Fair Anita is a member of the Fair Trade Federation, one of our Ethiopian artisan group partners is in the process of becoming a World Fair Trade Organization member, and Fair Trade International is one of the most recognizable fair trade logos. Each of these organizations has developed its own standards for for being a “true fair trade” organization and differentiating between them can be difficult. And these are only three of the most common fair trade networks and organizations. With so many options, it’s tempting to assume all of them are the same, but these three have different aims. Fair Trade International is a formal and expensive certification agency and membership organization that publishes quality standards for every fair trade product imaginable. The World Fair Trade Organization works to help fair trade organizations be their best and meet consistent fair trade principles while fostering a community of fair trade producers and traders. The Fair Trade Federation is specific to North America and works to develop a community of fair trade vendors based on principles similar to the World Fair Trade Organization’s, in order to promote the growth of the fair trade industry in North America.
Fair Trade Federation
The Fair Trade Federation belongs to the World Fair Trade Federation and is an association specifically for traders in North America who demonstrate a “360° Fair Trade” commitment. It’s nine fair trade principles are loosely based on the WFTO’s ten principles, but are tailored to organizations that sell products made all over the world in North America. Fair Trade Federation Members have access to the FTF logo after a rigorous screening process, and a community of similar organizations.
- Create Opportunities for Economically and Socially Marginalized Producers
- Develop Transparent and Accountable Relationships
- Build Capacity
- Promote Fair Trade
- Pay Promptly and Fairly
- Support Safe and Empowering Working Conditions
- Ensure the Rights of Children
- Cultivate Environmental Stewardship
- Respect Cultural Identity
These principles, while similar to the WFTO’s 10 Principles of Fair Trade, are intended to guide North American vendors of products made around the world to operate their businesses ethically with the needs of their producers and suppliers prioritized.
The screening process to be a FTF member and to use the FTF logo is based on a set of criteria and providing ongoing verification of that criteria. The criteria center on being a proven fair trade organization, with one year of operations, fair trade principles written into the mission, structure and everyday operations of the organization. The organization must also be primarily focused on trade in North America, having operations and paying taxes in either the U.S. or Canada. However, direct relationships with producers in other countries is encouraged as well. To prove it meets these criteria, an organization must provide financial statements, a list of producers, a list of wholesale vendors, and three references, one of which must come from a producer if the organization has relationships with producers. Applicants must also describe how their operations supports each of the nine principles.
After the initial application has been accepted, organizations must continue to provide updated financial statements and producer lists each year, as well as proof of support for two of the nine principles in their operations. Those two principles chosen by the Fair Trade Federation on rotation, so that all nine of the principles are evaluated over the course of five years.
As with all these organizations, dues are expected of member organizations. After the initial $85 application fee, annual dues for the FTF are based on a graduated scale based on sales revenue. The maximum amount an organization would pay is $2500 + .10 for every $1000 in sales after 2 million.
The FTF prides itself on the community it has built and the benefits to joining are tightly tied to the strength of that community. Organizations can rely on the connections between each other as well as the visibility afforded to FTF members. Use of the FTF logo comes with additional screening and usage fees, but provides the same credibility and opportunity to spread awareness about fair trade as the Fairtrade Mark from Fair Trade International and the WFTO Mark.
To learn more about the Fair Trade Federation take a look at their website: www.fairtradefederation.org.
World Fair Trade Organization
The World Fair Trade Organization (WFTO) is concerned with organizational adherence to fair trade principles. In 2013 WFTO released their Guarantee System which doesn’t guarantee or certify specific products, but instead institutes an “assurance mechanism” to monitor companies that volunteer themselves as fair trade. They define fair trade with ten principles, and then hold organizations accountable for them with the Guarantee System and reward them by allowing them to use the WFTO label.
The best explanation for WFTO’s “10 Principles of Fair Trade” is their website. Organizations that have earned the WFTO label will uphold these principles, and they are written to as descriptions of an organization that does just that. But for ease of reference, here is a quick summary:
- Creating Opportunities for Economically Disadvantaged Producers The organization has a plan to create opportunities for the producers in its community.
- Transparency and Accountability This principle is concerned with how the organization communicates both internally and externally. Does it involve employees in decision making? Is it honest with its stakeholders about how it operates?
- Fair Trading Practices WFTO defines fair trading practices along social, economic and environmental dimensions, especially how those dimensions impact the marginalized small producers they work with. WFTO wants to make sure it’s organizations are dealing in good faith with the producers they work with.
- Fair Payment WFTO outlines fair payment as Fair Prices, Fair Wages, and Local Living Wage. Fair prices are mutually agreed upon between buyer and seller and are not established by taking care of unequal power dynamics. Fair wages are at least the local living wage, which is sufficient to cover food, water, housing, education, healthcare, transportation, clothing, some savings, and other essential needs.
