IMO SFT Programme Versionfeb08
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IMO SOCIAL & FAIRTRADE CERTIFICATION PROGRAMME
Version February 2008
The programme and further information on “For Life” - IMO Social Responsibility and “Fair for Life” - IMO Social & FairTrade Certification are published on www.fairforlife.org . In the subsection “certified operators” all companies certified according to this programme are listed with their standard performance and the evaluation of their social impact.
Comments and suggestions about the contents of this document can be sent by email to [email protected] .
IMO S&FT Programme 2008 © Copyright: Bio-Foundation Switzerland
CONTENTS
1 APPLICABILITY AND LABELLING ...... 6
1.1 CERTIFICATION OPTIONS ...... 6 1.2 FAIR FOR LIFE – SOCIAL & FAIR TRADE CERTIFICATION ...... 6 1.2.1 Type of Operations...... 6 1.2.2 Labelling and Handling of Fair for Life Agricultural Products...... 7 1.2.3 Labelling and Handling of Non-Agricultural Products ...... 11 1.3 FOR LIFE - SOCIAL RESPONSIBILITY CERTIFICATION ...... 12 1.3.1 Type of Operations...... 12 1.3.2 Labelling and Handling of For Life Agricultural Products...... 12 1.3.3 Labelling and Handling of Non-Agricultural Products ...... 15 1.4 AUDIT & CERTIFICATION PROCESS ...... 15
2 SOCIAL STANDARD ISSUES HIRED LABOUR ...... 17
2.1 BASIC RIGHTS OF ALL WORKERS ...... 17 2.1.1 Forced Labour...... 17 2.1.2 Freedom of Association and Right to Collective Bargaining...... 18 2.1.3 Child Labour...... 18 2.1.4 Disciplinary Practices ...... 19 2.1.5 Equal Treatment and Opportunities...... 19 2.1.6 Health & Safety ...... 20 2.2 CONDITIONS OF EMPLOYMENT ...... 21 2.2.1 Contracts & Relations between Employer and Workforce...... 22 2.2.2 Wages ...... 23 2.2.3 Working Hours...... 23 2.2.4 Social Benefits...... 24 2.2.5 Equal Treatment of Different Labour Types...... 25 2.3 ENVIRONMENTAL ASPECTS ...... 26 2.3.1 Water Conservation...... 26 2.3.2 Energy Management and Climate Change...... 26 2.3.3 Ecosystem Management...... 27 2.3.4 Waste Management ...... 28
3 SOCIAL STANDARD ISSUES FOR PRODUCER GROUPS...... 29
3.1 ORGANISATION OF THE GROUP ...... 29 3.1.1 Transparent Administration and Relations with Producers...... 29 3.1.2 Pricing and Producer Payments ...... 31 3.1.3 Non-Discrimination and Gender Aspects...... 32 3.1.4 Internal Control System...... 32 3.2 WORKING CONDITIONS ON PRODUCER FARMS ...... 33 3.2.1 Child Labour and Young Workers on Producer Farms...... 33 3.2.2 Working Conditions on Producer Farms...... 34 3.3 LABOUR CONDITIONS PRODUCER GROUP STAFF ...... 36 3.3.1 Basic Labour Rights for Producer Group Staff ...... 36 3.3.2 Employment Conditions for Producer Group Staff...... 37 3.4 ENVIRONMENTAL ASPECTS ...... 38 3.4.1 Internal Monitoring Environmental Aspects ...... 38 3.4.2 Environmental Performance of Producers...... 39 3.4.3 Environmental Performance Group Processing ...... 39
4 FAIRTRADE STANDARD ISSUES ...... 42
4.1 OBLIGATIONS FOR FAIR TRADE BUYERS ...... 43 4.1.1 Trade Relationship ...... 43 4.1.2 Pricing & FairTrade Premiums ...... 44 4.2 OBLIGATIONS FOR FAIR TRADE PRODUCER COMPANIES ...... 45 4.2.1 FairTrade Obligations for all FairTrade Producer Companies ...... 46 4.2.2 Additional FairTrade Obligations for Producer Groups Operations ...... 47 4.2.3 Additional FairTrade Obligations for Hired Labour Situations...... 48
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Preamble
This Social and FairTrade certification programme was developed by the Swiss Bio-Foundation for IMO in response to various customer requests concerning the lack of breadth, applicability to a wide range of production situations and trade relations and accessibility of other fair trade and social responsibility certification schemes.
The programme is based on existing baseline standards such as ILO conventions and the FLO standards, but also comprises the recent recommendations on social standards as elaborated by the ISEAL SASA project. The programme is public and includes the input of various actors in the industry as well as other experts and stakeholders. Continued comments from stakeholders are highly welcomed to further improve and adapt the programme to common fair trade principles as well as to the practical needs of the companies that are implementing the programme.
Social Responsibility Certification confirms that workers enjoy fair and safe working conditions and that producer groups have well working, accountable internal structures with fair producer relations.
FairTrade Certification includes all social standards, but focuses additionally on fair trade relations and direct support of marginalized groups. “FairTrade” means long-term and trustful cooperation between partners, transparent price setting negotiations and prices, including a FairTrade premium, that allow for social development of the concerned communities. A FairTrade Policy defines the beneficiaries of FairTrade and confirms the social commitment of the production company. Although IMO does not restrict FairTrade to developing countries and marginalized producers, FairTrade clearly aims to improve the social conditions of those groups who are most disadvantaged in the respective local setting.
IMO Social and FairTrade certification of products also confirms traceability of said products from production to sales.
Prologue to the 2008 Version of the Programme Since 2006, various producer groups, plantation operators, manufacturers and buyers world-wide have been audited and certified according to this programme. The experiences gained in this process and feedback from many different actors and experts in the field of fair trade and Corporate Social Responsibility led to a revision of the standard in 2008. Comments were invited and considered from a wide range of stakeholders.
In particular, the Swiss Bio-Foundation would like to thank the following experts for their valuable contribution and input to the revision process: M. Rajasingham, Teresa Blanco, Gero Leson, Franz Augstburger, Chris White, Henrich Neisskenwirth, Girija HR.
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TERMS AND DEFINITIONS
The following terms are defined in their meaning and use within the IMO Social and FairTrade Programme only.
Agrochemical – A chemical substance used in agricultural production systems to maintain soil fertility (fertilizer), control weeds (herbicide) or combat pests (insecticide, fungicide, etc.)
Child – In this standard “Child” shall refer to any person under the age of 15, unless local minimum age law stipulates a higher age for work or mandatory schooling, in which case the higher age would apply.
ILO Definition of “Child”: Any person less than 15 years of age, unless local minimum age law stipulates a higher age for work or mandatory schooling, in which case the higher age would apply. If, however, local minimum age law is set at 14 years of age in accordance with developing-country exceptions under ILO Convention 138, the lower age will apply.
Contract Production - Trader or manufacturer contracting farmers to produce or deliver crops in a certain defined quality (e.g. organic or FairTrade). In this structure the trader or manufacturer acts as group operator who organizes the producers and normally also manages the internal control system.
Discrimination – The ILO definition is used: “Any distinction, exclusion or preference based on race, colour, gender, religion, political opinion, nationality or social origin (or any other motive determined by the afore-mentioned states) that causes equality of opportunity or treatment in employment or work to be lifted or reduced”.
Economic Threshold – The level of infestation or pest attack at which the benefits received (for example in terms of yield or crops saved) cover the cost of the treatment or application.
Ecosystem – A set or system of one or more biological communities (plants, animals etc.) along with the physical media within a determined zone. Examples: forests, wetlands, lakes.
Erosion – Removal or displacement of soil caused by movement of water or wind.
FairTrade Premium – Extra amount paid on top of the FairTrade price for all FairTrade produce bought. The FairTrade premium has to be administered separately from all other revenues and its use is strictly confined to agreed social projects or higher producer payments.
FairTrade Price – Fair base sales price for the FairTrade certified product as negotiated between the FairTrade producer company and the FairTrade buyer. The FairTrade price includes normally a differential for standard compliance and certification and considers the quality of the product (overall product quality, organic production, etc.). The FairTrade price, however, normally does not include the FairTrade Premium.
FairTrade Producer Company – Any company who effectively produces and markets the FairTrade product in the country of origin. This is typically a producer group, plantation or a manufacturer.
Farmgate Price – Price paid to the producers for the product purchased (at the farm, or at purchase centres, etc.).
FLO – FairTrade Labelling Organization (www.fairtrade.net).
Forest Stewardship Council (FSC) – International standard for sustainable forest management and timber products (http://www.fsc.org/en/ ).
Global Organic Textile Standard (GOTS) – International standard for organic textiles (http://www.imo.ch/imo_services_textile_gots_en.html ).
Integrated Pest Management (IPM) – A long-term prevention strategy to combat pests, involving a combination of techniques such as biological control (use of beneficent insects or microbes), use of pest-resistant varieties and the use of alternative agricultural practices in e.g. pruning, spraying or fertilizing.
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Internal Control System (ICS) – An ICS is a documented quality assurance and quality management system that allows an external certification body to delegate the annual inspection of individual group members to an identified unit within the certified producer group and which manages compliance with a standard (and internal quality expectations) by taking over some of the farmers quality management responsibilities.
Medium Family Producer – Small to medium-size family owned farms with some permanent hired labour; bigger than smallholder producers. In this standard, only farms with less than app. 10 permanent workers are considered as medium-size family farms.
Natural Water Body – Lakes, lagoons, rivers, streams, brooks or other bodies of surface water that exist naturally.
Organized Producer Group – Group of producers organized in a formal kind of farmers association or cooperative.
Old Growth Secondary Forest – Secondary forest (forest that has been logged and has recovered naturally or artificially) that has sufficiently developed the structures and species normally associated with old primary forest of that type to act as a forest ecosystem distinct from any younger age class forest (adapted from: www.cbd.int ).
Primary Forest – Forest that has never been logged and has developed following natural disturbances and under natural processes, regardless of its age (www.cbd.int ).
Producer – Primary producer such as farmer or handicraft artisan. Term used in this programme only for smallholder producers and medium-size family producers.
Record – Document that presents results obtained or provides evidence of activities carried out.
Smallholder Producer – Producer who does not structurally depend on hired labour, managing his / her farm mainly with her / his own and the family’s labour-force.
Threatened or Endangered species – Species of flora and fauna indicated as threatened or endangered in applicable laws or regulations or by the IUCN – The World Conservation Union’s Red List (http://www.iucnredlist.org/ ).
Worker – All staff working in an operation including employees, permanent, seasonal, temporary, migrant, foreign, casual and sub-contracted workers. The term “workers” shall also include others such as persons employed in the administrative branch of an organisation.
Young worker – A young worker is defined by age as being between 15 to 17 years.
ILO Definition: Any worker over the age of a child as defined by ILO and under the age of 18.
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1 APPLICABILITY AND LABELLING 1.1 CERTIFICATION OPTIONS IMO offers the following certifications or assessments according to Social and FairTrade Criteria:
Option Content of Certification For Life - Social Responsibility • basic labour rights as expressed in the ILO conventions Certification • good working conditions • see chapter 1.3 social responsibility activities • for producer groups: accountable structures, fair relations with producers Fair for Life - Social & FairTrade • fulfilment of all social standards as above Certification • additional FairTrade criteria such as fair prices, payment and use of a see chapter 1.2 FairTrade Premium, long term mutually beneficent trade relations, etc. Individual Performance • in case certification can not yet be granted or only part of the Assessment standards are to be assessed, or • external verification of private social standards / codes, or • individual approach to Corporate Social Responsibility (CSR)
1.2 FAIR FOR LIFE – SOCIAL & FAIRTRADE CERTIFICATION
1.2.1 Type of Operations Fair for Life – IMO Social & FairTrade Certification is offered to a variety of operators:
Operation FairTrade Focus Standard Sections Plantations/ estates/ farms Workers (agriculture and 2. Hired Labour & processing, if any) 4.2 FairTrade producers Smallholder Producer Groups Normally on smallholder 3. Producer Groups & • farmer or handicraft associations / producers 4.2 FairTrade producers cooperatives • manufacturers contracting farmers for production (“contract production”) Group of medium-size family Depending on overall FairTrade 3. Producer Groups & producers policy: normally agricultural 4.2 FairTrade producers workers on farms, as well as processing workers Manufacturers/ processors (food or Workers 2. Hired Labour non-food products) (4.2 FairTrade producers) Importers and other first buyers from Trade relation to FairTrade 4.1. FairTrade Buyer FairTrade Producer Companies (food or producer companies non-food products)
FairTrade certification of producers and manufacturers is mainly designed for low-income producers and workers in developing and emerging countries, as FairTrade clearly aims at improvement of the social conditions of the most disadvantaged groups in production, worldwide. The primary target groups are smallholder farmers and marginalized workers in developing countries.
A FairTrade policy defines the overall FairTrade focus for the respective production situation, based on analysis of the social groups most in need of additional support through FairTrade and a FairTrade Premium for social development (see chapter 4 for details).
FairTrade certification in developed countries is subject to individual assessment of certification eligibility. A well developed and adapted fair trade concept is required.
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1.2.2 Labelling and Handling of Fair for Life Agricultural Products If an agricultural product is to be labelled as “Fair for Life - Social & FairTrade Certified by IMO” (with or without the logo “Fair for Life“) the following conditions must be met:
Labelling Requirements for IMO Social & FairTrade Certified Products Origin of Raw The agricultural ingredients are from certified FairTrade origin . Material See chapter 1.2.2.3 for details regarding multi-ingredient products and non- certified ingredients. As “certified FairTrade origin ” IMO accepts o Products that are Social & FairTrade certified by IMO o all FLO certified produce o If other fair trade certification schemes are to be approved as “certified FairTrade origin” individual compliance assessment based on audit report by a qualified certification body Processing and Products are processed and handled along the chain of custody by certified or Handling approved processing or trading units as defined in the table below (up to the point of labelling). Other Social Responsibility certifications may be accepted as equivalent e.g. for part of the certification scope. Traceability FairTrade certified ingredients are traceable and kept separate from non- FairTrade certified products. IMO accepts a maximum of 5% commingling in case of technical problems to ensure 100% separation during processing. Traceability is confirmed by Transaction Certificates.
For non-agricultural products such as textiles, please refer to chapter 1.2.3.
1.2.2.1 Control Requirements for different production and trade actors The following table summarises the control requirements for different production and trade actors for agricultural FairTrade certified products:
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Type of Operation Remarks Certification Procedures ”Fair for Life” – IMO Social & Fairtrade 4.1 FairTrade Buyers 4.2 FairTrade Producer Companies* 1.2 Handling & .Labelling 2. Hired Labour 3. Groups Producer Plantation, Estate, Farm x x x Full annual audit & certification of each unit (e.g. plantation & factory) Smallholder Group or Contract x x x Full annual audit & certification of group Production operation Group of medium-size farms x x x Bigger farms must be certified according to Hired Labour Full annual audit & certification of group requirements operation Processing company in x x (x)* (x) Depending on overall FairTrade policy, FairTrade focus Full annual audit & certification developing or low/middle income 1 may be only on agricultural production and not on country as per DAC List processing - in this case only chapter 2 Contracted processor in country x (x) See requirements below Simplified procedures see requirements below as per DAC list Producer Group processing x x (x ) Working conditions included in chapter 3. Depending on Included in group operation audit & certification activities small scale overall FairTrade policy, FairTrade focus may be only on according to chapter 3 agricultural production Producer Group processing x x (x)* (x) See details in chapter 3 for what scale full Hired Labour Full hired labour audit & certification in addition activities large scale certification required. Depending on overall FairTrade to audit & certification of group activities policy, FairTrade focus may be only on agricultural production and not on processing First buyer from FairTrade x x Minimum: certification as “FairTrade Buyer”. Normally full annual audit & approval. May be Producer Company (normally Optional: full FairTrade Certification (incl. hired labour delegated to organic certification body importer) requirements, chapter 2) Processor in developed country, x Optional full FairTrade Certification (hired labour Registration with IMO and regular update on traders of not yet consumer requirements, chapter 2). trade activities. Traceability must be ensured. packed products Trade with consumer packaged No registration or certification requirements certified products * Chapter 4.2 applies to FairTrade Producer Companies (manufacturers or plantations / producer groups with own export). It also includes criteria on fair purchase from smallholder farmers in case of a smallholder group. If the companies also act as buyers, i.e. buy from other certified companies, chapter 4.1 for FairTrade buyers applies as well.
1 All countries on the DAC List of Official Development Aid recipients ( http://www.oecd.org/dataoecd/43/51/35832713.pdf) IMO Social & FairTrade Programme Version Feb. 08 1. Applicability & Labelling 8/49
1.2.2.2 Subcontracted Processing Operations
Depending on the size and the relevance of activities, subcontracted processors have to undergo the full process of certification for social criteria. However, a simplified approach can be adapted if the contracted processing may be such a small part of overall production and activities that the contractor does not have the bargaining power to demand full social certification.
Contracted processor Type 1 • No own certification, however IMO may do brief • less than 50% of annual turnover compliance checks based on a risk assessment. These made from processing the certified compliance checks (short audits) are normally conducted FairTrade product as part of the contracting operators audit and paid by the AND contractor. • added value by processing is < app. • Subcontractor has to confirm in writing that all core 25% (price difference between minimum labour rights as defined in chapter 2.1 are met. unprocessed to processed product) • The mandating company (= the certified operator) shall monitor compliance of the subcontracted operation with the requirements in chapter 2.1. A report of this monitoring has to be kept on file. Contracted processor Type 2 • IMO audit necessary • More than 50% of annual turnover For bigger processors hired labour needs to be ceritified; made from processing the certified see chapter 2 FairTrade product For smaller processors, a summary of labour conditions OR is assessed; see chapter 3.3 • added value by processing is > app. • Annual IMO social responsibility audit, normally three 25% party contract signed between contracting company, contracted processor and IMO. Contracted Processing in individual Depending on actual project organisation, this is usually households or very small communal covered as part of a group certification. Compliance with processing activities fundamental labour rights as summarized in the group chapter 3 and traceability is normally supervised by an internal control system; its efficiency is evaluated by IMO.
The definition of operator types is approximate and shall roughly express the different project situations and resulting adaptation of certification requirements. The actual categorisation of contracted operators is done by IMO.
1.2.2.3 Use of Labels and other References to Certification Use of the green certification seal “Fair for Life - Social & FairTrade certified by IMO” is optional. The seal may only be used on IMO FairTrade certified products and may only be applied to the product by companies who are Social & FairTrade certified by IMO (e.g. plantation in origin country) or have at least signed a label contract with IMO (e.g. manufacturer in consuming country) by registering as authorized processor/trader.
Certified operations are permitted to make reference to their “Fair for Life - Social & FairTrade certified by IMO” certification and use the certification seal in all PR material such as brochures, company information, website, etc. IMO also publishes the performance of the certified operation on the website www.fairforlife.net ; companies may link their consumers to their rating site.
The following references to IMO Social and FairTrade certification may be used: • Fair for Life - IMO Social and FairTrade certified (operation/product as per certificate) • IMO Social and FairTrade certified (operation/product) • IMO FairTrade certified • (audited and) certified according to the IMO Social & FairTrade Programme.
