What do these two different routes – Fairtrade and Rainforest Alliance – say about the companies’ respective strategies?

Bama Athreya and Tim Newman:

As ILRF’s press release in response to Mars’ announcement indicates, Fair Trade is a stronger certification system for ensuring that worker rights are protected and that the general socioeconomic situation is improving for cocoa farmers. It is a more costly and dedicated program for companies to pursue than Rainforest Alliance certification. So, it is clear that Cadbury is taking a stronger step toward sustainability than Mars at this point.

It is also important to note that Cadbury claims that it does not source its cocoa from Cote d’Ivoire and it has had a long history of working in Ghana. It appears that Cadbury’s work in Ghana has been building toward Fair Trade for years. Other companies, like Mars have not been moving in this direction and source much more cocoa from Cote d’Ivoire, which has a less developed Fair Trade cooperative movement. As a result of Cadbury’s sourcing history, they have been working for years in a way that made them well placed to commit to Fair Trade.

Having been campaigning against other major chocolate companies like Mars, Hershey and Nestlé since 2001, we feel it is much past due for all of these companies to immediately make a commitment to Fair Trade certified cocoa and to work with farmers in Cote d’Ivoire and throughout West Africa to support the development of Fair Trade cooperatives.

Michael Niemann:

The choice of strategies provides quite a bit of insight into the level of commitment each company is willing to undertake.

Rainforest Alliance (RA) certification imposes the least amount of requirements on the companies that plan to use its seal. It is not the product that is certified, it is the farming method. According to my conversation last year with a senior manager for the RA sustainable agriculture program, the onus is on the farmer to change farming practices. The use of the seal is free to corporations and there are no additional charges except possibly for chain of custody verification. The farmer, on the other hand, is responsible for obtaining certification and has to bear the cost, unless the exporter/manufacturer agrees to pick up the tab. The press release did not mention anything about Mars intending to do do.

Fairtrade, on the other hand, creates a broader context of obligations that are shared by the farmer and the corporations that obtain the Fairtrade seal. The farmers commit to social and environmental practices, and the companies, in turn commit, to fair prices, social premium and an ongoing relationship with the farmer organizations.

Mars, a privately held company, has long been reluctant to provide any information about its business practices beyond what is required by law. Its secrecy is well documented and it is no wonder that it chose the third party certification scheme that requires the least in terms of financial and other commitments. Rainforest Alliance certification is sought only for 100,000 tons, the rest is to be certified by UTZ, whose standards are essentially the same.

Cadbury, on the other hand, chose Fairtrade certification for only one of its products in the UK and Ireland. The impact will be felt by cocoa farmers in Ghana and elsewhere immediately in the form of additional social premium payments. The minimum price is not an issue at the moment [because the world price of cocoa is higher than the Fairtrade minimum price]. However, the company has yet to commit to expanding certification to its other products. While I believe that Fairtrade certification holds more long-term promise for the farmers, so far Cadbury has only adopted it in a limited way.

These difference in strategies can probably be traced back to the companies' respective history. Mars has always rejected public scrutiny of its business practices. It's own website explains its status as a privately held company as a matter of freedom. Rainforest Alliance certification fits into that attitude.

It would be tempting to invoke Cadbury's Quaker history to explain Cadbury's decision. But, as the Nevinson reports of a century ago showed, that commitment was only skin deep. More importantly, though, Cadbury has its main market in the UK and fairtrade has much better recognition and support there than in the US. Local social preferences may well have forced its hand.

What does this mean for the Global Protocol, the agreement signed in 2001 by the cocoa and chocolate industries to eliminate child slavery?

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