Consultation document for Fairtrade Stakeholders: Review of the Fairtrade Standard for Honey Consultation Period 15.04.2015 – 15.05.2015 Project Manager Lucy Russell, Project Manager, Standards, l.russell@fairtrade.net, 0049 (0)228 94923 282 PART 1: Introduction Welcome to the consultation on the Fairtrade Standard for Honey. Thank you for taking the time to participate. First you will find an introduction to the topic and consultation process and then you will be asked the consultation questions. The whole process should take you around 15 minutes. 1. General Introduction Fairtrade Standards support the sustainable development of disadvantaged small-scale farmers and workers. Producers and traders must meet applicable Fairtrade Standards for their products to be certified as Fairtrade. Within Fairtrade International, Standards & Pricing (S&P) is responsible for developing Fairtrade Standards. The procedure followed, as outlined in the Standard Operating Procedure for the Development of Fairtrade Standards, is designed by Fairtrade and compliant with all requirements of the ISEAL Code of Good Practice for Setting Social and Environmental Standards. This involves wide consultation with stakeholders to ensure that new and revised standards reflect Fairtrade International’s strategic objectives, are based on producers’ and traders’ realities and meet consumers’ expectations. You are invited to participate in this consultation and contribute to the full review of the Fairtrade Honey Standard. For this purpose, we kindly ask you to comment on the proposed changes to the requirements suggested in this document and encourage you to give explanations, analysis and examples underlying your statements. All information we receive from respondents will be treated with care and kept confidential. Please submit your comments to the Project Manager Lucy Russell at: l.russell@fairtrade.net by 15.05.2015. If you have any questions regarding the draft standard or the consultation process, please contact the Project Manager by email or call +49-228-94923-282. Following the consultation round we will prepare a paper compiling the comments made, which will be emailed to all participants and also be available here http://www.fairtrade.net/standards-work-inprogress.html under the section for the honey review project. Taking into account all the comments received, the draft standard will be amended and presented for approval in June 2015. 2. Background and Objectives The Fairtrade Standard for Honey presents the requirements that honey producers and traders must comply with (in addition to the requirements for producers in the Standard for Small Producer Organizations and the requirements for traders in the Trader Standard). The objective of the review of Standards_Consultation_Document 15.04.2015 this standard is to propose any necessary amendments to these requirements and ensure they are fully aligned with the recently revised Trader Standard and the FLOCERT compliance criteria. 3. Project and Process Information This standard review project started in January 2015. The project assignment (PA) is available at: http://www.fairtrade.net/standards-work-in-progress.html. 4. Confidentiality All information we receive from respondents will be treated with care and kept confidential. Results of this consultation will only be communicated in aggregated form. All feedback will be analysed and used to draw up the final proposal. However, when analysing the data we need to know which responses are from producers, traders, licensees, etc. so we kindly ask you provide information about your organization. Standards_Consultation_Document 15.04.2015 PART 2: Draft Standard Consultation The consultation is split into the following sections: 1) Information about your organization ............................................................................................... 4 2) Quality ............................................................................................................................................. 5 3) Weather-related risks ...................................................................................................................... 8 4) Alignment with Trader Standard and compliance criteria ............................................................... 9 4.1 Fairtrade payers and conveyors .................................................................................................... 9 4.2 Fairtrade eligible .......................................................................................................................... 10 4.3 Alignment with other revised Trader Standard requirements ...................................................... 13 5) Any other comments ....................................................................................................................... 