Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee - Contributing to Sustainable Development : the role of Fair Trade and non-governmental trade-related sustainability assurance schemes
Date: 2009-05-05
Institutions: European Commission
Subjects: European Economic and Social Committee, fair trade, insurance, non-governmental organisation, sustainable development, traceability

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 5.5.2009 
COM(2009) 215 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT AND THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE 

Contributing to Sustainable Development: The role of Fair Trade and non-
governmental trade-related sustainability assurance schemes 

EN 

   EN 

 
 
 
  
COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT AND THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE 

Contributing to Sustainable Development: The role of Fair Trade and non-
governmental trade-related sustainability assurance schemes 

TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

5. 

Introduction .................................................................................................................. 3 

Fair Trade Developments since 1999........................................................................... 4 

Sustainability Criteria Applied..................................................................................... 5 

Policy Considerations................................................................................................... 6 

Contribution to Sustainable Development ................................................................... 6 

Private Trade-related Sustainability Assurance Schemes and the WTO ..................... 8 

Public procurement ...................................................................................................... 8 

EU support ................................................................................................................... 9 

Conclusions: the role of public authorities in relation to Fair Trade and other private 
trade-related sustainability assurance schemes .......................................................... 10 

ANNEX I.................................................................................................................................. 12 

ANNEX II ................................................................................................................................ 13 

ANNEX III............................................................................................................................... 14 

ANNEX IV............................................................................................................................... 16 

ANNEX V ................................................................................................................................ 17 

EN 

2 

   EN 

 
1. 

INTRODUCTION 

This  Communication  examines  the  current  situation  of  Fair  Trade  and  other  non-
governmental  (i.e.  private)  trade-related  sustainability  assurance  schemes.  The  Commission 
has  long  recognised  that  consumers  can  support  sustainable  development  objectives  by 
purchasing decisions. This Communication responds to the growing interests that have been 
articulated, at political level as well as in the growing level of purchases by EU consumers. At 
political  level  the  European  Parliament  adopted  a  report  in  2006  on  Fair  Trade  and 
Development1.  The  report  points  out  the  need  for  raising  awareness  among  consumers,  and 
the  risk  of  abuse  by  companies  that  enter  the  Fair  Trade  market  without  complying  with 
certification  criteria.  Additionally,  it  recognises  that  Fair  Trade  is  an  essentially  voluntary, 
private  sector  phenomenon,  and  that  too  heavy  regulatory  embrace  could  prove  damaging 
rather than beneficial.  

The  2005  exploratory  opinion  of  the  European  Economic  and  Social  Committee  (EESC) 
looked  at  "consumer  assurance  schemes".  Key  findings  were  to  identify  the  need  for 
authoritative quality assessment of consumer assurance schemes and to fix central definitions. 
In June 2006 the European Council adopted its renewed sustainable development strategy and 
encouraged Member States to promote sustainable products, including Fair Trade2. 

EU  consumers  each  year  purchase  Fair  Trade  certified  products  for  approximately  €1.5 
billion; which is 70 times more than in 1999 when the Commission adopted a communication 
on  this  topic.  This  success  underlines  the  need  for  consumers  public  authorities  and  other 
stakeholders,  including  producer  organisations  in  developing  countries  to  measure  the  real 
impact of Fair Trade.  

In this communication the term "Fair Trade" is used in conformity with standards established 
by  the  international  standard  setting  and  conformity  assessment  organisations,  that  are 
members  of  the  ISEAL3,  and  as  applied  by  the  Fair  Trade  organisations.  The  term  "other 
private sustainability assurance schemes" is used to describe other labelling schemes that aim 
to  inform  consumers  about  the  sustainability  of  the  production  of  the  product.  (A  brief 
overview of terms and organizations is appended in Annex I).  

This  Communication  provides  an  up-date  on  developments  arising  since  the  1999 
Commission  Communication  on  fair  trade4  and  suggests  preliminary  considerations  on  the 
role  of  public  authorities  and  stakeholders  in  the  field  of  Fair  Trade  and  other  private 
sustainability  assurance  schemes.  Issues  to  be  addressed  are  relevant  for  several  EU  policy 
areas,  e.g.  consumer  protection,  economic  and  social  development,  trade,  corporate  social 
responsibility,  environment  and 
this 
Communication may be followed by more targeted initiatives in one or more policy fields.  

internal  market.  Where  appropriate, 

the  EU 

1 
2 

3 
4 

European Parliament Report on Fair Trade and Development (2005/2245(INI) "The Schmidt Report". 
"Member  States  should  promote  sustainable  products  that  stem  for  organic  farming  and  fair  trade  as 
well as environmentally sound products" 
http://register.consilium.europa.eu/pdf/en/06/st10/st10117.en06.pdf, page 13. 
International Social And Environment Accreditations and Labelling 
COM(1999)619 of 29-11-1999. Information on the 1999 Commission Communication is appended in 
Annex II. 

EN 

3 

   EN 

 
                                                 
 
This  Communication  does  not  cover  sustainability  and  labelling  schemes  established  by 
public authorities (such as the EU eco-label). 

2. 

FAIR TRADE DEVELOPMENTS SINCE 1999 

The  most  striking  developments  since  1999  have  taken  place  in  national  markets  where 
certified Fair Trade products were already present. Answering the 1999 Communication’s call 
for  a  single  label  and  the  need  for  independent  verification  and  control,  the  “Fairtrade 
Certification Mark” has been successfully implemented5. 

