Archived decisions

Hampshire County Council

Policy and Resources Scrutiny and Select Committee Item 7

6 June 2005

Fairtrade

Report by the Director of Property, Business and Regulatory Services

Contact: Neil Jones Ext: 6180 email: [email protected]

How the conclusion in this report fits with the Corporate Strategy

This scheme will impact on the delivery of the following Corporate Aims

Aim 2 - stewardship of the environment


1	Background

1.1	At the County Council meeting on the 23 February 2005, Councillor Mrs Buckley tabled a motion relating to Fairtrade. The main thrust of the proposal was that the "County Council desires to be recognised as a council that actively supports and promotes the concept of Fairtrade, ensuring that producers from all countries get a fair price for their goods and labour". There are seven other elements to the motion and the full text is reproduced in Appendix 1.

1.2	The motion was referred to the Policy and Resources Scrutiny and Select Committee for consideration. This report is intended to provide background information about Fairtrade and to identify a number of key issues relevant to Members' deliberations about the motion. The report suggests what practical measures need to be considered and also rehearses the wider economic arguments over world trade.

2	Fairtrade and the fair trade movement

2.1	The definition agreed by the major organisations in the fair trade movement is:

	"Fair Trade is a trading partnership, based on dialogue, transparency and respect, which seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalised producers and workers - especially in the Southern hemisphere. Fair Trade organisations (backed by consumers) are actively engaged in supporting producers, raising awareness and in campaigning for changes in the rules and practices of conventional international trade." The aims of the movement are neatly summarised by the slogan of the Fairtrade Foundation - Fairtrade `Guarantees a better deal for Third World Producers'.

2.2	Fair Trade is the banner under which many organisations operate, such as Traidcraft and Cafedirect plc. Fairtrade is the `brand' name for products certified to stringent internationally recognised fair trade standards and is promoted throughout the UK by the Fairtrade Foundation. Their website provides detailed information about the retail outlets at which consumers can purchase Fairtrade products.
2.3	In September 2004, there were 422 Fairtrade certified producer groups in 49 countries selling to hundreds of registered importers, licensees and retailers in 19 countries. The range of product categories covered by Fairtrade is:

	· Beer	· Honey
	· Biscuits and cakes	· Hot chocolate
	· Cereals and bars	· Jams and spreads
	· Chocolate	· Juice
	· Chutney and preserves	· Nuts
	· Cocoa	· Spirits
	· Coffee	· Footballs
	· Cosmetics	· Sugar
	· Dried and fresh fruit	· Tea
	· Flowers	· Wine

2.4	Detailed information about Fairtrade and the standards required is provided in Appendix 2, but the general criteria are shown below:

	· All aspects to be guided by principles of mutual respect, justice and equal partnership. · Displaying transparency on information, aims and working practices. · Paying fair prices to producer groups, to reflect the true costs of production. These would cover areas such as product development, transport, environmental protection and social development. · Ensuring individual workers receive fair wages. · Ensuring favourable conditions for employees, with particular attention paid to the situation of women so as not to perpetuate historical inequalities. · Promoting high/improving product quality. · Showing a preference for products which are of particular benefit or significance to countries in the South e.g. coffee, cocoa, sugar, textiles and finished products (as opposed to raw materials). · Respecting traditional crafts and encouraging their development. · Encouraging sound environmental policies. · Developing long term relationships with producers.

2.5	To become a Fairtrade Town (or any other populated area), 5 goals must be met: · The local council must pass a resolution supporting Fairtrade, and serve Fairtrade coffee and tea at its meetings and in offices and canteens. · A range of Fairtrade products must be readily available in the area's shops and served in local cafés and catering establishments · Fairtrade products must be used by a number of local work places and community organisations · The council must attract popular support for the campaign. · A local Fairtrade steering group must be convened to ensure continued commitment to Fairtrade Town status.

	Further details on these criteria are shown in Appendix 3.

2.6	At present, Fairtrade status has been awarded to 110 local authorities of which 11 are towns and cities in the South East of England. This includes Portsmouth and Southampton (both granted on 5/3/04), but within the County Council's administrative area only Romsey (1/3/05) has gained Fairtrade status. Winchester City Council passed a resolution in favour of seeking Fairtrade status in April 2004, but as is clear from the qualifying criteria, this is not sufficient in itself to merit certification. The participation of a wide range of workplaces, shops, cafes and churches is required and this requires the impetus of active leadership. In many areas this is provided by a local Fair Trade committee established by fair trade groups and groups campaigning for `trade justice'.

