In April, Fair Trade USA released a new draft labeling policy for multi-ingredient products, proposing to maintain a threshold requirement of just 20% fair trade ingredients while eliminating the requirement that all ingredients available as fair trade be included in fair trade form (“commercial availability”) and without adopting a requirement to disclose the percentage of actual fair trade ingredients included in the product. Fair World Project responded by submitting comments directly to Fair Trade USA and publishing a press release and blog describing our concerns that this policy is ultimately harmful to committed brands and producers as well as misleading to consumers.  Our assertion that the policy is deceptive is backed up by a survey conducted online by an independent researcher of more than 1,000 consumers that clearly demonstrates the use of the “Fair Trade Certified Ingredients” and “Fair Trade Certified [Specific Ingredient]” labels as permitted under the draft policy are misleading to consumers.  View Fair Trade Testing report as PDF file (1MB)

At this point, the open comment period on the draft policy is closed and we are awaiting word on the final policy.  However, the dialogue continues. And Fair Trade USA is publicly changing their arguments to justify their draft policy. For example, earlier this week, Fair Trade USA stated in an article that the reason for eliminating commercial availability is that in the US most sugar is sourced domestically, meanwhile not giving a reason for not requiring threshold disclosures. We submitted a response to these misleading statements:

Fair Trade USA has yet to provide a credible argument for their refusal to implement a basic level of transparency in its labeling policy.

The problem with a 20% threshold of certified ingredients with no accompanying disclosure of actual threshold or requirement that all ingredients commonly associated with fair trade be certified is not that composite products include domestic ingredients, it is that there is no standards or auditing for the other 80% and therefore no guarantee that a major ingredient, like sugar, is not purchased under exploitative conditions (either domestically or internationally).

This argument that companies are buying domestic sugar and that is why their policy is changing is both new and misleading. As stated in the article, Fair World Project was consulted as Fair Trade USA worked on this new policy. The exact wording of the option that was proposed was, “Businesses determine which ingredients will be Fair Trade except for commodities that are high profile, coffee/cocoa/tea, which must always be Fair Trade. After they determine which ingredients will be Fair Trade, they receive a label based on labeling policy.”

This was a question about business choice, not domestic sourcing. If Fair Trade USA would like to have a conversation about whether in the context of the United States specifically sugar may be considered an ingredient that is typically sourced domestically rather than one that is commonly associated with fair trade, we should have that discussion with broad stakeholder input. It should not be unilaterally decided as a justification for an otherwise deceptive and detrimental labeling policy that ultimately misleads consumers and undermines brands that are sourcing all or most ingredients from marginalized smallholder farmers under fair trade terms.

We will continue to call on Fair Trade USA to be transparent about their decision-making and to implement a policy that is clear to consumers and accountable to small-holder producers, workers, and movement-oriented brands and will update our website in the case of new developments.

Posted on May 10th, 2013

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Posted on April 24, 2013

Ask most ethically-minded shoppers whether a chocolate bar bearing a fair trade label on the front contains mostly fair trade ingredients and they would probably say yes. Chocolate bars have ingredients like cocoa and sugar and vanilla and one would expect that if a company cared to have one ingredient fair trade, they would of course want them all fair trade. Take for example Equal Exchange’s milk chocolate mini with 71% fair trade ingredients.  And that is the milk chocolate bar, the dark chocolate mini is 100% fair trade. Alter Eco makes a dark chocolate quinoa crunch bar that is also 100% fair trade.

But unfortunately this is not always the case. Under Fair Trade USA’s new labeling policy, they will allow their fair trade seal to appear in a prominent position on the front packaging of chocolate bars that have fair trade cocoa and no other fair trade ingredients. Currently brands are required to purchase as fair trade all ingredients available as such to use the seal in this way. Some milk chocolate bars are mostly milk and sugar, with cocoa as little as 32% of the total ingredients. Under the changed policy, the total percentage of fair trade ingredients may be just that same 32%. That means that a brand that buys cheap sugar through an exploitative supply chain, uses artificial vanilla flavor bought through a chemical company rather than a fair trade agricultural supply chain, and conventional milk powder will get to use the same fair trade seal as brands like Equal Exchange and Alter Eco who use 70-100% fair trade ingredients.

And although this policy change is still listed as being in draft form and open for feedback, it appears Fair Trade USA has always had this policy, at least unofficially, as in these chocolate chips with fair trade cocoa but not fair trade sugar or vanilla, and using the older Fair Trade USA logo.

It is not just chocolate. In this iced tea example, tea is the very last ingredient, even though there is a fair trade label on the front.

