Comparison of three coffee labels:

Transcription

1 Comparison of three coffee labels: Fairtrade Rainforest Alliance UTZ Certified July

2 Table of Contents Comparative table for coffee labels... 3 Executive Summary... 6 Methodology General information Standards Environmental criteria Social criteria Economic criteria Application process Inspection References

3 Comparative table for coffee labels 1 Administrator Starting point / Concept Initiators Objective Target group Fairtrade Rainforest Alliance UTZ CERTIFIED Fairtrade Labelling Organisation (FLO) Founded to give farmers from the South fair market access and to strenghten their position, thus making it possible for them to make a proper living. Dutch NGO and a number of Mexican coffee farmers. Improving the position of the (small) farmers through the strengthening of cooperatives or producer organisations. At origin only small farmers, afterwards also opened to plantations in some products (tea, fresh fruits, flowers...) Standards ISEAL compliant 2 Sustainable Agriculture Network (SAN) Born out of a protective reflex for the (rain)forest and for biodiversity. A group of people with very different backgrounds. To protect biodiversity in an area as large as possible. No specific target group. ISEAL compliant UTZ CERTIFIED Founded out of demand for certification of plantations (coffee) and being able to sell sustainable coffee on a larger scale. Coffee producer in Guatemala and a Dutch company(ahold). To combine quality with a responsible production process. At origin aimed at plantations, later opened up for small farmers. ISEAL compliant Composed of mandatory and progress criteria which must be fulfilled after a fixed period. Criteria are not always quantifiable. An average score of 80% must be obtained on all criteria, of which 14 are mandatory. On all other criteria, a minimum score of 50% must be obtained. Criteria are precise and often quantified. Consists of mandatory and progress criteria which must be fulfilled after 1-4 years, and optional criteria (<15%). Criteria are not always quantifiable. Fairtrade has one standard for small farmers which covers most products. 3 For some products there are (additional) standards for other producer setups. Rainforest Alliance has one standard for all different crops (for some countries, these are supplemented with interpretation guides.) UTZ CERTIFIED has a standard for each crop. Social criteria Meets key ILO-standards, Meets key ILO-standards Meets key ILO-standards This table is the summary of a larger desk study of the three labels with regard to coffee (see farther, from p. 8). The summary focuses on the differences between the labels whereas the complete study reveals also the similarities between the labels. The study did not conduct any field work and is based on a review of the standards and website of the labels together with interviews with the different label organizations. Conclusions on the implementation of the standards are therefore not part of the scope of this study. ISEAL is an international non-profit organization that codifies best practice for the design and implementation of social and environmental standards initiatives. For some products (tea, flowers...) there is also a standard for hired labour and contract production. 3

4 (from the specifications) Environmental criteria (from the specifications) Economic criteria (from the specifications) supplemented with criteria for sick leave, maternity leave, social security and pensions. Extensive environmental criteria in production to ban GMO s and shifting cultivation. There is a minimum purchase price installed, that aims at covering the costs of sustainable production for the producer. If world market prices are higher, producers negotiate, but receive never less than the minimum price. supplemented with criteria about land-rights. Extensive environmental criteria in production to ban GMO s and shifting cultivation, supplemented with criteria regarding the protection of biodiversity and environment. There is no specified minimum price. Farmers must negotiate their own sales prices. Basic environmental criteria based upon integrated cultivation. There is no specified minimum price. Farmers must negotiate their own sales prices. If a better price than the market price is negotiated, this is called the UTZ PREMIUM. Fairtrade has a Fairtrade premium for each sold product which is to be used for the social, environmental and economic development of the producers/workers and their communities. On request, up to 60% of the value of the contract must be pre-financed. No criteria regarding the production process. No criteria regarding the production process. Extensive quality requirements for the various stages of the production process. Labelled coffee 100% of the product must be Fairtrade certified. 90% of the product must be certified.4 90% of the product must be certified. Supervision Announced annual inspection. With indication of the percentage (30-90%) products may wear the label. Announced annual inspection. Announced annual inspections supplemented with unannounced inspections of 10% of the certificate holders. Audited by one independent inspection organisation FLO- CERT separated from FLO. Several local independent inspection-organisations separated from the SANmembers of the umbrella Rainforest Alliance. Several independent inspection-organisations. 4 From July 1st 2010 it will be 100%. 4

5 FLO-CERT is ISO65 accredited. Not all ISO65 accredited. All ISO65 accredited. Traceability Inspection of the entire chain-of-custody Inspection of the entire chainof-custody Inspection of the entire chainof-custody Final verdict A reliable multistakeholder initiative with particular attention to economic and social criteria. A reliable multistakeholder initiative with particular attention to the environment. A reliable multistakeholder initiative with particular attention to the production process. The label ensures good working conditions, a limited impact on the environment and it offers a (financial) added value to the producer and his community. The label ensures good working conditions and actively contributes to a better environment and increased biodiversity. The label ensures good working conditions, a limited impact on the environment and it provides quality assurance regarding the production process. 5