16 Standards_Consultation_Document 15.04.2015 1) Information about your organization Please provide information about your organization so that the data can be analysed precisely and we can contact you for clarifications if needed. The results of the survey will only be presented in an aggregated form and all respondents’ information will be kept confidential. 1.1 Name of organization ____________________ 1.2 Your name ____________________ 1.3 Your email ___________________ 1.4 FLO ID (if applicable) _________ 1.5 What is your responsibility in the supply chain (if applicable)? Please tick all that apply ☐ Producer (bee-keepers certified as a Fairtrade small producer organization) who does not export ☐ Producer (bee-keepers certified as a Fairtrade small producer organization) who exports own product ☐ Exporter certified as a Fairtrade Trader ☐ Importer certified as a Fairtrade Trader ☐ Processor certified as a Fairtrade Trader ☐ Retailer ☐ Licensee ☐ Brand owner ☐ Consumer ☐ Other (please specify) ______________ 1.6 Which organization in the Fairtrade system do you work for (if applicable)? ☐ Producer network ☐ National Fairtrade organization ☐ Fairtrade International Standards_Consultation_Document 15.04.2015 2) Quality The requirement 1.4.1 on the quality of honey in the current honey standard is currently not checked, and Fairtrade does not regulate the quality of products. S&P therefore proposes to remove the lines related to quality from the requirement, as shown in the questions 2.1 - 2.4 below. However it is important to keep the information on how to calculate whether the honey is price level A or B since there are two separate Fairtrade price levels for honey. This is addressed in question 2.5 below. 2.1 Please clarify which parts of the quality-related lines (all in requirement 1.4.1 from the current honey standard) are useful/add value and should be kept in the guidance section, and which parts should be removed completely from the standard. Below are the separate parts to the quality requirement and our questions. Quality: The honey must fulfil EU and Swiss quality standards. What is your opinion on the line above on EU and Swiss quality standards? ☐ Move to the guidance as this is useful information but not relevant for audits ☐ Delete from the standard completely ☐ Make this line a requirement (this would then be transferred to the compliance criteria and audited) ☐ I do not know ☐ Other Please explain your rationale below and/or provide any other feedback on this line ________________________ 2.2. As explained above, since Fairtrade does not regulate quality and the lines below (also from requirement 1.4.1) are not audited, S&P proposes to either move these lines to the guidance or to remove completely from the standard. It must not have any objectionable flavour, aroma or taint absorbed from foreign matter during the processing and storage. It must not have begun to ferment or be effervescent. Honey must be free of any residues caused by medical application against bee illness (e.g. varroasis, foulbrood, etc.). Honey must not contain any foreign sugar. The honey should be free of foreign matters such as mould, insects, insect debris, sand, etc. Eventual feeding of sugar must be limited strictly to the non-productive season and in addition must be kept at the absolute minimum necessary Standards_Consultation_Document 15.04.2015 What is your opinion on the lines above about honey quality? ☐ Move to the guidance as this is useful information but not relevant in audits ☐ Delete from the standard completely ☐ Make this line a requirement (this would then be transferred to the compliance criteria and audited) ☐ I do not know ☐ Other Please explain your rationale below and/or provide any other feedback on this line ________________________ 2.3. The lines below are also from requirement 1.4.1, but not audited. S&P proposes to either move these lines to the guidance or to remove completely from the standard (question 2.5 addresses who is responsible for determining quality). Quality control prior to shipment must be carried out through an independent agent unless otherwise agreed between seller and Fairtrade Payer. What is your opinion on the lines above about quality control? ☐ Move to the guidance as this is useful information but not relevant for audits ☐ Delete from the requirement completely ☐ Make this line a requirement (this would then be transferred to the compliance criteria and audited) ☐ I do not know ☐ Other Please explain your rationale below and/or provide any other feedback on this line ________________________ 2.4. The line below is also from requirement 1.4.1, but not audited. S&P proposes to either move this to the guidance or to remove completely from the standard. Only new export quality barrels should be used for bulk shipment. Standards_Consultation_Document 15.04.2015 What is your opinion on this line about the quality barrels for shipment? ☐ Move to the guidance as this is useful information but not relevant for audits ☐ Delete from the requirement completely ☐ Make this line a