Fairtrade certified cotton How do I get the Fairtrade Certification Mark on a cotton product and what difference will it make?
Photography: Kennet Havgaard, Morten Holtum, Simon Rawles and Stefan Lechner.
Do you want to make a difference? In this brochure, you can find out how to acquire the Fairtrade Certification Mark for a product made of cotton and what it entails to be part of Fairtrade. Contents Fairtrade certified cotton...4 What is Fairtrade? What is Fairtrade certified cotton? How to get started...6 Certification Purchase License agreement Life, earth and cotton...10 Fairtrade and the world around us...12 Fairtrade and organics Fairtrade and the supply chain Fairtrade and CSR The organization...14 Contact information...14 3
Fairtrade certified cotton 4
What is Fairtrade? Fairtrade is an alternative approach to conventional trade and is based on a partnership between producers and consumers. Fairtrade offers producers in developing countries a better deal and improved terms of trade. This allows them the opportunity to improve their lives and plan for their future. Fairtrade labelling was created in the Netherlands in the late 1980s. The Max Havelaar Foundation launched the first Fairtrade consumer label in 1988 on coffee sourced from Mexico. The labelling initiatives have different names in different countries but are all members of Fairtrade Labelling Organizations International (FLO), founded in 1997 to establish worldwide standards and certification. The international name is Fairtrade. All these labelling initiatives are non-profit and are responsible for promoting the awareness of Fairtrade and the licensing of products. The Certification Mark guarantees that international Fairtrade standards have been met. your customers: Buying this product contributes to fighting poverty and to sustainable development for some of the world s most marginalized farmers. FLO-CERT, an independent international certification company, certifies the trade and monitors the cotton all the way from the farmer s field to the ready-made product. The system also ensures that cotton farmers live up to Fairtrade standards of decent working conditions, democratic development and environmental protection. Liaison Officers in each country offer advice and training to farmers, helping them comply with Fairtrade standards and seize new market opportunities. What is Fairtrade certified cotton? Cotton is a vital fibre crop for the global textile industry and also plays a key role in the social and economic development of developing countries. An estimated 100 million households are involved in cotton production in 70 countries around the world. Yet world market prices on cotton have been unstable for a long period of time and are plunging downward: In 2002 the price for cotton hit US$ 0.92 per kilo the lowest level in 30 years. The highly subsidized cotton industry in the United States, the European Union (EU), China, and other producing countries adds further pressure to prices. In many countries where cotton is the main source of income, the direct consequence of these falling prices is poverty. Clothes and fabrics made from Fairtrade certified cotton guarantee that the farmers receive a minimum price for their cotton which always covers the costs of sustainable production. In addition, the farmers receive a premium for social and economic investments such as education and health services, processing equipment and loans to members of the cotton cooperatives. Furthermore, they receive an even higher price if their cotton is organic. With Fairtrade certified cotton in clothing and fabrics you send a clear message to 5
How to get started 6
The following is an example of how a textile company can develop products made from Fairtrade certified cotton. A company wants to sell clothes made from Fairtrade certified cotton and is therefore interested in using cotton from certified farmers in Africa, Asia or South America. After an enquiry to the national labelling initiative, the company is provided with a list of Fairtrade approved suppliers. The company finds a suitable supplier in Bangladesh that can manufacture the product. The following three requirements must be fulfilled: 1: Certification 2: Purchase of Fairtrade certified cotton 3: License to the Fairtrade Certification Mark 1. Certification One of the most important responsibilities of the labelling initiative is to ensure that production and trade have taken place according to international Fairtrade standards and that the cotton can be traced from the farmer s field all the way to the ready-made product. All companies that manufacture the cotton must therefore be approved by FLO-CERT. For example, if the clothes are sewn and packaged in Bangladesh. The supplier in Bangladesh must therefore be approved by FLO-CERT. Fairtrade standards only apply for cotton as a raw material and not for the entire supply chain, but all parties involved in the manufacturing of the cotton product must demonstrate efforts to comply with relevant ILO (International Labour Organization) conventions. In the above example, the company found a supplier in Bangladesh that was already approved by FLO-CERT to process the Fairtrade certified cotton, but you may also choose to assist your existing suppliers in obtaining the Fairtrade approval and continue your cooperation with them. The certification means that: For all companies manufacturing the cotton