MAKING THE DIFFERENCE

MAKING THE DIFFERENCE A new global strategy for Fairtrade Fairtrade Labelling’s Strategic Review (2007/2008) FTL Strategic Review Summary, March 2009 Page 1 of 17 pages CONTENTS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Introduction by Barbara Fiorito, Chair of FLO, during the period of the strategic review The Plan At A Glance Revalidating Our Beliefs – Fairtrade’s Mission, Vision & Values The Scope of Fairtrade Our Ambitions for Fairtrade Changing the way we work What these changes mean for our stakeholders Ideas Into Action: Our Programme For Change Next Steps in the Strategic Review Looking Back: Context & Process of our Strategic Review: Acknowledgement & Thanks 3 4 5 6 8 10 14 15 16 16 17 FTL Strategic Review Summary, March 2009 Page 2 of 17 pages 1. Introduction by Barbara Fiorito, Chair of FLO (during period of strategic review) There is a much-repeated story, originating in the work of the American ecologist and poet Loren Eisley, about two people on a beach, one of whom is frantically picking up starfish stranded by the retreating tide. The other pleads with them to stop wasting time and energy, saying “there are just too many, you can’t make a difference”, to which the first one responds as another starfish is returned to the sea “well I made a difference to that one!” It’s a fitting parable for the Fair Trade movement which has always been driven more by the desire to make a practical difference to the lives of people where we can, than by a need to conceptualise generic solutions to the problems of trade and development. It’s an approach that has served us well in the past. In the last seven years alone, global sales of Fairtrade certified products have increased nearly ten-fold to almost 2.4 billion Euros annually. In this period, Fairtrade has expanded from a small range of basic commodities to a truly lifestyle option for consumers in our most successful markets that today benefits over 1.5 million farmers, workers and their families. It’s also an approach that we should maintain for the future. One of the things that makes Fairtrade special is the way it harnesses the passion and commitment of so many people with diverse talents and perspectives in order to make a difference. Never has that been more apparent than in the Strategic Review process that is currently drawing to a close and on which we report in this paper. Over the course of nearly two years, the members and stakeholders of Fairtrade have engaged in extensive discussion about how we can best realise our shared mission and vision in the next phase of our work. In particular, the voice of our producer partners has been heard more clearly than ever before, and has influenced the largest part of our emerging strategy. But our Strategic Review, while reminding us of our shared goals and reinforcing our strengths as a global network, has also required us to look at where we can improve the impact of our work and how we should do things differently in the future. We live in a changing world in which new issues such as climate change are rising rapidly up the agenda of our stakeholders and the general public. If we are to retain and build on public support we must be more dynamic and adaptable to that external environment, but we must also remain constant in our fight against poverty and injustice which continue to afflict so many of our fellow citizens. We can do both if we have clarity and agreement on our long-term goals and hold fast to our unchanging beliefs and values. As Chair of the FLO Board I am immensely grateful to all of those who have worked so hard to make the Strategic Review a success; not only in terms of its concrete outputs but also in the way the project has been conducted. It has shown Fairtrade at its best. The conclusion of this project also marks the end of my tenure as Chair and I am delighted that I hand to my successor such a strong beacon to light the way for the next stage of Fairtrade’s journey. Barbara Fiorito, former Chair of FLO FTL Strategic Review Summary, March 2009 Page 3 of 17 pages 2.   The Plan At A Glance Fairtrade’s vision is of a world in which all producers can enjoy secure and sustainable livelihoods, fulfil their potential and decide on their future. Our mission is to connect consumers and producers via a label which promotes fairer trading conditions and through which people who are disadvantaged by conventional trade1 can combat poverty, strengthen their position and take more control over their lives We aim to be a social enterprise in which consumers and producers are social as well as economic players, and a global movement for change, deriving our authority from our connections with all levels of civil society, which will be reflected in our ownership and governance structures. The growth of Fairtrade in recent years means that we can now make a step change in the impact of our work but we must do so in a way that genuinely creates and sustains change in the way trade is conducted. We need to broaden, deepen and strengthen our operations so that we scale up in a way that is true to our core beliefs. Accordingly we will Enable change for producers through an operating model that prioritises Fairtrade’s role of enabling development via producer empowerment rather than simply a policing activity. We will be accountable to consumers for the promise that every