“Fair” Trade: Thirty-Seven Years On – Comments & Responses
OVERVIEW: In Episode 221 of #PodSaveChocolate I cast a critical eye on “Fair” trade in cocoa. In this post I respond to some comments made during the live episode.
The Comments
- WFTO Verification that launched the WFTO Guaranteed Fair Trade Label and independently audits the whole business against the 10 WFTO (formerly IFAT).
- Working with a Fairtrade Certified Cooperative - a Gold Standard as the WFTO member is the watchdog in the supply chain.
- Consumers International conducted a 2 year survey than an ISO Standard is not needed BECAUSE Fairtrade International Certification and IFAT (now WFTO) have already got the criteria set.
- Totally independent as Member organisation. one of the four networks that developed FINE Criteria in 2001.
- It is totally audited independently.
In the Heat of the Moment &
Examining the Claims
In the context of a comment in a live stream, I know that comments are sometimes cursory, fragmentary. It’s hard to write something more than a sentence long and stay in touch with what the host(s) and/or guest(s) are saying.
As the host, I had a run of show I was following (not a script I was reading) and while I am always happy to jump back and forth between the run of show and comments, I am reading and responding to the comments, as best I can, in real time.
One thing I try to avoid, however, when doing this, is coming off as defensive. While I was familiar with the WFTO, related terms were not retrievable in the moment. Plus, at least one of the comments (including ones not copied over) represent personal experiences which I have no mechanism to evaluate. That, and the fact that the commenter was anonymous to me in the moment, meant that it made sense to have time to unpack, reflect, and provide context – not just for me but for others who are interested (or invested in) the topic.
Since the episode, I have learned that the commenter was the director of a Fair Trade organization for over 18 years and built a business on WFTO's infrastructure: a WFTO Guaranteed System member, audited against the 10 WFTO Fair Trade Principles, and entitled to display the Guaranteed Fair Trade (“GFT”) label. Past writing shows the positioning of the GFT label as a differentiator against competitors. That doesn’t mean the comments should be weighted less, or that they be treated as anything other than sincere. Sincerity and proximity-driven framing (proximity is a source of correct, specific information an outsider wouldn’t necessarily have access to) aren’t in tension; they usually travel together.
What often happens to many people embedded that closely, for that long, in any institution’s messaging ecosystem is that the organization’s internal vocabulary becomes their default vocabulary, and statements that function as marketing to an outside audience read, from inside, as plain descriptions of how their world works.
This is not unique to this commenter and this organization. It’s worth keeping in mind when examining who is making what representations and comparing them against official statements.
What the Comments Do Not Address
None of the comments address the concluding point I brought up in the live stream:
Price floors without supply management make [“fair” trade’s] problems worse. That's not a criticism of fair trade in isolation: it’s an observation that criticizes the whole “raise the price” strategy across every mechanism (LID, FMP, LIRP) simultaneously.
The three mechanisms (LID, FMP, LIRP) do not address demand, and so do not reflect the dynamics of the commodity that is cocoa. For that reason, they can never (in my opinion), because of this structural defect, be more than a very small part of a solutions set that improves the lives and livelihoods of cocoa-farming families around the world.
The Comments
IFAT (International Fair Trade Association, founded 1989) rebranded as WFTO in 2009. The Guaranteed Fair Trade product label and 10 Principles are exactly as WFTO describes them on their own site.
Formed in 1998, FINE is the acronym formed from its founding members’s names – FLO (Fairtrade Labeling Organization/Fairtrade International), IFAT (now WFTO), NEWS! (the Network of European Worldshops, which ceased to exist in its original form in October 2008), and EFTA (the European Fair Trade Association).
Self Check: I could not reach the website at fairtrade.eu for technical reasons so I substituted the Wikipedia entry (for FLO) in its place.
In December 2001, those four networks jointly agreed on a common Fair Trade definition and set of principles. Those are more commonly referred to as “the FINE definition of Fair Trade” than as “the FINE Criteria.”
If this means that WFTO is a separate, independent organization from Fairtrade International (which is how I construe it), and not a subsidiary or licensee, that’s true. They’re two distinct bodies with different histories and different verification models.
From what I read, this overstates the situation. How much of an overstatement it is is a matter of interpretation.
WFTO’s Guarantee System Handbook describes the monitoring cycle as having three components working together
- self-assessment;
- a monitoring audit; and
- a peer visit
Peer visits are explicitly conducted by “peers,” who can be trading partners or members from regional WFTO networks, not independent third-parties. So there is an “independent-audit” component, but the system as a whole is self-assessment + peer review + audit, not audit alone.
