FLO International Fairtrade Labelling Organizations International FLO Shaping

FLO International Fairtrade Labelling Organizations International (FLO) Shaping Global Partnerships Forum on Global Citizenship YMCA Asia Youth Center, Tokyo Japan 18 th October 2008 Kaori NAKAJIMA, Fairtrade Label Japan

FLO International Why Fair Trade? Not all producers benefit equally from the advantages of international global trade à No access to markets and price information à Dependance on middlemen, No negotiation power à Not abel to get fair price à For workers, low wages, unsafe working conditions, no freedom to join a union Fair Trade or Alternative Trade to the existing “Unfair” International Trade Fair Trade addresses the injustices of conventional trade

The Arabica Coffee Market 1989 -2006 FLO International Comparison of Fairtrade and New York Exchange prices

FLO International What is Fair Trade? the basic principles (FINE definition) “a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, disadvantaged producers and workers – especially in the South. ” Central values: partnership, dialogue, transparency, accountability, respect, (gender-)equity, sustainability

FLO International’s mission To enable the sustainable development and empowerment of disadvantaged producers & workers in developing countries through Fairtrade labelling by: • setting international Fairtrade standards • certifying production and trade according to these Fairtrade standards • facilitating producers’ compliance with the standards, and facilitating producers’ access to the preferential fairtrade market • promoting the case for trade justice

FLO International Aims of Fairtrade Aim: Sustainable development through trade, for disadvantaged producers in developing countries Fairtrade Labelling combats poverty through trade. Means: Market access under good trading conditions It is a market-based approach to supporting development and empowering producers most disadvantaged by unequal trade conditions, primarily in the Global South. Instruments: - Standards for producers and importing traders – mutual effort for sustainability - Certification by FLO-CERT – certification mark for the consumer / end user

FLO International History of Labelling Initiatives and FLO • First Fairtrade label, called Max Havelaar, was initiated in 1988 in the Netherlands. • After this first initiative, other national Fairtrade labellers soon followed, some using the same name, other introducing new names like Trans. Fair or the Fairtrade Foundation. • In 1997, FLO International was established, as a sectretariat for all National Labelling Initiatives. At first it was seen as an internal service office for all member organizations.

FLO International History of Labelling Initiatives and FLO II • Since 2001: Harmonization of Standards, certification procedures and trade certification • On September 2003, FLO transformed its former certification department into a separate legal entity: FLOCERT Gmb. H (Ltd. ). The main reasons for the foundation of FLO-CERT were to make Fairtrade certification operations more transparent, to fully comply with ISO 65 (the worldwide quality standard for certification organizations) and to limit the liability of FLO e. V.

FLOOrganizations International Fairtrade Labelling (FLO) International FAIRTRADE LABELLING ORGANIZATIONS INTERNATIONAL (FLO) was established in 1997, and is an association of 20 national labelling initiatives that promote and market the Fairtrade CM in their countries. FLO International is the worldwide standard setting and certification body for labelled Fairtrade. It regularly inspects and certifies producer organizations in more than 50 countries in Africa, Asia and Latin America, encompassing approximately 1. 5 million families and workers

FLO International is made up of two organizations 1) FLO International e. V. is a publicly recognized nonprofit multi-stakeholder association involving FLO’s 20 member organizations (or Labelling Initiatives), producer organizations, trader and external experts. It develops and reviews Standards and assists producers in gaining and maintaining certification in order to capitalize on market opportunities. 2) FLO-CERT Gmb. H is a limited company that coordinates all tasks and processes all information related to the inspection and certification of producers and of trade. Operating independently from any other interests, it follows the international ISO Standard for Certification Bodies (ISO 65).