The consumer recognition level for the Fair Trade mark in the UK was above 70% in 2008 
(compared  to  12%  in  2000)6  and  in  France  74%  in  2005  (compared  to  9%  in  2000)7. 
Worldwide sales of certified Fair Trade goods exceeded €2.3 billion by the end of 2007, 8 (but 
still  an  order  of  magnitude  behind  organic  food  sales  and  still  less  than  1%  of  total  trade)9. 
Europe  is  Fair  Trade's  home:  between  60%  and  70%  of  global  sales  take  place  here,  with 
large variations between its fastest growing market, Sweden, and newer Member States where 
the concept is still relatively young. 

Fair Trade has played a pioneering role in illuminating issues of responsibility and solidarity, 
which  has  impacted  other  operators  and  prompted  the  emergence  of  other  sustainability 
regimes.  Trade-related  private  sustainability  initiatives  use  various  social  or  environmental 
auditing standards10, which have grown in number and market share. The best known social 
standard is perhaps SA8000, initiated by Social Accountability International (SAI) in 199711. 
Assurances that extend into broader issues, including both social and environmental criteria, 
are for example Utz certified and the Rainforest Alliance (RA).  

Multi-enterprise  sustainability  trade  initiatives,  in  different  parts  of  Europe,  range  from 
national arrangements to pool the results of social audits to transnational initiatives with some 
government backing, such as the Ethical Trading Initiative (ETI)12. The background work by 
operators to fulfil and audit standards need not be transmitted by means of a certification and 
label  for  consumers;  fulfilling  and  auditing  standards  can  count  as  a  company's  efforts  of 
corporate  social  responsibility  (CSR)13,  which  is  not  always  indicated  on  the  product.  CSR 
activities  can  be  reinforced  by  a  company  committing  to  a  recognised  set  of  criteria  or 
objectives, such as through the UN Global Compact14.  

5 
6 
7 
8 
9 

10 

11 

12 

13 

14 

See further information on definitions in Annex I.  
Fairtrade Foundation, 2008. 
OECD, Trade Policy Working Paper No. 47. Part 1; Jan 10, 2007. 
Fairtrade Labelling Organizations International, 2008. 
Land,  P. &  Andersen,  M,  "What  is  the world  market  for  certified products",  Commodities  and  Trade 
Technical Paper, OECD.  
See  also  the  Portal  for  Responsible  Supply-Chain  Management,  established  as  part  of  the  European 
Alliance on CSR; www.csr-supplychain.org.  
SAI  claims  that  "retailers,  brand  companies  and  other  employers  worldwide  with  annual  sales  over 
USD175 billion are using SA8000"; www.sa-intl.org. 
Other  initiatives  to  mention  in  this  context  include  the  Business  Social  Compliance  Initiative 
(http://www.bsci-eu.com/),  and  the  Global  Social  Compliance  Programme  (http://www.ciesnet.com/2-
wwedo/2.2-programmes/2.2.gscp.background.asp). 
Communication (2006) 136 of 22 March 2006 on "Making Europe a pole of excellence on Corporate 
Social Responsibility". 
www.unglobalcompact.org. 

EN 

4 

   EN 

 
                                                 
Private labelling markets can be divided between;  

(1) 

Fair Trade proper;  

(2) 

(3) 

other "niche" certified products not participating formally in Fair Trade but targeting 
consumers aware of sustainability issues (Rainforest Alliance, Utz Certified);  

products covered by baseline standards that aspire to be "industry-wide" (e.g. Code for 
the Coffee Community (4C's); Ethical Tea Partnership);  

(4) 

the rest ("no name" commodity supplies).  

A single producer may sell into all four of these categories. It can be tricky for the consumer 
to  assess  the  significance  of  various  sustainability  schemes.  It  is  against  this  complex  and 
evolving backdrop that political and institutional developments should be assessed. 

3. 

SUSTAINABILITY CRITERIA APPLIED  

Private  trade-related  private  sustainability  schemes  use  a  set  of  criteria  to  assess  and/or 
guarantee the sustainability of the products. Criteria often build on one or more of the three 
pillars  of  sustainable  development;  economic,  environmental  and  social  development, 
sometimes  linking  into  international  standards  and  agreements.  Some  schemes  focus  on  a 
particular  issue  and  objective  (e.g.  carbon  footprint  for  climate  change  mitigation)  whereas 
others rely on criteria in a wider sustainable development context. 

This  section  describes  the  first  category  –  Fair  Trade  –  referred  to  above15  which  achieved 
significant levels of consumer recognition in those markets where it is operating. Recognition 
goes  with  a  good  measure  of  understanding  of  the  issues  that  Fair  Trade  promotes.  The 
criteria and standards applied by Fair Trade are among the most comprehensive and ambitious 
in  terms  of  addressing  a  broad  set  of  issues  and  conditions  that  impact  the  producers  in 
developing countries, including in particular a minimum price for the producer and a premium 
paid to the community of the producer. 

