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This chapter summarizes the presentations. The editors have tried to reflect the presentations as accurately as possible but by doing so are not endorsing any programmes or claims. A copy of the presentations can be found in Appendix III.

Latest developments in social and environmental certification initiatives

(For introductory information on these initiatives, see Chapter II. Corresponding pages are indicated in brackets.)

The organic movement (introduction at page 3): The organic market has gone from double digit growth rates to healthy growth rates of 5-10%. A shift from air freight to sea freight is expected to reduce both costs and food air-miles. The movement works further on harmonization of group certification standards. There are also ideas of creating organic-plus certification programmes with additional qualifications like HACCP or EurepGap. Some organic certifiers already offer EurepGap certification as an additional service. Interest is growing in the social chapter of the IFOAM Basic Standards. There are also new initiatives for collaboration between the organic and fair trade movements such as between the Soil Association and the Fairtrade Foundation in the UK.

ISEAL (page 5): The ISEAL Alliance is moving from being an observer of change towards being a driver of change, initiating new activities through which its members work increasingly together.

Sustainable Agriculture Network(page 3): SAN is involved in several sustainable agriculture projects. PROARCA is 5-year project promoting the green market segment. The SASA project made the SAN and other participants look carefully into how they are doing their social certification. The new Rainforest Alliance certification seal replaces the old ECO-OK and Better Banana seals. The biggest growth for SAN is in the coffee and the fern programmes; there are now 23 fern farms certified. SAN continues to train new auditors and has also 3 auditors trained to conduct EurepGap audits. SAN has developed chain-of-custody protocols and has tested them on coffee mills. To streamline certification "whole farm" standards are being developed, for farms that grow secondary crops not yet included in the SAN standards. Furthermore, SAN is considering integrated or joint audits, for example with SA8000 certifiers.

Social Accountability International (page 4): SAI started in 1996 (as CEPAA), partly as not-for-profit and partly as a business. SAI has developed the SA8000 auditable humane workplace standard SA8000. Child labour problems and abuse of labour situations have been central to the standard. Companies have sought SA8000 certification mainly to protect their reputation. The SAI accreditation agency checks the accredited certification bodies every 6 months to ensure the absence of any conflict of interests and to check the quality of the audits. SAI offers auditor training courses globally and has a worker training programme. An important feature of the SA8000 is the open complaints and appeals procedure, which has led to corrective action in several cases.

Social Accountability in Sustainable Agriculture (SASA) project (page 5): In 2002, four audit exercises were completed. They focussed on demonstration of the certification systems and generated tremendous learning about each participating initiative. Critical social issues that have been highlighted are: Working hours in seasonal production systems and Freedom of association and right to collective bargaining. It has been decided to add a discussion to the project on standards - their interpretation and where thresholds for certification are set. Also more time is needed to discuss among the steering committee and with the constituent groups about preliminary results and how they can be best applied. Therefore there will be fewer audits but they will be more focussed, for example on Internal Control Systems for smallholders or on integrated audit methodologies or on supply chain issues. A few workshops for discussion with key stakeholder groups have been added to the project. Interested persons can contribute to the discussions in the Global Consultative Group, Pilot Audit Crop/Country Groups or by simply writing an Email.

Fairtrade Labelling Organization International (page 4): One of the latest developments of FLO International is the new structure with a Certification Department that is separate from the other departments, following ISO guidelines for certification bodies. Furthermore generic tropical fruit standards have been developed that will make it easier to add new tropical fruit products to the fair trade range.

Producers' experiences of standard implementation

Cost-benefit analysis at Del Oro, Costa Rica,

by Mikkel Andersen (FAO/RUTA) & Omar Somarribas (Del Oro), Costa Rica.

The aim of the case study was to contribute to the development of a common methodology for impact assessment and cost-benefit analysis of standard implementation. Following a participative approach, the producers' experience with certification in both quantitative and qualitative terms was studied.

Del Oro, Costa Rica, comprises five farms and a juice processing plant. The transformation activities were excluded from the study. Del Oro started work with the Rainforest Alliance/Sustainable Agriculture Network in 1996 and got SAN certified for all 5 farms in 1997. In 1998 one of the 5 farms was converted to organic production methods and received full certification in 2001. The case study comprises the years 2000 and 2001. Because the plantation is young, productivity in general was still increasing as trees matured and entered the maximum production phase.