The IMO Social & FairTrade Certification Seal “Fair for Life” may be applied as displayed here, according to the needs of the client. Use in black and white or negative printing is permissible (see additional labelling instructions). All use of the IMO seal must be approved by IMO prior to printing.
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Additionally, IMO’s corporate logo “IMO control” may be used by all operators who are certified by IMO.
1.2.2.4 Social & FairTrade Certified Multi-Ingredient Agricultural Products The following composition criteria apply for multi-ingredient (composite) products that shall be labelled as Social & FairTrade certified by IMO:
Label category* Composition requirements IMO ”Fair for Life” seal: label restrictions Fair for Life - Social • 95% of all ingredients which are “Typically Certification seal ok. & FairTrade certified FairTrade-certifiable” 2 on the market are used by IMO in certified FairTrade quality*. • At the very least 50% of the agricultural ingredients (in weight) must be certified FairTrade* or certified social quality **, with max 20% being social quality. “Made with • Only selected ingredients are certified Certification seal ok. FairTrade […]” FairTrade quality* (and even FairTrade- Label displays overall certifiable ingredients are not FairTrade) or percentage of FairTrade production chain not certified as required 3. ingredients • At the very least 20% of the total agricultural ingredients must be certified FairTrade* or certified social quality **, with a maximum of 5% being social quality. Indication in • < 20% ingredients certified FairTrade quality *. No seal, “FairTrade” NOT ingredient displayed with product statement only name on front label. * Certified FairTrade quality: “Fair for Life - Social & FairTrade certified by IMO” or FLO certified. The acceptance of other FairTrade schemes is based on individual equivalence approval. ** Certified social quality: IMO For Life- Social Responsibility Certification, SA 8000 certification, Rainforest Alliance certification, Utz Certified, FSC certification; others after equivalence evaluation.
Additional Rules and Considerations: • The ingredient statement always clearly indicates the certification status for each ingredient (FairTrade certified, from certified social production or similar expressions). • In principle, each ingredient available in certified FairTrade quality should come entirely from certified FairTrade origin. However, IMO may grant temporary exception to blend in a small percentage of products that are not from certified FairTrade origin to allow for necessary processing flexibility until the market of certified FairTrade products is sufficiently developed. • Temporary exceptions to the 95% minimum rule may be possible if the manufacturer can demonstrate adequate efforts to develop/support supply chain certification of the FairTrade certifiable ingredients used, until supply has sufficiently developed.
2 Typically FairTrade certifiable means that the respective product is commonly produced in FairTrade target countries (i.e. mainly developing or emerging countries) and thus would be a product that could be expected to be FairTrade certified (e.g. coffee, sugar, palm oil, coconuts, spices). All products for which FLO standards exist are considered automatically FairTrade-certifiable; for others IMO might need individual evaluation of the recipe. Ingredients that would be considered not typically-FairTrade-certifiable are e.g. diary products, strawberries. 3 Examples: soap from FairTrade shea butter, but other ingredients are not yet from FairTrade origin, although FairTrade-certifiable. Or: a big body lotion factory in Ghana is not certified yet but uses FairTrade shea butter and has FT trader approval by IMO. In this case the soap could be labelled as “made with FairTrade shea butter”. IMO Social & FairTrade Programme Version Feb. 08 1. Applicability and Labelling 10/49
1.2.3 Labelling and Handling of Non-Agricultural Products In principle the same labelling principles apply for Social & FairTrade certification of non-agricultural / industrial products, such as e.g. FairTrade textiles, as for agricultural products. However, due to the special nature of these products (very long chain of custody, many different constituents of the final product, many of which may be of non-agricultural origin) the following slightly adapted rules apply:
Certification Rules Non-Agricultural Products for Social & FairTrade Certification Certifiable Any manufacturer of non-agricultural products (such as e.g. textiles or fabrics) in companies developing or emerging countries may apply for Fair for Life - IMO Social & FairTrade certification. In longer production chains it is recommended to focus actual FairTrade certification with payment of FairTrade Premium on the most labour intensive steps, e.g. confection. Social Responsibility Certification may be more suitable for other processing steps and is sufficient for labelling the final garment as Fair For Life certified (see requirements below for processing). Fair for Life Certification requires the use of Fairtrade certified raw material (see below). If this is not possible, Social Responsibility Certification is the best option. Applications from manufacturers in developed countries are assessed on case to case basis and only with due justification for specific FairTrade practices beyond good working conditions. For manufacturers who wish to demonstrate their good working conditions and fair labour practices, Social Responsibility certification is the applicable option. Companies in developed countries are often also buyers of FairTrade products and may be certified as FairTrade Buyers, or may only need to be registered to label IMO FairTrade certified products with the IMO seal (if not buying directly from FairTrade Producer Company). Origin of raw The principal constituent of the product is from certified FairTrade origin (see chapter material 1.2.2), e.g. the cotton fibre in jeans. In case of a product substantially made from non-agricultural material such as e.g. polyester fleece, no FairTrade certification of raw material is required, but a clear overall FairTrade policy must outline what production/manufacturing steps or activities are the focus of FairTrade. The fleece processor needs to comply with the same requirements as any processor (see below). Processing IMO must be informed on the entire chain of custody up to the product to be labelled and handling as “Fair for Life – Social and FairTrade certified by IMO”. Traceability of the product must be ensured by a traceable lot system and transaction certificates. The main labour intense processing step must normally be fully Social & FairTrade certified by IMO, e.g. confection in case of jeans production. IMO decides for each chain of custody which processing units need to be Social & FairTrade certified. All other intermediate manufacturers who handle the FairTrade product comply with the ILO Labour Standards and can prove this by one of the following means: • IMO Social Responsibility certification • Certification according to IMO-acknowledged certification schemes with effective control of social minimum standards: SA8000, IVN natural textiles, Global Organic Textile Standard. • On a case by case basis (equivalence check fees apply) IMO may also approve the following proofs of compliance with labour standards o Documentary proof that the production unit participates in a recognised FairTrade initiative such as Ethical Trading Initiative, Fair Wear Foundation, Fair Labour Association, Workers’ Rights Consortium. o Letter of endorsement of a union accredited by ICFTU. o Proof that the company is owned by the workers. o Social audit report not more than two years old by a qualified external verification organisation. Based on a risk assessment along the chain of custody, IMO may decide to require IMO Social Responsibility Certification of operations with high risk of labour right violations. If not the full product chain can be approved, adapted labelling such as “made with certified FairTrade cotton” or similar may be possible.
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1.3 FOR LIFE - SOCIAL RESPONSIBILITY CERTIFICATION
1.3.1 Type of Operations For Life – IMO Social Responsibility Certification is offered to a variety of operators:
Operation Standard Chapter Plantations/ estates/ farms 2. Hired Labour Smallholder Groups 3. Producer Groups • farmer or handicraft associations or cooperatives • manufacturers contracting farmers (“contract production”) Group of medium-size producers 3. Producer Groups Manufacturers/ processors (food or non-food products) 2. Hired Labour Other companies with substantial workforce 2. Hired Labour
Social Responsibility certification is suitable for all companies world-wide that wish to demonstrate their fair labour practices and good working conditions to clients and other stakeholders.
As Social Responsibility certification does not only set clear minimum requirements for certification, but also assesses the operation’s overall performance beyond minimum compliance, it is also suitable for producers and manufacturers in regions with already relatively good labour practices.
It may also be the best option for companies in countries with a reputation of poor labour standards who wish to demonstrate to clients their good working conditions, fair labour practices and commitment to social development in their communities. 1.3.2 Labelling and Handling of For Life Agricultural Products Companies have the choice to either • apply for certification as a company only (no certification of products). In this case there are no requirements regarding used raw materials or certification of suppliers or trade partners • apply for certification of production as well as products, which allows labelling of products with reference to IMO Social Responsibility Certification and use of the IMO “for life” seal.
If the product is to be labelled as “Social Responsibility Certified by IMO” (with our without the IMO Social Responsibility logo “for Life”) the following conditions must be met: Labelling Rules for Social Responsibility Certified Products Origin of The agricultural ingredients are from certified social responsibility origin . See rules in raw 1.3.2.3. for details regarding multi-ingredient products and non-certified ingredients. material For non-agricultural products such as textiles, please refer to chapter 1.3.3. As “certified social responsibility certified origin ” IMO accepts o IMO Social Responsibility or FairTrade certified products o FLO, Rain Forest Alliance, SA 8000, FSC, UTZ Certified o If other social certification schemes are to be approved as equivalent, an individual compliance assessment based on an audit report by a qualified certification body is required. Processing Products are processed and handled along the chain of custody by certified or approved and processing or trading units as defined in chapter 1.3.2.1 (up to the point of labelling). handling Other social responsibility certifications may be accepted as equivalent Traceability Social responsibility certified ingredients are traceable and kept separate from non-social certified products. IMO accepts a maximum of 5% documented commingling in case of technical problems to ensure 100% separation during processing. Transaction certificates confirm the traceability.
1.3.2.1 Control Requirements for Production and Trade Actors The following table summarises the control requirements of different (potential) actors in the production and trade chain of a product:
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Type of Operation Remarks Certification Procedures ”For Life” – IMO Social Responsibility 1.3 Labelling 1.3 & Handling Hired 2. Labour Producer 3. Groups Plantation, Estate, Farm x x Full annual audit & certification of each unit (e.g. plantation & factory) Smallholder Group or Contract x x Full annual audit & certification of group operation Production Group of medium-size farms x x Bigger farms must be certified according to Hired Full annual audit & certification of group operation Labour requirements Processing company in x x Full annual audit & certification developing or low/middle income country, see DAC list 4 Contracted processor in x (x) See requirements in 1.2.2.2 Simplified procedures see requirements country on DAC list in 1.2.2.2 Producer Group processing x x Working conditions included in chapter 3. Included in group operation audit & certification according activities small scale to chapter 3 Producer Group processing x x See details in chapter 3 for the scale required for Full hired labour audit & certification in addition to audit & activities large scale full Hired Labour certification certification of group activities Processor in developed x Optional full own Social Responsibility Certification Registration with IMO and regular update on trade country or any company (hired labour requirements, chapter 2). activities. Traceability must be ensured. labelling final products with reference to IMO certification Trade with consumer No registration or certification requirements. packaged certified products
4 All countries on the DAC List of Official Development Aid recipients ( http://www.oecd.org/dataoecd/43/51/35832713.pdf) IMO Social & FairTrade Programme Version Feb. 08 1. Applicability & Labelling 13/49
1.3.2.2 Subcontracted Processing Operations See chapter 1.2.2.2 for information on simplified control requirements for subcontracted processors.
1.3.2.3 Use of Seals and other References to Certification Use of the blue logo “For Life- Social Responsibility certified by IMO” is optional.
On products, the logo may only be used if the products themselves are Social Responsibility certified by IMO and it may only be applied by companies who are IMO Social Responsibility certified (e.g. plantation in country of origin) or have at least signed a label contract / registration with IMO (e.g. manufacturer in consuming country).
If only a company but not its products are Social Responsibility certified by IMO, use of the certification seal is restricted to the company’s PR material, brochures, etc.
The following references to IMO Social Responsibility certification may be used: • For Life - Social Responsibility certified by IMO (operation/product) • IMO Social Responsibility certified (operation/product) • IMO Social certified • (audited and) certified according to the IMO Social Responsibility Programme.
The IMO Social Responsibility Logo “for life” may be applied as displayed here, according to needs of the client. Use in black and white or negative printing is possible, see also additional labelling instructions. All use of the IMO seal must be approved by IMO prior to printing.
Additionally, IMO’s corporate logo “IMO control” may be used by all operators certified by IMO.
IMO publishes the performance of the certified operation on the IMO website and companies may link their clients to their rating site.
1.3.2.4 Social Responsibility Certified Multi-Ingredient Agricultural Products The following composition criteria apply for multi-ingredient (composite) products that shall be Social Responsibility certified by IMO:
Label category* Composition requirements IMO ”For Life” seal, label restrictions “Social • 95% of all agricultural ingredients are used in Certification seal on Responsibility certified social or FairTrade quality. product ok certified product” “Made with […] from • Only selected ingredients are from certified Certification seal ok; certified social social origin or production chain not certified Label displays clearly responsible as needed. which ingredient is from production” • At the very least 20% of the total agricultural certified social origin ingredients must be from certified FairTrade* or certified social origin. Indication in < 20% ingredients from certified FairTrade or No seal, reference to ingredient certified social origin**; certified social production statement only NOT displayed with product name on front label
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Additional Rules and Considerations: • The ingredient statement clearly indicates the certification status for each ingredient (from certified social production, from certified FairTrade production, or similar expressions). • In principle, each ingredient available in certified social quality should come entirely from certified social origin. However, for practical reasons, IMO may grant temporary exception to blend in a small percentage of products that are not from certified social responsibility origin to allow for sufficient processing flexibility until the market of certified social products is sufficiently developed. • As certified social origin, IMO accepts IMO Social Responsibility Certification, SA 8000 certification, Rainforest Alliance certified origin, Utz Certified, FSC certified origin. As certified FairTrade origin, IMO accepts IMO Social & FairTrade certification as well as FLO certification. • Temporary exceptions to the 95% rule can be granted until sufficient supply of Social / Fairtrade certified materials is available, if the manufacturer can demonstrate efforts to get suppliers certified.
1.3.3 Labelling and Handling of Non-Agricultural Products In principle the same labelling principles apply for non-agricultural/ non-food produce, such as e.g. textiles to be labelled as “For Life - Social Responsibility certified by IMO”, as for agricultural produce. However, due to the special nature of many products (very long chain of custody, many different constituents of the final product, many of which may be of non-agricultural origin) the following slightly adapted rules apply:
Labelling Rules Non-Agricultural Products for Social Responsibility Certification Certifiable Any manufacturer of non-agricultural products world-wide (such as e.g. textiles or companies fabrics) who wants to demonstrate fair labour practices and excellent working conditions may apply for IMO Social Responsibility Certification.
For product certification, only the most labour intensive production step (normally confection) MUST be Social Responsibility certified; for other processors other proofs of compliance with ILO standards may be sufficient. Origin of raw The principal constituent of the product is from IMO certified social origin, e.g. the material cotton fibre in jeans. In case of a product substantially made from a non- agricultural product such as e.g. polyester fleece, the actual production of the polyester fleece would need to be social responsibility certified. As “certified social or FairTrade origin ” IMO accepts the following certifications: IMO Social Responsibility or Social & FairTrade Certification, FLO Certification, SA8000 certification. Approval of other social certification origins may be possible after individual compliance assessment based on an audit report by a qualified certification body. Processing and IMO must be informed on the entire chain of custody of the product. Traceability of handling the product must be ensured by a traceable lot system and transaction certificates. The main labour intensive steps or those with the highest risk of violation of workers rights are fully Social Responsibility certified by IMO, e.g. confection in case of jeans production. IMO decides for each chain of custody which processing units need to be Social Responsibility certified. All other intermediate manufacturers who handle the FairTrade product comply with the ILO Minimum Labour Standards and can prove this by one of the following means: see 1.2.3 for details
1.4 AUDIT & CERTIFICATION PROCESS The audit and certification procedures according to the IMO Social and FairTrade Programme are described in detail in the separate document IMO I, 2.1.5 Standard Procedures Social & FairTrade Certification. The information in this chapter is a summary of the process for easier overview (see also tables in sections 1.2.2.1 and 1.3.2.1 for details on control requirements for different types of operations).
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I Producer and Manufacturing Companies in developing or emerging countries • Application for certification by submitting necessary details on operation, confirmation of the certification budget and transfer of required pre-payment. Social and/or FairTrade certification is then included in the scope of existing IMO certification contracts, or a new contract is signed • The applicant prepares for certification by self-assessment against the standard requirements and correction of major deficiencies, development of required documentation, etc. The operator also has to complete an operator profile describing the working conditions and activities in detail. • Annual complete on-site audit of the production and manufacturing process, wherever possible in combination with audits for other schemes, e.g. organic, GOTS • Audits are performed by specifically trained and experienced IMO auditors of the world-wide IMO group network. All information obtained is handled as strictly confidential. • The audit of a hired labour operation (estate, factory, etc.) includes a physical inspection of production facilities, interviews with management as well as workers, review of staff files, production records and other documents. • The audit of a producer group includes visits of producers, interviews with their group representatives, visit to any group operation processing facilities and their workers, review of internal control system documentation and policies • At the end of the audit, the audit report is completed and audit findings are discussed. The report is then further elaborated electronically by auditor and evaluated by another expert. The certification decision is communicated in a notification letter and a summary assessment. The company also receives the final official audit report and, in case of satisfactory performance, a certificate. The applicant has the right to appeal against the decision. • Certified operations are published on the website www.fairforlife.net including their overall performance rating and evaluation of social impact. All information as published on the website is included in the summary assessment and the certified operation has the right to request corrections in any information published or may oppose publication of the rating. • After certification, certified operations are expected to continuously improve their performance and work on any deficiencies or conditions as outlined in the summary assessment. Normally, a new full audit is required each year for update of certification.
II Traders and Manufacturers in Industrial Countries (FairTrade only) First Buyer of FairTrade Products: • To label the final products as IMO Social & FairTrade the first buyer from FairTrade producer companies must also be certified as FairTrade Buyer; this is typically the importer e.g. in Europe or North America. • In the audit, compliance with FairTrade Buying requirements (chapter 4.1) is evaluated and the traceability of the certified products confirmed. • Thus, normally an annual audit visit is required. In certain simple cases (e.g. trader certified organic and/or FLO, only buying from one or two FairTrade companies with good bargaining power and with confirmation of good trade relations from FairTrade producer company), IMO may decide to assess compliance with the buying requirements based only on submitted documentation. Alternatively, in certain cases other qualified certification bodies may be delegated to assess the certification requirements.
Further processing or handling steps in consumer countries: • Until final packaging of the product with reference to IMO Social & FairTrade Certification, every processing or handling step must be registered with IMO. A registration form must be submitted and handled quantities notified twice a year. There is no regular audit or certification of registered traders, but traceability and separation of products must be ensured at all times; IMO reserves the right to perform spot-checks. Transaction certificates will be required.
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2 SOCIAL STANDARD ISSUES HIRED LABOUR
Explanation of Structure in Standard Issue Sections
Policy: For each standard issue the IMO expectations and considerations regarding the specific points are described in a general way. This introductory text seeks to introduce and clarify the detailed control points. Basis for audit and certification are the control points in the table below the policy text.
Rating of Control Points: 0= very poor performance / not compliant at all 1= not yet sufficient, but already positive developments towards the norm for good social performance 2= defined as the norm for good social performance; 3= voluntary performance higher than norm, beyond minimum performance 4= exceptionally high performance; outstanding, far beyond minimum performance M= indicates a “MUST”, i.e. this requirement must always be fulfilled for certification MAX = Maximum number of points for the respective control point; All rating levels up to the MAXIMUM may be chosen, even if not explicitly defined in the control point text ( comment & explanation necessary)
Total Norm Points (TNP) = Total number of points if all norm requirements were fulfilled (all points rated as “2”). For certification, an operation must meet the following percentages of Total Norm Points per chapter; First year: 90%, Second year: 95%, Third Year: 100%. Continuous improvement is expected All M= MUST requirements must be fulfilled.
see also IMO 2.1.5G-e IMO Standard Procedures Social & FairTrade Audit and Certification for details
Applicability and Reference to other Social Standards The following IMO Social standard issues are based among others on the applicable ILO Conventions, FLO Hired Labour Standards, Rainforest Aliance, ETI as well as SA8000 standards. The control points in this chapter are the basis for certification of any kind of plantations, or manufacturing or trading operation world- wide. For groups of smallholder or medium-size producers or handicraft artisans, see chapter 3.
