|
Fair trade is all about giving producers and workers a better deal while providing consumers with the choice to know that they are not eating or consuming bloody or slave produced treats.
The Fair Trade Labelling Organization (FLO ) is the biggest international body that certifies producers, importers, and is likely familiar to many N.A. consumers from the Transfair USA and Transfair Canada labels on coffee, tea, and chocolate.
The Institute for Marketecology (IMO) has created a "complimentary" fair trade / social responsibility set of standards that is more flexible and are easier to adapt to different production and labour conditions and goes beyond farmer coops. Fair For Life.
Major Differences
Production Organization
FLO generally requires that producers form coops to ensure that producers control the process. In cases where coops do not exist, this may leave some producers unable to access FLO certification. IMO will certify more flexible production relationships.
Fair trade premium
FLO sets a worldwide fair trade premium for a commodity. Producer coops determine how the premium will be spent.
IMO does not set the premium. It is arrived at through negotiations between the producers and buyers. This has the potential for abuse but currently results in approximately 10% premiums, according to the IMO.
Products
FLO certifies a wide range of primary commodities from coffee and tea, to quinoa and seed cotton. IMO has no limit on the number of products that it will certify as long as they meet the standards. Thus producer organizations and buyers can make separate/joint applications to IMO and get certified with a bit less red tape.
Which one is fairer?
This is a question that really can't be answered. Long term the goal of fair trade and these certifications is to make all production fairer. The actions of producers and buyers are more important than the actual label on the products. The IMO standards have a twin edged benefit of flexibility, which could lead to more or less fairness based on the principles/or lack of that the parties live up to. For now, long live FAIR Trade!
A comparison of the systems is also provided by the IMO :
IMO’s FairTrade standards are based on FLO standards and ISEAL recommendations for social standard setting, which incorporates key aspects of the requirements by Rainforest Alliance, SA 8000 and ILO Conventions. IMO’s system is intended to serve as complementary to existing Fairtrade and social certification schemes. It builds on the experiences made with the implementation of these systems while addressing some of the challenges faced by these schemes. The following table shows a comparison of key provisions of the IMO versus other Fairtrade programmes.
| Comparison between IMO and other Fairtrade systems |
| Products |
Same standard applicable to all kinds of products, food and non-food. |
| Type of Smallholders groups |
IMO certifies smallholders not only if organized in formal co-operatives and associations but also when contracted by a commercial buyer or NGO (contract production). Specific rules for contract production ensure that contract growers are treated fairly.
Because contract production is a common business relationship in developing countries Fairtrade rules must ensure fair treatment of smallholder contract farmers. Numerous smallholder projects in Asia and Africa that appear to have a strong beneficial social impact for thousands of smallholder farmers are contract production projects, because no traditional well-working cooperative structures exist. |
| Pricing System |
The fair price and Fairtrade premium is agreed between supplier and buyer, not set by IMO. It applies to all purchases by a buyer, not only certain Fairtrade consignments. FLO sets specific minimum prices and fixes the premium for each commodity, sometimes even country specific. Farmers are always guaranteed a minimum farm gate premium price in addition to a Fairtrade premium that may or may not be paid directly to the farmers. If the premium is not paid directly to the farmers it is used for social development projects in the farmers communities. The pricing system ensures that farmers get a fair price and that workers as well as farmers can contribute to the social development of their respective communities. Thus the basic aim of the pricing system is the same as FLO’s, but to reach the same goal, IMO let’s the trade partners agree on an appropriate price and premium, based on transparent and open negotiations. IMO then checks that the paid prices and premiums are appropriate and fair. |
| Fairtrade premium |
IMO does not set a fixed Fairtrade Premium for each material or product. Rather, the trade partners agree on a suitable premium price in due consideration of the aims of Fairtrade and the overall premium price that shall reach the farmers or targeted social group. Typically, IMO Fairtrade premiums are app. 10% of farmgate prices which is in a similar range as FLO premiums.
Fairtrade premium shall reach the targeted social groups, normally farmers and workers. In some settings the main target group can also be e.g. migrating labor in small/medium size farmers or in small processing workshops. It is recommended to focus premium use on the most marginalized target groups in a specific production situation.
Decision on use of overall Fairtrade premium can be made by a committee (not only farmers assembly/workers assembly) which may also include the Fairtrade buyer and external development experts. |
| Certification System |
Standards and compliance criteria are transparent for companies seeking certification. The certification system requires good overall performance for the first inspection and sets incentives for continuous improvements.
The rating system and qualitative evaluation of social impact and special achievements on IMO’s website allows certified operation to objectively demonstrate exceptionally high performance. |
| Quality control in smallholder groups |
Farmer groups must have an Internal Control System (ICS), modeled after that for organic certification, to ensure that the individual farmers actually comply with social as well as applicable environmental standards. |
| Transparency of performance |
IMO publishes performance rating of certified operations on the website for maximum transparency. The buyer knows what “their” Fairtrade premium is used for. (The website is under construction and will be available soon). |
| Equivalence with other systems |
For multi-ingredient products, IMO will accept as equivalent and on a case-by-case basis, certification of ingredients by other certification systems that meet criteria as rigorous as IMO’s. This allows meeting content rules for Fairtrade ingredients, even though not all ingredients may be certified by IMO. |
| Multi-ingredient products |
IMO’s programme requires that multi-ingredient products contain meaningful proportions of Fairtrade or Social Responsibility certified ingredients before the entire product can be certified. |
| Textile Chain of custody requirements |
For Fairtrade textiles, IMO audits all major labor-intense textile processing steps, and ensures that a Fairtrade premium is also paid for and reaches workers in cloth manufacturing workshops. In contrast, other schemes focuses on the production of cotton under Fairtrade conditions. |
|
