ANNEX CHAPTER 3:
INCOME AND SHARED RESPONSIBILITY
Document SA-S-SD-21
Version 1
EnglishBinding from July 1st, 2022
Published on July 1st, 2022

Included in this document:
S14 Shared Responsibility

Tools related to this Chapter:
S16: Sustainability Investment Plan Template© 2021 Rainforest Alliance. All rights reserved.

The Rainforest Alliance is creating a more sustainable world by using social and market forces
to protect nature and improve the lives of farmers and forest communities.
Name of the document

Dateofpublication

Annex Chapter 3: Income and Shared Responsibility

June 30th, 2020

first

Expires by
Until further
noticeLinked to
SA-S-SD-1 Rainforest Alliance 2020 Sustainable Agriculture Standard, Farm
Requirements
SA-S-SD-2 Rainforest Alliance 2020 Sustainable Agriculture Standard, Supply
Chain Requirements
Replaces

Applicable to

SA-S-SD-15-V1.2:
Annex
S14:
SharedResponsibility, published September 3rd,
2021

Farm and Supply Chain Certificate Holders

Annexes are binding and must be complied with for certification.
More information
For more information about the Rainforest Alliance, visit www.rainforest-alliance.org, contact info@ra.org or
contact the Rainforest Alliance Amsterdam Office, De Ruijterkade 6, 1013AA Amsterdam, The Netherlands.
Translation Disclaimer
For any question related to the precise meaning of the information contained in the translation, please referto the official English version for clarification. Any discrepancies or differences in meaning due to translation
are not binding and have no effect for auditing or certification purposes.
Any use of this content including reproduction, modification, distribution, or republication, without the prior writtenconsent of Rainforest Alliance is strictly prohibited.

SA-S-SD-21-V1

2

OVERVIEW OF KEY CHANGESThe replaced document has been shortened to make it more user friendly.
The following changes in content were made:SectionSubject

Change2.1

SD
payment
forindividual and large
farms

Explanatory text removed due to updated
requirement 3.2.2: SD may be spent to the benefit of
the workers of the farm, or the producer him/herself.

2.2

Timeline

Processed fruits & coconut oil: Introduction datechanged for January 2023

2.2

Timeline

Tea: Introduction date clarified for from January 1,
2023 onwards, based on volumes sold as RAC fromJanuary 1, 2022

2.2

SD/SI payment in tea

Brand owner approach further refined to be clear
which steps need to be taken with brand owner
making payments directly and timeframe for
implementation.

2.2

Agreements
between Farm andSC CH

Clarification of how to set up contractual
agreements when SD and SI are not known
separately at the time of contracting. Anotherclarification
aroundtheamountincontracts/commitments is what must be paid.

2.2

Sustainability
Investments

Clarification around which company initiatives andinvestments can be counted as SI

2.2

Reporting

Requirements for reporting SD/SI data adapted toalign with system functionalities, confirmation is notavailable in the traceability platform and is therefore
removed.

SA-S-SD-21-V1

3

TABLE OF CONTENTS
S14 Shared Responsibility ..................................................................................................................... 5
1.

Introduction ................................................................................................................................ 52.

Implementation of requirements ............................................................................................. 5
2.1.

Farm Responsibilities on SD and SI .................................................................................. 5

Requirement 3.2.1: Sustainability Differential in Groups ........................................................ 5
Requirement 3.2.2: Sustainability Differential in Large and Individual Farm CHs ............... 5
Requirement 3.3.1: Sustainability Investment Plan ................................................................. 5
2.2.