6 Executive Summary The three labels each have different origins, resulting in very different approaches. Fairtrade aims to strengthen the small farmer so that he can choose his own future and way to develop. Rainforest Alliance is the result of a protection reflex for the (rain)forests and biodiversity. UTZ CERTIFIED arose from the concern to produce a quality product in a sustainable manner. This is reflected in the specifications. Fairtrade views everything from the producers point of view, Rainforest Alliance looks at the relationship between producer and environment and UTZ CERTIFIED pays particular attention to the end product and the production stages. It may come as no surprise that for coffee only UTZ CERTIFIED has criteria for the quality of the end product. Just as it s no surprise that Rainforest Alliance scores best on the environmental front followed by Fairtrade, while UTZ CERTIFIED is less strict on this front. All labels have high scores for social criteria and there are not many large difference between the labels. In contrast with the other labels, Fairtrade asks to follow the legislation on social security and pensions. Furthermore it has additional criteria regarding sick leave. Both UTZ CERTIFIED and Fairtrade do not have a regulation concerning holidays. One important difference is that only Rainforest Alliance has a clause regarding land rights. The biggest differences can be found in the economic criteria. Fairtrade scores significantly better on this front than the other labels. Fairtrade is the only label that provides a minimum price which aims at covering the costs for sustainable production completely. In addition, upon request of the producer, pre-financing of sales up to 60% of the contract value is also an option. Furthermore, there is also an established Fairtrade premium with which producers can invest in community projects. With UTZ CERTIFIED, farmers can negotiate their own premium, there is no established minimum for this. Rainforest Alliance has no premium, nor does it have a minimum price. In addition, Fairtrade also imposes criteria for the establishment and functioning of cooperative farmers organisations. Other labels have no criteria for this. It should be noted that Rainforest Alliance is the only label with which not all criteria are mandatory. In order to obtain the label, a total score of 80% must be reached on all criteria. For all non-mandatory criteria, a minimum score of 50% must be achieved. With Fairtrade, all criteria are mandatory. For some criteria (progress criteria) the producer has a fixed period to meet the criteria. In addition to mandatory criteria, UTZ CERTIFIED also has progress criteria which must be achieved within 1 to 4 years. In addition, UTZ CERTIFIED has a number of optional criteria (<15%). Fairtrade is the only label that requires all single ingredient consumer goods (of which coffee) to be 100% certified in order to be able to carry the label. For UTZ CERTIFIED and Rainforest Alliance, this is 90%. In fact, the latter even allows 30% certified production, as long as this is indicated on the label. These differences in criteria have to do with the different target groups. With its strong economic criteria, Fairtrade primarily addresses small farmers. UTZ CERTIFIED primarily addresses plantations, given its focus on production factors. Rainforest Alliance seeks nature preservation and highlights the area that can be certified without approaching specific target groups. For the preparation of specifications, the traceability of the products, the application procedure and the chain-of-custody there are hardly any differences between the labels. All systems aim to work along the lines of international standards for as far as possible. For both Fairtrade and Rainforest Alliance, an independent inspection organisation was separated from the original label organisation. AS a result, the applicants can only summon one inspection organisation. UTZ CERTIFIED works with several independent inspection organisations that were never tied to the original label organisation. This ensures more independence of the inspection organisation(s). All inspection organisations of UTZ CERTIFIED and Fairtrade (but not all of Rainforest Alliance) are ISO65 certified. ISO65 6

7 ensures independent and quality supervision of the specifications. The functioning of the inspection organisations fell outside the scope of this research. Leading to the conclusion that the three most common labels with regard to sustainable coffee meet the strictest standards (on paper) regarding inspection, traceability and transparency. Although all labels have strict standards regarding working conditions, there are great differences in other fields, thus enabling consumers to opt for a specific approach to agriculture. UTZ CERTIFIED stands for quality monitoring and a production oriented approach of coffee cultivation. Rainforest Alliance has extensive criteria with regard to nature preservation. Fairtrade chooses for an agriculture in which producers are the main focus. Fairtrade is further distinguished by its (financial) support for smaller farmers, providing them with market access and by making subsistence possible for them and their community. 7

