wfto fair trade standard draft 3 - people tree foundation...marketing fto mo fair trade organization...

WFTO Fair Trade Standard draft version 3.4 (October 2012) of 18

World Fair Trade Organization Guarantee System

WFTO Fair Trade Standard Draft 3.4

Introduction

The WFTO Fair Trade Standard is part of the WFTO Guarantee System, focusing on the management and operation of Fair Trade Organizations (FTOs) in relation to their Fair Trade practices. It comprises a set of compliance criteria based on the WFTO Principles and International Labour Organization (ILO) conventions.

Many of these criteria are mandatory requirements, but some of them must be met right from the beginning while others are to be reached over a set period of time. There are also some requirements where a Fair Trade Organization (FTO) must show continuous improvement over time.

An FTO is expected to apply the WFTO Principles and implement the requirements in a diligent and transparent manner and work on continuously improving their Fair Trade practices. Compliance with these standards will be assessed by various means, including self-assessment, peer visits and external audit. These are described in the WFTO Guarantee System Handbook.

The standard is subject to periodic review and changes, as defined by the WFTO review policy.

Structure

The WFTO Fair Trade Standard comprises of the ten WFTO Principles together with defined compliance criteria to assess conformity with the Principles.

The “Compliance Criteria” are the requirements that a Fair Trade Organization must meet to be approved as a WFTO member and continue in membership. Not all criteria must be met from the beginning and the time by which they have to be achieved is indicated in the “Achieve by” column. The Compliance Criteria are used as the basis for members’ self-assessments and their monitoring audits. Some criteria are specific to producer organizations or buying organizations and this is indicated in the text.

The “Applicable to” column indicates which type of Fair Trade Organization (FTO) the criterion applies to. The Standard distinguishes between three types of WFTO Fair Trade Organization, i.e. producer FTOs, marketing FTOs and non-trading FTOs1.

The “Achieve by” column indicates the time frame and type of compliance criteria. There are 3 “achieve by” levels, i.e. mandatory, year xx, and continuous improvement.

Mandatory means that the compliance criteria must be met for approval as a WFTO member. For existing members non-compliance with these criteria constitutes major non-conformity and may lead to disapproval or suspension of the membership status of the

1 Organizations which support Fair Trade activities but are not directly involved in trading of Fair Trade products. They could be

organizations whose primary mission is to promote Fair Trade through provision of technical, financial, business advisory or other services to Fair Trade producers and/or Fair Trade Organizations. They also may be assessed against this Standard.


organization. “Mandatory” sets the minimum level of performance, but FTOs are encouraged to continually improve well beyond meeting the mandatory levels.

Mandatory by Year xx means the criteria must be met at the latest XX years after joining WFTO (which counts as Year 0). Non-compliance with these criteria after this given time constitutes major non-conformity and may lead to disapproval or suspension of the membership status of the organization.

Continuous Improvement means the Fair Trade Organization is expected to improve its performance against these criteria as long as it remains a member of WFTO. The progress will be monitored and lack of progress may constitute non-conformity. This can lead to suspension of the membership status of the organization, unless it is justifiable.

Applicability of Standard Requirements

For the purpose of applying the Standard, WFTO members are categorised in 3 overarching categories:

1 Producer FTOs

a) Cooperatives or other formal producer associations owned and controlled by the producers.

b) Fair Trade workshops or Fair Trade motivated producer companies /organizations with hired workers producing Fair Trade products.

c) Umbrella organizations of producer organizations where the umbrella organization is controlled by the producer organizations and responsible for the marketing and selling of their fair trade products.

Organization/Company

Workers

Cooperative

Producers

Workers

Umbrella Organization

Producers Organizations

Workers


2 Marketing FTO’s

a) Retailers

b) Wholesalers: exporters, importers, other traders, brand companies

c) Marketing organizations (e.g. national exporters) buying from local producer groups and marketing their products

3 Non Trading FTO’s

a) Fairtrade support organizations and other FTO’s who do not produce or trade Fair Trade products.