Fair Trade criteria 

The  criteria,  as  defined  by  the  Fair  Trade  movement  and  recalled  in  the  2006  European  Parliament 
report are; 

–  a fair producer price, guaranteeing a fair wage, covering the costs of sustainable production and 
living. This price needs to be at least as high as the Fair Trade minimum price and premium where 
they have been defined by the international Fair Trade associations;  

–  part payments to be made in advance if so requested by the producer;  

15 

Appended in Annex III is a presentation of the additional private sustainability schemes; referred to in 
this section.  

EN 

5 

   EN 

 
                                                 
–  long-term,  stable  relations  with  producers  and  producers'  involvement  in  Fair  Trade  standard-

setting; 

–  transparency  and  traceability  throughout  the  supply  chain  to  guarantee  appropriate  consumer 

information; 

–  conditions  of  production  respecting  the  eight  International  Labour  Organization  (ILO)  Core 

Conventions; 

–  respect  for  the  environment,  protection  of  human  rights  and  in  particular  women's  and  children's 
rights  and  respect  for  traditional  production  methods  which  promote  economic  and  social 
development; 

–  capacity  building  and  empowerment  for  producers,  particularly  small-scale  and  marginalised 
producers  and  workers  in  developing  countries,  their  organisations  as  well  as  the  respective 
communities, in order to ensure the sustainability of Fair Trade; 

–  support for production and market access for the producer organisations; 

–  awareness-raising  activities  about  Fair  Trade  production  and  trading  relationships,  the  mission 

and aims of Fair Trade and about the prevailing injustice of international trade rules; 

–  monitoring  and  verification  of  compliance  with  these  criteria,  in  which  southern  organisations 
must  play  a  greater  role,  leading  to  reduced  costs  and  increased  local  participation  in  the 
certification process;  

–  regular impact assessments of the Fair Trade activities. 

4. 

POLICY CONSIDERATIONS  

4.1. 

Contribution to Sustainable Development 

One of the particular features of Fair Trade and other private sustainability assurance schemes 
is that it is an essentially voluntary, dynamic mechanism that develops along with societal and 
consumer  awareness  and  demands.  As  the  understanding  of  sustainability  challenges 
develops, private trade-related sustainability assurance schemes tend to follow. In some cases, 
they  are  at  the  forefront  of  issues;  raising  awareness  and  pushing  consumer  interest  and 
understanding of new and emerging sustainable development challenges. Niche markets and 
schemes can influence mainstream business and government policy making.  

The  Commission  considers  that  it  should  not  take  a  role  in  ranking  or  regulating  criteria 
related  to  private  trade-related  sustainability  assurance  schemes,  and  their  relevance  in 
relation to sustainable development objectives. Regulating criteria and standards would limit a 
dynamic element of private initiatives in this field and could stand in the way of the further 
development of Fair Trade and other private schemes and their standards.  

EN 

6 

   EN 

 
Sustainable  development  can  be  served  by  schemes  that  prioritise  environmental,  social,  or 
economic  elements..  It  is  important  for  good  market  functioning  that  consumers  and 
producers have access to reliable information on the schemes. Here, it is possible to indicate 
some  elements  that  are  relevant  in  assessing  good  practice  that  operators  should  undertake 
according to the Commission:  

Standards and criteria should be objective and non-discriminatory to avoid any (unintended) 
negative  impact  on,  in  particular,  producers  in  developing  countries.  The  Commission 
welcomes efforts under way towards greater definitional clarity, such as the publication of a 
Fair  Trade  Charter.  To  allow  consumers  to  make  their  choices  in  a  well  informed  manner, 
standards  and  criteria  should  be  applied  in  a  transparent  manner.  Part  of  the  information 
which  consumers  and  producers  may  require  to  maintain  confidence  in  the  market  is  the 
proportion of the extra price which is transmitted to producers16.  

Ideally, there should be independent monitoring to guarantee that the products are the result of 
practices carried out according to a specific set of criteria balancing ecological, economic and 
social  considerations.  The  nature  and  results  of  the  auditing  process  should  be  available  for 
inspection17.  The  Commission  therefore  encourages  relevant  parties  to  improve  their 
evaluation methodology so as to allow consumers to make informed choices.  

Further clarity and understanding is needed of the actual impact of the private sustainability 
schemes  on  producers  in  developing  countries  and  also  on  their  environment  in  a  broader 
sense.  Consumers  should  ideally  be  offered  some  element  of  objective  assessment  of  the 
impact  of  schemes.  In  this  area  the  Commission  expects  improvements  given  the  work 
already under way and looks forward to progress which could form the basis for further policy 
considerations18. 

Annex IV contains a list of process issues relating to consumer assurance schemes identified 
by the European Economic and Social Committee. The Commission encourages further work 
towards  a  common  understanding  of  what  basic  process  requirements  it  is  reasonable  to 
expect  schemes  to  meet,  while  continuing  to  avoid  entering  into  defining  appropriate 
sustainability standards for private schemes. 

16 

17 

18 

The  U.K.  House  of  Commons  report  "Fair  Trade  and  Development,  June  2007,  suggested  a  label  to 
inidiciate the percentage of the price received by the producer.  
Appended  in  Annex  IV  is  a  list  of  issues  relating  to  consumer  assurance  schemes  identified  by  the 
EESC.  
The  ISEAL  Alliance  is  undertaking  a  project  of  writing  to  examine  good  practice  for  measuring  the 
impact of standards and certification.  

