Fairtrade International commissioned Vrije Universiteit Amsterdam and Dimes Consultancy to conduct a due diligence analysis of the impact of its production chains on human rights, in the context of ESG(Environmental, Social and Governance) criteria. (1)
The objective of the research is to understand whether and how supplies of certified fair trade products can contribute to the Human Right Due Diligence (HRDD) of operators-in industry and distribution-who use them. (2)
1) Human Rights Due Diligence. Foreword
The United Nations Human Rights Council
unanimously adopted the Human Rights Guiding Principles on Business and Human Rights in 2011. (2) Human rights due diligence entails the duty of companies to proactively manage the negative human rights impacts of their supply chains. This responsibility is expressed in four essential duties:
- Identify and assess the actual or potential adverse human rights impacts that the company may cause or contribute to through its activities, operations, products and services related to its economic relationships,
- Integrate the results of impact assessments into business processes and take appropriate actions to control, mitigate and eliminate negative social impacts (actual and potential),
- Check the effectiveness of measures and procedures undertaken to address adverse human rights impacts,
- communicate how impacts are being addressed and demonstrate to stakeholders-particularly those affected-that appropriate policies and processes are in place.
2) Human Rights and Fairtrade
Human rights are at the heart of Fairtrade International’s vision. (3) Its label certifies that products have been made with respect for workers’ rights and the environment, with special attention to Low and Medium Income Countries (LMICs).
All workers and farmers everywhere based have the right to work in safe conditions, receive stable and adequate compensation to support their families with dignity. To be able to decide their own future, without giving up their union and association rights.
3) Due diligence, ESG and Fairtrade. The analysis of Vrije Universiteit Amsterdam
Vrije Universiteit Amsterdam analyzed Fairtrade’s Human Right Due Diligence (HRDD) in line with ESG criteria. The analysis considered:
- Minimum and standard commodity prices (fair trade),
- Training of producers and workers,
- Development projects and advocacy activities.
The survey was confined, due to cost and time constraints, to the conditions of female and male workers in banana cultivation in Colombia and the Dominican Republic and in coffee cultivation in Colombia and Ethiopia.
3.1) Human rights, five indicators
The analysis considers five human rights indicators:
- income,
- working conditions,
- freedom of association,
- Forced and child labor,
- Non-discrimination and women’s rights.
Information was gathered through individual and group interviews (> 100), workshops held with farmers and workers, documents and reports from other NGOs.
3.2) Method
The social impact of Fairtrade banana and coffee supply chains was analyzed using the one path backward method. That is, the researchers started from the results (with respect to the five indicators above) to assess whether and what Fairtrade interventions contributed and to what extent to the changes found.
This method of analysis, Outcome Harvesting, is more effective than others because the results are derived from a set of activities, which foster a context of relationships based on trust, solidarity and co-participation. Conversely, analyses based on simple cause-and-effect patterns are reductive. (4)
3.3) Favorable social impact
A favorable impact of the Fairtrade approach on social and economic rights has been observed in several areas:
- minimum price prevents the negative impacts of list volatility and ensures income stability. Farmers can then invest to improve the quality and resilience of production. Colombian coffee producers, for example, have purchased silos to protect coffee from rain and moisture,
- the ‘Fairtrade premium’ guarantees improved living standards while also helping to ensure useful services to communities, such as health and education. Through the establishment of local health garrisons, schools, scholarships,
- Fairtrade standards are effective in protecting weak parties in economic relationships. Not only farmers and suppliers of goods versus their buyers, but also, for example, migrant workers, whose protection has also been included in theHLO (Hired Labor Organizations) standard,
- protection of children and vulnerable adults is also effective. Fair price postulates fair production. Thus Fairtrade was able to mitigate the problem of child exploitation in Ethiopia and the Dominican Republic.
3.4) Areas for improvement
In contrast, fair trade has less influence in power relations within societies. Much discrimination is related to the entrenched social (mal)customs in some countries, where machismo and patriarchy still dominate. Rather than laws that still ignore the rights to form and join unions. And these discriminations are often so internalized that they are not perceived as such by workers. (5)
4) Fairtrade for due diligence of other supply chain players.
Business operators are now subject to a crescendo of responsibilities, with regard to:
- ESG and CSR(Corporate Sustainability Reporting. See notes 6,7),
- due diligence. Starting with the coffee, cocoa, soybean, palm oil and timber supply chains (8.9).
Certifications of hypothetical ‘sustainability’ of at-risk supply chains – RSPO(Roundtable for Sustainable Oil Production) above all – have, moreover, proven to be completely unreliable on environmental issues (10) and avoid venturing into the most sensitive topic, human rights precisely.
Sourcing Fairtrade certified products, on the other hand, can enable companies to fulfill Human Right Due Diligence (HRDD) requirements even on the most vulnerable and distant supply chains.
#SDG8, decent work and economic growth. #SDG12, responsible consumption and production.
Dario Dongo and Alessandra Mei
Notes
(1) Von Baar, A. & Knoote, F. (2022). A Fair Price for Human Rights Due Diligence. Bonn: Fairtrade International/Amsterdam: Vrije Universiteit Amsterdam. https://files.fairtrade.net/publications/A-fair-price-for-human-rights-due-diligence-Dec-2022.pdf
(2) Human Rights Guiding Principles on Business and Human Rights (2011). United Nations Human Rights Council https://www.ohchr.org/en/special-procedures/wg-business/corporate-human-rights-due-diligence-identifying-and-leveraging-emerging-practices
(3) Dario Dongo, Giulia Baldelli. Fair trade, ABC. The Christmas we would like every single day. GIFT (Great Italian Food Trade). 22.12.18
(4) The Outcome Harvesting method allows the consideration of expected and unanticipated outcomes by collection (harvest) of the results (outcome) of changes (in practices, behaviors, relationships). To understand what changes influenced outcomes. ‘In 2013, the United Nations Development Program (UNDP) Evaluation Office selected Outcome Harvesting as one of eleven promising innovations in monitoring and evaluation practices‘
(5) Information gathered during interviews and focus groups shows that in some cases, even in Fairtrade supply chains, women internalize sexist stereotypes. One woman interviewee noted, for example, that ‘on farms women are the first to wake up and the last to go to sleep.’ Another woman, during a workshop, asked her husband what his living wage was. Thus showing that they are unaware of their individual rights
(6) Dario Dongo. Sustainability reporting, ESG and due diligence. GIFT (Great Italian Food Trade). 18.7.22
(7) Dario Dongo. Corporate Sustainability Reporting, new EU directive kicks off. GIFT (Great Italian Food Trade). 2.12.22
(8) Dario Dongo. Due diligence and deforestation, stop unsustainable imports of commodities. Proposed EU regulation, the ABC. GIFT (Great Italian Food Trade). 6.3.22. NB: The EU Zero Deforestation Regulation (EUDR) was approved by the European Parliament, Council and Commission on 6.12.22
(9) Dario Dongo, Elena Bosani. Due diligence and ESG, corporate social and environmental sustainability, the proposed EU directive. GIFT (Great Italian Food Trade). 20.4.22
(10) Marta Strinati, Dario Dongo. Palm oil, soybean, wood, coffee, cocoa. What is the purpose of sustainability certification? Greenpeace Report. GIFT (Great Italian Food Trade). 16.5.21
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
Graduated in Law from the University of Bologna, she attended the Master in Food Law at the same University. You participate in the WIISE srl benefit team by dedicating yourself to European and international research and innovation projects.
