coffee.pdf copyrights.pdf Nations Conference on Trade and Development, Trade and International Markets Bureau (2012) Liu, P. (2009) “Private standards Development Board “Socially Conscious Consumer in international trade: issues and http://unctad.org/meetings/en/ Trends Fair Trade”, Canada opportunities”, Food and Agriculture SessionalDocuments/tdb61d2_en.pdf http://www5.agr.gc.ca/resources/ Organization, WTO Workshop prod/Internet-Internet/MISB-DGSIM/ on Environment-related Private CDE Initiatives in Southern Africa ATS-SEA/PDF/6153-eng.pdf Standards, Certification and Enhancing productivity for access to Labelling Requirements http://www. markets Private Sector Development Steering Committee of the State- fao.org/fileadmin/templates/est/ in Southern Africa 2013 of-Knowledge Assessment of AG_MARKET_ANALYSIS/Standards/ http://www.cde.int/sites/default/ Standards and Certification (2012). Private_standards___Trade_Liu_ files/documents/brochure_cde_ Toward sustainability: The roles WTO_wkshp.pdf intiatives_in_southern_africa_2013.pdf and limitations of certification. (Executive summary.) Washington, ECLAC, “Impact of changes in the Dragusanu, R., Giovannucci, D. and DC: RESOLVE, Inc European Union Import regimes Nunn, N. (2013) ‘The Economics http://www.resolv.org/site- for sugar, banana and rice on of Fair Trade’ Harvard University assessment/files/2012/06/Toward- Selected CARICOM countries” 2008. http://scholar.harvard.edu/files/ Sustainability-Executive-Summary. Economic Commission for Latin rdragusanu/files/jep_firstdraft_ pdf America and the Caribbean (ECLAC) sept10_2013.pdf http://www.ilocarib.org.tt/trade/ World Fair Trade Organization documents/understanding_epa/ Inter-Parliamentary Union “Fair (WFTO) Annual Report overview/L.168.pdf Trade and innovative financing 2012 http://www.wfto.com/ mechanisms for sustainable index.php?option=com_ Sidwell, M. (2008) “Unfair Trade”, development”, Resolution adopted docman&task=doc_ Adam Smith Institute, London, 2008 unanimously by the 128th IPU download&gid=2247&&Itemid=1 http://www.adamsmith.org/images/ Assembly, March 2013 http://www. pdf/unfair_trade.pdf ipu.org/conf-e/128/res-2.htm Inter-Parliamentary Union and the D’Hollander, D. and Marx, A. (2012) European Parliament ‘Outcome World Bank (2008) ‘Agriculture “Pulse report private certification Document of the Annual 2011 session and Poverty Reduction’, systems and government policy: An of the Parliamentary Conference on Agriculture for Development overview and assessment” Leuven the WTO’ Geneva, 22 March 2011 Policy Brief http://siteresources. Centre for Global Governance http://www.ipu.org/splz-e/trade11/ worldbank.org/INTWDR2008/ Studies University of Leuven outcome.pdf Resources/2795087-1191440805557 http://www.acodev.be/system/ /4249101- 1191957549239/Brief_ files/ressources/governments_and_ AgPovRedctn_web.pdf private_standards_finalv.pdf

58 Promoting Responsible and Sustainable Sourcing Through Fair Trade

United Kingdom House of Lords, ‘European Union, http://www.udbs.dur.ac.uk/fairtraderesearch/The%20 Developments in EU Trade Policy Report, House of Lords Economics%20of%20Fair%20Trade%20plain%20guide. Select Committee on the European Union, Ch. 5: Trade pdf and Development, 2008, (accessed October 2014) http://www.publications.parliament.uk/pa/ld200708/ Tallontire, A. and Vorley, B. (2005) “Achieving fairness in ldselect/ldeucom/200/20008.htm trading between supermarkets and their agrifood supply chains”, UK Food Group Briefing 2005 United Kingdom House of Commons, International http://www.eldis.org/fulltext/UKfood_brief_ Development Committee Fair Trade and Development, fairsuplychains_0905.pdf 2007 http://www.publications.parliament.uk/pa/cm200607/ UNEP, ‘The Trade and Environmental Effects of cmselect/cmintdev/356/356i.pdf Ecolabels: Assessments and Responses’, UN Environment Programme, 2005 Hiscox, M. J. (2007) ´Fair Trade as an Approach to http://www.unep.ch/etb/publications/ Managing Globalization”, Conference on Europe and the Ecolabelpap141005f.pdf Management of Globalization https://www.princeton. edu/~smeunier/Hiscox_Fair%20Trade%20and%20 Lindsey, B. (2004) ‘Grounds for complaint? “Fair trade” Globalization.pdf and the coffee crisis’, Adam Smith Institute. http://www.adamsmith.org/sites/default/files/images/ Bisaillon V., Gendron C. and Turcotte M.-F. (2006) Fair uploads/publications/groundsforcomplaint.pdf Trade and the Solidarity Economy: the Challenges Ahead, Les cahiers de la Chaire – collection recherché, n. 05- IADB ‘Brazil, Promotion of socially responsible market 2006, University Of Quebec Chair of Social Responsibility opportunities – Donors Memorandum’, 2002, Inter- and Sustainable Development (CRSDD) American Development Bank http://www.crsdd.uqam.ca/Pages/docs/ http://idbdocs.iadb.org/wsdocs/getdocument. pdfCahiersRecherche/2006/05-2006.pdf aspx?docnum=1041483