2.1 BASIC RIGHTS OF ALL WORKERS The criteria apply to ALL Hired Labour operations and to all categories of workers. The term “workers” shall refer to all workers including employees, seasonal, temporary, migrant, foreign, casual, permanent, and sub-contracted workers but not restricted to field workers only. The term “workers” shall also include others such as persons employed in the administrative branch of an organisation.
2.1.1 Forced Labour There is no forced or bonded labour. The company must not retain any part of workers’ salary, benefits, property, or documents in order to force workers to remain on the operation. The company must also refrain from any form of physical or psychological measure requiring workers to remain employed in the operation. Spouses and children of contracted workers are not compelled to work in the operation . N° Control Points Forced Labour MAX Score 1 (0) Clear evidence ( 2=M) no indication of forced labour 2 M=2 2 Family and dependents of workers are (0) compelled to work in the organisation (1) expected to work 3 in the operation ( 2=M) are free to seek employment elsewhere (without deductions for main M=2 worker). (3) Very worker friendly arrangement, efforts to provide work for family if wished so 3 Employer (0) retains ( 2=M) does not retain original legal workers documents (i.e. identity card) for 2 a period longer than demanded by law. M=2
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N° Control Points Forced Labour MAX Score 4 Employer (0) does retain (2) does not retain any part of worker’s salary, benefits, etc. 2 5 (0) Restrictions (2) no restrictions on workers rights to terminate employment 2 6 (0) Employment is linked to fulfil an obligation or debt of a third party; large loans to workers; 3 disproportional to their income (2), no such implications. (3) Very positive schemes for workers, e.g. small loans at good conditions in case of need
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 14 12
2.1.2 Freedom of Association and Right to Collective Bargaining Workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain collectively unless restricted by law. The employer adopts an open attitude towards the activities of trade unions and their organisational activities. Workers representatives are not discriminated against and have access to carry out their representative functions in the workplace. Where the right to freedom of association and collective bargaining is restricted by law, the employer facilitates and does not hinder the development of parallel means for independent and free association and bargaining.
N° Control Points Freedom of Association MAX Score 1 Employer (0) prohibits ( 2=M) permits associative activities and collective bargaining (3) recognises 4 in writing and deed the right of workers to freedom of association and collective bargaining (4) is M=2 exceptionally active to promote/support associative activities 2 Information on workers right to organize provided by employer. (0) no information at all (2) basic 3 information; workers know that they are free to organize (3) information on workers rights by independent third parties or: Detailed information as per local law provided by the employer 3 (0) Management discriminates or punishes workers for exercising their right to join or participate in 4 union/associative activities (2=M) no such discrimination or punishment (3) management M=2 supports/ promotes workers’ associative activities in a positive way 4 (1) Indication (2) no indication that employer obstructs or controls worker representatives meeting 4 workers during working hours. (3) Employer grants workers time within working hours for workers meetings and provides physical facilities 5 Employer or management (0) insist on always being present during meetings of worker 2 representatives (1) attend meetings sometimes (uninvited) (2) are present or attend meetings only on invitation 6 Where more than one union exists (0) there are indications (2) no indications that the management 2 favours one union over the other 7 Where no unions exist / or existing unions do not offer a good option for workers (0) the management 3 does not facilitate (2) facilitates the formation of a workers council / representation organisation elected by the workers; (3) acts as active / committed facilitator. If there is substantial unionisation 3 8 Workers’ awareness of freedom of association: (0) not aware (1) aware of the option but feel hesitant 4 to really join a union/organisation (2) aware of the option but clearly not interested (3) some union activities or own active workers representation organisation. (4) Exceptionally high degree of unionization or very active workers representation with collective bargaining/joint salary negotiations or agreements in other labour issues
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 26 16
2.1.3 Child Labour Children (<15 yrs) are not employed and shall not work in the operation. If there are or were still children working in the company, the company is expected to present a remediation policy to responsibly phase out any form of child labour as soon as possible, at the latest within 1 year. Remediation shall prevent any children who are no longer working for the company from entering worse forms of child labour, and shall also ensure that the children are able to attend and remain in quality education until no longer a child. Children may under no circumstances be required to do work that is likely to jeopardize their health, safety or emotional development.
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Young workers (15-17 years) shall not perform work that is hazardous or dangerous to the health and safety of youth workers. It could jeopardise their educational, emotional, social and physical development. Total working hours for young workers shall not exceed 10 hours per day (with at least one rest day out of every seven), including travel and school. Children and young workers shall not be requested or allowed to work at night.
N° Control Points Child Labour MAX Score 1 There is (0) child labour (2=M) no child labour (including children assisting their parents) (3) 4 company actively engaged in programmes to eliminate child labour in general (4) exceptionally M=2 active in the elimination of child labour If there is child labour see policy above; give details on scope & nature of employment and planned remediation; individual decision whether certification can still be granted 2 Young workers (0) are ( 2=M) are not engaged at night or in work that is hazardous to their 3 health, safety and that may jeopardize their development. (3) Very restricted work scope for young M=2 workers; special safety precautions are in place in workplaces of young workers. If n.a. (3). 3 Young workers are (0) normally (1) occasionally (2) never engaged in work not appropriate for their 2 age (too complex/hard/, etc.). If n.a. (2) 4 Working hours of young workers (0) do not permit them to attend school (1) interfere only slightly 3 with education (2=M) do not interfere with education ; normal school attendance (3) operator M=2 actively supports schooling or specific education and training. If n.a. (3). 5 Daily working hours of young workers including travel and school do (0) exceed 10 hours ( 2=M) less 3 than 10 hours ; sufficient rest periods (3) less than 8 hours, If n.a. (3) M=2
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 15 10
2.1.4 Disciplinary Practices There is no physical abuse, corporal punishment, verbal abuse or other forms of intimidation. Disciplinary measures are clearly handled and transparent for the workers. N° Control Points Disciplinary Practices MAX Score 1 (0) Evidence (2=M) no evidence of corporal punishment. (3) Clear written policy that prohibits any 3 form of corporal punishment; policy made known to all staff M=2 2 (0) Clear evidence (1) some indication (2=M) no indication that disciplinary practices do violate 4 dignity and basic human rights. (3) Very good understanding between management and workforce M=2 considering disciplinary issues; no real disciplinary actions necessary 3 Disciplinary practices are (0) highly unfair/not transparent (1) ok, but a few problems (2) fair and 4 transparent. (3) Clear written policy that prohibits any form of corporal punishment; policy made known to all staff; (4) exceptionally good policy & no discipline problems 4 Written grievance procedures: (0) none although discipline is an issue (2) written procedures 3 5 Deductions from wages as a disciplinary measure (0) are practiced ( 2=M) are not practiced . No 2 deductions from wages done other than provided for by national law or with the expressed M=2 permission of the worker concerned. All such deductions are recorded in the staff file
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 16 10
2.1.5 Equal Treatment and Opportunities There shall be no discrimination in hiring, compensation, access to training, promotion, termination, benefits or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, HIV / Aids, union membership or political affiliation. N° Control Points Equal Treatment and Opportunities MAX Score 1 (0) Clear evidence (1) Some indication (2=M) No indication of systematic discrimination (distinction, 4 exclusion or preference) with respect to remuneration (wages and benefits). (3) Employer is actively M=2 involved in promoting mutual respect and harmony among the workers through cultural and educational activities; (4) exceptional commitment
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N° Control Points Equal Treatment and Opportunities MAX Score 2 (0) Clear evidence (1) Some indication (2) No indication of systematic discrimination (distinction, 4 exclusion or preference) with respect to opportunities (hiring, training, promotion). (3) High presence of potentially discriminated groups in good positions 3 (0) Clear evidence (1) Some indication (2) No indication of systematic discrimination in hiring 4 practices. (3) Company policy or quota regulation on how to avoid discrimination 4 (0) Clear evidence (2) No indication of behaviour that is sexually coercive, threatening, abusive or 4 exploitative. (3) Policies and clear procedures to prevent behaviour that is sexually intimidating and use of abusive language 5 Additional points for voluntary commitment : employer has especially well adapted working 3 conditions for women or fathers with young children (e.g. part time positions, very flexbile hours, child care support, etc.) – rating (0) to (3). No norm requirement 6 Additional points for voluntary commitment : employer creates employment or special training 3 opportunities for particularly disadvantaged/discriminated groups – rating (0) to (3). No norm requirement
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 22 8
2.1.6 Health & Safety A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work by minimizing, so far as is reasonably practicable, the causes of hazards inherent in the working environment. Workers shall receive regular and recorded health and safety training and such training shall be repeated for new or reassigned workers. The company shall assign responsibility for health and safety to a senior management representative. Free access to clean toilet facilities and to potable water and food consuming areas shall be provided. Accommodation, where provided, shall be clean, safe, and meet the basic needs of the workers. In assessment of whether the taken measures are sufficient to guarantee a safe working environment, IMO will use a risk-based approach, i.e. larger factories with many workers or any particularly hazardous industry type will be expected to have better developed and more formal procedures and safety measures in place than smaller, low-risk operations. N° Control Points Health and Safety MAX Score 1 Risk areas and potential hazards are (0) not identified (1) partially identified (2) clearly identified with 3 signs in local language and / or pictorially. (3) Efforts have been made to reduce risk areas and to make all workplaces safe. If no real risk areas (2) indicate “n.a.” 2 Fire fighting equipment (0) not available (1) present but in poor condition/not accessible (2=M) 3 available and functional (3) well maintained, adequate and sufficient M=2 3 Emergency procedures (0) not in place, not even orally (1) in place but not known to workers OR not 3 written but all workers fully aware of relevant emergency procedures (2=M) in place M=2 (written/signposted) and known by workers; (3) advanced procedures including training of staff on evacuation procedures 4 Emergency exits (0) none (1) exits not entirely unobstructed (2=M) unobstructed and clearly 3 identified. Sufficient for quick and safe evaluation in an emergency M=2 5 Workplaces, machinery and equipment are (0) unsafe (1) not dangerous, partially safe (2=M) 4 adequately safe and without major risks to health (as per good industry standard) (3) very safe, M=2 special efforts have been made to make workplaces as safe as possible 6 Actual safety situation & accidents at work (0) several accidents or any severe accidents in past 2 4 years; ( 1=M) only minor accidents or injuries occasionally , with appropriate follow-up M=1 improvements taken; (2) no substantial accidents or work-related health problems; (3) high focus on safety issues, very good preventive measures and training; (4) exceptionally high and actively implemented safety standards 7 Records about accidents at work and work related sicknesses: (0) not recorded (2) recorded but no 3 follow-up (3) recorded, analysed and preventive measures put in place. OR: no accidents / illnesses in past 3 years 8 In cases of work related accidents the company (0) does not provide any financial assistance (1) 4 provides financial assistance on a recoverable basis (2) provides insurance cover or full payment (3) provides comprehensive medical insurance cover for work and non work related illnesses; (4)
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N° Control Points Health and Safety MAX Score provides exceptionally good insurance coverage fully paid by company; insurance covers permanent disability / death 9 Workers awareness of occupational H&S: (0) not aware of the basic requirements; (1) aware but not 4 systematically trained; (2) informed and adequately trained on occupational H&S risk management (as appropriate for their duties); (3) very good regular training 10 Safety officer: (0) None although safety problems (1) No safety officer, but safety is no real issue at 3 all (2) A person trained as safety officer with sufficient qualification and management powers is assigned. (3) Safety committee with participation of workers 11 Risk analysis of H&S hazards: (0) not carried out; (2) regular analysis done; written safety policy; (3) 3 exceptionally high H&S awareness in-house 12 First aid equipment: (0) No first aid facility (1) first aid boxes are in place but not adequately stocked 3 with basic medicines. ( 2=M) Adequately stocked first aid boxes. Emergency medical care (as M=2 relevant for potential accidents) is available on site or close to workplace; (3) very good first aid & medical care; also for health problems not directly related to work (on site or via near by doctor, etc.) 13 First aid staff: (0) not available; (1) properly trained staff appointed; (2) well trained staff appointed 3 and always present during working hours; (3) staff provided with refresher course annually 14 Pregnant women, nursing mothers and young persons are (0) engaged in potentially hazardous 3 work (2=M) excluded from potentially hazardous work M=2 15 Adequate protection of workers from exposure to chemicals (0) missing although necessary (1) 3 provided in acceptable condition (2=M) provided, maintained and effectively M=2 followed/implemented; or: not necessary; (3) exceptionally good protection efforts 16 Adequate protection of workers from noise, dust, and light (0) missing although necessary (1=M) 3 provided in acceptable condition (2) provided, maintained and effectively followed/implemented; M=1 or: not necessary; (3) exceptionally good protection efforts 17 Suitable (special) work clothes (if necessary) (0) not provided (1) provided but workers are required 3 to pay; (2) necessary protective work clothes and gear provided free of charge, well maintained and replaced regularly; (3) work clothes (even not necessary for safety reasons) provided and maintained 18 Changing areas & washing facilities/showers if workers handle toxic substances: (0) no separate 2 changing areas or washing facilities although toxic substances are handled; (2) changing areas and washing facilities available; clothes/gear worn during application /handling of toxic substances is not taken home for washing. If n.a. 2 19 Chemical storage: (0) in workers’ areas or together with household goods; ( 2=M) separate, well 2 locked and clearly identified storage with access restriction. If no critical chemicals (2) M=2 20 Light situation at the work place: (0) not sufficient/strain on the eyes; (2) sufficient for the task; (3) 3 very good and agreeable for workers 21 Ventilation at work place: (0) no ventilation; (1) poor and ineffective; (2) effective with adequate flow 3 of fresh or purified air (by local standards); (3) exceptionally good working environment (air & temperature) 22 Access to potable water: (0) no access; (2=M) convenient access , free of charge; (3) high quality 4 water or tea for free; (4) also other drinks (coffee, juice, etc.) for free M=2 23 Facilities to heat/consume food: (0) no facilities; (1) inadequate facilities; (2) clean and adequate 4 facilities to consume food of their choice, or fairly priced canteen; (3) subsidised meal provided; (4) free quality meal provided 24 If accommodation for workers is provided: (0) it is unacceptable; (1) sufficient but overall standard or 4 5 cleanliness is relatively low; (2=M) adequate and safe according to local standards , at reasonable M=2 costs. If not yet adequate: written plan to improve within 1 year after certification; (3) very good accommodation at normal/subsidised rates; (4) exceptional. If n.a. (2).
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 77 48
2.2 CONDITIONS OF EMPLOYMENT The following conditions of employment criteria apply to all hired labour operations. Size and complexity of the applicant operation will be considered in the evaluation of performance.
5 Adequate accommodation: hygienic and healthy conditions (dry, day light access, appropriate lighting, ventilated/heated, clean sanitary facilities approximately 1 per 15 workers, sufficient space per person, dignified sleeping structures); some privacy ensured and storage of personal belongings possible; access to laundry place, kitchen facilities if necessary. IMO Social & FairTrade Programme Version Feb. 08 2. Social Issues Hired Labour 21/49
2.2.1 Contracts & Relations between Employer and Workforce Employment is based on a well defined relationship between the employer and workers. There is a written agreement on employment conditions such as job position, working hours, overtime regulation, social benefits entitlement & deductions, annual paid leave & sick days as well as termination of employment. Ideally, this is defined for each worker in a written employment contract, which is signed by employer and worker, and a copy given to the worker. Alternatively only worker specific details such as position, tenure and wages are given in a contract or similar document, while additional information, which is applicable to all workers, is published in separate public documents (e.g. employment manual, openly displayed working regulations, Collective Bargaining Agreement CBA, etc.). The company has a Social or FairTrade Policy that declares its commitment to complying with labour laws and the requirements indicated in this programme or international standards as well as its commitment to continuous improvement of working conditions. Ideally the social policy is developed in close cooperation with workers. The policy should summarize the rights and responsibilities of the management and workers with regard to labour aspects, living conditions (if applicable), basic services, occupational health and safety, training opportunities and community relations. If there is also FairTrade certification, it includes aspects such as FairTrade beneficiaries, the decision process for Premium use and intended Premium use (rough description of types of projects to be possibly funded),etc. The Social Policy must be approved by the upper management and be distributed and made known to all workers. It may be a single “declaration document” to inform workers on the company’s overall commitment for Social Responsibility, or may be a set of different, more detailed policies (e.g. on discrimination, recruiting, Health & Safety, etc.). In this case, these policies must be made known to all workers to fulfil the same overall purpose. The employer shall develop a corporate self-understanding of partnership with the workers and do his / her best to create a positive working atmosphere. N° Control Points Working Relations MAX Score 1 There is a system of written contracts / agreements on employment conditions (see above): (0) no 4 written documents for any workers; (1) written agreement on employment conditions only for M=2 permanent workers; OR: documents not covering above listed aspects; (2=M) written agreement on employment conditions for all workers, see above; (3) good and detailed contracts. Contract and related documents outline rights and duties of both sides and are signed by employer and worker; worker receives copy 2 Contracts / agreements are effectively on file for all workers: (0) missing or incomplete contract files 2 or any case of suspected fraud; ( 1=M) a few unsigned or incomplete contracts (but worker M=1 effectively has all rights of written contract); (2) complete and signed set of contracts/documents that outline employment conditions. 1st inspection: If so far generally no contracts were issued but workers have effective rights and company agreed to introduce contracts/agreements 1 3 Workers are (0) not (1) sufficiently (2) well informed about their duties and rights. 3 4 There is (0) no (1) little (2) adequate (3) very good interaction and understanding between employer 4 & workers and a positive working atmosphere; (4) exceptionally close communication between workers and employers; workers have impression to work in model company; many events / support for workers, etc. 5 Social policy (see above): (0) none, very low management awareness of social issues, low 4 commitment (1) no written policy, but clear social commitment (2=M) written basic social policy M=2 (or included in different related policies); policy is made known to workers If none must be developed within 6 months after first inspection; (3) well developed social policy, known to all workers, developed in close cooperation with workers 6 Training by employer: (0) No training offered (1) basic on-the-job training (2) advanced continuous 4 on-the-job training (3) training for career advancement; certificates provided (4) exceptionally good & generous study and advanced training options available for all categories of workers 7 Legally required registration of workers: (0) illegal workers; (2=M) all workers who work for more 3 6 than 2 months/year are legally registered if required by law; (3) even shorter term temporary M=2 workers always registered OR: employer actively supports workers in obtaining working permits, etc before employment
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 24 14
6 Wherever provident fund /pension fund /social security fund subscription is available it can be accepted as ‘registration’ with the concerned government agency. IMO Social & FairTrade Programme Version Feb. 08 2. Social Issues Hired Labour 22/49
2.2.2 Wages Wages and benefits paid for a standard working week meet, at a minimum, national legal standards. In any event, wages should always be enough to meet the basic needs of the workers and their families and should also provide some discretionary income. Where the certification applicant uses payment by production (piecework) system, the established pay rate must permit the worker to earn the minimum wage during normal working hours and under normal operating conditions. The certification applicant pays the workers for any time spent in required meetings and training sessions and for other unproductive time due to conditions beyond their control (such as occupational health and safety measures). N° Control Points Wages MAX Score 1 Wages of PERMANENT workers are (0) far below (1) slightly below (2=M) in line with official 4 minimum wages or (if not available) official industry benchmark standards *(3) clearly above M=2 minimum wages for respective activities (or above wages in comparable other companies if minimum wage not really applicable for the nature/level of work done. (4) Wages (including realistic bonus) substantially higher than common for the specific task/region. (In case of payment-per- production, calculate income of an average production day without overtime) 2 Wages of SEASONAL/TEMPORARY workers are (0) far below (1) slightly below (2=M) in line * (3) 4 above official minimum wages. (4) Wages (including realistic bonus) substantially higher than M=2 common for the specific task/region (In case of payment-per-production, calculate income of an average production day without overtime). If all workers are permanent 4 3 The wages paid are (0) not (1) almost/just (2=M) sufficient to meet the basic needs of the 4 workers and their family. (3) The wages provide some discretionary income. (4) Exceptionally M=2 high wages (including average bonus & social benefit contributions by employer), ensuring good living standard in local context 4 Training sessions, time lost due to machine stoppage and other events beyond the control of the 3 employee other than adverse weather conditions are (0) not remunerated (1) remunerated at a reduce rate (2) paid at the normal daily rate for permanent workers; (3) such time is fully remunerated even for short-term/hourly paid labour 5 Unproductive time due to poor weather conditions etc. is (1) not remunerated (2) remunerated at a 3 reduced rate (3) fully remunerated 6 If accommodation or other in kind remuneration is offered, worker (0) cannot choose freely the type 2 of remuneration preferred (i.e. cash instead of housing); (2) can choose freely. If n.a. (2). 7 Deductions for housing are (0) higher than 10% of prevailing local market prices (1) slightly more 4 than local prices (2=M) in line with local prices (3) substantially less than local prices/subsidised M=2 (4) free. If n.a. (2). 8 Payments are (0) not done, unduly delayed, very irregular (1) not on fixed days or occasionally 2 slightly delayed payments (2=M) regularly done and on fixed days M=2 9 Payments are (0) not (1) poorly (2=M) well documented 2 M=2 10 Actual earnings as well as actual deductions and contributions for social benefits (if any) are 2 indicated to the employee every time the payment is made. (0) No such details indicated to worker. (2) Wage sheet etc. contains this information
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 30 20
2.2.3 Working Hours Working hours comply with national laws or benchmark industry standards, if there are no laws in place. In any event, workers shall not on a regular basis be required to work in excess of 48 hours per week and shall be provided with at least one day off for every 7 day period on average. Overtime shall always be voluntary, should not exceed 12 hours per week, shall not be demanded on a regular basis and shall generally be compensated at a premium rate. Adequate rest breaks (for heavy or dangerous work allow longer and more frequent breaks) shall be given.
