The proliferation of fair trade certification schemes and multinational food companies using fair trade only as a labelling and marketing tool was a major point of discussion at a Biofach 2014 seminar, Does Fair Trade Certification Matter.
The discussion included concerns of players in the supply chain, what retailers and suppliers can do, why trading fair needs to include domestic ingredients, and the World Trade Fair Organization’s (WTFO) new Guarantee System for fair trade.
Some of the speakers spoke about small producers being pushed out by large organizations, but that fair trade and Small Producer programs had provided a way forward, and about the need to support the ethical and social aspects of using Fair trade products.
David Bronner of Dr Bronner’s, USA said the company decided to support fair trade in 2005 as organic certification does not reach the social purpose side. “Fair trade certification is necessary for your customers to know and trust that your operation and supply chain is indeed fair,” Mr Bronner said. Multinationals add fair trade as a marketing niche for their brand and fair trade certification can be a joke with 2% of fair trade content on the finished product, he added.
“Why not put the percentage of fair trade content on the front of the packaging? It should have a percentage disclosure,” Mr Bronner said.
Another major point was the need to help consumers understand that there are suppliers, retailers and stakeholder groups dedicated to the principles of fair trade, using proper compliance and operating transparently under an ethical supply chain to deliver fair premiums and social benefits.
One of the speakers was Italy-based Rudi Dalvai, president of the board of directors, World Trade Fair Organization (WTFO), which believes that the role of Fair Trade Organisations (FTOs) is and remains that of the principle actor of fair trade which supports small and marginalised producers by building up long-term trading partnerships based on dialogue, transparency and respect.
Mr Dalvai said the new form of fair trade is often oriented to develop and promote a particular certification label and to satisfy the “ethical demand” of the consumer, thus offering the kind of guarantee against the exploitation requested by the consumer.
It’s a new concept that is introduced to the market, but it’s certainly different from the concept expressed by Fair trade pioneers, which is cemented on the process of development and partnership with small and marginalised producers, not simply that they are free from exploitation, he said.
Mr Dalvai believes that the most of the “historical” Fair FTOs have not lost their way and that they continue to support specifically small producer organizations.
“In the mainstream market, many licensees of certified fair trade are interested in the product label, but not in working to support the values behind fair trade,” he said. “As a consequence they try to lower the bar for fair trade principles lower and lower.”
Mr Dalvai’s view is that commercial licensees of the fair trade label, which are looking more towards the consumer market and do not have a real commitment to the small farmers, try to make it easier for them to buy FT products by applying pressure to lower FT standards.
The WFTO Guarantee System, which is only for members and is an internal control system, first of all needs to be accepted by the members of WFTO which have to implement it.
“Once fully implemented, which will take about one more year, we will start to focus to promote the WFTO product label in the 70 different countries where our members are based,” Mr Dalvai said.
“We will provide to our members the instruments to do so. Some FT certification bodies, like Flo Cert, IMO, Ecocert and Naturland are co-operating with WFTO to do the external audit. But we are aware, and they also, that it could also be seen as a competition to their own FT certification logo.
“Personally I prefer to see it as an integration to identify organisations which are 100% dedicated to FT.”
The Guarantee System for fair trade certification aims to reduce costs and includes self-assessment every two years, a monitoring audit every 2-6 years and peer visits every 2-6 years.
However, the Guarantee System does not guarantee that small producers are not being stood over by labour unions, land owners, large farmers or officials.
Mr Dalvai says that the system cannot give this guarantee. “What is important to mention is that WFTO is a membership organization and this guarantee system is only for members, and two-thirds of the members are small producer organisation and their umbrella organisations,” he said.
“This gives a certain guarantee. Only organisations which comply with principles and standards of Fair Trade Organisation can become a member of WFTO.”
The WFTO system can monitor breaches of rules by producers/suppliers more cost-effectively and in a more sustainable way, especially for small producer organisations, Mr Dalvai added.
“Our system has the WFTO Standards for FTOs at the basis. It is not my role to say, if the WFTO Standard are better or worse than the fair trade criteria which are used by fair trade certification bodies. But I am sure that WFTO Standards have set the bar high.”
Fair Trade International’s recently introduced a new labelling program, the Fairtrade Program mark labelling for cocoa, that allows chocolate companies to use 100% Fairtrade cocoa, but other ingredients in the chocolate need not be Fairtrade sourced.
Mr Dalvai’s view is that the new sourcing programs of Fairtrade International for cocoa will definitely increase the purchase of FT cocoa.
“But my question, which argument to use, to convince companies which have produces until now fair trade chocolate with also the sugar from FT sources, to continue to do so,” he said.
“Fair trade sugar is more expensive than conventional sugar and if competitors are allowed to produce chocolate without FT sugar, this may be unfair competition for the ones which use FT sugar.”
With the proliferation of private labels in some mainstream and organic retailers in Europe, including an expansion of ‘Fair’ branding, it should be asked if this approach helps the Fairtrade movement and the small producer.
Mr Dalvai believes if behind the label or brands there are also FT values, it helps. “If it is only an empty marketing tool, it does not help and the question of the guarantee becomes an important one in this context,” he said.
“The challenge is to find a system, which is credible and economically sustainable at the same time, in which the small producers play an important role, as they are the stakeholders of this system.”