EN 

7 

   EN 

 
                                                 
Principles for maximising the impact of private trade-related sustainability assurance schemes; 

–  Maintaining the non-governmental nature of private schemes throughout the EU.  

–  Exploring  the  scope  for  possible  synergies  between  schemes  and  enhancing  clarity  for  the  consumer 

and producers.  

–  Achieving a common understanding of reasonable basic process requirements. 

–  Establishing  objective  facts  on  the  relative  impacts  of  different  private  trade-related  sustainability 

assurance schemes. 

4.2. 

Private Trade-related Sustainability Assurance Schemes and the WTO 

Trade 
liberalisation  can  offer  opportunities  for  economic  growth  and  sustainable 
development.  Development  and  the  integration  of  developing  countries  into  the  global 
economy,  especially  the  least  developed,  are  key  objectives  of  the  WTO  and  of  EU  trade 
policy.  

Multilateral trade liberalisation through the WTO system is the most effective way to expand 
and  manage  world  trade,  and  may  help  to  create  opportunities  for  economic  growth  and 
sustainable  development.  However,  trade  liberalisation  is  not  sufficient;  impact  of  trade 
policies  on  growth,  development  and  sustainability  is  in  part  framed  by  regulation  and 
policies in a wide range of other areas that impact on growth and sustainable development.  

Private initiatives that operate through essentially voluntary participation are consistent with a 
non-discriminatory  multilateral  trading  system.  Any  government  intervention  or  regulatory 
mechanisms  relating  to  such  labelling  schemes,  while  not  problematic  per  se,  need  to  take 
account of WTO obligations, in particular to ensure their transparent and non-discriminatory 
functioning.  

Principle in relation to WTO; 

–  Ensuring transparent and non-discriminatory functioning of labelling schemes.  

4.3. 

Public procurement 

A  field  in  which  important  developments  have  been  taking  place  is  public  procurement. 
Public authorities spend the equivalent of 16% of the EU GDP and therefore constitute a key 
strategic market.  

In  order  to  better  respond  to  the  contracting  authorities'  need  for  guidance  to  implement 
sustainable  public  procurement,  the  Commission  has  recently  adopted  a  Communication  on 

EN 

8 

   EN 

 
public  procurement  for  a  better  environment19  (complementing  the  Commission's  Green 
Procurement  Guide)  and  is  currently  working  on  publishing  a  parallel  guide  on  social 
procurement.  Together,  these  guides  constitute  a  comprehensive  guide  to  sustainable  public 
procurement. 

Many authorities are calling for tenders including sustainable objectives or "fair trade" in their 
procurement policies. Some Member States have gone further and require specific "Fair Trade 
label or equivalent". According to European public procurement rules, contracting authorities 
that wish to purchase fair trade goods, cannot require specific labels because this would limit 
the access to the contract of products which are not so certified but meet similar sustainable 
trade standards.  

If a contracting authority intends to purchase Fair Trade goods, it can define in the technical 
specifications of the goods the relevant sustainable criteria, that must be linked to the subject-
matter  of  the  contract  and  comply  with  the  other  relevant  EU  public  procurement  rules, 
including the basic principles of equal treatment and transparency. These criteria must relate 
to  the  characteristics  or  performance  of  the  products  (e.g.  glasses  made  out  of  recycled 
material) or the production process of the products (e.g. organically grown).  

Contracting  authorities  that  intend  to  purchase  sustainability  assurance  goods  should  not 
simply take the concept of a particular label and include it in the technical specifications of 
their purchases. They ought instead look at the sub-criteria underlying, for example, the Fair 
Trade  label  and  use  only  those  which  are  relevant  to  the  subject  matter  of  their  purchase. 
Contracting authorities must always allow bidders to prove compliance with these standards 
by using Fair Trade labels or by other means of proof.  

Environmental and social criteria may also be incorporated in the execution clauses, provided 
these criteria are linked to the execution of the contract in question (e.g. minimum salary for 
the workers involved in the performance of the contract) and comply mutatis mutandis with 
the other requirements mentioned above in relation to the technical specifications. 

Principles  to  help  realise  the  potential  contribution  to  sustainable  development  from  public 
purchasing decisions:  

–  Secure that appropriate guidelines are available on how to implement sustainable public procurement 

4.4. 

EU support  

The  Commission  has  provided  financial  support  for  Fair  Trade  and  other  sustainable  trade 
related activities essentially through its development cooperation instruments (budget chapter 
19),  through  co-financing  actions  with  NGO's.  Between  2007  and  2008,  €  19.466  million 
were allocated for various NGO implemented and co-financed actions. The majority of these 
actions were in the field of awareness raising within the EU. 

Actions financed within the framework of multiannual Country Strategy Papers and Indicative 
Programmes,  covering  agricultural  and  rural  sectors,  include  activities  that  contribute  to 
facilitating Fair Trade. The Special Framework of Assistance for Traditional ACP Suppliers 
of  Bananas  and  the  Accompanying  Measures  for  Sugar  Protocol  have  also  contributed  to 

19 

Commission  Communication on  public  procurement  for  a better  environment:  COM  (2008)400 of  16 
July 2008. 

EN 

9 

   EN 

 
                                                 
helping  farmers  to  sell  in  the  Fair  Trade  niche.  On  the  other  side  of  the  chain,  projects  in 
support  of  trade  and  private  sector  development  may  also  contribute  to  facilitating  trade 
activities, including Fair Trade.  