requirement (this would then be transferred to the compliance criteria and audited) ☐ I do not know ☐ Other Please explain your rationale below and/or provide any other feedback on this line ________________________ 2.5 There are two Fairtrade Minimum Prices for honey depending on the quality level: a price for quality A and a price for quality B. To ensure that the correct price is paid, it is important that producers define the quality level of their honey. S&P proposes to add a requirement that the producer must determine the quality level of their honey. This would become a new requirement and therefore transferred to the compliance criteria and audited in future. The information on how to calculate it would be available in guidance to be used as a reference for producers when determining their honey quality. Please see the proposal below (with changes marked in blue). Quality requirement (applicable to small producer organizations) NEW: You determine whether your honey is quality level A or B as defined in this standard. Definition of the quality standards for honey: Honey traded under Fairtrade conditions will be classified into two categories, according to its quality. Two criteria standards are defined as being relevant for determining the quality, namely water content and Hydroxymethylfulfural (HMF) content. For each category, points are given according to the following scheme: Guidance: Honey traded under Fairtrade conditions is classified into two categories, according to its quality (see pricing table for different prices). The tables below determine the quality of the honey based on the two indicators, water content and Hydroxymethylfulfural (HMF) content: A quality: Any honey that achieves 18 points or more. B quality: Any honey that achieves 17 points or less. Table 1: Assessing the water content in honey Water content (% Chataway) Points Factor Max. points 16.9 % or less 5 4 17.0 – 17.5 4 4 17.6 – 18.5 % 3 4 18.6 – 19.0 % 2 4 19.1 – 19.5 % 0.5 4 19.6 % or more 0 4 Standards_Consultation_Document 15.04.2015 20 16 12 8 2 0 Table 2: Assessing the HMF content in honey HMF content (ppm) Points Factor 5.0 or less 5 3 5.1 – 9.9 4 3 10.0 – 12.0 3 3 12.1 – 15.0 2 3 15.1 – 20.0 1 3 20 and over 0 3 Max. points 15 12 9 6 3 0 The quality of the honey is determined by adding together the points given for the two quality criteria above. On this basis, two quality categories are defined: A quality: Any honey that achieves 18 points or more. B quality: Any honey that achieves 17 points or less. What is your opinion on the proposed changes? ☐ I agree with the proposal (that producers would be responsible for determining the quality level of their honey and information on calculating quality levels would be moved to the guidance section) ☐ I do not agree with the proposal ☐ I partly agree with the proposal ☐ I do not know ☐ Other Please explain your answer and/or provide any further information on how you determine your honey quality ________________________ 3) Weather-related risks Background Honey production is dependent on predictable weather and, especially with the impacts of climate change, producers increasingly face the risk of their production being affected by irregular rainfall pattern, drought, frosts etc. S&P received a request to consider this aspect in the standard to protect producers. As such S&P proposes to include a Voluntary Best Practice* in the standard, to encourage traders to support producers who face weather-related risks. * Voluntary Best Practices (VBP) (included in the revised Trader Standard, applicable from September 2015) refer to the additional steps that all supply chain actors can take to foster even fairer trading conditions. They serve as your reference point for achieving best practise and contribute to greater sustainability in the entire supply chain. These practices are voluntary and not required in order for you to be in compliance with the Fairtrade Standards. They will however be monitored on a regular basis in order to identify those actors that go beyond minimum compliance. Standards_Consultation_Document 15.04.2015 Proposal Please see the proposal below: Weather-related risks (applicable to traders) VBP You demonstrate that you have taken action to support producers to mitigate weather-related risks. Guidance: Honey production is dependent on regular weather patterns and, especially with the impacts of climate change, producers face the risk of their production being affected by irregular rainfall, drought, frosts etc. You are encouraged to support producers who face these risks. Ways in which you can do this include providing relevant training/capacity building to producers on how they can mitigate the effects of irregular weather, sharing insurance costs (if available), or sharing the risks with the producer by paying the producer a higher price. 