Principle 1
Creating Opportunities for Economically Marginalised Producers
Poverty reduction through trade forms a key part of the organisation’s aims. The organisation supports economically marginalised Producers and Workers, whether they are grouped in associations, co-operatives or companies, employed in Fair Trade committed family businesses, or informal/self employed Workers or Homeworkers.
It seeks to enable them to move from income insecurity and poverty to social and economic empowerment. The organisation has a plan of action to carry this out.
Principle 2
Transparency & Accountability
The organisation is transparent in its management and commercial relations. It is accountable to all its stakeholders and respects the sensitivity and confidentiality of commercial information.
The organisation finds appropriate, participatory ways to involve Workers, Producers and members in its decision-making processes. It ensures that relevant information is provided to all its trading partners. The communication channels are good and open at all levels of the supply chain.
Principle 3
Fair Trading Practices
Intent
The organisation trades with concern for the social, economic and environmental well-being of economically marginalised Producers and Workers and does not maximise profit at their expense.
Defined trade commitments
It is responsible and professional in meeting its commitments in a timely manner. Suppliers of FT products respect contracts and deliver products on time and to the agreed quality and specifications.
Payment and Pre-finance
Fair Trade buyers, recognising the financial disadvantages faced by Producers and Suppliers of FT products, ensure orders are paid on receipt of documents or as mutually agreed.
For handicraft and other non-food FT products, an interest free pre-payment of at least 50% is made on request. For food FT products, pre-payment of at least 50% at a reasonable interest rate is made if requested. Interest rates paid by suppliers must not be higher than the buyers’ cost of borrowing from third parties. Charging interest is optional and as agreed between the trade partners. Where Fair Trade Suppliers receive a pre-payment from buyers, they ensure that this payment is passed on to the Producers who make or grow their Fair Trade products.
Cancellation and dealing with problems
Buyers consult with their Producers or Suppliers of FT products before cancelling or rejecting orders. Where orders are cancelled, or changed at short notice through no fault of Producers or Suppliers, adequate compensation is guaranteed for work already done. Suppliers and Producers consult with buyers if there is a problem with delivery and agree on revised terms when delivered quantities and qualities do not match those ordered or products are delivered late.
Long term trading partnerships
The organisation maintains long-term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. It maintains effective communication with its trading partners. Parties involved in a trading relationship seek to increase the volume of the trade between them and the value and diversity of their product offer as a means of growing Fair Trade for the Producers in order to increase their incomes.
Fair competition
The organisation works cooperatively with the other Fair Trade Organisations in its country and avoids unfair competition. It avoids duplicating the designs or patterns of other organisations without permission. Cultural identity and respect of traditional skills Fair Trade recognises, promotes and protects cultural identity and traditional skills reflected in indigenous craft designs, food products and other related services.
Principle 4
Fair Payment
A fair payment is one that has been mutually negotiated and agreed by all through on-going dialogue and participation, which provides fair pay to the Producers and can also be sustained by the market, taking into account the principle of equal pay for equal work by women and men. The aim is always the payment of a Local Living Wage.
Fair Payment is made up of Fair Prices, Fair Wages and Local Living Wages.
Fair Prices
A Fair Price is freely negotiated through dialogue between the buyer and the seller and is based on transparent price setting. It includes a fair wage and a fair profit. Fair prices represent an equitable share of the final price to each player in the supply chain.
Fair Wages
A Fair Wage is an equitable, freely negotiated and mutually agreed wage, and presumes the payment of at least a Local Living Wage. Local Living Wage A Local Living Wage is remuneration received for a standard working week (no more than 48 hours) by a Worker in a particular place, sufficient to afford a decent standard of living for the Worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transport, clothing, and other essential needs, including provision for unexpected events.
Principle 5
Ensuring No Child Labour and Forced Labour
Child Labour
The organisation adheres to the UN Convention on the Rights of the Child and national/ local law on the employment of children. Organisations who buy Fair Trade products from Producers /Producer groups or Fair Trade companies ensure that the Producers comply with the UN Convention on the Rights of the Child and national/ local law on the employment of children.
Any involvement of children in the production of Fair Trade products (including learning a traditional art or craft) is always disclosed and monitored and does not adversely affect the children’s well-being, security, educational requirements and need for play.
Forced Labour & Human Trafficking
The organisation ensures that there is no forced labour or human trafficking in its workforce and/ or by its Producers, Producer groups or Homeworkers.
Principle 6
Commitment to Non Discrimination, Gender Equity and Women’s Economic Empowerment, & Freedom of Association
Non-discrimination and equal pay
The organisation does not discriminate in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, HIV/Aids status or age.
Where women are employed within the organisation, even where it is an informal employment situation, they receive equal pay for equal work. The organisation recognises women’s full employment rights and is committed to ensuring that women receive their full statutory employment benefits. The organisation takes into account the special health and safety needs of pregnant women and breast-feeding mothers.
Gender Equity
The organisation has a clear policy and plan to promote gender equality that ensures that women as well as men have the ability to gain access to the resources that they need to be productive and also the ability to influence the wider policy, regulatory and institutional environment that shapes their livelihoods and lives.