FLO-CERT requires full documentation and physical traceability of all Fairtrade certified cotton. This means that Fairtrade certified cotton must be stored and manufactured separately from other cotton and that there is a system in place to track all Fairtrade transactions. Documentation of decent working conditions at the factories must exist. For example, the factory needs an SA 8000 certification, a WFTO (World Fair Trade Organization) membership certificate, participation in the Fair Wear Foundation initiative or a social audit conducted against the ETI (Ethical Trading Initiative) base code or equivalent. There are total six different social compliance indicators and one of them must be fulfilled. All companies manufacturing cotton will, after an application, be audited by FLO-CERT. After the audit, the company receives an approval that is valid for three years. Continued compliance will be monitored every year. The application process can take up to two months if the company is compliant and the application fee is 525 Euros. FLO-CERT will also charge an annual trade certification fee of maximum 2730 Euros. FLO-CERT is ISO 65 accredited. ISO 65 is the leading, internationally recognized quality norm for bodies operating a product certification system. FLO-CERT follows the ISO 65 norm in all its certification operations. Concretely, ISO 65 accreditation guarantees that: A quality management system is in place Transparency in all processes Independence in the certification decision making FLO-CERT is checked by an independent third party to ensure compliance with ISO 65 rules. 7
2. Purchase Fairtrade ensures that farmers who have grown the cotton are guaranteed a minimum price and the premium. That is why the cotton in your products should be purchased from Fairtrade certified cotton producers in Africa, South America or Asia. 3. License agreement A licensee is a company that has obtained a license to use the Fairtrade cotton Certification Mark on a ready-made product. Becoming a licensee entails: Signing a license agreement with your national labelling initiative Following the international guidelines regarding the use and marketing of the Certification Mark Reporting sales to FLO-CERT on a quarterly basis Permitting FLO-CERT to conduct inspection visits Paying a license fee on the wholesale value of the sales of your products. In return, the licensee is given the right to use the Certification Mark for Fairtrade cotton on the product. Where does the license fee go? The license fee helps to finance certification, standards development, support and training of the cotton producers. Another part of the license fee is used for the overall marketing of certified products. This includes campaign activities, websites, newsletters, public relations and much more. 8
It is not the finished fabric or a manufactured piece of clothing, but cotton itself that is Fairtrade certified. To obtain the Fairtrade certification for cotton, at least 50 % of the end product must consist of cotton. At present, Fairtrade certified cotton comes from India, Burkina Faso, Cameroon, Mali, Senegal, Brazil, Egypt, Peru and Kyrgyzstan. 9
Life, earth and cotton Bintou Dembele and her husband have seven children. They live in Djidian, Kita region in Mali. Bintou is working as an administrator within the cotton cooperative, which includes tasks such as organizing its meetings and being in charge of the maintenance of its buildings. There are around 100 members of the cooperative. Before Fairtrade, it was a struggle to feed our children, but now we are comfortable in the knowledge that we have enough to eat. This has been the most important change for my family. I can also afford to send all of my children to school and to buy them the clothes they need, says Bintou Dembele. The premium from Fairtrade sales has been of great use to the cooperative. They chose to build a storage centre with the first premium. The village had limited storage for grain and cereal. They have extended the building and they plan to employ an administrator to run the centre with future premium money. Bintou says that Fairtrade has brought lots of changes to women s lives. In the past, men would take all decisions to do with the village, without consulting their wives. They would tell the women what to do. Now, women are represented in the cooperative. We have a voice and we are listened to. We discuss with men any development projects that will affect the village. We have input and this has had a huge difference on our lives. Furthermore, profits now go directly to women farmers too, and not to their husbands. We are managing our own money. This is changing the status of women generally in the community. I hope all my children will go on to finish their studies, go on to university and eventually work for the government. They have more ambition now. 10