- Ensuring no Child Labor and Forced Labor WFTO uses the UN Convention on the Rights of the Child to define child labor as well as local law. This principle extends beyond the organization seeking the WFTO label to their supply chain, ensuring that the organization does not rely on forced or child labor in any way to produce their profit.
- Commitment to Non Discrimination, Gender Equity and Women’s Economic Empowerment, and Freedom of Association This WFTO principle requires the organization to not only refrain from discriminating themselves but to have a plan to promote gender equity in the community. This principle also provides for the employees’ right to create unions and bargain collectively.
- Ensuring Good Working Conditions The WFTO establishes the minimum for good working conditions and working hours as compliant with local laws and International Labor Standards on Occupational Safety and Health. Organizations must also be aware of and actively involved in improving the health, safety and working hours of the producer groups in their supply chain.
- Providing Capacity Building The organization is actively working to provide grow the producer groups it is working with and works on developing the capacity of its members.
- Promoting Fair Trade The organization vocalizes its support for fair trade.
- Respect for the Environment The organization priorities the use of raw materials from sustainable sources and work to reduce their footprint with renewable energy sources and reduced energy consumption.
These principles cover a lot of ground, and the WFTO has adjusted its standards so not all of them are mandatory to gain the WFTO label. However, the non-mandatory standards are still tracked, and improvement must be shown over certain time horizons.
The Guarantee System is how the WFTO encourages fair trade organizations to comply with their standards and continue to grow. It was implemented in 2013. To achieve Guaranteed Status an organization has to complete the following steps:
- Application - In order to apply, an organization must meet certain criteria. They must demonstrate commitment to the WFTO’s Fair Trade Principles, which also requires two years of sound, sustainable operations in order to prove that. The organization must have the needs and futures of disadvantaged groups at the heart of its mission, and have three external references, one of which is already a member of the WFTO. Fair Anita has provided these for artisan groups in the past. The application itself only requires filling out the application form and paying the necessary fee. The fee is determined by annual sales or income, and won’t exceed €750 or $878. The annual WFTO membership fee is gradated in the same way, with the maximum fee being €2,600 ($3,042) for a producer or organization in an exporter country, and €10,400 ($12,172) for an organization in an importer country. WFTO does provide resources to help complete the application if necessary.
- Provisional Membership Status The global Board of Directors for the WFTO votes on the status of an organization’s membership status, to gain Provisional Member status. This status does not include the right to use the WFTO Mark or Product Label, but it does include a welcome package! The package includes information on becoming a Guaranteed Fair Trade Organization.
- Self Assessment Report This must be completed within one year of gaining Provisional Member Status. It is a process to help organizations new the WFTO understand and comply with the standards set forth by WFTO Fair Trade Standard.
- Peer Visit This stage is intended as preparation for the Monitoring Audit and helps the organization new to the WFTO establish it’s network within the WFTO. A peer organization visits the new organization and walks through their Self Assessment Report to establish areas for improvement. These are not necessarily mandatory to become a Guaranteed Member, but are mandatory once an organization becomes one.
- Monitoring Audit This must be completed within one year of the Self Assessment Report to ensure accurate information. An auditor from the same region as the organization will visit and go through the Self Assessment Report and review supporting information. The WFTO will review the report from that auditor.
- Improvement Plan This will be developed based on any shortcomings found in the Monitoring Audit. This can be updated as improvements are made, and is the last step before achieving Guaranteed Status.
- Guaranteed Status Only at this point can the organization use the WFTO Product Label, and this begins the four year Monitoring Cycle, which involves an Self Assessment Report and Monitoring or Peer Audit every year. Some criteria becomes mandatory in year 2 that wasn’t mandatory to achieve the initial Guaranteed Status, so improvements still must be made.
Throughout this process, the organization is subject to the Fair Trade Accountability Watch (FTAW). This is similar to a Better Business Bureau for fair trade. Anyone can submit a complaint against a WFTO organization for failing to live up to the standards set by the WFTO. This mechanism is part of what keeps WFTO organizations accountable year after year.
The benefits to being a WFTO member mirror those of being a truly fair trade organization. By valuing the social, economic and environmental health of your organization’s community you can build a sustainable business that promotes good in the world. But along with that the WFTO label provides credibility to your brand and a community to rely on for help as you grow.
The World Fair Trade Federation website, https://wfto.com, is a great resource for more information about their Guarantee System, Fair Trade Principles, or membership!
Fair Trade International
Fair Trade International touts itself as the world’s largest and most recognizable “fair trade system.” They call themselves a system because it is not just a membership organization, but a body that establishes and upholds standards for fair trade production and provides a certification process through its FLOCERT arm for producers to earn that certification and prove to their vendors and consumers that they are verifiable fair trade, ethical, organizations. The hallmarks of this system are the Fairtrade Mark, Fairtrade Minimum Price and Fairtrade Premium.