For  the  budget  years  2008  and  2009,  additional  credits  of  €1  million  each  year  have  been 
included specifically for actions related to Fair Trade in the credits for trade budget (chapter 
20). These credits will be used to top up the financing under the development instruments20. 

The EC has provided support to "fair trade related projects" mainly on a demand-driven basis, 
responding to grant requests from NGOs for co-financing actions in this area, mostly related 
to awareness raising within the EU. The EU Commission considers paying more attention to 
supporting  impact  assessments,  market  transparency  efforts  and  assessing  difficulties  in 
implementing schemes and obtaining certification. This could be further supported by similar 
action by EU member states to finance studies on the impact of Fair Trade.  

A  Commission  project  taken  forward  by  UNCTAD  is  to  develop  an  internet  portal  on 
sustainability  claims  schemes.  The  project  aims  to  provide  comparable  information  on  the 
content and processes of the range of existing schemes, to the benefit of both consumers and 
producers. The intention is increase transparency on how different schemes tackle the various 
relevant criteria and to allow stakeholder exchanges on this.  

Principles to help the EU to use its direct support to schemes optimally; 

–  Identifying  target  areas  under  existing  budget  provisions  such  as  studies  clarifying  the  impacts  of 
different schemes, supporting market transparency efforts and cost-benefit analyses of support given.  

5. 

CONCLUSIONS:  THE  ROLE  OF  PUBLIC  AUTHORITIES  AND  OF  OPERATORS  IN 
RELATION TO FAIR TRADE AND OTHER PRIVATE TRADE-RELATED SUSTAINABILITY 
ASSURANCE SCHEMES 

Given the potential contribution of Fair Trade and other trade-related sustainability assurance 
schemes  to  sustainable  development,  the  Commission  intends  to  stay  engaged  and  further 
support such schemes. Where appropriate, this Communication may be followed by additional 
initiatives in one or more policy fields. At this stage, the Commission; 

•  Reiterates  the  importance  of  maintaining  the  non-governmental  nature  of  Fair  Trade  and 
other  similar  sustainability  schemes  throughout  the  EU.  Public  regulation  could  interfere 
with the workings of dynamic private schemes.  

•  Observe that Fair Trade has a significant presence in much of the EU market and a high 
level of consumer recognition linked to the development and transparency of standards and 
principles underlying the system. 

•  Observe  that  many  different  types  private  schemes  can  contribute  towards  sustainability 
objectives, but their multiplicity can carry risks of consumer confusion. The Commission 
sees scope for further reflection around the principles for maximising the impact of private 
trade-related sustainability assurance schemes, while avoiding entering into defining what 
are the appropriate sustainability standards to be followed by these private schemes: This 

20 

Appended in Annex V are examples of current financing.  

EN 

10 

   EN 

 
                                                 
is, however, without prejudice to compliance with relevant sustainability-related standards 
and legislation set by public authorities. 

In this context the Commission; 

•  Recalls  that  transparency  and  adequacy  of  information  to  consumers  about  standards  of 
private  sustainability  schemes  are  key,  and  that  there  could  be  benefit  from  arriving  at  a 
common  understanding  of  what  basic  process  requirements,  such  as  independent 
monitoring, are reasonable to expect. 

•  Recalls that further assessment of the impact of private sustainability schemes could be a 

key step forward. 

•  Intends  to  explore  the  scope  for  further  dialogue,  co-operation  and,  where  appropriate, 
convergence between different private labelling schemes to promote possible synergies and 
enhance clarity for the consumer.  

In the context of public purchasing, the Commission; 

•  Underlines the interest of providing guidance to public purchasing authorities help realise 

the full potential contribution to sustainable development from their decisions.  

•  Underlines  that  a  contracting  authority  that  intends  to  purchase  sustainability  assurance 
goods  should  use  only  criteria  linked  to  the  subject  matter  of  their  purchase  and  comply 
with the other relevant EU public procurement rules. Contracting authorities must always 
allow bidders to prove compliance with these standards by using Fair Trade labels or by 
other means of proof.  

In the context of financing, the Commission; 

•  Intends  to  continue  funding  for  relevant  Fair  Trade  and  other  sustainable  trade  related 
activities  in  accordance  with  its practice  to  date.  This  does  not  exclude  the  possibility  of 
financing also more targeted actions in order to pursue priorities identified. 

•  Recalls  the  need  to  assess  the  results  of  analyses  of  the  impact  of  private  sustainability 
assurance  scheme  on  sustainable  development  parameters,  including  the  implications  for 
economic,  social  and  developmental  criteria  in  producing  countries.  Given  the  focus  of 
private sustainability assurance scheme on the working and living conditions for producers 
in developing countries, the Commission considers that particular attention should be given 
to  this  aspect.  Analysis  should  compare  the  impact  of  various  private  schemes  so  as  to 
provide a basis for possible further initiatives in this field.  

EN 

11 

   EN 

 
ANNEX I 

FAIR TRADE DEFINITION 

Fair Trade standards are the result of consultation of stakeholders and experts and are set in 
accordance with the requirements of the International Social and Environment Accreditations 
and  Labelling  Alliance  (ISEAL).  The  alliance  is  a  formal  collaboration  of  leading 
international standard-setting and conformity assessment organizations focused on social and 
environmental issues. 