Khima Rinchhod lives on his 3½ acres of farm land with his wife Jamnaben, their son Sujubhai and their daughters Gitaben and Nariben. They live in the Kutch region in the state of Gujarat in Western India. Khima has grown cotton all of his life, just as his father did before him. He also grows beans and millet, which they use for flour to bake the family s chapatti bread. When there is some left over, Khima sells it on the local market. Cultivating cotton is hard work. Every year Khima digs channels to water the 2½ acres of cotton. The harvest takes eight days and Khima s neighbours help him during this period. They all start at six in the morning and finish at four in the afternoon, only stopping for a lunch break. Khima used to sell his cotton locally. The buyer would always find a reason to offer us a poor price, says Khima. Now Khima sells the entire harvest through the cooperative Agrocel, which is a Fairtrade certified cooperative. Through the cooperative, he receives a higher, stable price and with support and training from the FLO Liaison Officers he has converted to organic farming. One advantage of organic farming is that the ability of the soil to retain water is improved. Khima and his wife managed to give their son an education, but their daughters have not been as fortunate. The local school is only for students below the age of 14 and the family cannot afford to send the girls to a boarding school. However, Khima is optimistic about the future now that the cooperative sells Fairtrade certified cotton. We will benefit from this financially, but what s more important is that we are given the opportunity to improve the local education for the children here in the community. The family lives in a mud-built house with a thatched roof, but they hope to be able to tile the roof one day. When we earn more money we can increase the production by buying more organic fertilizers and in this manner improve the soil. Then we will earn enough to improve our house, he explains. Purchasing cotton The company buying the cotton directly from the farmers must ensure that the minimum price and premium are paid. Usually it s the local ginner buying the Fairtrade cotton. The ginner is the operator who cleans and presses the cotton. The ginner must pay at least the minimum price, the premium and a higher price if the cotton is organic. On a yearly basis, the ginner must present documentation for having paid the price indicated in the product specific standards for cotton. This is controlled by FLO-CERT. The ginner must also be prepared to pre-finance up to 60 % of the order value. 11
Fairtrade and the world around us 12
Fairtrade and organics Fairtrade certified cotton can be organic, but is not necessarily organic. This is because Fairtrade wants to support the most marginalized farmers who cannot always afford to convert to organic farming or who lack knowledge about organic agriculture. However, Fairtrade allows for a step-by-step approach to environmental protection. Fairtrade standards are based on international environmental regulations and follow the international recommendations and laws outlined in the United Nations Environment Programme, WHO-banned substances and Pesticides Action Network s Dirty Dozen list. The use of allowed chemical substances is strictly controlled and gradual reduction of chemical substances and substitution for organic manure is encouraged. The farmers also have to make their own environmental development plans and show progression. Fairtrade standards also guarantee them a higher minimum price for organic cotton and the premium money is often used for organic conversion and certification. Also, the use of GMO is strictly forbidden. In addition, almost all Fairtrade certified cotton is rain fed. Fairtrade and the supply chain The Fairtrade certification of cotton guarantees that farmers who have grown the cotton have been given a better deal, but the manufacturing process of the cotton from the farmer s fields to the ready-made product is not yet guaranteed in the same way. There are many specialized companies involved in the manufacturing of a cotton product and many challenges in the textile industry that need to be overcome before an international agreement can guarantee that the factory workers have worked under decent conditions and have been given a fair payment for their labour. For the same reasons, the Certification Mark for Fairtrade certified cotton differs a little from the ordinary Fairtrade Certification Mark. The Certification Mark for cotton consists of the Fairtrade Mark with a sub text specifying that only the cotton is Fairtrade certified. However, Fairtrade standards already require that all companies manufacturing the cotton must submit documentation of decent working conditions. By using Fairtrade certified cotton in your products you are giving the farmers a chance to compete on the world market where they, at the very beginning of a long textile supply chain, can gain a much stronger position compared to conventional cotton trade. Fairtrade and CSR Corporate Social Responsibility can be defined as the company s work to integrate social and environmental considerations in its core business and in the interaction with the stakeholders. (Peter Lund-Thomsen, associate professor, PhD. CBS). A company s involvement in Fairtrade is unquestionably a CSR activity, especially if it is related to its core business. The Fairtrade system not only gives a company the opportunity to reduce the risk connected with the complex supply chains of global trade, it also publicly demonstrates that it takes social and environmental considerations seriously. At the same time, involvement in Fairtrade can contribute to developing the identity of a company, which in turn can generate goodwill and employee satisfaction. In addition, expansion opportunities can come as a result of increased demand on ethically certified products. In short, involvement in Fairtrade offers a competitive advantage. 13