Gendron C., Bisaillon V. and Otero A. I. (2006) ILO ‘Creating Market Opportunities for Small Enterprises: The Institutionalization of Fair Trade: More than a experiences of the Fair Trade Movement’, 2002, Degraded Form of Social Action, Les cahiers de la International Labour Organization. Chaire – collection recherché, n. 12-2006, University Of http://www.ilo.org/dyn/empent/docs/F1057768373/ Quebec Chair of Social Responsibility and Sustainable WP30-2002.pdf Development (CRSDD) http://www.crsdd.uqam.ca/Pages/docs/ Fair Trade: Overview, Impact, Challenges. Study to pdfCahiersRecherche/2006/12-2006.pdf Inform DFID’s Support to Fair Trade, 2000 http://portals.wi.wur.nl/files/docs/ppme/ACF3C8C.pdf WTO Public Forum 2006: “Equitable Trade: creating a level playing field for men and women” http://www. EU-ACP Joint Parliamentary Assembly ‘Resolution on wto.org/english/forums_e/public_forum_e/session_26_ trade based on fairness and solidarity’, OJ C_062, 27 num31_e.htm February 1997 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri= Hayes, M. and Moore, G. (2005) “The Economics of Fair CELEX:21997P0227(29):EN:HTML Trade: a guide in plain English

59 Promoting Responsible and Sustainable Sourcing Through Fair Trade

WEBSITES

Africa Fairtrade Network (AFN) http://www.fairtrade-advocacy.org/ http://www.fairtradeafrica.net/ Fair Trade Federation Altereco www.fairtradefederation.org www.altereco.com Fair Trade Foundation Befair (BTC – Belgian Development Agency) http://www.fairtrade.org.uk/ http://www.befair.be/ Fair Trade Institute – Documents Gateway Catholic Relief Services http://www.fairtrade-institute.org/database/ http://www.catholicrelief.org/ publications.php?lang=en

Conacado, Dominican Republic Fairtrade Labelling Organizations (FLO)/ Fairtrade http://conacado.com.do/ International http://www.fairtrade.net/ Conservation Agriculture Network (CAN) http://www.rainforest-alliance.org/index.cfm Fair Trade Original, the Netherlands www.fairtrade.nl Consumers International - CI http://www.consumersinternational.org/ Fair Trade Resource Network www.fairtraderesource.org World Fair Trade Organization Africa (formerly Cooperation for Fair Trade in Africa – COFTA) FINE http://www.wfto-africa.org/ http://www.fairtrade-advocacy.org/

Coordinadora Latinoamericana y del Caribe de FLO-CERT Comercio Justo - Latin American and Caribbean http://www.flo-cert.net Network of Small Fair Trade Producers (CLAC) http://clac-comerciojusto.org/ Forest Stewardship Council (FSC) http://www.fscus.org/ De Evenaar, the Netherlands www.de-evenaar.nl Green America (formerly Co-op America) http://www.greenamerica.org/programs/fairtrade/ Divine Chocolate Ltd (UK), United Kingdom www.divinechocolate.com Global Exchange www.globalexchange.org EL PUENTE, Germany www.el-puente.de International Federation of Organic Agriculture Movements (IFOAM) Equi’Sol, France http://www.ifoam.org/ www.equisol.org International Organic Accreditation Service (IOAS) European Fair Trade Association - EFTA http://www.ioas.org/ http://www.european-fair-trade-association.org/ International Social and Environmental Accreditation Fair Gold and Labelling (ISEAL) http://www.fairgold.org/ http://www.isealalliance.org/

Fair Trade Advocacy Office Landmark Project

60 Promoting Responsible and Sustainable Sourcing Through Fair Trade

http://www.landmark-project.eu/ Root Capital (formerly EcoLogic Finance) http://www.rootcapital.org/ Lutheran World Relief www.lwr.org/fairtrade/index.asp Savanna Farmers Marketing Company Limited, Ghana www.acdep.org Marine Stewardship Council (MSC) http://www.msc.org/ Social Accountability International (SAI) http://www.sa-intl.org/ Max Havelaar Foundation http://www.maxhavelaar.nl/ Ten Thousand Villages, Canada www.tenthousandvillages.ca Oikocredit – Fair finance, Fair trade http://www.oikocredit.coop/ United Students for Fair Trade www.usft.org Organic Consumers Association www.organicconsumers.org Weltladen-Dachverband, Germany www.weltladen.de People Tree, United Kingdom www.peopletree.co.uk World Fair Trade Organization (WFTO) http://www.wfto.com/index.php Plate-Forme pour le Commerce Équitable http://www.commercequitable.org/