3.1. Do you agree with the proposal to include the above Voluntary Best Practice in the honey standard? ☐ Yes ☐ No ☐ Partly ☐ I do not know Please explain your rationale below or provide any feedback on the proposal. If you also have any feedback on the wording, or if you have suggestions on what to highlight as best practice in the guidance, please also explain below. ________________________ 4) Alignment with Trader Standard and compliance criteria A revised version of the Fairtrade Trader Standard was published in March 2015 and will be applicable from September 2015. The Fairtrade Honey Standard complements and defines more specific requirements or exceptions to the Trader Standard where necessary. The following questions present a subset of the revised rules established in the Trader Standard and the corresponding requirements in the honey standard. They examine whether specifications are needed in the honey context. 4.1 Fairtrade payers and conveyors Background The revised Fairtrade Trader Standard defines which requirements are applicable to Fairtrade payers*, and which to Fairtrade conveyors**. *A Fairtrade payer is the trader who is responsible for paying the Fairtrade price (market price or minimum price, whichever is higher) and the Fairtrade Premium to the producer. **A Fairtrade conveyor is a buyer who buys Fairtrade products under Fairtrade conditions directly from the producer, but it pays the price differential (if applicable) and the Fairtrade Premium only once it has received them from the Fairtrade payer (this takes place no later than 30 days after the end of each quarter - see Trader Standard 4.3.2). Standards_Consultation_Document 15.04.2015 Allowing first buyers to act as Fairtrade conveyors may facilitate more Fairtrade sales when traders would otherwise not be able to pay the premium and price differential before they have received it from the payers. New Trader Standard (applicable from September 2015) - annex 1: For honey the first buyer is by default the Fairtrade payer. But if the producer sells honey to an exporter, who sells to an importer, the exporter may act as a price and premium conveyor. The importer would then become the price and premium payer. Please confirm whether or not there are cases where the first buyer should be allowed to act as a conveyor, because it cannot act as the Fairtrade payer? ☐ Yes - I confirm that there are cases where the first buyer should be allowed to act as Fairtrade conveyors ☐ No - there are no cases where Fairtrade conveyors should be allowed ☐ I am unsure ☐ I don’t know If yes, please specify in which cases it is not possible for the first buyer to act as the Fairtrade payer. Please provide any further relevant information. ________________________ 4.2 Fairtrade eligible Background According to the Trader Standard, conveyors must buy products from producers as Fairtrade, and transfer the corresponding premium later, for the full volume that they have bought. However in some cases the conveyor doesn’t yet know at the time of purchase from the producer, if the product can be sold on as Fairtrade to the next buyer. So for some products S&P may propose to allow conveyors to buy up some of the sales volume as Fairtrade eligible only if it is beneficial to producers. Fairtrade eligible means that the product is potentially Fairtrade, and that the conveyor would pay the price differential (if applicable) and the Fairtrade Premium, only for the volume that it has sold on to a Fairtrade buyer. This could be allowed only for a certain percentage of the sales volume. This means that even if the conveyor doesn’t sell any of the honey as Fairtrade, the price differential (if applicable) and the Fairtrade Premium would still need to be paid for the percentage of the product which wasn’t Fairtrade eligible. Possible opportunities: Fairtrade eligible sales can open up opportunities for increasing Fairtrade sales volumes, when the conveyor would otherwise not be able to buy the products as Fairtrade upfront. It can be seen as a way of sharing risks with the producer. Standards_Consultation_Document 15.04.2015 Possible risks: Producers have the risk of not receiving the Fairtrade Premium and price differential for their Fairtrade eligible product, even though they have invested in certification complied with the standards. If Fairtrade eligible were allowed for honey the requirement could look like this: Fairtrade eligible If you buy honey from producers as Fairtrade eligible; • the volume amounts to a maximum of XX% of the contract volume*; • you sign a purchase contract with the producer that is clearly identified as a “Fairtrade eligible contract”, with a clearly defined Fairtrade eligible volume; you provide information to the producer on the prospects for selling the Fairtrade eligible volume as Fairtrade; you facilitate access to pre-finance for the Fairtrade eligible volume (directly or via a third party); you pay the market price to the producer for the Fairtrade eligible volume; additionally you pay the price differential (difference between the Fairtrade