your Fairtrade cookbook

1. your Fairtrade cookbook Matilde Defraije Michael Van Overstraeten

2. agenda • Introduction : the scope of Certification & Licensing • New Standards Framework, what’s new ? • Are You Compliant ? strenghened controls • The Product Certification Process • Food Composite Product Policy • (discussion) • Traceability & Mass Balance • (discussion) • Labeling Fairtrade Products, how and when ? • Support & Tools • (discussion) 14.30 14.45 15.00 15.15

3. objective The Fairtrade Certification Mark is your independent guarantee that this product has been certified in accordance with international Fairtrade Standards. The purchase of this product enables the improvement of working and living conditions of producers in developing countries and encourages environmental protection.

4. Certification contract • framework contract allowing certification of products (and ingredients) against the Fairtrade specifications • compliance to the Fairtrade standards • control audits • applies to : every operator handling non-finished Fairtrade inputs/outputs • Licensing contract • framework contract allowing the usage of the Fairtrade Certification Mark on finished products • compliance to the Certification Mark guidelines • licensing rights • control audits • applies to : brand owners • in Belgium : “Certification & Licensing contract” Definitions

5. Who needs certification ? • Every operator in the supply chain • from producer to retailer,until the product is labeled Certification Exporter Producer Importer Processor Processor Wholesaler Retailer Once the end product is packaged, it can no longer be tampered with. So from there certification is no longer required.

6. responsabilities of the “License Holder” • comply to certification requirements when applicable (certification & licensing) • compliance to the Fairtrade standards • allow control audits • certification of the finished products • quarterly sales reporting • payment of license fees Definitions

7. agenda • Introduction : the scope of Certification & Licensing • New Standards Framework, what’s new ? • Are You Compliant ? strenghened controls • The Product Certification Process • Food Composite Product Policy • (discussion) • Traceability & Mass Balance • (discussion) • Labeling Fairtrade Products, how and when ? • Support & Tools • (discussion) 14.30 14.45 15.00 15.15

8. “New Standards Framework” • launched July 2011 • response to a clear call from producers to make the Fairtrade Standards work for them. • supports disadvantaged producers to enter Fairtrade and continuously develop over time. • easierto understand. • allows producers to choose theirown development path • Through the new division of requirements into core and development ones, producers now have more flexibility • Producers also write their own development plans • The NSF offers a better cost-benefit ratio for producers Standards

9. example Standards

10. Compliance Criteria • Keep the same format known today • 2 types: Core and Development • Core Requirements • Based on a Compliant/Non-Compliant approach • Development Requirements • Ranks are used for clarity and harmonization of interpretation to audit each requirement. • The auditor chooses a rank from 1 – 5 to grade the CC. • Scale: 5 (best practice) – 1 (no action) • average of all scores is calculated Standards

11. example: SPO standard • 4.12.0 : Disadvantaged / minority groups have been identified. • Ranks: • 5 The organization has developed criteria for this in writing and has identified all possible groups. • 4 The organization has analyzed this before the audit. • 3During interviews directors or managers are able to identify minority/disadvantage groups. • 2 During interviews directors or managers are not able to identify this OR there are obvious groups missing. • 1Organization opposed strengthening the position of minority groups of any/some kind. Standards

12. Generic Trade Standard (july 2011) • Key changes: • reorganization of the Standard into 4 chapters (General Requirements, Trade, Production and Business & Development) • inclusion of a chapter regulatingcomposite products and ingredients • inclusion of new sections defining physical traceability, single site mass balance and group mass balance. • addition of requirements on the use of the Fairtrade trademark Standards

13. agenda • Introduction : the scope of Certification & Licensing • New Standards Framework, what’s new ? • Are You Compliant ? strenghened controls • The Product Certification Process • Food Composite Product Policy • (discussion) • Traceability & Mass Balance • (discussion) • Labeling Fairtrade Products, how and when ? • Support & Tools • (discussion) 14.30 14.45 15.00 15.15

14. Are you compliant ? • statistics • strenghened controls • onboarding Matilde • sanctions • close follow-up of non-conformities • support towards compliance Standards (in 2010 less licensees were audited)

15. Sanction Framework

16. Major Non Conformities • 1.1.0.03The operator allows announced and unannounced audits at all premises including subcontracted premises and provides all requested information needed to demonstrate compliance with the Fairtrade standards. • ►Subcontractor contract required • 2.1.1.01 The trader has clearly identified all certified products as Fairtrade in all purchase and sales documentation (e.g. invoices, delivery notes and purchase orders). • ► FLO-ID of both parties + Faitrade ref. on article level • 2.2.1.5The operator must ensure that volumes sold as Fairtrade do not exceed the volumes purchased as Fairtrade. • ► Begin & end stock registration required for balance exercise

17. Minor Non Conformities • 1.1.0.11Keep FLO-CERT updated with contact details and any other relevant information that affects FLO-CERT certification (new company structure, change in legal status, etc.) • 1.2.0.04Submit all promotional artwork bearing the FAIRTRADE Certification Mark for approval, prior to use • 2.1.1.02 Purchase and sales documentation for unfinished Fairtrade products state both FLO ID’s of the seller and the buyer and display which products are Fairtrade and the applicable dates of transaction. • 2.1.1.07Keep record of all entries, processing and sales of Fairtrade products. • 8.3.1.2Submit all packaging of consumer ready Fairtrade products for approval, prior to use. • > Submit through Product Database!