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N° Control Points Working Hours MAX Score 1 Weekly working hours are as a rule (0) far higher (1) slightly higher (2=M) in line with national 4 labour legislation (3) lower than required (for normal wage) M=2 2 Usual weekly working hours are (0) far more than 48 hours (1) slightly more than 48 hours (2) not 3 more than 48 hours (3) equal to or less than 40 hours 3 Documentation of working hours and overtime is (0) not trustworthy/not existing (1=M) existing but 2 relatively poor (2) good M=1 4 Overtime is obligatory for the workers: (0) fully at discretion of the employer / very regular; (1) 3 7 whenever needed; more than 6 weeks/year; (2=M) overtime is not obligatory ; (3) very worker- M=2 friendly overtime practices (very little/flexible overtime) 5 Maximum working hours per week (including overtime) (0) exceed 60 hours/week by far (2=M) do 4 8 not exceed 60 hours/week (3) equal or less than 46 h (4) < 42 hours M=2 6 Overtime is (0) not remunerated extra (2=M) remunerated according to local legislation ; at least 3 paid extra or can be time-compensated (3) remunerated at premium rate ( even if required by law M=2 3 if paid at premium rate ) 7 Rest breaks & rest days, even during peak times: (0) none (1) some efforts, but not one day out of 7 4 guaranteed, e,g. during peak periods (2) one day in every 7-day period agreed and guaranteed. Adequate rest times during the day. (3) Two rest days per week. (4) 2 rest days per week plus exceptionally generous rest times. 8 Flexibility for workers (working days and hours): (0) No flexibility, even upon request; (2) reasonable 4 minimal working times; flexibility to meet also needs of workers; (3) special consideration is given to workers who need more flexibility in working hours (parents, young workers studying etc.); or very flexible working hours scheme; (4) exceptional flexibility 9 There is (0) disagreement (1) some basic agreement, but e.g. not written or no problem with 2 overtime at all (2) a written agreement between workers and employer regarding maximum and minimum normal weekly working hours, annual number of hours’ variation and the periods during which these hours of variation may fall 10 Annual paid leave: (0) not even official holidays granted; (1) legally required holidays / annual leave 4 granted but not guaranteed; ( 2=M) official public holidays and annual leave granted as per M=2 local legislation; (3) more annual leave than legally required; (4) exceptionally generous vacation practices in local context; at least public holidays & 2 weeks paid leave
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 33 20
2.2.4 Social Benefits The employer shall provide access to adequate schemes to support the workers’ social security and welfare such as pension/provident funds, health insurance, medical care, etc. Control point 1 is not applicable where there is no national legislation concerning social benefits. In such a case, the addional coverage for retirement (control point 2) and maternity (control point 3) then become MUST criteria (2=M) for all permanent employees. N° Control Points: Social Benefits MAX Score 1 Compliance with national legislation in regard to social benefits (sickness, retirement, maternity) is 2 (0) not at all achieved (1) not fully, but almost (2=M) fully achieved M=2 2 Basic coverage for retirement (independent from legislation) is guaranteed: (0) not at all; (2) basic 4 coverage for all workers who have access to a basic provident/pension fund, legally required employer contributions paid; (3) for all workers substantial part contributed by employer OR higher than legally required; (4) exceptionally high coverage & contributions for all workers 3 Basic coverage for maternity is guaranteed (independent from legislation): (0) not at all; (1) some 4 efforts / not yet sufficient; (2) basic coverage for permanent workers; (3) for all workers or for permanent workers higher than required; at least 12 weeks. (4) exceptionally generous practice; substantial contributions by employer 4 Medical insurance (independent from legislation) for workers: (0) no health insurance nor minimal 4
7 In agriculture the following may in some cases be acceptable as M fulfilled: obligatory maximal during peak time (less than 6 weeks/year) and if agreed beforehand with workers; workers are ok with the situation. 8 In exception, working hours may be averaged over a month, if there is a good overtime agreement (CP9) and sufficient rest periods are granted. In agriculture the following may be considered as M fulfilled: more than 60 hours only during short peak times (see above), if agreed with workers beforehand, always voluntary, with adequate rest breaks. IMO Social & FairTrade Programme Version Feb. 08 2. Social Issues Hired Labour 24/49
N° Control Points: Social Benefits MAX Score support from employer in case of non-work related sickness; (2) at least basic medical insurance for permanent workers; (3) for all workers OR coverage higher than normal and employer contributes towards insurance costs; (4) exceptionally high coverage with unusually high contributions from employer in local context 5 Unemployment insurance or compensation for loss of work: (0) none, even for long term permanent 4 workers; (2) as legally required; (3) for all workers or higher than legally required; contributions by employer; (4) exceptionally generous practice 6 Paid sick leave: (0) no right to paid sick days; (1) legally required paid sick days sometimes granted 4 but not guaranteed; (2=M) paid sick days granted as per local legislation; (3) better coverage than M=2 legally required; at least 10 paid sick days/year; (4) exceptionally generous sick days practices in local comparison; some protection for long term illness/ absence due to health reasons 7 Records on social benefits payments by employer and deductions from workers wages: (0) no/very 2 poor records; (2=M) adequate records M=2 8 Additional points for voluntary commitment: Extra social benefits such as e.g. free child care, death 4 insurance, membership to a private retirement fund, educational fund etc. rate extra benefits (beyond above) from (0) to (4). No norm requirement.
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 28 14
2.2.5 Equal Treatment of Different Labour Types The employer shall grant all workers the same rights and benefits, independent of their employment status; this includes also seasonal and temporal labour. Obligations to employees under labour or social security laws and regulations arising from the regular employment relationship shall not be avoided through the use of labour-only contracting, sub-contracting, or home-working arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment, nor shall any such obligations be avoided through the excessive use of fixed-term contracts of employment .
N° Control Points Treatment of different Labour Types MAX Score 1 With regard to wages*, there are (0) strong (1) some (2) little (3) no differences between permanent 3 and temporary workers (for work of equal value). If only permanent workers 3 2 With regard to social benefits & working conditions, there are (0) strong (1) some (2) little (3) no 3 differences between permanent and temporary workers (for work of equal value).** 3 If there is still substantial differences between permanent and temporary workers, (0) no actions 2 even after certification (1) some improvement considerations (2=M) a plan for gradual M=2 improvement in place within 1 year after certification. If n.a. (2) 4 Regular employment for regular workers (working basically all year): (0) regular workers don’t have 4 the status of permanent workers; (2) regular workers are employed with all benefits of a permanent worker such as regular work guaranteed, social security payments, sick-days/paid leave entitlements and others; may be salaried or paid on daily wage. (3) Only regular, permanent workers. (4) In comparision to the industry norm, special effort is made to provide more workers with regular employment, rather than contract labour 5 Employer (0) does (2=M) does NOT hire and fire workers on a continuous basis to avoid 3 implications or regular employment (e.g. social security payments); (3) all workers doing regular M=2 work are employed as permanent workers 6 There is (0) substantial (1) some (2=M) no indication that sub-contracting, home-working, 2 apprenticeships etc. are used to avoid regular employment or direct contracting M=2 7 In case work is sub-contracted: working conditions of subcontractor are (0) far below (1) slightly 3 below (2=M) basically the same as for directly contracted workers for similar tasks; clear M=2 agreements on working conditions between operation and the subcontractor; subcontractor’s working & employment conditions are internally supervised; (3) working conditions of subcontractor are confirmed by third party. If n.a. 3
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 20 14 * Use daily rates for comparison; relevant are differences due to status not different experience/qualification.
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** Equal social benefits: workers may have access to the same schemes such as pension fund, etc, or the salaries could be increased by the equivalent amount as paid to permanent workers for social benefits.
2.3 ENVIRONMENTAL ASPECTS All IMO Social Responsibility or IMO Social & FairTrade certified operations must be either • certified according to an acknowledged organic or ecological minimum standard (Organic Textile GOTS, FSC, Rainforest Alliance, EUREPGAP, Utz Certified), • OR must fulfil the IMO Integrated Production Standards (separate document, industry specific). • Exception: agricultural product processing companies (food processors, ginneries, etc.) only general environmental criteria as listed below apply
Additionally the following general environmental criteria apply to ALL hired labour operations (plantations as well as any type of processor or manufacturer):
Minimum requirements for certification: All M must be fulfilled and the following percentage of total norm points reached in this chapter: First year of certification: 70%; second year: 80%; third year: 90% of total norm points; after 4 years: 100% of total norm points. A transition period of 12 months applies for operations which were certified according to the IMO Social and FairTrade Programme before these environmental criteria became effective. If minimum requirements for certification in section 2.3 are not fulfilled during this transition period, it will be sufficient to develop an approved plan of how to achieve compliance with the requirements within one year from the date of re-auditing. 2.3.1 Water Conservation N° Control Points Water Conservation MAX Score 1 Overview of water usage : (0) water usage not known; (2) the company knows at least roughly the 4 source and quantity of all surface and ground water directly and / or indirectly used. Concessions/permits are available if required; (3) very good overview of water usage 2 Water conservation practices : (0) no water conservation practices / apparent waste of water; (2) 4 adequate water use practices and rational use of water; no apparent waste of water, e.g. through very inappropriate irrigation techniques, ineffective use in processing, or other loss of water; (3) very good water conservation practices compared to regional standards; (4) exceptional efforts 3 Waste water treatment (processing waste water, domestic sewage water, farm waste water): (0) no 4 waste water treatment; (1=M) basic waste water treatment and no substantial risk to environment M=1 or people. (2) Adequate treatment of all waste water generated in the operation; (3) very good water treatment; efficacy of own waste water treatment is professionally supervised OR no waste water produced; (4) exceptional efforts; water minimization and high standard of water treatment 4 Discharge of contaminated water into natural water bodies : (0) discharge of untreated contaminated 4 water; (2) discharge only of water with physical and biochemical characteristics that do not degrade the receiving water body; (3) very good waste water management and continuous supervision. Waste water analysis done regularly. If n.a. (3) 5 Groundwater contamination : (0) no efforts to minimize contamination; (2) adequate awareness of 4 contamination impact and efforts to minimize groundwater pollution (e.g. good septic systems, adequate storage of chemicals, appropriate fertilizer application techniques); (3) very good groundwater quality protection management . If n.a. (3)
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 20 10
2.3.2 Energy Management and Climate Change N° Control Points Energy Management and Climate Change MAX Score 1 Overview of energy consumption : The operation (0) has no (1) has a rough idea of energy & fuel use in 4 terms of costs; (2) is able to roughly quantify the electricity and fuel consumption associated with its production; (3) very good overview and monitoring of energy consumption in different parts of operation 2 Minimizing electricity consumption : (0) no efforts; (2) electricty is not apparently wasted and reasonable 4 efforts to minimize overall consumption (lights and machines are turned off after use, rational use of IMO Social & FairTrade Programme Version Feb. 08 2. Social Issues Hired Labour 26/49
N° Control Points Energy Management and Climate Change MAX Score airconditioning, new machines/facilities are optimized with regard to engery efficiency); (3) high efficiency with regard to electricity use or very low overall consumption; or investment in alternative sources of electricity (solar, wind, water, etc.); (4) exceptional efforts to minimize electricity consumption and to use renewable energy sources 3 Minimizing fuel consumption : (0) no efforts; (2) adequate fuel saving practices (for new machines also 4 fuel consumption considered in purchase decisions; minimizing car/truck/tractor trips around operation, optimized operation schemes in factories, adequate temperature setting if heating/cooling required); (3) investment in energy efficient equipment, high efforts to minimize fuel consumption, increased use of biogas, biodiesel, solar, wind or water power OR: very low overall fuel consumption; (4) exceptional efforts, e.g. low-energy buildings, advanced processing techniques, use of sustainable renewable fuel sources only 4 Renewable energy sources : (0) no awareness of sustainability of energy sourcing; only nonrenewable 4 or exploitive energy sources used (e.g. indiscriminately harvested wood from unmanaged forests); (2) adequate efforts to increase percentage of renewable (own biogas, biodiesel, solar, water, wind, etc.) and / or sustainably harvested energy sources and low carbon energy sources (e.g. natural gas instead of coal); (3) very good efforts and improvements to convert to renewable / low carbon energy sources; (4) exceptional efforts or all energy used is already sourced from renewable energy sources. 5 Additional points for voluntary commitment: Further efforts to mitigate climate change: 4 Assess operation’s overall awareness and engagement to minimize impact on climate change in its operation and community with rating from (0) to (4). No norm requirement. E.g.: active support of sustainably produced eco-fuel production and use, targeted training and information on energy management and climate change, active in reduction of greenhouse gases (CO 2, NO 2, methane). For farms, relevant aspects are (addtional to other energy management efforts): reduction of CO 2, NO 2 and methane emissions by optimized lifestock management, no burning of grassland/bushland, build up of organic soil fertility, appropriate composting methods, appropriate animal manure management (collection, storage, spreading) and efforts to reduce or avoid fertilizers that use nitric acid or ammonium bicarbonate.
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 20 8
2.3.3 Ecosystem Management The following control points apply to both plantations and manufacturers, even though the ecosystem impact of manufacturers may be less apparent. However, many manufacturers also manage quite substantial areas and often do have important ecosystems within or adjacent to their boundaries. In case manufacturers are e.g. in an urban industrial zone, with no actual natural area, there still may be endangered species (even in urban ecosystems) that need to be protected, or the manufacturer could engage in conservation programmes elsewhere for performance beyond minimum requirements. Some points will not be applicable. N° Control points Ecosystem Management MAX Score 1 Documentation of natural and / or semi-natural ecosystems and other areas of special ecological value 4 within and adjacent to the boundaries of the operation: The operation has (0) no (2=M) adequate knowledge (3) good documentation (4) a management plan or other advanced management M=2 programmes on ecosystem conservation and minimization of impact on local ecosystems. Manufacturer without natural/seminatural areas (2) 2 Knowledge of endangered or rare habitats and near threatened, vulnerable, endangered or critically 4 endangered species of fauna and flora , as defined by the IUCN Red List and national red lists if available: The operation has (0) no (1) little (2) adequate knowledge (3) good documentation of any such species and/or habitats within and adjacent to its boundaries (4) a management plan or other advanced management programmes providing details on effective management measures to conserve endangered habitats and threatened species of fauna and flora 3 Protection of threatened or endangered species of flora and fauna and threatened habitats : Present 4 operation (0) directly destroys such species and /or habitats (1) has some negative impact; (2=M) no evidence that operation has substantial negative impact on such species and / or habitats; (3) the M=2 operation protects all near threatened, vulnerable, endangered or critically endangered species and threatened habitats within and adjacent to its boundaries OR is active in conservation outside of own
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N° Control points Ecosystem Management MAX Score boundaries (if no own land); (4) exceptional efforts 4 Conversion or destruction of land ecosystems , e.g. clearings of primary or old-growth secondary forests; 4 introduction of potentially invasive species; conversion of natural grass- or bushland or of other ecologically valuable areas: The operation (0) carries out or is responsible for such land conversions / M=2 destruction of ecologically valuable areas; (1) some shortcomings, OR: no longer practices such land destruction of ecosystems without compensation but has done so in the past few years; (2=M) does not engage in such conversion or destructions or has taken sufficient compensatory ecosystem conservation action ; (3) no such conversion or destruction and good awareness of conservation principles; (4) practises management of land use according to acknow ledged ecosystem conservation standards. Manufacturer without natural/seminatural area and no fauna/flora impact (2) 5 Destruction of or adverse impact on aquatic ecosystems (e.g. regulation of water courses, water bodies 4 or wetlands; destruction of benthic ecosystems through intensive aquaculture or fisheries; introduction of potentially invasive species into water bodies, pollution of rivers): M=2 The operation (0) carries out or is responsible for such adverse impact or destruction (1) no longer applies such destructive practices, but has done so in the past years without having taken sufficient compensatory ecosystem conservation action (2=M) does not engage in such destructive practices or has taken sufficient compensatory ecosystem conservation action; if not: written obligation declaration ; (3) no conversion or destruction at all and some awareness of conservation principles; (4) practises active management of aquatic ecosystem use according to internationally acknowledged ecosystem conservation standards. If basically no aquatic ecosystem inside or adjecent to operation 2 6 Land clearing or conversion of land or aquatic ecosystems: (0) carried out without necessary permits 4 and / or not in accordance with national / local legislation; uncontrolled burning as means of land clearing; (2) carried out in accordance with national / local legal requirements; no burning or controlled smallscale burning only (3) exemplary efforts to minimize environmental impact. If n.a. (2)
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 24 12
2.3.4 Waste Management N° Control Points Waste Management MAX Score 1 Integrated waste management (clean operation; waste production, collection and disposal is handled in 4 an organized way) (0) no adequate waste management (1) very basic / insufficient active waste management (2) integrated waste mangement for continuous improvement in place (3) very good waste management plans (4) exceptionally good waste management (present practices and targets). 2 Composting, recycling & waste reduction : (0) no efforts at all (2) adequate efforts (3) very good 4 performance with regard to recycling, composting & reduction of waste production. 3 Waste disposal: (0) no structured waste disposal in place; (1) open waste disposal dumps and / or open 4 air burning of waste; (2) municipal waste disposal or optimized waste disposal by means of burial of waste or proper incineration that minimizes impact on the environment and on human health. Open burning only of combustable materials without harmful emissions (e.g. no plastic); (3) advanced / low emission waste disposal OR very low waste production; (4) exceptional waste disposal management OR no waste at all
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 12 6
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3 SOCIAL STANDARD ISSUES FOR PRODUCER GROUPS
Explanation of Structure in Standard Issue Sections Policy: For each standard issue the IMO expectations and considerations regarding the specific points are described in a general way. This introductory text introduces and clarifies the detailed control points. Basis for audit and certification are the control points in the table below the policy text.
