Supporting
sharedresponsibility
Fairtrade’s Human Rights andEnvironmental Due Diligence Report 2023

First edition, December 2023

Contents
3

Foreword

5

Fairtrade system and scope

8

Fairtrade’s HREDD process

9
11
13
17
19

20

2

1. Commit and embed
2. Identify and assess adverse impacts
3. Prevent, mitigate and remediate
4. Track
5. Communicate

Audit results

21
29
31
32

Fairtrade producer organisations
Fairtrade traders
Compliance trends
Corrective measures analysis

35

Conclusions and looking ahead

36

Appendices

36
37
38

Appendix 1:
Appendix 2:
Appendix 3:

Methodology and data collection
Different types of Fairtrade Standards requirements
Compliance criteria in 2022

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Foreword
There is a lot to do to make global supply chains
fair and sustainable. Fairtrade has worked formore than three decades to support the prevention, mitigation and remediation of human rights
and environmental wrongs in supply chains andresearch says we have made a difference for many
people – but many wrongs persist.
Along with numerous other civil society and multistakeholder initiatives, we’ve long called forlegislators and corporate leaders to focus more of
their attention in this area.
It is therefore encouraging that Human Rights andEnvironmental Due Diligence (HREDD) is becoming
increasingly obligatory. Fundamentally, we view the
HREDD approach with great hope.
If conducted fairly, HREDD can be groundbreaking
in advancing human rights and environmental
sustainability in global supply chains.

This report – the first of its kind for Fairtrade –showcases what we do in relation to human rights
and environmental due diligence.
This encompasses our actions across three roles:
first, as an employer and a system with 25 member
organisations; second, as a supporter of sustainable
practices at companies throughout supply chains;
and third, as an advocate for fairer laws and businesspractices globally.
Fairtrade exists to advance and support smallholder farmers’ and workers’ rights. We seek to do
this through a holistic set of approaches, including
ongoing producer support, Standards, certificationand development projects. Meanwhile, our awarenessraising and advocacy work seeks to highlight andtransform unfair and unsustainable public policies,
business practices and consumption patterns.
With specific HREDD requirements now being
legislated in some regions, we are aligning our workwith the due diligence approach.

However, fairness doesn’t come automatically.
Global supply chains are fraught with disparities in
economic power. In many commodities, producers at
the beginning of the supply chain receive a very small
portion of the total value. If buyers push the costsof due diligence onto these producers, HREDD candeepen poverty and actually aggravate risks.
Similarly, if buyers turn away from poor, “high-risk”
sourcing areas and suppliers – even where these
suppliers are taking meaningful measures to mitigate
the risks – trade becomes less fair.
That’s why we’re calling for fair due diligence, basedon dialogue with rightsholders – the people whoserights may be harmed by business – along with faircost sharing, collaboration and continuous improvement. We discuss these crucial elements on page 4.

In this work, we are building on our ongoingengagement with rightsholders and focusing on
the root causes of many challenges in global supply
chains. We address unfair pricing and purchasing
practices and build toward living incomes, living
wages, cooperation with farmers and workers, andco-investment amongst supply chain actors.
While we can support companies with each stepof the due diligence process, participation in asustainability initiative like Fairtrade can never absolve
a company of its responsibility to conduct due diligence.
We hope what you read in this report prompts
feedback that helps us develop our HREDD work
further – and drives forward the discussions on therole of multi-stakeholder initiatives in due diligence.
We look forward to hearing what you think.

We call for fair due diligence,
based on dialogue, fair cost
sharing, collaboration andcontinuous improvement.

3

Sandra Uwera Murasa
Global CEO
Fairtrade International

Melissa Duncan
Executive Director
Fairtrade International

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

The five keys tofair due diligence1
2

Dialogue with rightsholders
It’s a fundamental principle in due diligence –and Fairtrade – that people should shape thedecisions that influence their lives.
Guidance from the Organisation for Economic
Cooperation and Development (OECD) clarifies
that every step of human rights due diligenceneeds to be informed by rightsholders.
This is not only right, but also practical: where
human rights or environmental problems areserious, local stakeholders are usually alreadymitigating and remediating them. It is mosteffective for companies to join existing efforts.

4Interdependent human rights
Human rights are indivisible and interdependent.
As long as the right to a decent standard ofliving goes unfulfilled, many other humanrights and environmental harms will also persist
in global supply chains. The illustration here
highlights these linkages.
This means that to address child labour, forced
labour and deforestation, we must address
the lack of living incomes, living wages andcollective bargaining.

Rights to:
Family life
Just and favorable
conditions of work

Right to:An adequate
standard oflivingReasonable
working hours

Right to:Housing

Right to:
Water

4

3

LivingIncomeRights to:Equal protection
Nondiscrimination

5

Right to:Food andnutrition

Fair cost sharing
It is crucial that the costs of implementing due
diligence are shared fairly among value chain
partners. In many global supply chains, very
little value goes to primary producers. Millions
of farmers live in poverty and have limited or nomeans to invest in more sustainable production
practices.
To invest in stronger due diligence measures,
farmers need better prices, longer-lasting
business relationships and co-investment.

Collaboration
To tackle poverty and inequality, which are
the root causes of many human rights andenvironmental problems in supply chains, weneed collaboration between suppliers, buyers,
governments and civil society actors.
Everybody must play their part. Companies
need to assess and reform their purchasing andpricing practices where these aggravate risks
in supply chains. Multi-stakeholder initiatives
like Fairtrade can support but not substitutecorporate due diligence.

Continuous improvement
We need ambitious regulation and continuous
improvement in business practices, not just a
search for low-hanging fruit. First steps must
be taken by supply chain actors who hold themost power and resources. Smallholder
cooperatives need time to develop their due
diligence measures.

Rights to:
HealthLife

Rights to:
Education
Protection
for the child

Living Income – the foundation for many
human rights and Sustainable Development Goals.
Modified from a graph by Shift.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Fairtrade systemand scope
Fairtrade exists to advance and support
smallholder farmers’ and workers’ rights andenvironmental sustainability in global supply
chains. We aim to bring these rightsholders theopportunity to earn fairer prices, build stronger
communities, and have more say over their futures.

⚫ FLOCERT, the main independent certifier for
Fairtrade, which certifies companies throughout supply
chains, from farms and mines to manufacturers.
⚫ The Fair Trade Advocacy Office, which influences

public policies to improve livelihoods in global supply
chains. It is a joint initiative of Fairtrade International,
the World Fair Trade Organization (WFTO) and theEuropean branch of WFTO.

Fairtrade
International

Producer
Networks

Fairtrade Standards development,
governance, coordination

Organisation

The Fairtrade system⚫ Three regional producer networks, governed bytheir membership of more than 1,900 Fairtradecertified producer organisations representing morethan two million farmers and workers. Producer
networks support producer organisations tostrengthen their operations, adhere to FairtradeStandards, introduce best practices, address humanrights and environmental challenges, and develop
the needed capacities through thematic programmes
and projects.

membership association for the system, maintains
and updates the Fairtrade Standards and pricing,owns the Marks, and organises multi-stakeholder
decision-making bodies including the annual General
Assembly, Fairtrade Standards Committee and more.

25

Local
Fairtrade
Organisations

Licensing of the FAIRTRADE Mark,
commercial services, raising awarenessRegional
markets
Producers

Exporter / importer

Manufacturer

Brands and retailers

Consumers

Supply chain

The Fairtrade system includes:

Producer representationand support

marketing organisations, collaborating with local
companies, civil society and governments, building
awareness of Fairtrade and, for national Fairtradeorganisations, licensing the use of the FAIRTRADE
Marks to companies to place on their products.

⚫ Fairtrade International, which serves as the

Fairtrade is co-owned by more than two million
farmers and workers.

3⚫ 25 national Fairtrade organisations andAudits and certification by FLOCERT

5

Fairtrade system and scope

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Producer co-ownership
Farmers and workers having a say in Fairtrade is an
essential part of how we work. The system is governedby a General Assembly and a Board of Directors.
At the General Assembly, producer representatives
hold 50 percent of the voting power.
Other Fairtrade entities have a similar emphasis on
producer participation:⚫ The Fairtrade International Board comprises four

Global scope
Fairtrade producers are located in 70 countries.
A total of 68 percent of Fairtrade farmers andworkers live in Africa and the Middle East region,
while 18 percent are in Latin America and the
Caribbean, and 13 percent are in Asia Pacific. These
farmers and workers are organised into 660, 970
and 300 producer organisations, respectively.
Fairtrade certifies more than 150 products, and morethan 300 herbs and spices. The products that involve
more than 90 percent of Fairtrade farmers andworkers are coffee, cocoa, tea, flowers and plants,
cane sugar, cotton and bananas. In terms of selling
Fairtrade-labelled products to consumers, in 2021
more than 2,500 companies licensed more than
37,600 products, which were sold in 143 countries.
More detail on Fairtrade producers and sales can befound in our monitoring reports.
Fairtrade’s development projects, designed tosupport farmers, workers and their organisations
with particularly entrenched challenges, also takeplace across the world. To date, we have implemented
more than 150 projects. More detail can be found on
our project map.
More than 1,000 staff are employed by Fairtradeorganisations around the world. Fairtrade
International employs more than 90 people, of
which 68 percent are women.

producer representatives, four national Fairtradeorganisation representatives and three independent
members.

⚫ The Fairtrade Standards Committee, which makes
all final decisions on changes to Standards and prices,
includes three producer representatives, one trade union
representative, two national Fairtrade organisation
representatives, one trader and one company thatsells Fairtrade-labelled products (a licensee).
⚫ The Fairtrade Executive Team guides membersin the operational delivery of our strategic ambitions.
It is made up of the CEOs from the three producer
networks, three elected CEOs from the national
Fairtrade organisations and the Global CEO of Fairtrade
International.

Meaningful stakeholder engagement
We agree with the fundamental principle in human rights-related work that no one can decide
for other people how their grievances should be
ranked and addressed. They must be involved.
Every step of human rights and environ­mental due diligence needs to be informed bymeaningful engagement with the farmers andworkers in supply chains, respecting their views,
experience and knowledge. Rightsholder views
need to inform every decision.
Engagement is meaningful if it is based on open,
two-way communication and good faith.

Fairtrade is co-owned
by farmers and workers.

6

Fairtrade system and scope

Fairtrade believes that changes in power relations are central in advancing human rights andenvironmental sustainability in global supply
chains. Rightsholder voice should influence bothdue diligence practices and legislation.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Governance of Fairtrade’s
due diligence work
The Fairtrade International Board of Directors
oversees the design and effectiveness of Fairtrade’s
policies and processes on due diligence, human rights
and environmental sustainability. These issues are
discussed at every Board meeting. For example,
in 2023, the Board discussed the impact of new andupcoming due diligence legislation on Fairtrade’s role,and Fairtrade’s first set of business services on
HREDD.
Our HREDD Centre of Excellence leads the developmentof Fairtrade’s HREDD policies and processes, as wellas supporting materials and training to educate staff
about HREDD developments. The Centre is led by
Fairtrade’s Business and Human Rights Lead, Dr Tytti
Nahi, and hosted by Fairtrade Finland.