For all compliance criteria it is indicated to which category of FTO they are applicable to. If an FTO is active in more than one function (e.g. as a producer FTO as well as a marketing FTO for products from other organizations) the criteria of both functions apply for the relevant part of their business.

Definitions

Terms Abbreviation Definition

Fair Trade Organization

FTO An organization that is currently a member of WFTO. They may or may not wish to use the WFTO label or be directly involved in the trading of Fair Trade products.

Fair Trade products FT products Any products produced and sold by an FTO (using the WFTO label or not) unless specifically excluded from the FTO’s Fair Trade range.

Non-trading FTO NTO Fair Trade Organization that is not involved in trading of FT products (e.g. a Fair Trade support organization).

Marketing FTO MO Fair Trade Organization trading and marketing FT products. This includes retailers, wholesalers, domestic trading organizations, exporters, importers and other trading organizations. Examples for different types of marketing organization are illustrated above.

Producer FTO PO An FTO that produces FT products. It could be a producer cooperative or producer association, a private Fair Trade dedicated company (e.g. an artisan workshop) with workers, or an umbrella producer organization marketing the products from its different groups.

Producer Individual producers who are members of the Producer FTO (e.g. a farmer or artisan). The producers actively participate in the FTO (normally they have voting rights) and participate in decisions regarding use of the profits of the FTO.

Small producer In the WFTO Principles this term refers to producers who predominantly depend on themselves and their families to produce the FT product.


Workers All workers (employees, workers, seasonal workers etc.) working for an FTO. They can be contracted or seasonal/casual workers.

Supplier Vendor of Fair Trade products to an FTO. This can be a group of producers producing and supplying FT products who are not members of an FTO, or WFTO members.

Fair Trade Partners FT Partners WFTO members who sell or buy FT products from each other.

Fair Trade products with WFTO label

WFTO-FT products

FT products using the WFTO Fair Trade label.

WFTO label user

A Trading FTO who uses or intends to use the WFTO label on their products.

Principle 1 Creating Opportunities for Economically Disadvantaged Producers

Poverty reduction through trade forms a key part of the organization’s aims. The organization supports marginalized small producers, whether these are independent family businesses, or grouped in associations or co-operatives. It seeks to enable them to move from income insecurity and poverty to social and economic empowerment. The organization has a plan of action to carry this out.

N° Compliance Criteria Applicable to Achieved by

1.1 The FTO has a mission and/or policy documents expressing its organizational commitment to improve social and economic conditions of marginalized producers, workers and suppliers. Such documents are made publicly available to interested parties.

PO/MO/NTO Mandatory

1.2 The management body and the key staff of the FTO understand the WFTO Fair Trade Principles.

PO/MO/NTO Mandatory

1.3 The FTO primarily works and trades with producer groups, and suppliers from socially and/or economically disadvantaged groups, or otherwise demonstrates positive impact on marginalised groups as a central part of its business.

PO/MO Mandatory

1.4 The FTO demonstrates 2commitment through its actions and trading activities to improve the economic and social conditions of disadvantaged producer groups, workers, and suppliers.

PO/MO Continuous improvement

1.5 The FTO maintains an up-to-date register, with basic information about its FT suppliers and producers. The information shall include type of organization, location, contact person, and their socio-economic conditions.


2 For example demonstrates via a business plan, annual report , written plans on social or economic improvements.


Principle 2 Transparency and Accountability

The organization is transparent in its management and commercial relations. It is accountable to all its stakeholders and respects the sensitivity and confidentiality of commercial information supplied.

The organization finds appropriate, participatory ways to involve employees, members and producers in its decision-making processes. It ensures that relevant information is provided to all its trading partners. The communication channels are good and open at all levels of the supply chain.


2.1 The FTO has a description of its organizational structure and governance, and a working financial administration system.