Rating of Control Points: 0= very poor performance / not compliant at all 1= not yet sufficient, but already positive developments towards the norm for good social performance 2= defined as the norm for good social performance 3= voluntary performance higher than norm, beyond minimum performance 4= exceptionally high performance; outstanding, far beyond minimum performance M= indicates a “MUST”, i.e. this requirement must always be fulfilled for certification MAX = Maximum number of points for the respective control point; All rating levels up to the MAXIMUM may be chosen, even if not explicitly defined in the control point text ( comment & explanation necessary)
Total Norm Points (TNP) = Total number of points if all norm requirements were fulfilled (all points rated as “2”). For certification, an operation must achieve the following percentages of Total Norm Points per chapter; First year: 90%, Second year: 95%, Third Year: 100%. Continuous improvement is expected. All M= MUST requirements must be fulfilled.
see also IMO 2.1.5G-e IMO Standard Procedures Social & FairTrade Audit and Certification for details
Applicability and Reference to Other Social Standards This section only applies to groups of producers (e.g. farmers’ co-operatives or groups of handicraft producers) either organized independently as a group (e.g. cooperative) or by a processor/trader (“contracted production”).
The group standards are primarily intended for use in groups of smallholder producers (structurally depending on family labour; marginalized producers with limited own marketing potential). The standard may also be applied to groups of medium family producers that no longer structurally depend on family labour alone (they typically have 1-5 permanent farm workers and some temporary/seasonal labour). Any plantation with a substantial number of workers (> app. 15 permanent workers or more than 40 workers for more than 2 months per year) as part of a smallholder group needs to be inspected according to the complete IMO Hired Labour standards (chapter 2 of the IMO Social & FairTrade Programme).
The control points regarding group organisation as listed in this standard are based on the FLO standards for producer groups and IMO’s experience with producer groups.
3.1 ORGANISATION OF THE GROUP
3.1.1 Transparent Administration and Relations with Producers The producer group or contracting company shall have effective management in place to plan and control its activities. The group or contracting company is accountable for its economic activities, especially any activities of direct importance for its registered producers.
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N° Control Points Transparent Administration / Relation with Producers (all Groups) MAX Score 1 The group/company has a regularly updated business planning and long-term strategic policy, which 3 includes considerations how profits/benefits can be shared with the farmers: (0) no planning or written policies; (1) ok planning, but no/few written documents; (2) ok basic business planning, including benefit sharing aspects; (3) very good planning, important business information accessible to all growers of the group 2 The group/company has (0) no (1) poor (2) good official book keeping (3) which is audited annually by 3 a qualified external audit company 3 Producers are (0) not informed (2) receive basic information on approximate quantities that can be sold 3 to the group operator (if usually only part of production is bought: fair selection who can deliver); (3) good information of producers on deliverable products; efforts to buy substantial quantities from all producers. If n.a. 2 4 Additional points for voluntary commitment : Special support schemes for producers (e.g. inputs at 4 subsidised prices, loan schemes, community projects) paid directly by group/company (not from FairTrade Premium): comment and give (1) to (4) points depending on level of support (no norm requirement) 5 If producers’ dependency on a single product is a serious economic problem, the supplier is making (0) 3 no (1) some (2) reasonable (3) exceptional efforts to promote product diversification (TNP/Maximum points are summed up in subchapters 3.1.1.1 and 3.1.1.2 respectively)
3.1.1.1 Additional Requirements for Organized Producer Groups Organized Producer Groups: farmer cooperatives, formal farmer associations etc., which collect the products from their members and sell them as a group.
N° Additional Control Points (organized producer groups) MAX Score 1 An organisational structure which enables participation and control by the members: (0) not in place; 4 (1=M) very basic; or in set up phase; (2) in place; (3) well established and already successfully M=1 practiced since > 2 years; (4) exceptional commitment and active participation of members 2 There is (0) no general assembly (1) a general assembly with limited voting rights (2) a general 4 assembly with voting rights for all members as the supreme decision taking body for an elected executive board (3) a well attended general assembly / producers really participating well in group decisions (4) exceptional participation 3 Producers are informed about the group’s overall business policy and new developments and feel part 4 of the group: (0) very low producers involvement & information; (2) good overall involvement of producers; (3) producers feel very involved and support the organization strongly; (4) exceptional; organization really run & managed by producers 4 Regular meetings / exchange in group/sub-groups/village centres, etc.: (0) no such active subgroups; 4 (2) ok active subgroups; group members know each other; (3) committed and active subgroups; good exchange & interaction between members; (4) outstanding
TOTAL 3.1.1 PLUS additional requirements 3.1.1.1 MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 32 16
3.1.1.2 Additional Requirements for Contract Production Situations While initially the contracting company (or NGO, etc.) may be the organizing instrument for the social and economic development of the contracted smallholder producers, a producer representation organization shall be initiated which can (at least potentially) represent the producers’ interests in negotiations with the contracting company. If more suitable, several producer representations can be set up (e.g. for different, independent regions). If the producers are medium-size family farms with reasonable bargaining power of their own, the focus is still on transparent and fair relations between contractor and producers; a representation organization also has to be initiated, but the focus of group activities may be rather on training and joint discussion of important improvement aspects such as improvement of labour conditions on the participating farms, meaningful FairTrade Premium projects in the producers’ communities of farm workers (if also FairTrade certified), etc. The contracting company may not misuse the contractual relationship as a means to lower purchase prices (without prior agreement by farmers organisation due to substantial reasons) and so create economic dependency for the producers .
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N° Additional Control Points (contracted production) MAX Score 1 Within 1 year from 1 st certification onwards, the contracting company (1) permits (2=M) initiates and 3 supports the set up of one or several farmers representation organisation(s). (3) Good & active M=2 farmers representation already has a defined and active role in the contract production project First certification assess plans for coming year (1) or (2), no M 2 Within 1 year from 1 st certification onwards, the producer representation organisation has (0) no 4 democratic structure (2=M) a constitutionally democratic structure with voting rights for all M=2 members to elect their representatives. OR: proven efforts of contracting company to initiate/support such structure even though group chose different structure; (3) effectively a democratic structure (with at least annual assembly on which critical issues are discussed); (4) very active First certification; no producer organisation (2) and write “n.a.” 3 At the latest within 2 years from 1 st certification onwards, the farmers representation organisation is (0) 4 still not existing/no effort ( 2=M) effectively in place and discussing farmers interest with contracting M=2 company; (3) active farmers representation; (4) exceptionally active farmers representation organization with effective bargaining power for producers. First 2 years of certification: assess actual situation, including defined plans (0)–(4); no M 4 Interaction and exchange of producers with each other to support development of a group feeling is 3 supported/improved: (0) no efforts, even after 1 st certification; producers don’t know even other registered producers in their own village; (2) adequate efforts; reasonably active producer subgroups or exchange between producers; (3) very committed and active subgroups or overall group; very good exchange & interaction between members 5 Producers feel: (0) misused; (1) contractual relationship not good, but acceptable; (2) fairly well treated 3 in the contractual relationship; (3) exceptionally well treated 6 Cancellation of contract by producer: (0) not free; (1=M) by contract free to cancel; (2) effectively 3 free to cancel the contract within an appropriate and fair time frame and fair conditions M=1 7 The contracting company gives (0) no (1) very little (2) sufficient basic (3) very detailed information 3 about market prices or its cost/profit calculations in order to allow open discussion on prices paid to the producers
TOTAL 3.1.1 PLUS additional requirements 3.1.1.2 MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 39 22
3.1.2 Pricing and Producer Payments N° Control Points Pricing and Producer Payments MAX Score 1 Mechanisms / rules for setting producer prices: (0) very arbitrary and totally unclear system (1) no 4 clear rules, but reasonable approach (2) at least roughly defined mechanisms/rules that are communicated to all producers (3) written, clear rules or set prices which are accepted by growers and known to them (4) close cooperation in price setting / producers have strong influence on prices 2 Producers receive payment for products delivered (0) sometimes not/very late (1) rather 4 irregular/unreliable timing; ( 2=M) reliable & timely payment ; within reasonable time after product M=2 delivery; (3) timely payment and substantial prepayment (> 20% of estimated sales) for the produce delivered to the group. If new group: evaluate capacity/plans 3 The producers are paid in a way convenient to them (cash, normally): (0) not at all 2 convenient/according to their will/by fertilizers, etc.; for exaggerated prices; (1) rather inconvenient payment; (2) convenient for producers 4 Documentation of producer payments: (0) payments/prices paid not traceable/documented at all; (1) 3 documentation; (2) payments are reasonably well documented; (3) producers receive very good records on payment done/products delivered 5 Quality grading & price differentials for different product qualities (0) not transparent, unjustifiably strict 4 practice (2) adequate and transparent procedures of grading and justified price differentials; (3) farmers involved in grading & quality improvement management; producers accept price differential practice as fair 6 Producer prices paid cover basic production costs: (0) prices clearly do not cover production costs / 4 producers forced out of production due to low prices; (2) average prices cover at least basic costs of production and allow farmers to continue production; (3) very good prices; (4) exceptionally high prices (even if due to market levels) 7 The group operator prepares a summary of total money paid to each producer: 4 (0) no summary would even be possible from documentation; (1) no summary done (but would be possible to calculate); (2) producer receives information on total quantity delivered and total money paid to producer in the respective season/year; (3) this information is made known to the family of producer. Payment to wife / husband is evaluated if money is commonly misused in spite of apparent need/poverty in the family.
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TOTAL max TNP Score
Maximum Points / Total Norm Points / Effective Points 25 14
3.1.3 Non-Discrimination and Gender Aspects If the organisation restricts new membership, the restriction may not contribute to gender discrimination or discrimination of particular social groups.
N° Control Points Non-Discrimination and Gender Aspects (all groups) MAX Score 1 Statutes (or similar effectively used guidelines) (0) clearly restrict (1) slightly restrict (2=M) do not 3 restrict access to membership based on race, colour, religion, sex, political opinion, national M=2 extraction or social origin 2 Disadvantaged groups (other then women) are (0) systematically excluded (2) not systematically 4 excluded, even if not present (3) actively encouraged to participate actively in the group (committee members, staff, become full members) 3 Women group members: (0) excluded (1) not excluded but not present (2) not excluded, some women 4 members, wives of members are free to also attend group meetings (3) Women are actively encouraged to participate in the group and become full group members/ many women members 4 Trainings and group activities for registered farmers adequately include all family members who are 4 involved in production; (0) clear exclusion of e.g. wives of members; (2) active promotion of group participation, appropriate organisation of trainings to also include the wives, etc.; (3) high efforts to include women 5 Producers and workers are always paid directly (e.g. for women farmer payment to women, not her 2 husband): (0) no direct payment; ( 2=M) direct payment M=2 6 Additional points for voluntary commitment : The group is active to strengthen the overall social and 3 economic role of women (or men, if disadvantaged) in the communities and in the group by specific programmes, trainings, adapted procedures for e.g. group meetings. – Rating (0) to (3), no norm requirement 7 Additional points for voluntary commitment: The group creates specific and particularly beneficial 3 opportunities (e.g. as producers, workers, micro entrepreneurs) for disadvantaged / discriminated ethnic (e.g. minorities) or social (e.g. handicapped) groups. - Rating (0) to (3), no norm requirement
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 23 10
3.1.4 Internal Control System A basic Internal Control System (ICS) ensures that all registered producers comply with the requirements on farm level and that only produce from registered farmers is bought. The ICS also ensures close contact with the farmers and the understanding of their needs e.g. of extension and training. The ICS shall be set up within 1 year after 1st certification, or within 6 months in case of medium producer groups with regular farm labour. Each group has internal social standards, which summarize all core aspects of fair treatment of farm labour, safety aspects and children assisting in the fields. The internal social standard may contain specific FairTrade aspects (if applicable). It may be included in an overall internal standard (e.g. in farmer contract) and should contain minimum requirements as well as progress objectives. The bigger and more labour intensive the farms, the more details will be expected in the standard. The social standards are made known to all producers. N° Control Points Internal Control System (all groups) MAX Score 1 The group has a list with all registered farmers: (0) no list or register; (1=M) paper register or 2 electronic, slightly incomplete list ; (2) complete electronic list with names, place, farm area or area M=1 under cash crop, year of registration 2 The group has (0) no (1=M) basic overview even if no formal ICS yet ; external inspection confirms 3 overall picture; (2) written up to date overview information on working conditions on the group’s farms M=1 (sufficient if well described in 13.1 Operator profile) 3 If bigger farmers (with some contracted labour) are members of a smallholder group, (0) these are 2 not yet known; no knowledge of labour situation at all; (1=M) farmers & overall labour situation is M=1
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N° Control Points Internal Control System (all groups) MAX Score known; (2) farmers are listed/marked in farmers list and all relevant labour aspects are monitored and targeted in improvement plans, etc. If no bigger farms (2) If group of medium producers and no actual monitoring yet surveying & monitoring of labour situation must be scheduled to be done within 6 months after first audit (1) 4 Internal Social Standard for farmers (see above): (0) no standard; no clear understanding of social 3 aspects on farms; (2) standard available and adequate for producer farm risk level; (3) social standards well developed, with farmers’ participation 5 Producers are aware of (internal) social standard requirements and progress objectives as relevant 3 for their farms: (0) no awareness at all; (2) adequate awareness; (3) farmers very committed to also improve the situation of their workers. If really no labour on farms 3 6 A basic ICS that also covers social aspects is in place within 1 year after certification (included in organic ICS, if also certified organic). For group of medium-size farms: 6 months after first audit. First Certification: assess plans/capacity for each aspect (2) if good plan & capacity, otherwise (1) a - basic general and social/labour relevant data for each farmer: (0) none; (1) very basic; (2) ok; (3) 3 very good, detailed data on farm and social issues b - risk-based internal inspection, at least 1 inspection in 2 years (if farmers have major compliance 3 problems:1 inspection per year): (0) none; (1) very basic; (2) ok; (3) very good inspection/supervision of social issues c - sanction system for non-compliant farmers: (0) none; (1) very basic; (2) ok; (3) very good 3 d - qualified ICS staff: (0) no staff; (1) very basic qualification; (2) ok; (3) very good staff 3 7 Farmers receive training on production issues: (0) none at all, although urgently needed; (1) 3 none/very little, but low demand; (2) good training opportunities, as needed; (3) very good training 8 If there are critical labour issues on farm level, there is (0) no (1) some ideas, but no plan (2) a written 3 plan (3) a very good, annually reviewed plan to achieve social improvements also for this labour group. If no critical labour issues (major musts fulfilled) (2) 9 The purchase system ensures in principle that only produce from registered farmers is bought and 3 that it is kept separate from non-certified produce: (0) no such system; (1) some basic system in place; (2) good system; (3) very good traceability system
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 34 24
3.2 WORKING CONDITIONS ON PRODUCER FARMS Workers on smallholder or medium producer farms also have a right to fair labour conditions and shall be included in the Social/FairTrade development planning of the group. In medium producer farms, agricultural workers may often be the most marginalized group and therefore the focus of FairTrade activities (if FairTrade certification is envisaged). They may be the main target group for FairTrade Premium use. Note: For any bigger producers (more than approximately 15 permanent workers or more than 40 workers in total for more than 2 months per year) as part of the group, the complete hired labour standards (chapter 2 of this programme) apply. Such operations must be inspected and certified according to these standards. Workers = employed or contracted workers, including temporary, seasonal or casual labour. Neighbouring farmers helping each other on their farms (mutual exchange of work) are not considered as workers.
3.2.1 Child Labour and Young Workers on Producer Farms Children (<15 yrs) are not employed/contracted as workers . However, ILO convention 33 permits that in non- industrial situations “Children over twelve years of age may, outside the hours fixed for school attendance, be employed on light work-- (a) which is not harmful to their health or normal development; (b) which is not such as to prejudice their attendance at school or their capacity to benefit from the instruction there given; and (c) the duration of which does not exceed two hours per day on either school days or holidays, the total number of hours spent at school and on light work in no case to exceed seven per day; not on Sundays and legal public holidays nor during night.”
Children helping on their family farms : Children are allowed to do light work for limited time per day on their family’s farm provided that: Such work is not hazardous or dangerous to their health and safety, it does not jeopardise the children’s educational, emotional, social and physical development, children are supervised by
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their parents, children are receiving appropriate training according to the type of work they are performing, and school education is not jeopardised by farm work.