There are two international Fair Trade standard setters that certify Fair Trade Organizations 
across  the  world,  according  to  ISEAL  principles;  the  Fairtrade  Labelling  Organizations 
(FLO)  and  the  World  Fair  Trade  Organization  (WFTO)  (previously  the  International  Fair 
Trade Association, IFAT). The WFTO is an associate member of ISEAL. These two standard 
setters have produced the "Charter of Fair Trade principles".  

In  accordance  with  the  "Charter  of  Fair  Trade  principles"  (January  2009)  Fair  Trade  is 
defined as (based on the FINE definition in 2001): 

"Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks 
greater  equity  in  international  trade.  It  contributes  to  sustainable  development  by  offering 
better trading conditions to, and securing the rights of, marginalized producers and workers 
–  especially  in  the  South.  Fair  Trade  Organizations,  backed  by  consumers,  are  engaged 
actively  in  supporting  producers,  awareness  raising  and  in  campaigning  for  changes  in  the 
rules and practice of conventional international trade".  

This above definition is used in this Communication. .  

The Fairtrade Labelling Organizations (FLO) is a multi-stakeholder association involving 23 
member  organizations,  traders  and  external  expert.  The  organisation  develops  and  reviews 
Fairtrade standards and provides support to Fairtrade Certified producer by assisting them in 
gaining and maintaining Fairtrade certifications and capitalizing on market opportunities. For 
example  the  Fairtrade  Labelling  Organisation  (FLO)  sets  the  standards,  and  a  separate 
international certification company - FLO-CERT - regularly inspects and certifies producers 
against these standards, and audits the flow of goods between producers and importers. 

Furthermore, the World Fair Trade Organization (WFTO) has developed an independent third 
party certification system: the sustainable fair trade management system. 

A distinction not easy to make is that between NGO-initiated goal-driven operations, i.e. the 
primary objective is to contribute to sustainable development, and mainstream initiatives that 
are foremost business-oriented but seek to contribute to sustainability objectives. For example 
supermarkets  propose  their  own  fair  trade  brands  together  with  other  Fair  Trade-certified 
products. 

EN 

12 

   EN 

 
ANNEX II 

THE 1999 COMMUNICATION ON FAIR TRADE 

The  issues  identified  in  the  Communication  of  1999  have  been  addressed  in  different 
instances.  At  a  European  level,  the  2006  report  of  the  European  Parliament  (the  "Schmidt 
Report") and the 2005 exploratory opinion of the European Economic and Social Committee 
(EESC)  (rapporteur  Richard  Adams)  presented  considerations  relating  to  Fair  Trade  and 
similar  private  sustainability  schemes.  In  June  2006  the  European  Council  adopted  its 
renewed sustainable development strategy and included fair trade in the call to Member States 
to promote sustainable products21. 

Issues  of  relevance  to  sustainability  labelling  have  also  been  referred  to  in  many  EC  policy 
documents; the Communication on Agricultural Commodity chains, poverty and dependence; 
the EU Policy for Africa; the Action Plan on Cotton; the Aid for Trade Strategy adopted by 
the  council  in  October  2007)  and  the  Commission's  Green  Paper  on  agriculture  product 
quality  (October  2008)22. Although the Commission's 1999 Communication on “fair trade” 
remains  the  most  comprehensive  statement  of  the  Commission’s  stance  towards  what  was 
then called “fair trade”.  

The  Communication  pointed  out  three  key  issues;  (i)  the  development  of  Fair  Trade  and 
"ethical trade" need to be dealt with in a coherent manner; (ii) Fair Trade should contribute to 
sustainable  development  through  voluntary  participation,  and  EC  involvement  should  take 
WTO  obligations  into  account;  and  (iii)  schemes  must  satisfy  the  needs  of  producers  from 
developing countries and allow consumers to make properly informed choices. 

21 
22 

http://register.consilium.europa.eu/pdf/en/06/st10/st10117.en06.pdf, p. 13. 

The  Commission's  Green  Paper  on  agricultural  product  quality  of  October  2008  addresses  the  issue  of  fair  trade  in  the  context  of  food  quality  certification 

schemes.  A  Commission  Communication  (forthcoming)  on  the  same  subject  is  planned.  Paper  on  agricultural  product  quality:  product  standards,  farming 
requirements and quality schemes COM (2008) 641 final of 15 October 2008. 

EN 

13 

   EN 

 
                                                 
ANNEX III 

CRITERIA RELATED TO GOOD AGRICULTURAL AND BUSSINESS PRACTICE 
AS WELL AS SOCIAL AND ENVIRONMENTTAL CRITERIA 

This part refers to the section three in the Communication and provides examples for certified 
products targeting consumers awareness of sustainability issues.  

It  is  common  for  certification  schemes  to  include  criteria  related  to  good  agricultural  and 
business  practice  as  well  as  social  and  environmental  criteria.  The  Utz  Certified  Code  of 
Conduct (which currently applies to coffee and is due to be extended to cocoa, tea and palm 
oil) includes elements such as standards for record-keeping, minimised and documented use 
of agrochemicals for crop protection, protection of labour rights and access to health care and 
education for employees and their families. In the social field, workers' protection is based on 
both national laws and ILO conventions but also relate to housing, clean drinking water and 
training  for  workers.  Environmental  criteria  relate  to  the  prevention  of  soil  erosion,  water 
usage, energy use and sustainable energy sources as well as deforestation. 