Supply Chain Responsibilities on SD and SI .................................................................... 6

Requirement 3.2.3 and 3.3.4: Payment of the Sustainability Differential and Sustainability
investment .................................................................................................................................. 6
Requirement 3.2.4 and 3.3.6: Contractual agreements/commitments on SD and SI
payment ..................................................................................................................................... 7
Requirement 3.2.5 and 3.3.4: Timeframes for payment of SD and SI .................................. 8
Requirement 3.2.6 and 3.3.5: Recording and Reporting SD and SI ..................................... 9
Brand owner approach: ........................................................................................................... 9
Requirement 3.2.7: Minimums and Fixed Amounts .............................................................. 10
3. Overview of Supply Chain Requirements (SD and SI) and their applicability per sector ...... 11

SA-S-SD-21-V1

4

S14 SHARED RESPONSIBILITY
1. INTRODUCTION
The implementation of the Shared Responsibility requirements needs different approaches foreach of the sectors as the dynamics of global supply chains for Rainforest Alliance certified
commodities vary significantly. This annex provides this sector-specific content.
Guidance on the implementation of sector-specific rules outlined in this document can further
be found on the Rainforest Alliance website.

2. IMPLEMENTATION OF REQUIREMENTS
2.1. Farm Responsibilities on SD and SI
Requirement 3.2.1: Sustainability Differential in Groups
Requirement 3.2.1 requires the group administrator to distribute the total amount of SD
received from buyers for the sale of the certified products to group members, proportionallybased on the volume that each member delivered to the group.
CHs must have complete and accurate evidence showing all payments of SD made to groupmembers. This must be updated at least annually. The payment evidence must show that the
total sum of SD payments to group members is equal to the total SD amount received fromthe buyer(s). Only Transaction and tax-related costs can be deducted from the total SD thefarm CH received, if proof is available. This means farm CHs must have an adequate
accounting system in place to:••••

Record SD payments separately from the product price and quality premiums or otherpremiums.
Record amounts and dates of payments made to each group member linked tovolume of product delivered to the group.
Provide group members with information on the agreed amount of SD (by volume),
and timelines and methods for payment.
Provide each group member with information on the SD paid to them.

Requirement 3.2.2: Sustainability Differential in Large and Individual
Farm CHs
Requirement 3.2.2, which applies to individual farm CHs and large farms, states that the
Rainforest Alliance Sustainability Differential must be used for the benefit of the producer
and/or workers. Whenever the SD is used to the benefit of workers, worker representatives must
be consulted when establishing how the SD should be used.
If the SD is paid for the benefit of the workers, management must keep records of:••Consultation with the representation of workers on sustainability priorities.
Use of the SD against the categories defined by the Rainforest Alliance (wages, working
conditions, health and safety, housing).

Requirement 3.3.1: Sustainability Investment Plan
All farm CHs must have a plan that identifies sustainability investment needs using theRainforest Alliance Sustainability Investment Plan template (Annex S16). This plan is also used
to monitor expenditure of Sustainability Investments.

SA-S-SD-21-V1

5

Sustainability Investments listed in the investment plan must be directly linked to achieving
compliance with core requirements and relevant improvement requirements of the 2020
Sustainable Agriculture Standard. To identify the investments needed, group or farmmanagement must use the results of their self-assessment, risk assessment, internal inspections,
audits, farm management plan and capacity assessment.
Farm Certificate holders develop their Sustainability Investment (SI) plan prior to contracting
for the coming year so they can use it as a basis for negotiation with buyers about the valueof monetary SI or in-kind contributions needed.

Investment planning for multiple crops
Farm CHs growing multiple crops need to specify in their investment plan the investment needs
for all crops they intend to market as Rainforest Alliance certified. These should all be included
in one investment plan.

Reporting
Farm CHs must report on the SI they receive and how they use it. They must report this at theend of the crop season, at least annually. Monetary and in-kind SI received, and how this has
been spent against each of the Investment categories must be recorded in the Sustainability
Investment Plan. Farm CHs must also report these amounts from the investment plan, in the
Rainforest Alliance Indicator Template.