FLO International FLO’s Structure Labelling Initiatives (LI) Producer Networks (20 LIs・ 21 Countries) 3 continents - Latin America, Africa and Asia FLO International (Association) ・Setting Fairtrade Standards ・Producer Support FLO-CERT (Limited Company) • Producer Certification • Trader Certification

How Fairtrade FLO works. International Fairtrade is best described from three points of view: • Producer side • Market side • Four elements of infrastructure and governance

How Fairtrade FLO works. International – the producer side • Fairtrade standards, which aim to encourage co-operation and collaboration • Producers apply for certification • Producers are certified by FLO-CERT, a separate certification body • Certified producers are guaranteed a price that covers • – minimum cost of sustainable production, – a “Fairtrade Premium“ for social, environmental or capacity projects Producers receive no guarantee on levels of sales

How Fairtrade FLO works. International – the market side • 20 nationally-based labelling initiatives license the Fairtrade label to manufacturers and retailers • The costs are absorbed by the licensee or passed on to the consumer • Trade certification – conducted by FLO-CERT or labelling initiatives – ensures product and supply chain integrity

FLOof. International The four elements Fairtrade Labelling

FLOof. International The four elements Fairtrade Labelling FLO International e. V. • Standards development • Producer support • International policy and advocacy

FLOof. International The four elements Fairtrade Labelling FLO International e. V. • Standards development • Producer support • International policy and advocacy FLO-CERT Gmb. H • Producer certification • Trade audit

FLOof. International The four elements Fairtrade Labelling FLO International e. V. • Standards development • Producer support • International policy and advocacy FLO-CERT Gmb. H • Producer certification • Trade certification CLAC (Latin America) Network Asian Producers African Fairtrade Network • Awareness raising in the south • Consolidating producer policy, and strategy • Developing partnerships and capacity support

FLOof. International The four elements Fairtrade Labelling FLO International • Standards development • Producer support • International policy and advocacy FLO-CERT • Producer certification • Trade certification Three Producer Networks: Central & Latin America Asia Africa 20 Labelling Initiatives • Awareness raising in the south • Consolidating producer policy, and strategy • Developing partnerships and capacity support • Licensing the label • Trade certification • Marketing and communication • Awareness raising

FLO International Fairtrade Standard Setting 1. Producer standards: • Small farmers / Hired labour • Generic / Product specific • Minimum requirements / Progress requirements 2. Trading standards: • Price • Premium • Pre-financing • Medium/long term commitment Standards Unit and Committee: Stakeholders participation

FLO International Fairtrade Standards

Products FLO International Non-Food Products • Coffee • Vegetables • Sports Ball • Tea • Herb Spices • Cut Flowers • Cocoa • Nut Oil Seeds • Ornamental Plants • Honey • Quinoa • Cotton • Fresh Fruits • Rice • Dried Fruits • Sugar • Juices • Wine 22

FLO International Who are the Fairtrade producers? Small farmers: they are part of organizations, which are able to contribute to the social and economic development of their members and their communities and are democratically controlled by their direct members. Hired labour: Organizations which use hired labour can only participate in Fairtrade if they are organized, normally in unions, and if the company they work for (farm, plantation, etc. ) is prepared to promote workers’ development and to pass on to the workers the additional revenues generated by fair trade.

FLO International Producer Standards Minimum Requirements: • Must be met at moment of Initial Certification • Show that organisation has potential for development • Make sure that Fairtrade benefits can reach target group Progress Requirements: • Dynamic issues addressing the development process

FLO International Achievements in the South 1. Fairtrade directly benefits over 1. 5 million producers & workers 2. Including their families, 7. 5 million people benefit indirectly 3. Fairtrade certified producers operate in 58 countries 4. 632 producer organisations are in Fairtrade 5. 100 million Euros additional income in 2006 alone 6. 35% of Fairtrade volume also organically certified

FLO International Premium Projects Water Education Infrastructure Health

FLO International Impact of Fairtrade for producers FT means that producers receive a fair price but it goes far beyond a simple economic transaction: • Producers and workers get experience in organising themselves to defend their rights • Producers learn about the international trade of their product and acquire export experience • improve the quality of their product through close cooperation with Fairtrade registered importers. • Workers learn what their rights are and how the organisation is managed. • They are also involved in project definition of the Fairtrade premium income.

