FLO InternationalFLO International

GuaranteeingGuaranteeing

a better deal for producersa better deal for producers

Presenting a viable Presenting a viable tradetrade

alternative alternativeFT FT ((labelledlabelled)) products represent: products represent:

• For producers: •A fairer deal in a globalised market•An effective tool for autonomous

development through trade

• For consumers: •An informed choice in (mainstream)

shopping behaviour•Consumers’ responsibility

1) Some history1) Some history2) FLO structure2) FLO structure3) Way of 3) Way of working working (in (in standard setting)standard setting)

• People concerned about supporting disadvantaged people in developing countries – Trade not Aid (some 40 years ago).

• World Shops, Church bazars, etc

• Alternative Trading organisations (ATOs)

• Mainstreaming requires labelling (UCIRI)

History of Fair TradeHistory of Fair Trade

• First Fairtrade label, called Max Havelaar, was initiated in 1988 in the Netherlands.

• Switzerland launched in the meantime, in 1991 the second Max Havelaar label

• In 1992 the Transfair label was launched in several European countries (coordinated by TransFair International)

History of Fairtrade History of Fairtrade LabellingLabelling

•While more National Initiatives and Fairtrade products emerged, the need for harmonisation became apparent

• In 1997, FLO International was established, as a secretariat for all National Labelling Initiatives

•Since 2001: Harmonisation of Standards, certification procedures and trade auditing

History of Fairtrade History of Fairtrade LabellingLabelling

Definition of Fair Trade:„Fair Trade is 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, marginalized producers and workers – especially in the South.

Fair Trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.“

(Common definition agreed by FLO, IFAT, NEWS!, EFTA – FINE)

The Fair Trade movement

The Fair Trade movement

FINE is an informal collaboration platform of four big networks active in Fair Trade

F airtrade Labelling Organisations (FLO)I nternational Federation for Alternative

Trade (IFAT)N etwork of European Worldshops (NEWS!)E uropean Fair Trade Association (EFTA)

The MissionTo enable development & empowerment of

disadvantaged producers & workers by:a)    setting international FairTrade standards;b)    certifying production and trade according to international FairTrade standards;c)    facilitating and developing FairTrade markets through national FT labeling organizations;d)    facilitating producer support;e) promoting the FT-approach in debates on trade and development.

FLOFLO InternationalInternational

Producers and companies registered

with FLO• 19 national fairtrade labelling organisations• 375 FLO certified producer organisations in

48 producing countries• 800,000 producers• Including dependents 5 million people affected

• 337 FLO registered companies worldwide • 509 companies in 18 countries are licensed

to use the Fairtrade certification mark

Results so farResults so far

25.972 28.91333.495

39.750

48.548

58.809

83.761

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

Volume (MT)

General Sales generated by labelled fairtrade (1997 - 2003)

1997 1998 1999 2000 2001 2002 2003

FLO and stakeholders FLO and stakeholders FLO’s open structureFLO’s open structure

• FLO Board (direct participation)• Standards and Policies Committee• Certification and Appeals

Committees• FLO Fairtrade Forum• Marketing meetings

FLO Board

Standards + policy Cte.

FLOMeeting of Members

Director

Fin. & Adm.

ProductManagers

Info system

Appeal cie1/3

Prod. SupportFacilitator.

Certification Unit

Trade Auditing

Executive board

Markets & marketing meetings

deciding

consultative

FLO/NI staff

stakeholders

Regional Producer Meetings

Producer Liaison Officers

FLO’S NEW STRUCTURE:FLO’S NEW STRUCTURE:

Inspection

regional/local

February 2002

Certif. cie1/3

Stakeholder Participation

Terms of Appointment

(overarching principles for all governing committees)

Balance of stakeholder interestBalance of expertise and knowledge

FLO Board appoints S&P and Certification Cte. for a 2-3 years term upon nomination

Stakeholder Participation

Standards & Policies

(9 members in total) 2 - Producers (SH + HL) 2 - Traders - conventional and ATO

(Alternative Trading Organisation) 3 - National FLO member organisations (Nis) 2 - External Experts (incl. 1 representative

from trade union movement)

Members of S&P Committee (Sept.03) – 9 in totalProducer: Carlos Vargas, Coocafe/Costa Rica – coffee

cooperative; position is vacantAlex Yeboah Afari, VREL/Ghana – banana plantation

Traders:Jeroen Kroezen, AgroFairGerd Nickoleit, gepa

Nis: Fenny Eshuis, MH-NLJudith Kyst, MH-DKMax Leuzinger, MH-CH

Externals: David Joyce – ICTU (Irish Congress of Trade Unions); position is vacantPhil Wells – Consultant

Coordinator:Olaf Paulsen, FLO - Manager Policy Development

Stakeholder Participation

Stakeholder Participation

Certification Cte.