2.7	The Fairtrade website also lists 240 local authorities that are working towards fair-trade status. This list includes the county councils of Lancashire, Nottinghamshire, Shropshire and Wiltshire. The only county to be awarded Fairtrade status in England so far is Somerset, which was recognised in March 2005. This effort was co-ordinated by the Somerset Fair Trade Network and it is important to note that there has been a great deal of local activity with six towns in Somerset having previously achieved Fairtrade status.

3	Policy and prices

3.1	The County Council does not have any formal policy regarding the purchase of fair-trade products. However, the current informal approach is characterised by the following actions:

	· support for the annual `Fairtrade fortnight' at both the Castle Restaurant and at the Sir Harold Hillier Gardens and Arboretum - typically this involves the display of promotional material for Fairtrade and raising awareness of the availability of these items.
	· availability of Fairtrade tea and coffee for both committee meetings and meetings within departments (on request)
	· ongoing sales of Fairtrade chocolate through the Castle Restaurant and some vending machines

	However, it must be acknowledged that the take-up of Fairtrade tea and coffee under these arrangements is very modest.

3.2	Although the Council does not have a specific policy about Fairtrade, it does have mature policy and practice in the wider field of sustainability. As part of its approach to sustainability, the County Council signed up to the Aalborg Commitments in June 2004. The fourth of these ten commitments encourages `responsible consumption and lifestyle choices' by adopting and facilitating the prudent and efficient use of resources to encourage sustainable consumption and production. Although there is freedom to set priorities locally, one of the fifty actions specifically identified includes support for eco-labelled, organic, ethical and fair trade products. There is, therefore, overlap between the motion proposed by Councillor Mrs Buckley and existing policy commitments.

3.3	The County Council is also developing the sustainability of its procurement activities in general. In the area of its food purchases, the Council's recent emphasis has been on local sourcing and support for Hampshire Fare. Good progress has been made in both areas. There has been little focus on Fairtrade and this reflects both the current policy environment and the knowledge that the use of Fairtrade products will carry financial implications.


3.4	The County Council's total purchases of coffee, tea, drinking chocolate and sugar are shown in the table below with an indication of the cost of alternative Fairtrade products:

	Current Fairtrade Difference %
	Coffee £44,300 £65,100 £20,800 47%
	Tea £41,900 £67,500 £25,600 61%
	Drinking Chocolate £7,700 £11,500 £ 3,800 49%
	Sugar £59,800 £75,500 £15,700 26%
	Total £153,700 £219,600 £65,900 43%

	It is considered likely that this gap could be reduced if a firm commitment were made to purchase Fairtrade products, but it is inevitable that a broad commitment to Fairtrade would result in significant additional costs.

3.5	A more limited commitment, in line with Fairtrade's minimum requirement to serve Fairtrade tea and coffee at meetings and in its offices, would clearly have a smaller financial impact. An initial estimate indicates that the additional cost of such a policy could be less than £10,000 if it were restricted to refreshments served to Members and to those provided at meetings held within departments at The Castle. At this level, cost is unlikely to be a barrier should the Scrutiny and Select Committee favour adoption of this policy.

4.	Alternative approaches

4.1	While the principles behind Fairtrade do attract a great deal of support, it seems clear that the fair trade movement as a whole considers that large scale improvement will require `trade justice'. This is fundamentally an economic issue linked to the global distribution of wealth, terms of trade (for example differential import duties on agricultural produce and finished products), production subsidies and the conditions imposed on financial loans to developing countries by the World Bank and the International Monetary Fund. Many campaigning groups including churches, are active on these issues and they are also the focus of the `Make Poverty History' campaign.

4.2	At the other end of the spectrum, there is a body of opinion that argues that `trade justice' or managed trade policies with price support mechanisms and quotas may sound good in principle, but will never work in practice. The argument is made that the only trade that has ever lifted countries out of poverty is free trade. Other strands of the counter argument to fair trade highlight the trade-off between support for producers at the expense of consumers and the tendency of price supports mechanisms to induce oversupply and to act as a barrier to change.