PO/MO/NTO Mandatory

2.2 The FTO has annual accounts3, audited externally, and has reports of its Fair Trade activities, making them available to its FT partners as well as to its producer members and workers.

PO/MO/NTO Mandatory by Year 4

2.3 The FTO commits to transparent communication with its FT producers and/or FT partners. This includes communication on the structure of Fair Trade pricing, taking into account the sensitivity and confidentiality of commercial information supplied.

The FTO provides detailed information4 about FT producer groups and basic information about the FT producers they purchase from/work with.

PO/MO Mandatory

2.4 The FTO implements appropriate and participatory ways to involve constituent members and workers in its decision-making, such as annual general meetings or regular worker/producer meetings with management.

PO/MO/NTO Continuous improvement

2.5 The FTO has a good process for internal communication with its constituent members and workers, such as regular meetings or internal newsletters. .


Principle 3 Fair Trading Practices

Intent The organization trades with concern for the social, economic and environmental well-being of marginalized small producers and does not maximize profit at their expense.

3 Working accounts need to be available in year 1 with a timeline for fully audited accounts agreed.

4 The PO/MO has to develop detailed information on their FT producers (i.e. producer/supplier profiles) that includes information

about the kind of organization, number of members/producers, their social and economic background, location, production, etc.


Defined trade commitments It is responsible and professional in meeting its commitments in a timely manner. Suppliers respect contracts and deliver products on time and to the desired quality and specifications.

Pre-finance Fair Trade buyers, recognizing the financial disadvantages producers and suppliers face, ensure orders are paid on receipt of documents and according to the attached guidelines. An interest free pre-payment of at least 50% is made if requested.

Where southern Fair Trade suppliers receive a pre-payment from buyers, they ensure that this payment is passed on to the producers or farmers who make or grow their Fair Trade products.

Cancellation and dealing with problems Buyers consult with suppliers before cancelling or rejecting orders. Where orders are cancelled through no fault of producers or suppliers, adequate compensation is guaranteed for work already done. Suppliers and producers consult with buyers if there is a problem with delivery, and ensure compensation is provided when delivered quantities and qualities do not match those invoiced.

Long term trading partnerships The organization maintains long-term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. It maintains effective communication with its trading partners. Parties involved in a trading relationship seek to increase the volume of the trade between them and the value and diversity of their product offer as a means of growing Fair Trade for the producers in order to increase their incomes.

Fair competition The organization works cooperatively with the other Fair Trade Organizations in country and avoids unfair competition. It avoids duplicating the designs of patterns of other organizations without permission.

Cultural identity and respect of traditional skills Fair Trade recognizes, promotes and protects the cultural identity and traditional skills of small producers as reflected in their craft designs, food products and other related services.


3.1 When buying FT products, the FTO has written agreements (e.g. contracts or purchase orders) with its FT partners, producer members and suppliers, detailing product specification, delivery and lead times, price and payment terms.

PO/MO Mandatory by Year 2

3.2 The producer FTO respects contracts and delivers products on time and to the desired quality and specification. In case of problems it communicates in a timely manner with its trade partners and endeavours to improve its performance as needed.

PO/MO Mandatory

3.3 When buying FT products, the FTO respects the agreed terms of payment, especially payment in a timely manner.

PO/MO Mandatory

3.4 When buying FT products, the FTO provides interest free pre-finance (at least 50%) for purchases from producer FTOs and FT suppliers, if requested.

MO Mandatory



3.5 If receiving pre-finance, the producer or marketing FTO ensures that the pre-finance is used to pay the producer members and/or suppliers immediately upon delivery of the product, and to provide pre-finance for inputs and raw materials bought by them, where applicable.

PO/MO Mandatory

3.6 The FTO has a fair and transparent system, including a communication mechanism and a system of compensation, to deal with quality problems and product cancellation in line with Fair Trade objectives.


