CERTIFICATION CONTRACT

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1 CERTIFICATION CONTRACT between FLO-CERT GMBH And Legal Name of Client PARTIES (1) FLO-CERT GmbH, established and registered in Bonn, Germany with company number whose registered office is at Bonner Talweg 177, Bonn, Germany. FLO-CERT (2) Name of Client, whose place of business is in [REGISTERED or OFFICIAL OFFICE ADDRESS]. Client AGREED TERMS 1. DEFINITIONS The Parties agree that the following terms will have the meaning assigned to them below. Audit: evidence gathering process that aims to assess the compliance of a Client and/or a product with certain standards. Audits may be conducted on- or off-site and may be announced or unannounced. Auditor: person qualified to carry out audits on behalf of FLO-CERT. The Auditor may be an employee of FLO-CERT or an independently contracted natural or legal person. Certificate: document issued by FLO-CERT which outlines the scope and duration of a Client s Certification with FLO-CERT. A valid Certificate serves as authorization to trade in Fairtrade Products. Certification: process by which FLO-CERT determines a Client s compliance with applicable Fairtrade Standards, including FLO-CERT Compliance Criteria. Certification Fee: amount payable to FLO-CERT by the Client, as set out in Appendix 1. Client: any entity certified by FLO-CERT which has signed a Certification Contract. Y:\8. QM\8.5 Forms\Approved Contracts\Approved Certification Contracts Page 1/9

2 Confidential Information: any information that would be regarded as confidential by a reasonable business person relating to: (i) the business, affairs, customers, clients, suppliers, plans of the disclosing party (or of any member of the group of companies to which the disclosing party belongs); and (ii) the operations, processes, product information, know-how, designs, trade secrets or software of the disclosing party (or of any member of the group of companies to which the disclosing party belongs). Conventional Product: any product that is not a Fairtrade Product. Effective Date: the date this agreement is signed by both the Client and FLO-CERT. Fairtrade: Fairtrade refers to all or any part of the activities of FLO, FLO-CERT, Fairtrade producer networks, Fairtrade Labelling Initiatives and Fairtrade marketing organizations. Fairtrade is used to denote the product certification system operated by Fairtrade International (FLO). Fairtrade Certification Mark: registered trademark owned by FLO and sub-licensed to labeling initiatives (LI). The Fairtrade Certification Mark is only for use on consumer retail products that have met the Fairtrade Standards, and for the promotion of such products by the licensees, certified operators and third parties. Fairtrade International (FLO): multi-stakeholder, non-profit organization focusing on the empowerment of producers and workers in developing countries through trade. FLO provides leadership, tools and services needed to connect producers and consumers, promote fairer trading conditions and work towards sustainable livelihoods. Fairtrade Labelling Organizations International e.v. is the legally registered name for 'Fairtrade International'. Fairtrade Products: products that are produced, processed and traded in compliance with applicable Fairtrade Standards under a valid Certificate. Fairtrade Standards: Fairtrade Standards and Fairtrade Product-specific Standards are requirements that producers and traders have to meet in order to obtain Fairtrade product certification. Standards are set by Fairtrade International. A list of current Fairtrade Standards is accessible on Labelling Initiative: A Labelling Initiative (LI) is a full member of FLO as defined by the FLO constitution. The LI is responsible for licensing, marketing, business development and awareness raising in a defined geographical area. A LI has the right to sub-license the Fairtrade Certification Mark to licensees and third parties within their area. A list of current member organizations may be accessed at Producer: any Client that has been certified according to Fairtrade Standards relevant for production and any applicable product standards. Trader: any Client that has been certified according to Fairtrade Generic Trade Standards and any applicable product standards. 2. PURPOSE OF THE CONTRACT 2.1 This contract is an agreement for the provision of Certification by FLO-CERT to the Client, and for the payment of a Certification Fee by the Client to FLO-CERT. Y:\8. QM\8.5 Forms\Approved Contracts\Approved Certification Contracts Page 2/9