Self Check: The WFTO’s Guarantee System Manager Handbook (Version 4.2, updated August 2019, the version linked from WFTO’s site) requires that every nominated peer be evaluated against the following criterion, “the peer does not have undue commercial influence or strong conflicts of interest that could compromise his/her objectivity.” So a trading partner can be a peer reviewer, but WFTO does run a conflict check before approving them.
The Monitoring audit, the component that IS done by external auditors, isn’t independent of WFTO itself. Auditors are trained, qualified, and pooled by WFTO. WFTO proposes which auditor a member gets, and the member prepays the auditor directly “to ensure impartiality.” That’s independence from the specific member being audited, not independence from the standard-setter.
This is where I will nitpick the “totally independently audited” claim. Both the audited company and the auditor operate within the same overarching entity and framework. That interdependence should not be dismissed without being raised.
The Handbook states, in Chapter 2, that “the aim is that the implementation of the Guarantee System [...] will be subject to an independent third-party audit,” phrased as a future goal, not current practice. And the glossary’s “Certifier audits” entry says system-wide external certification will happen “once the Guarantee System has undergone a development period.” As of this 2019 document, WFTO’s own paperwork treats full third-party certification of the whole system as aspirational, not yet implemented.
Self Check: The 2019 Handbook is the most recent one linked to on the WFTO website, and multiple sources reference this as the most recent version. This future-tense framing of the independent third-party audit may be out of date.
Upon taking a closer look, this appear promotional framing, not a factual claim that can be verified or falsified. I found a WFTO LinkedIn post using nearly identical phrasing (“ONLY two Global Systems which independently audit a Product and a Business … together = a Gold Standard”).
The commenter may have been quoting WFTO’s marketing copy, or possibly quoting the LinkedIn post. Either way, the language appears to be WFTO’s self-description, not independent verification of WFTO’s rigor.
I spent more time looking for corroboration for this and could not find a primary source; no Consumers International report, survey, or position paper matching this description.
This doesn't mean it’s not a position Consumers International (“CI”) held (or holds). CI has been active in fair trade / ethical labeling discussions since the 1990s and I discovered that this kind of “no need to duplicate FLO/IFAT criteria in ISO form” argument is a plausible historical position for them to have taken during the ISO 65/standards debates of that era.
What I can’t confirm is the fact of an official survey, its length, or its conclusion from anything I could find online. So right now it’s an unsourced claim which remains to be fact-checked.
That’s Not the Whole Story …
The “no ISO standard needed, FLO/IFAT criteria already cover it” turns out to be moot because ISO went and built the standard anyway. ISO 34101, published in 2019, is exactly the kind of formal, internationally-recognized standard that IFAT/WFTO said was unnecessary.
What happened next: Côte d'Ivoire and Ghana’s regulators concluded that ISO 34101 still didn't fully address producing-country concerns, so they built (through ARSO) ARS 1000 on top of it. The critical analysis is blunt: “It is not clear how a new certification standard (ISO 34101) will fix the problems of previous ones … a new or one-standard model will not fix these [structural] problems.”
FLO/IFAT criteria (claimed sufficient, 1997–2001) → ISO 34101 (built anyway because it wasn't, 2019) → ARS 1000 (built on top because ISO 34101 still wasn't, 2021+).
At each step, a new authoritative standard was written, and at each step the actual failure mode – weak buyer promotion, selective farmer adoption, no independent enforcement, industry-controlled governance – went untouched (if not unquestioned).
Clay Gordon
I touched on some aspects of this in this episode.
Make Whose FINE?
FINE is not: a certifying body itself nor is it a detailed standards document.
FINE is an informal association of four main fair trade networks.
In December 2001, they agreed on a common definition of fair trade, to serve as the basis for their individual work. This is the document sometimes loosely called “the FINE definition” or, less commonly, “the FINE Criteria.”
The key text of the definition:
“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.”
Alongside that definition, FINE also agreed on fair trade’s “strategic intent”; three commitments:
- working deliberately with marginalized producers;
- empowering them as stakeholders in their own organizations; and
- campaigning for changes to conventional trade rules.
FINE has no legal structure, no staff, no enforcement power, and no unified certification scheme. The basic principles FINE agreed on are meant to underpin the individual criteria/standards each member network uses for its own monitoring.