The annualized costs of the development and implementation of the SAN standard were calculated as 1.5% of the total production costs. The main investments were new infrastructure and the change of the type of herbicide. The annualized costs of the 3-year conversion period towards organic status was calculated as 1.4% of the total production costs for that particular farm. On the long term, the variable costs before harvest increased by 37%. Initially yields dropped considerably, which can be partly explained by a lack of research; during the first 6 months of the conversion period no specific organic methods were applied to compensate for not using chemical fertilizers and pesticides. Since the year 2000 yields have been increasing again and Del Oro expects the organic farm to be back on pre-organic production levels in 2003.

The financial analysis of the five farms shows that profits were low or negative in 2001 and positive in 2002, mainly due to better prices on the world market. In addition, the organic farm experienced significant losses in 2001, but a good profit in 2002, the first year full certification and organic price premiums were received. The total production costs per hectare do not differ much between the conventional and organic farms, but variable costs before harvest are higher for the organic farm.

The implementation of the SAN standard offered an update on legislation and useful learning on best practices. The Rainforest Alliance also provided important public relation support at a time when Del Oro got media attention due to an innovative natural resource and waste management practice. Organic certification offers a significant price premium. Long term benefits will depend on market prices and whether the certification programmes offer new learning opportunities. In the producers' view, there are several areas for improvement of the certification programmes: multiple recognition of organic certificates; more flexibility to local conditions; and services offered by the certification bodies (training courses, capacity of auditors and promotion in the market). More market transparency would also be welcome.

Clarification was asked about the "capacity of auditors". It was explained that for the company a more narrative certification report would be interesting, which would also include the areas on which improvements had been made. The SAN representative stated that they (as many certification bodies) should continue work on how to get the same interpretation of the same situation by different auditors. He also explained that formerly SAN had had an extension role but due to the ISO guidelines on the prevention of conflict-of-interest they had lost that aspect of their work.

It was questioned if cost of certification was a problem, given that Del Oro was also ISO14001 certified. As a big company it was not a big problem, but as a commercial company they require value for money.

The relations with government were discussed. The Costa Rica government has developed a legal framework for organic agriculture but as a company Del Oro had not had a lot of contact with the government. It was remarked that there is a need for parallel action on extension, certification and marketing. However, the Costa Rican government does not have the resources to do a lot on extension. It was noted that the extension role could not be just put on the certification bodies either, as this would result in conflicts of interest, as shown in recent financial auditing scandals in the US.

Views on building partnerships for environmentally and socially responsible trade

The difficulties encountered by small farmers to meet the requirements of the international market.

By Emilie Dardaine, FLO, Germany.

Nowadays the Northern consumer wants to buy good quality products that do not endanger his health or the health of the producers and that are environmental friendly. As a result buyers ask greater aesthetic presentation of the fruit and the creation of buffer zones. Buyers require producers of conventional bananas to wear gloves and masks while spraying at the packing station where the temperature may be up to 40°C. At the same time the price of a box of bananas has not been increased to cover these additional costs.

We need to be aware that farmers will comply with standards only if: They are applicable to the reality of the production; farmers are convinced of the usefulness of the criteria; and the producer price covers the costs of these requirements.

FLO International sets a minimum price that covers cost of production, cost of complying with FLO International standards and the cost of living of the farmers. FLO International facilitates exchanges between buyers, consumers and the producers that help producers to understand market realities. Finally, producers participate in standards setting, they are represented in FLO certification committee and in the FLO Board.

If we want a socially and environmentally responsible production and trade, we cannot have standards that cannot be complied with by the poorest. Let us remind ourselves that certification is a tool and not a goal.

A question was asked from the audience on the relation between fair trade and food safety requirements. There is no direct relation but as everybody else the fair trade supply chain has to comply with legal food safety requirements.

The role of certification, advantages and disadvantages of local versus international certification bodies in building partnerships.

