This is the second post explaining how you can change the world by buying fair trade. If you have missed the introduction, catch up here. What Is The ‘Product Certification Route’?
There are two different channels to make products which are officially recognised as fair trade: the ‘integrated supply chain route’ and the ‘product certification route’. There will be an extra post discussing how fair trade can be integrated in the whole supply chain. The product certification route is the focus of this post. You may have seen products carrying the Fairtrade International label on coffee, tea, chocolate or flowers in your supermarket. The Charter of Fair Trade Principles defines that in the product certification route
“products complying with international standards are certified indicating that they have been produced, traded, processed and packaged in accordance with the specific requirements of those international standards.“
There is a blinding abundance of fair trade, green and sustainable standards and labels – most of them claiming to stand for a certain standard. Moreover, in some countries, for instance France (LOI n° 2014-856 du 31 juillet 2014 Article 94), fair trade companies are registered as a specific kind of company by the State. There, government agencies regularly control the work of the fair trade certifier – and the process gets even more complex.
The complexity is the reason why this post only introduces the two most relevant fair trade labels from the World Fair Trade Organisation (WFTO) and Fairtrade International. WFTO and Fairtrade International together developed the Charter of Fair Trade Principles. In the last post we learned that these two distinct entities both promote fair trade and have their own organizations to monitor compliance with fair trade standards.
What is the World Fair Trade Organisation?
For all of us who already know about the WTO: the WFTO has a similar objective: promoting international trade. There are two decisive differences: Firstly, the WFTO focuses on fair trade goods. Secondly, the WFTO does not organise trade between states. In the WFTO there are over 400 members in 70 countries on five continents. Besides a minority of individual associates, most members are organisations alongside the fair trade supply chain: from producer cooperatives over importing companies to retailers and selling associations. The WFTO is structured like a global association and has five regional branches. It is very different from Fairtrade.
What is Fairtrade?
Luckily I am explaining the difference between the company Fairtrade and the over-arching idea of fair trade in writing! Fairtrade – the two words written together – is a company and officially called Fairtrade International. The name ‘fairtrade’ is usually employed as a brand – for the Fairtrade label.
Fairtrade International develops the fair-trade standards, for instance a specific minimum wage for an industry, like coffee. “[T]o ensure the independence, quality and credibility of the Fairtrade certification system” there is a distinct entity which controls compliance by producers, importers and sellers: the international limited company FLOCERT.
How does the Product Certification Route work in practice? The Case Study of FLOCERT
In theory the product certification route works literally according to its name. In practice the process has two parts: you need a producer who is certified to create the product – like coffee beans – in accordance with Fair Trade standards. Then you need a buyer, usually a conventional company like a huge supermarket chain which pays licence fees to be allowed to use the so-called ‘Fairtrade mark’ on, to keep that example, a specific coffee brand.
This post focuses on the first part. Imagine: we have an orange association and we hope to increase its sales and get support in learning new methods by becoming member of the Fairtrade model. Firstly, we need to apply to FLOCERT for the Fairtrade certificate. FLOCERT checks first whether we are eligible. Since we are not recruiting children for diamond mining in a war-torn region, but a small orange association we have good chances! So FLOCERT sends us a visiting expert. This expert talks to the workers and us, the management and owners. Mostly, s/he has a profound look around and scrutinizes the production regarding fair-trade standards.
Prerequisite for scrutinising our orange association is operationalising what ‘fair trade’ is in practice. Underlying the Fairtrade certification process is a complex system which translates big words into concrete action: firstly, fair-sounding ideas like ‘good labour standards’ are broken into specific criteria which then are opened up into distinct details. These are then translated into long lists – 150 pages for small producers’ organizations applying for the Fairtrade label. The lists are the operational departing point for auditing and evaluating the gap between requirements and reality. They also account for the differences in the production of different goods – oranges are fresh fruits and turning them into juice requires a different production process than turning coffee beans into coffee. For outsiders, the lists may be even more complex: they also refer to other concepts, like the premium paid by Fairtrade on top of the agreed minimum price. Don’t be confused: both, the minimum price for the oranges and the premium go to the cooperative! But the premium goes to the community working in our orange association and everyone in the community gathers and decides together how to spend the money for the benefit of all.
The data collected by the visiting export is sent to an analyst who evaluates it and elaborates whether – and if yes how big – there is a gap between the way we treat our employees on the orange farm and the conduct required for products carrying the Fairtrade label.
The official overview of this process provided by FLOCERT is very objective orientated. The possibility of long stretches of time spent with re-adjustments and changes in the local production is not mentioned in their video and leaves me wondering: how long would it take for our hypothetical orange farm to be certified as fair trade. Weeks? Months? Does it depend on the region? Or is it simply a case-by-case question? Similar questions apply for the fee our hypothetical orange association would be required to pay for certification. The certification fee varies with the kind of organization, and its structure and sub-groups.
I hope that at some point in the future I will have a chance to clarify these and other hands-on questions. If you know the answers (or have further suggestions for questions) email me under Bizolutioners or comment below.
Maybe you have already read or heard about Fairtrade not holding its promise? Stay tuned in for a post explaining why the product certification route is currently heavily criticized!