18. agenda • Introduction : the scope of Certification & Licensing • New Standards Framework, what’s new ? • Are You Compliant ? strenghened controls • The Product Certification Process • Food Composite Product Policy • (discussion) • Traceability & Mass Balance • (discussion) • Labeling Fairtrade Products, how and when ? • Support & Tools • (discussion) 14.30 14.45 15.00 15.15

19. no product is allowed on the market without prior approval by the Licensing Initivative (Max Havelaar) • the reality • we still come across products that were not approved • we receive packaging approvals before recipes… • supplied information is incomplete • responsibility • the “License Holder” • advice • implement procedures for product development Product certification

20. approval process Product certification • submit product composition • check against GTS standard for compliance • submit direct supplier of ingredients • check certification status • submit full supply chain information • producers • intermediates (no currently implemented) • submit availability • countries, dates, distribution • submit packaging artwork • check against Certification Mark Guidelines • submit promotional artwork • check against Certification Mark Guidelines

21. how ? • onlineproduct database • when ? • beforeproduction ! • why ? • complianceto Fairtrade standards • Certification Mark credibility • clear communication towards consumers • what’s in it for you ? • know supply chain > secure supply, mitigate risks (wkp 3) • link consumer > product > producer impact • match offer and demand (challenge today) • promoteproducts Product certification

22. agenda • Introduction : the scope of Certification & Licensing • New Standards Framework, what’s new ? • Are You Compliant ? strenghened controls • The Product Certification Process • Food Composite Product Policy • (discussion) • Traceability & Mass Balance • (discussion) • Labeling Fairtrade Products, how and when ? • Support & Tools • (discussion) 14.30 14.45 15.00 15.15

23. What it is • Mandates the conditions under which a food composite product may carry the Fairtrade Mark and which food composite ingredients can be considered Fairtrade • Valid from • 1 July 2011 • Where to get a copy • Under section “2.2 Product Composition” of the Generic Fairtrade Trade Standard • Applicable to • all new products (since 1 July 2011) • existing products after transition period of 2 years • (1 July 2013) Food Composite Products

24. Previous Standard • All that can be Fairtrade should be Fairtrade • « Defining ingredient » • minimum 50% Fairtrade • New Standard : Golden rules • “All that can be Fairtrade should be Fairtrade” • Fairtrade standard exists • including minor ingredients • Minimum Fairtrade percentage • 20% • Products with > 50% added water/dairy • 20% of dry mass Food Composite Products

25. Exceptions • defined in the standard • only concerns ATCB (not minimum %) • Type I exceptions • Supply shortage • Inadequate quality • New standard (transition) • Unavailable ingredient (list) • Type II exceptions • Transitioning ingredient (insufficent volumes) • Provenance (AOC, AOP,..) • no product is approved unless it conforms to the standard or a formal exception is logged Food Composite Products

26. Discussion • What is your experience with the new standard ? • Are you aware of the unavailability list ? • What is your opinion on the FCP ? • Should an exception be granted for minor ingredients (<1%, <2%?) that are available as Fairtrade ? Food Composite Products 14.30 14.45 15.00 15.15

27. agenda • Introduction : the scope of Certification & Licensing • New Standards Framework, what’s new ? • Are You Compliant ? strenghened controls • The Product Certification Process • Food Composite Product Policy • (discussion) • Traceability & Mass Balance • (discussion) • Labeling Fairtrade Products, how and when ? • Support & Tools • (discussion) 14.30 14.45 15.00 15.15

28. what is Physical Traceability of Faitrade products? • Fairtrade products shall be marked and kept separate from non-Fairtrade produce at each stage of the supply chain • why is it important? • most consumers believe FT products come from FT producers • trend towards requesting phTr in food certification schemes: food safety, food quality and credibility or the label • what do the standards say ? • Physical traceability required for all products • Exception for sugar, juices, cocoa, tea • volontary traceability • long term goal : full traceability Traceability

29. PhysicalTraceability Traceability Mass Balance

30. Exceptions • Sugar • Physical traceability lost in producing countries • Whole year activity run by families • Different varieties are planted > harvest is prolonged during the whole year • FT and non FT inputs are mixedfor cost-effective production  • Highly perishable product, • Producers sell product to the closest processing unit • Processing units with big capacities • Juices • Physical traceability lost in producing countries • 80% of producers cannot segregate • Tea • Physical traceability lost in producing countries • 50% tea volume is mixed at producer level • At collecting points or transport, During processing, • and at storage Traceability