In the development of our HREDD policies, processes
and tools, we take meaningful engagement withinternal and external experts and potentially affectedstakeholders very seriously. Engagement is facilitatedby an internal HREDD Working Group, which brings
together HREDD experts from different functions andFairtrade organisations on six continents.
The policies and processes for different salientissues are developed by senior advisors at Fairtrade
International and the producer networks.

No one can decide for otherpeople how their grievances
should be ranked and addressed.
People must be involved.

7

Fairtrade system and scope

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Fairtrade’s
HREDD process
Fairtrade calls for regulators and corporations toadvance and conduct fair due diligence – and we
also practise what we preach.
Since 2019, we have been making concerted efforts tostrengthen Fairtrade’s own process of due diligenceon human rights and the environment.
We have seen that HREDD helps in developing
Fairtrade Standards, policies and processes so that
we become increasingly effective at addressing thesalient issues and advancing the rights of farmers,
workers and other rightsholders.
In this chapter, we discuss how Fairtrade conducts
HREDD on our own operations, and in certified supply
chains. Our HREDD process follows five steps:
commit and embed; identify risks and adverse
impacts; prevent, mitigate and remediate; trackprogress; and communicate results.

1
2
3

Fairtrade’s roles in HREDD
Bringing farmer and worker voices
to policy discussions

Developing our own HREDD process

Supporting HREDD by commercial
partners and farmer organisations

We also indicate how Fairtrade can support companies
at each step of their due diligence process. For more
information on Fairtrade as an HREDD partner, please
see the Fairtrade Risk Map.

Highlights of Fairtrade’s HREDD process
and support for commercial partners

1

Own HREDD process / Support to partners

EMBED
Human Rights
Commitment in
2020; aligning otherpolicies; multiplemeans of internal
capacity building.

8

Information of salientissues in supply chainsand due diligence;
tailored service of
mapping the gaps incompany practices.

Fairtrade’s HREDD process

2
3
4
5

Own HREDD process/

Support to partners

IDENTIFY
Systematic risk assessment,
results in Fairtrade Risk Map;
complaints mechanisms at global
level and plantations.

Fairtrade Risk Map;
tailored advice on risk
assessment methods;
Risk Reports.

ADDRESS AND REMEDIATE
Standards; auditing and corrective
measures; minimum price & premium;ongoing producer support; support
for remediation systems; targeted
development programmes; awarenessraising and advocacy work..

TRACK
Audits; annual producer satisfaction
survey; commissioned impact
research.

COMMUNICATEDue Diligence Report;
Fairtrade Risk Map

Holistic interventions;tailored Prevention and
Mitigation Plans.

Tailored Premium use data;
Producer satisfaction survey.

Premium use data, examples
and pictures.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

1

Commit and embedThis first step of HREDD is for the organisation to
document its intentions on human rights andenvironmental sustainability, and operationalise
these intentions across the business.

The Commitment: A snapshot

Fairtrade’s Human Rights Commitmentcommits us to align with the United Nations’
Guiding Principles on Business and Human Rights(UNGP) – and to develop HREDD policies andprocesses that are driven by the perspectives ofFairtrade farmers and workers.
This commitment is shared by all Fairtradeorganisations. The text was the result of three
years of internal dialogue. External guidance wasprovided by several experts, notably from the Danish
Institute for Human Rights, as well as guidelines
from the UN, OECD, FAO and UN Global Compact. The
CEOs of Fairtrade member organisations discussed
the commitment in October 2019, and it was approvedby the Fairtrade International Board in 2020.
The commitment has been communicated to all
Fairtrade staff via internal newsletters and intranet,
and to external stakeholders on Fairtrade International’s
website and through multiple publications, eventsand newsletters.
Training and advice supporting the implementationof the commitment has been offered to all Fairtradeorganisations in the following ways:⚫ Fairtrade’s HREDD Centre of Excellence answers
internal queries and offers training.

⚫ Our internal HREDD Working Group brings
together 80 colleagues from around the world tolearn from each other.
⚫ An HREDD newsletter, plus webinars and workshops, inform Fairtrade staff members about internaland external due diligence developments.
⚫ An e-learning course serves to orient staff to
HREDD and Fairtrade’s approach to it.

We seek to respect all internationally recognised
human rights, including environmental – we all
have the right to a safe, healthy and stableenvironment. We commit to developing our
HREDD process and piloting new ways tofacilitate collaboration between producers andother supply chain actors.
We recognise our opportunity – and responsi­
bility – in encouraging companies to respecthuman rights, including environmental rights.
We work with our business partners andnetworks to raise understanding of humanrights and human rights-based approaches.

Aligning our strategy
We revise our global strategy every five years,
through a broad consultation with internal and external stakeholders. Our current strategy for 2021-2025
focuses on five priorities: expanding producer powerand benefits in trade relations; innovation and growth;
advocacy and citizen engagement; digitalisation
for improved transparency and decision-making(for producers as well as for the Fairtrade system);and strengthening our system for the future.
The strategy highlights the key steps in aligningthese strategic priorities with our Human Rights
Commitment. As part of expanding producer power,
we work to advance living income and living wages
and support producers in strengthening their due
diligence work and gaining leverage on how due
diligence is conducted in their value chains.
Market innovation involves developing new solutions
to support meaningful engagement and collaboration
on HREDD among supply chain actors. Our advocacy
work focuses on HREDD-related legislation, climate
justice and deforestation, and workers’ rights in the
textile and garment industries, to name a few priorities.
In terms of digitalisation, we are rolling out systems
that support greater data ownership by producers
and greater two-way transparency between producer
organisations and their commercial partners. At
the moment, one focus areas is deforestation andgeolocation data.

9

Fairtrade’s HREDD process

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Our commitment to human rights, environmental
sustainability and due diligence is also reflected in
the Fairtrade Organisation Code, which lays out thehuman rights expectations of staff in Fairtradeorganisations.

price reviews for coffee and bananas. For bananas,
we introduced our first Living Wage Reference Price
to close the gap to living wages. We will undertakea price and Premium review for cocoa in 2024. This
review, and others moving forwards, will take into
account HREDD costs for producers.

Strengthening due diligencein the Fairtrade Standards

Consultations on Fairtrade Standards and prices are
public, open for all stakeholders, and entail physicalconsultation workshops for rightsholders throughout
Africa, Asia, Latin America and the Caribbean.

The Fairtrade Standards convey our expectations to
all Fairtrade certified organisations – almost 2,000
producer organisations and more than 3,000 traders,processors and manufacturers.
The Standards have long guided and expected certified
producer organisations to take some due diligencemeasures, including risk assessments, policies andremediation work. Gender policies, for example, havebeen encouraged at both farmer cooperatives andplantations, and child labour monitoring and remediation systems especially for farmer cooperatives inknown risk regions. The new Fairtrade Cocoa Standard
includes the full HREDD cycle.
Importantly, the three Fairtrade producer networks
offer advice, training and support to producer
organisations on an ongoing basis.
At the moment, we are revising the Fairtrade Standards
to strengthen our due diligence expectations for all
Fairtrade certified organisations. In particular, we
hope to encourage dialogue and concrete collaboration
between Fairtrade producers and buyers.
In 2023, we have been reviewing our Standards forlarger organisations that typically hold more economic
power in supply chains – traders, plantations andother organisations with hired labour. We expect tofollow this with the review of our Standards for farmer
cooperatives and contract production settings.
Fairtrade Minimum Prices and Fairtrade Premium arealso part of our Standards, and relate to improving
farmer and worker incomes. In 2023, we completed

The inclusive process seeks to ensure that ourStandards respond to the realities experienced byproducers, workers and traders. We understand that
Standards need to be realistic, in order for them toactually contribute to the protection of people andplanet and encourage organisations to remain
certified.
Establishing and maintaining HREDD systems requires
expertise, time, partnerships and funding. In response,
we have already published HREDD guides for producer
organisations and traders and we strive to facilitate
access to public funding and corporate partnerships
for producer organisations.

How Fairtrade supports companies
to build their own commitment
We can work with companies to develop theircommitments, policies, and expertise. A fuller
review of our support measures is available
on the Fairtrade Risk Map but here are thehighlights:⚫ Information: We offer all corporate partners
information and support to understand humanrights, environmental issues, due diligence,
related legislative developments and the roleof Fairtrade and meaningful rightsholder
engagement in HREDD.

⚫ Sourcing: Choosing Fairtrade certified

commodities can play a significant part in a
corporate risk management system.

We are revising the FairtradeStandards to strengthen
expectations of due diligence,
dialogue and collaborationin certified supply chains.
10

Fairtrade’s HREDD process⚫ Tailored service: Fairtrade can offer additional
support to a corporate partner for mapping thelegal obligations, commodity-specific risks andgeographic hotspots most salient to the partner.

⚫ Dialogue: We are uniquely positioned tosupport meaningful engagement and dialogue
among supply chain actors, as per UN and OECDdue diligence guidance.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

2

Identify and assess adverse impacts

The second step is about identifying and assessing
the human rights and environmental risks and harmsthat are most common and serious – or “salient” – inthe organisation’s operations and business relationships. This is often done through risk assessments
and grievance mechanisms.
Fairtrade’s work has always been based on arightsholder-driven assessment of the salient
human rights and environmental issues. Fairtrade
was originally established in 1988 by Mexican
indigenous communities, coffee farmers and a Dutch
civil society organisation to advance the livelihoods ofthose farmers and their communities and their rightto a decent standard of living.
As Fairtrade expanded to new commodities,
geographical areas and aims, our risk and impact
assessments became fragmented, with different
methods and processes used in different commodities
and continents. Since 2020, we have been aligning
this work with the UNGPs and carrying out an
ongoing, system-wide assessment of human rights
and environmental risks in our operations and global
supply chains of the commodities we certify.

-

Living income and living wage
Child labour and forced labour
Gender rights and discrimination
Working conditions, freedom of associationand collective bargaining
Climate change and deforestation
Water and biodiversity

The risk map serves to share general product andregional risk information transparently with our
stakeholders. It has improved the consistency of ourinternal insight as a system.

Grievance mechanisms
Fairtrade has global-level mechanisms where any
stakeholder can report grievances related to Fairtrade,
FLOCERT or a certified organisation. For example, in
2022, we received 115 allegations related to certified
organisations and 44 complaints related to FLOCERT
services.

Assessing risks

Grievances can be reported confidentially via a website form, email, phone, or WhatsApp – all offered in
multiple languages. Further information is available
on our website and you can read the 2022 statistics
here.

The digital Fairtrade Risk Map summarises our key
findings. Launched in early 2023, it highlights thesalient risks in the commodities and countries where
Fairtrade works. The highlighted risks are not specificto Fairtrade certified supply chains – they are deeply
entrenched challenges that all actors face in theseindustries.