8 Methodology To perform the study we initially used documents available on the websites of the different labels. For general information, history, application procedures... we examined the site of the label organization and / or the associated inspection-organizations. We supplemented with information gathered from interviews with the label- and inspection-organizations. As a basis for substantive comparison of the labels we exclusively used the following standards and related documents: Fairtrade Generic Fairtrade standards for Small Producers' Organizations. Version: Rainforest Alliance Sustainable Agriculture Standard April UTZ CERTIFIED UTZ CERTIFIED Good Inside Code of Conduct For Coffee. Version January These standards referred to several other documents available on the websites of the three labels, which were also consulted. For all the above documents, no specific source references were made. If external sources were consulted, the source is always specified. Given the differences between the labels and the accompanying standards, it was impossible to demarcate the chapters according to the logic of all three labels. The classification in the following chapters is on behalf of the author and is made according to his logic and priorities: general information standards social criteria environmental criteria economic criteria application process inspection In all chapters the same strategy is used. All documents are organized into tabular form according to relevant subcategories. At the end of each chapter a review is to be found. If certain information was not found in the literature at hand, the three different label organizations were contacted for more information. In addition, FLO-CERT was contacted with questions about the inspection of the Fairtrade label. Nearing the end of the research, the three label organizations were asked to provide input on the draft version of the final report. It was always asked to substantiate this information with evidence. If not, it will be noted that it was a verbal, non binding statement. The labels were only reviewed on the topics coffee and Small Producers Organizations. Due to time constraints other products and standards were not treated. Finally, this comparison does not make any claims about the checks carried out in the field. All information relating to the inspection was collected on the basis of literature and cannot be used to verify if the established procedures are actually followed. 8

9 General Information Comparative table Manager History Fairtrade Rainforest Alliance UTZ CERTIFIED Fairtrade Labelling Organisation (FLO) In 1964 during the UN Conference on Trade and Development (UNCTAD), the foundation for Fair Trade was laid: punctual financial aid must be replaced by a genuine trade policy that offers the southern producers an advantageous access to the northern markets. "Trade, not aid" became the slogan for Fair Trade. In 1988, with the aid of Dutch NGO Solidaridad and in cooperation with Mexican coffee farmers the first Fairtrade labeled coffee was brought on the market. In the years following the initiative was quickly replicated in several European and North American countries. In 1997, Fairtrade Labelling Organizations International (FLO) was founded. This organization brings together the various "Labelling Initiatives" and harmonizes the Fairtrade standards. In 2002 the international Fairtrade label was launched to raise the profile of Fairtrade and simplify the import / export of Fairtrade products. Sustainable Agriculture Network (SAN) Rainforest Alliance was founded in 1986 by a group of people with different backgrounds who were concerned of the disappearance of the rainforest. In the early days, the focus was therefore especially on environmental protection, specifically to protect the rainforest and on social criteria. This led to the standard "smartwood" for wood products (1989). Early 90s, the focus moved to sustainable tourism and the first agricultural product: bananas. Then came coffee, cocoa and ultimately a whole range of other agricultural products. These three categories (wood, tourism and agriculture) are the three main categories of the label. In 1991 the Conservation Agriculture Network was formed (later it becomes the Sustainable Agriculture Network). Their main tasks are to develop and monitor standards for agriculture and the promotion of sustainable agriculture in South America. UTZ CERTIFIED UTZ CERTIFIED arose last century (1997) from the collaboration between coffee producers in Guatemala (under whom Nick Bocklandt) and a Dutch company (Ahold). UTZ CERTIFIED is born from the need of coffee brands to find access to the sustainable coffee market as well and the demand from large coffee plantations to be able to be a certified producer of responsible coffee. In the beginning it was known as UTZ Kapeh. In 2007 the name change to UTZ CERTIFIED. Some plantations had become too large to participate in Fairtrade certification, but still wanted to market their sustainability. The idea behind the creation of the label was to create a recognition for responsibly produced coffee and allow brands to react to the ever increasing demand for this type of coffee. As a basis for drawing up the criteria, EUREPGAP 5 was used. In 2004, FLO splits into two independent organizations: FLO is responsible for developing standards, and FLO-CERT, which handles inspection and audits. SAN owns the various standards, while Rainforest Alliance owns the label. Since 2004 this initiative is supported by the Dutch NGO Solidaridad. 5 EUREPGAP was formerly known as GLOBALGAP. 9

10 Mission The mission of Max Havelaar (Fairtrade) is to unite disadvantaged producers and consumers, promote fair trade, strengthen the position of disadvantaged producers and by this allow them to have more control over their life and to fight poverty. The mission of the Rainforest Alliance is to protect the ecosystems. The main values are: clean water and clean air, respect for biodiversity, flora and fauna, reduction of waste and reducing the greenhouse effect. Rainforest Alliance also wants to create a sustainable livelihood for local communities dependent on land use. UTZ CERTIFIED wants to independently make the interaction between coffee producers and coffee roasters less complicated. UTZ CERTIFIED's mission is to develop a standard for environmentally and socially responsibly produced products. The focus is on the production of coffee and factors such as quality and environment play an important role. Vision Objectives FLO believes that trade can be a driving force for reducing global poverty and stimulating sustainable development. This is only possible with increased transparency and equal treatment of all participants. FLO believes further that if the efforts of farmers are supported they can take their lives into their own hands allowing them a view on a sustainable future. In FLO's vision collaboration between stakeholders is very important and they are constantly looking for partners who have a similar vision. The goal of Fairtrade is to create a world in which all producers can enjoy a life where they can reach their full potential and have full control over their own future. FLO believes that its vision is supported by consumers, businesses and the community and hopes to remodel international trade to create a fairer system with their support. Rainforest Alliance wants to reshape the current business model into a more sustainable one. Rainforest Alliance believes joint cooperation is the way towards success. The emphasis is on: supply of durable goods, equal access for all (both large and small producers), financial incentives for sustainable products, and support and regulation by the governments. Rainforest Alliance aims to protect biodiversity in an area as large as possible, reduce the ecological footprint of producers and integrate their operations into the environment (both in social and ecological terms). Rainforest Alliance wants to bring sustainably produced products to businesses in a global market where the demand for these products is increasing. UTZ CERTIFIED's vision is to produce quality coffee with particular attention to the professionalization of the farmers. In addition, the vision of UTZ CERTIFIED is aimed to set up a production that meets the expectations of all stakeholders (farmers, processors, distributors and consumers). UTZ CERTIFIED has the following goals: 1) The professionalization of farmers from the South by facilitating access to knowledge on professional agriculture. 2) Increase the credibility of the participating producers through the integration of the ILO conventions and the Global Good Agricultural Practices (GlobalGap) in the standard. 10