By Jean Martin Tetang, Export Agro, Cameroon

In central Africa there are many traditional agricultural practices that are organic. Since the advent of the organic market thousands of small producers regroup themselves around organic projects. The operators of these projects organize the certification and are often the exporters. However, due to many problems encountered during the certification process, in Cameroon only 2 out of 14 operators are active. Problems include delays in audits and issuing of certificates, sometimes certificates are issued after the harvest campaign is over.

In Central Africa there are no national standards for organic agriculture and the operators depend on foreign certification bodies. The association of organic producers and exporters currently studies the development of local standards that will be adapted to the local context and will help to create recognition of organic production at government level and in the local markets and hopefully generate a better co-operation with international inspectors.

Partnerships in responsible trade, Chiquita's experience: methods, risks and benefits.

By George Jaksch, Chiquita, Belgium

Chain of events: In 1992 Chiquita started co-operation with the Rainforest Alliance in the "Better Banana Project" and in 2000 all owned farms were certified. In 1999 Chiquita made a public commitment to Corporate Responsibility. The first internal audits against the SA8000 were conducted in the year 2000. In 2001 an Agreement on freedom of Association and minimum labour standards was signed with the union associations IUF and COLSIBA and in the same year the first Corporate Responsibility Report was published. A second round of internal SA8000 audits was conducted in 2002, this time with observers. Chiquita also became member of the Ethical Trade Initiative in the UK. Chiquita works to obtain the first SA8000 certifications of its banana farms in 2003.

The qualifications of a partnerships and its partners are: Integrity / sincerity; competence; social & environmental responsibility; transparency; commitment and resources; spirit of dialogue and co-operation; willingness to persist and make the partnership work. A partnership needs a meaningful agenda with common interests and objectives, defined roles and responsibilities and defined goals and targets. There need to be mechanisms for dialogue and decision making; a regular review to maintain direction; and private conflict resolution mechanisms. A partnership can not be an image exercise.

Going from a megaphone diplomacy to constructive dialogue has resulted in understanding that enables solutions. Energy could be shifted from conflicts to improvements. Partnerships give a view of the wider world and recognition follows, eventually. In the future, partnerships are probably the only way to make adequate progress towards sustainability.

"Companies have a duty to contribute to the evolution of equitable and sustainable communities and societies"
Johannesburg Declaration, 2002

Value addition in the Food Supply Chain.

By Volkert Engelsman, EOSTA, The Netherlands

Observed megatrends in purchase criteria are: Food safety, taste and health; Environment; and Social Justice. In the organic market 7% of the organic customers are responsible for 55% of all organic purchases; the so-called "heavy users". Therefore the wishes of those 7% (should) weigh more in value addition decisions, and these well aware consumers demand such things as combined organic-fairtrade and add-on certifications. The responses of the retail sector include add-on criteria such as "no airfreight", "sourced locally", "IFOAM accredited" or "no copper". The retailers with a maximum strategy towards organics display more organic products in their stores and are able to capture 3-8% of the organic market. In contrast, supermarkets with a basic strategy towards organics have few organic products on offer and have only 2% or less organic market share.

The challenge is to create economic awareness for organic agriculture, social development and food quality. For agricultural quality EurepGap and the organic EU regulation are considered the basics. With increasing consumer awareness there will be more demand for e.g. biodynamic methods, biodiversity initiatives and CO2 emission reductions. For social quality requirements the observance of national laws, ILO conventions and the SA8000 standard are the basics. Higher consumer awareness would demand fair trade and additional efforts for e.g. education and medical care. A forum for Food, Quality and Health has launched a Food Quality Index, based on residue levels, physiological compounds, sensoric compounds and vitality characteristics.

EOSTA's Nature & More audit includes ratings for Ecological Quality, Social Quality and Product Quality, which together give an average quality ranking. On the web site of EOSTA interested buyers can look up company profiles and the ratings for the different ecological, social and product aspects that make up the total quality rating. Somebody from the audience asked who did the verification. Apart from the organic and other existing certificates, the verification and ranking for the Nature & More programme was entirely done by EOSTA, but they would welcome any offer from certification bodies to develop a third party verification programme to confirm their results.

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