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Ethical Trade Fairtrade

What does Fairtrade measure? Introduction Series Part 2

If you haven’t read part 1, read it here.

What does Fairtrade Measure?

The below graphs highlight the standards for small farmers’ organizations. What essentially the farmer/producer must meet to be certified as Fairtrade, and thereby qualify to sell their raw materials in the Fairtrade supply chain to buyers. As you can see the largest obligations of the label are environmental and social, with economic factors third. There are around 80 environmental obligations and 75 social obligations that must be met prior to being certified Fairtrade.

If we break these environmental, social and economic factors down further you can see what obligations are required to be certified as Fairtrade.

Environmental – Key aspects

The key aspects within the environmental obligations that must be in place to receive Fairtrade certification are the following.

Note when we refer to the organisation we are talking about the farm that is trying to be certified.

  1. Soil – Focusses primarily on training to prevent soil erosion. It also includes reporting measures that the organisation wants to be certified has done to improve soil fertility.
  2. Forests – Primarily looking at what the organisation does to report on activities that it does to protect and enhance biodiversity. The organisation must avoid negative impacts on protected areas!
  3. Inputs – The organisation must provide training to workers who handle pesticides and other hazardous chemicals. The organisation wanting to be certified is not allowed to use any banned chemicals on the Fairtrade red list, so this will be things like nasty chemicals and harmful pesticide etc. The organisation must provide training on pests and disease to workers. Alongside this the organisation must also raise awareness of reusing organic waste through implementing practices that allow nutrients to be recycled.
  4. NO GMO – In order to be certified Fairtrade, the organisation is prohibited from using any GMOs in any aspect of the crop.
  5. Biodiversity – The organisation must avoid negative impacts on protected areas, as well as maintaining buffer zones around bodies of water (in order to protect them). The organisation must report on activities that it does to protect and enhance biodiversity.  Alongside this, it must raise awareness so that invasive species are not introduced as well as raising awareness of protected species so that no one in the farms/factories hunts rare or threatened species.
  6. Waste – The organisation must ensure farms are free of hazardous waste, alongside equipment to handle accidents and spills. It must also raise awareness about re-using waste.
  7. Water – The organisation wanting to be certified must list sources of water that it is using for irrigation and processing of the crop. It also must provide training to members on how to use water efficiently. Alongside this, it must keep authorities informed about the situation of water in the area in case local authorities consider the water source as being depleted.
  8. Energy – Must keep records of energy consumption, as well as taking measures to ensure energy is more efficiently used as far as possible and replacing non-renewable energy with renewable sources where possible.
  9. Climate – The organisation must report on measures done to reduce energy consumption throughout, and how it is increasing carbon sequestration in its operation, this could be through things such as planting trees etc.

Social – Key aspects

1)      No discrimination – No discrimination can occur in any aspect of the farm/factory. This will be explored further in other blogs. This one, in particular, will be explored in more detail in relation to female rights and increasing the labour force participation of women, alongside incentives for women to develop their careers. As an ethical auditor myself this is a crucial aspect of how a farm/factory must operate. Overall it involves non-discrimination against the core characteristics which are; race, colour, gender, sexual orientation, disability, marital status, age, HIV/AIDS status, religion, political opinion, language, property, nationality, ethnicity or social origin. Everyone should be treated equally.

2)      Child labour – No children must be employed below the age of 15.

3)      Human Rights – The organisation wanting to be certified must identify disadvantaged/minority groups and have programs in place to improve their social and economic position.

4)      Condition of Work and Social Protection– The organisation must give local, migrant, seasonal and permanent workers the same benefits and employment conditions for the same work performed.

5)      Health and Safety – Conditions of work must comply with the Fairtrade standard. It also must have a health and safety committee alongside first aiders trained on site.

6)      Training – Alongside the above, there must be training in place for workplace safety for all workers, as well as personal protective equipment free of charge. Training must also be provided for handling chemicals and how to deal with accidents.

7)      Labour Practises – This can be broken down into numerous sections

  • Employment and Employment relationships – Good conditions for work must occur at the organisation. The core ILO (International Labour Organisation) conventions are considered as the main reference for good working conditions.
  • Forced labour – The organisation must not engage in forced labour and all workers must have contracts.
  • Payment – The organisation must make regular payments to workers at regularly scheduled intervals which are documented, with all regular workers assigned to permanent contracts.
  • Wages – Minimum wages must be specified and communicated to workers.
  • Social security – Your organization must set maternity leave, social security provisions and non-mandatory benefits according to national laws
  • Negotiation of conditions – Workers must be free to join a worker’s organisation that allows negotiation of their working conditions.

8)      Sexual harassment – The organisation must not engage in, support or tolerate behaviour that is sexually intimidating or abusive.

9)      Facilities – The organization must provide clean drinking water and clean toilets with hand washing facilities close by for workers and clean showers for workers who handle pesticides. These facilities must be separate for women and men and the number of facilities must be in proportion to the number of workers.

Economic – Key aspects

  1. Economic Viability – Fairtrade should lead to the demonstrable empowerment and environmentally sustainable, social and economic development of producer organisations and their members and through them of the workers employed by the organisation.
  2. Supply Chain Responsibilities – This one is incredibly important and again why Fairtrade stands out from other labels. Buyers must sign binding purchase contracts with producers which must state as a minimum, agreed volumes, quality price, payment terms and delivery conditions.  Fairtrade payers must pay to producers at least the Fairtrade minimum price for all the product contracted. A Fairtrade premium must be paid for it.  All activities you plan to fund with the Fairtrade premium must also be included in the Fairtrade development plan!!!

Fairtrade Premium and Fairtrade Development Plan – This is the extra sum of money paid on top of the floor price, that must be agreed prior to becoming Fairtrade. The organisation must plan and document at least one activity with the intention to promote the progress of the business/organisation members/workers/community/ environment. The plan is called the Fairtrade Development Plan. The plan must include: the description of the activity (what you plan to do); the objective of the activity (why you plan to do it); the timeline of the activity (by when you plan to do it); the responsibilities (who will be in charge of doing it); and in case you need to spend funds (such as the Fairtrade Premium or other sources of funds), the budget of the activity (how much you plan to spend).

This must be reported on the results of the Fairtrade Development Plan every year and document the presentation. The report must answer the following questions: Were the actions carried out yes/no? If not, why? When? At what cost? Was the objective achieved or are further actions needed?

The extra earned from the Fairtrade Premium must always go towards this aspect. By therefore buying Fairtrade you are essentially not only helping build communities / protect the environment (aid), but you are contributing to their industry as well (trade).

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