3.7

The FTO maintains long-term relationships with its suppliers. It does not terminate trading relations or stop buying from them without appropriate notice and reason.

PO/MO Mandatory

3.8 Where possible efforts are made to increase the value or diversity of products to benefit producers.


3.9 The FTO does not engage in unfair competition.

PO/MO Mandatory

3.10 The FTO is respectful of intellectual property and associated rights regarding protected names/brands, organizational designs, including logos, labels, and culturally based designs or names.

PO/MO Mandatory

Principle 4 Payment of a Fair Price

Fair price A fair price is one that has been mutually agreed by all through dialogue and participation, which provides fair pay to the producers and can also be sustained by the market. Where Fair Trade pricing structures exist, these are used as a minimum.

Fair pay Fair pay means provision of socially acceptable remuneration (in the local context) considered by producers themselves to be fair and which takes into account the principle of equal pay for equal work by women and men.

Capacity building to set prices Fair Trade marketing and importing organizations support capacity building as required by producers, to enable them to set a Fair price.


4.1 The FTO has a mechanism to set the FT product price, based on transparent and verifiable costs and profit margins, as well as market prices where they exist. It must take into consideration other Fair Trade minimum prices, if they exist.


4.2 The FTO ensures that FT partners and/or FT producers mutually agree the process in which prices are set, through dialogue and participation. FT partners and/or FT producers




receive transparent information on price setting along the value chain, when such information is available.

4.3 The Producer FTO strives to pay producers prices that provide a sustainable livelihood5.

PO Continuous improvement

4.4 The FTO reviews its cost structures and strives to improve production management in order to maximise benefits for FT producers.


4.5 The FTO supports producer FTOs to enable them to participate in setting prices. Similarly, the producer FTO does the same with its FT producers.


4.6 The FTO ensures that a fair wage6 is paid to its workers that equals or exceeds national/local minimum wages, or market rates if these are higher.


4.7 The FTO is committed to provide living wages by adjusting wages according to changes in the cost of living (e.g. inflation) and providing training to improve productivity.7


Principle 5 Ensuring no Child Labour and Forced Labour

Child Labour The organization adheres to the UN Convention on the Rights of the Child, and national / local law on the employment of children. Organizations who buy Fair Trade products from producer groups either directly or through intermediaries ensure that the producer complies with the UN Convention on the Rights of the Child, and national / local law on the employment of children. Any involvement of children in the production of Fair Trade products (including learning a traditional art or craft) is always disclosed and monitored and does not adversely affect the children’s well-being, security, educational requirements and need for play.

Forced Labour The organization ensures that there is no forced labour in its workforce and / or FTOs or home-workers. Organizations who buy Fair Trade products from producer groups either directly or through intermediaries ensure that no forced labour is used in production of their purchases.


5.1 The FTO does not employ children and complies with relevant national law with regard to child labour and young workers. The organization has a system to verify the age of their workers.

PO/MO/NTO Mandatory

5 Ensuring that at least minimum wage level is met.

6 Employment contracts with clear payment terms and pay slips to demonstrate fair wages paid.

7 Living wage targets are set in consideration of the price distribution between producers and workers, in order to ensure that fair

trade impacts on the most marginalized groups in their respective settings.



5.2 For specified cases where child labour is allowed by national law (e.g. children working with their parents to learn skills or students working in school holidays) and the FTO does employ them, the FTO must demonstrate that it has mechanisms, appropriate to its resources, to monitor the health, safety, welfare, education and right to play of working children according to the relevant UN Convention on the Rights of the Child.

PO/MO/NTO Mandatory

5.3 The FTO has a policy (or policy statement included in other documents) with regard to child labour and the involvement of children in the production process.


5.4 If young workers (minimum working age of 17 years) are employed, the FTO shall ensure that their working conditions conform to applicable national regulations, in particular that they do not work more than 8 hours per day, do not work at night, are not involved in heavy labour or working with chemicals and that their work does not prohibit schooling if relevant.