11 3) Add value to the coffee brands and allow them to communicate about responsibly produced coffee. Baseline Fairtrade criteria are primarily focused on strengthening the position of the small farmer and his community. Fairtrade has one standard for all products of small farmers, including coffee. Some products have additional standards. 6 Especially social and economic criteria are very detailed in the standards. Rainforest Alliance focuses mainly on the environmental criteria and approaches most issues from this perspective. On the second place comes the social dimension, addressing good working conditions and the local community. UTZ CERTIFIED focuses primarily on the final product. This leads to a less producer-oriented approach but a more Western approach to agriculture where quality plays an important role. There is attention for good working conditions and environment without emphasizing. Organization There is also attention for the environment, but without emphasizing it. FLO is part of FINE, an informal organization of the four major Fair Trade networks: FLO World Fair Trade Organization (WFTO) Network of European World Shops (NEWS) European Fair Trade Association (EFTA) FLO is supported by 24 members. 19 members represent the Labelling Initiatives. These are responsible for the promotion of Fairtrade and the granting of the label in the countries concerned. In Belgium, this is Max Havelaar. The Rainforest Alliance is the secretariat of the Sustainable Agriculture Network (SAN), a coalition of eight environmental organizations from South and Central America, recently supplemented by the Nature Conservation Foundation from India. UTZ CERTIFIED has no constituency but is an initiative of several organizations that are part of the board of directors. In addition, UTZ CERTIFIED is supported by grants from a range of organizations like Solidaridad, Stichting Doen, Hivos, Irish Aid,... Solidaridad is also part of the board of directors. There are 3 networks of producers. Each continent (Asia, Africa, South / Central America) has its own representative. Finally there are two associate members. These 6 For some products (tea, flowers, ) there is also a standard for hired labour and contract production. 11

12 Revenue (2008) Board of Directors are the Fairtrade organizations of Mexico and South Africa. FLO earns its revenues from: grants: 42% services 7 : 52% other: 6% The Board comprises the following representatives: 5 persons from the Labeling Initiatives 8 4 persons from the networks of producers (at least one member of each continent) 2 representatives of certified dealers. Rainforest Alliance earns its revenues from: grants: 30,9% membership: 9,1% services: 32,2% donations: 20,7% other: 8,1% There are no proportions defined for the composition of the board of directors. Members are asked to reside the board. Currently there are 27 members from various sectors of society. UTZ CERTIFIED earns revenue from: grants: 47% services: 42% other: 11% The Board of Directors consists of 5 to 7 members with a balance between producers and consumers. None of the board members represents an organization. They are appointed as experts in the interest of UTZ CERTIFIED. Target 2 external experts. Originally only small farmers but subsequently also made available to certain plantations (tea, fresh fruit, flowers...). Distribution by continent 9 Africa: 31% Central / Latin America: 57% Asia & Oceania: 12% No specific target group. Africa: 49% Central / Latin America: 41% Asia & Oceania: 8% Originally only for plantations, but afterwards made accessible to small farmers. Africa: 13% Central / Latin America 78% Asia & Oceania: 9% 7 Services includes the license fees. 8 There are 19 Labelling Initiatives who are responsible for the attribution of the licenses and the promotion of Fairtrade on there territory. For Belgium this is Max Havelaar Belgium. 9 Commerce équitable & durable: tant de labels et de systèmes de garantie... Comment s'y retrouver? Agence Belge de Développement

