© fairtrade 2012 your fairtrade cookbook matilde defraije michael van overstraeten

© Fairtrade 2012

your Fairtrade cookbookMatilde DefraijeMichael Van Overstraeten

© Fairtrade 2010

agenda > Introduction : the scope of Certification & Licensing

> New Standards Framework, what’s new ?

> Are You Compliant ? strenghened controls

> The Product Certification Process

> Food Composite Product Policy(discussion)

> Traceability & Mass Balance(discussion)

> Labeling Fairtrade Products, how and when ?

> Support & Tools(discussion)

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© Fairtrade 2010

objective

The Fairtrade Certification Mark is your independent guarantee that this product has been certified in accordance with international Fairtrade Standards. Thepurchase of this product enables the improvement of working and living conditions of producers in developing countries and encourages environmentalprotection.

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Definitions Certification contract framework contract allowing certification of products (and

ingredients) against the Fairtrade specifications compliance to the Fairtrade standards control audits applies to : every operator handling non-finished Fairtrade

inputs/outputs

Licensing contract framework contract allowing the usage of the Fairtrade Certification

Mark on finished products compliance to the Certification Mark guidelines licensing rights control audits applies to : brand owners

in Belgium : “Certification & Licensing contract”

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Certification Who needs certification ? Every operator in the supply chain from producer to retailer, until the product is labeled

Who

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Once the end product is packaged, it can no longer be tampered with.

So from there certification is no longer required.

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Definitions responsabilities of the “License Holder” comply to certification requirements when applicable

(certification & licensing) compliance to the Fairtrade standards allow control audits certification of the finished products quarterly sales reporting payment of license fees

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Standards “New Standards Framework” launched July 2011 response to a clear call from producers to make the Fairtrade

Standards work for them. supports disadvantaged producers to enter Fairtrade and

continuously develop over time. easier to understand. allows producers to choose their own development path

Through the new division of requirements into core and development ones, producers now have more flexibility

Producers also write their own development plans The NSF offers a better cost-benefit ratio for producers

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Standards example

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Standards Compliance Criteria Keep the same format known today 2 types: Core and Development

Core Requirements Based on a Compliant/Non-Compliant approach

Development Requirements Ranks are used for clarity and harmonization of interpretation to

audit each requirement. The auditor chooses a rank from 1 – 5 to grade the CC. Scale: 5 (best practice) – 1 (no action) average of all scores is calculated

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Standards example: SPO standard

4.12.0 : Disadvantaged / minority groups have been identified.

Ranks: 5 The organization has developed criteria for this in writing and has

identified all possible groups. 4 The organization has analyzed this before the audit. 3 During interviews directors or managers are able to identify

minority/disadvantage groups. 2 During interviews directors or managers are not able to identify

this OR there are obvious groups missing. 1 Organization opposed strengthening the position of minority

groups of any/some kind.

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Standards Generic Trade Standard (july 2011)

Key changes: reorganization of the Standard into 4 chapters (General

Requirements, Trade, Production and Business & Development) inclusion of a chapter regulating composite products and

ingredients inclusion of new sections defining physical traceability, single site

mass balance and group mass balance. addition of requirements on the use of the Fairtrade trademark

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Standards Are you compliant ?

statistics

strenghened controls onboarding Matilde sanctions close follow-up of non-conformities support towards compliance

2010 2011 2012Licensees not compliantLicensees 100% Compliant

2010 2011 20120

20

40

60

80

100

120

140

number of minor NC`snumber of MAJOR NC,s

(in 2010 less licensees were audited)

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Sanction Framework

Audit Report First communication

1/3 month(s) later 1 month later

> 1 major NCrNC = 1.2.1.1.1

Warning letter +1 month for CAR

NC solved by OEorSuspension + 1 month for CAR

NC solved by OEorDecertification

1 major NC (+ regular NC)

1 month for CAR NC solved by OEorWarning letter +1 month for CAR


≥ 1 regular NC 3 months for CAR

NC solved by OEorWarning letter +1 month for CAR


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Major Non Conformities

1.1.0.03 The operator allows announced and unannounced audits at all premises including subcontracted premises and provides all requested information needed to demonstrate compliance with the Fairtrade standards.

►Subcontractor contract required

2.1.1.01 The trader has clearly identified all certified products as Fairtrade in all purchase and sales documentation (e.g. invoices, delivery notes and purchase orders).