4.3	It is also the case that many of the world's leading companies are taking corporate social responsibility increasingly seriously. This argues that the `gap' in ethical standards between conventional products and Fairtrade alternatives will decrease over time. It is sometimes the case that these initiatives are dismissed by those in the Fairtrade movement as cynical exercises, but there appears to be real substance to many of the claims and a number of these projects are described in Appendix 4.

5	Summary

5.1	A great number of local authorities have obtained or are seeking recognition under the Fairtrade scheme. The County Council would, therefore, be following a well trodden path and it would seem that the cost of a basic implementation would be less than £10,000.

5.2	The principles behind Fairtrade fit with the Aalborg commitments to which the Council signed up to in 2004 to ensure it embeds sustainability throughout all its activities. It is unlikely, therefore, that any conflict would arise between existing corporate policy and the motion proposed by Councillor Mrs Buckley.

5.3	The passing of a motion by the County Council will not in itself result in recognition for Hampshire as a Fairtrade county. Although Winchester and Andover are working towards Fairtrade status, evidence from the only successful county so far, Somerset, suggests that there needs to be greater activity (and success) at a local level for a successful outcome to be achieved. This raises the question of the role that the County Council wishes to play in this movement and from which source the necessary leadership will come.

5.4	Given the close alignment with the procurement agenda, which is currently considered by the Buildings, Land and Procurement Panel (BLPP) it is suggested that issues relating to Fairtrade, particularly around purchasing be considered by BLPP as part of its procurement agenda.

5.5	Although there is widespread support for the aims of Fairtrade, it is clear that there are conflicting views about the success and desirability of such schemes. There is certainly no universal consensus that the Fairtrade movement will achieve its economic, political and social aims. On the other hand it could be argued that these matters should be left to the choice of individual customers through their purchasing decisions.

6.	Conclusion

6.1	The principles of `Fairtrade' products and the wider philosophical arguments have been reviewed in the report. On balance the County Council for a modest cost could commit to support the wider principles but leave its development and application for local groups to develop in the wider community.

6.2	The committee would therefore have to recommend to the County Council that it passes the necessary resolution in favour of Fair Trade producers, encourage their promotion and review the development of a Fairtrade network across the County.


Recommendation(s)

That:

1	The County Council supports the development of Fairtrade where applicable and agrees that the implementation of their principles be reviewed and monitored over time so that progress can be made consistent with the representations that the County Council can influence.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1 Published works

2 Documents which disclose exempt or confidential information as defined in the Act

........................

P&RSSC0605A

Appendix 1

COUNTY COUNCIL MEETING 23 February 2005

NOTICE OF MOTION - FAIRTRADE

Councillor Mrs A Buckley, seconded by Councillor A. P. Collett, proposed the following motion, notice of which had been given in accordance with Standing Order 17.

"Hampshire County Council desires to be recognised as a Council that actively supports and promotes the concept of Fairtrade, ensuring that producers from all countries get a fair price for their goods and labour.

The County Council gives its support to the concept of Fairtrade and will seek national recognition as a Fairtrade County.

The County Council will seek to purchase products displaying the Fairtrade Mark which guarantees producers are fairly paid and work in reasonable conditions.

The County Council shall encourage the use of products that carry the Fairtrade Mark amongst local business, commercial and other organisations.

The County Council will endeavour to ensure that where refreshments are provided at meetings held in county facilities everybody attending is offered a choice of Fairtrade products (such as tea, coffee, fruit and fruit juice or biscuits).

The County Council affirms that it will work with suppliers, contractors and consultants to raise awareness of ethical considerations and social responsibility in county purchasing decisions.

The County Council will promote awareness of Fairtrade on a regular basis by making publicity and educational material available to local people concerning the opportunities that Fairtrade provides to foster sustainable development.

The County Council resolves that a Cabinet Member shall be assigned responsibility to ensure a continued and widening commitment to a Fairtrade Hampshire and to provide periodic reports on the County's progress towards meeting this objective."

Appendix 2

FAIRTRADE - BACKGROUND INFORMATION

1. Background

Fair trade labelling was created in the Netherlands in the 1980s and the first Fairtrade consumer guarantee mark was used in 1986 on coffee sourced from Mexico. Today, there are 20 national organisations, including the UK's Fairtrade Foundation, that run the international standard setting and monitoring body, Fairtrade Labelling Organisations International (FLO). Producers registered with FLO receive a minimum price that covers the cost of production plus an extra premium that is invested in the local community. This international body sets standards and ensures the regular auditing of producers and commercial traders.