13 Products FLO has standards for the following products: Coffee Cocoa Tea Dried fruit Cotton flowers and plants Bananas Fresh fruit and vegetables Juices Spices Gold Honey Nuts Quinoa Rice Dry beans and vegetables Sugar wine grapes Sports Balls The label may also be used on products with multiple ingredients. Rainforest Alliance has standards in addition to wood and agricultural tourism for the following products: Coffee Cocoa Ferns and flowers Vegetables and fruits (bananas, citrus, pineapple, mango, avocado, guava, nuts,...) Tea 11 The label may also be used on products with multiple ingredients. UTZ CERTIFIED has standards for three different products: Coffee Cocoa Tea Statute Worldwide there are currently 746 Fairtrade certificates issued to producers for coffee. According to the Coffee barometer tons of coffee was sold with the Fairtrade label (figures 2008). Privately collectively controlled For coffee there were currently 649 licenses issued. This corresponded to more than 530,000 hectares. According to the Coffee barometer 62,000 tons of coffee were sold with the Rainforest Alliance label (2008 figures). Privately collectively controlled For coffee there were currently 310 licenses issued counting for 90,000 producers. According to the Coffee barometer tons of coffee were sold with the UTZ CERTIFIED label (figures 2008). Privately individually controlled Annual report Available on the website Available on the website Available on the website 10 Coffee barometer 2009, Tropical commodity coalition. 11 A complete list can be found on p17 of the following document: 13

14 Conclusions The three different labels are each of different origin resulting in a very different approach. Fairtrade is created under the principle "trade not aid" and is focused on strengthening the small farmer, enabling him to take his future and development in his own hands. Rainforest Alliance is the result of a reflex to protect the Amazon rainforest and biodiversity. UTZ CERTIFIED arose from the concern to produce high quality coffee in a responsible manner and thus has the product as starting point. These three different approaches (small farmer, environment and product quality) are represented strongly in the mission, vision and objectives of the label. Fairtrade s primary focus is to help strengthen and support small farmers allowing them market access to the economic system. The objective is to make farmers independent and autonomous. Fairtrade sees this as a good way to fight poverty. To achieve this goal cooperation between the various links in the chain and the consumer is expected. Only secondarily Fairtrade pays attention to environmental protection. Rainforest Alliance puts particular emphasis on protecting biodiversity and improving the situation of the local population. It seeks to achieve this by imposing production conditions combined with enhancing the knowledge of the producers. Rainforest Alliance, like Fairtrade, sees the value of good cooperation between different factors in order to achieve its objectives. Rainforest Alliance also emphasizes on educating consumers and they expect the government to install regulations to punish non-sustainable products and to favor sustainable products. UTZ CERTIFIED wants mainly to supply quality coffee and to allow large producers to respond to the demand for responsibly produced coffee. The starting point is the potential improvement that can be achieved for both consumers (good quality coffee) and businesses (capturing market share of renewable coffee). This leads to an approach where the final product is the objective and not the social or environmental aspects, like the other labels. However in their standards there has been paid attention to environmental and social criteria. These different approaches are related to the focus on different target groups. Fairtrade focuses primarily on small farmers (but allows also large plantations). UTZ CERTIFIED has a reverse strategy (focusing on plantations but also giving access for small farmers). Rainforest Alliance works primarily on the basis of area that can be certified and therefore has no specific target. The product range for which the standards have been developed also indicates the difference in vision between the labels. Rainforest Alliance is primarily concerned with protecting biodiversity. This allows certification of all possible agricultural products. The focus is not on product but on the number of hectares that can be protected. UTZ CERTIFIED is particularly keen on products that are cultivated on a large scale, such as coffee, tea and cocoa. Fairtrade puts more focus on products that can be grown by small farmers. All labels are mostly funded with government grants and provision of services to members. Rainforest Alliance also gets funds from donations. 14

15 Standards All standards are available on the internet and are regularly updated. The standards meet all the criteria / requirements of ISEAL (International Social and Environmental Accreditation and Labeling Alliance). ISEAL is an international non-profit organization, that has established a code of good practices for the design and implementation of social and environmental criteria in the development of standards. Comparative table Minimum requirements Labeled Coffee Composition of the committee that draws up the standards. Fairtrade Rainforest Alliance UTZ CERTIFIED Several criteria must be met at the start of the certification. The other criteria are optional in the initial phase (progress requirements). They are to be met later, after a fixed period. 100% of the product must be certified. Between 5 and 11 members (always odd) with an equal number of representatives of users and suppliers. Suppliers are represented by a producer and a representative of the workers (by preference linked to Trade Unions). If several producers are represented they should come from different continents. Users are represented by The standard includes 14 mandatory criteria that must be met in any case. In addition there are criteria of which at least 50% must be met. In total a score of at least 80% should be met for all criteria. This score is calculated by granting the criteria one the following simplified scores: 100% in order: 100% 50-99% in order: 50% 0-49% in order: 0% If the percentage (30-90%) is specified products are allowed to carry the label. Without specification 90% of the product has to be certified representatives including 4 of SAN (Sustainable Action Network). The other eight members must come from three groups: 1. experts 2. NGOs 3. producers and suppliers The three groups should be represented in equal numbers and comprise at least 60% of the total group members. The standard for coffee consists of a set of mandatory criteria and criteria that should be fulfilled after 1 to 4 years. In addition there are a limited number of optional criteria to be met. This makes the standard progressively more strict during the first 4 years. In the first years there are 97 mandatory checkpoints, and 77 optional checkpoints remaining. After four years, the plantation has to meet 152 mandatory checkpoints and 22 optional checkpoints remain. 90% of the product has to be certified. Between 6 and 12 representatives. Suppliers and manufacturers have two seats. Representatives of NGOs and experts have also two seats. There is also one seat for an expert in sustainability or certification. Finally, there are one or two seats for non-voting 12 From the 1 of July 2010 this becomes 100%. 15