FLO International Market Development

Over 1500 product available in over FLOlines International 60 countries

FLO International Fairtrade Sales (estimated retail value in million Euros) Annual Compound Growth 2003 -2006: 39%

FLO International Sales Volumes Fairtrade Coffee

FLO International Sales Volumes Fairtrade Coffee • In the UK, 20% market share for roasted and ground coffee and an estimated of 5% market share for instant coffee • 5% market share in Canada • Marks & Spencer converted its entire coffee range to Fairtrade in 2006 • Dunkin Donuts, a global retailer and franchiser adopted a policy of 100% Fairtrade espresso coffee in Northern America and Europe

FLO International Sales volumes Fairtrade bananas

Selected Market Shares FLO International

FLO International Fair Trade in Trend: Examples Sells exclusively Fair Trade bananas Unilever (Europe): launch Ben&Jerry’s Fair Trade Icecream Over 100 brand products, Over 30 private label products Complete switch of coffee / tea (6% growth vs. 1. 5% market), textiles Various offers in restaurant chains and public transport Companies often serve FT products in canteens Nestlé UK launched «Partners Blend» Cafédirect sells exclusively FT certified products Michel: Conversion of Michel Orange Premium and Bodyguard

Marketing. FLO FTLInternational Products Overall objective: Increase sales of Fairtrade labelled products Specific objectives: 1. Increase awareness of Fairtrade 1. 1. Awareness on consumer level 1. 2. Awareness in policy discussion 2. Increase availability of Fairtrade products 2. 1. Market penetration 2. 2. New Product Development 2. 3. New Markets 2. 4 Link up certified producers & registered traders in the South with Fairtrade markets in the North

FLO International The Fairtrade Certification Mark (CM) The Fairtrade CM is a “seal of approval” that appears on products that meet internationally agreed Fairtrade Standards and which guarantees to consumers that their purchases will benefit the producers, their families and the surrounding communities from the developing countries that they originate from.

FLO International The Power of the Mark • 20 years of independent guarantee for Fairtrade • Recognition in Europe ranges from 42 -84% • Bridging between commercial and civil organizations • Co-operates with major international NGOs, including Oxfam • Commercial partners such as Tesco, Carrefour, Coop, Marks & Spencer, Ben & Jerry’s • Each of us (consumers, businesses, NGO’s) can make a difference to reduce poverty, but by working together we can do more than we can separately.

FLO International What makes Fairtrade Unique? • • Fairtrade is not only about social and environmentally friendly production methods, but about the empowerment and development of producers. Fairtrade is a true multi-stakeholder organization whereby the producers take ownership in the system and participate at all levels of decision making.

FLO International Labelled Fairtrade: a viable trade alternative 1. For producers ▪ A fairer deal in a globalised market ▪ An effective tool for autonomous development through trade ▪ Empowerment of producers and producer organisations 2. For consumers ▪ An informed choice in (mainstream) shopping behaviour ▪ Consumers’ responsibility

FLO International Mobilizing Consumer Support Several important factors showing significant increase: • Awareness in richer countries of scale of global poverty and inequality. • Desire of individuals to “make a difference” • Interest in connecting individual actions with wider movements • Recognition of power as consumers to influence business practices Changing expectations are a problem for businesses that fail to adapt, but an opportunity for businesses that will.

FLO International Consumer Movement • • • Fairtrade is the sustainability label with the highest consumer awareness and likeability. Fairtrade covers the largest range of products and therefore offers an opportunity for multicategory projects. Fairtrade has a global reach and is present in all major consumer markets and supported by individual consumers, volunteers, NGOs, etc Growing Movement - Fairtrade Town, Fairtrade University, Fairtrade School, Fairtrade Church Education for Sustainable Development

FLO International Conclusion ü In 20 years (since 1988) Fairtrade has established recognition, trust and support of consumers in most European countries, the US, Canada, Australia and New Zealand, Japan and the other Asian countries as well ü Relative to its scale, Fairtrade is having a significant impact on producers in the developing world (> 1, 500, 000 farmers, workers and their families) ü Each of us (consumers, businesses, NGO’s) can make a difference to reduce poverty, but by working together we can do more than we can separately.

FLO International Thank you for your attention! • FLO International www. fairtrade. net • FLO-CERT, the Fairtrade Certifier www. flo-cert. net • Fairtrade Label Japan www. fairtrade-jp. org