► FLO-ID of both parties + Faitrade ref. on article level

2.2.1.5 The operator must ensure that volumes sold as Fairtrade do not exceed the volumes purchased as Fairtrade.

► Begin & end stock registration required for balance exercise

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Minor Non Conformities

1.1.0.11 Keep FLO-CERT updated with contact details and any other relevant information that affects FLO-CERT certification (new company structure, change in legal status, etc.)

1.2.0.04 Submit all promotional artwork bearing the FAIRTRADE Certification Mark for approval, prior to use

2.1.1.02 Purchase and sales documentation for unfinished Fairtrade products state both FLO ID’s of the seller and the buyer and display which products are Fairtrade and the applicable dates of transaction.

2.1.1.07 Keep record of all entries, processing and sales of Fairtrade products.

8.3.1.2 Submit all packaging of consumer ready Fairtrade products for approval, prior to use.

> Submit through Product Database!

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Product certification

no product is allowed on the market without prior approval by the Licensing Initivative (Max Havelaar)

the reality we still come across products that were not approved we receive packaging approvals before recipes… supplied information is incomplete

responsibility the “License Holder”

advice implement procedures for product development

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1. submit product composition check against GTS standard for compliance

2. submit direct supplier of ingredients check certification status

3. submit full supply chain information producers intermediates (no currently implemented)

4. submit availability countries, dates, distribution

5. submit packaging artwork check against Certification Mark Guidelines

6. submit promotional artwork check against Certification Mark Guidelines

approval process

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how ? online product database

when ? before production !

why ? compliance to Fairtrade standards Certification Mark credibility clear communication towards consumers

what’s in it for you ? know supply chain > secure supply, mitigate risks (wkp 3) link consumer > product > producer impact match offer and demand (challenge today) promote products

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Food Composite Products

What it is Mandates the conditions under which a food composite product

may carry the Fairtrade Mark and which food composite ingredients can be considered Fairtrade

Valid from 1 July 2011

Where to get a copy Under section “2.2 Product Composition” of the Generic

Fairtrade Trade Standard

Applicable to all new products (since 1 July 2011) existing products after transition period of 2 years

(1 July 2013)

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Previous Standard All that can be Fairtrade should be Fairtrade « Defining ingredient » minimum 50% Fairtrade

New Standard : Golden rules “All that can be Fairtrade should be Fairtrade”

Fairtrade standard exists including minor ingredients

Minimum Fairtrade percentage 20%

Products with > 50% added water/dairy 20% of dry mass

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Exceptions defined in the standard only concerns ATCB (not minimum %)

Type I exceptions Supply shortage Inadequate quality New standard (transition) Unavailable ingredient (list)

Type II exceptions Transitioning ingredient (insufficent volumes) Provenance (AOC, AOP,..)

no product is approved unless it conforms to the standard or a formal exception is logged

© Fairtrade 2010


Discussion

What is your experience with the new standard ?

Are you aware of the unavailability list ?

What is your opinion on the FCP ?

Should an exception be granted for minor ingredients (<1%, <2%?) that are available as Fairtrade ?

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Traceability what is Physical Traceability of Faitrade products? Fairtrade products shall be marked and kept separate from non-

Fairtrade produce at each stage of the supply chain

why is it important? most consumers believe FT products come from FT producers trend towards requesting phTr in food certification schemes:

food safety, food quality and credibility or the label

what do the standards say ? Physical traceability required for all products Exception for sugar, juices, cocoa, tea

volontary traceability long term goal : full traceability

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Traceability Fairtrade: 50MT Non-Fairtrade: 100MT

Fairtrade: 50MT Non-Fairtrade: 100MT

Physical Traceability

Mass Balance

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Traceability Exceptions Sugar

Physical traceability lost in producing countries Whole year activity run by families Different varieties are planted > harvest is prolonged during

the whole year FT and non FT inputs are mixed for cost-effective production

Highly perishable product, Producers sell product to the closest processing unit Processing units with big capacities

Juices Physical traceability lost in producing countries

80% of producers cannot segregate Tea

Physical traceability lost in producing countries 50% tea volume is mixed at producer level At collecting points or transport, During processing, and at storage

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Traceability Exception : Cocoa