As for certified entities, since 2015, the FairtradeStandards have required human rights-based
grievance mechanisms to be implemented by certified
plantations and other organisations that dependon hired labour. A similar requirement is being
considered for traders, farmer organisations andcontract production settings.

Our risk assessment process is described on the
map website. To identify and assess the commodity-,geographic- and organisation-related risk factors,
we consider external research and data, Fairtrade’s
internal expertise, and – importantly – rightsholder
perspectives. The published findings have beenvalidated by farmers and workers.

Grievance mechanisms can only work where people
are aware of their rights and are not scared to reporttheir concerns. Fairtrade strengthens the voices ofrightsholders by supporting worker committees
and democratic farmer organisations, promoting
fairer division of value between producers and buyers,and providing human rights training for farmers,
workers and producer organisations.

The map also discusses nine salient issues,
including relevant data and information on Fairtrade’s
preventive and remediating measures. The salientissues highlighted by our assessment are as follows:

11-

Fairtrade’s HREDD process

It is best practice to complement grievancemechanisms with other approaches for identifying
human rights breaches and victims. Initiatives such as
Fairtrade that have a large presence in producer
countries often find out about human rights breaches
through discussion and observation rather than throughformal grievance mechanisms.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Fairtrade helps to addresshuman rights and environmental
harms and root causes – but nosustainability standards canguarantee that supply chainsare free from violations.

How Fairtrade supports companies to
identify and assess risks or adverse
impacts
Fairtrade – or any certification system – is nota substitute for a company’s own due diligencework. But we can support corporate risk
assessment in several ways:⚫ Fairtrade Risk Map: Supports any company
to assess the human rights and environmental
risks related to their own operations and supply
chains.
⚫ Dialogue: Fairtrade can work with companies to facilitate their rightsholder dialogue with
farmers and workers in their supply chains.
⚫ Advice: Fairtrade can offer advice on risk
assessment methods and processes, including
the related laws and norms.
⚫ Risk reports: We can offer rightsholderinformed overviews of the salient risks,violations and root causes in a particularsupply chain or commodity and country (forexample, coffee beans from Ethiopia).
⚫ Supporting suppliers: Fairtrade certified
smallholder farmer organisations are required
to conduct regular risk assessments and act on
the identified risks. This will soon be extended toFairtrade certified traders and plantations. We
support producer organisations through training
and by providing Fairtrade risk assessment
tools. A fuller review of our support measures isavailable on the Fairtrade Risk Map.

12

Fairtrade’s HREDD process

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

3

Prevent, mitigate and remediate

This step refers to the organisation taking action on
its identified salient issues, including putting policies
and procedures in place, having an action plan andcooperating in the remediation of existing violations.
Human rights violations and environmental damages
are broadly present in supply chains, affecting
farmers, workers and other rightsholders. Work inagriculture and mining is often low paid, precarious
and fraught with health hazards. Over 110 million
children around the world are estimated to engage
in agricultural work that threatens their health andsafety or interrupts schooling. The dominance ofchemical intensive production methods drives
biodiversity loss, water pollution, greenhouse gas
emissions, and health risks.
No actor can prevent or remediate these harms alone.
Fairtrade uses many means to facilitate and contributeto multi-stakeholder collaboration that advances
the prevention, mitigation and remediation of theseharms.
Fairtrade mainly works with agricultural supply chains
and the textile industry. Our main focus is at farmlevel, but we also work to promote due diligence andreduce unfair trading practices throughout supply chains.
Our leverage is greatest where Fairtrade production
engages the most people and sales are highest,
namely in the supply chains for coffee, cocoa,
bananas, flowers and cane sugar.
Overall, research shows that Fairtrade’s efforts do
mitigate many salient risks and harms. A review of
151 recent academic studies shows that Fairtradeis effective in addressing low farmer incomes andworker wages, poor working conditions, weakdemocratic organising and adaptation to climatechange. Through improved incomes and a better
standard of living for farmers and workers, Fairtradesupports several other rights, such as health andeducation.
“Fairtrade has the capacity to contribute to ceasing, preventing, and mitigating certain human rights
issues,” notes an empirical study by van Baar andKnoote (2022). It states that “Fairtrade’s impact, to alarge extent, seems to be directed at the most salient
human rights issues,” and that Fairtrade producer
networks have a “contextualised and nuanced understanding of thorny issues such as child labour.”13

Fairtrade’s HREDD process

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Fairtrade fundamentals
for addressing risks andharms in supply chains
Fairtrade Standards: Our Standards aredesigned to deepen respect for humanrights and the environment amongproducers and other supply chain actors.
These detailed Standards are based on UN
human rights covenants and International
Labour Organization conventions and arerevised regularly, through inclusive processes, toincrease their effectiveness. We encourage continuous
development – our Standards become more demanding
one, three and six years after certification. See
Appendix 2 for different types of Standard requirements.
We are currently revising the Fairtrade Standards tostrengthen our due diligence expectations for all
Fairtrade certified organisations. See page 10 for
further information.
Verification and corrective measures:
Fairtrade’s independent certifier, FLOCERT,
follows rigorous practices in verifying
whether a producer or trader fulfils the
Fairtrade Standards. On-site audits cantake more than two weeks for large producer organisations. Unannounced on-site
audits are particularly common in areas withhigh human rights or environmental risks.
While not infallible, we find that independent auditing
and subsequent dialogue remain useful tools in
HREDD. Whenever an audit reveals non-conformities,
it leads to an agreement on corrective measures thatthe organisation needs to implement. Whenthe number of non-conformities is high and it isdifficult to verify the completion of corrective
measures through documents, FLOCERT conducts afollow-up audit. FLOCERT has ISO 17065 accreditation,
which is only granted to highly competent, consistentand impartial certifiers. Audits are covered by thecertification fee and not charged separately.
Minimum Price and Premium: Fairtradeis the only major certification with fixedminimum prices for most commodities.
Producers earn the market price or the
Minimum Price, whichever is higher.
This price security can facilitate farmers’
investments in fairer and more sustainableproduction practices.

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Fairtrade’s HREDD process

The Fairtrade Premium – an extra sum of money
paid on top of the selling price – allows farmers andworkers to invest in community and business projectsof their choice. Democratic decision-making on how
to spend Premium funds can have positive ripple
effects in contexts where democratic practices are
not common.
The Minimum Price and Premium also benefit commercial partners, since too-low prices can be seen as
contributing to human rights or environmental
violations. In 2021, the total Fairtrade Premium paid
amounted to €202 million. Plantation workers
allocated 68 percent of their Premium and smallholder farmers 16 percent to social investments,
including education, healthcare and housing. Ourlatest monitoring report offers more information.
Support for farmers and workers: Fairtrade
producer networks support farmers andworkers to know their human rights,
get organised, develop their businesspractices, and build environmental andsocial sustainability.
The needs of more than 1,900 Fairtrade certified
producer organisations in 70 countries and territories
are immense and varied – much more support isneeded than we can deliver. Services are delivered
through in-person or remote training, site visits andnetworking opportunities.
To support HREDD, we have started building producers’ capacity to strengthen their HREDD systems. We
are collaborating with the International Trade Centre
to pilot producer support methods and learn about
the measures needed, in conjunction with legislation,
to foster fair and impactful due diligence in global
supply chains.
We have also published a first-of-its-kind guide on
HREDD for smallholder farmer cooperatives, andfollowed it with guides for companies that rely on
hired labour, “first buyer” traders and small
businesses and microenterprises.
Particular support is offered for remediation workwhen child labour, forced labour or gender-based
violence is identified at a certified organisation.
This builds on the Fairtrade producer networks’ andFairtrade’s Human Rights and Environmental Due Diligence Report 2023

Fairtrade International’s protection committees andpolicies, which make it the top priority that protection
measures respect the views of the impacted people
and serve their best interests. We encourage producer
organisations to engage all duty bearers, including
local protection agencies.

and worker voices in partnership with like-minded
companies and organisations. At the moment, ouradvocacy work focuses on living incomes and living
wages, mandatory HREDD, deforestation, climatechange adaptation and resilience, gender inclusion
and market access.

Our latest annual survey shows that across Africa,
Asia and Latin America, 75-84 percent of producer
organisations are highly satisfied with Fairtrade’s
producer support activities overall.

Fairtrade is a worldwide movement for fairer trade.
Thousands of fair trade-affiliated towns, universities,
faith-based organisations, schools and workplaces
are actively raising public awareness of human rights
abuses and environmental challenges in supply
chains, supported by Fairtrade campaigns and events.

Rightsholder engagement: Producers
have equal decision-making power inFairtrade, from standards setting andprice updates to governance, oversightand strategy. Fairtrade only certifies
smallholder farmers who are democratically organised into cooperatives,and plantations that allow their workers
to join trade unions.
Fairtrade has extremely close dialogue with farmers
and workers. Our producer networks employ morethan 230 staff who work directly and locally with
farmers and workers. We call for and can facilitate
dialogue and collaboration between farmers, workers
and commercial partners in the supply chain.
Collaboration: Working with tradeunions, NGOs, multi-stakeholder
initiatives, development agencies,
business coalitions and governments
helps to develop and amplify our efforts.
For example, we have goal-driven
collaboration with other sustainability
standards through the Global Living Wage
Coalition and Living Income Community of Practice.
Research: Fairtrade undertakes, commissions,reviews and disseminates a constant streamof research. Our goal is to generate under­
standing among companies, governments,
civil society organisations and consumers
about what works to prevent, mitigate
or remediate human rights situations and provide
solutions in global supply chains.
We publish our research on our website.
Advocacy and awareness raising:
Fairtrade seeks to highlight imbalancesof power in global supply chains andprovide concrete recommendations topropel changes in legislation, norms
and business practices. We amplify farmer

15

Fairtrade’s HREDD process

Development projects and programmes:
We know that farmer cooperatives andplantations need to strengthen their
HREDD work. We also know that all
business partners must assume their
responsibility to support farmers with
the necessary resources to make HREDD
a reality. Our tailored projects and ongoing programmes support producer organisations and offer
opportunities for other companies to address adverse
impacts in their supply chains.
To date, Fairtrade has completed about 150 projects
around the world. These include developing opportunities for women, progressing towards living incomes,
strengthening democratic management at farmerorganisations or tackling deforestation. Details areavailable on our project map.
Sustainability services: Fairtrade experts,
in consultation with farmers and workers, develop innovations such as living
income and living wage reference prices,and carbon credits. Fairtrade also offers
advisory services on due diligence,
which are summarised on the next page.
These mechanisms and resources are grounded in
our long-standing experience, and are available tocompanies that seek additional progress towards
specific goals. They can, for instance, help companies
make progress in aligning with the EU Deforestation
Regulation, Corporate Sustainability Reporting
Directive, Corporate Sustainability Due Diligence
Directive and Green Claims Directive. These services
incur additional costs for corporate partners and are
subject to availability.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Fairtrade also offers four due diligence services:

Advisory service on HREDD

How Fairtrade supports companies’
prevention, mitigation and remediation efforts

Understand due diligence expectations andobligations relevant to your company, and the role ofFairtrade and meaningful rightsholder engagement inthis.