purchase supports the efforts of producers to work towards a socially and environmentally sustainable livelihood, rather than a guarantee of “perfection” in ethical issues. Revise our standards and certification systems to ensure they are aligned with the empowerment and development goals of Fairtrade, and can adapt to the needs of individual producers rather than imposing a model on them. Make producer support a more integral part of the Fairtrade system and devolve operations to the South so that they are more responsive to the needs of producers and more accountable to them. Support the Producer Networks in their desire to have a clearer role and take on greater responsibility within the Fairtrade system. Re-organise our market-facing operations so that we operate more as a single global system and can better leverage fundamental change in business commitment and adoption of Fairtrade principles. Develop Fairtrade’s capacity to support marginalized producers and their communities by further increasing consumer demand for Fairtrade in mainstream consumer markets. Extend the scope of Fairtrade to new product areas in a carefully-managed way that ensures we are not growing one part of the market at the expense of another and that considers development impact, reputational risk and the best use of resources.   > > > > > > > 1 Fairtrade often uses the term “disadvantaged producers” to define the target constituency of its work. While it is correct to say that Fairtrade aims to help producers overcome disadvantage, it is not correct or helpful to define our partners in the South by their disadvantage. In this paper, the term “producer” is used generically to mean farmers, workers and their organisations in the context of Fairtrade’s development goals of helping to tackle marginalisation and disadvantage. FTL Strategic Review Summary, March 2009 Page 4 of 17 pages > Manage and deliver change from the centre by reorganising and strengthening our core activities and working more strategically within product categories and in producer countries and regions. The proposed changes to the way we work will be implemented through a two-year transformation programme that will equip Fairtrade with the organisational structure, working culture and resources to ensure it is fit for purpose at the scale we aspire to. We seek to make Fairtrade more credible, affordable, simple, efficient scaleable and we will develop indicators that measure our performance against these criteria. Implementation of the strategy will follow approval of the plan by FLO’s General Assembly (expected December 2008) but we hope that the dialogues that have begun in the course of our Strategic Review will continue. We believe the strategy is stronger for having been developed collaboratively and we intend to build on that process in the way we deliver our agreed objectives. 3. Revalidating Our Beliefs: Fairtrade’s Mission, Vision & Values Fairtrade’s vision is of a world in which all producers can enjoy secure and sustainable livelihoods, fulfil their potential and decide on their future. We believe that trade can be a fundamental driver of poverty reduction and greater sustainable development, but only if it is managed for that purpose, with greater equity and transparency than is currently the norm. We believe that people can overcome disadvantage and marginalisation if they are empowered to take more control over their work and their lives, if they are better organised, resourced and supported, and can secure access to mainstream markets under fair trading conditions. We also believe that people, businesses and civil society institutions in the developed world are supportive of trading in this way when they understand the needs of producers and the opportunities that Fairtrade offers to change and improve their situation. Our work is driven by informed consumer choices, and the desire of business to meet the expectations of their customers, both of which provide crucial support for wider campaigning to reform international trade rules and create a fairer economic system. Our mission therefore is to connect consumers and producers via a label which promotes fairer trading conditions through which producers who are disadvantaged by conventional trade can combat poverty, strengthen their position and take more control over their lives Our vision and mission will be reflected in the values by which we work as an organisation so that we ourselves set an example for the changes we seek in others. Therefore we will work collaboratively and seek to empower those who wish to be partners in our mission. Trust is a crucial factor in our work and we will be mindful of our responsibilities to those who place their trust in us, embracing transparency and stakeholder participation as important ways of being accountable for our work. FTL Strategic Review Summary, March 2009 Page 5 of 17 pages 4. The Scope of Fairtrade In order to maintain focus on our core mission and to maximise the impact of our work, we have agreed the scope within which Fairtrade will operate as follows. People  The needs of small-scale producers for market access under fair trading conditions lies at the heart of Fairtrade and will continue to be a priority. No other ethical trade initiative addresses the problems faced by family-based producers working at the far end of global supply chains over which they have virtually no influence, but in which decisions are made that can affect their whole lives. Without Fairtrade in the past twenty years, the numbers of those forced off their land and into migrant labour or urban poverty would have been swelled by hundreds of thousands more farming families.  