All producers claim physical traceability is possible

65% of northern operators segregate

Mainstream cocoa industry: Same recipe for most products > single continuous line Huge volumes are processed avoiding halts Segregation requires shifting 100% of the production to the FT

Requesting phtr could cause great damage to: Mainstream partnerships Producers receiving their premium 35% of operators with no segregation

But … volontary certification against Fairtrade with Physical Traceability

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Traceability Mass Balance requirements Documentary traceability requirements: invoices, delivery notes,

contracts Calculation of conversion ratio’s & recipes FT ingredients should be purchased prior to selling FT volumes sold should not exceed FT volumes purchased FT quality purchased equals FT quality sold FT sugar sold cannot contain 100% beet sugar

Applicable only on ingredients ! example : not box of pralines

> different statement on packaging :[Name(s) of ingredient(s)]: traded in compliance with Fairtrade standards. Total xx%.

© Fairtrade 2010

Traceability Volontary Certification for Physical Traceability

Organic > traceable (?) we will require a statement at product approval (cheked during

audits)

Request traceability from your suppliers !

Documentary traceability requirements: invoices, delivery notes, contracts identify ingredients as "Fairtrade with Traceability"

> different statement on packaging :

[Name(s) of ingredient(s)]: Fairtrade certified and sourced from Fairtrade producers. Total xx%.

© Fairtrade 2010

Certification Mark

objectives consistent usage (avoid consumer confusion) clear and honest communication

applicable to product packaging and promotional material (incl. online)

new guidelines ! applicable from januari 2012 for new products transition period (2 year) for reprinting existing products

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Certification Mark

Packaging Guidelines

Certification Mark New version Mark on front of pack Respect aspect ratio, colors size (less prominent than brand)

Messaging no overclaiming (Fairtrade biscuit > Biscuit with Fairtrade

ingredients) no overclaiming (if Mass Balance : Fairtrade certified) Identify Fairtrade ingredients Total Fairtrade percentage Minimum text

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Certification Mark

Messaging

before "ingredients : Cocoa Masso*, Cocoa Buttero*, Sugaro*,

Cranberrieso. o Organic certified / * Fairtrade certified (total xx%) “The Fairtrade Certification Mark is your independent guarantee that the *Fairtrade

ingredients in this product have been certified in accordance with international Fairtrade Standards. The purchase of this product enables the improvement of working and living conditions of producers in developing countries and encourages environmental protection.”

from 2012 identifying Fairtrade ingredients by * is prohibited Mass Balance : “[Name(s) of ingredient(s)]: traded in compliance with Fairtrade

Standards, total xx%. Fairtrade means fairer trading conditions and opportunities for producers in developing countries to invest in their businesses and communities for a sustainable future. www.info.fairtrade.net”

Physical Traceability : "[Name(s) of ingredient(s)]: Fairtrade certified and sourced from Fairtrade producers. Total xx%. Fairtrade means fairer trading conditions and opportunities for producers in developing countries to invest in their businesses and communities for a sustainable future. www.info.fairtrade.net”

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Support support better follow-up of inspections & assitance towards compliancy enhanced support on ingredient research pragmatic exception handling

tools guidelines, best practices online productdatabase online product reporting

© Fairtrade 2010

Support long term goals

product certification the online productdatabase is user friendly the online submission tool aligns with product validatiion

processes product information is complete

impact & sensitization a consumer can find the producer organisation & impact based

on product EAN code

match offer and demand a consumer can find where products are available a consumer can find proximity product retailers and consumption

areas on google maps an institution, company, or horeca can find suppliers

(wholesalers)

© Fairtrade 2010

Support long term goals

product certification the online productdatabase is user friendly and favours reuse the online submission tool aligns with product validatiion

processes product information is complete

impact & sensitization a consumer can find the producer organisation & impact based

on product EAN code

match offer and demand a consumer can find where products are available a consumer can find proximity product retailers and consumption

areas on google maps an institution, company, or horeca can find suppliers

(wholesalers)

© Fairtrade 2010

Traceability Discussion

What is your input ?

If there was only one thing to change, what would it be ?

How can we support you further ?

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© fairtrade 2012 your fairtrade cookbook matilde defraije michael van overstraeten

Documents

fairtrade certification

certification of products

certification requirements

control audits certification

end product

standards example

standards compliance

finished products compliance