61 Promoting Responsible and Sustainable Sourcing Through Fair Trade

(Endnotes)

1. Vihinen, L. and Lee, H.J (2005) ‘Fair Trade and 10. Communication from the Commission, Policy the Multilateral Trading System’ , OECD Papers, Coherence for Development – Accelerating Volume 5, Number 2, July 2005, OECD http://www. progress towards attaining the Millennium ingentaconnect.com/content/oecd/16091914/2005/ Development Goals, COM (2005) 134, 12.04.2005. 00000005/00000002/0205021ec001 http://eur-lex.europa.eu/legal-content/EN/TXT/PD F/?uri=CELEX:52005DC0134&from=EN 2. Inter-American development Bank, Brazil, Promotion of socially responsible market 11. European Parliament, Resolution on Fair Trade and opportunities – Donors Memorandum, http:// development, P6_TA (2006)0320, 06.07.2006. idbdocs.iadb.org/wsdocs/getdocument. http://www.europarl.europa.eu/sides/getDoc. aspx?docnum=1041483 do?pubRef=-//EP//NONSGML+TA+P6-TA-2006- 0320+0+DOC+PDF+V0//EN 3. Centre for the Law of EU External Relations ‘Linking trade and non-commercial interests: the EU as a 12. Art. 23 (d) Partnership Agreement ACP-EU, revised global role model?’, 4 CLEER Working Papers 2013, in 2010, cit. editor with A. Ott and A. Dimopoulos http://www. asser.nl/upload/documents/20130919T025016- 13. Dimopoulos, A. (2010). The effects of the Lisbon cleer_13-4_web.pdf Treaty on the principles and objectives of the Common 4. Nindl, E. (2014) An empirical assessment of Commercial Policy. European Foreign Affairs Fairtrade: A perspective for low- and middle- Review, 15(2), 153-170 income countries? University of Vienna Department https://pure.uvt.nl/portal/files/1361591/ of Economics Working Paper No. 160 http://epub. Dimopoulos_The_Effects_of_the_Lisbon_ wu.ac.at/4069/1/wp160.pdf Treaty_111104_publishers_check_copyrights.pdf

5. WFTO, 60 years of Fair Trade, http://www.wfto. 14. European Commission (2015) “Trade for All: com/index.php?option=com_content&task=view&id Towards a more responsible trade and investment =10&Itemid=11&limit=1&limitstart=3 policy “http://trade.ec.europa.eu/doclib/docs/2015/ october/tradoc_153846.pdf 6. European Parliament, Resolution on Fair Trade, A4- 0198/98, OJ C 226/73, 20.07.1998. 15. European Commission (2015) Cit. pp. 25

7. Communication from the Commission to the Council 16. Euractiv ‘ French fair-trade sector seeks revival after on Fair Trade, COM(1999) 619 final, 29.11.1999, crisis dip’ (07/05/2013, accessed October 2014) (European Commission Communication on Fair http://www.euractiv.com/health/french-fair-trade- Trade) seeks-revival-news-519566 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do? BTC ‘Fair trade and the economic crisis’ BTC uri=COM:1999:0619:FIN:EN:PDF Belgian Development Agency, Brussels 2012 http:// www.befair.be/sites/default/files/all-files/brochure/ 8. Art. 23 (i) Partnership Agreement ACP-EC, signed Fair%20Trade%20and%20the%20economic%20 in revised in 2010 http://www.europarl.europa.eu/ crisis.pdf document/activities/cont/201306/20130605ATT67 International Trade Centre ‘Fair trade ‘will survive’ 340/20130605ATT67340EN.pdf economic crisis’ World Export Development Forum, 2008 http://www.intracen.org/WorkArea/ 9. Communication from the Commission, Agricultural DownloadAsset.aspx?id=43688 Commodity Chains, Dependence and Poverty – A proposal for an EU Action Plan, COM (2004) 89, 17. European Commission (2012) “Trade, growth and 12.02.2004. http://eur-lex.europa.eu/legal-content/ development Tailoring trade and investment policy EN/TXT/PDF/?uri=CELEX:52004DC0089&from=EN for those countries most in need” Communication COM(2012) 22