Since 1998, co-operation between the 4 main groups involved in fairtrade, the Fairtrade Labelling Organisation (FLO), International Federation of Alternative Trade (IFAT), Network of European World Shops (NEWS!) and European Fair Trade Association (EFTA), has become increasingly regular; working together they are known by the acronym, F I N E.

2. Aims

The aims of Fair Trade as set out by FINE are as follows:

1. To improve the livelihoods and well-being of producers by improving market access, strengthening producer organisations, paying a better price and providing continuity in the trading relationship.

2. To promote development opportunities for disadvantaged producers, especially women and indigenous people and to protect children from exploitation in the production process.

3. To raise awareness among consumers of the negative effects on producers of international trade so that they exercise their purchasing power positively.

4. To set an example of partnership in trade through dialogue, transparency and respect.

5. To campaign for changes in the rules and practice of conventional international trade.

6. To protect human rights by providing social justice, sound environmental practices and economic security.

3. Fairtrade Standards

3.1 Producer Standards

There are two sets of producer standards, one for small farmers and one for workers on plantations and in factories. The FLO organises regular audits of producers and traders to ensure that the Fairtrade standards are being adhered to. These checks are carried out by a network of over 40 trained inspectors, based in the producer regions who verify, not only that the standards are being met, but also that the benefits of Fairtrade are being used for social, environmental or economic development, as democratically decided by each group. The first set applies to smallholders organised in cooperatives or other organisations with a democratic, participative structure, while the second set applies to organised workers. Unless otherwise stated, the standards listed on these pages apply to both.

As Fairtrade is also about development, the official standards also distinguish between minimum requirements, which producers must meet to be certified Fairtrade, and progress requirements that encourage producer organisations to continuously develop.

1. Social Development

Fairtrade adds development potential and should make a difference in development for both producers and workers:

· The producer organisation must demonstrate that Fairtrade revenues will promote social and economic development for small farmers

· The benefits of Fairtrade must be shared based on a democratic decision taken by the beneficiaries

· Organisations must not discriminate on race, sex, religion etc.

· Workers involved with hazardous materials, such as pesticides, must be adequately trained and supplied with protective clothing

Small Producers

· The majority of members must be small producers, i.e. predominately dependent on the labour of themselves and their families, not hired labour.

· Every Fairtrade product produced must have at least 50% of its content produced by small producers

Hired Labour

· After two years of certification workers are to be employed under legally binding employment contracts.

2. Economic Development

· Producers must have access to the means necessary for bringing a quality product to market

· The Fairtrade premium must be distributed in a way which is decided on democratically. Administration should be transparent for both beneficiaries and the Fairtrade Labelling Organisation (FLO). In the case of hired workers the distribution would be decided by a joint body consisting of both workers and management

3. Environmental Development

· Producers are expected to safeguard the natural environment and make environment protection part of farm management

· Producers will implement a system of Integrated Crop Management (ICM) with the aim of establishing a balance between environment protection and business results

· ICM aims to minimise the use of fertilizers and pesticides by gradually replacing them with organic fertilizers and biological disease control. FLO also encourages producers to work towards organic certification

4. Standards on Labour Conditions

FLO regards the International Labour Organization Conventions as the authority on working conditions and expects all registered producers to meet the requirements as far as possible.

· Forced or bonded labour must not occur

· Children are not to be employed below the age of 15, and may only work when their education is not jeopardized. They must not undertake tasks which are hazardous for them due to their age

· Employment is not conditioned on the work of the spouse

· The organisation must recognise the rights of all employees to join an independent trade union and must not discriminate against workers on the basis of union membership or activities

· Salaries must be in line with, or exceeding, regional average and official minimum wage. Payments must be made regularly, in legal tender and be properly documented

· Adequate sick leave, working and overtime regulations must be put in place.