Minimum Price and the price at which you initially bought the product from the producer) and Fairtrade Premium, if applicable, for the amount of the Fairtrade eligible volume that you eventually sold as Fairtrade to your next buyer; you pay the price differential and Fairtrade Premium (if applicable) within 30 days after the end of each quarter; and you report on a quarterly basis to the producer on the sales of the Fairtrade eligible products. • • • • • • *If you are required by law to purchase the full production volume from a producer, you are allowed to buy up to 100% of the volume as Fairtrade eligible. Guidance: “Fairtrade eligible” means that the product is potentially Fairtrade, but the conveyor doesn’t yet know at the time of purchase from the producer, if the product can be sold on as Fairtrade to the next buyer. It is produced and traded according to Fairtrade Standards, but the price differential and Fairtrade Premium are paid to the producer, only if the conveyor sells the product as Fairtrade to the next buyer. Fairtrade eligible sales can open up opportunities for increasing Fairtrade sales volumes, when the conveyor would otherwise not be able to buy the products as Fairtrade upfront. It can be seen as a way of sharing risks with the producer. Since only a maximum of XX% of the purchase volume can be sold as Fairtrade eligible, the other XX% is sold as Fairtrade and Fairtrade price differential and Fairtrade Premium is be paid regardless of whether the product is sold as Fairtrade to the next buyer. Fairtrade eligible contracts fall within the scope of audits. Standards_Consultation_Document 15.04.2015 4.2.1. In your opinion should conveyors be allowed to buy honey as Fairtrade eligible? ☐ Yes, always ☐ Yes, but only in some cases (please specify below in which cases and why) ☐ No, never ☐ I don’t know Please provide any further relevant information (in particular on how this could benefit producers if you ticked yes). ________________________ 4.2.2. If you answered that Fairtrade eligible should be allowed, in your opinion what should the percentage be? ☐ 25% Fairtrade Eligible of the volume (this means that the other 75% must be Fairtrade) ☐ 50% Fairtrade Eligible of the volume (this means that the other 50% must be Fairtrade) ☐ 75% Fairtrade Eligible of the volume (this means that the other 25% must be Fairtrade) ☐100% Fairtrade Eligible of the volume (this means that none of the volume is automatically Fairtrade when bought from the producer) ☐Other If you tick this box, please specify what percentage you think is necessary to be Fairtrade eligible (note: the rest of the volume would then be Fairtrade). ________________________ ☐ I don’t know Please provide any further feedback on your answer below. Please also include relevant information such as: - when you buy Fairtrade honey whether you usually know already that you have a Fairtrade customer for it; - if you buy more than only for Fairtrade customers, what the % is of your honey that is not yet sold; and - whether you would increase your Fairtrade honey volume if Fairtrade eligible would be allowed. ________________________ Standards_Consultation_Document 15.04.2015 4.3 Alignment with other revised Trader Standard requirements The Honey Standard requirements which are affected by the new Trader Standard requirements are listed in the questions below. The proposed changes to the honey standard requirements (and corresponding Trader Standard requirements) are shown in blue. Also relevant alignments with the FLOCERT compliance criteria are noted. Please check if you can identify any difficulties in applying these rules in your specific setting by answering the questions. Revised Trader Standard wording (2015 onwards) Honey Standard and/or explanations of what applies for honey (proposed changes are marked in bold blue) Timely payment of Premium and price by payers (Core) Applies to: Fairtrade payers 4.3.1 You pay the producer (or the conveyor, if applicable) the price and/or the Fairtrade Premium for the Fairtrade products in a timely manner. Please refer to the product standards for specific timelines. Both the requirement 4.3.1 of the Trader Standard and 4.3.1 of the Honey Standard (except for deleted sections in red regarding payment involving conveyors, which is covered by 4.3.2 below in the Trader Standard) apply. They are complementary to each other: 4.3.1 Payment Terms: Payment shall be net cash against a full set of documents on first presentation and after quality control acceptance by both parties. The documents to be presented will be those stipulated in the contract and customary in the honey trade. Late payment For contracts involving Fairtrade payers and producers, pPayment must be made according to the international customary conditions, but as a minimum no later than 30 days after the receipt of the documents transferring ownership. For contracts involving Fairtrade payers, producers and conveyors, conveyors must