62 Promoting Responsible and Sustainable Sourcing Through Fair Trade

18. SDG target 2.4 calls for “By 2030, double the 26. The term “sustainable” trade has been linked to the agricultural productivity and incomes of small- definition of sustainability used in the Brundtland scale food producers, in particular women, Report and confirmed at the Rio and Johannesburg indigenous peoples, family farmers, pastoralists World Summits on Sustainable Development. and fishers, including through secure and equal access to land, other productive resources and 27. A group of FT NGOs participating in the ETI is inputs, knowledge, financial services, markets and currently lobbying for a broadening of the ethical opportunities for value addition and non-farm trade concept to pay more attention to these issues employment”. See: https://sustainabledevelopment. (information supplied by Fair Trade Foundation). un.org/?menu=1300 Fair Trade: Overview, Impact, Challenges. Study to 19. SDG target 12.6: “Encourage companies, especially Inform DFID’s Support to Fair Trade, 2000 large and transnational companies, to adopt http://portals.wi.wur.nl/files/docs/ppme/ACF3C8C. sustainable practices and to integrate sustainability pdf information into their reporting cycle” and target 12.7 “Promote public procurement practices that are 28. Commission Communication on Fair Trade (1999), sustainable, in accordance with national policies and cit. priorities”. 29. Fair Trade: Overview, Impact, Challenges. Study to 20. Lernoud J., Potts J., Sampson G., Voora V., Willer Inform DFID’s Support to Fair Trade (2000), cit. H. and Wozniak B, (2015) “The State of Sustainable Markets – Statistics and Emerging Trends 2015”. ITC 30. OECD, Fair Trade and the Multilateral Trading Geneva System, (2005), cit.

21. See Cernat, L. and Kutlina-Dimitrova, Z. (2015) 31. Labelling Initiatives are national organisations which “International public procurement: license companies to use the FAIRTRADE Mark on From scant facts to hard data” Chief Economist’s consumer products and promote Fairtrade in their Note (Issue 1, April 2015) European Commission DG countries. Trade http://trade.ec.europa.eu/doclib/docs/2015/ april/tradoc_153347.pdf 32. FLO, Shaping Global partnership. FLO International Annual report 2006-2007, http://www.fairtrade. 22. e.g. Purchase from Africans for Africa (PAA Africa) net/uploads/media/Final_FLO_AR_2007_01.pdf

23. De Schutter, O. (2014) “The Power of Procurement 33. ILO, Creating Market Opportunities for Small Public Purchasing in the Service of Realizing Enterprises: experiences of the Fair Trade the Right to Food” Briefing Note 08 - April 2014 Movement (2002) International Labour http://reliefweb.int/sites/reliefweb.int/files/ Organization resources/20140514_procurement_en.pdf http://www.ilo.org/dyn/empent/docs/ F1057768373/WP30-2002.pdf 24. Bonfield, P. (2014) “UK Department for Environment, Food and Rural Affairs “UK 34. European Parliament, Report on Fair Trade and Department for Environment, Food and Rural Affairs Development, (2005/2245(INI)), Rapporteur: https://www.gov.uk/government/uploads/system/ Frithjof Schmidt, Committee on Development, 06 uploads/attachment_data/file/332756/food-plan- June 2006 july-2014.pdf http://www.europarl.europa.eu/sides/getDoc. do?pubRef=-//EP//NONSGML+REPORT+A6-2006- 25. This is the definition produced by FINE, an informal 0207+0+DOC+PDF+V0//EN&language=EN network that involves the Fairtrade Labelling Organizations International (FLO), the International 35. Commission Communication on Fair Trade, (1999) cit. Federation for Alternative Trade ((IFAT), now the World Fair Trade Organization (WFTO)), the 36. Inter American Development Bank (IADB), Network of European World Shops (NEWS!) and Brazil - Promotion of socially responsible market the European Fair Trade Association (EFTA). opportunities – Donors Memorandum, cit.

63 Promoting Responsible and Sustainable Sourcing Through Fair Trade

37. European Parliament, Report on Fair Trade and associate the FAIRTRADE symbol excluding the text Development, cit. box with “a better deal for third world producer”. http://www.fairtradeguernsey.com/index. 38. UK Food Group Briefing, Achieving fairness in php?moreinfo=80&page=5 trading, cit. 45. FLO website http://www.fairtrade.net/ 39. A. Tallontire, Challenges facing Fair Trade: which way now? Paper for the DSA conference 2001, 46. Fairtrade Foundation. Annual Review 2009/2010. Different Poverties, Different Policies, IDPM, http://www.fairtrade.org.uk/~/media/fairtradeuk/ Manchester 10-12 September 2001, Natural what%20is%20fairtrade/documents/policy%20 Resources and Ethical Trade programme, NRI, and%20research%20documents/general%20 http://www.greenbeanery.ca/bean/documents/ briefing%20papers/annual%20reports/2009-2010. conf01tallontire.doc ashx