After decades in which smallholders have been squeezed out of markets by larger plantations the world is beginning to wake up to the damage this has caused socially and environmentally. Fairtrade has shown that small-scale farmers can achieve greater productivity while preserving the natural environment and the wellbeing of people working on the land, as well as delivering high quality products. We will do more to help small producer organisations demonstrate a truly sustainable model of production and trade. Our unique focus on empowering small-scale producers through democratic, farmer-owned organisations will therefore be maintained and developed. But Fairtrade has a wider ambition to assist all people who are disadvantaged by conventional trade, and landless labourers are among those in greatest need of our model. We have worked with plantations employing workers in products like tea and bananas for most of our history and in recent years this aspect of our work has also brought benefits to growers of grapes, citrus and flowers. We will strengthen our hired labour model to ensure that it complements the work of others seeking to secure and enhance labour rights in the Global South. In particular we shall develop a stronger partnership with independent trade unions that are the best means by which workers can be empowered to negotiate on a more equal footing with their employers. Our plans also present opportunities to extend the reach of Fairtrade to more areas of production, and we shall seek to open the system to different kinds of producer set-ups that could use Fairtrade for development and empowerment. We shall also review our work across supply chains, looking for more opportunities in the products we certify for value to be added in the developing world, and to bring people working in these later stages of production into Fairtrade. We will improve our understanding of the particular contexts in which different groups of people experience hardship. This will include strengthening our policies on equality and diversity within organisations in respect of issues such as gender and ethnicity as well as the contexts of people as economic actors such as farmers or workers. We will ensure that we provide the most appropriate support for each, and that we do not support one group at the expense of another. We will also develop tools to assist small producer organisations to retain access to Fairtrade markets in which suppliers of different scale and capacity operate.    FTL Strategic Review Summary, March 2009 Page 6 of 17 pages Products  Fairtrade’s origins lie in agricultural products and will continue to be a major focus of our work. Global trade in agriculture is inherently unfair and the failure of the WTO’s Doha (“Development”) Round of trade negotiations to change this adds impetus to our work. Moreover, improved access to rich country markets for the developing world’s farmers and farm-workers is recognised as an important route out of poverty.  The vibrant and dynamic market for Fairtrade products that exists in many countries has also benefited producers of the original products included in Fairtrade such as coffee and bananas. There are many producers who are currently outside the Fairtrade system and who are eager for us to extend the scope of standards and certification. Accordingly we will invest more in extending Fairtrade to all sectors of agricultural production and trade where we can have impact, and we will also streamline the processes by which this happens. On the other hand there are concerns about the costs and risks of over-rapid engagement in new product areas beyond agriculture and we will develop a clear and consistent policy framework for further extending the product scope of Fairtrade.  Partners  The mainstreaming of Fairtrade principles was one of the fundamental aims of the labelling scheme and it was always the intention not just to create a Fairtrade market for a few producers and consumers, but to demonstrate the possibility of a different way if trading to the wider world. We therefore welcome the increasing interest from large and well-established commercial traders in Fairtrade. We regard this as a sign of success and hope to extend the range of such partnerships in the future..  The scale and scope at which these companies work presents enormous opportunities to scale up the impact of our work for the benefit of producers. However, they also present challenges and uor stakeholders clearly want us to ensure that the engagement of these companies with Fairtrade is based on commitment to our vision. Such commitment should be proportionate to the resources at their disposal and the marketing benefits they get from use of the Fairtrade label. In many markets the mainstreaming of Fairtrade has been driven by the efforts of Fair Trade Organisations that fundamentally share our mission Those partners have often helped create the consumer demand that is now attracting the interests of larger commercial actors. Our partnerships with Fair Trade Organisations also remains highly relevant and crucial to our mission. The pioneering role of our longstanding partners is not just a matter of legacy. They continue to innovate in Fairtrade across the scope of its work by identifying new producer groups, building their capacity and helping them enter the Fairtrade system, developing products tailored to the needs of marginalised producers and forging new and deeper relationships with consumers.   