(6 members in total) 1 - Producer Organisation 2 - Traders - conventional and ATOs

(Alternative Trading Organisations) 1 - National FLO member organisation (Nis) 2 - External Experts

Stakeholder Participation

Members of the Certification Committee(as of Sept.03) – 6 in total

Producer: Juan Eduardo Henriquez Santos, Chile - honey cooperative

Traders: Kirit Dal, Nirwana Sugar Ltd., UKMarjoleine Motz, Fairtrade Assistance (FTA), NL

Nis: Jos Harmsen, MH-NLExternals: Liz Humphrey, Consultant

Rolf Belling, ConsultantCoordinator: Rüdiger Meyer, FLO – Manager FLO Cert

1.Defining Fairtrade Standards

Social, Environmental and EconomicStandards & Policies

2.Guaranteeing the StandardsInspection and CertificationFLO Certification Ltd.

3.Business facilitation

Supply & Demand, QualityProduct Management

4.Producer supportCompliance, linking to developmentProducer Support Network

FLOFLO InternationalInternational

Functions

• S&P Committee - Mandate- Decide on Standards proposals (incl ratification process through FLO Board)- Develop advice and recommendations on

> Fairtrade principles - generic standards> FLO policies related to standards> Product specific standards and prices

2 Producers, 2 traders, 3 Nis, 2 External experts (1 trade union rep.) – senior experts in different fieldsFLO Board sets priorities for workplan

Standards & Policies Standards & Policies (S&P)(S&P)

Stakeholder Participation

Way of working - S&P CommitteeAt times 7 different work teams (WT)Terms of work for WTsInviting special expertise as per WTReporting back to S&P Committee4-6 physical meetings of S&P per yearWTs mostly work by email consultation

Defining Fairtrade Defining Fairtrade StandardsStandards

Standards & Policies (S&P)Standards & Policies (S&P) Social Standards

• Small farmers / Hired labour• Generic / Product specific• Minimum requirements / Progress

requirements

Environmental Standards• Generic / Product specific

Economic/Trade Relationship Standards Generic / Product specific Minimum Price and FT-Premium Pre-financing Medium/long term commitment

Standards Development

Procedures for Standard setting

• Product Rational Paper (policy frame)• Light or heavy approach/cost-benefit • Proposal for standards (product

specific requirements, defining minimum price)

• Consultation with stakeholders• Standards decision by S&P Cte;

ratification by FLO director mandated by the FLO Board

Standards ReviewProcedures for Standard

setting

• Regular review of generic and product specific standards (3 year cycle)

• Co-ordinated by the S&P Cte• Extended stakeholder consultation• Final decision ratified by FLO Board

1.Defining Fairtrade Standards

Social, Environmental and EconomicStandards & Policies

2.Guaranteeing the StandardsInspection and CertificationFLO Certification Ltd.

3.Business facilitation

Supply & Demand, QualityProduct Management

4.Producer supportCompliance, linking to developmentProducer Support Network

FLOFLO InternationalInternational

Functions

Guaranteeing the Guaranteeing the standardsstandards

FLO CertificationFLO Certification Ltd. Ltd.

• Legaly separate sub-set of FLO International

• Follows ISO standards for certification bodies

Functions

•Producers inspectionconformity to FT standardsFT benefits are used for social and

economic development •Certification•Trade auditing

to cross check reported sales and reported purchases

FLO-FLO-Business Business facilitationfacilitation

Enhance FT’s impact in commercial markets:– matching supply and demand in volume and quality– anticipate and react on market trends– work with cross border operating companies

Improve producers’ response to the market: – Providing information on quality requirements– Providing information on trends and traders– Relation management

FLO Product Managers:– a team of product specialists dedicated to the strategic

marketing of FT, and existing and new products

FacilitaFacilitating ting PProducerroducer Support - PSN

Support producers to strengthen their position:– commercial performance– quality produce– institutional building

Link between producers and support:– identify needs for support with producers and FLO Cert– identify donors and technical expertise– bringing together the right partners and facilitate

FLO Producer Support Facilitator:– closely linked to product managers in the North and

producers and liaison people in the South