Fairtrade producer certification and auditing

The certification process begins with a written application to FLO-CERT from the producer organisation, often with the support of a trading partner such as the exporting company. If the application is accepted, the organisation will be physically inspected against Fairtrade standards by a regionally-based FLO-CERT inspector.

The inspector’s report is then considered by the FLO-CERT Certification Committee which takes the final decision on whether or not to certify. Producers are issued with a certificate valid until an agreed date (usually for one year), and this certificate can be renewed following re-inspection.

Fairtrade is intended to help producer organisations to continually develop and improve their practices for the benefit of their members/workers, their families and the wider community. For this reason, where producers have difficulties in continuing to meet Fairtrade standards, they are provided with the support and time to enable them to do so rather than being automatically or immediately excluded from the system. Producer groups that fail to meet minimum Fairtrade standards are first informed of the reasons for their non-compliance and given actions to rectify the situation within a specified timeframe. If the group fails to take the required corrective actions within the prescribed period, then the group is suspended from trading under Fairtrade terms for a fixed period during which they are again requested to undertake the corrective actions. If they still fail to take the necessary actions to become compliant, the producer group is ultimately decertified and barred from trading under Fairtrade terms.

In the early years of FLO and Fairtrade certification, producers were not charged for the certification of their farms; rather, this cost was subsidized by industry fees. However, because of the overwhelming number of producer applications received and the growing cost associated with these certifications, FLO-CERT found it necessary to implement a system of producer fees in order to be able to address the backlog of applications, recruit and train more inspectors, and to re-inspect regularly the increasing number of certified farms. The producer representatives on the FLO board unanimously approved the certification fee model..

The FLO-CERT producer certification fee system was therefore introduced in 2004 to cover the costs of inspection and comply with the ISO Standards for Certification Bodies (ISO 65), under which certification fees must be paid by the group seeking certification. This fee system mirrors the organic certification system and guarantees the independence of the process.

Since implementing producer fees, FLO-CERT has been able to improve the quality and timeliness of its producer inspection and certification services. Many producer groups have found that investing in Fairtrade Certification affords them access to higher-priced Fairtrade markets and is a worthwhile business move.

Revised in 2007, there are different certification fee structures for small farmer organizations and hired labour set-ups. The types of fees are:
(i) application fees
(ii) initial certification fees
(iii) renewal certification fees.

The actual fee charged to a group will depend upon the amount of work involved in preparing, inspecting and evaluating the inspection report. This varies according to the size of the organization, the number of products which the organization wishes to sell under Fairtrade terms and whether or not the group has any processing facilities. Further details are available on the FLO website.

There are some instances where producer groups may find the costs of Fairtrade certification difficult to meet and so a Producer Certification Fund  has been established. Producer organisations can apply to this Fund for a grant covering up to 75% of the certification fee. In addition many groups also receive assistance in paying their certification fees from commercial partners (e.g. buyers, importers) or from NGO or other partners.

Fairtrade-certified ingredients can be bought only from independently audited and certified Fairtrade farmers. They receive at least the Fairtrade minimum price and/or (as relevant in accordance with the standards), a premium, which is used to invest in community development.

Where possible, the Fairtrade system seeks to ensure full physical traceability on certified products. However, ingredients like cocoa, tea, juice and sugar can come from many different farms and countries and often have to be mixed together, Fairtrade with non-Fairtrade, for transport and production. Unless volumes are very small or extremely large, it is often impractical or too expensive to keep them completely separate.

To make sure that Fairtrade-certified farmers receive the correct price and premiums for all relevant ingredients, the amounts used in products carrying the Mark are carefully monitored by the Fairtrade system. This ensures that the volume of finished products that carry the Mark directly relates to the equivalent volume of Fairtrade-certified ingredients traders have bought. The farmers receive full Fairtrade benefits for every product sold carrying the FAIRTRADE Mark.

More information about the Fairtrade Foundation's product certification and traceability requirements can be found here.