· Workplaces, machinery and equipment must be safe and without risk to health

3.2 Standards for Traders

Standards set out by the FLO stipulate that traders must:

· Pay a price to producers that covers the cost of sustainable production and living

· Pay a premium that producers can invest in development

· Make partial advance payments when requested by the producer

· Sign contracts that allow for long term planning and sustainable production practices

3.3 Fairtrade Certification

To achieve Fairtrade certification, the producer must contact the Fairtrade Labeling Organisation (FLO) and if the FLO considers that there is a `Fairtrade market potential' for this product, it will send a standard questionnaire to the producer to find out more about the organisation. If this evaluation is positive, FLO will perform an inspection visit. A final decision will then be made by the independent Certification Committee and a contract is made between the producer and the FLO.

In December 2003, the FLO introduced a certification fee for `Initial Fairtrade Certification'. The price includes the evaluation of the initial questionnaire, the initial inspection and the end decision. The application is assessed according to the FLO standards by FLO-Cert Ltd, an independent certification group. Payment does not, therefore, automatically guarantee certification. The fees for the initial Fairtrade Certification vary according to the number of farmers or workers registered with the producer:


	Plantations	Cooperatives		Cost for initial certification (Euro)
Number of	· workers	1st grade · members	2nd grade · groups	Initial inspection
Cat. A	< 500	< 500		2,000
Cat. B	> 500	> 500	< 10	2,800
Cat. C	> 1,000		10-30	3,600
Cat. D			31-100	4,400
Cat. E			> 100	5,200

Example: A cooperative with less than 450 members will pay 2,000 Euros.

FLO Certificates are only valid for a limited time period, usually one year. Renewal involves further fees as follows:

· Basic Fee - each certified producer pays an annual fee of 500 Euros per year.

· Value Fee - each certified producer pays 0.45% of the value of product sold under Fairtrade conditions in the previous calendar year.

3.4 Prices

Products sold to the Fairtrade market attract the minimum prices established by the FLO. Published case studies indicate that in 2003 the Fairtrade price for coffee was US $1.26 per pound against an average open market price of US $0.75. For a group of co-operatives in Ethiopia employing 8,963 worker, sales at the Fairtrade price increased the average income of each worker by £144 and created a development fund of around £70,000. Appendix 3

FIVE GOALS TO BECOME A FAIRTRADE TOWN, CITY OR DISTRICT

The Fairtrade Foundation requires a town or district to achieve the following five goals in order to become Fairtrade accredited. When they have been realised, a signed and dated certificate will be presented by the Fairtrade Foundation.

The goals are shown in bold. Optional extras recommended, but not required, are in italics.

1. Local council passes a resolution supporting Fairtrade and agrees to

serve Fairtrade tea and coffee at its meetings and in its offices and canteens.

· Local council commits itself to promoting awareness of Fairtrade to its constituency on a regular basis, through its free publication (if it has one) and other outlets

· Local council allocates Fairtrade responsibilities to a member of staff or committee (possibly its Environmental or Agenda 21 officer, working in partnership with local Fairtrade steering group - see goal 3) to ensure continued commitment to its Fairtrade status

· Street signs are erected declaring it as a Fairtrade Town/Area

2. A range of (at least two) Fairtrade products is readily available in the area's shops and local cafés/catering establishments.

It should be easy for local people to find Fairtrade products as they do their everyday shopping. Targets are:

o Retail outlets: Population of <10,000 - 1 retail outlet per 2,500

Population of <200,000 - 1 retail outlet per 5,000

Population of <500,000 - 1 retail outlet per 10,000

o Catering Outlets Population of <10,000 - 1 catering outlet per 5,000

Population of <200,000 - 1 catering outlet per 10,000

Population of <500,000 - 1 catering outlet per 200,000

· These should display literature or placards advertising the fact that they serve or sell FAIRTRADE Mark products

· A local display directory could be produced advising people where they can buy or find Fairtrade products - both on paper and online

3. Fairtrade products are used by a number of local work places and community organisations

· Aim to include a flagship employer (other than the council)

· Venues should display stickers, posters or a certificate advising users that they use Fairtrade and/or support the Fairtrade campaign

· Educational campaigns are organised in these places to deepen peoples' understanding of the issues and deepen their commitment to Fairtrade

4. Attract media coverage and popular support for the campaign.

· For the press, the story can be revived as each goal is achieved, organising a big splash for the Fairtrade endorsement ceremony, and developing a strategy to keep it in the news long after. This will also enable local businesses and organisations to benefit from their involvement