31. Exception : Cocoa • All producers claim physical traceability is possible • 65% of northern operators segregate • Mainstream cocoa industry: • Same recipe for most products > single continuous line • Huge volumes are processed avoiding halts • Segregation requires shifting 100% of the production to the FT • Requesting phtr could cause great damage to: • Mainstream partnerships • Producers receiving their premium • 35% of operators with no segregation • But … volontary certification against Fairtrade • with Physical Traceability Traceability

32. Mass Balance requirements • Documentary traceability requirements: invoices, delivery notes, contracts • Calculation of conversion ratio’s & recipes • FT ingredients should be purchased prior to selling • FT volumes sold should not exceed FT volumes purchased • FT quality purchased equals FT quality sold • FT sugar sold cannot contain 100% beet sugar • Applicable only on ingredients ! • example : not box of pralines • > different statement on packaging : • [Name(s) of ingredient(s)]: traded in compliance with Fairtrade standards. Total xx%. Traceability

33. Volontary Certification for Physical Traceability • Organic > traceable (?) • we will require a statement at productapproval (cheked during audits) • Request traceability from your suppliers ! • Documentary traceability requirements: invoices, delivery notes, contracts • identify ingredients as "Fairtrade with Traceability" • > different statement on packaging : • [Name(s) of ingredient(s)]: Fairtrade certified and sourced from Fairtrade producers. Total xx%. Traceability

34. Discussion • Do you have traceability ? • Questions? Traceability 14.30 14.45 15.00 15.15

35. agenda • Introduction : the scope of Certification & Licensing • New Standards Framework, what’s new ? • Are You Compliant ? strenghened controls • The Product Certification Process • Food Composite Product Policy • (discussion) • Traceability & Mass Balance • (discussion) • Labeling Fairtrade Products, how and when ? • Support & Tools • (discussion) 14.30 14.45 15.00 15.15

36. objectives • consistentusage (avoid consumer confusion) • clear and honest communication • applicable to • product packaging and promotional material (incl. online) • new guidelines ! • applicable from januari 2012 for new products • transition period (2 year) for reprinting existing products Certification Mark

37. Packaging Guidelines • Certification Mark • New version • Mark on front of pack • Respect aspect ratio, colors • size (less prominent than brand) • Messaging • no overclaiming (Fairtrade biscuit > Biscuit with Fairtrade ingredients) • no overclaiming (if Mass Balance : Fairtrade certified) • Identify Fairtrade ingredients • Total Fairtrade percentage • Minimum text Certification Mark

38. Messaging • before • "ingredients : Cocoa Masso*, Cocoa Buttero*, Sugaro*, Cranberrieso. o Organic certified / * Fairtrade certified (total xx%) • “The Fairtrade Certification Mark is your independent guarantee that the *Fairtrade ingredients in this product have been certified in accordance with international Fairtrade Standards. The purchase of this product enables the improvement of working and living conditions of producers in developing countries and encourages environmental protection.” • from 2012 • identifying Fairtrade ingredients by * is prohibited • Mass Balance : “[Name(s) of ingredient(s)]: traded in compliance with Fairtrade Standards, total xx%. Fairtrade means fairer trading conditions and opportunities for producers in developing countries to invest in their businesses and communities for a sustainable future. www.info.fairtrade.net” • Physical Traceability :"[Name(s) of ingredient(s)]: Fairtrade certified and sourced from Fairtrade producers. Total xx%. Fairtrade means fairer trading conditions and opportunities for producers in developing countries to invest in their businesses and communities for a sustainable future. www.info.fairtrade.net” Certification Mark

39. agenda • Introduction : the scope of Certification & Licensing • New Standards Framework, what’s new ? • Are You Compliant ? strenghened controls • The Product Certification Process • Food Composite Product Policy • (discussion) • Traceability & Mass Balance • (discussion) • Labeling Fairtrade Products, how and when ? • Support & Tools • (discussion) 14.30 14.45 15.00 15.15

40. support • better follow-up of inspections & assitance towards compliancy • enhanced support on ingredient research • pragmatic exception handling • tools • guidelines, best practices • online productdatabase • online product reporting Support

41. long term goals • product certification • the online productdatabase is user friendly • the online submission tool aligns with product validatiion processes • product information is complete • impact & sensitization • a consumer can find the producer organisation & impact based on product EAN code • match offer and demand • a consumer can find where products are available • a consumer can find proximity product retailers and consumption areas on google maps • an institution, company, or horeca can find suppliers (wholesalers) Support

42. long term goals • product certification • the online productdatabase is user friendly and favours reuse • the online submission tool aligns with product validatiion processes • product information is complete • impact & sensitization • a consumer can find the producer organisation & impact based on product EAN code • match offer and demand • a consumer can find where products are available • a consumer can find proximity product retailers and consumption areas on google maps • an institution, company, or horeca can find suppliers (wholesalers) Support

44. Discussion • What is your input ? • If there was only one thing to change, • what would it be ? • How can we support you further ? Traceability 14.30 14.45 15.00 15.15