Other private schemes have a more environmental focus: it is evident from the name that the 
Rainforest Alliance is one of these, although in practice the RA certification scheme combines 
both environmental and social concerns: 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

Social and Environmental Management System  

Ecosystem Conservation  

Wildlife Protection  

Water Conservation  

Fair Treatment and Good Working Conditions for Workers  

Occupational Health and Safety  

Community Relations  

Integrated Crop Management  

Soil Management and Conservation  

Integrated Waste Management  

A third type listed in the report, section 3, is standards that have been set up with the intention 
that  they  should  apply  "industry-wide"  rather  than  to  cater  for  a  niche  market  of 
discriminating consumers. One example of this type of initiative is the Common Code for the 
Coffee  Community  (4C)  Association,  which  has  worked  over  the  past  five  years  to  set  the 
baseline  for  sustainable  development  within  the  mainstream  coffee  sector.  The  4C 
Association standards build on the Millennium Development Goals of the United Nations and 
exclude  the  worst  forms  of  social,  environmental  and  economic  practices  in  the  production, 
post-harvest  processing  and  trading  of  green  coffee.  Definitions  are  primarily  based  on  the 
UN Human Rights Declaration as well as existing UN conventions and standards and, usually, 

EN 

14 

   EN 

 
national  legislation.  Once  the  ten  worst  practices  have  been  eliminated  participants  have  to 
continuously improve on the other parameters set out in the Code. 

EN 

15 

   EN 

 
ANNEX IV 

Range  of  process  issues  relating  to  consumer  assurance  schemes  identified  by  the 
European Economic and Social Committee: 

a) 

Scheme Governance 

Where does ultimate control of the scheme lie? 

b) 

Scheme Goals 

Are the goals clearly defined? 

c) 

Scheme scope 

Does the scheme address the "problem" as normally defined? 

d) 

Scheme standards or terms 

Do the standards set and monitored by the scheme express the goals?  

e) 

Impact assessment 

Is there credible assessment of the impact of the scheme on the goals? 

f) 

Independent review 

Is there any independent review of the scheme's operation? 

g)  Cost-benefit analysis 

Is  there  any  process  to  monitor  and  evaluate  the  costs  of  the  scheme  borne  by 
suppliers,  traders  and  consumers  in  comparison  to  the  progress  made  to  achieve  the 
goals? 

h) 

Public claims 

Do  the  public  claims  by  certified  companies  or  suppliers  match  the  goals, 

standards and outcomes of the scheme? 

EN 

16 

   EN 

 
 
 
 
 
 
 
 
 
 
ANNEX V 

THEMATIC PROGRAMMES "CO-FINANCING WITH EUROPEAN NGOs" and "NON STATE ACTORS AND LOCAL AUTHORITIES IN DEVELOPMENT" 

2007 and 2008 Projects including the promotion of Fair Trade among its objectives and / or activities 

Contract 
year 

Title 

Contracting party  

Nationality 

Budget 

DAC Code 

2008 

ESTRATEGIA PARA EL FORTALECIMIENTO DE INICIATIVAS 
COMUNITARIAS PRODUCTIVAS ACORDES CON EL DESARROLLO 
SUSTENTABLE 

2008 

 COMPETITIVIDAD PRODUCTIVA Y COMERCIAL DE LA RED 
DEPARTAMENTAL DE PEQUEÑOS PRODUCTORES DE HABA 
CONVENCIONAL Y ORGÁNICA (ASOHABA) EN EL MERCADO 
COMUNITARIO Y DE COMERCIO JUSTO 

2008  Cafe amigable con la naturaleza Santa Cruz - Bolivia 

2008 

OntunLan, N''do Botor - Turismo Socialmente responsavel no sector de 
Quinhamel 

2008  Espaço por um Comércio Justo: alternativas em rede 

FUNDACION TIERRA VIVA 

Venezuela 

49968 

15150 

CREDI FUTURO ASOCIACION 

380000 

43040 

ASOCIACION CENTRO DE PROMOCION AGROPECUARIA 
CAMPESINA 

Bolivia 

515267 

43040 

INSTITUTO MARQUES DE VALLE FLOR FUNDACAO 

Portugal 

496389,32 

33210 

CENTRO DE INFORMACAO E DOCUMENTACAOAMILCAR 
CABRAL ASSOCIACAO 

Consortium  

370011,99 

15150 

2008 

Decent Life - decent work. Enhancing international strategies and policies of 
trade unions 

SUDWIND DIE AGENTUR FUR SUD NORD BILDUNGS UND 
OFFENTLICHKEITSARBEIT GMBH 

Consortium  

662264 

99820 

2008 

Mobilizing for a sector dialogue for the improvement of working conditions in 
the globalized toy industry 

SUDWIND DIE AGENTUR FUR SUD NORD BILDUNGS UND 
OFFENTLICHKEITSARBEIT GMBH 

Consortium  

929043 

99820 

2008  F.R.A.M.E. (Fair and Responsible Action in MEditerranean area ) 

CONSORZIO CTM-ALTROMERCATO SOCIETACOOPERATIVA  Consortium  

494821 

99820 

2008  Network Sustainable Consumption 

SUDWIND DIE AGENTUR FUR SUD NORD BILDUNGS UND 
OFFENTLICHKEITSARBEIT GMBH 

Consortium  

647023 

99820 

2008  Creating Coherence. Trade for Development: Development Aid for Trade 

MOVIMENTO PER L AUTOSVILUPPOL INTERSCAMBIO E LA 
SOLIDARIETA 

Consortium  

968233 

99820 

EN 

17 

EN 

 
  