FTL Strategic Review Summary, March 2009 Page 7 of 17 pages Places  Fairtrade will continue to focus its work on producers in the Global South as reflected by the regions covered by our producer Network members (Africa, Asia and Latin America & the Caribbean). While poverty is unfortunately not restricted to these regions, they are where our mission is most relevant.  We will also do more to improve the reach of Fairtrade for producers in least developed countries who are currently under-represented in the system. We will also continue to work in the emerging economies of the South (such as Brazil, India and Mexico) where there are millions of people whose livelihoods could be improved through Fairtrade. The Global South also represents a growing market for Fairtrade producers and we will adapt our models for licensing the Fairtrade Label and for developing new markets to facilitate “South:South” trade and business for producers in their domestic markets. Where possible. we will build on the existing strengths of the Fairtrade Labelling Initiatives in embedding support for Fairtrade within national civil societies, but we will develop new ways of starting work in new markets where our existing model is not immediately replicable. We shall keep the geographical scope of our work under regular review and ensure that any expansion is undertaken using a clear and consistent framework based on our vision and mission.   5. Our Ambitions for Fairtrade The growth of Fairtrade in recent years means that we can now make a step change in the impact of our work. But it is not sufficient just to achieve further growth in Fairtrade, we must do so in a way that genuinely creates and sustains change in the way trade is conducted. Our long-term goal is to help make trade fair by setting an example of how Fairtrade principles can become the norm for international trade, and we will do this by  Creating an efficient and effective environment to connect producers & consumers, within a streamlined global system that is part of the civil societies in which it operates and values and respects the diversity of its stakeholders Designing and implementing an operating model that prioritises Fairtrade’s role of enabling development via producer empowerment Scaling-up our business and our principles to achieve mainstream market penetration and strengthen Fairtrade’s capacity to support marginalised producers and their communities Transforming Fairtrade into a social enterprise with grass-roots social support in which consumers and producers are social as well as economic players. We aspire to be a global movement for change, deriving our authority from our ownership and governance structures    FTL Strategic Review Summary, March 2009 Page 8 of 17 pages These goals impact on three different change processes in our work – Broadening - Enabling more people and communities to benefit from our model of trade that prioritises benefits to people and planet in production modes and business relationships. Deepening - Increasing the value that each producer and producer organisations sees from their engagement with the Fairtrade system. Strengthening - Ensuring that each activity in the Fairtrade system, and the organisation of those activities in the overall system, are designed to maximise the direct impact of our work and to leverage the indirect outcomes we seek to influence. While we have not yet agreed precise targets, the outcomes we expect from these processes would include:  At least a doubling of the number of Fairtrade Certified Producers over the next five years, with a strong focus on those areas (e.g. least-developed countries) where Fairtrade could have more impact on fighting poverty. A three-fold increase in the number of people within Fairtrade Certified Producers benefiting from Fairtrade, so that we are also supporting the efforts of existing producer partners to scale-up their operations as well as helping new groups to access the system. Easier access to the system for those in most need of Fairtrade through more pro-active support services as well as certification processes that are more “user-friendly” and (where possible) less costly. Extending the range of Fairtrade standards will also play an important role in broadening Fairtrade’s impact. Improvement in the ratio of benefits to costs for Fairtrade Certified Producers. We will aim to increase the financial benefits provided by the Fairtrade price and premium mechanisms compared to producers’ revenue through conventional channels as well as reducing the direct and indirect costs of obtaining and retaining certification where possible. Producer support becoming a more integral part of the Fairtrade system so that producers are helped to enter and stay in the system. Stronger partnerships with technical service providers will increase the capacity of Fairtrade Certified Producers to transform the lives of their members.     