5. A local Fairtrade steering group is convened to ensure continued commitment to its Fairtrade town/area status.

· This should ideally include a council representative, campaigners and people representing the area's schools, churches and businesses. The group is responsible for an annual assessment to monitor whether the area is continuing to meet the five goals. The group organises special events for Fairtrade Fortnight in March each year

· An educational event or competition is organised to raise awareness of trade issues and Fairtrade amongst young people

Authorities Already Fairtrade Accredited

Counties:
*· Somerset*	· Flintshire
· Denbighshire

Cities:
· Aberdeen	· Liverpool
· Brighton & Hove	· Manchester
· Bristol	· Newcastle upon Tyne
· Cambridge	· Norwich
· Cardiff	· Nottingham
· Carlisle	· Oxford
· Chester	· Plymouth
· Coventry	· Portsmouth
· Derby	· Preston
· Dundee	· Salford
· Edinburgh	· Southampton
· Exeter	· Stirling
· Hereford	· Swansea
· Lancaster	· Wells
· Leeds	· Wolverhampton
· Leicester	· York

Towns:
· Aberfeldy, Perthshire	· Lewes
· Aberystwyth, Ceredigion	· Linlithgow
· Ammanford, Carmarthenshire	· Lowestoft
· Ashbourne	· Ludlow
· Bolton	· Malvern
· Brampton, Derbyshire	· Matlock & District
· Bridgenorth, Shropshire	· Millon - Cumbria
· Burntisland, Fife	*· Minehead*
*· Castle Cary, Somerset*	· Monmouth
· Chelmsford	· Morpeth
· Doncaster	· Nailsworth
· Dorking	· Paisley
· Dornoch, Sutherland	· Reading
· Faringdon	· Romsey
*· Frome*	· Stafford
· Garstang, Lancashire	· Strathaven
*· Glastonbury*	· Stroud
· Guisborough	*· Taunton*
· Hamilton, South Lanarkshire	· Thornbury, Gloucs
· Kendal	*· Wiveliscombe, Somerset*
· Keswick	· Windemere & Bowness
· Keynsham

Boroughs:
· London	· Milton Keynes
_ Camden	· Pendle
_ Croydon	· Stockport
_ Kingston
_ Lambeth
_ Lewisham

Districts:
*· Bath and Nth East Somerset*	· Hebden Bridge
· Dyfi Valley, Powys	· Wrexham

Villages:
· Bradford on Avon, Wiltshire	· Fairlie, Ayrshire
· Cherry Burton, East Yorkshire	· Haworth
· Criccieth, Gwynedd

Appendix 4

ALTERNATIVES TO FAIRTRADE: FOUR EXAMPLES

1. Sustainable Agriculture and the SAI Platform

The Sustainable Agriculture Initiative (SAI) Platform is a group created by the food industry to support the development of sustainable agriculture. The SAI Platform aims to address the social and environmental problems faced by rural communities as these affect both agricultural productivity and consumer confidence

Members of SAI Platform include some of the biggest producers behind leading brands:

· Danone

· Nestle

· Unilever

· Kraft

· McDonalds

· Findus

· McCain

· Tchibo

· Sara Lee

· VOLCAFE

· Corsorzio Interregionale Ortofrutticoli

· Friesland Foods

· Neumann Kaffe Gruppe

The SAI Platform does not lay down any specific criteria for the farmers involved to adhere to. It encourages them to work towards sustainable practices within a free market. SAI Platform aims are as follows:

· Society

o Food quality and safety

o Farmers' skills

o Rural, social and economic conditions

· Environment

o Soil

o Air

o Energy

o Biodiversity

· Economy

o Food supply

o Farmers' income

o Sustainable food products

· Crop Health and Animal Welfare

2. Ethical Tea Partnership (ETP)

In 1997 a number of UK tea packers set up the to validate conditions on estates and factories by credible, independent monitoring. They state that, whilst systems like `Fairtrade' work well for small producers and cooperatives, they are not easy to control when a large number of producers are involved and when crops are sold through auctions, which is the position for large volume buyers.

The ETP is currently involved in seven tea producing countries: Kenya, Malawi, Sri Lanka, India, Indonesia, Tanzania and Zimbabwe. These countries have been chosen because they produce 65% of worldwide tea exports and nearly 80% of UK imports - this includes over 500 estates.