Fair Trade USA argues that their new policy of allowing companies to use only certified cocoa, tea, or coffee allows brands who currently use no fair trade to have an entry point and to benefit farmers by opening up new markets. In our most recent publication, Nasser Abufarha writes that there is room in the movement for companies that are not fully committed to fair trade, but they should not be allowed to dictate the movement. Though Nasser is an independent contributor, his articulation in this case does reflect the view of Fair World Project also. Opening up markets for fair trade producers is important, as they are the core of the movement and the most important recipients of the benefits of fair trade. However, multinational companies who open new markets for a limited segment of producers should not be allowed to dictate the terms, especially at the expense of those committed brands like Equal Exchange and Alter Eco cited above who have made a full commitment to transforming trade and are leaders in the movement. If they need to compete against less expensive “fair trade” products, they face unfair competition. And if too many unknowing consumers choose the bars with fewer fair trade ingredients, that could in turn impact the farmers who supply them, including farmers of ingredients like fair trade quinoa and vanilla that are not included in the bars with only fair trade cocoa.

Fair World Project has made several recommendations for how Fair Trade USA can change its labeling policy to allow for the entry of new companies without creating unfair competition and consumer confusion in the market.

One is to disclose the percentage of total fair trade ingredients on the packaging in a place where a consumer would see it at the same time as they see the fair trade logo. This is the most clear way to communicate quickly and effectively to consumers the difference between products that contain a small percentage of fair trade ingredients and those that are majority or fully fair trade. The percentage disclosure should be required especially as information accompanying a front-panel seal, but should also apply to multi-ingredient products containing minimal fair trade ingredients such that a front-panel seal is not used. This should be an industry standard.

Another recommendation is to increase the threshold from 20% to 50% total fair trade ingredients before the fair trade seal can appear on the front panel. If they did this, fair trade cocoa in a chocolate bar such as in the example above would be designated as fair trade in the ingredient list, giving credit to brands who use fair trade cocoa, but the seal would not appear on the front of the packaging where it is likely to confuse or even deceive consumers and create a disadvantage for truly committed brands. Ideally the total percentage of fair trade ingredients would still be disclosed, but raising the threshold requirement even alone would go a long way to improving clarity while allowing an entry point for brands new to fair trade, and would be more in line with the policy requirements of IMO’s Fair for Life.

So far Fair Trade USA has not taken these recommendations. The current proposed change would drop the requirement that all ingredients that are available as fair trade be certified as fair trade in a multi-ingredient product. The proposal does not include mitigating changes like raising the threshold to at least 50% for the use of a fair trade seal on the front panel and requiring disclosure of the percentage of total fair trade ingredients. Therefore this change undermines the movement for transformative trade and caters to companies who want to receive an advantage in the marketplace while making a minimum investment in fair trade supply chains and in producers.

5 Responses

Cathy Lawson

04.24.13

Lets call a spade a spade. No fair claiming Fair Trade when you are not. At least add the percentages. Sounds like false advertising to me!

Laurie McLaughlin, Canada

04.24.13

You’d think that a common-sense “fair” approach like a 50% minimum would be acceptable. How can consumers influence this trade labeling body?

Kerstin

04.24.13

The policy change is open for public comments through the end of the month. Perhaps if they hear from enough of us they will change their minds. You can give feedback by going to their website here http://www.fairtradeusa.org/certification/standards
and clicking on draft policy: multiple ingredient policy.

Pam Fischer

04.24.13

When I buy Fair Trade I want to know the profits go primarily to small farmers, to the indigenous workers, who make it. I want to know that my money is not slipping into the pocket of some larger corporation through loophole words or invisible behind the scenes agreements. If I can’t trust the Fair Trade label to be honest, then I’d rather skip the export products and stick with foods I buy from small local farmers and artisans instead. At least then I KNOW WITHOUT DOUBT that my money is supporting the person who cares enough to create food in harmony with nature Vs despite nature or in ways that destroy it and the people who depend on it for survivial. For me, buying Fair Trade is one of the ways I have to support the health and welfare of small farmers and food artisans everywhere, NOT the already bulging profits of corporations who care nothing about the quality of the food or the integrity of the food growing culture.

Danika @ Your Organic Life

04.24.13

As a former intern from their early days it really saddens me the way they have been watering down their certification for multi-ingredient products. Many of the same arguments in this article also apply to personal care products they certify, some of which have as little as 5% Fair Trade ingredients. I know the head of Fair Trade USA, and I know he is sincerely passionate about Fair Trade, but I think it’s a case of they can’t see the forest for the trees. They are so focused on producers they have lost site of the perspective of the consumers who need to trust the integrity of their certification. They really don’t get that the certification is being watered down and people are losing trust in it. And while they may be helping more producers right now, as fewer and fewer consumers trust the certification their ability to help producers is going to be diminished. It’s a bad move in the long term.