40. Alvarez, A (2014) “The inclusion of market- 47. International Markets Bureau (2012) “Socially driven supermarkets in Fairtrade: concerns and Conscious Consumer Trends Fair Trade” , Canada implications for farmers” Evolving Globalisation http://www5.agr.gc.ca/resources/prod/Internet- http://evolving-globalisation.org/category/ Internet/MISB-DGSIM/ATS-SEA/PDF/6153-eng.pdf international-trade/ 48. European Commission (2016) Special 41. Communication from the European Commission Eurobarometer 441 - The European Year for to the European Parliament, the Council and Development - Citizens’ views on Development, European Economic and Social Committee Retail Cooperation and aid market monitoring report “Towards more efficient and fairer retail services in the internal market for 49. European Commission (2015) Special 2020” Brussels, 5.7.2010 COM(2010)355 final http:// Eurobarometer 440 - Europeans, Agriculture and ec.europa.eu/transparency/regdoc/rep/1/2010/ the CAP EN/1-2010-355-EN-F1-1.Pdf 50. ibid 42. M&S aims to become world’s most sustainable retailer; 28/07/2011 51. McKinsey (2015) “Global agriculture’s many http://ec.europa.eu/environment/ecoap/ opportunities” http://www.mckinsey.com/~/media/ about-eco-innovation/business-fundings/united- McKinsey/Industries/Private%20Equity%20and%20 kingdom/488_en.htm Principal%20Investors/Our%20Insights/Global%20 agricultures%20many%20opportunities/Global%20 43. Commission Staff Working Document On Retail agricultures%20many%20opportunities.ashx and Services in the Internal Market Accompanying “Pursuing the global opportunity in food and document to the Report on Retail Market agribusiness” http://www.mckinsey.com/industries/ Monitoring: “Towards more efficient and fairer retail chemicals/our-insights/pursuing-the-global- services in the Internal Market for 2020” Brussels, opportunity-in-food-and-agribusiness (accessed 5.7.2010 SEC(2010) 807 June 2016) http://ec.europa.eu/internal_market/retail/ docs/100705-staff-working-document_en.pdf 52. Fairtrade International “Fairtrade Sourcing Programs - An Overview” http://www.fairtrade.net/ 44. The survey interviewed a nationally representative about-fairtrade/fairtrade-sourcing-programs/fsp- quota sample of 1.947 adults throughout Great overview.html (accessed June 2016) Britain in 121 sampling points. The survey asked people to identify the Fairtrade symbol, excluding 53. Fairtrade International (2015) “Global Change, Local the text which is only used in the UK. This symbol Leadership: Annual Report 2014 – 2015” http:// (without the text) is used by FLO labeling initiatives. fairtrade.se/wp-content/uploads/2013/07/2014- The survey found that 53% of adults correctly 2015-FI-Annual-report.pdf

64 Promoting Responsible and Sustainable Sourcing Through Fair Trade

54. Fairtrade International “Breakthrough for Fairtrade 61. FAO (2012), Statistical Year Book 2012, Food and Farmers” Agricultural Organisationhttp://www.fao.org/ http://www.fairtrade.net/new/latest-news/single- docrep/015/i2490e/i2490e01c.pdf view/article/breakthrough-for-fairtrade-farmers. html (accessed June 2016) 62. Kuit, M. And Waarts, Y. (2014) “Small-scale farmers, certification schemes and private standards: Costs 55. European Commission (2014) “MAP 201 4 – 1: and benefits of certification and verification systems Monitoring Agri-trade Policy Agricultural trade for small-scale producers in cocoa, coffee, cotton, in 2013:EU gains in commodity exports” http:// fruit and vegetable sectors”. Technical Centre for ec.europa.eu/agriculture/trade-analysis/map/2014- Agricultural and Rural Cooperation, Wageningen. 1_en.pdf http://publications.cta.int/en/publications/ publication/1823/ 56. European Commission (2015) “Monitoring Agri- trade Policy MAP 2015 – 1” http://ec.europa.eu/ 63. agriculture/trade-analysis/map/2015-1_en.pdf 64. An in depth overview of agricultural supply chains 57. 2013 saw for the second year in a row a drop in and sustainable considerations, see OECD and the unit price of coffee (-24%), after an impressive FAO (2016) “OECD-FAO Guidance for Responsible 40% surge in 2011. For cocoa beans, after a sharp Agricultural Supply Chains” http://mneguidelines. increase of in 2010, prices have declined since; in oecd.org/OECD-FAO-Guidance.pdf 2013 they dropped by 8.5% vs. 2012. In volume terms, coffee imports in 2013 were even slightly 65. On Wednesday, 24 April 2013 in the Savar Upazila higher than the year before (at 2.8 million t) but of Dhaka, Bangladesh an eight-story commercial cocoa beans imports were down 8% to 1.3 million t. building named Rana Plaza collapsed. By 13 May Cotton prices also continued to decline (-7.5%) in 2013 it was estimated 1,130 people had perished in 2013 and sugar prices were lower by 5.2%. This had the collapse. Approximately 2,500 injured people a positive impact on the import quantities of these were rescued from the building alive. Potentially products. the deadliest garment-factory accident in history, as well as the deadliest accidental structural failure 58. Except for tropical fruits for which imported in modern human history, it led to significant volumes increased by 6 %, all of the import value scrutiny and criticism of the multinational Western increases were substantially price driven. In other companies and brands (including Walmart, Mango, words, the EU paid more for the same physical Bennetton, Primark) which either directly sourced, inflow of these products. or sold garments that were made in by factories in the Rana Plaza itself. 59. World Bank (2008) ‘Agriculture and Poverty Reduction’, Agriculture for Development Policy Brief 66. FLOCERT is the independent certitifaction body http://siteresources.worldbank.org/INTWDR2008/ for Fair Trade, and Fair Trade International is the Resources/2795087-1191440805557/ 4249101- governance body for the Fairtrade system, and the 1191957549239/Brief_AgPovRedctn_web.pdf World Fair Trade Organisation is the global body See also Grewal B., Grunfeld H. and Sheehan P. representing the Fair Trade movement. (2012) ‘The contribution of agricultural growth to poverty reduction’ ACIAR http://aciar.gov. 67. http://www.fairtradetowns.org/ au/files/node/14358/ias76_the_contribution_of_ agricultural_growth_to_p_27524.pdf 68. Taken from Fairtrade International Annual Report 2014-2015 http://fairtrade.se/wp-content/ 60. OECD and WTO (2013) ‘Aid for Trade and Value uploads/2012/09/2014-2015-FI-Annual-report.pdf Chains in Agrifood’ https://www.wto.org/english/ tratop_e/devel_e/a4t_e/global_review13prog_e/ 69. International Organization for Standardization (ISO) agrifood_47.pdf 70. WTO Agreement on Technical Barriers to Trade http://www.wto.org/english/docs_e/legal_e/17- tbt_e.htm