16 Specific standards Accessibility Definitions of the criteria Traceability one person of the Labelling Initiatives and one of the traders. If more traders are represented, there must be a person from the ATO or Alternative Trade Organizations (eg Oxfam Fairtrade) present. In addition independent experts are admitted. There is one standard for "small producers" which is valid for almost all products.13 Additionally there is a separate standard for each product group. For some products such as tea, flowers and fresh fruits there are also standards for "Hired labor" and "contract production". These standards do not apply to coffee. All producers may apply for the label. The criteria in the standards are not always quantifiable and leave room for interpretation. A system of traceability is mandatory for Fairtrade. The operators have the freedom to choose a traceability system. Representatives from Asia, Africa, and South / Central America must represent more than 50% of the group members. There is one standard for all products. The standard is supplemented by local 'interpretation guides. All producers may apply for the label. The criteria are well defined and are often quantified. There is relatively little room for interpretation. Rainforest Alliance has an online system for tracking the chain of coffee products. members of UTZ CERTIFIED. No category should be represented for more than 50%. 30% of the members must be from countries in which UTZ CERTIFIED is active. At least two continents (Asia, Africa or South / Central America) should be represented. For each product group there is one standard. All producers may apply for the label. The criteria in the standards are not always quantifiable and leave room for interpretation. UTZ CERTIFIED has an online system for tracking the chain of coffee products. This system has to make sure every pack of coffee can be traced back to the certification holder from which it comes. Labeled products must be processed separately from non-labeled products. This system makes sure every pack of coffee can be traced back to the certification holder from which it comes. Labeled products must be processed separately from non-labeled products. Rainforest Alliance provides training for workers to ensure This system makes sure every pack of coffee can be traced back to the certification holder from which it comes. Labeled products must be processed separately from non-labeled products. There must be kept a sample of each load for 13 Small producers are cooperative organizations which consist for at least 50% of small farmers (who deliver 50% of the total production). There must be clear rules for membership and all members must have a vote in the general assembly. 16

17 the proper functioning of the chain-of-custody. one year so that checks can be performed in case of complaints. Fairtrade requires an audit of the various processors and distributors of certified products. Rainforest Alliance requires an audit of the various processors and distributors of certified products. 14 UTZ CERTIFIED requires an audit of the various processors and distributors of certified products. Availability All standards are fully accessible on the website. The standard is fully accessible on the website. All standards are fully accessible on the website. Conclusions All standards meet the criteria / requirements of ISEAL and the composition of the committee that draws up standards contains sufficient guarantees for a broad stakeholder participation in all three. All standards are available on the Internet and accessible to all producers. Besides these similarities, there are some major differences. Rainforest Alliance has a standard for all products with the best-defined criteria which leave little room for interpretation. Fairtrade and UTZ CERTIFIED have a standard for each product line with less quantifiable criteria. The last two sometimes set stricter application requirements. Fairtrade has a standard of which all criteria must be met, supplemented by a set of progress criteria to be realized after a certain period. UTZ CERTIFIED has a similar system supplemented by optional criteria which total to less than 15% of the total number of criteria to be met. Rainforest Alliance has only a limited number of mandatory criteria. In addition, a score of 80% for the additional criteria has to be met, with a minimum score of 50% for each of the additional criteria. One thing interesting about Fairtrade is the use of separate standards for small producers and "hired labor. The substantive differences in these standards are not very strong, but it allows a way to approach the differences between small producers and production in plantations. In this study, only the standards for small producers are considered. Fairtrade is the only label which requires single ingredient products to be 100% certified in order to have the label. With UTZ CERTIFIED and Rainforest Alliance this is 90%. In the last one it can even go to only 30% certified production as long as indicated on the product. All labels have a system for traceability of their products and make audits of the chain-of-custody mandatory. 14 Oral communication. 17

18 Social criteria Comparative table Fairtrade Rainforest Alliance UTZ CERTIFIED Discrimination Extended criteria. Extended criteria. Discrimination of handicapped is not mentioned. Child labour < 15 years Wife Freedom of Union Sick leave/ Social security/ Retirement/ Maternity leave Permitted under very strict conditions. The wife has the right to work at another place. Present and combined with support for the creation of unions. There is a system of sick pay. Other regulations must comply with local legislation or Union agreements. Subcontractors Preference for permanent staff. Permitted under very strict conditions. Present and combined with support for the creation of unions. Preference for permanent staff. Leave At least 12 days of paid leave each year. Extended criteria. Prohibited. Present. Maternity leave must comply with local legislation. Safety Wide focus. Primary focus on pesticides. Wide focus. Safety clothing Should be provided. Should be provided. Should be used. Training workers and their families Medical Support Social Development Training is provided in function of the work to be undertaken and on the basic principles of Fairtrade. All courses must be paid as a normal working day. There is no training for the families of the workers. Employees are entitled to free medical assistance. The needs of people are the primary focus. There are courses provided that focus on environment and social management. The courses are specified to the work to be undertaken. All courses must be paid as a normal working day. Training is provided for workers and their families. They focus mainly on general hygiene and environmental protection. Employees and their families are entitled to medical assistance. There are medical checks provided for employees and their families. Focus on helping people. Land rights Land rights must be proven, if this is not possible it has to be proved that the land is free from conflict. There are courses provided that focus on safety during work. There is also a literacy program provided for employees and their families. Employees and their families are entitled to medical assistance. 18