5.5 The FTO does not employ forced labour and complies with relevant national law with regard to forced labour.

PO/MO/NTO Mandatory

5.6 The FTO shall not withhold payments or any legal documents from its employees.

PO/MO/NTO Mandatory

5.7 The FTO shall ensure that it does not restrict workers’ freedom of movement or employment.8

PO/MO/NTO Mandatory

Principle 6 Commitment to Non Discrimination, Gender Equity and Freedom of Association

Non-discrimination The organization does not discriminate in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, HIV/Aids status or age.

Gender Equity The organization provides opportunities for women and men to develop their skills and actively promotes applications from women for job vacancies and for leadership positions in the organization. The organization takes into account the special health and safety needs of pregnant women and breast-feeding mothers. Women fully participate in decisions concerning the use of benefits accruing from the production process.

8 Sometimes even well intended services can lead to undue dependence or restriction of freedom, e.g. loan schemes that keep

producers in long-term debt and oblige them to remain in the group, keeping original identity papers of workers while employed etc.


Equal pay Organizations working directly with producers ensure that women are always paid for their contribution to the production process, and when women do the same work as men they are paid at the same rates as men. Organizations also seek to ensure that in production situations where women’s work is valued less highly than men’s work, women’s work is re-valued to equalize pay rates and women are allowed to undertake work according to their capacities

Freedom of Association The organization respects the right of all employees to form and join trade unions of their choice and to bargain collectively. Where the right to join trade unions and bargain collectively are restricted by law and/or political environment, the organization will enable means of independent and free association and bargaining for employees. The organization ensures that representatives of employees are not subject to discrimination in the workplace.


6.1 In its employment practices the FTO does not practice any discrimination in hiring, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, HIV/Aids status or age, unless it is part of its mission to favour particular disadvantaged groups.

PO/MO/NTO Mandatory

6.2 The FTO respects the right of all employees to form and join workers’ organizations of their choice and to bargain collectively. Where the right to join trade unions and bargain collectively are restricted by law and/or political environment, the FTO will enable means of independent and free association and bargaining for employees. The FTO ensures that representatives of employees are not subject to discrimination in the workplace.

PO/MO/NTO Mandatory

6.3 The FTO actively supports and encourages its employees to organise, meet and discuss problems both with each other and with management.


6.4 The FTO supports women’s rights and is active in strengthening the role of women within its organization. The FTO actively promotes applications from women for job vacancies and for leadership positions in the organization. Women fully participate in decisions concerning the use of benefits accruing from production.


6.5 The FTO strives to support women employees and women producer workers in combining family and work duties, e.g. by flexible working hours, childcare support, leave if family members are ill.


6.6 FTO’s working directly with producers ensure that women are always paid for their contribution to the production process, and when women do the same work as men they are paid at the same rates as men.

PO /MO Mandatory by Year 2



6.7 In selection of FT producers, the FTO does not practice any discrimination based on gender, race, caste, national origin, religion, disability, sexual orientation, marital status, union or legal group membership, political affiliation, HIV/Aids status or age, unless it is part of its mission to favour particular disadvantaged groups.

PO/MO/NTO Mandatory

6.8 The FTO shall identify particularly disadvantaged and vulnerable groups among its FT producers or suppliers and give priority and/or special preferential conditions when working with them.


6.9 The FTO does not practice any discrimination with regard to wages (equal pay for equal work).


Principle 7 Ensuring Good Working Conditions

Health and Safety at work The organization provides a safe and healthy working environment for employees and / or members. It complies, at a minimum, with national and local laws and ILO conventions on health and safety.

Working hours and conditions Working hours and conditions for employees and / or members (and any home-workers) comply with conditions established by national and local laws and ILO conventions.