Fairtrade’s support for addressing andremediating salient human rights risks andharms is strongest where:

Advisory service on risk
assessment• the highest-risk commodities of the company
are in Fairtrade’s product portfolio;• the company sources 100 percent of thosecommodities as Fairtrade;• and the company also participates inFairtrade’s programme, advocacy andawareness raising work.

Understand human rights and environ­mental risk assessment, and the next steps instrengthening your own risk assessment processes.

Risk report
A tailored assessment of risks and root
causes in a particular product and country, produced
through meaningful rightsholder engagement.

Collaboration with Fairtrade can form a larger
part of due diligence efforts for a small or
medium-sized enterprise (SME) because international due diligence guidance expects lessextensive measures from SMEs than it doesfrom large corporations. A fuller review of our
support measures is available on the Fairtradewebsite.

Prevention and mitigation plan
Overview of activities thatyour company could join or initiate
to prevent and mitigate the salient
risks and root causes in a particular
product and country.

Can beaccompanied
by real-time exchangewith rightsholders andFairtrade staff.

How Fairtrade supports businesses
in addressing risks and harms
This graphic is for illustrative purposes only.
It represents the due diligence efforts
required of a given company. Fairtrade’smeasures fill a larger or smaller shareof the circle, depending on the context
and the company’s own actions.

16

Fairtrade’s HREDD process

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

4

Track

Tracking refers to checking the progress of prevention,
mitigation and remediation actions.
To track the effectiveness of our human rights
and environmental interventions in certified supply
chains, we draw on a number of key sources.
First, we analyse FLOCERT audit data on important
human and environmental rights criteria. This
analysis has a direct impact on the targeting ofFairtrade producer networks’ ongoing producer
support activities. The next chapter includes someof this analysis.
Second, the producer networks monitor their regularservices and conduct an annual satisfaction andneeds survey among their members.
Third, to track whether our work is bringing theintended outcomes and impact, our programmes
include bespoke monitoring and evaluation
frameworks. External consultants are sometimes
engaged for mid-term or end evaluations.
Fourth, we commission research, including into
specific aspects related to human rights andenvironmental impacts. To ensure that theseresearch findings also influence our operations,
we conduct learning workshops both with theparticipating producer organisations and allinterested Fairtrade system staff. We also informthe Fairtrade International Board and publish thestudies on our website.

17

Fairtrade’s HREDD process

In the past year, our research work has included:⚫ Comparison of Fairtrade and non-Fairtrade sugar­

cane farmers in Mauritius: A total of 93 percent
of Fairtrade producer organisation members reported
an improvement in the conditions for workers overthe past 10 years, as opposed to just 40 percent of
the non-certified farmers. Climate change and lessparticipation by women than men were some of theongoing reported challenges.

⚫ Impact of Fairtrade on flower workers in Kenya,

Uganda and Ethiopia: Better working conditions
and greater fairness in recruitment and promotion
were cited as the core benefits of Fairtrade by flower
workers. For example, on average, women occupy
more than 50 percent of leadership and management
positions on Fairtrade certified farms. Progress is stillrequired on union organisation and living wages.

⚫ Fairtrade’s role in human rights due diligence: In

coffee farming in Ethiopia and Colombia, and banana
production in the Dominican Republic and Colombia,
Fairtrade interventions have advanced social andeconomic rights. In particular, the Fairtrade Minimum
Price and Premium have made significant contributions.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Increasing transparency
Companies need knowledge about their value chains
and their business partners’ due diligence work to
identify risks and harms, find partners, and trackthe effectiveness of mitigation and remediation
efforts. Traceability (the route a product takes fromfarm to shelf) and transparency (of production
practices and due diligence measures) are crucial
to HREDD.
However, producer organisations have legitimate
concerns that their buyers, if given a transparent
view of the risks and challenges that producers face,
could discontinue their purchases, regardless of the
producer organisation’s mitigation efforts. Many risks
and harms at farms and factories are rooted inpoverty, inequality, unfair business practices andweak public policies, and are slow to fix.
Producer organisations also need information about– and opportunities to influence – how their buyers
prioritise different risks, challenges and solutions.
Fairtrade seeks to support all partners with theinformation they need.
There are many related developments at Fairtrade.
Information on how producer organisations invest
their Fairtrade Premium and the impact it makes, forexample, is increasingly stored on our FairInsightplatform. Producer organisations can then share thiswith commercial partners.
Forest landscape management is particularly
topical in cocoa and coffee supply chains. Fairtradeis partnering with a satellite monitoring provider
to support producer organisations to monitor
deforestation risk based on farm geolocation data.

To achieve transparency,
we need to build trust andcollaboration, not just formeasuring and tracking, butalso resolving the problems
that are identified.

18

Fairtrade’s HREDD process

How Fairtrade supports companies’
tracking
Fairtrade offers information that helps companies track how our joint efforts prevent, mitigate
and remediate risks and harms in supply chains:⚫ Audit and monitoring data: Fairtrade canoffer data generated by our monitoring andevaluation work as well as aggregated audit
data.

⚫ Project monitoring: The outputs, outcomes

and impacts of our programme and project work
are monitored and evaluated, and we share thefindings with all project participants and funders.

⚫ Research: Fairtrade’s impact is typicallyscrutinised in several academic articles eachyear, which we are happy to summarise to our
corporate partners.
We are developing our data management
systems and practices so that our data can bebetter analysed and more transparently sharedwith external stakeholders.

The tension
It is challenging to square the goals of advancing
transparency, protecting people’s privacy, andmaintaining producers’ ownership of their own
information.
For example, while we require cocoa cooperatives
in Ghana and Côte d’Ivoire to have systems to monitor
and remediate child and forced labour, we arestill working on fair means to collect and share
information about the findings and progress made.
There are also practical challenges in data collection.
Many cooperatives and even some plantations arevery small organisations with limited digital fluency.
These organisations need support and time.
To achieve transparency, we need to build long-term
relationships and trust that ensure not just measuring
and tracking, but also collaboration in resolving the
problems that are identified.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

5

Communicate

The last step of HREDD focuses on how theorganisation shares information with partners
and stakeholders about its salient issues, due
diligence actions and effectiveness.

How Fairtrade supports companies incommunication

To foster greater awareness among consumers andcompanies, we strive to be increasingly open about
the complexities of human rights issues – and ourmeans of addressing them.
The Fairtrade International website goes into depth
on issues related to human rights and environ­mental protection. We commission research into key
areas, such as gender equality, climate change andhousehold incomes, and make these findings publicly
available. Our risk map goes even further in compilingthe known problems in a given sector.
With a greater emphasis on advocacy in our current
global strategy, we are working to make thechallenges in supply chains even more visible, andto encourage citizens, businesses and governments
to take action.

Fairtrade can support companies in communicating about their due diligence work in linewith laws and stakeholder expectations. This
includes:⚫ Credible claims: Companies that source

Fairtrade products and license the Fairtradelabel can use the Fairtrade label and associatedclaims on their products and related sustain­
ability reports.

⚫ Content for sustainability reports: We

can offer information and analysis to support
report­ing on sustainability and due diligencework.

⚫ Assets: We offer examples, citations andtailored support in a multitude of languages tosupport your company’s sustainability communications.

⚫ Advice that supports credible and legitimate
sustainable communications. Our five key
recommendations are highlighted here.

⚫ Joint campaigns: Many national Fairtradeorganisations conduct marketing or communications campaigns to raise awareness about
these issues, and invite commercial partners toparticipate.

Fairtrade hosted a producer-led living
income summit in Abidjan in May 2023, wherecocoa farmers shared their priorities.

19

Fairtrade’s HREDD process

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Auditresults
Audits can be one good tool in tracking theeffectiveness of prevention, mitigation andremediation measures – and prompting further
action. At Fairtrade, our audit approach, criteria andpractices are increasingly aligned with due diligencethinking and many audits lead to further corrective
measures.
This chapter shares audit results showing how
Fairtrade producers and traders are meeting the
Fairtrade Standards, and sheds light on their humanrights and environmental challenges. The audit
criteria relate both to Fairtrade’s generic Standards
for different types of organisations and to our
product-specific Standards. Further informationon the methodology can be found in Appendix 1.
We will share product-specific analyses of audit
results in 2024.
Audits are, of course, no substitute for HREDD.
Business organisations must build a holistic due
diligence system and use multiple tools for each stepof the process.
This is why Fairtrade complements Standard-setting,auditing and the corrective measures taken withmultiple other approaches to address and remediatehuman rights and environmental risks and harms.

Audits are no substitute for
HREDD. Business organisations
must build a holistic due
diligence system and use
multiple tools for each stepof the process.

20 Audit results

How Fairtrade audits align withdue diligence thinking
First, FLOCERT’s audit approach is risk-based. Audits
are particularly thorough in high-risk contexts.
The audit frequency increases when the risk of nonconformities is higher, and auditors are informed indetailed Terms of Reference about the known risks
they should focus on.
Second, FLOCERT audit practices include dialogue
with rightsholders and various stakeholders. Interviews with farmers, workers, trade unions and otherkey stakeholders are a core part of the audit routine,
and auditors are trained in creating a confidential andcomfortable interview situation.
Third, audit criteria encourage due diligence, dialogue
and continuous development. They go beyond pass/
fail criteria such as “there is no discrimination inmembership, recruitment, promotion, remunerationor other activities.” Instead they require ongoing
management of key risks through criteria such as“measures are taken to prevent discrimination by any
recruitment agency the company uses.”
Fairtrade audit criteria also encourage continuous
development. The number of criteria increases
one, three and six years after an organisation joins
Fairtrade. Demanding “development criteria” allow
certified organisations to decide which measures aremost relevant for them. For each criterion, organisations gain a score between 1 and 5, which helps themmonitor their progress. Organisations must scorean average of 3 for the development criteria taken asa whole (but not for every single criterion).
Fairtrade audit criteria also build dialogue withincertified organisations. We require smallholder farmers
to get organised and farmer cooperatives to operate
democratically. Plantations must allow workers toform unions and must maintain social dialogue. Keydecisions must be made at producer organisations’annual General Assemblies. Dialogue with external
stakeholders is also required on some issues, such asaddressing risks to water resources.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

A note on audits
This chapter should be read with an understandingthat while audit data promote transparency andindicates where more support is needed, they do
not tell the whole story of an organisation’s efforts
and operating environment.
An audit is a limited tool to find all the existing
problems. Robust audits entail a review of relevant
documentation (such as employee records andcontracts), a site visit and dialogue with workers,other stakeholders and management, and canindeed identify many issues and areas that require
improvement.
However, many sensitive issues, such as child labourand gender-based violence, are difficult to discover.
Actions may not be witnessed, and the victims may

not disclose their experiences due to shame, fearof reprisals, lack of alternative sources of income ora number of other reasons.
In addition, audits very seldom reveal the root
causes of the problems. Audits focus on individualcompanies. They do not analyse the power relations
and pressures in the related value chains, society andecosystems.
In the case of Fairtrade certified farmer organisations
and other producers, their human rights and environ­mental risks and challenges are often rooted inpoverty and inequality, which they cannot fix alone.
In recent years, challenges have been aggravated by
the COVID-19 pandemic and inflation.