Organisational constitutions and by-laws allow for and enable women to become active members of the organisation in their own right (where it is a membership based organisation) and to take up leadership positions in the governance structure regardless of women’s status in relation to ownership of assets such as land and property.
Freedom of Association
The organisation respects the right of all Workers to form and join trade unions of their choice and to bargain collectively. Where the right to join trade unions and bargain collectively is restricted by law and/or political environment, the organisation will enable means of independent and free association and bargaining for Workers. The organisation ensures that representatives of Workers are not subject to discrimination in the workplace.
Principle 7
Ensuring Good Working Conditions
Health and Safety at work
The organisation provides a safe and healthy working environment for Workers and Producers. It complies, at a minimum, with national and local laws and ILO conventions on health and safety.
Working hours and conditions
Working hours and conditions for Workers and/ or Producers (and any Homeworkers) comply with conditions established by national and local laws and ILO conventions.
Safe working conditions for Producers and Suppliers
Fair Trade Organisations are aware of the health and safety conditions in the Producergroups they buy from. They seek, on an ongoing basis, to raise awareness of health and safety issues and improve health and safety practices in Producer groups.
Principle 8
Providing Capacity Building
The organisation seeks to increase positive developmental impacts for economically marginalised Producers and Workers through Fair Trade.
The organisation develops the skills and capabilities of its Workers and Producers / Producer groups. Organisations working directly with Producers develop specific activities to help these Producers improve their management skills, production capabilities and access to markets – local / regional / international / Fair Trade and mainstream – as appropriate.
Organisations, which buy Fair Trade products assist their Suppliers of FT Products to develop their capacity to support the economically marginalised Producers that they work with.
Principle 9
Promotion of Fair Trade
The organisation raises awareness of the aims of Fair Trade and of the need for greater justice in world trade through Fair Trade. It creates awareness of ongoing climate change and the impact this has on the Fair Trade community everywhere and especially on growers, producers and artisans who produce the lowest carbon emissions but suffer most from floods, droughts, changing rainfall patterns and rising temperatures.
The organisation educates its employees, constituencies, consumers and the general public about climate change and ways for them to combat it. It is the responsibility of the Fair Trade Organisation whether in the north or the south to assist producers in their transition to compliance with the criteria.
It provides its buyers and customers with information about the products it markets and the Producer organisations, Producers or Workers that make or grow the products. Honest advertising and marketing techniques are always used.
Principle 10
Climate Action and Protection of the Environment
Climate Action and Reduction of Greenhouse Gas Emissions
Fair Trade Organisations support and practice production, agriculture, service and trade activities that are natural resource conserving, low-emitting, culturally sensitive, socially just and economically viable.
They work on adapting and building resilience to climate change and reducing the greenhouse gas emissions of their operations. Where they work with groups of agricultural producers and indigenous people, FTOs contribute to the conservation of their territories, strengthen their systems of land use (cultural landscapes) and protect their biodiversity with the aim of preserving the ecosystem and strengthening their agricultural models to gain resilience to climate change.
Buyers and importers of Fair Trade products and services support their supply chain partners in adopting practices and transport options that encourage sustainable development and protect our planet at this time of crisis.
As far as possible producer FTOs encourage and promote local production and local sourcing of raw materials. Fair Trade enterprises ship goods by sea, as far as possible choosing shipping lines with the greenest, most sustainable credentials.
With regard to consumption, efforts are made to reduce environmental damage or ill-effects. All airline travel needs to be carefully considered, preferring to hold virtual meetings as far as possible, while recognizing the value of in-person visits to achieve better understanding of producers’ challenges and victories, and for meeting in conferences.
Sustainable Production and Waste Management
Fair Trade Organisations grow, produce and trade their products or services with minimum greenhouse gas emissions (see above), harm to natural ecosystems, wildlife and biodiversity.
Ways are found to lessen unsustainable energy use. Solar, wind, hydro or other alternative energy use is encouraged. Water use as well as water and air pollution is minimised.
Fair Trade Organisations manage their waste responsibly, in line with reduce-reuse recycle principles, in order to reduce significantly the amount of waste that is thrown away.
Farmers and indigenous peoples, by preserving their ecosystems and suffering from climate change, have their rights and territories guaranteed and their agricultural models strengthened to be more resilient to climate change. Fair Trade agricultural commodity producers adapt their practices to the changing climate, adjusting planting dates, using drought resistant varieties, diversifying their crops and conserving natural resources.
In flood prone areas, flood alleviation measures are taken. They use organic or low pesticide production methods wherever possible. Fair Trade Organisations that produce or sell consumable agricultural products have a written policy statement on their position with regard to genetically modified organisms.
Product Design and Packaging
Wherever possible, raw materials, ingredients, components and elements of Fair Trade Products or such materials required for services are obtained from Fair Trade or sustainable, responsible sources, or made from recycled or re-used material.
Products are designed to be as readily recyclable, compostable or biodegradable as possible. To the extent possible, only recycled or easily biodegradable materials are used for product packing and the use of nonrecycled plastics is reduced to the minimum.
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2023
CREDIT: World Fair Trade Organization - Find Out More!
Read in more detail: PDF of The WFTO Fair Trade Standard (2023)