Safe working conditions for producers Fair Trade Organizations are aware of the health and safety conditions in the producer groups they buy from. They seek, on an ongoing basis, to raise awareness of health and safety issues and improve health and safety practices in producer groups


7.1 The FTO does a basic assessment of health and safety conditions and demonstrates awareness of the main risk areas. This can be done internally or with external experts.


7.2

Accidents or work related health problems of workers and producers are recorded and analysed with appropriate corrective action to prevent similar cases in the future.

PO/MO/NTO

Mandatory by Year 2

7.3 The FTO respects all legal requirements regarding pregnant and breast-feeding women and takes into account their special health and safety needs.

PO/MO/NTO Mandatory

7.4 The FTO provides safe working conditions and addresses conditions to prevent risks of serious accidents or health problems for all workers, including:

fire hazards

responsible handling of any chemicals (adequate personal protection, training in their use, locking




chemicals away when not in use, providing product safety information)

safety of machinery to prevent accidents

safe drinking water

adequate toilet facilities

protective clothing provided

first aid provision (first aid kits, trained first aider)

7.5 The Producer FTO or any Marketing FTO directly working with producers maintains an overview od safe working conditions on producer level. It works with producers to ensure safe production methods and introduces training and preventative and improvement measures when necessary.


7.6 The FTO has a system of recording and managing working hours of its workers, especially overtime. It meets national legislation with regard to working hours, overtime remuneration, statutory holidays and annual leave.


7.7 The FTO provides its workers with all legally required social benefits (e.g. retirement funds, sickness leave, basic social security).


7.8 Within its possibilities, the FTO strives to provide additional social security and benefits to its employees and producer workers, above what is required by national regulations, in particular:

health insurance/medical support

retirement schemes

social security in case of disability or death of the income earner

sick leave


7.9 The FTO does not use limited term contracts, or apprenticeship as a means to avoid social security for employees. The FTO regularly reviews its employment practices and long term “casual” workforce and strives to provide as many workers as possible with regular employment.


7.10 The FTO discusses working hours with its workers and optimises processes and lead times to avoid excessive workload during peak times of production, in collaboration with FT partners.


Principle 8 Providing Capacity Building

The organization seeks to increase positive developmental impacts for small, marginalised producers through Fair Trade.

The organization develops the skills and capabilities of its own employees or members.


Organizations working directly with small producers develop specific activities to help these producers improve their management skills, production capabilities and access to markets – local / regional / international / Fair Trade and mainstream as appropriate.

Organizations, which buy Fair Trade products through Fair Trade intermediaries in the South, assist these organizations to develop their capacity to support the marginalized producer groups that they work with.


8.1 The FTO provides regular capacity building for its employees according to their needs and the needs of the organization.

A FTO develops a plan and budget for capacity building activities

Training may be provided internally or externally.


8.2 The Producer FTO provides regular training and support, when required, to FT producers and workers with the aim of strengthening their:

professional qualifications

product quality and designs (if applicable)

marketing capabilities (market information, pricing)

management capabilities

improvement of practices with regard to Fair Trade principles (e.g. children in the production process)

PO Continuous improvement

8.3 The Marketing FTO assists its Producer FTOs to improve their management skills, production capabilities and access to markets. If buying through an intermediary, the FTO must support capacity-building assistance to the FT producers through the intermediary or other local/national Fair Trade support organizations.

MO Continuous improvement

Principle 9 Promotion of Fair Trade

The organization raises awareness of the aims of Fair Trade and of the need for greater justice in world trade through Fair Trade. It advocates for the objectives and activities of Fair Trade according to the scope of the organization.

The organization provides its customers with information about itself, the products it markets, and the producer organizations or members that make or harvest the products.

Honest advertising and marketing techniques are always used. N° Compliance Criteria Applicable to Achieved by

9.1 The FTO promotes and/or raises awareness of Fair Trade and Fair Trade principles internally with its employees.

PO/MO/NTO Mandatory

9.2 The Producer FTO or Marketing FTO buying locally from informal producer groups, promotes Fair Trade and its principles to its FT producers, as appropriate to its size and scope of operation.