  
2008  A NETWORK FOR THE DEVELOPMENT 

PROVINCE OF PESARO AND URBINO 

Consortium  

115621 

99820 

Frauen und Globalisierung: Decent work for ALL! –  

2008 

Informations- und Mobilisierungskampagne für menschenwürdige Arbeit für 
Frauen in der globalen Exportindustrie am Beispiel Bekleidung 

2008 

Verantwortliche Öffentliche Beschaffung und Menschenwürdige Arbeit JETZT!– 
Öffentlichkeits-, Bewusstseins- und Lobbykampagne zur Durchsetzung sozialer 
und ökologischer Beschaffung von Öffentlicher Hand und privaten Institutionen 

CHRISTLICHE INITIATIVE ROMERO EV 

Consortium  

720446 

99820 

CHRISTLICHE INITIATIVE ROMERO EV 

Consortium  

701163 

99820 

2008  Local capacity building for Fairtrade in Sweden, Finland and Estonia  

FORENINGEN FOR RATTVISEMARKT SVERIGE 

Consortium  

823148 

99820 

2008 

Network of Schools and Local Communities contributing to the achievement of 
the MDGs 

POLSKA AKCJA HUMANITARNA 

Consortium  

999000 

99820 

2008 

Fair Flowers - a gift to all involved. Raising the awareness of local authorities, 
consumers and traders on the production of cut flowers in developing countries 

FIAN FOODFIRST INFORMATIONS & AKTIONS NETWERK 
SEKTION DER BUNDESREPUBLIK DEUTSCHLAND EV 

Consortium  

669087 

99820 

2008 

A case for poverty reduction: Consumer awareness and action in 6 EU member 
states 

Introducing the MADE-BY label for sustainable fashion in the 

2008 

United Kingdom 

2008 

La sensibilisation sur les interdépendances entre Nord et Sud : un enjeu pour 
la mobilisation des citoyens européens en faveur du développement. 

CONSUMERS INTERNATIONAL LBG 

Consortium  

857713 

99820 

STICHTING INTERKERKELIJKE AKTIE VOOR LATIJNS 
AMERIKA SOLIDARIDAD 

Consortium  

770000 

99820 

ASSOCIATION FRERES DES HOMMES 

France 

789205,5 

99820 

2007  Export Trade from Kenya – Enabling the poor to share the fruits.  

AFRICA NOW LBG 

Royaume-Uni 

408000 

31191 

2007  Appui aux familles vulnérables dans deux zones cotonnières du Mali 

ASSOCIATION VETERINAIRES SANS FRONTIERES - CENTRE 
INTERNATIONAL DE COOPERATION POUR LE 
DEVELOPPEMENT AGRICOLE VSF CICDA 

France 

740614,53 

43040 

2007  Empowering Emerging Farmers through fair trade development in South Africa 

STICHTING INTERKERKELIJKE AKTIE VOOR LATIJNS 
AMERIKA SOLIDARIDAD 

Pays-Bas 

1000000 

33120 

2007  PUBLIC AFFAIRS - Mobilising action for Fair Trade Public Procurement 

STICHTING EUROPEAN FAIR TRADE ASSOCIATION 

The Netherlands 

568200 

99820 

2007 

Campaign for sustainable purchasing of computers: Making public purchasing 
in Europe work for development by raising awareness ot the working conditions 
and environmental issues in the global supply chain of computers. 

WELTWIRTSCHAFT, OKOLOGIE & ENTWICKLUNG - WEED EV  Germany 

1038334,5 

99820 

EN 

18 

EN 

 
  
 
 
2007  Enlarging FAIR 

PANGEA - NIENTE TROPPO SOCIETA COOPERATIVA 
SOCIALE SCSARL 

Italy 

448198,2 

99820 

2007  Expanding Fair Trade Awareness in Slovakia and the Czech Republic 

NADACIA INTEGRA 

Slovakia 

202779 

99820 

2007  Fair consumption 

MAGOSFA KORNYEZETI NEVELESI ES OKOTURISZTIKAI 
ALAPITVANY 

99880,26 

99820 

2007  Supermarkets, supply chains and poverty reduction 

WAR ON WANT 

United Kingdom 

360000 

99820 

2007 

Decent work, trade and development: raising awareness among trade unions 
and women´s groups of the employment implications of international trade 
relations 

WAR ON WANT 

United Kingdom 

720000 

99820 

2007  Education for Global Sustainability, Responsible Consumption and Fair Trade 

UUSI TUULI RY 

496579,78 

99820 

2007  FEEDING AND FUELLING EUROPE 

MAGYAR TERMESZETVEDOK SZOVETSEGE 

Hungary 

1078521,66 

99820 

2007  Médiatiser la face invisible du développement 

ASSOCIATION COMITE FRANCAIS POUR LASOLIDARITE 
INTERNATIONALE 

France 

346591,06 

99820 

19.466.102,80 

. 

EN 

19 

EN