3 2.2 The purpose of this contract is to enable FLO-CERT to certify the Client against the applicable Fairtrade Standards, FLO-CERT Compliance Criteria. 3. OBLIGATIONS OF THE CLIENT 3.1 The Client will perform all actions required to receive and maintain Certification. This includes compliance with applicable Fairtrade Standards, FLO-CERT Compliance Criteria, which are fully listed in Appendix 2. If Fairtrade Standards, FLO-CERT Compliance Criteria or FLO-CERT Policies are violated by the Client, FLO-CERT is authorized to apply sanctions relating to the certification status of the Client. The applicable sanctions can be found in the Standard Operating Procedure (SOP) for Certification, referenced in Appendix 2. The Client explicitly acknowledges the validity of the list of sanctions. 3.2 The Client will allow FLO-CERT and its Auditor(s), free and unencumbered access to all areas, records (including internal audit reports) and personnel necessary for the purpose of granting Certification. 3.3 The Client agrees that FLO-CERT may appoint sub-contractors to conduct Audits. 3.4 The Client will not make use of its Certification in such a manner as to bring FLO- CERT into disrepute and will not make any statement regarding its Certification which is misleading or unauthorized. 3.5 The Client will not make representations about its Certification beyond the scope outlined in its Certificate. 3.6 When trading Fairtrade Products, the Client will only trade with Fairtrade Products which are listed in its Certificate. 3.7 The Client uses Certification only to indicate that its products are certified as being in compliance with the Fairtrade Standards. 3.8 The Client only refers to its product certification in communication media such as documents, brochures or other advertising, in compliance with the requirements of FLO-CERT. 3.9 The Client has a duty to inform and will provide FLO-CERT on a periodic and continuous basis with: (c) (d) (e) (f) (g) (h) An updated list of producer group members; An updated list of production sites; An updated list of any subcontractor s sites; and Periodic reports of purchases, sales and processing of Fairtrade Products, confirmation of receipt of Fairtrade Premiums, and other reports as described in FLO-CERT Policies and FLO-CERT Compliance Criteria; and Any information on changes that significantly affect the design or specification of any Fairtrade Product, or any indication that a Fairtrade product may no longer comply with FLO-CERT Certification requirements. Any information on changes related to the organization of the Client, such as a change from single-estate to a multi-estate Producer or a change from 1 st Grade to 2 nd or 3 rd Grade Producer. Any information regarding a potential or real conflict of interest present between the Client and an Auditor or FLO-CERT employee in direct contact with the Client. Any information that leads to a change in the fees charged by FLO-CERT The Client will keep a record of all known complaints relating to any Fairtrade Product s compliance with applicable standards. The Client will take and document appropriate action with respect to such complaints and any deficiencies found in Y:\8. QM\8.5 Forms\Approved Contracts\Approved Certification Contracts Page 3/9

4 products or services that affect compliance with the requirements of Certification. The Client will make these records available to FLO-CERT when requested. 4. CERTIFICATION FEES AND PAYMENT 4.1 The Client will pay the Certification Fees, which are non-refundable. Non-payment of fees is grounds for immediate termination of this Contract and withdrawal of the Certificate of the Client. 4.2 FLO-CERT may change Certification Fees after giving three months written notice to the Client as specified in clause 8.2. The Client may terminate this contract as specified in clause 8.3 after a change in Certification Fees. 4.3 Certification Fees will be due and payable on the due date noted on the invoice sent to the Client on a yearly basis by FLO-CERT. 5. OBLIGATIONS OF FLO-CERT 5.1 FLO-CERT will evaluate all Clients against relevant Fairtrade Standards, FLO-CERT Compliance Criteria and FLO-CERT Policies by means of audits. 5.2 FLO-CERT will make available to Clients an up-to-date detailed description of the evaluation and Certification procedures, and documents containing the requirements for Certification, the applicant s rights and duties, including Certification Fees. 5.3 FLO-CERT will provide Clients who are successful in their Certification with a Certificate. 5.4 FLO-CERT has procedures for receiving allegations, complaints, appeals and disputes received from Clients or third parties about issues related to Certification. Current procedures are described in the relevant documents listed in Appendix FLO-CERT will only use properly trained and competent Auditors to conduct Audits. 5.6 FLO-CERT will publish a list of certified Clients on its website, showing the name and function of the Client. 6. CONFIDENTIAL AND PUBLIC INFORMATION 6.1 Both Parties agree to maintain each other s Confidential Information confidential. 6.2 The following is not considered to be Confidential Information, and may be disclosed by either party: (c) (d) (e) (f) (g) (h) Information that is in the public domain; Information that was in either party s lawful possession before entering into this Agreement; Information that is lawfully disclosed to either party by a third party without restriction on disclosure; Information that is independently developed by either party, such as Trader and Producer lists containing the name and address of the Client, scope and status of Certification; Information the parties agree in writing is not confidential or may be disclosed; Information that is required to be disclosed by law, by any court of competent jurisdiction or by any regulatory or administrative body. All data in aggregated form that is not traceable to an individual entity. Producer Data: data necessary to generate essential marketing and impact information, such as producer profiles for consumers. This includes data on number of members/workers and gender breakdown, total production capacity of Fairtrade Products and organic/conventional breakdown, area cultivated with Fairtrade Products, examples on the use of Fairtrade Premiums and other such data. Y:\8. QM\8.5 Forms\Approved Contracts\Approved Certification Contracts Page 4/9