Fairtrade producer organisations
The following graphs show audit results from 2022
for human rights and environmental issues coveredin the Fairtrade Standards, and include both smallscale producer organisations and larger producer
organisations that rely on hired labour. These are theaggregate results for 1,537 producer organisations
that had an audit in 2022 (about 80 percent of allcertified producer organisations).1 They represent awide range of products and regions. For detail of thehuman rights issues and related compliance criteria,
see Appendix 3.

It takes concrete collaboration
between producers, buyers,
governments and civil society
to address and remediate thehuman rights and environmental
harms in global supply chains.
1

In addition, in 2022, there were a small number of audits that did not check any related HREDD compliance criteria, such as afocused follow-up audit checking previous unrelated non-conformities. This analysis only includes audits that looked at any of
the HREDD critieria.

21

Audit results: producers

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

How to read the figures
Instead of pass/fail auditing, the auditing of the
Fairtrade Standards is mainly carried out on a scale of
1 to 5, where 3 fulfills Fairtrade requirements, scores
4 and 5 indicate a higher achievement, and lower
scores indicate “non-conformities.” For each FairtradeStandard requirement, the compliance criteria andthe scoring scheme are devised by FLOCERT. All compliance criteria can be found on the FLOCERT website.
For the minority of criteria that are assessed on pass/
fail basis, score 3 is considered a pass and score 1 afail. This allows us to analyse all results numerically.
The bars show aggregate scores for all criteria in eachhuman rights and environmental issue. When looking
at all the compliance criteria and audit results related
to the issue, the light green section shows whatpercentage of scores were 3s. In other words, howoften organisations met the criteria .
The darker green sections show how often certified
producers exceeded Fairtrade requirements, while thered sections show how often they did not meet therequirements.

Is 3 a poor score?
It’s great news that the light green areas are
so large in each bar. A score of 3 says that anorganisation fulfils the Fairtrade requirement –which is often no small feat. With many Fairtrade requirements, compliance takes commitment, know-how, investment and proactive
measures.
Sometimes a 3 score is unattainable, even if theorganisation is doing all it can. Most Fairtradecertified producer organisations operate inchallenging contexts, where human rights andenvironmental risks are systemic and rooted
in poverty and inequality, unfair distribution ofvalue in supply chains and weak public policies.
It takes collaboration between retailers, traders,
producers, governments and civil society tochange these risks and resolve the root causes.

Fairtrade producer organisations:
Overview of audit scores on human rights
and environmental issues in 2022

Decent livelihoods

0%

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HealthLabour rights
Child protection and rights
Non-discrimination
Civil rights
Environment
Fair practices
Organisational capacity
Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements
Source: Fairtrade International, based on FLOCERT audit data

22 Audit results: producers

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

0%

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Detail:Decent livelihoods
Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements

Every human being has a right to a decent standardof living. A decent livelihood is also fundamental
to securing many other human rights. The FairtradeStandards include multiple requirements that aredesigned to improve the livelihoods of farmers andworkers.

⚫ Examples of Fairtrade requirements: Wages arealigned with laws and Collective Bargaining Agreements (CBAs); pay rates for production-based work is
proportionate to other workers’ pay, minimum wage
if it exists, or regional average; wages have been
specified for all employee functions; wages rise
gradually towards living wages.

⚫ Additional requirements for organisations that

rely on hired labour include: Any deductions fromwages are legal and in line with actual costs incurredby the company; working hours are recorded; if
housing is provided to workers, it is decent, affordable
and maintained.

⚫ In 2022, there were, on average, 17 compliancecriteria for different types of producer organisationsin this area.2

Only 6 percent of audited criteria were scored at 1
or 2, and therefore not complying sufficiently with
the Standards. The majority of criteria were scoredat least a 3 (78%), while 16% were scored at a moreadvanced level in this area.
To give an example: with regard to salaries in producer
organisations that rely on hired labour, a score of 3 isattained when the organisation pays salaries aboveor equal to the legal minimum, and also above or equal
to the level agreed in the CBA as well as the regional
average. An organisation scores 2 if wages are below
the regional average, or a 1 if wages are even below
the minimum set by law or CBA. If the organisation
scores 1 or 2, corrective measures are agreed. For
example, the organisation can make retroactive salaryadjustments. This is the compliance criteria with thehighest number of scores of 1 and 2 in the area ofdecent livelihoods.
A score of 4 or 5 is achieved when a producer organisation fulfils all legal provisions, agrees on additional
benefits with workers and offers these benefits toall workers.3 These positive scores indicate progress.
Even when a producer organisation scores 4 or 5 forwage criteria, it does not mean that all its members or
workers are earning a living income or a living wage.

Research insight:
An analysis of 151 studies
from 2015-2020 found that
Fairtrade’s work frequently
increases the income of farmer
and worker households andimproves their quality of life.
Exploring Fairtrade’s
impact, 20222

Why is there a different number of compliance criteria for producer organisations that rely on hired labour, smallholder producer organisations and contract production settings? This is simply because these production settings are very different fromeach other in terms of the salient human rights and environmental issues, organisational strengths and challenges, and bestpractices for addressing the issues.

The UN Guiding Principles on Business and Human Rights also note that the scale and complexity of due diligence measures mayvary according to the size, ownership and structure of the enterprise. Smallholder producers, whether organised in an association or in a contract production setting, are often in vulnerable positions in their supply chains.
3

Compliance criteria 3.3.5.01: “(Only applicable for organisations and/or individual members with more than 20 workers whoare present for one month or more during a year; or fewer workers where the local law has defined a lower number, and own
processing facilities of any size.) You have set salaries for workers according to CBA regulations where they exist or at regional
average wages or at official minimum wages for similar occupations, whichever is the highest.”

23 Audit results: producers

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

0%

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Detail:HealthAudit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements⚫ Examples of Fairtrade requirements: Highly

Health is one of the issues where certified producer
organisations often exceed Fairtrade requirements.
This was the case for 20% of the criteria. The nonconformity rate was 8%, while 92% of the audited
criteria were scored as meeting the requirements.

hazardous substances are not used; hazardous
chemicals are stored safely and not applied close tohuman activity; personal protective equipment andtraining is provided; work processes, places, machineryand equipment are safe; bullying and harassment
is prevented in the workplace; first aid training andequipment is sufficient.

⚫ Additional requirements for organisations that

Research insight:
A study that tracked a set of
producer organisations over a
decade, found that Fairtrade certi­
fied organisations were better able
to support health and safety measures or investments for members.

rely on hired labour include: Lighting, heating,ventilation and fire exits are sufficient; irrigationwater-related health risks are identified andaddressed; organisation has an active health andsafety officer and committee as well as a medical
officer; medical check-ups are offered to all workers
at least every three years.

Assessing the impact ofFairtrade on poverty
reduction and economic
resilience, 2022

⚫ There were 41 compliance criteria on average fordifferent types of producer organisations.
0%

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Detail:Labour rights
Sub-categories:

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Forced labour
Freedom of association and collective bargaining
Working conditions

Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements⚫ Examples of Fairtrade requirements: There are no

indications of the use of forced labour; remediation
measures are taken where forced labour is identified;workers are free to join workers’ organisations andgroup negotiations; all trade unions are allowed tomeet workers; workers have access to clean drinking
water and toilets during work days; production-based
employment is not used to avoid time-bound contracts;
wages are paid regularly.

⚫ Additional requirements for organisations that

rely on hired labour include: The company pays
recruitment charges, visa fees and travel costs for
migrant workers; senior management has regular,
documented meetings with elected worker representatives; the company adheres to any relevant CBA

24 Audit results: producers

that exists; overtime is voluntary, not excessive andcompensated at a premium rate.

⚫ There were 42 compliance criteria on average fordifferent types of producer organisations.

The overall non-conformity rate for criteria in thelabour rights area in 2022 was 6%. Looking at the subcategories, the non-conformity rate for forced labour
criteria is very low (1%), while those for freedom of
association and working conditions are somewhat
higher (6% and 8% respectively). Freedom of association and collective bargaining also showed thehighest rate of above average performance with 16%
of criteria being scored a 4 or 5.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Detail:

0%

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Child protection
and rights
Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements⚫ Examples of Fairtrade requirements: Children

below the age of 15 or the legally defined minimum
age are not employed; younger children only help withsafe tasks on farms outside school hours and withsupervision; workers below the age of 18 are notsubmitted to work that jeopardises their health,safety, morals or school attendance; all actions arealigned with the UN Convention on the Rights of theChild.

⚫ Additional requirements for organisations that
rely on hired labour include: Access to primaryeducation is ensured for children of all permanent
resident workers; the company has a child labour
policy, a rights-based remediation policy, andremediation projects to ensure the immediate andcontinued protection of children.

⚫ There were 10 compliance criteria on average fordifferent types of producer organisations.

There were very few non-conformities in the areaof child protection and rights. Only 2% of the scores
were non-conformities. These related to various
requirements, including those for producer organisations to carry out risk assessments, implement a childprotection policy and provide crèche facilities andeducational opportunities for workers’ children.
More than 20% of the scores were 4 or 5, whichshows that many producer organisations go beyond
the minimum requirements to advance child protection and rights. Among other possible measures,producer organisations are implementing child rightsbased remediation policies and programmes, often in
partnership with governmental or internationalorganisations.
We recognise that audits alone are insufficient to
identify all cases of child labour. For moreon this, refer to page 21.

Case study: Child labour prevention and remediation programme
for Ivorian and Ghanaian cocoa producer organisations
In recent years, significant focus has been put on
monitoring and identifying child labour cases in thecocoa sector, especially in Côte d’Ivoire and Ghana.
With the incidence of child labour increasing in thepast decade – more than 1.5 million children aged 5-17
who were working on cocoa farms in Côte d’Ivoire andGhana were affected according to a 2020 report – it isclear that monitoring is necessary but not sufficientto get to the root of the problem.
Fairtrade launched a new initiative in 2023 known
as the Fairtrade Child Labour and Forced Labour
Prevention and Remediation Programme. This
programme will disburse funds to successful
Fairtrade certified applicants for initiatives that focus
on essential but often underfunded elements ofstrengthening children’s rights and ending harmful
practices: namely prevention, and taking effective
action when cases are found.
As this report shows, the Fairtrade Standards prohibit
exploitative child labour, and compliance is regularly
monitored on-site by the certifier FLOCERT. Still,no certification system can provide a 100 percent
guarantee that a product is free of child labour.