2.2. Responsibilities on Agreements and Payments
Requirement 3.2.3 and 3.3.4: Payment of the Sustainability Differential
and Sustainability Investment
The applicability of the Shared Responsibility requirements differs per sector. The table below
indicates which SC CH is responsible for complying with the SD and SI requirements:

Crop/Sector

SC CH responsible for
SD/SI

Coffee
Cocoa
Processed fruits andCoconut Oil
Hazelnut
Herbs and Spices

First Buyer
the initial certificate holder
legally owning the certified
product after the farm
certificate holder

Timeline for
implementation : For
Obligations:--

Other crops
Brand owner

Tea

SA-S-SD-21-V1

a person or company whomarkets any commodity or
product under a registeredbrand name or label. This
may include corporate,
food service and retail andthe private label or store
brands owned by retailcompanies

specify amounts andpayment terms for SD
and SI in contractual
agreements with farmCHs
make payments onvolumes purchased as
RAC.

volumes certified against
the 2020 Rainforest
Alliance Standard
purchased after:
1 July 2021
1 July 2021
1 January 2023
1 July 2021
1 July 2021
1 July 2021

(in the absence of a contract
between farm CH and brand)--

make commitments to
the Rainforest Alliancespecifying SD/SI amounts
by volume
make payments onvolumes purchased as
RAC. Transfer of SD/SI tofarm CHs will be

January 1, 2022.
NB. Brands pay SD/SI fromJanuary 1, 2023 onwards,
based on volumes fromthe previous year

6

facilitated by the
Rainforest Alliance
ImporterBanana and Fresh
FruitsFlowers

the organization outside thecountry of origin importing
certified volume directlyfrom origin, including
retailers, brand owners or
any other organization who
performs this function

TBD-

specify payment terms incontractual agreementswith their direct suppliers
verify that their suppliers
include specific payment
terms in their contracts
with farm CHs supplying
the RAC product.

1 January 2023

NB:
Exporters must forward
the SD and SI to the farm
CH.
The full fixed value of SI
must reach the farm CH.
TBD

TBD

Table 1: Overview of SC CHs responsible to comply with requirements for the payment of SD/SI

NOTE: Supply chain CHs working with multiple crops
Supply chain CHs working with multiple crops may have different responsibilities for paymentof SD and SI, depending on the role they play in each supply chain and the payment
responsibilities for the relevant sector.

Requirement 3.2.4 and 3.3.6: Contractual agreements/commitments on
SD and SI payment
In all crops but tea, groups and individually certified farms must have clear contractual
agreements in place which specify the amount and other terms around Sustainability
Investments and Sustainability Differential.

First buyer approach (coffee, cocoa, processed fruits and coconut oil,hazelnut, herbs & spices, other crops)
First buyers must negotiate SD and SI amounts with farm certificate holders. The supply chain
CH will include the agreed SD and SI in contracts with farm CHs. If in-kind SI is agreed between
parties in addition to the monetary SI amount it should also be included in the contracts.

Importer approach (bananas and fresh fruits)
Importers must negotiate and agree on the SD with the supplier. The fixed SI amount and theagreed SD amount are included in contracts. If in-kind SI is agreed between parties, in addition
to the fixed monetary SI amount, it should be included in the contracts.
If the importer is not directly purchasing the certified volume from the farm CH, the supply
chain CH in the country of origin (first buyers/exporters, etc.) must include the negotiated SD
amount and the fixed SI amount in contracts with the farm CH. If in-kind SI is agreed between
parties, in addition to the fixed monetary SI amount, it should be included in the contracts. In
this case the Supply Chain CH that contracts directly with the farm CH must Transfer the fixed
SI and agreed SD amounts to the farm CH.

Brand owner approach (tea)Brand owners who do not contract directly with a farm CH must make commitments to the
Rainforest Alliance specifying the amount of SD/SI by volume they will pay. Payments of SD/SI
to Farm CHs will be facilitated by the Rainforest Alliance. To enable this Brand Owners must
trace out of the Rainforest Alliance traceability platform (“redeem”) the volumes used,packed, and sold as Rainforest Alliance Certified, at least on a quarterly basis.
SA-S-SD-21-V1

7

When volume is redeemed out of the Rainforest Alliance traceability platform, the platform
shows the SD/SI amount (amount by volume, US$/MT) the brand owner commits to pay to thefarm CHs via the Rainforest Alliance payment facility. An invoice is sent to the brand owner forthis amount. The brand owner pays the SD/SI according to the terms set in the invoice.

