FOR APPAREL & HOME GOODS Factory Program Guidebook OVERVIEW The Fair Trade USA® Factory Support Services team created the Factory Program Guidebook to help factories implement their fair trade certification program. It provides a high-level summary of the entire journey to certification and beyond. Purpose and The key audience of this Factory Program Guidebook is factory management, primarily the Fair Trade Officer, who is the factory representative responsible for implementing the Apparel and Audience Home Goods Factory program. This Factory Program Guidebook may also be a resource for other stakeholders, including but not limited to: Fair Trade USA Factory Support Services field teams that provide consulting services to factories and workers; participating brand partners that buy and sell Fair Trade Certified™ products; Fair Trade Committees1; and community partners who support the implementation of the Fair Trade Premium Plan. OVERVIEW Scope and Structure This Factory Program Guidebook is a tool for factories to better understand the steps and actions involved when participating in the Fair Trade USA Apparel and Home Goods Factory program. It includes information from every department that engages with the factory, and it is structured for factories to easily identify where they are in the process, understand each step, and be able to access more information, materials, tools, and guidance. The Factory Program Guidebook does not replace the Apparel and Home Goods Factory Standard (also referred to as the Factory Standard) and other related policies, requirements, and supporting guidance, which set the minimum expectations for initial certification and renewal of certification. OVERVIEW Fair Trade USA is a nonprofit organization and the leading certifier of fair trade products in North America. The trusted Fair Trade Certified seal on a product signifies that it was made according to rigorous fair trade standards that promote sustainable livelihoods and safe working conditions, protection of the environment, and strong, transparent supply chains. In addition to meeting rigorous compliance standards, factories that are Fair Trade Certified receive additional funds for every product sold on fair trade terms, between 0.5% -2% of Freight on Board (FOB), that go back to the workers. The workers decide how to best utilize these funds to positively impact their lives and communities. Fair Trade USA develops, implements, updates, enforces, and audits against fair trade standards, including the Apparel and Home Goods Factory Standard, which drive income sustainability, community and individual well-being, empowerment, and environmental stewardship. OVERVIEW Value for Factories Factories that participate in the Fair Trade USA Apparel and Home Goods Factory program benefit from: • A direct economic benefit to workers through Fair Trade Premium • Commitment from fair trade buyers, who nominate factories for the program that are strategic long-term valued partners • Recognition for achieving Fair Trade USA’s factory certification and implementing initiatives with Fair Trade Premium that support the workforce • A workforce that is empowered and has resources to improve • Development and leadership opportunities for workers and members on the Fair Trade Committee • Apparel and Home Goods Factory Standard implementation guidance from Fair Trade USA at no direct cost to the factory, which helps to improve the factory’s human resources and environmental practices OVERVIEW How Does the Factory Program Work? First, the brand partner Factories must adopt and For every Fair Trade Certified A committee of workers, called a Brands add the Fair Trade nominates the factory and implement the Fair Trade product sold, the brand pays a Fair Trade Committee, decide Certified seal to their products supports its journey towards fair Apparel and Home Goods premium from 0.5-2% of FOB together how to spend the and communicate their trade certification. Factory Standard. Once the that goes into a fund at origin. funds to improve their lives and commitment to sustainability to factory is certified, every buyer communities. their customers through hang that is a participant in the tags, media campaigns, program at the certified factory and more. can sell Fair Trade Certified products. REQUIRED READING FOR ALL FACTORIES ❑ Factory Program Guidebook ❑ Requirements for Certificate ❑ Policy on Identifying the ❑ Unannounced Audit ❑ Glossary Resources Scope Premium Participants Policy ❑ Trade Standard ❑ Factory Standard ❑ Guidance for Determining ❑ Guide to Identifying the ❑ Program Assurance Manual Scope Premium Participants Sections Use these icons to navigate to each of the main content OVERVIEW sections included in the Factory Program Guidebook How to