25 Audit results: producers

Further
information about
Fairtrade’s measures
to address and remediate
the risks and harms canbe found on our risk map,
under Salient Issues.

In addition, while many cooperatives now have a monitoring andremediation system in place, they maylack the resources to implement more expensive
prevention and remediation measures.
The programme was launched with €450,000
from Fairtrade Germany, Fairtrade Austria, Fairtrade
Max Havelaar Switzerland and other Fairtradeorganisations, and will be expanded with additional
contributions. In this way, the programme also
provides an avenue for cocoa exporters, importers,
manufacturers, brands and retailers in Fairtradecocoa supply chains to support producer organisations to address and remediate child labour andforced labour, which is a new requirement in the
Fairtrade Standard for Cocoa.
A significant number of the applications received
to date focus on educational initiatives, including
renovating school buildings or funding canteens tofeed students during the school day. Fairtrade Africa
will be monitoring and collecting results from theinitial projects selected in 2024.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

0%

10%

20%

Detail:Non-discrimination
Sub-categories:

30%

40%

50%

60%

70%

80%

90%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

GenderOther vulnerable groups

Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements⚫ Examples of Fairtrade requirements: All indivi­

duals are treated fairly in membership, recruitment,
promotion, remuneration or other activities; there is
no exploitation or abuse at the workplace; measures
are taken to prevent discrimination by any recruitment
agency; hazardous work is not allocated to people ina vulnerable situation, such as pregnant women or
disabled people.

⚫ Additional requirements for organisations that

rely on hired labour include: Employment conditions
and benefits are equivalent for local, migrant,
seasonal and permanent workers; workers get atleast eight weeks of paid maternity leave; nursing
mothers get at least one paid0%
break per10%day to
20%
30%
breastfeed for up to nine months; the company has a
non-discriminatory policy on disciplinary measures.

The non-compliance rate was second highest for
non-discrimination: in 2022, 10% of criteria werescored as non-compliant. When a non-conformity isdetected, it does not necessarily mean that there is acase of discrimination. It may be, for example, that theorganisation just does not have the required policies
in place to avoid discrimination.
Non-conformities are most common in genderrights-related criteria (15%), particularly the requirements for producer organisations to develop andimplement a gender policy and involve women in thegender policy writing process. Fairtrade operates inmany environments where women are traditionallydisadvantaged
employment
and40%
50% in agricultural
60%
70%
80%
90%organ100%
isational management.

⚫ There were 21 compliance criteria on average fordifferent types of producer organisations.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Detail:Civil rights
Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements⚫ Examples of Fairtrade requirements: There are

no indications of land or water use conflicts (which
can violate people’s self-determination); where aland dispute exists, there is an active legal resolution
process; the organisation and its members respectprivacy by not testing for pregnancy, HIV or genetic
problems during the recruitment of workers.

⚫ Additional requirements for organisations that

rely on hired labour include: All health records
maintained by the company are kept and communicated to workers confidentially and management has
no access to them.

Only 2% of criteria were scored as non-compliant
in this area, while the majority (98%) were scored
as meeting the criteria. A total of 9% of criteria werescored as exceeding the minimum requirements witha score of 4 or 5.
An organisation scores 4, for example, if it does notconduct tests for pregnancy, HIV or genetic problems
during the recruitment of workers, has a clear policy
forbidding this, and controls this at member level.
They also score 4 if workers’ representatives areinvited to the General Assembly and have the right to
ask questions and make suggestions.

⚫ There were 3 compliance criteria on average fordifferent types of producer organisations.

26 Audit results: producers

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

0%

10%

20%

0%

30%
10%

40%
20%

50%
60%
30%
40%
50%

70%
60%

80%
90%
70%
80%
90%

100%
100%

0%

10%

20%

30%

60%

70%

100%

Detail:Environment
Sub-categories:

40%

50%

80%

90%

Climate change and deforestation
Water and biodiversity

Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements⚫ Examples of Fairtrade requirements: There isa process to ensure that pesticides on Fairtrade’s
Hazardous Materials “Red List” are not used; water
sources and land at risk of soil erosion have been
identified; members avoid negative impacts on areasthat are protected or have high conservation value;
the organisation has an Internal Control System that
0%
20%
30%
covers all members and works
well. 10%⚫ Additional requirements for organisations that

rely on hired labour include: The company raises
environmental awareness among its workers; insteadof or in addition to pesticides, the company also uses
other methods to prevent and control pests; if nonrenewable energy is used in processing facilities,
measures are taken to improve energy efficiency.

⚫ There were 46 compliance criteria on average for
0%

10%

20%

Among climate-related criteria,
40%
50%
60%
70%
80%
90%
100%
producers
face
the most
chalResearch
insight:
lenges with identifying landat risk of soil erosion, taking
An analysis of 151 studies
measures to reduce greenfrom 2015-2020 found that inmany contexts, Fairtrade certihouse gas emissions, andfication has a positive impact on
having a procedure tofarmers’ and farmer organisaavoid causing deforesttions’ climate change related
ation or degradation ofknowledge and practices.
vegetation.

10%

different types of producer organisations.

0%

Environment is the area where certified organisations most commonly exceed Fairtrade requirements.
The requirements on water and biodiversity were
exceeded more often (31% of audited criteria) thanthose on climate and deforestation (23%).

30%

20%

40%

30%

40%

50%

50%

60%

Exploring Fairtrade’s
80%
90%
impact,2022100%

60%

70%

70%

80%

90%

100%

Detail:Fair practices
Sub-categories:

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Fair contracts and payment schedules
Fair trading practices
Traceability

Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements⚫ This area underpins many human and environmental rights.

⚫ Examples of Fairtrade requirements: There
are signed contracts with each buyer; all elementsin the contracts are honoured; the buyer is notified
promptly if unforeseen circumstances prevent the
producer from supplying the agreed volume;
if composite products are sold, the minimum percentage of Fairtrade content is declared; Fairtrade andnon-Fairtrade products are not mixed.

A total of 91% of criteria on fair practices werescored as compliant (a score of at least 3).
Minimum requirements were surpassed on 18% of thecriteria (scored as 4 or 5). The non-compliance rate
was 8% (scored as 1 or 2).
The area with the highest non-conformity rate isthat of fair contracts and payment schedules (11%).
Fair trading practices have the lowest level of
non-conformities (4%) followed by traceability (8%).

⚫ There were 40 compliance criteria on average fordifferent types of producer organisations.

27 Audit results: producers

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

0%0%Detail:

10%

20%

10%
30%

20%
40%

30%

40%

50%

50%
60%

60%

70%

70%

80%

80%

90%

100%

90%

100%

Organisational
capacity
Sub-categories:

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Democratic decision-making
Management system and due diligence
Premium management

Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements⚫ Examples of Fairtrade requirements for small-scale producer organisations: If the organisation
receives complaints, it takes action on them; thehuman rights and environmental risks of the organi­sation and its members are identified every three
years; Board elections are free, fair and transparent;
annual report, budgets and accounts are presented to
the General Assembly for approval.

⚫ Additional requirements for organisations that

rely on hired labour include: The company has a grievance mechanism and ensures that workers are awareof it; sub-contractors are required to comply with
International Labour Organization conventions; audit
results are shared with workers; an elected workers’committee prepares an annual Fairtrade Premium
spending plan, which is then approved by the General
Assembly.

⚫ There were 79 compliance criteria on average forThis issue has by far the largest number of compliancecriteria, reflecting the high importance that Fairtradeplaces on strong, democratically governed producer
organisations. 83% of audited criteria were scoredas a 3 or above. Still, this issue also recorded the most
non-conformities in 2022 – 8% of audited criteria werescored as a 1 and 9% were scored as a 2.
It is a crucial question whether an organisation has
the internal capacity to conduct the five steps ofdue diligence in a robust manner, engaging with key
stakeholders and ensuring that the results of eachstep feed into the next ones. Looking at the disaggregated results, we can see that producers have most
non-conformities in the management system anddue diligence area (25% of the criteria). One common
non-compliance in this area is that the corrective
measures agreed in a previous audit have not been
fully implemented.

different types of producer organisations.

Case study: HREDD pilot projects in Latin American and the Caribbean
Fairtrade’s producer network in Latin America andthe Caribbean – CLAC – is currently carrying out
four HREDD pilot projects with smallholder farmerorganisations.
In collaboration with the International Trade Centre,
CLAC is seeking to generate knowledge about the time,know-how, costs and support required for smallholder farmer organisations to strengthen their due
diligence measures. This understanding is needed to
inform discussions and decisions about the accompanying measures required to complement existing regulations aimed at fostering fair and effective HREDD in
global supply chains.
Taking the OECD guidelines and Fairtrade HREDD guides
for small-scale producer organisations as the starting
point, CLAC is working with two coffee producer organisations in Honduras and Brazil, and two cocoaorganisations in the Dominican Republic and Peru.

28 Audit results: producers

Further
information about
Fairtrade’s measures
to address and remediate
the risks and harms canbe found on our risk map,
under Salient Issues.

They adapt the OECD and
Fairtrade resources to local
contexts, capacity, resources andrisk areas. Knowledge about HREDD isbuilt via interactive training where, for example, roleplaying has been found to be helpful in prompting
discussion about the most severe issues affecting
these communities.

In Peru, Heidy Medina Velázquez is in charge ofcertification for the cocoa producer organisation
Colpa de Loros. She emphasised that “the contribution
being made by the pilot [project] here in the cooperative is of great importance since many members arebeing trained on human and environmental rights and,in this way, they are becoming aware of their rights.”

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Fairtrade traders
At Fairtrade, when we refer to traders we mean
all supply chain actors who buy and sell Fairtrade
products between primary production and retail,including processors and manufacturers. Traders also
have to comply with certain requirements in order tobe Fairtrade certified and trade Fairtrade certified
products.

The data here are from 1,815 certified trader organisations that had an audit in 2022 which touchedon HREDD criteria (about 54 percent of all certified
traders). As in the producer section above, noteworthy
trends are discussed in the text after each graph.

In this report, we focus on trader audit scores whenit comes to contributing to fair trading conditions for
producer organisations through fair purchasing practices and pricing. Unfair purchasing practices, including pressure to accept prices that do not cover all
production costs, last minute changes in orders, andshort lead times often contribute to the human rights
and environmental challenges faced by suppliers.

Unfair purchasing practices,
including pressure to accept
low prices, often contributeto suppliers’ human rights andenvironmental challenges.

When traders, brands and retailers conduct due
diligence, they need to look at how their own
purchasing and pricing practices impact their
suppliers.

