9 Dec 2022

Fairtrade – a valuable "piece" contributing to corporate human rights work

By Tytti Nahi, Director of Business and Human Rights, Fairtrade HREDD Centre of Excellence

A new study finds Fairtrade to be a valuable partner for companies that take sustainability seriously and work to reduce human rights harms in their supply chains. In particular, Fairtrade can help companies to identify and reduce the greatest harms – in dialogue with farmers and workers. Here’s what we’ve learned.

Bananas ready for harvest 870

The strengths and weaknesses of certifications have been much discussed in recent weeks, as the negotiations are in full swing for a European Union-wide corporate sustainability law.

Social audits can’t fix labour rights abuses”, reminded Human Rights Watch on 15 November. Certifications can be “a piece, not a proxy” for corporate sustainability due diligence, added SOMO, a Dutch expert NGO, ten days later. These reports agreed that certifications and social audits can be valuable sustainability tools for companies – but robust internal processes and many other measures are needed too.

Fairtrade fully agrees. Certification can only form part of a company’s sustainability efforts. This is why we engage in so many measures beyond certification. Farmer and worker incomes are so low, environmental challenges so complex, and discrimination so deep-seated in many supply chains, that holistic approaches and collaboration among governments, business and civil society are crucial.

Where does Fairtrade contribute?

Given the need for a multi-stakeholder approach, what kind of a "piece" – in the words of the SOMO briefing – can Fairtrade be? Does Fairtrade reduce the human rights harms in supply chains? What can we offer to corporate sustainability due diligence work?

These questions are focal in a new study published by Fairtrade today. The study has been completed by a team of scholarly researchers, and informed by interviews with well over 100 farmers, workers, cooperative or plantation managers engaged in small-scale coffee production in Colombia and Ethiopia, or large banana plantations in the Dominican Republic and Colombia.

Here are four key takeaways.

First, Fairtrade does make a difference in advancing several human rights and in particular improved incomes and better standard of living. Also, improved incomes are shown to support several other rights, such as health and education.

Fairtrade’s key interventions here are the Fairtrade Minimum Price and Premium. Fairtrade Minimum Prices are shown to prevent negative human rights impacts caused by low or fluctuating prices, and the Fairtrade Premium supports farm and social investments, bringing a higher standard of living for farmers and workers.

Second, Fairtrade can support progress and build awareness in areas like workers’ rights and gender rights, but national laws and local culture play large roles in either limiting or enhancing rights.

For instance, the local research team in the Dominican Republic found that Fairtrade has improved job stability and living conditions for women workers on banana plantations, through an “impressive selection of policies on women’s rights”. On the other hand, machismo, limited unionization and the vulnerability of Haitian migrant workers still hinder full realization of rights.

Third, the letter of Fairtrade Standards tells rather little about the on-the-ground impact of Fairtrade. Our standards do include detailed human rights requirements, from conducting human rights risk assessments, to encouraging unionization and measures to prevent child labour and harassment.

But there is more to upholding rights than just writing rules on paper. People need awareness of their own rights and responsibilities. Workplaces and supply chains need to engage in social dialogue. Farmer organisations, plantations and manufacturing shops need resources to put in place stronger sustainability processes and training. And policies and laws need strengthening.

This is why Fairtrade does not just do standards, auditing and corrective measures, but also training and support for farmers and workers, development programmes, advocacy work, awareness raising campaigns, and why we set Fairtrade Minimum Prices and Premiums. The study finds that this holistic approach has been crucial in advancing human rights in each of the studied cases.

For instance, Ethiopian coffee farmers reported a variety of benefits from Fairtrade thanks to standards and other interventions: better working conditions for hired labourers, improved wages, fairer working hours, and provision of safety equipment, as well as school buildings, health posts, better roads and electricity infrastructure thanks to Fairtrade Premium funds.

Fourth, the study proposes that Fairtrade can be “a valuable partner in various steps of corporate human rights due diligence”, especially with regards to risk assessment, risk mitigation and engagement with affected stakeholders.

The study notes that “Fairtrade has the capacity to contribute to ceasing, preventing, and mitigating certain human rights issues”, especially as “Fairtrade’s impact, to a large extent, seems to be directed at the most salient human rights issues”. Fairtrade’s producer networks in Africa, Asia and Latin America are seen to have “a thorough, contextualized, and nuanced understanding of thorny issues such as child labour”.

Further, “Fairtrade is in a good position to bring insights on risks and the voice of producers to the table as a partner in corporate risk identification and assessments”.

Support for meaningful engagement with farmers and workers may be the most valuable form of support, for companies that are highly committed to sustainability. While expected by the UN and OECD due diligence guidance, such engagement does not come easy. The latest report by CHRB, the Corporate Human Rights Benchmark, shows that among the world’s largest companies in food and agriculture, information and communication technology, and automotive manufacturing sectors, over 70 percent score zero on their approach to engaging with affected stakeholders.

The study pushes Fairtrade to be clear on our role as a support, not a substitute to companies’ HRDD. It also frames a choice for companies, legislators, and even certifications between superficial “tick the box due diligence” and “meaningful HRDD” that seeks deep dialogue, fair cost sharing and concrete progress.

We are doing our best to promote meaningful legislation and to support companies and producers to navigate this evolving landscape, so that we can each bring our "piece" to the table to advance human rights for all.