CORPORATE SOCIAL RESPONSIBILITY

How to Obtain Fair Trade Certification

Interested in adding a social mission to your business, or simply finding importable goods farmed and manufactured with an eye toward environmental and economic sustainability? Here's how to work with Fair Trade USA.
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A tipping point for fair trade awareness came early in 2010, when Ben & Jerry's announced it would convert to fully fair-trade ingredients by 2013. For a certification that's only been in existence in the United States for 12 years, and is still gaining clout with consumers, that's not only a boon, but also a hearty stamp of approval.

The organization behind the certification, Fair Trade USA, was founded in 1998 as Trans Fair USA by University of California-Berkeley graduate Paul Rice. During travels to Nicarauga, Rice helped found a fair-trade-minded coffee cooperative—effectively the first of its kind in the world. Upon his return to the states, he wrote his thesis on reforming coffee importing practices. Today, the organization works with nearly 1,000 worker and farm collectives around the globe, with 2009 retail sales of $1.2 billion, and since its inception an estimated $200 million in additional income for farmers and workers.

Today, Fair Trade USA—the 501(c)(3)'s new moniker as of 2010—works with the Fairtrade Labelling Organizations International, know casually as FLO, to promote environmental sustainability starting at the farm level, by developing and certifying growing cooperatives around the world, and connecting domestic importers to cooperatives that uphold social, economic, and environmental standards. Within the United States, the group aims to enhance consumers' awareness of their purchasing power to "enliven developing countries, relieve exploitation, and promote environmental sustainability."

"At the end of the day, our mission is to end poverty in the developing world," says Stacy Geagan Wagner, director of media and public relations for Fair Trade USA, which is based in Oakland, California.

You've seen the Fair Trade logo, the figure holding two basins in front of a tilted globe, on coffee—2009 imports topped 110 million pounds. The organization also certifies tea, grains, chocolate, sugar, spices, herbs, fruit, vegetables, certain textiles, wine are available from fair-trade sources. They're often priced at a premium, which is due to the higher cost of working with the sustainable growing collectives and certifying other facilities that work with fair-trade products. In the U.S. market, more than 7,000 products sourced from 58 countries are certified and labeled as Fair Trade. If you're interested in bringing fair trade products into the United States, or are interested in converting your supply line into one that Fair Trade USA could certify, here's how to get started.

Fair Trade Certification: Learn Precisely What it Means

Fair Trade products can be found in 60,000 U.S. retailers—but how they got there, and what that certification logo means can vary greatly from product to product. Coffee sold as beans, for instance, is considered a whole, pure product, so every step of the growing and packaging process must be certified by Fair Trade USA, and a bag of beans must be 100 percent fair trade coffee to be labeled such. However, if coffee beans of fair-trade origin are used in another product, such as ice cream,  that doesn't qualify the ice cream product as fair trade—unless coffee is the only ingredient in that ice cream available for fair-trade approval.

That means when Ben & Jerry's converts to all fair trade products, and an ice cream made of domestic eggs and milk, and imported sugar, vanilla, cinnamon, and chocolate, can only be labeled as fair traid if the latter four ingredients are individually fair-trade certified.

Certification standards, however, vary per product category—which include such foodstuffs as beans, grains, and vegetables, as well as body care, apparel, flowers, and even sports balls. A detailed list is available on the products and partners page of Fair Trade USA's website.

For manufactured products, such as apparel, fair trade standards are introduced not only into the farm where the cotton or linen is produced, but also into the factory, so that workers living conditions and wages improved there as well.

"A couple of key things in manufacturing facility, are the working conditions, and having a voice in the workplace, having a private grievance process. We actually go in and train people as to what are their rights under fair trade," Geagan Wagner says.

What doesn't fair trade certification include?  Although being certified by Fair Trade USA doesn't mean a product is organic, the overlap is significant: 47 percent of the Fair Trade imports into the United States were certified organic as well in 2009, according to the organization.

Although organic certification is done by the United States Department of Agriculture rather than a nonprofit, it is a natural pairing Geagan Wagner says.

"Rigorous environmental standards have always been part of the Fair Trade certifications," she says. "A healthy environment is part of a healthy future. Our product is impacted by chemical use, and so is the land. Things that preserve the natural habitat are also important for the development opportunity of a community, so we work toward that."