Fairtrade traders:
Overview of selected audit scores in 2022
Decent livelihoods
Fairtrade Minimum Price

0%
0%

10%
10%

20%
20%

30%
30%

40%
40%

50%
50%

60%
60%

70%
70%

80%
80%

90%
90%

100%
100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Fairtrade Premium
Pricing

Fair practices
Fair contracts
Payment schedules
Meaningful engagement
Pre-finance
Quality claims
Other purchasing practices
Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements
Source: Fairtrade International, based on audit data from FLOCERT

29 Audit results: traders

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Detail:Decent livelihoods
Sub-categories:

0%

10%

0%

10%

20%
20%

30%
30%

40%
40%

50%
50%

60%

70%

60%

70%

80%
80%

90%

100%

90%

100%

Fairtrade Minimum Price
Fairtrade Premium
Pricing

Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements⚫ Examples of Fairtrade requirements: The traderof audited criteria scored as a 3 or better, and 6%
scoring below the minimum requirements at 1 or 2. All
three sub-categories related to pricing, the Fairtrade
Minimum Price and Premium, had similar levels ofcompliance with 85-87% of audited criteria scoring 3
and 6-9% scoring 4 or 5.

pays at least the relevant market price or the Fairtrade
Minimum Price – whichever is higher – to the producer;
discounts for quality cannot be made on the Fairtrade
Minimum Price; the trader agrees with the producer
on the source of information for the market price; thetrader pays the Fairtrade Premium to the relevant
producer or conveyor.

The pricing category had the highest percentage ofscores of 1 (5%), due to the payer/conveyor failing to
pay at least the relevant market price or the Fairtrade
Minimum Price (whichever is higher) to the producer,
or failing to agree with the producer on the source of
information for the market price.

⚫ There were 41 compliance criteria for traders.
Overall, traders showed high levels of compliancewith criteria related to decent livelihoods, with 94%
0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Detail:Fair practices

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Sub-categories:

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Fair contracts
Payment schedules
Meaningful engagement
Pre-finance
Quality claims
Other purchasing practices

Audit score range: 1

2

3

4

5

Scores 1 and 2 = non-compliance; 3 = compliance with Fairtrade Standards; 4 and 5 = performance exceeds Fairtrade requirements⚫ Examples of Fairtrade requirements:• Fair contracts: Final purchase orders are
confirmed in writing; reports of each purchase
contract are shared with suppliers.
• Payment schedules: Timely payment of the priceand the Fairtrade Premium.
• Meaningful engagement: A sourcing plan isprovided to each producer or conveyor; most of
the planned sourcing is realised.
• Pre-finance: Traders pay some or all of a contract inadvance, or facilitate pre-finance from elsewhere. •• Quality claims: Claims are made without delay andare properly documented; results of authorised
independent surveyors are accepted as binding.
• Other purchasing practices: Fair negotiations incase of unforeseen circumstances; not engaging
in unfair practices that damage the producers.
30 Audit results: traders⚫ There were 93 compliance criteria for traders.
The data indicate a relatively high proportion of
non-conformities with 12% of criteria receiving ascore of 1 or 2.
The highest scoring areas were quality claims andother purchasing practices.
The lowest scoring areas were payment schedules,
meaningful engagement and fair contracts, wheretraders were non-compliant with 17-19% of thecriteria. The lowest scoring individual criteria wererelated to providing sourcing plans and defining thepurchase conditions clearly.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Compliance trends
For producers, rates of compliance have held quite
steady over the past five years, even as numbers oforganisations and number of compliance criteria haveincreased. For traders, compliance rates have also
remained steady.

A certified entity will be suspended if major core
criteria have been violated. FLOCERT lifts thesuspension once corrective measures have beentaken within relevant timelines, otherwise the entity
is decertified.

The rate of compliance with voluntary best practices
has declined during this time, from about one third to
one quarter of audited traders. These practices aredefined in Fairtrade Standards, but it is optional for
traders to comply with them.

In 2022, the number of suspensions was 570,
including 368 producer organisations and 202 traders.
In 2022, a total of 628 organisations left the Fairtradesystem, including 216 producer organisations and 412
traders. These figures include entities that decided
themselves to leave Fairtrade certification.

When an audit reveals non-conformities, this leads
to an agreement on corrective measures that theorganisation needs to implement.

Producer organisations: Compliance trends on HREDD criteria, 2018-2022
Audit year

Operators
auditedTotal audits

Compliancelevel (rate ofcomplianceout of criteria
audited)Noncompliancelevel

Compliance detailComplianceof corecriteria

Complianceof major
criteria

Compliance ofdevelopment
criteria

2018

1,282

1,294

89%

11%

89%

93%

83%

2019

1,462

1,476

88%

12%

88%

92%

82%

2020

1,197

1,210

90%

10%

89%

93%

84%

2021

1,592

1,633

89%

11%

89%

93%

82%

2022

1,537

1,566

89%

11%

89%

93%

82%

Traders: Compliance trends on livelihoods and fair practices criteria, 2018-2022
Audit year

Operators
auditedTotal audits

Compliancelevel (rate ofcomplianceout of criteria
audited)Noncompliancelevel

Compliance detailComplianceof corecriteria

Complianceof major
criteria

Complianceon Voluntary
Best Practices

2018

1,556

1,569

90%

10%

91%

90%

34%

2019

1,586

1,591

89%

11%

89%

90%

32%

2020

1,763

1,774

90%

10%

89%

91%

33%

2021

1,787

1,795

90%

10%

89%

90%

26%

2022

1,815

1,821

90%

10%

90%

90%

26%

The total number of audits includes all types of audits, including initial, renewal, follow-up and unannounced audits.
Where one operator has been audited several times in the given year, all audits are counted in the total number of audits.

31

Audit results: traders

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Corrective measures analysis
Ambitious audits are not quick pass/fail exercises.
Most FLOCERT audits find some challenges andnon-conformities with the Fairtrade Standards – andresult in an agreement about the corrective measuresthe certified organisation needs to complete within
an agreed timeframe. So, at their best, audits are avaluable tool for continuous improvement.
This section shows what types of corrective
measures Fairtrade certified producer organisations
take to address non-conformities found during
FLOCERT audits.
For this section, we selected certified coffee producers
from the three biggest producer countries –Honduras, Brazil and Peru – between 2020 and 2022.

We then analysed corrective measures for coreand development compliance criteria in areas withthe highest percentage of non-conformities:
organisational capacity (management systemand due diligence) and environment (water andbiodiversity).
It is important to recognise that non-conformities
in producer audits are often not the result of poor
performance by the individual organisation, but rather
reflect systemic challenges caused by entrenched
power imbalances, legal systems or cultural norms.
Insights into root causes, as well as more detailed
information on what we do to mitigate and remediatehuman rights and environmental risks, can be foundon our risk map under Salient Issues.

Compliance criteria on water and biodiversity
Results from coffee producer organisations in Brazil, Honduras and Peru, 2020-2022

Issue:

Water and biodiversity

Core criteria:

3.2.2.19 You have compiled a regularly updated list of the pesticides that areused by members on the Fairtrade crop that indicates which of those materials
are on the Fairtrade International Hazardous Materials List (HML), Part 2(Orange List) and Part 3 (Yellow List); and includes at a minimum:• Name of the active ingredient and commercial brand name and• Crop on which they are used
• Name of targeted pest or disease

Number of non-conformities: 17 out of 111 audits
Description:• There is no list (7 audits)• There is a list but it does not comply with all requirements/is not being
updated (6 audits)• The list of products is not correct (4 audits)

Typical correction:

A list will be created to highlight materials used by producers; an inspection
will be done to ensure the revision of the list; and the organisation commits toeliminate the use of materials on the Hazardous Materials ”Red List.”

Possible causes:• Lack of knowledge about changes in Fairtrade’s Hazardous Materials“Red List” (revised in 2020). Difficulties in finding the updated list online.
• Limited resources to regularly review and revise the list of pesticides in use.
• Lack of knowledge about or availability of alternative pest control methods.
Challenges in accessing accurate information about the active ingredients,
brand names, crops and targeted pests.

Support provided byproducer networks:• Standards training focused on Chapter 3 (production).
• Tailored support to certified organisations’ technical teams on checking the“Red List” and reporting forms.
• Trainings on integrated pest management, agroecology, better agricultural
practices. Opportunities for producers to exchange experiences among themselves. Demonstrative plots for alternative pest, weeds and disease control.

Core criteria must be met by all Fairtrade certified organisations.
Development criteria allow certified organisations to decide which measures are most relevant for them.
Organisations must score 3 on average for the development criteria overall but not for every single development criterion.

32 Audit results

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Issue:Water and biodiversity

Development criteria:

3.2.3.07 You have trained your members on measures to use water efficiently,
including the following topics:a) Estimating how much water is needed to irrigate and/or process Fairtrade
cropsb) Measuring (or estimating) how much water is extracted from the sourcec) Water quality for irrigation or processingd) Measuring how much water is used for irrigation and/or processinge) Providing maintenance to the water distribution systemf) Adopting, as applicable, methods to recirculate, reuse and/or recycle water

Number of non-conformities: 43 out of 104 audits
Description:• The organisation lacked capacity for training OR less than 50% of members
were trained (18 audits)• The content of the training and the list of participants were not disclosed
during the audit visit (1 audit)

Typical correction:

Producers will receive training on efficient water use

Possible causes:• Insufficient resources for providing sufficient trainings. Limited understanding about the specific topics outlined in the compliance criteria.
• Insufficient documentation on training contents and participants.
• For crops that need irrigation, the calculation of water use and water
extraction can be complex.

Support provided byproducer networks:• Standards training focused on Chapter 3 (production).

Issue:

Water and biodiversity

Development criteria:

3.2.3.11 You have identified and listed all sources of water for irrigation andprocessing of Fairtrade crops• Trainings on water use, opportunities for producers to exchange experiencesamong themselves.

Number of non-conformities: 22 out of 115 audits
Description:• The sources of water have been not identified yet (8 audits)• The organisation only knows some of the sources OR it knows all thesources but this is not written down (10 audits)• The organisation has a list with all the sources but the information is notcomplete/systematised (4 audits)

Typical correction:

The organisation will identify and list all the sources of water; all the sourcesof water will be listed in a written document

Possible causes:• Cooperative members’ farms can be spread out over a wide geographic areawith a high number of small water sources.
• Limited resources for the technical team of the farmer organisation to visit
all members and map all farms and possible processing facilities and/or toprocess the information from all members.
• Limited understanding about the importance of identifying and documenting
all water sources.

Support provided byproducer networks:

33

Audit results• Standards training focused on Chapter 3 (production).
• Tailored support to certified organisations that are mapping their own
compliance with the Fairtrade Standards and identifying gaps andcorrective measures.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Compliance criteria on management system and due diligence
Results from coffee producer organisations in Brazil, Honduras and Peru, 2020-2022

Issue:

Management system and due diligence

Compliance criteria:

3.1.0.01 You have informed your members about the Fairtrade Standards
for environmental practices and labour practices (the latter only applicable
where members employ workers)

Number of non-conformities: 98 out of 295 audits
Description:• The organisation partially informed its members (less than 80%) and training
was organised (79 audits) but the content of the training was not provided
during the audit (2 audits)• No information was shared with its members (6 audits)

Typical correction:

Training sessions will be organised and a list of the content covered andthe members who have completed them will be provided. Additional material
will be developed and shared with members (for example, flyers, photos,
presentations)

Possible causes:• COVID-19 curbed the number of in-person trainings in 2020 and 2021.
• The cost of training all members.