19 Conclusions For the following aspects there are few differences between the labels: forced labor, child labor <15, the possibility of collective bargaining, wages, overtime, education for children of employees, housing, hygiene. There are relatively few major differences between the three labels. However, unlike others, the Fairtrade label enforces the local legislation for social security and pensions, and provide criteria for sick leave. UTZ CERTIFIED and Fairtrade have no standards regarding vacation. Sometimes there is a different approach between the labels. UTZ CERTIFIED calls for protective clothing use, while the other labels have clothing available. Rainforest Alliance has mandatory medical checks of employees. UTZ CERTIFIED and Rainforest Alliance provide training and medical assistance for the families of employees as well. A final important difference is that Rainforest Alliance has a clause about land rights. This is not found in the other labels. 19

20 Environmental criteria Comparative table Pesticides Material used (eg. sprinkler systems...) Erosion control Fairtrade Rainforest Alliance UTZ CERTIFIED Uses the WTO (World Health Organization) list and views the problem from a health standpoint. Uses Western standards and requires a special scenario for the products on the WHO list. There are procedures in place for proper use and the calibration of the material. Uses Western standards and views the problem from an economic standpoint. The material used with pesticides has to be in good shape and calibrated. Extended criteria. Extended criteria. Only mentioned briefly. Fertilizers Extended criteria for the preservation and application of fertilizers. GMO's Using fire to clear land Waste Prohibited in the whole chain. Only in specific circumstances. The cooperative must own and implement a comprehensive waste management plan. Emphasizes on composting. Prohibited in production. Only in specific circumstances. The farm must have and implement a comprehensive waste management plan. Allowed if rules comply with local legislation. No waste management plan. However, there is emphasis on composting and recycling products. No training for farmers/employees. Employees regularly receive training on the prevention of waste. No training for employees. Water usage Fairtrade pays attention to efficient water use, avoiding water pollution and the depletion of groundwater. Rainforest Alliance pays attention to efficient water use, avoiding water pollution and the depletion of groundwater. UTZ CERTIFIED pays attention to efficient water use and avoid water pollution. It doesn t pay attention to the depletion of groundwater. Land usage Primary forests should not be used. Primary forests should not be used and this retrospectively for five years before applying for certification. Natural15 forests may not be used. Secondary forests may be chopped if the loss is compensated. Ecosystem protection on the farms Protection and restoration of parts of the farm to original condition. Observance of a buffer between production If possible, unused land must be restored into original condition. 15 The definition of natural forest is not always clear. In some definitions it is used only for primary forests, while other definitions use the term for primary forest as well as secondary forest which have not been planted. 20

21 Harvesting of non-cultivated crops additional protection of wildlife Only possible if there is no damage to the environment. areas and ecological valuable areas. Only possible if no damage to the environment. An inventory of the wildlife present on the farm must be drawn up. These species and their habitat must be protected. Energy use Preparation of an energy efficiency plan and reduction of dependency on fossil fuels (2011). 16 Greenhouse gases The farm must reduce its greenhouse gas emissions and use technologies to maximize carbon sequestration in soil and plants to maximize (2011). 17 Criteria related to energy efficiency. Conclusions For the following aspects there are only a few differences between the labels: pesticide monitoring, signaling during and after the use of pesticides in the fields, keeping registers concerning their use, training on pesticide use, avoidance of resistance to pesticides, soil structure, fertility and fertilizer use and protection of protected species. In general it can be concluded that UTZ CERTIFIED pays least attention to environmental criteria. They have no prohibition on the use of GMOs and use of fire to clean land is also permitted. In addition, the criteria for erosion control and waste management are less stringent, and UTZ CERTIFIED has no criteria to avoid the depletion of groundwater tables. UTZ CERTIFIED has a different approach for certain categories. For example, they mainly focus on operating conditions (state of the material, storage,...) and less for environmental protection. When it comes to the use of pesticides, there are two approaches. Fairtrade views this from a health point of view (WHO list). UTZ CERTIFIED looks at it from a Western legal position. Rainforest Alliance combines both views and thus is probably the strictest. Rainforest Alliance is clearly the strictest label regarding environmental criteria. They have additional focus on wildlife, energy, global warming, the ban on use of secondary forests and attention to the restoration of ecosystems. These criteria are not found with Fairtrade and UTZ CERTIFIED (except for energy use and the use of secondary forests). 16 This criteria is applicable by This criteria is applicable by