Use This Document Home Use this icon to return to the Table of Contents Track Your Progress Reference this progress bar to determine how far along you Chapters are in a specific content section Use these icons to navigate to a specific chapter within each of the main content sections of the Factory Program Guidebook Table of Contents APPLICANT FACTORY CERTIFIED FACTORY OTHER 1) Fair Trade USA 2) Apparel and Home 1) Immediate Actions 2) Needs Assessment 1) Accommodations 2) Frequently Asked Introduction Goods Factory After Certification Due to COVID-19 Questions Standard Overview 3) Factory Intake Form 4) Compliance 4) New Fair Trade 3) Resources 4) Fair Trade USA 3) Premium Projects and Agreement Improvement Committee Factory Program Teams 6) Fair Trade 5) Transaction 5) Training 6) Renewal Audit 5) Acronyms to Know Committee Reporting 7) Audit Preparation 8) Certification Audit Applicant Factory Fair Trade USA Introduction What does a successful factory in the program look like? Factory Journey Here’s an example: With dedication, factories can typically attain certification in 8–12 months. The A certified factory in India is in its third year of certification. At year zero, the speed of the onboarding is directly affected by how quickly the factory implements factory was certified with one single buyer. Now, three years later, the factory has the Apparel and Home Goods Factory Standard requirements. Here’s a roadmap five fair trade buyers and is one of the highest worker-to-Premium ratios in the that illustrates milestones in a timeline: program. Workers in this factory have benefited from multiple Premium projects every year, including field trips, healthy breakfasts, free eye check-ups for workers, • Fair Trade Program Intro for and a full scholarship for higher education of one of the workers’ children. The Management 1) INTRODUCTION factory has embraced and excelled in meeting the Apparel and Home Goods • Determine Certification Scope Factory Standard and honestly communicates its challenges and action plans to its • Application & Agreement buyers, the Factory Support Services team, and the Fair Trade USA Certification team. • Risk-Based Pre-Assessment (RBPA) 2) RISK BASED PRE- ASSESSMENT • Compliance Improvement Plan • Fair Trade Program Intro for Workers 12 months 3) WORKER & • Committee Elections & Training – 8 COMMITTEE • Premium Transfer Process TRAININGS (with Brand) • Fair Trade Committee Bank Account • Third Party Conformity Assessment Bodies Conducts Audits 4) AUDIT & • Corrective Action Plan Resolution CERTIFICATION • Factory Certification Apparel and Home Goods Factory Standard Overview In five major sections, the Apparel and Home Goods Factory Standard outlines requirements and compliance criteria for facilities that produce apparel and home goods. The objective of the standard is to increase empowerment—including leadership, economic development, and engagement of workers—and to ensure fair working conditions and environmentally responsible production methods. ENVIRONMENTAL TRADE REQUIREMENTS ECONOMIC SOCIAL RESPONSIBILITY EMPOWERMENT RESPONSIBILITY & DEVELOPMENT MANAGEMENT This section guides the This section focuses on the Fair This section outlines social and This section guides the criteria This section provides a identification of Premium Trade Premium, conditions of labor standards, including the for an environmental framework of basic trade Participants, election of the Fair worker employment, working prohibition of child labor and management system that requirements, including how to Trade Committee, and hours, and remuneration. forced labor, freedom from monitors and improves work with subcontractors and management and spending of Fair discrimination and abuse, the environmental performance with how to cooperate with Fair Trade Premium. It also addresses right to freedom of association, requirements around hazardous Trade USA and its Conformity grievance procedures. This section and health and safety chemicals and waste Assessment Bodies (CABs) encompasses requirements for protections. management. during audits in a transparent the success of the Fair Trade manner. Apparel and Home Goods Factory program. Apparel and Home Goods Factory Standard Overview Did you know? Did you know? Did you know? Did you know? Did you know? Premium Participants are the The use of short-term Night work is prohibited for Workers handling any potentially For workers employed at main beneficiaries of the Fair employment status and workers age 15-18. The factory hazardous chemicals regularly subcontracted facilities and/or Trade Premium. They include apprenticeship schemes for the may employ young workers, but receive free medical homeworkers, there must be a personnel working at certified purpose of avoiding