5 6.3 A party may disclose the other party's Confidential Information to those of its representatives and partners who need to know such Confidential Information for the stated purpose of performing the obligations under this contract, or strengthen activities of Fairtrade to support Producers and Traders, allow verification of flow of goods and supply chain data or facilitate cross-border sales, provided that: it informs such representatives and partners of the confidential nature of the Confidential Information prior to disclosure; and at all times, it is responsible for such representatives' or partner s compliance with the confidentiality obligations set out in this clause. 6.4 FLO-CERT warrants to the Client that it maintains agreements with all of its partners that receive Confidential Information ensuring that such Confidential Information will not be disclosed publicly or to the Client s competitors. 7. DURATION AND TERMINATION OF AGREEMENT 7.1 This Agreement will be valid from the Effective Date and will continue in force until terminated according to this clause 7, superseding any previous Agreement on Certification by the Parties. 7.2 This Agreement may be terminated by either party for any reason with at least 3 calendar months written notice to the other party. 7.3 FLO-CERT may terminate this agreement with immediate effect if: (c) (d) (e) (f) (g) the Client makes incorrect references to the Certification system, uses licences, Certificates or the Fairtrade Certification Mark in a misleading or improper way. Rules on Fairtrade label use are subject of Licensing Agreements with Labelling Initiatives and can be obtained from them; The Client is also a Fairtrade International Licensee, and the Licensing Agreement is terminated, for whatever reason; The Client fails to pay certification fees; The Client is decertified; For a breach of any provision of this contract by the Client where, in case of remedial breach, the Client has failed to remedy the breach within 15 days of receiving notice of the breach from FLO-CERT. This includes nonpayment of Certification Fees; If the Client enters into bankruptcy or goes into liquidation; If the Client and/or its assets are bought by another entity. 7.4 Upon termination of this Agreement, FLO-CERT is required to publish the change in certification status as a result of the termination of this Agreement. 7.5 Termination of this Agreement does not relieve the Client from its obligation to pay all Certification Fees due. 7.6 Termination of this Agreement will lead to the Client losing its status as Fairtrade Producer or Trader and result in the following: (c) (d) The Client will discontinue its use of all advertising or packaging matter that contains reference to Certification with FLO-CERT. The Client will inform its suppliers and customers of the status change in Certification. A Client may sell off stock of Fairtrade Products existing at the time of notice of termination for a period of 3 calendar months after notice of termination according to clause 7.2. Any sales contracts entered into before notice of cancellation may be fulfilled for the same period. Upon termination of this agreement according to clause 7.3 the Client will cease to sell any Fairtrade products existing at the time of notice of termination. Y:\8. QM\8.5 Forms\Approved Contracts\Approved Certification Contracts Page 5/9

6 8. AMENDMENT 8.1 Any modification of this contract must be mutually agreed upon and shall generally be in writing. 8.2 For practical purposes FLO-CERT may decide to modify this contract through written notification three months prior to the intended effectiveness of the change. The continuation of the payment of the Certification Fees according to clause 4 is considered as the Client s approval. 8.3 In the event the Client does not agree with the intended change, the Client may terminate this contract in writing within 30 days after receipt of the written notification by FLO-CERT and with effectiveness of the termination on the date of the change. 9. INDEMNITY AND LIMITATION OF LIABILITY 9.1 Except in case of intent or gross negligence, liability of each party and its agents or assistants in performance shall be disclaimed. However, the foregoing does not apply in case of a breach of material contractual obligations or in the event of damages to life, limb, or health. Material contractual obligations are obligations which are essential to the contract, and whose fulfillment enables the due performance of the contract, and that the parties regularly rely on and may rely on for compliance. The liability for damages shall be limited to the typical foreseeable damage. 9.2 The Client will indemnify FLO-CERT for any claim made against FLO-CERT by a third party for death, personal injury or damage to property arising out of or in connection with defective goods, to the extent that the defect in the goods is attributable to the acts or omissions of the Client, its employees, agents or subcontractors; 9.3 Nothing in this clause shall restrict or limit either Party's general obligation at law to mitigate a loss it may suffer or incur as a result of an event that may give rise to a claim under this indemnity. 10. FORCE MAJEURE 10.1 Neither party will be liable in damages for any delay or default in performing hereunder if such delay or default is caused by conditions beyond its reasonable control including, but not limited to natural disasters, Government restrictions (including the denial or cancellation of any export or other necessary license), wars, insurrections and/or any other cause beyond the reasonable control of the party whose performance is affected. The right to terminate will not be affected If either party is prevented from, or delayed in, performing any duty under this contract, then this party shall immediately notify the other party of the event, of the duty affected, and of the expected duration of the event If any Force Majeure event prevents or delays performance of any duty under this contract for more than sixty days, then either party may on due notification to the other party terminate the contract. 11. ASSIGNMENT 11.1 Neither party may assign, transfer, or in any other manner hand over to any third party the rights or obligations of this Agreement unless agreed in writing by the other party. Y:\8. QM\8.5 Forms\Approved Contracts\Approved Certification Contracts Page 6/9