65 Promoting Responsible and Sustainable Sourcing Through Fair Trade

71. Geographical Scope policy of Producer Certification supporting the registered producers in complying for Fairtrade International http://www.fairtrade.net/ with this standard. Fairtrade Standard for Contract fileadmin/user_upload/content/2009/standards/ Production, cit. documents/generic-standards/2014-07-16_ Geographical_Scope_policy_EN.pdf 79. Producer Organization: The producer organization is a group of registered producers contracted 72. Fairtrade Standard for Small Producer and/or supported by the promoting body. Its Organizations http://www.fairtrade.net/ purpose is to enable the registered producers to fileadmin/user_upload/content/2009/standards/ democratically decide on the Fairtrade Premium use documents/2014-07-16_SPO_EN.pdf and negotiate with the promoting body over terms of trade. The producer organization is expected 73. Fairtrade Standard for Hired Labour to become stronger over time and become an http://www.fairtrade.net/fileadmin/user_upload/ autonomous small producer organization which content/2009/standards/documents/generic- can comply with the Fairtrade Standard for standards/2014-07-16_HL_EN.pdf Small Producer Organizations. When producer organization is referred to in the text, it can mean 74. Fairtrade Standard for Contract Production one or more than one producer organization. http://www.fairtrade.net/fileadmin/user_upload/ Fairtrade Standard for Contract Production, cit. content/2009/standards/documents/generic- standards/2014-02-28_CP_EN.pdf 80. Fairtrade Product Classification, Fairtrade International http://www.fairtrade.net/fileadmin/ 75. Explanatory document for the Fairtrade Trade user_upload/content/2009/standards/ Standard (2011) Fairtrade International http:// documents/2013-12-10_Product_Classification_.pdf www.fairtrade.net/fileadmin/user_upload/ content/2011-12-29_Explan_Doc_GTS_EN.pdf 81. Fair Trade Advocacy Office, Fair Trade Standards and their Verification in Brief, April 2007 76. Tallontire, A. and Vorley, B. (2005) “Achieving http://www.fairtrade-advocacy.org/images/Fair_ fairness in trading between supermarkets and their Trade_standards_and_their_Verification_in_Brief. agrifood supply chains”, UK Food Group Briefing: pdf September 2005 http://www.eldis.org/fulltext/ UKfood_brief_fairsuplychains_0905.pdf 82. OECD (2005), cit.

77. In addition to the general Standards for Contract 83. UK Food Group Briefing, Achieving fairness in Production, there are additional standards for trading, cit. production of specific products: Cereals, Cocoa, Fibre crops (including cotton) and Prepared and 84. Fairtrade publishes new gold and precious metals Preserved Fruit and Vegetables. Product standards standards, Fairtrade International (accessed for contract production, Fairtrade International October 2014) http://www.fairtrade.net/single- (accessed October 2014) view+M538639b3300.html http://www.fairtrade.net/contract-production- standards.html 85. Fairtrade consultation to align Standard for Gold with international regulations on conflict-minerals 78. The promoting body is the intermediary http://www.fairtrade.net/single-view+M5f883191e7a. organization that either contracts and/or supports html small producers in producing and marketing one or more crops. It is responsible for supporting 86. Fair Gold http://www.fairgold.org/ these producers to get organized. The promoting body can either be a trader (exporter/ processor), 87. WFTO Annual Report 2012 http://www.wfto. or non- trader (NGO or private) which is a legal com/index.php?option=com_docman&task=doc_ entity forming a partnership with the producers download&gid=2247&&Itemid=1 it contracts and/or supports, i.e. the registered producers. The promoting body is the holder of 88. Fair Trade Advocacy Office, Fair Trade Standards the Fairtrade certificate and is responsible for and their Verification,cit .