9.3 The Marketing FTO engages in the promotion of Fair Trade and its principles to the general public and consumers, as appropriate to its size and scope of operation.


9.4 The FTO demonstrates engagement in on-going and planned promotion of Fair Trade (internal and external), awareness raising, education, campaigning or advocacy.


9.5 The FTO collaborates with local/national Fair Trade Organizations and/or its FT partners in Fair Trade campaigning and networking.


9.6 The FTO provides its customers with truthful information about itself, the products it markets and the suppliers and producers of the FT products.

PO/MO Mandatory

9.7 The FTO employs honest and ethical advertising and marketing techniques.

PO/MO Mandatory

Principle 10 Environment

Sustainable sourcing Organizations that produce Fair Trade products maximize the use of raw materials from sustainably managed sources in their ranges, buying locally when possible.

Production techniques They use production technologies that seek to reduce energy consumption and where possible use renewable energy technologies that minimize greenhouse gas emissions.

Managing waste They seek to minimize the impact of their waste stream on the environment. Fair Trade agricultural commodity producers minimize their environmental impacts by using organic or low pesticide use production methods wherever possible.

Purchasing policy Buyers and importers of Fair Trade products give priority to buying products made from raw materials that originate from sustainably managed sources, and have the least overall impact on the environment.

Packaging and shipping All organizations use recycled or easily biodegradable materials for packing to the extent possible, and goods are dispatched by sea wherever possible.


10.1 The FTO complies with relevant key local and national rules and regulations on environmental aspects that concern their activities.

PO/MO/NTO Mandatory



10.2 The FTO strives to understand and minimise negative environmental impacts of production of FT products with regard to water conservation, protection of water bodies and natural ecosystems, energy usage and waste.


10.3 The FTO strives to understand key environmental challenges in its supply chains and prioritises products9 from sustainable sources and those produced with least overall impact on the environment.


10.4 All organizations use recycled or easily biodegradable materials for packing as far as possible, and goods are dispatched by sea wherever possible.


SECTION 11 Fair Trade Supply Chain Management

Purchasing A marketing FTO is expected to buy the majority of its products from suppliers who comply with the core Fair Trade Principles (see Annex 1 below). These may be WFTO members, producers or suppliers of Fair Trade products guaranteed under an equivalent Fair Trade system (see WFTO System Recognition Policy) or “unverified” suppliers directly monitored by the FTO.

Fair Trade Supply Chain Management A marketing FTO must have an internal management system in place to ensure that it is buying products from fair trade supply chains and that even unverified suppliers comply with the core Fair Trade Principles.

Use of the WFTO label Fair Trade products from the following sources may carry the WFTO label, once the FTO has signed a label agreement with WFTO and the FTO has undergone its first monitoring audit:

other WFTO members

suppliers certified or approved by a Fair Trade system deemed equivalent to the WFTO Guarantee System (see WFTO System Recognition Policy). In the case of partially equivalent schemes, the FTO can reduce the internal monitoring of that supplier accordingly.

producer groups/ suppliers directly monitored by the FTO as part of its internal monitoring system.

The label may not be used on products bought from unverified suppliers who are marketing organizations but not working directly with producers, as the FTO would be unable to carry out any monitoring of the producers of those products.

Other products in their range which are not specifically Fair Trade and therefore excluded from use of the label, are expected to be from sustainable / responsible production and from a supplier who does not act contrary to the values of WFTO. The FTO must declare in its WFTO membership profile which of its suppliers are not to be included in the scope of the WFTO Guarantee System and therefore cannot carry the WFTO label.

9 Products made from raw materials from sustainable sources or grown using sustainable agricultural methods.



11.1 In the operational profile (in Self Assessment Report) the FTO identifies all Fair Trade suppliers, as well as those suppliers to be included or excluded from the WFTO Guarantee System10. It also identifies the monitoring programme for each of the included suppliers, e.g. WFTO member, FTO's internal monitoring system, WFTO Equivalent System.