Numi Organic Tea works with fair trade collectives, and sells a wide array of organic teas from around the world, after working with individual farmers to source and produce tea in ways that are healthy to the workers and land. Brian Durkee, the company's vice president of operations, says organic certification, which requires roughly three years of supervision of growing land, to ensure no prohibited pesticides or fertilizers are used, can be a significant challenge for both producers and sellers.

"Even if everything is perfectly clean, and no pesticides are used, they have to wait three years after the point you request certification," he says. "Frankly, it entails a lot of doumentation. Organics is a process that takes a lot of investment from a farm. And once you get it into the U.S., it is a labeling law."

Dig Deeper: The Mission-Driven Business


Fair Trade Certification: Find Your Niche


Stacy Fader had worked as a massage therapist and directed the spa at the Great Harbor Yacht Club in Nantucket, Massachusetts. Her dream was to create her own spa-friendly product line.

"Ive always thought that fair trade would be a good match for such a self-indulgent industry," Fader says. "Paying for fair wages for workers, and high-quality ingredients could give women a justification for spending so much on something so indulgent."

Fader called Fair Trade USA, hoping to develop the first  certified fair-trade salon and spa product line in the United States. The organization suggested existing cooperatives that farmed or produced ingredients she needed for her Kumani Essentials brand of hair, face, and body products, such as shea butter and chamomile.  Fader says she visited several cooperatives in West Africa, and talked with workers at farms that were fair-trade certified, and workers at those that were not.

"I visited a lot of places where fair trade practices were not in place, and after doing so, going with fair trade was a no-brainer, seeing how women and children were treated at each," she says. "I interviewed many of them, and they said that working for a fair trade cooperative really turned their life around."

Now, Fader imports shea butter from a cooperative in Burkina Faso, and uses every available fair-trade ingredient in her line of products. She's in the process of expanding her line of a dozen products, and says that getting a new balm or shampoo certified is an involved process that takes between one and three weeks. Her biggest struggle in making sure each product is certifiable is obtaining reasonable quantities of the raw ingredients.

"If there's any item I need that's available fair trade anywhere in the world, I have to buy it, so that gets a little tough," she says. "Ssome of the companies out there the minimum order out there is a whole truckload of chamomile!"

Should Fader, or any other fair-trade product producer, fall short and not be able to find every necessary ingredient, she could still label her product as using "fair trade ingredients," but would be prohibited from using the Fair Trade USA logo.

For importing whole products, such as produce, the process can be a bit simpler. Fair Trade USA maintains lists of every certified cooperative, and can connect a business with producers that fit its needs. Say you want to import fair-trade bananas, which are primarily farmed on plantations.

"The importer can always start with us, and we can connect them with producers on already certified farmers on plantations," Geagan Wagner says.

Dig Deeper: How to Build a Values-Driven Business


Fair Trade Certification: Work From Scratch


An alternative to working with Fair Trade USA's roster of existing fair-trade certified farms, manufacturers, and plantations, is to reach out to workers yourself and help them form a collective follow fair trade practices, so it can become certified.

When Numi Organic Tea wants to add a new product to its line, it starts from scratch, Durkee says.

"Many fair-trade importers will just find the fair-trade list of growers, and buy their products from that list. We will help invest in the growers and help them obtain the certification," he says. "Numi, with zero investment at first, has been doing this from day one, visiting, partnering with, and inspecting every partner. We don't offer a product unless we know we can stand behind it."

Durkee says working directly with suppliers makes natural sense for Numi, which has built itself as a company upon a mission of social consciousness, and fair labor standards are a part of that. He suggests that mission-driven businesses make an initial investment of roughly $3,000 to reach out to farmers and work directly with them.

"At the end of the day when you're dealing with organics and fair trade, you want everyone involved in the process to be a stakeholder in it. You want everyone in the process to see an improvement in their lives because of their involvement in it," he says. "I think the first step they're going to need to do is know who your suppliers are."

Dig Deeper: How to Write a Mission Statement


Fair Trade Certification: Engage Your Consumers

According to a study by Canadian public research firm GlobeScan, 73 percent of consumers that are familiar with the Fair Trade label also trust it. Part of Fair Trade USA's mission is to educate consumers so they know precisely what the fair trade certification means, and use their spending power to create better working conditions, healthier farms, and more prosperous communities around the globe.