N° Control Points Child Labour on Producer Farms MAX Score 1 Children under 12 years EMPLOYED/CONTRACTED: There are (0) some children (2=M) no children 2 under 12 years CONTRACTED on the farms . If there are still contracted child workers group has M=2 a plan with related activities to reduce/eliminate child labour; children do no hazardous work 2 Children between 12 and 15 years EMPLOYED/CONTRACTED: Children of this age group (0) work 2 substantially on farms as contracted workers; (2=M) if sometimes working for pocket money, they M=2 only do light and non-hazardous work during non-school hours; not more than approximately 2 hours/day. (3) Not even light work by children of this age group (as contract workers). If there are still contracted child workers (12-15 years) to a greater extent group has a plan with related activities to correct the situation and children do not carry out any hazardous work 3 Children of contract workers assisting their parents: (0) children assist the contract worker 2 substantially; (2) no work carried out by children of contract workers on the farm 4 Children < 12 years working on their own family farms: (0) very common; children < 12 do substantial 4 or heavy/hazardous work (1) sometimes / on some farms children do substantial work; (2) not common or children do only very light and appropriate work for less than 2 hours/day under their parents’ supervision; farm work does not compromise school attendance; (3) children < 12 do no actual farm work at all and high awareness about child labour / need for education; (4) very good school attendance, no farm work 5 Children between 12 and 15 working on their own family farms (or neighbouring farms if farming is 4 done as community): (0) very common; children work regularly for several hours / day; (1) sometimes / on some farms; children work for several hours / day; (2) no SUBSTANTIAL work (more than approximately 3 hours/day regularly); work is non-hazardous and appropriate to their age; (3) children between 12 and 15 do no regular farm work at all (but may accompany certain activities for training) AND high awareness about child labour / need for education 6 Young workers (15-18 years) on their own family farms (0) do (2) do not engage in work that is 2 dangerous to their health, safety and that may jeopardize their development. If n.a. (2). 7 If too much/too hazardous work is done by children on their family farms, the group has (0) no 3 plan/activities (1) some ideas & activities (2=M) a plan with related activities (3) exceptionally good M=2 programmes to gradually reduce/eliminate child labour and improve schooling rates. If no substantially working children (3) 8 Young workers (15-18 years) EMPLOYED/CONTRACTED (0) do (2=M) do not engage in work that 2 is dangerous to their health, safety and that may jeopardize their development M=2 If n.a. (2)
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 21 16
3.2.2 Working Conditions on Producer Farms All farm workers (or workers for a handicraft producer) have fair and safe working conditions (safety, wages, working hours, regular payment, acceptable living conditions if living on the farm, social benefits as required by law). Any worker working for a major part of the year (more than approximately 8 months) is considered as “Permanent worker” in the following control points. If no workers contracted (e.g. on typical smallholder farms), rating is normally (2) unless indicated otherwise.
N° Control Points Working Conditions on Producer Farms MAX Score 1 Forced Labour on farms: (0) Evidence (2=M) no indication of forced labour 2 M=2 2 Producers (0) clearly do not allow (2=M) allow associative activities and collective bargaining of 2 workers and do not discriminate unionized workers M=2 3 Disciplinary practices: (0) violate human dignity or are not transparent; (2) fair and transparent; no 2 deductions from wages without agreement of worker; or no disciplinary actions 4 Discrimination: (0) Evidence (2) no indication of systematic discrimination of workers (based on 3 gender, race, caste, origin, religion, etc.); no sexually coercive/intimidating /abusive behaviour; (3) good opportunities for disadvantaged social groups. If no labour 3 5 Farm machinery and equipment (including farm processing) are (0) very unsafe/ in dangerous 3
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N° Control Points Working Conditions on Producer Farms MAX Score condition (1=M) not really dangerous (2) adequately safe for workers or farmers themselves; work M=1 accidents not common; (3) very good practice and equipment 6 Handling of agrochemicals / farm inputs by farmer and/or worker: (0) no protection / very unsafe 3 handling although toxic inputs; (2=M) adequately safe handling procedures and protection of M=2 workers and producers, as required for specific type of inputs used. If not ok improvement/training plan for member producers; (3) very advanced handling procedures in local context, or no toxic/irritating substances used at all 7 Storage of agrochemicals / farm inputs: (0) highly toxic inputs stored openly or in kitchen/bedrooms. 2 Containers reused for water, etc.; ( 2=M) toxic agrochemicals not stored in living quarters ; M=2 adequately locked away to prevent accidental use by children. Empty containers not re-used for water or food. If not ok improvement/training plan compulsory If no toxic/irritating inputs (2) 8 Workers and family members are informed about major safety risks and safe working practice: (0) not 3 informed; (1) sufficiently aware of existing risks; (2) workers well trained or no major safety risks 9 First aid equipment: There is (0) no (1) some incomplete (2) sufficient basic first aid equipment (as 3 needed for potential work accidents); (3) good and complete first aid kid & knowledge in first aid. If smallholder with only occasional casual labour (2) or (3) if has first aid 10 Adequate protection from noise, dust, light (0) missing although necessary (2) adequate protection or 2 not necessary 11 Defined employment conditions for permanent workers (job position, wage, benefits if any, working 2 times, leave entitlement, housing if any): M=1 (0) employment conditions not defined, not even orally; (1=M) clearly defined and known to worker , even if not written; (2) contract or official registration of worker or other documents indicating at least the basic employment conditions. If no permanent worker (working for more than 8 months / year) (2) 12 Defined employment conditions for casual/seasonal workers: 2 (0) employment conditions not clear, not even orally; (1) wage and working times agreed and known to worker, even if not written; (2) contract or official registration of worker or other documents indicating at least wages and working times. If Smallholder producer (2) 13 Permanent workers are paid (0) less than local average (1) local average (2=M) at least applicable 4 9 minimum wages or typical local rates (if no minimum wage defined); if not: improvement plan; (3) M=2 paid more than local average (including benefits, if any) (4) paid substantially more. If no permanent workers (3) 14 Casual or seasonal labour are paid (0) less than local average (1) local average ( 2=M) at least typical 4 local rates ; if not: improvement plan ; (3) paid more than local average (including. benefits, if any); (4) M=2 paid substantially more. If no casual/seasonal workers (3) 15 Payments of all workers are (0) not done or unduly delayed; (1) no fixed days, or a few delays; (2) 2 regularly done as agreed 16 Payments are (0) not (1) poorly (2) documented, at least for permanent workers; (3) documented for 3 all workers. If no workers (3) 17 Regular working hours and rest days of permanent workers are normally (0) far higher (1) slightly 3 higher (2) basically in line with national labour legislation 18 Overtime is (0) compulsory, not remunerated extra; (1) voluntary but not paid extra OR not voluntary 3 but paid extra; (2) voluntary and at least paid as extra time or time compensated; (3) voluntary and remunerated at premium rate. If no permanent workers (3) 19 Permanent farm workers: (0) no paid leave/holiday; (2) official holidays are granted as paid leave; (3) 4 holidays plus annual paid leave. If no permanent workers (3) 20 Provident funds / basic coverage for retirement/basic social security: 3 (0) not at all, although local system would permit registration of workers; (2=M) basic coverage for M=2 permanent workers if legally required. If not: improvement plan to correct situation; (3) for all workers or for employed workers better than required. Smallholder producer (2) or if farmer has some kind of social security (3) 21 If workers are given housing on the farm: (0) not acceptable conditions in local comparison; (1=M) 3 acceptable; (2) safe and adequate housing conditions in local context; reasonably priced; (3) very M=1 good housing in local context 22 Farm workers are included in social development plan of the group: 3 (0) not included, although many producers have contracted labour; (2) gradual improvement of working conditions of farm workers included in development plan/FairTrade policy or similar document; (3) demonstrated efforts to increase awareness in labour issues and work towards improvement of labour conditions
TOTAL MAX TNP Score
9 In case of pay-per-production, calculate income of an average production day without overtime. IMO Social & FairTrade Programme Version Feb.08 3 Social Issues Producer Groups 35/49
Maximum Points / Total Norm Points / Effective Points* 61 44 * High score in this chapter may indicate either excellent working conditions for workers contracted on producer farms, or that the participating farms are genuine smallholder farms that structurally only depend on family labour.
3.3 LABOUR CONDITIONS PRODUCER GROUP STAFF Also workers in producer organisations (companies contracting producers), i.e. field staff, office staff and workers in group-operated processing units have a right to fair working conditions. At least the most marginalized workers groups shall be included in the social or FairTrade development plan of the group. Note: For any bigger processing workshops/factories (more than approximately15 permanent workers or more than 50 workers in total for more than approximately 2 months per year) operated by the group, the complete hired labour standards (chapter 2 of this programme) apply. Such operations must be inspected and certified ONLY according to these standards. For subcontracted processing units, please see chapter 1.2.2.2 for audit requirements.
Workers = All staff working in an operation including employees, permanent, seasonal, temporary, migrant, foreign, casual and sub-contracted workers in fields, production but also office adminstration, etc.
3.3.1 Basic Labour Rights for Producer Group Staff N° Control Points Basic Labour Rights Producer Group Staff MAX Score 1 Child workers EMPLOYED/CONTRACTED: There are (0) some children (2=M) no children below 2 15 CONTRACTED as workers . If there are still contracted child workers see chapter 2.1.3 for M=2 policy details 2 Children of contract workers assisting their parents: (0) children assist the contract worker 2 substantially; (2) no work of children of contract workers 3 Young workers (15-18 years) (0) do (2=M) do not engage in work that is dangerous to their health, 2 safety and that may jeopardize their development. If n.a. (2). M=2 4 Forced Labour: (0) Evidence (2=M) no indication of forced labour 2 M=2 5 Associative activities and collective bargaining of workers (0) clearly not allowed (2=M) allowed , no 4 discrimination against unionized workers; (3) workers are unionised or effectively organized / bargain M=2 as a group 6 Disciplinary practices: (0) violate human dignity or are not transparent; (2) fair and transparent; no 3 deductions from wages without agreement of worker; (3) very positive relation between employer and workers; no need for major disciplinary actions 7 Discrimination: (0) Evidence (2) no indication of systematic discrimination of workers (based on 4 gender, race, caste, origin, religion, etc.); no sexually coercive/intimidating/abusive behaviour; (3) employer active in promoting mutual respect and harmony between workers; or policies against discrimination 8 Processing machinery and equipment (0) very unsafe/ in dangerous condition (1) not dangerous, 4 partly unsafe (2=M) adequately safe for workers ; no serious work accidents. If safety is a problem M=2 improvement plan; (3) very safe, special efforts have been made to make workplaces as safe as possible 9 Adequate protection from chemicals, noise, dust, light (0) missing although necessary (1=M) provided 4 in acceptable condition (2) provided, maintained and effectively implemented; (3) high protection M=1 efforts or no risks at all 10 Workers are informed about major safety risks and safe working practices: 4 (0) not informed; (1) sufficiently aware of existing risks; (2) workers adequately trained or no major safety risks; (3) workers very well informed and trained; (4) exceptionally well trained in Health & Safety aspects 11 First aid equipment: There is (0) no (1) incomplete (2) sufficient basic first aid equipment (as needed 3 for potential work accidents) (3) very good first aid equipment and emergency medical care 12 Pregnant or nursing women and other risk groups are (0) engaged in potentially hazardous work 2 (2=M) excluded from potentially hazardous work M=2 13 Adequate light and ventilation: (0) very poor; (2) adequate by local standards; (3) very good; (4) 4 exceptional efforts 14 Emergency procedures: (0) not in place, not known at all; (2) known by all staff (even if not written); 4 (3) good written safety procedures and signs; (4) very good safety system
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N° Control Points Basic Labour Rights Producer Group Staff MAX Score 15 Emergency exits: (0) evacuation in emergency not possible; (2=M) quick and safe evacuation in an 2 emergency possible M=2 16 Fire fighting equipment: (0) not available; (1) in poor condition/not accessible; (2) available and 3 functional; (3) well maintained, adequate and sufficient for size of operation
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points* 49 32
3.3.2 Employment Conditions for Producer Group Staff N° Control Points Employment Conditions Producer Group Staff MAX Score 1 Defined employment conditions for permanent workers (job position, wage, benefits if any, working 3 times, leave entitlement, housing if any): M=1 (0) employment conditions not defined, not even orally; (1=M) clearly defined and known to worker, even if not written; (2) contract or official registration of worker or other documents indicating at least the basic employment conditions; (3) good contract system If no permanent worker (working for more than 8 months / year) (2) 2 Defined employment conditions for casual/seasonal workers: 3 (0) employment conditions not clear, not even orally; (1=M) wage and working times agreed and M=1 known to worker, even if not written; (2) contract or official registration of worker or other documents indicating at least wages, working times; (3) good contracts 3 Permanent workers are paid (0) less than local average (1) local average ( 2=M) at least applicable 4 10 minimum wage s or typical local rates (if no minimum wage defined); if not: improvement plan; (3) M=2 paid more than local average (including benefits, if any); (4) paid substantially more. If no permanent workers (3) 4 Casual or seasonal labour are paid (0) less than local average (1) local average (2=M) applicable 4 minimum wages or (if not defined) typical local rates; if not: improvement plan; (3) paid more than M=2 typical local wages (including benefits, if any); (4) paid substantially more 5 Training sessions, time lost due to machine stoppage and other events beyond control of worker are 2 (0) not remunerated (2) paid at normal rate 6 Payments of all workers are (0) not done or unduly delayed; (1) no fixed days, or a few delays; (2) 2 regularly done & on agreed days 7 Payments are (0) not (1) poorly ( 2=M) well documented 2 M=2 8 If accommodation or other in-kind remuneration is offered, workers (0) cannot choose freely (2) can 3 chose freely the type of remuneration preferred (e.g. cash instead of housing); (3) substantially less than local prices/subsidized accommodation or food. If n.a. (2) 9 If staff is given housing by the company: (0) not acceptable conditions in local comparison; ( 1=M) 4 acceptable; (2) safe and adequate housing conditions in local context; reasonable rates; (3) very M=1 good housing; very good/subsidised rates; (4) very good and free If no housing (2) 10 Weekly working hours and rest days of permanent workers are normally (0) far higher (1) slightly 4 higher (2) weekly hours in line with national labour legislation; at least 1 rest day out of seven; (3) weekly working hours lower than legal maximum hours OR working hours < 42 hours/week; (4) exceptionally good working hour requirements; flexible working hours 11 Overtime is (0) compulsory, not remunerated extra; (2) voluntary and at least paid as extra time or 3 time compensated; total working time not > 60 hours, including typical overtime; (3) remunerated at premium rate. If no workers (3) 12 Holidays/paid leave: (0) no paid leave/holidays; (2) holidays and paid leave granted as per legal 4 requirements; (3) generous paid leave allowance, paid sick days; (4) exceptionally generous paid leave & sick days allowance 13 Basic coverage for retirement / provident fund: (0) not at all; (2=M) for all workers if legally required 4 (in many cases only for permanent workers). If not plan for correction; (3) better than legally M=2 required OR for all workers with adequate contributions from employer (even if legally required); (4 ) exceptionally high coverage and contributions by employer 14 Basic coverage for maternity is guaranteed: (0) not at all (1) some efforts / not yet sufficient; (2) basic 4 coverage for permanent workers as per legal requirements; (3) for all workers or for permanent workers higher than required OR at least 12 weeks; (4) exceptionally generous practice; substantial contributions by employer
10 In case of pay-per-production, calculate income of an average production day without overtime. IMO Social & FairTrade Programme Version Feb.08 3 Social Issues Producer Groups 37/49
N° Control Points Employment Conditions Producer Group Staff MAX Score 15 Regular employment for regular workers (working basically all year): (0) regular workers don’t have 4 the status of permanent workers; (2) regular workers are employed with all benefits of a permanent worker: regular work guaranteed, social security payments, sick-days/paid leave entitlements, etc. May be salaried or paid on daily wage; (4) Special effort to provide more workers than industry normal with regular employment rather than contract labour 16 If (some) workers are clearly marginalized included in social development plan of the group: (0) not 3 included; (2) gradual improvement of working conditions of workers included in development plan/social policy; (3) demonstrated commitment to continuously improve labour conditions of workers If n.a. 3
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points* 53 32
3.4 ENVIRONMENTAL ASPECTS All applicants for IMO Social Responsibility or IMO Social & FairTrade Certification must be either • Certified according to an acknowledged organic or ecological minimum standard (Organic Textile GOTS, FSC, Rainforest Alliance, EUREPGAP, Utz Certified), • OR must fulfil the IMO Integrated Production Standards (separate document). • Exception: agricultural product processing companies (food processors, ginneries, etc.) only general environmental criteria as listed in this chapter apply
Additionally the following general environmental criteria apply to all hired labour operations (plantations as well as any type of processor or manufacturer):
Minimum requirements for certification: All M must be fulfilled and the following percentage of total norm points reached in this chapter: First year of certification: 70%; second year: 80%; third year: 90% of total norm points; after 4 years: 100% of total norm points.
A transition period of 12 months applies for operations which were certified according to the IMO Social and FairTrade Programme before these environmental criteria became effective. If minimum requirements for certification in section 2.3 are not fulfilled during this transition period, it will be sufficient to develop a plan of how to achieve compliance with the requirements within one year from the date of re-auditing.
3.4.1 Internal Monitoring Environmental Aspects Basic environmental performance aspects shall be included in the groups ICS / monitoring system. Since there are not MUST requirements for the producers and full compliance (2) in every single control point is not required for certification, groups have some flexibility to set their own specific targets and development criteria in the fields of water conservation, energy use, ecosystem conservation and waste management. N° Control Points Internal Monitoring Environmental Aspects MAX Score 1 Internal Standards for producers : (0) very poor environmental aspects on farms, but not included in 4 standards; (2) all relevant environmental requirements that are not yet well implemented on the farms are included in the internal standards as progress requirements adapted for specific production situation; (3) good and detailed environmental requirements included First year of certification (2) with reminder condition to include it 2 ICS: progress in environmental aspects is: (0) not checked although problems (1) not evaluated explicitly 4 but no problems (2) evaluated during internal inspections or during normal extension visits in first year of certication; environmental performance is documented in farmer files; (3) inspectors are well aware of environmental issues and good inspection First year of certification (2) with reminder to include it
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 8 4
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3.4.2 Environmental Performance of Producers The following control points assess the typical situation on the producer farms. If there are huge differences between different producers, please provide details. Medium family producer farms are expected to demonstrate better performance in environmental issues to be evaluated as fulfilling the norm adequately.
