Fairtrade International entrusted the Vrije Universiteit Amsterdam and Dimes Consultancy with an analysis of due diligence on the impact of its production chains on human rights, in the context of ESG criteria (Environmental, Social and Governance). (1)
The aim of the research is to understand if and how the supply of certified fair trade products can contribute to the Human Rights Due Diligence (HRDD) of the operators - in industry and distribution - who make use of it. (2)
1) Human Rights Due Diligence. Premise
The United Nations Human Rights Council unanimously adopted the document in 2011 Human Rights Guiding Principles on Business and Human Rights. (2) The due diligence on human rights entails the duty of enterprises to proactively manage the negative impacts of their supply chains on human rights. This responsibility is expressed in four essential duties:
- identify and assess the actual or potential adverse human rights impacts that the enterprise may cause or contribute to causing through its activities, operations, products and services related to its economic relationships,
- integrate the results of impact assessments into business processes and take suitable actions to control, mitigate and eliminate negative social impacts (actual and potential),
- verify 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 brand certifies that the products have been manufactured respecting the rights of workers and the environment, with particular attention to Low and Medium Income Countries (LMIC, Low and Medium Income Countries).
All workers and farmers wherever based have the right to work in conditions of safety, receive a stable and suitable remuneration to support their families with dignity. Being able to decide your own future, without renouncing union and association rights.
3) Due diligence, , ESG and Fairtrade. The analysis of Vrije Universiteit Amsterdam
Free University Amsterdam analyzed the Human Rights Due Diligence (HRDD) of Fairtrade, in line with ESG criteria. The analysis considered:
- minimum and standard prices of commodities (fair trade),
- training of producers and workers,
- development projects and activities advocacy.
The survey due to cost and time constraints, it was limited to the conditions of male and female workers in the cultivation of bananas in Colombia and the Dominican Republic and in those of coffee in Colombia and Ethiopia.
3.1) Human rights, five indicators
The analysis considers five indicators of human rights:
- Income Amount,
- working conditions,
- freedom of association,
- forced and child labour,
- non-discrimination and women's rights.
The information were collected through individual and group interviews (> 100), workshop organized with farmers and workers, documents and reports from other NGOs.
The social impact of the banana and Fairtrade coffee supply chains was analyzed using the backward path method. In other words, the researchers started from the results (compared to the five indicators above) to evaluate whether and which Fairtrade interventions have contributed and to what extent to the changes observed.
This method of analysis, Outcome Harvesting, is more effective than others as the results derive from a set of activities, which favor a context of relationships based on trust, solidarity and sharing. Analyzes based on simple cause-effect schemes are conversely reductive. (4)
3.3) Favorable social impact
A favorable impact of the Fairtrade approach to social and economic rights has been observed in several areas:
- the minimum price prevents the negative impacts of price volatility and ensures income stability. Farmers can thus invest to improve the quality and resilience of production. Colombian coffee producers, for example, have purchased silos to protect the coffee from rain and humidity.
- the 'Fairtrade premium' guarantees the improvement of living standards and is at the same time useful for guaranteeing useful services to the community, such as health and education. Thanks to the establishment of local health centers, schools, scholarships,
- Fairtrade standards are effective in protecting weaker parties in economic relationships. Not only farmers and suppliers of goods with respect to their buyers, but also for example migrant workers, whose protection has also been included in the HLO standard (Hired Labor Organisations),
- the protection of children and vulnerable adults is also effective. The fair price postulates fair production. Thus Fairtrade managed to mitigate the problem of child exploitation in Ethiopia and the Dominican Republic.
3.4) Areas for improvement
Fair Trade on the other hand, it has less influence in power relations within societies. Many discriminations are linked to the (bad) social customs rooted in some countries, where machismo and patriarchy still dominate. Rather than laws that still ignore the rights to form and join trade unions. And these discriminations are often so internalized that they are not perceived as such by the workers. (5)
4) Fairtrade for the due diligence of other operators in the supply chain
Economic operators are now subject to a growing responsibility, with regard to:
- ESG and CSR (Corporate Sustainability Reporting. See notes 6,7),
- due diligence . Starting from the supply chains of coffee, cocoa, soy, palm oil and timber (8,9).
Certifications of hypothetical 'sustainability' of supply chains at risk – RSPO (Roundtable for Sustainable Oil Production) above all – they have proved to be completely unreliable on environmental issues (10) and avoid venturing into the more delicate subject, human rights in fact.
Procurement of Fairtrade certified products can instead allow companies to fulfill the requirements of Human Rights Due Diligence (HRDD) 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
(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/XNUMX/XNUMX
(4) The Outcome Harvesting method makes it possible to take into consideration the results obtained, expected and not, by harvesting (harvest) of the results (outcome) of changes (in practices, behaviors, relationships). To understand what changes affected the results. '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) The information collected during the interviews and in the focus group show how in some cases, even in Fairtrade supply chains, women internalize sexist stereotypes. For example, one woman interviewed noted 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 report, ESG and due diligence. GIFT (Great Italian Food Trade). 18.7.22
(7) Dario Dongo. Corporate Sustainability Reporting, the new EU directive is underway. GIFT (Great Italian Food Trade). 2.12.22
(8) Dario Dongo. Due diligence and deforestation, stop imports of unsustainable commodities. Proposal for an EU regulation, the ABC. GIFT (Great Italian Food Trade). 6.3.22. NB: yes EU Zero Deforestation Regulation (EUDR) was approved by the European Parliament, the Council and the Commission on 6.12.22
(9) Dario Dongo, Elena Bosani. Due diligence and ESG, social and environmental sustainability of companies, the proposed EU directive. GIFT (Great Italian Food Trade). 20.4.22
(10) Marta Strinati, Dario Dongo. Palm oil, soy, wood, coffee, cocoa. What is sustainability certification for? Greenpeace report. GIFT (Great Italian Food Trade). 16.5.21