66 Promoting Responsible and Sustainable Sourcing Through Fair Trade

89. Dammert, A.C. and Mohan, S. (2014) ‘A Survey of intracenorg/Content/Publications/The%20 the Economics of Fair Trade’, Forschungsinstitut zur Interplay%20of%20Public%20and%20Private%20 Zukunft der Arbeit, Institute for the Study of Labor Standard.pdf (IZA) http://ftp.iza.org/dp8167.pdf Dragusanu, R., Giovannucci, D. and Nunn, N. (2013) 98. Fairtrade International Annual Report 2013-2014, cit. ‘The Economics of Fair Trade’ Harvard University http://scholar.harvard.edu/files/rdragusanu/files/ 99. ‘Fairtrade product sales in Belgium up 7.5%’ Expats, jep_firstdraft_sept10_2013.pdf 04/04/2014 (accessed October 2014). http://www.xpats.com/fairtrade-product-sales- 90. Fairtrade Minimum Price and Fairtrade Premium belgium-75 table, Fairtrade International http://www.fairtrade. net/fileadmin/user_upload/content/2009/ 100. ‘Germany a key market for fair trade products’, standards/documents/2014-09-29_EN_Fairtrade_ Deutsche Welle, 07/05/2014 (accessed October Minimum_Price_and_Premium_table.pdf 2014). http://www.dw.de/germany-a-key-market-for-fair- 91. Explanatory document for the Fairtrade Trade trade-products/a-17616111 Standard, cit. 101. European Commission Communication on Fairtrade 92. ibid (2009), cit.

93. Standard-compliant coffee, which led in terms of 102. European Parliament resolution of 27 September market penetration, reached a 40 per cent market 2011 on a New Trade Policy for Europe under the share of global production in 2012 (up from 15 per Europe 2020 Strategy (2010/2152(INI)) cent in 2008). Other commodities with significant http://www.europarl.europa.eu/sides/getDoc. market shares (in terms of global production) in do?pubRef=-//EP//NONSGML+TA+P7-TA-2011- 2012 include cocoa (22 per cent; up from 3 per cent 0412+0+DOC+PDF+V0//EN in 2008), palm oil (15 per cent; up from 2 per cent in 2008) and tea (12 per cent; up from 6 per cent in 103. Communication from the European Commission to 2008). the European Parliament, the Council and European Economic and Social Committee “Trade, growth Potts J., Lynch M., Wilkings A., Huppé G., Cunningham and development Tailoring trade and investment M., and Voora V. (2014) ‘The Sustainability policy for those countries most in need” 27.1.2012 Initiatives Review 2014: Standards and the Green COM(2012) 22 final Economy’, State of Sustainability Initiatives http://trade.ec.europa.eu/doclib/docs/2012/ http://www.iisd.org/pdf/2014/ssi_2014.pdf january/tradoc_148992.EN.pdf

94. In 2012, 40 per cent of coffee production and 22 104. Communication from the European Commission to per cent of cocoa production was standards- the European Parliament, the Council, the European compliant, ibid Economic and Social Committee and the Committee of the Regions “A Stronger Role of the Private 95. Potts J. et al.(2014), cit. Sector in Achieving Inclusive and Sustainable Growth in Developing Countries” Brussels, 13.5.2014 96. European Commission Working document on COM(2014) 263 final standards & trade of agricultural products (2013) http://ec.europa.eu/transparency/regdoc/ http://ec.europa.eu/agriculture/consultations/ rep/1/2014/EN/1-2014-263-EN-F1-1.Pdf advisory-groups/international/2013-01-28/working- document-standards_en.pdf Directorate-General 105. EEAS Press Release EU Delegation to Kyrgyzstan for Agriculture and Rural Development http://eeas.europa.eu/delegations/kyrgyzstan/ documents/press_corner/140806_pr_handicraft_ 97. International Trade Centre (2011) The Interplay of en.pdf Public and Private Standards (Literature Review EU project holds first workshop on crafts Series on the Impacts of Private Standards – part development in Kyrgyzstan (accessed October III) http://www.intracen.org/uploadedFiles/ 2014).