FLO built Fairtrade certification on top of that definition, IFAT/WFTO built its Guarantee System on top of it, and so on. FINE produced a shared definition and set of principles; any enforceable criteria live separately inside each of the four member organizations' own standards.
10 Principles, 17 SDGs
The commenter mentioned 10 WFTO principles, so I went looking for them.
They reminded me a lot of the 17 UN SDGs, so I asked an LLM to tease out the overlaps:
| WFTO Principle | Direct SDG connection |
|---|---|
| 1. Creating Opportunities for Economically Marginalised Producers | SDG 1 (No Poverty) — the principle's own language is "move from income insecurity and poverty to economic self-sufficiency," which is SDG 1's core target almost verbatim. Secondary: SDG 8 (Decent Work and Economic Growth). |
| 2. Transparency and Accountability | SDG 16 (Peace, Justice and Strong Institutions) — this maps to Target 16.6 specifically: "develop effective, accountable and transparent institutions." |
| 3. Fair Trading Practices | SDG 17 (Partnerships for the Goals) — Targets 17.10–17.11 call for a "universal, rules-based, open, non-discriminatory and equitable multilateral trading system" and increased developing-country export share. Secondary: SDG 12 (Responsible Consumption and Production). |
| 4. Fair Payment (Fair Prices, Fair Wages, Living Wages) | SDG 8 (Decent Work and Economic Growth) — Target 8.5: "achieve full and productive employment and decent work for all... and equal pay for work of equal value." Secondary: SDG 1, since the living-wage definition is essentially a poverty-line calculation. |
| 5. Ensuring no Child Labour and Forced Labour | SDG 8, Target 8.7 — this is the single tightest match in the whole list. Target 8.7 reads: "eradicate forced labour, end modern slavery and human trafficking... and secure the prohibition and elimination of the worst forms of child labour." That's close to a word-for-word restatement of the principle. |
| 6. Non-Discrimination, Gender Equity, Women's Economic Empowerment, Freedom of Association | SDG 5 (Gender Equality) — direct match on women's economic empowerment and leadership access. Secondary: SDG 10 (Reduced Inequalities), which covers the broader non-discrimination language (race, caste, disability, etc.) that SDG 5 doesn't reach. |
| 7. Ensuring Good Working Conditions | SDG 8, Target 8.8 — "protect labour rights and promote safe and secure working environments for all workers." Secondary: SDG 3 (Good Health and Well-being), via the health-and-safety language. |
| 8. Providing Capacity Building | SDG 4 (Quality Education), Target 4.4 — "substantially increase the number of youth and adults who have relevant skills... for employment, decent jobs and entrepreneurship." Secondary: SDG 17, Target 17.9, which is capacity-building aimed specifically at developing countries. |
| 9. Promoting Fair Trade | SDG 12, Target 12.8 — "ensure that people everywhere have the relevant information and awareness for sustainable development." Advocacy/awareness-raising is the operative overlap. |
| 10. Climate Action and Protection of the Environment | SDG 13 (Climate Action) — explicit match on building climate resilience and reducing emissions. Secondary: SDG 15 (Life on Land), since the principle's own text calls out conserving producer territories and protecting biodiversity, which is squarely SDG 15's territory, not SDG 13's. |
Seven of the SDGs have no real anchor anywhere in the 10 principles: 2 (Zero Hunger), 3 (Good Health, beyond the workplace-safety sliver in Principle 7), 6 (Clean Water and Sanitation; water only appears as one line item inside the living-wage definition), 7 (Affordable and Clean Energy), 9 (Industry, Innovation and Infrastructure), 11 (Sustainable Cities and Communities), and 14 (Life Below Water).
That's not a criticism of WFTO’s 10-principle framework, which was built around trade relationships and not sustainability. But it’s worth mentioning because WFTO claims the principles “deeply [emphasis added] align with the SDGs” as a holistic set.
I think it’s not unfair to point out that aligning with 10 of 17, and several only partially may not match everyone’s definition of deeply aligned.
Episode Hashtags
#cocoa #cacao #cacau
#chocolate #chocolat
#PodSaveChoc #PSC
#LaVidaCocoa #TheChocolateLife
#PodSaveChocolate and #TheChocolateLifeLIVE Archives
To read an archived post and find the links to watch archived episodes, click on one of the bookmark cards below.
Clay Gordon
Episodes 201-300 (links to older PSC archives are in the top nav).
Clay Gordon