7 12. WRITTEN FORM 12.1 The requirement of written form shall also apply to any additional agreements, assurances, or subsequent alterations, including cancellation of contract; oral supplementary agreements are ineffective and are valid upon written form only In addition to the legal requirements of the Federal Republic of Germany governing the written form, this obligation shall be met, 13. LAW AND JURISDICTION when the electronic scan of the original document in PDF-format is transmitted via , or where the original document is transmitted via letter or fax The exclusive place of performance and jurisdiction for all disputes arising from this contract will be Bonn, Federal Republic of Germany, for both parties, as far as applicable. FLO-CERT reserves the right to institute legal proceedings at the place where the Client has its place of business In the event of a dispute arising out of this Agreement, the parties may choose to resort to arbitration. The Arbitrator will be agreed upon by both parties and any decision by the Arbitrator will be binding on the parties. The cost of arbitration will be borne by the parties in such proportion as decided by the Arbitrator This contract and all questions concerning its performance, validity, and interpretation shall be governed by the law of the Federal Republic of Germany. This contract shall not include, incorporate or be subject of the provisions of the United Nations Convention on Contracts for the International Sales of Goods. 14. SEVERABILITY 14.1 Should any individual provisions of this Agreement be or become invalid in part or in whole, or should there be an omission in the present Agreement, the remaining provisions of the present Agreement will remain valid. Agreed and Signed on [Date]. FLO-CERT Client Y:\8. QM\8.5 Forms\Approved Contracts\Approved Certification Contracts Page 7/9

8 Appendix 1 Certification Fee List The certification fee list valid at the time of signing is set out in this appendix. FLO-CERT may change Certification Fees after giving notice to the Client 3 months prior to the intended effectiveness of the fee increase. The Client may terminate this contract as specified in clause 8.3 after a change in Certification Fees. If no such termination notice in writing has been received within 30 days after receipt by the Client of the written notification by FLO-CERT, or the Client continues to pay Certification Fees, the fee increase shall be deemed accepted by the Client. The fee list in its latest version can be found under: Y:\8. QM\8.5 Forms\Approved Contracts\Approved Certification Contracts Page 8/9

9 Appendix 2 List of Fairtrade Standards and FLO-CERT Compliance Criteria and Procedures Fairtrade International (FLO) reserves the right to amend Fairtrade Standards in accordance with FLO's Standard Operating Procedures (http://www.fairtrade.net/setting_the_standards.html ). Requirements of Fairtrade Standards may be added, deleted, or otherwise modified. Those who have to meet Fairtrade Standards are required to monitor pending and finalized revisions on FLO s website. Fairtrade certification ensures the compliance with Fairtrade Standards. Revision of Fairtrade Standards may lead to a change in the requirements of Fairtrade Certification. Those who wish to be certified or have already undergone certification are required to monitor the FLO-CERT compliance criteria and the complementary documentation on FLO- CERT s website as they will become valid and effective with publication through FLO-CERT. In accordance with the stated above the following documents are incorporated by means of dynamic reference and as applicable in their respective latest version depending on the function of the Client: Fairtrade Standards as adopted by FLO Generic and product specific Fairtrade Standards, as made available through publication on: FLO-CERT Compliance Criteria and complementary documentation The relevant version of each Compliance Criteria list, as it is subject to change, and the complementary documentation referenced in some specific requirements is accessible and published on the FLO-CERT webpage: FLO-CERT Procedural Documentation All procedural documentation properly adopted by the certification body and published on the FLO-CERT webpage: especially: FLO-CERT Standard Operating Procedure for Appeals and Reviews FLO-CERT Standard Operating Procedure for Allegations FLO-CERT Standard Operating Procedure for Complaints FLO-CERT Standard Operating Procedure for Certification, which includes the List of Sanctions Y:\8. QM\8.5 Forms\Approved Contracts\Approved Certification Contracts Page 9/9

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