It is claimed by the ETP that they form their ideals around four "core beliefs":

· All companies involved have a shared responsibility for the social and ethical conditions involved in sourcing the tea they buy

· Activities in this area should be non-competitive and apolitical

· Whilst respecting the cultural and legal differences in tea producing countries, companies should aim towards international standards

· Seeking to work in partnership with tea producers

Independently conducted audits are carried out on all the estates involved by a team from Price Waterhouse Coopers, who work with the partnership to organise, carry out and report on monitoring visits in the tea producing countries. This team currently comprises around 55 people globally. If an estate does not fulfil the criteria laid out by the ETP then the member companies will cease to trade with them until they are compliant. The main focus of the audits centres around the following five issues:

· Terms and Conditions of Employment

· Health and Safety

· Education

· Housing

· Basic Rights

Membership of the Ethical Tea Partnership is open to European and North American, and shortly, Australasian tea packers. These currently include:

· The Tetley Group

· Accord Services Ltd

· Sara Lee

· R Twining & Company Ltd

· Unilever (Europe)

3. Kraft and the Rainforest Alliance

Kraft has chosen to work with the Rainforest Alliance on certification schemes in Latin America and is promoting sustainability on the best long-term way to help coffee farmers. World production of coffee is around 6.6 million tonnes and Kraft buys over 450,000 tonnes a year, including around 6000 tonnes of Rainforest Alliance (RA) certified coffee. This is around one third of the total worldwide RA certified supply of coffee of circa 20,000 tonnes. Worldwide sales of Fairtrade coffee were 23,600 tonnes in 2003, according to Fair Trade Labelling Organisation).

The Rainforest Alliance and Kraft partnership offers farmers assistance to produce coffee efficiently with improved social and environmental conditions.

During certification, farms receive advice on improved farm management techniques that help them to farm more efficiently, as well as to protect workers' rights and conserve nature. Better quality and the certification seal of approval help farmers command a higher price in the market and improving the methods reduces costs and improves sustainability.

The Rainforest Alliance monitors the prices paid for certified coffee and reports that farmers in this program are earning more than the average cost of production. Best practice dictates that farms must be economically viable before the RA will certify them. Kraft pay a premium of US$0.36-0.54 per pound to encourage farmers to grow the best grade coffee. Certification costs are paid by farmers to support the Rainforest Alliance programme and the network of NGOs in coffee producing countries that provide advice and support to farmers and conduct farm assessments. No fees are paid to Kraft.

Public relations material available from Kraft points to substantial support for projects in many individual countries, including Peru, Ethiopia and Colombia.

4. Individual Company Initiatives

The Tetley Group

As well as being closely involved with the Ethical Tea Partnership, the Tetley Group also works in partnership with charitable organisations around the world. Corporate social responsibility material for the company identifies projects in Malawi, Australia, Poland and the UK.

Sara Lee

The Sara Lee Foundation is the philanthropic arm of the Sara Lee Corporation. The policy of the company is to give non-profit organisations at least 2% of its US pre-tax income annually through cash and product donations. In 2004, total corporate-wide cash and product donations totalled more than US$35million; the Sara Lee Foundation was responsible for more than US$5.5million of that total.

Unilever

Through corporate social investment initiatives, donations and the activities of employees, Unilever contributes to thousands of community initiatives around the world. In 2003, Unilever companies committed 66 million Euros to community and environment initiatives, equivalent to 1.5% of pre-tax profits. Around 9,000 charities and nonprofit making groups benefitted.

As well as being a founder member of the SAI Platform and supporting sustainable agriculture, Unilever also has initiatives for issues such as:

· Acidification	· GMOs
· Animal Testing	· HIV / AIDs
· Biodiversity	· Ozone Depletion
· Chemicals Management	· Packaging
· Climate Change	· Photochemical Smog
· Eco-labelling	· Transport
· Eutrophication	· Waste & Efficiency

Tate & Lyle

The EU sugar regime was designed in 1998, in order to promote a more stable sugar market. Tate & Lyle is the principle bridge into the EU market for raw cane sugar - 1.3 million tons each year. As a part of the scheme, Tate & Lyle receive government subsidies which enable them to pay more than three times the market price for the raw sugar that comes from these countries. This adds up to around £400 million more than the market price.