N° Control Points Environmental Performance of producers MAX Score 1 Water conservation practices : (0) apparent waste of water; (2) adequate water use practices and rational 4 use of water; no apparent waste of water, e.g. through defective irrigation pipelines, ineffective use in processing, or other loss of water; (3) very good water conservation practices compared to regional standards OR very low water usage; (4) exceptional efforts 2 Waste / sewage water management (processing waste water, domestic sewage water): (0) pollution of 4 waterbodies by untreated wastewater; (2) basic adequate waste water handling; no substantial risk to environment or people by sanitary facilities; (3) good waste water management OR no negative impact at all on ground and surface water; (4) exceptional efforts; minimization of water use and very good water treatment 3 Programmes to minimize energy consumption and mitigate climate change : (0) no efforts although high 4 consumption; (2) no apparent waste of energy OR training programmses/activities to minimize overall energy consumption; (3) very low overall consumption OR efficient use of electricity OR promotion of renewable sources of electricity (biogas, solar, wind, water, etc.); (4) exceptional efforts to minimize energy consumption / use renewable energy sources. 4 Protection of threatened or endangered species of flora and fauna and threatened habitats : (0) evidence 4 that producers directly destroy such species and / or habitats; (1) production has some negative impact; (2) no evidence of substantial active negative impact on such species and / or habitats; (3) producers protect all near threatened, vulnerable, endangered or critically endangered species and threatened habitats within the farm 5 Conversion or destruction of land ecosystems , e.g. clearings of primary or old-growth secondary forests; 4 introduction of potentially invasive species; conversion of natural grass- or bushland or of other ecologically valuable areas: Producers commonly (0) are responsible for such land conversions / destruction of ecologically valuable areas; (1) some shortcomings; (2) do not engage in such conversion or destructions or have taken sufficient compensatory ecosystem conservation action; (3) minimal or no land conversion, good conservation management of land use; (4) exceptional efforts 6 Destruction of or adverse impact on aquatic ecosystems (e.g. regulation of water courses, water bodies or 4 wetlands; destruction of benthic ecosystems through intensive aquaculture or fisheries; introduction of potentially invasive species into water bodies, pollution of rivers): Producers commonly (0) are responsible for such adverse impact or destruction; (1) some shortcomings; (2) do not engage in such destructive practices or have taken sufficient compensatory ecosystem conservation action; if not: written obligation declaration ; (3) minimal or no impact on aquatic ecosystems; good conservation management; (4) exceptional efforts 7 Land clearing or conversion of land or aquatic ecosystems: (0) uncontrolled burning as means of land 4 clearing; (2) acceptable land clearing practises; (3) exemplary efforts to minimize environmental impact OR no land clearing commonly practiced; (4) good awareness creation on minimizing and optimizing land clearing 8 Programmes for composting : (0) no efforts at all; (2) adequate efforts; (3) very good performance with 4 regard to composting; (4) exceptionally good performance 9 Programmes for recycling & waste reduction : (0) no efforts at all; (2) adequate efforts; (3) good 4 performance with regard to recycling and reduction of waste production; (4) exceptionally good performance 10 Waste disposal: (0) unacceptable waste disposal in local context, e.g. plastic all over the fields; (2) waste 4 disposal dumps on farms and/or controlled open air burning of waste with efforts to minimize negative impact on people and environment; (3) very good / low emission waste management; (4) exceptional waste management efforts
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 40 20
3.4.3 Environmental Performance Group Processing The following control points assess the environmental performance of the group operation’s central processing or packing sites (unless so big that the processing is evaluated accoding to full Hired Labour standards, which IMO Social & FairTrade Programme Version Feb.08 3 Social Issues Producer Groups 39/49
include environmental criteria as well – chapter 2.3). Bigger, more professional units are expected to demonstrate better performance in environmental issues in order to be evaluated as fulfilling the norm adequately.
N° Control Points Environmental Performance Group Processing MAX Score 1 Water conservation practices : (0) apparent waste of water; (2) adequate water use practices and rational 4 use of water; no apparent waste of water, e.g. through ineffective use in processing, or other loss of water; (3) good water conservation practices compared to regional standards OR very low overall use; (4) exceptional efforts 2 Waste water management (processing waste water, domestic sewage): (0) pollution of waterbodies by 4 untreated wastewater; (2=M) handling ensures that there is no substantial risk to environment or 2=M people e.g. by sanitary facilities, adequate treatment of processing waste water; (3) good waste water management; (4) exceptional efforts; minimization of water use and high standard of water treatment 3 Minimizing electricity consumption : (0) no efforts; (2) electricity is not wasted and reasonable efforts to 4 minimize overall consumption (lights and machines are turned off after use, rational use of airconditioning, new machines/facilities are optimized with regard to energy efficiency); (3) efficient use of electricity OR very low overall consumption; or investment in alternative sources of electricity (solar, wind, water, etc.); (4) exceptional efforts to minimize electricity consumption and use renewable energy sources
4 Minimizing fuel consumption : (0) no efforts; (2) adequate fuel saving practices (for new machines also fuel 4 consumption considered in purchase decisions; minimizing car/truck/tractor trips around operation, optimized operation schemes in factories, adequate temperature setting if heating/cooling required); (3) investment in energy efficient equipment, high efforts to minimize fuel consumption, increased use of biogas, biodiesel, solar, wind or water power); OR: very low overall fuel consumption; (4) exceptional efforts, e.g. low-energy buildings, advanced processing techniques 5 Renewable energy sources : (0) no awareness of sustainability of energy sourcing; only nonrenewable or 4 exploitative energy sources used (e.g. indiscriminately harvested wood from unmanaged forests); (2) adequate efforts to increase percentage of renewable (own biogas, solar, water, wind, etc.) and / or sustainably harvested energy sources and more low carbon energy sources (e.g. natural gas instead of coal); (3) very good efforts and improvements to convert to renewable / carbon efficient energy sources; (4) exceptional efforts or all energy used is already sourced from renewable energy sources 6 Additional points for voluntary commitment: further efforts to mitigate climate change: 4 Assess group’s overall awareness and engagement to minimize climate change in its operation and community with rating from (0) to (4); no norm requirement; e.g. active support of sustainably produced eco-fuel production and use, targeted training and information on energy management and climate change, active in reduction of greenhouse gases (CO 2, NO 2, methane). Relevant aspects for farm production are (addtionally to other engery management efforts): reduction of CO 2, NO 2 and methane emissions by optimized lifestock management, no burning of grassland/bushland, build up of organic soil fertility, appropriate composting methods, appropriate animal manure management (collection, storage, spreading) and efforts to reduce or avoid fertilizers that contain nitric acid or ammonium bicarbonate 7 Protection of threatened or endangered species of flora and fauna and threatened habitats : Present 4 operation (0) directly destroys such species and / or habitats (1) has some negative impact (2=M) no evidence that operation has substantial negative impact on such species and / or habitats; (3) 2=M producers protect all near threatened, vulnerable, endangered or critically endangered species and threatened habitats within the farm 8 Conversion or destruction of land ecosystems by processing operation , e.g. clearings of primary or old- 4 growth secondary forests; introduction of potentially invasive species; conversion of natural grass- or bushland or of other ecologically valuable areas: Group operation (0) is responsible for such land conversions / destruction of ecologically valuable areas; (1) some shortcomings or destruction in the past few years; (2) does not engage in such conversion or destructions or has taken sufficient compensatory ecosystem conservation action; (3) no conversion/destruction plus some conservation awareness; (4) minimizes land conversion and practises management of land use according to acknowledged conservation standards If basically no land ecosystem inside or adjacent to operation 2 or 3
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N° Control Points Environmental Performance Group Processing MAX Score 9 Destruction of or adverse impact on aquatic ecosystems (e.g. regulation of water courses, water bodies or 4 wetlands; destruction of benthic ecosystems through intensive aquaculture or fisheries; introduction of potentially invasive species into water bodies, pollution of rivers): Group operation (0) is responsible for such adverse impact or destruction; (1) some shortcomings or destruction in the past few years; (2) does not engage in such destructive practices or has taken sufficient compensatory ecosystem conservation action; if not: written obligation declaration ; 3) no conversion/destruction plus some conservation awareness; (4) practises active management of aquatic ecosystem use according to internationally acknowledged ecosystem conservation standards If basically no aquatic ecosystem inside or adjacent to operation 2 or 3 10 Land clearing or conversion of land or aquatic ecosystems (0) uncontrolled burning as means of land 4 clearing (2) acceptable land clearing practises (3) exemplary efforts to minimize environmental impact OR no land clearing practices; (4) good awareness of minimizing land clearing
11 Composting, recycling & waste reduction : (0) no efforts at all; (2) adequate efforts; (3) very good 4 performance with regard to recycling, composting & reduction of waste production 12 Waste disposal: (0) no structured waste disposal in place; (1) open waste disposal dumps and / or open 4 air burning of waste; (2) municipal waste disposal or optimized waste disposal by means of burial of waste or proper incineration that minimizes impact on the environment and on human health. Open burning only of combustable materials without harmful emissions (e.g. no plastic); (3) advanced / low emission waste disposal; (4) exceptional waste disposal management
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 48 22
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4 FAIRTRADE STANDARD ISSUES
Explanation of Structure in Standard Issue Sections Same as indicated in chapter 2 or 3
Applicability and Reference to Other Standards The control points for additional FairTrade aspects are based on FLO standards, private FairTrade initiatives and IMO’s experience with smallholder farmer groups. For IMO Social & FairTrade certification, both the Social standard issues (chapter 2 or 3) and the additional IMO FairTrade criteria in this section apply. The following table summarizes which standard issues for FairTrade certification are applicable to different actors (for complete details see chapter 1.2):
Applicable Social & FairTrade standard sections
Plantations and processors in Chapter 2 (Social Standard Issues Hired Labour) and chapter 4.2 developing/transition countries (Obligations for FairTrade Producer Companies) If also buying from other certified companies: also 4.1 Producer group operations including Chapter 3 (Social Standard Issues for Producer Groups) and small-scale own processing chapter 4.2 (Obligations for FairTrade Producer Companies) If also buying from other certified companies: also 4.1 First buyer from FairTrade supplier Chapter 4.1 (Obligations for FairTrade Buyers) (normally importer or importing Voluntary full FairTrade certification: chapter 2 (Social Standard processor in consuming country) Issues Hired Labour)
Beneficiaries of FairTrade “FairTrade” means long-term and trustful cooperation between partners, transparent price setting, open negotiations and prices that allow for social development of the concerned communities. Although IMO does not restrict FairTrade to developing countries and marginalized producers, it clearly aims at improvement of the social conditions of those groups who are most deprived in the respective local setting.
Cooperative long term trade relations and transparent price negotiations are a key aspect in the IMO FairTrade system. The resulting prices should allow for economic and social growth and well-being. Those who are weakest in their bargaining power, normally small farmers and workers, especially seasonal labourers, may need support in representing their rights. Thus, several control points have been added to ensure that they are recognised as valued partners in the fair trade product chain. Since this group is often also the most socially deprived one, they are normally the target group for social projects paid by FairTrade Premium money.
In the case of a longer production and trade chain in developing/transition countries, distribution of FairTrade benefits over the chain may become a difficult question. In this setting, it will be important to define how the overall FairTrade benefits (normally a certain FairTrade Premium on top of a fair sales price) will be shared amongst the main intended beneficiaries, these being the farmers and their communities as well as the workers and their communities. Since there will not be one best solution for all types of production situations, the certified operator must develop and internally discuss an overall FairTrade policy to define the main beneficiaries, keeping in mind their actual needs for additional support in improving social conditions. Example: in a setting where the raw ingredients are produced by very small and marginalized farmers in remote regions and processing is done in urban settings with workers already enjoying really good working conditions, it may be most meaningful to use all FairTrade Premium money for social projects in the farmers’ communities as well as paying higher prices directly to farmers. Another situation would be in the case of relatively wealthy small to medium-size farmers and a processing factory with many seasonal and disadvantaged workers without fixed income or training. In this case, focus on processing workers as main beneficiaries would certainly be a more appropriate impact of FairTrade. Seasonal labour on the medium-size farms could be another important target group.
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4.1 OBLIGATIONS FOR FAIRTRADE BUYERS
4.1.1 Trade Relationship First Buyers from certified FairTrade Producer Companies (normally the importer in consuming country) and FairTrade Producer Companies (producer group, company with contract producers, estate, manufacturer, etc.) should seek to establish a long term and stable relationship in which the rights and interests of both parties are mutually respected. Therefore, the buyer and the FairTrade supplier sign contracts and agree on the terms of their trade relationship, which allows for long-term planning and sustainable production practices. This overall agreement and/or related sales contracts (or similar documents) specify minimum and maximum volumes or approximate expected quantities, quality specifications and quality claim procedures, delivery conditions, FairTrade prices and FairTrade Premium as well as payment conditions. The long-term nature of cooperation is confirmed and any additional support offered by the buyer or additional obligations of the supplier are stated. Supplying smallholder groups can request prepayment of up to 50% of contract value in order to finance the buying operations of the producers’ organisation at the local level. Note: this chapter does not regulate the relations between a producer group operator and the growers these requirements are included in chapter 4.2! N° Control Points FairTrade Relationship (buyers) MAX Score 1 Buyer (0) changes suppliers constantly (1) changes suppliers regularly (2) has (or plans) a long-term 3 relation with the FairTrade suppliers; (3) demonstrates commitment to work with suppliers over the long term 2 Contracts between buyer and FairTrade supplier define the overall terms of their trade relation (see 3 above): (0) no such agreements; (1) only vague/incomplete agreements; ( 2=M) clear agreements . If M=2 not yet done to be introduced within 6 months ; (3) very well developed agreements, reflecting the needs of both trade partners 3 In case of fresh fruits or other perishable products, the buyer (0) does not inform the suppliers at all 2 on expected quantities; (2) provides the suppliers with sourcing plans with projected quantities in regular intervals. If n.a. (2) 4 If buying directly from an organized smallholder producer group and requested by supplier, the buyer 3 provides (0) no prepayment (2=M) partial pre-payment (3) exceptionally high prepayment of the product to be delivered. Exception: new trade relation or substantial delivery problems in the past (2). If n.a. (2) 5 If there have been quality problems and quality claims: (0) no compromises, e.g. suppliers had to pay 3 full costs although did not agree / no steps towards improvement of situation; (1) some compromises, some disagreements remaining; (2) partners have found agreement on the consequences (e.g. return of produce) and have taken steps to improve the situation; (3) exceptionally tolerant agreements and quality improvement assistance. If n.a. (2) 6 Number of trade intermediaries between FairTrade producer company and importer: 3 (0) many intermediaries; (1) 1-2 intermediaries; (2) minimized / basically direct; (3) basically direct from agricultural producer company 7 The buyer supports the suppliers: (0) no assistance at all; (1=M) some basic information and 4 support; (2) good support in particular providing market information and assistance with quality M=1 issues; (3) very good additional support e.g. in marketing, attending trade fairs, providing advanced training, etc.; (4) exceptional support, confirmed by excellent supplier feedback 8 Agreement of supplied quantities: (1) partner thinks the quantities are too low; (2) reasonable annual 3 quantities / well accepted by suppliers; (3) exceptionally high efforts to buy substantial quantities each year / acknowledged by the supplier 9 FairTrade pricing is not avoided by linking FairTrade sales contracts to reduced prices for “normal” 2 sales contracts: (0) strong indication of such deals; (1) a few cases of non-FairTrade purchases from FairTrade partners, but not very unfair deals; (2) no such cases at all or all cases really fair and transparent (well accepted, not linked to FairTrade sales) 10 The buyer has an overall FairTrade sourcing policy that favours marginalized social groups, in 3 particular smallholders: (0) no policy; not buying from any producer organization with high social impact; (2) buying at least partly from smallholder production projects or suppliers who can demonstrate high social impact for their workers, etc.; (3) well developed overall business policy to focus on high social impact FairTrade suppliers 11 Additional points for voluntary commitment: The buyer closely supports or initializes production 4 projects that create market access for producers who would not have market access without the buyer’s support/without FairTrade. Rating (2) - (4) depending on level of engagement; no norm requirement
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N° Control Points FairTrade Relationship (buyers) MAX Score 12 Additional points for voluntary commitment : Level of engagement to buy from genuine smallholder 4 producers: (1) some small to medium-size producer group operations in supply chain; (2) 1-2 smallholder group suppliers or > 40% of FairTrade products originating from smallholder producers; (3) 3-4 smallholder group suppliers or > 60% from smallholder producer groups; (4) many smallholder producer groups or > 80 % of FairTrade products from smallholder producer groups. No norm requirement 13 Information on FairTrade or Social Responsibility certified suppliers: (0) no information or 3 documentation on FairTrade suppliers; (2) complete list of FairTrade suppliers and Social Responsibility certified suppliers (if any) available; buyer holds their certificate and knows their production system and FairTrade focus; (3) very close relation to FairTrade suppliers with regular visits, exchange, support, etc. 14 If the buyer pays for and owns the FairTrade certificate of the supplying producer company: The 3 producer company is permitted to sell its products also to other buyers directly in case the contracting buyer cannot buy all products (at agreed price); possibly the producer company has to bear part of certification costs if selling as certified to other traders: (0) no such freedom; (1) limited freedom; (2) good/fair agreements; (3) exceptionally tolerant / producer company shows high flexibility 15 FairTrade purchases are traceable in the company’s trade documentation or book keeping (0) no 3 indications, not traceable for auditor (2) FairTrade quality indicated on invoices and in internal accounting / product flow documentation or data base (3) exceptionally well managed and product flow well documented; separate assortment numbers, automatic summary on FairTrade quantities handled at each level 16 FairTrade products are kept separate from non-FairTrade certified products at all stages: (0) no 3 separation measures; (2=M) adequate separation measures ; minimal commingling due to technical M=2 reasons during processing acceptable; (3) very good separation system OR all lots of a certain product are FairTrade 17 Transaction Certificates (TCs) confirm the traceability of FairTrade products: (0) no TCs although 3 required; (2) TCs issued as required by IMO; (3) overall advanced traceability system plus TCs as required
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 52 30
4.1.2 Pricing & FairTrade Premiums Prices are discussed and mutually agreed between the FairTrade Buyer and the FairTrade Producer Company, and are based on open and transparent communication of needs and expectations. FairTrade shall ensure that producers and workers receive fair prices for their products/services and thus can meet their basic needs and have some discretionary income. The prices paid ensure that at any time producers at the very least recover their costs, and can continue in production. Producers can invest in their families or in their workers welfare and contribute to the wellbeing of their communities. The prices also cover costs for compliance with this standard, plus costs of certification (if paid by supplier) Thus the FairTrade Price paid will normally exceed normal average market prices (world market prices if defined) for the respective product quality. As a general guideline, Hired Labour FairTrade suppliers’ standard compliance costs that are charged on top of normal market prices are restricted to 5% of market prices; depending on the market position and social impact of the supplier, they may be lower than that. For smallholder producer companies, prices of at least 5% higher than normal market prices (for respective quality) are recommended, with higher percentages being added in times of very low market prices. If market prices are high it may be acceptable for the FairTrade Price to be at market price level, provided that overall compliance costs, efforts and support of the supplier and additional benefits are considered. Long-term trading partners are strongly encouraged to agree on minimum prices to be paid irrespective of market price development. In addition to the FairTrade Price, the Buyer and the FairTrade Producer Company agree on a defined FairTrade Premium to be paid for all sales. The FairTrade Premium shall normally be defined separately in each sales contract and is channelled by the producer company directly into its FairTrade Premium fund. Premium fund money is administered transparently; the targeted beneficiaries of FairTrade (farmers, workers or their communities) decide on the use of this money, possibly with some initial assistance by the organising company and/or the buyer. The FairTrade Premium is restricted in use. It may only be used for agreed social community and development projects or paid as additional income to smallholder producers (see requirements for FairTrade Producer Companies in chapter 4.2 for details).