PO/MO Mandatory

11.2 A marketing FTO operates an internal management system to ensure that all its suppliers of FT products adhere to the core Fair Trade Principles. This includes responsible selection of suppliers and up to date information of the Fair Trade verification status of all suppliers (e.g. WFTO membership, FT certification, internal monitoring results) as well as basic risk assessments of possible violations of Fair Trade Principles in their supply chains, in particular unverified supply chains.

MO Mandatory

11.3 A marketing FTO buying from unverified Fair Trade suppliers must develop and put in place an internal monitoring system (IMS) to verify their compliance with the core Fair Trade. The IMS shall at least include:

A site visit to the production areas at least once every 2 years. This can be sub-contracted to another FTO, local researcher or local NGO but the FTO must ensure that the person carrying out the monitoring visit understands the core Fair Trade Principles and compliance criteria and must evaluate the findings;

The visits must be documented and cover the core Fair Trade Principles;

There must be demonstrated follow up on identified needs for improvement (e.g. training, awareness raising).

For verified suppliers (members of WFTO, or certified according to an approved FT certification system) the FTO may accept the result of their monitoring audits, without further need to conduct additional monitoring.

If a supplier is part of another FTO's IMS, the FTO may accept the result of their monitoring.

MO Mandatory by Year 2

10

Please note that an FTO is expected to buy the majority of its products from FT supply chains. The option to exclude suppliers from the WFTO Guarantee System scope is mainly to allow marketing organizations to add a few commercial products lines to their range. Although this does not serve their primary aim of benefitting marginalized producers it may help overall sales success to add items such as recycled or locally sourced products.



11.4 A producer FTO functioning as an umbrella marketing organization puts in place a simple internal monitoring system (IMS) to verify implementation of the Fair Trade Principles at all levels of the organization down to its FT producers. The IMS shall at least include:

That each producer group is visited (by field officers, advisors, representatives of the FTO etc.) at least once every 2 years with visits of production sites and interviews/discussions with producers. In justified cases a visit frequency of up to 4 years can be agreed with WFTO;

The visit must be documented and cover the core WFTO Principles applicable to producers (in particular in relation to safe working conditions, child labour, fair prices);

There must be demonstrated follow up on identified needs for improvement e.g. training, awareness raising.

PO Mandatory by Year 4

11.5 When selling a FT product that qualifies for the WFTO label to another marketing organization, the FTO shall ensure that all FT products are labelled in line with the WFTO labelling guidelines.



Annex 1 Core Fair Trade Principles

This is a list of the core Fair Trade principles that apply to all an FTO’s suppliers11 of FT products, whether they are WFTO members or not. These aspects must therefore be considered in the selection of FT suppliers and monitored by FTOs in their internal supplier management system.

1. Creating opportunities for small producers or other marginalized groups.

2. Transparent and accountable business relations with suppliers and customers.

Producers and workers are given a chance to participate in decision-making processes and have a voice within their organization.

3. Responsible and trade fairly. The organization pays producers on time and according to mutual agreement. They handle quality problems fairly.

4. The organization pays a fair price to producers, as mutually agreed by both sides.

5. No child labour or forced labour.

6. Commitment to non-discrimination, gender equity and freedom of association.

7. Ensuring safe and fair working conditions. The organization pays at least the applicable minimum wage, provides legally required benefits and manages working hours responsibly.

8. Where possible, assist in developing the capacity to support the marginalized producers that they work with.

9. The organization is expected to to provide truthful information about its organization (including prices to producers) to the FT buyer.

10. Respects the environment and where possible sources raw materials sustainably.

11

Marketing organizations or producer organizations selling to FTOs.

wfto fair trade standard draft 3 - people tree foundation...marketing fto mo fair trade organization...

Documents