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Fairtrade standards: audits guarantee fair conditions

Fairtrade products are now available in 125 countries – and the market is growing. But how can consumers be sure the products are really produced, processed and supplied fairly? We interviewed Fairtrade auditor Philipp Seitz of FLO-Cert.

Fairtrade is booming – and not just in Germany. In 2012 consumers all over the world bought Fairtrade products worth EUR 5.5 billion – a 15 percent increase over the previous year. In Germany alone sales rose by 23 percent. The producers are located exclusively in Asia, Latin America and Africa.

The certification body FLO-CERT is responsible for carrying out on-site checks to ensure producers and dealers comply with social, economic and environmental standards. The Fairtrade standard incorporates all key conventions enforced by the International Labor Organisation (ILO). We asked Philipp Seitz, an auditor at FLO-CERT, to talk about his work.

‘It observes social and economic criteria in addition to environmental ones’

What does your work entail in practice? How do you carry out an on-site audit?

Philipp Seitz: The work of a Fairtrade auditor is to check that producers – mostly farmers – comply with Fairtrade standards. Almost all Fairtrade products, now well over 50, are agricultural in origin. Producer groups vary in size; some are made up of as many as ten thousand farmers. So audits can sometimes take weeks, particularly if the audit is done by just one auditor. Between the first meeting and the last one, when the results are presented, we interview the farmers in groups as well as individually on their farms.

Fairtrade uses a variety of different audit techniques: group interviews, individual interviews, management interviews, field observations and document checks. These enable us to compare and check the various pieces of information one against the other, in order to get a clear overall picture and identify any dishonest  information. In addition, we have to check any relevant documents that prove whether or not standards have been observed. These might include factors such as product traceability or compliance on the use of Fairtrade Premiums.

What key criteria are the Fairtrade standards designed to enforce?

Philipp Seitz: Since this is essentially a social standard, it observes social and economic criteria in addition to environmental ones. These include aspects such as adherence to a minimum price and payment of a premium – a surcharge added to the Fairtrade Minimum Price to be used by producer groups for community projects. The standards also incorporate a whole series of ILO conventions which regulate employment conditions, including child labour. And we also check health and safety conditions at production facilities. When it comes to environmental criteria, for example, we look at any chemicals used, as well as at personal protection for the workers who handle these chemicals.

How easy (or difficult) is it for a company to get certification?

Philipp Seitz: As I said before, Fairtrade deals mostly with organised farmers’ groups such as cooperatives. But there are a few products which small farmers cannot produce in sufficient quantity and quality, so we also certify plantations. In such cases, Fairtrade’s target group is the plantation workforce. In terms of social standards, we typically look to see that production takes account of the sustainable development of the target group seeking certification. This means that requirements increase over time as groups gain experience. To begin with, for example, most groups are able to meet the basic requirements without problem. This cyclical increase in requirements enables groups to grow at the same pace.

Video ‘Fair Trade Benefits’: What Fairtrade means to farmers and their communities

Are the audits announced in advance?

Philipp Seitz: Audits of Fairtrade groups are generally announced and carried out once a year. Unannounced audits, what we call ‘mock audits’, are only conducted when there are grounds to believe that compliance with the Major Compliance Criteria is jeopardised.

Can you give an example of an audit that has been successful for many years?

Philipp Seitz: Well, there are many coffee cooperatives in eastern Africa where – despite their size (thousands and even tens of thousands of farmers) – checks have been carried out successfully for years or even decades. The same can be said of coffee cooperatives in Latin America, where numbers far exceed even those in Africa.

And what happens if Fairtrade standards are not observed?

Philipp Seitz: If a producer fails to observe the Major Compliance Criteria – these include appropriate use of the premium, no child labour, no banned pesticides – initially a suspension is imposed, which remains in force until correctional measures have been put in place. Failure to do this will result in the certificate being withdrawn from the group.

Background: Fairtrade standards

TransFair is a non-profit association established in 1992, whose objective is to improve living and working conditions for producers in Africa, Asia and Latin America through fair trade. Although TransFair does not deal directly with goods, it awards the Fairtrade label for goods that meet specified Fairtrade standards. With similar initiatives now in 20 countries worldwide, these merged to form Fairtrade Labelling Organizations International (FLO).

FLO-CERT is the independent certification body of Fairtrade International. Since 1997 it has been offering producers, dealers and manufacturers in approximately 115 countries certification in line with Fairtrade standards. The company employs over 100 auditors.

Philipp Seitz is one of these auditors. He also advises farmers’ groups on sustainability standards, developing systems for checking compliance with standards and designing technical service structures (‘extension services’), which take account of the challenges of climate change. After studying agricultural sciences in Bonn and Mexico, he worked for many years in Latin America (including in the Dominican Republic) exporting organic and Fairtrade bananas.

Auditing with the goal of certification is a lengthy process. In addition to interviewing company management, you also have to approach the workers. How do you ensure your measures achieve this?

Philipp Seitz: For the few products where plantations are permitted and which therefore do not involve small farmers, you have to go to the workers. But since with few exceptions Fairtrade targets organised groups of small farmers who belong either to a cooperative or some other legal structure, workers are generally only involved in exceptional cases, such as in processing plants. In these cases we visit the facilities and interview workers selectively, regardless of whether or not the product originates from a plantation or a cooperative. Whether and to what extent farmers are interviewed is established though group and individual interviews. To this end we carry out document checks and physical checks, including projects financed by the premium.

If we consider the specific case of cocoa production, the complete process involves other companies such as suppliers, in addition to the farmers. Are they also subject to the audit?

Philipp Seitz: The cocoa value chain is dealt with in exactly the same way as for other products. In addition to the farmers, the verification process applies to any actor involved in the value chain who comes into ‘ownership’ of the product. 

And from the consumer’s point of view, can you guarantee that the Fairtrade banana I buy at the supermarket is fairly traded? How can the consumer be sure?

Philipp Seitz: Thanks to the regular checks which guarantee both the implementation of Fairtrade standards and traceability right along the value chain.

What does a standard like this mean for the companies that manufacture your products in certificated factories?

Philipp Seitz: Certificated proof of quality improves prospects for sales and marketing – and higher prices as a result.

March 2015

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