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Posted on April 2, 2013

Hershey has committed to “sustainable cocoa and improving the lives of cocoa communities,” through an announcement in October 2012 to “certify” all cocoa by 2020 and more recently in March 2013 by announcing that it has developed a roadmap for how to do this that includes working with three certifiers, UTZ, Rainforest Alliance, and Fair Trade USA.

To those already working daily to improve the lives of all farmers, workers, and agricultural communities, good intentions or long-term goals are not satisfying. Fair World Project calls on Hershey to do more and do it more quickly.

Immediate Steps

Though Hershey’s commitment to open their cocoa supply chains to third party scrutiny is surely a welcome step toward eliminating the worst forms of labor abuse including child labor and poverty, a series of press releases outlining an 8-year timeline does not make Hershey’s chocolates more fair today.  The estimated 1.8 million child workers and hundreds of thousands of impoverished farmers in West Africa need real change immediately.  As a $6 billion company and the holder of the largest market share of chocolate in the US, Hershey is well-positioned to improve the conditions of workers and farmers quickly and dramatically. Though certification of supply chains may be a lengthy process, there are many steps Hershey can implement right now if they are serious about their commitment to farming communities and sustainability.

• Empower farmers who supply chocolate to negotiate prices, collectively if they wish, that enable them to take care of their families, workers on the farm, and farm sustainably.
• Purchase cocoa on fair trade terms from farmers already on the FLO-Cert registry as fair trade producers who are unable to currently sell all cocoa as fair trade.
• Provide regular, public, and transparent updates on progress made toward goals, not just on future plans.

  Increase commitment to the Child Labor Cocoa Coordinating Group for approved programs. This coalition is coordinating programs to end child labor with funding from major chocolate companies, of which Hershey is among the lowest contributors.

Commitment to Fair Trade and Third-Party Certification

It is vitally important to improve the lives of all farmers and workers, not just those undergoing auditing for third-party certification. However, when third-party certification is involved, the marketing message should be clear and consistent.

• Be clear about what a given certification label means and do not make false marketing claims. For example, Rainforest Alliance, a stated labeling program working with Hershey, is not a fair trade certification. Though this may be a suitable option to ensure that the worst labor abuses are eliminated and some environmental standards are upheld, Hershey needs to clearly acknowledge that this is not the same as fair trade. There are no standards or policies ensuring fair payment to small producers or other key fair trade principles.
• Hershey has the ability to positively impact the lives of thousands of farmers and workers by changing its business practices. If Hershey would like to claim some or all products as fair trade, it is not enough to only eliminate the worst abuses. It is essential to work with legitimate fair trade programs that address all principles of fair trade and meet the approval of the network of farmer and worker organizations, consumer advocacy organizations, and fair trade watchdogs working to ensure a high bar for fair trade. Fair World Project maintains our own list of recognized fair trade labels and constantly re-evaluate this based on changes in standards and practices of all programs.
• Consumers and advocates who wish to ensure their chocolate is produced and purchased under fair trade terms already have many options from brands fully committed to fair trade and farmer communities. If Hershey chooses to label and market any brands or products as fair trade, they should choose legitimate, high-bar labels, and also report the percentage of total company revenue that fair trade products represent.

Full Company Commitment

The cocoa industry is notorious for problems throughout the supply chain including poverty wages for farmers, child labor and child trafficking, and other labor rights abuses. Chocolate is also the identity ingredient in many of Hershey’s signature products such as Hershey’s kisses, Reese’s Peanut Butter Cups, and Kit Kat bars. Therefore, it is a good and logical place to begin its commitment to social responsibility. However, to be taken seriously as a company committed to social responsibility, farming communities, and the environment, a single-ingredient focus is not enough. There are social and environmental problems associated with many of the ingredients in Hershey products as well as in product production, and a holistic approach is needed both to ensure the well-being of farmers and workers through the total supply chain.  This eliminates the possibility of unfair competition with those brands that are in fact ensuring fair prices, working conditions, and sustainability for all ingredients and production practices. In some Hershey products, Hershey’s kisses for example, chocolate is not the top ingredient. Therefore, to establish itself as a company committed to social and environmental justice, Hershey needs to:

• Display a label denoting social or environmental sustainability on the front panel only if at least 50% of the dry weight meets the label standards, even if the labeling program would otherwise allow such use of the label, or clearly list the percentage of total product that is fair trade on label
• Commit to public transparency of wages and practices throughout the supply chains for all ingredients.
• Partner with consumer, worker, and farmer advocates to implement best practices in production, payment, wages, transparency and accountability.

We applaud efforts that pressure Hershey to uphold principles of justice and transparency that will benefit farmers, workers, and consumers without creating unfair competition for companies already implementing such beneficial business practices.

We also support and promote those brands that are already fully committed to farmers and workers through fair trade.

One Response

Kay Warren1

04.02.13

What else do you want us to do re Hershey?

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