The Fairtrade Mark is the branding provided to producers who have completed the certification process. It tells consumers that the product has met Fair Trade International Standards for fair trade.
The Fairtrade Minimum Price is an agreed upon price between producers and vendors that sets a standard price for a product that won’t drop even if the market for the product does, protecting producers from market variability.
The Fairtrade Premium is similar to the Fairtrade Minimum Price in that it’s a promised amount to pay a producer for their fair trade product. This Premium must go to improving the producer’s community socially, economically, or environmentally.
Fair Trade International’s certification is designed for producers, like Fair Anita’s artisan partners. They do work with trader organizations like Fair Anita, but do so less often and it is not their primary focus.
To learn more about Fair Trade International and all their standards, processes, resources, and components, go to their website: www.fairtrade.net.
Fairtrade International develops specific standards for all types of organizations and products, but the ones that are relevant to Fair Anita and its artisan partners are the Standards for Hired Labor, which are based on the following principles:
- Management of Fairtrade Premium. The Fairtrade Premium Committee, which includes workers’ representatives, is responsible for the management of the Fairtrade Premium in accordance with Fairtrade standards.
- Freedom of association and collective bargaining. Workers have the right to join an independent union to collectively negotiate their working conditions.
- Working conditions. Working conditions are equitable for all workers. Salaries must be equal or higher than the regional average or than the minimum wage in effect. Health and safety measures must be established in order to avoid work-related injuries.
- Physical audit - conducted with the following principles: “auditors are fully impartial, there is regular rotation of auditors, auditor fees are solely paid by the certifier, and the audit report is fully documented for transparency.” This step takes as long as it takes, generally, because it is dependent on the complexity and size of the organization. Auditors are looking into whether the organization upholds the standards of Fair Trade International.
- Audit report is sent to FLOCERT, the independent agency that evaluates and approves audit reports. This step can involve back and forth between FLOCERT and the organization under audit to rectify any “non-conformities.” While this can be hassle, it also proves that FLOCERT and by extension Fair Trade International, wants organizations to pass through the certification process successfully. Their statement on the subject says “Fairtrade’s approach is a balance between strictness and encouraging development… the overall focus is on giving Fairtrade products the opportunity to address problems and improve over time.” (https://www.fairtrade.net/producers/certifying-producers.html). Upon approval of the audit report, a three year certification cycle begins.
- During those three years, the organization is subject to 1 or 2 confirmation audits that are intended to monitor routine data, amounts received and paid around the Fairtrade Premium, and individual organization set up.
- The final step in the three year certification cycle is a renewal audit conducted in the third year. If the audit report is approved by FLOCERT, then another three year cycle begins.
- The organization is subject to unannounced audits at any time. These audits are prompted by indications of issues brought to the attention of FLOCERT. Sometimes these are allegations made about the organization specifically and sometimes these are higher level environmental factors that put the organization at greater risk for violating Fair Trade International’s standards.
FLOCERT also conducts audits of traders (organizations like Fair Anita as opposed to its artisan partners) but only in Australia, Canada, and Japan.
While FLOCERT is responsible for paying auditor fees, the certification process is not free for organizations seeking the Fairtrade Mark. The FLOCERT website does provide a cost calculator, and its output for an example artisan group (one factory without about 20 workers and 10 products to be certified) is steep. Given in Euros, the first year would cost the imaginary group €4,200, or $4,915 and the second and any subsequent year would cost €3,100 or $3,630. (https://www.flocert.net/solutions/fairtrade-resources/cost-calculator/).
Going through the FLOCERT process earns an organization the right to use the Fairtrade Mark on their approved products and inducts the organization into a regional Fairtrade Producer Network.These networks are supported by Fairtrade Standard specialists that advise, train, and provide information to help these organizations comply with and grow under the Fairtrade Standards.
Benefits of the Fairtrade Mark itself are centered on the credibility it brings products that have earned the Mark. It signals to consumers and vendors that the product has been found by independent auditors to be made ethically, according to Fair Trade International standards. For consumers who know about fair trade, the mark means that the product is certifiably fair trade and has gone through the stringent process to acquire that mark. It’s not just using the words fair trade and not meaning them. For those who aren’t as aware of the fair trade industry, the mark is a way to signal that the product doesn’t just come from far away, by purchasing it, they are supporting an organization that is good for its community.
Are all Fair Anita partners certified by one of these organizations?
The short answer is no. While knowing these differences and recognizing the logos can help you identify verifiable fair trade products in the market, not every true fair trade producer has earned one of them. Fair Anita does not require its artisan partners to have one of these certifications because the process of earning one is long and expensive. Fair Anita also aims to have close relationships with all of its artisan partners, so having an outside organization monitor the same things that Fair Anita pays attention to is not totally necessary.