Contractual agreements
For the first buyer and the importer approach the following applies to farm and SC CHs:
Agreements on SD/SI payments between farm and SC CH must include at least:••

The amount of the Sustainability Differential and Sustainability Investments by volume,
clearly distinguishing the SD and the SI from price, quality premiums, and other
differentials
Terms and conditions of payment, meaning:• Definition of the period the Sustainability Differential and Sustainability Investment
payment relates to (e.g., annual volume contracted in 2022, October harvest 2022)• Clear timeframe of payment (e.g., 3 weeks after receipt of certified product,annually at the end of the contract, etc., respecting requirement 3.2.5)• Method of payment (e.g., bank account details)• Currency

If the separate amounts for SD and SI are not known prior to contracting, the contractual
agreements may reference one total amount. When actual sale of the certified product ismade, SD and SI amounts must be indicated (in the platform). The sum of the SD and SI equal
the total amount agreed.

-

SC CHs that have their own investment programs in place may count thoseinvestments as SI, as long as the investments:
relate to the implementation of the Rainforest Alliance standard farm requirements
are agreed on with the farm CH.
are incorporated into the farm CH’s Investment Plan and contractual agreements (ifapplicable).
are backed up by evidence of the investments made (monetary and in kind).

Specific Situations
Farm CHs purchasing certified products from other farms
A Certificate holder (CH) with farming in scope who also purchases certified products fromother farm CHs. is considered as the first buyer for the volumes purchased. For those crops
where the first buyer is responsible for payment of SD/SI (see table 1), these CHs have to make
SD/SI payments for the volumes purchased as RAC.

Intra-company trading
For multinational organizations that operate under different legal entities, requirements 3.2.4
and 3.3.6 may be applied as follows:
1. Payment terms must be documented for the Sustainability Differential andSustainability Investments between the entity paying SD/SI (e.g., trader) and the entity
receiving SD/SI (e.g., farm CH)
2. Both paying and receiving entities must record all intra-company transactions of RAC
product in the RA traceability platform, including the agreed level of SD and SI pervolume.
3. Both paying and receiving entities must keep records of actual payment/receipt of
the SD and SI.

Requirement 3.2.5 and 3.3.4: Timeframes for payment of SD and SI
SA-S-SD-21-V1

8

The Rainforest Alliance has defined specific timeframes for the payment of the SD and SI per
sector, as set out in the table below:
Crop/Sector

Applicable payment timeframe

CoffeeProcessed
Coconut Oil

FruitsandHazelnut
Herbs and Spices

Payment is made no later than 12 months after shipment from farm CH
to first buyer.

Flowers
Other crops
Cocoa

Payment is made no later than 6 months after shipment from farm CH to
first buyer, unless otherwise required by local regulations.

Tea

Payment is made quarterly. Total quarterly amounts are paid within theterms set in the SD/SI invoice from the Rainforest Alliance to the brandowner, and latest by the close of the next quarter.

Banana and other Fresh Fruits

Payment is tied to regular payments for certified bananas and otherfresh fruits.

Table 2: Timeframe for SD and SI payment

Requirement 3.2.6 and 3.3.5: Recording and Reporting SD and SI
Recording of SD and monetary SI payment (in the RA platform)
First buyer and Importer approach:•••

When entering a sales transaction, farm CHs must indicate the SD and SI amounts
agreed in the contract in the field “SD/SI agreed” of the transaction details. SD/SI
amounts that were agreed in local currencies are converted and recorded in either €or US$.
The first buyer must confirm the agreed SD and SI amounts by confirming the overall
transaction made to them. If the amount entered by the farm CH differs from what wasagreed upon, the first buyer can reject the sales transaction and request the farm CH
to correct it.
For bananas and other fresh fruits: The agreed SD/SI amounts are recorded in theplatform between the farm CH and the first buyer (as explained above). If the importer
is NOT the first buyer, the SD/SI amounts agreed between the importer and its suppliers
are recorded outside the RA traceability system.

Brand owner approach:•

When redeeming certified volume from the platform, the brand owner indicates theSD and SI amounts they commit to pay in the field “SD/SI committed” of the transaction
details.

Recording of in-kind SI payment (outside the RA platform)
Sustainability Investments that are made in kind are usually not calculated based ontransacted certified volume. Therefore, in-kind investments are not reported through theplatform.