Support provided byproducer networks:• Tailored post-audit support to certified organisations. Advice and templates
for registering and reporting about trainings.
• Trainings on Fairtrade Standards to certified organisations’ staff and members.

Issue:

Management system and due diligence

Compliance criteria:

3.1.0.13 (Only applicable to 1st grade organisations with more than 100 members) You implement an Internal Management System (IMS) which enables
you to monitor and assess compliance with Fairtrade requirements at alllevels of the organisation
General principles for a functioning IMS are:
• A documented description of the IMS• A documented management structure that includes plans and policies• One person responsible for the IMS• An internal regulation• Identified internal inspectors• Training of personnel, internal inspector• Annual inspection protocols including key production indicators• Use of internal sanctions• Regularly updated Growers List of members• Use of risk assessment to address risks, threats to integrity

Number of non-conformities: 20 out of 95 audits
Description:• An IMS is in place but it does not comply with all requirements (4 audits)• There is no IMS in place and/or it is under development (8 audits)

Typical correction:

The IMS system will be developed and the one already in place will be updated
to comply with all requirements

Possible causes:• The complexity of IMS, limited capacity among producer organisations’ staff.
• Insufficient documentation.

Support provided byproducer networks:

34 Audit results• Training and tailored advice on IMS, documents on good practices in IMS.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Conclusions
and looking ahead
Our work on HREDD is a continuous source of lessons
learnt. Here are some of the main takeaways, which
we will continue to build on in 2024:
1. The root causes of human rights and environmental violations must be included in HREDD work,
such as lack of living incomes for farmers and living
wages for workers, unsustainable purchasing andpricing practices, and unequal power dynamics within
supply chains. Fairtrade will continue to emphasise
these root causes.
2. The potentially impacted people are the bestsource of information about risks, harms andeffective measures to address and remediate them.
We will continue to base our HREDD work on producer
input and to support organising, collective action andadvocacy by farmers and workers.
3. The management capacity and resources that
suppliers need are significant. In many global value
chains, very little value accrues to producers at the
beginning of the chain. To strengthen their HREDD
measures, producers need a fairer share of the value.
4. Collaboration between buyers and producers
requires transparency and respect for producer
ownership of their own data. Fairtrade seeks tofacilitate the flow of necessary information andcollaboration among supply chain partners. We
recognise that our ability to be a leading HREDD
partner for producers and companies depends ongetting this balance right.

It is a shared responsibilityof buyers, producers andgovernments to address andremediate violations in global
supply chains.

35

Conclusions and looking ahead

Looking forward, our priorities for the coming years
include:⚫ Continue bringing farmer and worker voices
to policy discussions. Among other regulations, it’s
crucial that the Corporate Sustainability Due Diligenceof the European Union, as well as the related implementation guidelines and accompanying measures,
include meaningful requirements on fair purchasing
practices, responsible disengagement when sourcing
relationships end, living incomes and living wages,
and meaningful stakeholder engagement.
⚫ Expand our HREDD support to producer organ-

isations. In 2024, we will build on our published
HREDD tools and start rolling out our hands-on
HREDD support for and dialogue with producer organisations throughout Africa, Asia and Latin America.

⚫ Deepen our dialogue with commercial partners
to share our insights and data on what makes due
diligence fair and effective and to facilitate engagement and collaboration with farmers, workers andother potentially impacted stakeholders.
⚫ Expand the Fairtrade Risk Map to support

collaboration among buyers and producers in
identifying and addressing salient risks and harms ina wider number of products.

⚫ Strengthen the Fairtrade Standards andassurance to encourage collaboration, due diligenceand continuous improvement in Fairtrade certified
supply chains. We aim for realistic requirements thatare fair and implementable for companies at different
stages in supply chains, in order to have real influenceon people’s lives and the state of our planet.
We hope that the analyses presented in this report
not only highlight what needs to improve within traderand producer organisations, but also the crucial roleof paying fair prices, building long-term relationships
and providing additional investments to address
systemic – and shared – problems.

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Appendices
Appendix 1: Methodology and data collection
The audit data analysed in this report are from audits
performed by FLOCERT. The overall process andmethodology are described below.

Audit process
The audit process plays a crucial role in assessing
whether the Fairtrade Standards are met. FLOCERT
assigns an audit frequency for each certified producer
organisation and trader based on the risk categorisation of each organisation. This builds on several
factors, including previous audit results, region,
any complaints received, and recent changes in thecertification status. Certified organisations areaudited at least every three years.
Audits involve detailed physical inspections of fields,
processing plants and offices, document and financereviews, and confidential interviews. Interviews areheld with members, workers, management, andcommunity members when possible, to gather firsthand information. Traders may be audited remotely
for those parts of the Standard that do not requirephysical inspection or interviews.
Auditors also review various documents provided by
the auditee, such as employment contracts, payroll
records, policies and procedures related to healthand safety, and grievance mechanisms. They assess
the clarity, consistency and implementation of these
documents in practice.
FLOCERT utilises a scoring system to assess compliance. Each audited criteria is assigned a score from 1
to 54 with 1 indicating a severe non-compliance and5 representing best practice. A minimum score of 3 isrequired for compliance.
At the end of the audit, the auditor shares the findings
with the producer or trader and explains any nonconformities with the Standards. The producer ortrader agrees on an action plan with the certifier toresolve the non-conformities.

Methodology
For the analysis in this report, we used the audit
records that were initially scheduled in 2022. Some
audits were brought forward to the end of 2021 or
postponed to the beginning of 2023, depending on
what suited the operators and auditors best. The data
were extracted from FLOCERT in early May 2023.
In order to protect the anonymity of producers andtraders, information is aggregated.

Known specifics of the data set- We have different Standards for different types oforganisations. For producers, we have Standards forsmall producer organisations, contract production
and hired labour. For traders, we have the TraderStandard. The requirements are different for eachtype of organisation.
- The Fairtrade Standards embed the concept of incremental development. Some requirements are applicable only for the operators that have been certified
for a longer period, while many others are applied toall operators from year 0. We currently have requirements applicable from year 0, year 1, year 3 and year 6.
- We have product-specific requirements that are
applicable only to the producers and traders who
trade a certain product. We have requirements thatare applicable only to operators who play a specificrole in a supply chain, for example traders who pay orconvey the Fairtrade Minimum Price and/or Fairtrade
Premium to producer organisations.
- Some operators receive one audit every three
years while others have much more frequent audits,
depending on FLOCERT’s risk assessment. FLOCERT
may conduct a follow-up audit six months after aprevious audit to monitor progress in corrective
action.
- We excluded some administrative requirements fromthe analysis; for instance, those related to coordinating
audits, conversion rates or defining small-scale farms.
For traders, we focus on requirements that cancontribute to better trade conditions and relations
with producer organisations. We excluded “voluntary
best practice” requirements for traders because theseare optional.

Known limitations- Due to a low number of certified operators, someaudit results have not yet been digitised and could not
be included in the analysis. This includes the results
for gold and associated precious metals, the Climate
Standard and the Textile Standard.
- Some operators have so-called “associates” that areclosely linked organisations to a “main” organisation.
Currently, we have no easy way to link the output
of associates’ audit results with the ones of mainorganisations. In this analysis, we treat them as
separate entities.

4

However, it is important to note that some requirements to have a policy is in place do not use a score of 1-5 ask for a “yes/no”
response. In this sample we converted “yes” to a score of 3 and “no” to a score of 1.

36 Appendices

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Appendix 2: Different types of Fairtrade Standards requirements
Fairtrade has different types of requirements for
producers, including core, major and development
criteria.
Core criteria are fundamental and must be met by
all Fairtrade certified producers and organisations.
They relate to Fairtrade’s mission of fair prices, decent
working conditions, environmental sustainability andorganisational development.
Major criteria are introduced in response to emerging
challenges or opportunities. An example of a major
requirement includes the traceability of products
throughout the supply chain to promote transparency
and accountability.
Development criteria encourage continuous
improvement. They focus on areas where progressis desired but not immediately achievable for all
producers. These requirements are meant to drive
positive change over time.
Voluntary best practices are included in the Fairtrade
Trader Standard. They are optional, additional requirements with which traders can comply. These aremarked as “VBP” in the Fairtrade Trader Standard.

37

Appendices

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Appendix 3: Compliance criteria in 2022
Producers’ compliance criteria by human rights area and type of producer set-up
Human rights area

Sub-areas# of possible compliance criteria
by type of producer organisation (PO)
HLO

SPO

CP

Average

Total #
POs
auditedper area

Decent livelihoods

-

41

8

2

17

783

Health

-

88

24

12

41

1,188

91

25

9

42

1,034

16

7

6

10

933

33

20

10

21

1,224

5

4

1

3

1,487

61

44

33

46

1,222

101

89

48

79

1,536

32

53

36

40

1,372

468

274

157

300

1,537

Forced labour
Labour rights

Freedom of associationand collective bargaining
Working conditions

Child protection and rights Non-discrimination
Civil rights
Environment

GenderOther vulnerable groups
Climate change anddeforestation
Water and biodiversity

Organisational capacity

Democratic decisionmaking
Premium management
Fair contracts andpayment schedules

Fair practices

Fair trading practices
Traceability

Total

Sample size 1,537; 2022 audit data from FLOCERTHLO = Hired Labour Organisation; SPO = Small-scale Producer Organisation; CP = Contract Production certified producer organisation;
PO = Producer Organisation (general term including HLO, SPO and CP)

38 Appendices

Fairtrade’s Human Rights and Environmental Due Diligence Report 2023

Fairtrade International Bonner Talweg 177 53129 Bonn Germany
Telephone +49 (0) 228 94 92 30 Fax +49 (0) 228 24 21 713 info@fairtrade.net www.fairtrade.net
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Disclaimer
Data in this report were collected through audit processes with producer organisations and traders by the certification body
FLOCERT. Fairtrade International is not responsible for the accuracy of the data. The report has been compiled to the best of ourknowledge and is provided for informational purposes only. Fairtrade International reserves the right to update the data as new
information becomes available. The data are provided ‘as is’ and are subject to change, and no warranty of any kind is given for theaccuracy and reliability of the data. Fairtrade International will not be liable for any claims or damages related to the quality andcompleteness of the data, as far as it is permitted under law.

Credits
Photos: CLAC / Isis Sol (cover); Didier Gentilhomme (p. 7); Fairtrade Austria / Guillermo Granja (p. 12); Mohamed Aly Diabaté / Fairtrade /Fairpicture (p. 13); Fairtrade Australia & New Zealand (p. 17); Fairtrade Belgium (p. 19); FLOCERT (p. 21) · Layout: Dreimalig, Cologne