67 Promoting Responsible and Sustainable Sourcing Through Fair Trade

http://eeas.europa.eu/delegations/tajikistan/press_ 113. Going further for fairtrade, DFID (8 March 2013; corner/all_news/news/2014/20140822_1_en.htm accessed October 2014) https://dfid.blog.gov. uk/2013/03/08/going-further-for-fairtrade/ 106. Success breeds success for EBAE 2012 winners (accessed October 2014). 114. Fairtrade Partners http://www.fairtrade.net/our- http://ec.europa.eu/environment/awards/news_ strategic-partners.html archives.html 115. Agence Française de Developpement (AFD) http:// 107. Horizon 2020 Work Programme 2014 – 2015: Food www.afd.fr/lang/en/home security, sustainable agriculture and forestry, marine and maritime and inland water research and the 116. German Development Bank (KfW) https:// bioeconomy, European Commission Decision C www.kfw-entwicklungsbank.de/Internationale- (2014)4995 of 22 July 2014) Finanzierung/KfW-Entwicklungsbank/ http://ec.europa.eu/research/participants/portal/ doc/call/h2020/common/1617612-part_9_food_ 117. German International Development Cooperation security_v2.0_en.pdf (GIZ) http://www.giz.de/en/

108. Sustainable Food Security Call for Submissions 118. Irish Aid https://www.irishaid.ie (accessed October 2014). http://ec.europa.eu/research/participants/portal/ 119. Swiss State Secretariat for Economic Affairs (SECO) desktop/en/opportunities/h2020/topics/2330- http://www.seco.admin.ch/?lang=en sfs-15-2014.html#tab1 120. Department for International Development 109. ‘Investment presents itself as a new frontier for https://www.gov.uk/government/organisations/ the common commercial policy. The Lisbon department-for-international-development Treaty provides for the Union to contribute to the progressive abolition of restrictions on 121. Directive 2014/24/EU of the European Parliament foreign direct investment. The Treaty grants and of the Council of 26 February 2014 on public the Union exclusive competence to that effect.’ procurement and repealing Directive 2004/18/EC Communication from the European Commission to http://eur-lex.europa.eu/legal-content/EN/TXT/PD the European Parliament, the Council, the European F/?uri=CELEX:32014L0024&from=EN Economic and Social Committee and the Committee of the Regions “Towards a comprehensive European 122. Fair trade in public procurement in the EU. international investment policy” Brussels, 7.7.2010 European Parliament. 17/7/2012 COM(2010)343 final http://trade.ec.europa.eu/ http://www.europarl.europa.eu/RegData/ doclib/docs/2011/may/tradoc_147884.pdf bibliotheque/briefing/2012/120334/LDM_ BRI(2012)120334_REV1_EN.pdf 110. Belgian Development Agency (BTC): Trade for Development Centre http://www.befair.be/en/ 123. Fisher, E. and Sheppard, E. (2012) “Pushing content/fair-trade the Boundaries of the Social: Private Agri-food Standards and the Governance of Fair Trade in 111. BTC Documentary on Fair Trade coffee in Kivu European Public Procurement” Int. Jrnl. of Soc. of (2014) Agr. & Food, Vol. 20, No. 1, pp. 31–49 http://ijsaf. http://www.befair.be/en/content/documentary- org/archive/20/1/fisher_sheppard.pdf fair-trade-coffee-kivu-now-available-english- subtitles 124. European Commission “(2010) Buying Social: A Guide to Taking Account of Social Considerations 112. Department for International Development’s in Public Procurement” Directorate-General for Programme Partnership Arrangements (PPAs) Employment, Social Affairs and Equal Opportunities, (accessed October 2014). Directorate-General for the Internal Market and https://www.gov.uk/programme-partnership- Services http://ec.europa.eu/social/BlobServlet?do arrangements-ppas cId=6457&langId=en

68 Promoting Responsible and Sustainable Sourcing Through Fair Trade

125. Directive 2004/18/EC of the European Parliament 128. Directive 2014/23/EU of the European Parliament and of the Council of 31 March 2004 on the and of the Council of 26 February 2014 on the coordination of procedures for the award of public award of concession contracts http://eur-lex. works contracts, public supply contracts and public europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX: service contracts (OJ L 134, 30.4.2004, p. 114) 32014L0023&from=EN http://eur-lex.europa.eu/legal-content/EN/TXT/ PDF/?uri=CELEX:02004L0018-20090821&from=EN 129. Monitoring the Scope and Benefits of Fairtrade - fifth edition – 2013,cit. 126. European Commission (2014) “Public Procurement reform fact sheet no 8: Social Aspects of the 130. Fairtrade International Annual Report 2013-2014, cit. New Rules”, Directorate General for the Internal Market http://ec.europa.eu/internal_market/ 131. South Africa: an emerging market for fair trade publicprocurement/docs/modernising_rules/ agriculture, Fresh Fruit Portal 14/06/2013 (accessed reform/fact-sheets/fact-sheet-08-social_en.pdf October 2014) http://www.freshfruitportal. com/2013/06/14/south-africa-an-emerging-market- 127. D’Hollander, D. and Marx, A. (2012) “Pulse report for-fair-trade-agriculture/?country=belgium private certification systems and government policy: An overview and assessment” Leuven Centre 132. BTC (2010) ‘South South Fair Trade’ , BTC Belgian for Global Governance Studies University of Leuven development agency, Brussels http://www.befair. http://www.acodev.be/system/files/ressources/ be/sites/default/files/South-South_Fair_Trade.PDF governments_and_private_standards_finalv.pdf

69 Brussels Rural Development Briefings A series of meetings on ACP-EU development issues

70