"What we need is more awareness among consumers. They need to speak with their dollars, because then and only then will the larger companies find that their practices aren't sustainable," Geagan Wagner says.

While public awareness for fair trade increased fourfold from 2005 to 2010, according to Fair Trade USA, there's still a long way to go. "Mission-based people who start companies who want to do the right thing already are doing the right thing and working with fair trade cooperatives," Geagan Wagner says. "What we need is more awareness among consumers—they need to speak with their dollars, because then and only then will the larger companies find that their practices aren't sustainable."

Fader's Kumani Essentials  says fair trade certification made sense for her due to her product's ideal demographic of educated, mid-to-high income women, because "everybody right now is looking for the organic seal, the animal-friendly wording." And she says that while a lot of people still don't know what the Fair Trade USA seal "looks like yet, or what it stands for, it's clear people will be looking for it soon."

"There are so many claims made on bottles these days, that I really feel it's so important to educate the consumers, and salon and spa owners, as far as what this really means," she says.

Buywell Coffee, which is based in Colorado Springs, Colorado, sells 100 percent fair trade and organic coffee. Built as a mission-driven business, Buywell aims not only to provide its worker collectives with fair wages, but also to allow consumers access to—and information about—fair trade coffee. So the company gives a lot of thought to pricing, and tries to keep its coffee accessible to consumers.

"Fair trade coffee is a little more expensive because you pay social premiums. Right now coffee is far above the base price anyway right now," says Chris Aaby, Buywell's manager of sales and marketing. "But when it gets down to the store level, we want fair trade organic coffee to be available to everyone, so we try to keep the prices low."

He says engaging consumers with a unique story can build additional product capital. For instance, Aaby and other Buywell staff went to Peru in summer of 2010 to visit a cooperative in Tingo Maria. The cooperative, more than 40 years old, had for the first time picked out all of its beans from women-run farms, and mixed them together. Buywell bought the coffee, and is calling it Café Hope.

"We got to go into one of their homes while we were there. I asked one woman how it made her feel that there were people in the us actively seeking their coffee," Aaby said. "She said it gave her hope for her children's futures, that they will be able to take over the farm and have a sustainable life and healthy life. They had a credit union, and doctors, and central, self-sufficient building, and we want everyone to know that."

Dig Deeper: How to Encourage Your Customers to Do Good


Fair Trade Certification: Maintain the Fair Trade Standards

A significant part of fair trade certification, and the costs involved in being certified, is keeping proper records, and allowing Fair Trade USA and FLO to audit both your bookkeeping and the collectives you work with.

According to Fair Trade USA, sellers in the United States must report quarterly on purchases they have made, and it must match with the records from any farm.
They have to report quarterly on the purchases that they have undertaken.

"We basically do a paper-trail audit. We also do on-site audits. In some cases, we'll send a specialist on-site, but that depends on the size of the risk," Geagan Wagner says. "How big is the supply chain? How long have they been in the system? How big is the company?"

Labeling is also strictly enforced, including proper placement of the Fair Trade USA logo on a package, and whether it fairly represents all of the ingredients that go into that given product.

Fader says in addition to submitting her quarterly sales reports, she undergoes an annual audit, to ensure her company is purchasing only fair trade products, and using them in ratios that allow continued certification.

"If I have something made of water, coconut oil, and shea butter, shea butter is the only one I can purchase fair trade, I'd have to use a certain percent of shea butter to make it certified fair trade anyway," she says.

In order to maintain inspections, and fund its operations, Fair Trade USA charges sellers a percentage of sales, as well as other charges involved in the original certification process.

For Buywell, the cost is worth maintaining its mission. Aaby says: "It does cost us to have Fair Trade USA come in and make sure we're paying the correct price for everything, and the farmers have to pay also to obtain the certification. But when you think of this global network of people who have to go to every farm and ensure they're following child labor laws, sure, it's pricey for farmers to do, but it opens up a new global market to them once they do it."

Dig Deeper: How to Build a Culture of Employee Appreciation

Last updated: Jan 31, 2011

CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer

Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.




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