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The FairTrade Premium for Smallholder producer companies is recommended to be at least 10% of farmgate prices and may not normally be lower than 5% of average farmgate prices, unless explicitly agreed and confirmed by the producer company, with appropriate justification. The FairTrade Premium for Hired Labour producer companies is recommended to be between 5- 10% of non- management labour costs, depending on the potential social impact of the FairTrade Premium and the expected additional FairTrade development contribution paid directly by the FairTrade producer company in case of large Hired Labour market players entering FairTrade. Alternatively, the buyer and producer company can agree on “FairTradeINCLUDINGPremium” prices that already include the FairTrade Premium (without clear specification of the Premium) if the final price is substantially higher than normal market prices for respective quality, i.e. add the FairTrade Premium directly onto the product price, without separate handling in a FairTrade fund. In this case, IMO cannot follow up on the exact use of the Premium, but will verify implementation of the FairTrade producer company’s overall FairTrade policy and FairTrade claims towards their buyers. For all products for which FLO minimum prices & FLO premiums have been established, IMO will use these rules as rough guidelines in the evaluation of adequate premiums and cost covering prices. N° Control Points Pricing & FairTrade Premiums (Buyers) MAX Score 1 The FairTrade Price (without Premium) paid is (0) never (1) sometimes (2=M) always at or slightly 4 above market price, as mutually agreed by FairTrade producer and buyer in consideration of M=2 compliance costs and overall support given (see above) (3) always clearly above normal market price (4) exceptionally high 2 FairTrade Price (without Premium) paid for organic FairTrade products is (0) conventional price/no 4 premium for organic (1) 1-9% higher than conventional price (2) at least 10% higher (3) >15% higher than normal market price for the respective non-organic product (4) even higher 3 FairTrade Price seems appropriate for respective FairTrade supplier situation (see policy above): (0) 4 unacceptable; (2=M) within range of above policy or based on detailed argumentation incl. view M=2 of supplier; (3) very good price; indications that the high price actually serves the intended social purpose; (4) exceptionally high price 4 FairTrade Premium: In addition to the agreed FairTrade price for the product, the buyer pays (0) 4 nothing (1) only very minimal amount (2=M) an agreed reasonable FairTrade premium (see above) M=2 (3) a high FairTrade Premium (4) an exceptionally high FairTrade Premium. Alternatively the agreed “FairTradeINCLUDINGPremium” prices are uniformly higher than normal market prices for respective quality. 5 FairTrade Premium is defined in invoices (or contracts) OR buyer has FairTrade Policy of supplier 2 indicating use of FairTrade Premium as included in overall prices: (0) no definition of Premium or any information on use of higher market prices; (2) acceptable definition of Premium price in documentation or FairTrade policy (or similar) from FairTrade suppliers 6 Additional points for voluntary commitment: The buyer agrees with the FairTrade Producer Company 3 on minimum prices in order to avoid prices for producers falling under costs of production for the farmers. Rating (1) to (3) depending on effort & price level; no norm requirement 7 Additional points for voluntary commitment: The buyer shows efforts to understand actual production 3 costs and to adapt the pricing policy as much as possible to this understanding. Rating (1) to (3); no norm requirement 8 The buyer pays the supplier(s): (0) delayed/no payment; (1) some delays/payment issues; (2=M) fully 2 & on time / as agreed in purchase agreements M=2 9 Documentation on open price negotiations: (0) no evidence of open communication on prices; buyer 3 deliberately does not inform suppliers on market developments, etc.; (2) adequate evidence of open communication on prices between buyer and FairTrade producer; (3) very positive interaction and communication on prices; buyer is open to accept suppliers’ prices and needs
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 29 14
4.2 OBLIGATIONS FOR FAIRTRADE PRODUCER COMPANIES The following standard section applies to all FairTrade Producer Companies. If the FairTrade Producer Company also buys in products from other FairTrade certified Producer companies, it acts as a FairTrade buyer as welland must therefore fulfil the same basic requirements as applicable to FairTrade buyers (chapter 4.1), Performance may be checked in a more qualitative way in case ofs limited scope and complexity. Purchase from small producers within a defined group operation is not considered purchase from other companies and is thus included in this standard section (see 4.2.3).
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4.2.1 FairTrade Obligations for all FairTrade Producer Companies FairTrade Producer Companies (producer group, company with contract producers, plantations, manufacturers) and their FairTrade Buyers (usually importers) should seek to establish a long term and stable relationship in which the rights and interests of both are mutually respected and prices are negotiated based on transparent communications. FairTrade Producer Companies are accountable trade partners for their buyers and work continuously on meeting the quality standards of consumer countries. The benefits of FairTrade shall reach the main intended beneficiaries, normally the farmers or the workers in certified operations as well as their families and communities. In the case of production chains with farm production as well as substantial processing, the overall FairTrade policy defines the main beneficiaries and FairTrade target groups, depending on overall social impact and their needs for FairTrade support (see also detailed policy included in above “Beneficiaries of FairTrade” section). Any money in a FairTrade Premium fund must be responsibly administered and only used for agreed social projects as decided by the FairTrade Premium Decision Body. Requirements regarding FairTrade Premium decision bodies and Premium use are outlined in chapters 4.2.2 and 4.2.3 for Producer Groups and Hired Labour Situations separately. If no Premium money has yet been received, assess plans/capacity to administer the money once it starts coming in most control points will normally be rated as (2), if really not ready yet rate as (1). Note: The Buyers’ most important obligations (see chapter 4.1 above) are also counterchecked during audit of FairTrade Producer Companies, but without effect on the certification of the supplier. N° Control Points Obligations for ALL FairTrade Producer Companies MAX Score 1 The company has (0) not fulfilled its trade agreements at all (1) several delivery or quality problems (2) 2 fulfilled the agreements with FairTrade buyers or, if not, has found a mutually agreed solution with its clients. If no sales/first certification 2 2 If there have been substantial quality problems and quality claims: (0) no steps towards improvement 3 of situation; (1) some compromises found with trade partner, some disagreements remaining; (2) partners have agreed on resulting consequences (e.g. return of produce) and have taken steps to improve the situation; (3) exceptional efforts to immediately improve situation. If n.a. (2) 3 The company works towards continuous improvement of product quality: (0) no efforts; (1) some 4 improvements; (2) continuous, serious efforts; (3) good efforts; (4) exceptional efforts 4 In price negotiations the supplier gives trade partners (0) clearly wrong information (1) slightly 4 inaccurate / not clear information (2) correct information (e.g. on prices paid to farmers or overheads) if requested by trade partner (3) detailed and correct information about operation 5 If the FairTrade Price paid is considerably higher (> approximately 10%) than normal market prices for 4 respective quality (but not declared as FairTrade Premium), the company prepares: (0) no summary; M=2 (1) some very basic written information; (2=M) accurate brief overview summary what this higher price is used for (or details of its costs structure) and sends this summary to clients upon request; (3) or (4) very good / exceptional overview. If n.a. 2 FairTrade Premium Administration 6 Any FairTrade Premium paid into a FairTrade Premium fund is (0) without actual administration; use 4 not documented (1) with some administration, incomplete records (2=M) responsibly administered in M=2 a separate account and any use well documented 7 The premium fund decision committee or board writes (0) no report (1) a report about some activities, 4 but incomplete (2=M) an annual short report on all activities financed by fund money (with detailed M=2 budget) (3) a very good report If FairTradePrices that INCLUDE PREMIUM (without separate definition of Premium) are received, the company summarizes all social projects or effective higher farmer prices or other social impact of the FairTrade price for the buyer. 8 The records of expenses paid from the fund correspond (0) not at all (1=M) with minor shortcomings 3 (2) satisfactorily to the amount spent as per bookkeeping and the activities reported in the annual fund M=1 report; (3) very good records, easy to trace 9 The effective use of the FairTrade Premium fund money is (0) not for the projects as agreed by 4 premium fund decision body (1=M) mostly for the agreed projects , other use justifiable (2) only for M=1 the agreed projects; (3) or (4) very good/exceptional projects/activities 10 Social impact of FairTrade Premium use: (0) no particular social impact although Premium received; 4 (2) good social impact (as can be expected for the amount received); (3) or (4) good/exceptionally high social impact; very good projects or substantial increase in farmers’ income
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 36 20
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4.2.2 Additional FairTrade Obligations for Producer Groups Operations Smallholder producer groups can request prepayment of up to 50% of the contract value in order to finance the buying operations from member producers and agree on terms and use of the prepayment with their buyers. The benefits of FairTrade (including a possible Premium) reach all members of the group and/or (depending on the social situation) possibly also workers on the farms, in the groups or in processing operations. The decision of how to use the benefits is based on a democratic decision-making process and taken by the beneficiaries or balanced committees including producers/workers. The producer group operation has a FairTrade Policy which states at least • The intended beneficiaries of FairTrade (based on a short social analysis in case of several different potential target groups) and (if necessary) distribution of Premiums over production steps. • FairTrade Premium decision processes and projected FairTrade Premium use (not detailed project use, rather overall scope of possible projects). • Commitment to (as per FairTrade focus) improve working conditions of all workers and farmers participating in the group and the well being of their communities. • Note: the basics of the group’s FairTrade policy and principles are also to be reflected in the group’s internal social standard (see chapter 3.1.4) and must be known to target groups. There should be a system of fair sharing of profits in the producer’s organisation or contracted production project. Prices paid to farmers are based on a transparent system. FairTrade Premium fund money is generally intended to finance sustainable social community projects or it should reach the farmers directly as added additional Premium prices (normally paid at the end of the year, once it is clear how much Premium has been received). Organized smallholder producer groups may also invest the Premium money into necessary business investment such a joint warehouse or livestock purchasing programmes, organic fertilizer production facilities, etc. However, the money is clearly not intended for maintaining normal business operations (paying market prices to farmers, paying ICS staff, paying workers the legal minimum wage, etc.). Contract production projects are not permitted to use Premium for clear business investments (such as e.g. a new packing station), unless the investment is then owned by the farmers as a group, nor can it be used for meeting their regular legal minimum requirements (local labour legislation).
N° Control Points Additional FairTrade Obligations Producer Groups MAX Score FairTrade Policy and Relations to Producers and Workers 1 The producer group operation has a FairTrade Policy (see details above): (0) no FairTrade policy, not 4 even clear ideas; (2=M) written FairTrade policy , approved by top management; (3) well developed M=2 FairTrade Policy documents. If M not met policy to be developed within 6 months 2 The FairTrade Policy is made known to relevant groups: (0) farmers not aware of any FairTrade 4 activities; (2) farmers and workers (if relevant) informed about basics of overall FairTrade approach; (3) farmers and/or workers (if relevant) very involved in FairTrade Policy making; well aware of policy. 3 Prepayments : If any prepayment has been received, it has (0) not been used for farmers payment / 2 other justified uses (1=M) not been used for farmers payment but use seems justified (2) used to M=1 pay farmers in time or any other measure agreed with trade partner. If n.a. (2) 4 Contracted Production : If wished so by the farmers, the farmers group shall be (2) permitted (3) 3 supported to gradually take over more and more responsibilities of an independent smallholder organisation company. If n.a. (3) 5 Annual products : Farmers are implicitly or explicitly required to grow the certified cash crop each year: 2 (0) strong such requirements, farmers immediately dropped if not growing the crop; (1) requirement exists; but growers not immediately dropped; (2) no such requirements; (restrictions that farmer must grow the certified crop at least in e.g. 2 years out of 3 are acceptable ). If n.a. (2) 6 If workers are also a Fairtrade target group : There is an annual assembly of workers: (0) none; (1) 3 informal, very few workers involved; (2) substantial participation; adequate communication between assembly/board and group/company management(3) very good, active assembly; well documented; good workers interests representation; If n.a. (2) Prices 7 Farmers receive higher farm-gate prices than from local traders: (0) no higher prices; (1) slightly higher 4 prices; (2=M) at least 5% higher prices for non-organic, 10% higher prices for organic produce M=2 plus Premium money or Premium projects. If not: detailed justification of overall FairTrade focus and impact, acceptable mainly in times of high market prices; (3) clearly more than 5%/10% higher prices plus Premium money or Premium projects or other clear benefits for farmers; (4) exceptionally high prices or additional benefits for farmers. First certification (2) if such prices are planned 8 Prices for farmers are based on a clear system: (0) pricing not transparent at all; prices very different 4 between farmers; not based an objective quality; (2) transparent pricing system; same prices for same IMO Social & FairTrade Programme, Version Feb. 08 4. FairTrade Issues 47/49
N° Control Points Additional FairTrade Obligations Producer Groups MAX Score quality; clear pricing rules or set prices; (3) good market price information for farmers; open communication on overheads OR producers own the group operation company; (4) exceptionally open communications OR farmers have high effective control over the group’s finances and the priced paid 9 Group or contracting company’s overhead costs for collection, processing & marketing & profit (sales 4 price minus actual prices paid to producers): (0) not transparent at all; totally out of scale compared to similar organizations/companies; (2) roughly known and seem justifiable / at least within normal range; no exceptionally high management costs compared to local typical situation; (3) well known and presented to clients upon request; relatively low overheads/proven efforts to keep overheads small in favour of higher producer prices (and fair workers wages, if applicable); (4) exceptionally low overheads for management / exceptionally high percentage of sales price used for raw products, workers or other social projects FairTrade Premium Use and Community Support 10 Use of FairTrade Premium is decided : (0) no formal or democratic decisions; (1=M) cooperative 4 board or a fund committee of contracting company decides on use, but no clear M=1 involvement/agreement of farmers; (2) by farmers assembly or a FairTrade committee with at least 2 farmers (and workers if these are also identified as a target group) in the committee; (3) effective democratic structures (well attended assembly, elected members of funds committee); (4) exceptionally good farmers assembly and discussions on Premium use 11 If the use of Premium fund money is decided by a committee (not the producer assembly), farmers 4 (and workers, if relevant) are (0) not aware and/or not agreeing with use (1) not informed, but ok with use (2) informed on fund activities and support the projects; (3) good farmer (and worker, if relevant) participation; (4) strong farmer/worker involvement or other very meaningful and competent composition of committee. If decided by farmers assembly (3) or (4) 12 Effective use of FairTrade Premium: (0) misuse, money “lost” etc.; (1) some Premium payment to 4 producers but not full amount or for fulfilling legal obligations towards workers; (2=M) full amount M=2 used for producer Premium payments or acceptable projects (see above); (3) / (4) high/very high social impact by Premium use. If the Premium was not separately defined by buyer, assess overall use and impact of the higher prices 13 The group operation supports social community programmes in general (e.g. schools, hospitals, 4 education scholarships, etc.): (1) no such activities beyond the agreed FairTrade Premium social projects/producer Premiums; (2) group is active in different fields of community development and initiates different approaches to promote development; (3) very good programmes/activities; (4) exceptional commitment 14 The group operation shows (0) no efforts at all (2) some own efforts to improve life of their producers 4 (beyond fair prices and use of FairTrade Premium), e.g. loan schemes, scholarships for workers children, etc.; (3) or (4) high/excellent programmes and commitment
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 50 28
4.2.3 Additional FairTrade Obligations for Hired Labour Situations In hired labour situations (factories, plantations) the benefits of FairTrade shall normally reach the workers and their communities as main target groups. There is an annual workers assembly which provides the opportunity for all workers to formally come together and discuss their needs with the management, as well as to gain experience in investing FairTrade Premiums to achieve a ‘social return’ in their communities. An institutionalized workers assembly and active representation board allows companies to better understand and address worker issues through this open forum. The Company also has to develop a FairTrade Policy which states at least: • Justification for FairTrade: expected impact of FairTrade, e.g. on social groups in need of special support or for community projects. • The intended beneficiaries of FairTrade distribution of Premiums over production steps, based on a short social analysis in case of several different potential target groups. • Justification of any compliance costs or other costs included in FairTrade price if higher than normal sales price (apart from FairTrade Premium money that is administered separately). • FairTrade Premium decision processes and projected FairTrade Premium use (not detailed project for use, rather overall scope of possible projects).
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• Commitment to improve working conditions for all or at least most marginalized workers; target plans for gradual improvement of working and living conditions of workers and / or for social community projects in the workers’ communities. • Note: The FairTrade Policy can be combined with the Social Policy as addressed in chapter 2.2.1 and must be made known to all workers. It should ideally be developed in close consultation with workers, or jointly by workers and management. Note: in situations where the need of additional market support through FairTrade or additional social impact is not evident, IMO may require this policy to be presented before the application for certification can be accepted. The FairTrade Premium is administered in a clearly separate bank account, and all use for agreed social projects is well documented. Decisions on the use of the FairTrade Premium are taken either by the assembly of workers or by a FairTrade Fund Decision Committee. Such a committee must always include workers and possibly external experts or buyer representatives, not only company management. Premium fund money is intended to finance sustainable social community projects or social projects for the workers directly. It may not be used for business investments of for meeting the company’s regulatory obligations (compliance with applicable labour legislation). If no Premium money has yet been received, assess policy, plans and capacity to administer the money and organized FairTrade Premium decision processes once Premium is received most control points will normally be rated as (2), if not clear ideas / capacity yet rate as (1) or (0) . N° Control Points AdditionalFairTrade Obligations Hired Labour MAX Score 1 The company has a FairTrade Policy (see details above): (0) no FairTrade policy; not even clear 3 ideas; (2=M) written FairTrade policy , approved by top management; (3) well developed FairTrade M=2 Policy documents. If M not met policy must be submitted before certification 2 The FairTrade Policy is made known to relevant groups: (0) workers not aware of any FairTrade 3 activities; (2) workers (if relevant) informed about basics of overall FairTrade approach; (3) workers (if relevant) very involved in FairTrade policy development; well aware of policy 3 There is an annual assembly of workers: (0) none; (1=M) informal, only very few workers involved; 4 (2) substantial participation; decisions documented; (3) very good, active assembly; well documented; M=1 (4) exceptionally high worker involvement in business decisions and addressing of workers’ problems 4 The assembly of workers elects a board to represent their interests towards the employer: (0) none; 4 (1) informal, board with only very few activities; (2) active board; good communication between board and employer; (3) very good, active board/workers representation; well documented activities; (4) acts as a very strong and involved negotiating partner 5 Premium use decisions are taken (0) by the management only (2=M) by workers assembly OR a 4 well balanced Premium decision committee (see above) (3) by active workers assembly or very M=2 competent balanced committee 6 Workers have effective influence on Premium use : (0) no such influence; (1=M) workers feel ok with 3 use of money but no formal vote/decisions; (2) documented democratic decision (assembly decision M=1 or selection of representatives for committee); (3) all workers involved in decision. If no Premium money yet received 2 7 If the use of Premium fund money is decided by a committee (not general assembly), workers are (0) 2 not aware and / or not agreeing with use (1) not informed, but ok with use (2) informed of fund activities and support the projects 8 Effective use of FairTrade Premium: (0) misuse, money “lost” etc.; (1) for social projects but also some 4 business investment or fulfilling legal obligations towards workers; (2=M) acceptable social projects; M=2 (3) / (4) high/very high social impact through Premium use If M not met written confirmation of correction within one year 9 The company supports social community programmes in general (e.g. schools, hospitals, education 4 scholarships, etc.): (1) no such activities beyond the agreed FairTrade Premium social projects; (2) group is active in different fields of community development and initiates different approaches to promote development; (3) very good programmes/activities; (4) exceptional commitment 10 The company shows (0) no efforts at all (2) some own efforts to improve life of their workers (beyond 4 good working conditions and use of FairTrade Premium), e.g. loan schemes, scholarships for workers children, etc (3) or (4) high/excellent programmes and commitment 11 Additional points for voluntary commitment: (3) or (4) There are programmes for workers to obtain 4 ownership shares of the company at preferential conditions. No norm requirement
TOTAL MAX TNP Score
Maximum Points / Total Norm Points / Effective Points 39 20
Version 4 - IMO February 2008 (29.02.2008) Author: Florentine Meinshausen. Authorisation: Rainer Bächi, Correction & Comments: W. Kathe, M. Rajasingham, Girija HR, , T. Blanco, F. Augstburger, H. Neisskenwirth IMO Social & FairTrade Programme, Version Feb. 08 4. FairTrade Issues 49/49