pay producers no later than 30 days after receipt of the payment from the Fairtrade payer. Timely transfer of Premium and price differential by conveyors (Core) Applies to: Fairtrade conveyors 4.3.2 You pay the price differential (if applicable) and the Fairtrade Premium to the producer no later than 15 days after receipt of payment from the Fairtrade payer. A different timeframe can be agreed in writing between you and the producer, in which case the payment must be made by no later than 30 days after the end of each quarter. Guidance: A price differential might come Standards_Consultation_Document 15.04.2015 Trader Standard 4.3.2 applies. into play in case the Fairtrade Minimum Price is higher than the price at which the conveyor initially bought the product from the producer. You then must convey to the producer the difference between the Fairtrade Minimum Price and the price paid, once the payment has been received from the Fairtrade payer. 4.3.1 Do you agree with the proposed changes to the requirement 4.3.1 of the honey standard, shown above in blue? ☐ Yes ☐ No ☐ Partly ☐ I do not know Please explain your rationale and provide and any further feedback below: _____________________ Revised Trader Standard wording (2015 onwards) Honey Standard and/or explanations of what applies for honey (proposed changes are marked in bold blue) Pre-financing Fairtrade contracts (Core) Applies to: First buyers 4.4.1 You pre-finance the payment of the Fairtrade contracts, or facilitate that this is done via a third party, to enable producer organizations to purchase the products from their members. You do not have to follow the requirement if: - there is a proven high risk (e.g. risk of default of the contract, of non-repayment or of important quality problems); - the producer declines this pre-finance in a verifiable way; or - this is not legally allowed in the country you are operating in. You do not put pressure on the producer to decline your offer of pre-finance, for instance, you do not make it a condition for signing a contract that the producer declines the pre-finance offer. Please see product standards for specific details. Standards_Consultation_Document 15.04.2015 Since the requirement 4.2.1 of the Honey Standard is contradictory to 4.4.1 of the Trader Standard (in the Honey Standard the onus is on producer to place a request, whereas the Trader Standard puts the onus on the payer to offer pre-finance), S&P proposes to remove part of 4.2.1 of the Honey Standard (see below). So the Trader Standard 4.4.1. and the below version of the Honey Standard would apply. 4.2.1 On request from the producer, the Fairtrade payer must make up to 60% of the value of the contract available as pre-finance to the producer at any time after signing the contract. The prefinance must be made available at least six weeks prior to shipment. Guidance: The pre-finance covers the period starting from payments by the producer organization to memberfarmers for the crop received, up to the payment by the buyer to the producer organization for fulfilment of the contract. A third party can either be a third party lender or another trader in your supply chain. 4.3.2. Do you agree with the proposed changes to the requirement 4.2.1 of the honey standard, shown above in blue? ☐ Yes ☐ No ☐ Partly ☐ I do not know Please explain your rationale and provide and any further feedback below: _____________________ Revised Trader Standard wording (2015 onwards) Honey Standard and/or explanations of what applies for honey (proposed changes are marked in bold blue) Sourcing plans for producers (Core) Applies to: First buyers 4.5.1 You provide a sourcing plan to each producer that you plan to buy from. Please refer to the product standards for the specific requirements. Guidance: At minimum, the sourcing plan is a realistic estimation of future purchases. If these are difficult to plan this should be made clear in the sourcing plan but the requirement still applies. You are encouraged to contact your buyers to enable you to have a more realistic estimation. Both Trader Standard 4.5.1 and Honey Standard 4.1.1 (aligned with compliance criteria as marked in blue) apply: 4.1.1 Sourcing plans must cover each harvest 12 months. Sourcing plans must be renewed a minimum of three months before they expire. 4.3.3. Do you agree with the proposed changes to align the wording of the requirement 4.1.1 of the honey standard with the compliance criteria, shown above in blue? ☐ Yes ☐ No ☐ Partly ☐ I do not know Please explain your rationale and provide and any further feedback below: _____________________ Standards_Consultation_Document 15.04.2015 5) Any other comments 5.1 Do you have any other comments or feedback regarding this consultation and proposed changes? Are there any further additional requirements which you feel should be added or amended? Have all the main issues been addressed? Please explain: _____________________ Standards_Consultation_Document 15.04.2015