SA-S-SD-21-V1

9

SC CHs making in-kind investments must keep documentation outside of the RA platform
demonstrating the type and amount of in-kind investments delivered.
Farm CHs who receive in kind investments must keep documentation outside of the RA
platform demonstrating the type and amount of in-kind investments delivered. They should
also include in-kind SI received, and record how this has been used against each of theInvestment categories in the Sustainability Investment Plan.

Requirement 3.2.7: Minimums and Fixed Amounts
The Rainforest Alliance has defined a minimum Sustainability Differential for cocoa. This means
the SD amount agreed between first buyer and farm CH must reach at least the minimum:
Cocoa

Geography
AfricaRest of the World

Minimum SD

70 US$ per MT of cocoa bean

70 US$ per MT of cocoa bean

Start Date

All certified cocoa produced
during the 2022-2023 harvest
cycle or later that is sold as
Rainforest Alliance certified

July 1, 2022

Table 3: Minimum SD in cocoa

The Rainforest Alliance has defined a fixed Sustainability Investment for banana and other fresh
fruits. This means no negotiations are needed for SI. The amount must be included incontractual agreements.
Banana andfresh fruit

Geography
All

Fixed SI

US$ 5.50 (US$ 0.10 per banana box (18.14 kg))

Start Date

Importers must pay this amount for volumes entering the supply
chain from January 1, 2023 onwards.

Table 4: Fixed SI in banana and fresh fruit

SA-S-SD-21-V1

10

3. OVERVIEW OF SUPPLY CHAIN REQUIREMENTS (SD AND SI)
AND THEIR APPLICABILITY PER SECTOR
No

Topic

CoffeeCocoa

Tea

Banana and Fresh
FruitsOther
sectors*

Importer has
responsibility for SD
payment.

CH
responsible
for First buyer
3.2.3
payment of SD

First buyer

CH
responsible forcontractual
3.2.4 agreements/ First buyer
commitments
for SD

ContractualCommitments on SD
agreements exist
levels are made by
between sellers andFirst buyer
First buyer
brand owners in buyers starting with farm
Rainforest AllianceCH until level oftraceability platform.
importer.

3.2.5

Other SC CHs between
farm CH and importertransfer payments.

Quarterly. quarterly
for the previous
6 months,
As set by commercial
quarter’s volumes
unlesspayments andPayment
sold as RAC
otherwise
timelines.
timeframe for 12 months
required by NB For volumes sold as
SD
RAC in 2022, invoicing
local
and payment will be
regulations.
done in Q1 2023.

Reporting of
SD payment in
3.2.6 traceability First buyer
platform

3.2.7

Brand owner

Minimum SD
amountNA

Supply chain
CH
3.3.4 responsible for First buyer
payment of SI

First buyer

Flowers

TBD

TBD

12 months

TBD

First buyer

Brand ownerFirst buyer

First buyer

TBD

70 US$/MT
cocoa
bean.
Mandatoryfrom
October 1
2022(Africa); July
1, 2022 (restof the world)

NA

NA

NA

TBD

First buyer

Brand owner

Importer has
responsibility for SI
payment of $ 5,50 p/ MT
to be received by thefarm CH on exported
First buyer
volumes.

TBD

Other SC CHs between
farm CH and importertransfer payments.
Reporting of SI
payment in
3.3.5 traceability First buyer
platform

SA-S-SD-21-V1

First buyer

Brand ownerFirst buyer

First buyer

11

TBD

No

Topic

CoffeeCH
responsible forcontractual
3.3.6 agreements/ First buyer
commitments
for SI

Cocoa

Tea

Banana and Fresh
FruitsOther
sectors*

ContractualCommitments on SI
agreements exist
levels are made by
between sellers andFirst buyer
brand owner in buyers starting with farm First buyer
Rainforest AllianceCH until level oftraceability platform.
importer.

* Other sectors: Including Processed fruits, Coconut Oil, Hazelnut, Herbs and Spices, Vegetables

SA-S-SD-21-V1

12

Flowers

TBD