22 Economic criteria Comparative table Minimum price Fairtrade Rainforest Alliance UTZ CERTIFIED Fairtrade guarantees a minimum price for products. This minimum price is agreed in consultation with stakeholders and is aimed to cover the costs of sustainable production for the producer (including the costs of the audits). Premium If the world market price is higher, producers negotiate their selling price, but they never receive less than the minimum. The minimum price is adjusted annually and can be found on the website of FLO. Fairtrade gives a Fairtrade premium per sold product. This premium must be used for social, environmental and economic development of the producers community. For the use of Fairtrade premium a plan is drawn up that has to be approved on the general meeting of the cooperative. Farmers have to negotiate with the buyers about bonuses themselves. Farmers have to negotiate with the buyers about bonuses themselves. Analysis of sales performance of UTZ CERTIFIED shows that buyers pay more than the normal World market price for certified coffee. This is amongst others dependent on the quality of the coffee. Pre-financing A system is provided whereby up to 60% of the value of the contract must be pre-financed if requested by the producer. This negotiated premium is known as an UTZ premium and has a variable value. Quality Comprehensive criteria on various stages in the processing. Management Emphasis on corporate Emphasis on social and Emphasis on risk 22

23 plan social responsibility. environmental aspects. assessment. Communication about the label Annual reports Operation of the cooperative A development plan has to be drawn up (also regarding the use of the premium) to promote the social, environmental and economic development of the cooperative and its members. Communication and training on the meaning of the label must be provided. The publication of an annual report is mandatory. There should be clear rules for membership and all members have the right to vote in the General Assembly. The organization may not allow any form of discrimination and a program is installed to improve the social and economic position of minorities. There is an annual general meeting (which approves the annual report and accounts) and an elected executive board. Training must also be provided so that members can take part in the administration of the organization. The plan should include a short, medium and long term vision. It is necessary to provide procedures for implementation and monitoring of the plan. Communication and training on the meaning of the label must be provided. There are no further details given. 23

24 Conclusions In terms of economic criteria, there are big differences between the three labels. Fairtrade is the only label that provides a minimum price, completely covering the costs of sustainable production (including certification). In addition, upon request of the producer there is a possibility to get up to 60% of the contract value pre-financed. Finally, there is also an established Fairtrade premium with which producers can invest in community projects. Rainforest Alliance has no premium nor a minimum price. UTZ CERTIFIED has no fixed premium, but from analysis of their sales results it seems that participating producers receive a higher price for their products. The farmers are responsible for negotiating this option. Regarding the management system there are also differences. UTZ CERTIFIED focuses on risk assessment (even in training). Rainforest Alliance focuses on environmental and social management in the short, medium and long-term. Fairtrade enforces a development plan to be drawn up (also regarding the use of the bonus) to promote the social, environmental and economic development of the cooperative and its members. For small producers, Fairtrade submits a set of criteria for the operation of the cooperatives in terms of transparency and discrimination among others. The other labels have no relevant criteria for this. When it comes to control on quality only UTZ CERTIFIED has criteria. These requirements regard the entire chain, from harvesting to processing and transportation. 24

25 Application process Comparative table Procedure Fairtrade Rainforest Alliance UTZ CERTIFIED An application for certification shall be submitted to the control body (FLO-CERT). Then an application form will be sent to the applicant. This should be returned completed. FLO- CERT then verifies if the application falls under the scope of Fairtrade. This can also be checked online. Then an application package is sent to the applicant. This includes material under which a detailed questionnaire, information about the cost,... Farmers apply to their local SAN secretariat. The applicant will then receive an information package with a questionnaire. He can then decide to proceed with certification. For this, he has to contact again the local SAN secretariat. 18 An application for certification shall be submitted to UTZ CERTIFIED. Then the applicant prepares for an announced audit. For this, there is a self-audit form available. When the applicant has finished the preparation, he has to contact an approved external auditor to request an audit. If the audit is positive, the license is granted. Cost for producer These documents must be completed and sent back to FLO-CERT. Then the applicant prepares for an announced audit. Documents and explanation will be provided in due time by FLO-CERT. When the applicant has completed the preparations, an audit is performed. If the audit is positive, the license is granted. Producer organizations pay a fixed cost of 500 for assistance during the application process. Afterwards, the applicant will be charged for certification by FLO-CERT. This is depending on the size of the producers organization. There is a daily charge of 400 ( 350 for hired labor). Producers pay a price for the certification of plantations. There is also an additional contribution per hectare of certified area. For coffee this is 3.88 ($ 5) per hectare. 19 The audits are paid directly by producers and depend on the chosen auditor Oral communication. 19 Certification manuel Rainforest Alliance Certified. Presentation by Adelaide Webster. 20 Oral communication. 25