We will also encourage business partners to move from simply complying with specific Fairtrade standards to a pro-active commitment to Fairtrade principles. We will ask them to source more goods from producers who most need their support, to invest in more direct relationships based on partnership and dialogue, and to provide or contribute to technical, financial and capacity building support. We will also seek to change purchasing practices to ones which support the efforts of producers to use Fairtrade for empowerment and development. Internally, our ambition is to encourage greater and more active participation by producers in the Fairtrade system and this will be reflected throughout our operations in processes of decentralisation and devolution. FTL Strategic Review Summary, March 2009 Page 9 of 17 pages 6. Changing The Way We Work Enabling Change for Producers A renewed commitment to Fairtrade as a model for development is fundamental to this business model, and this impacts on the place of quality assurance tools such as standards and certification within that model. Those tools are a way of measuring progress against the criteria included in standards documents but they are not an end in themselves. For our certification system to be a useful development tool for producers, we must ensure that our business partners and consumers understand the proposition behind the label. This is not a guarantee of “perfection” in ethical issues but a promise that every purchase supports the efforts of producers to work towards a socially and environmentally sustainable livelihood. Of course we must ensure that the normal expectations of consumers and industry around ethical standards are met, but Fairtrade should not create artificially high barriers to entry for the producers who look to Fairtrade to help them clear those barriers. Rather, the high standards of the Fairtrade system are an outcome of the way producers use the support of consumers and the ensuing benefits of Fairtrade for development. Producers have also told us that they want the system to adapt to their needs rather than the imposing its own model on producers. While the underlying principles of our standards need to be applied universally in a consistent manner, a “one size fits all” approach is not helpful. Our empowerment model will provide a basis for producers to prepare their own development plans, including the milestones and indicators needed to monitor implementation. We will ensure that our standards and certification processes are aligned with this approach by orienting our standards around the following areas:  Business & Development Standards will provide a framework for producers to set their own goals and development objectives. These would cover their production and business (such as converting to organic production, diversifying their income and broadening their export and marketing channels) as well as the capacity of their organisations and their social role within their communities. Production Standards will specify how the principles of sustainable production should be incorporated through minimum criteria and continual improvement in employment and working conditions, health and safety, and environmental management systems. Trade Standards will underpin the promise that every purchase supports the efforts of producers to work towards a socially and environmentally sustainable livelihood. Consumers increasingly expect to be able to trace the products they buy back to the primary producer and this is an excellent opportunity for Fairtrade to connect the people at different ends of the supply chain. From a Fairtrade perspective, traceability is also a useful tool for producers to understand more about how their products reach consumers and to provide greater transparency of the flow of money back along the “value chain”.   FTL Strategic Review Summary, March 2009 Page 10 of 17 pages Production Standards are not unique to Fairtrade, although our progressive approach to continual improvement is by no means universally adopted, and the need for multiple certifications adds to the financial and administrative burden placed on producers. We will therefore seek collaboration with other certifiers with a view to reducing the need for multiple audits; this will also allow Fairtrade to focus on the developmental aspects of its work rather than on basic ethical assurance. This is where it best adds unique value and also how it can best be differentiated in an increasingly crowded product labelling environment. Additionally we will complement certification processes by introducing monitoring and evaluation systems that collect and use information gained from our operations and by producers themselves to measure individual progress and overall impact, and – more importantly – to incorporate the learning gained into continual improvement of our work at all levels. It is also important that producer support becomes a more integral part of the Fairtrade system. Producers are eager to use the benefits of Fairtrade to improve their businesses and to develop the capacity of their organisations to drive change. It is the way Fairtrade enables and empowers producers to do this that makes it a unique development model, and we should do more to inform consumers of this dimension to our work. Fairtrade’s producer support cannot “do” the development work for producers but equally it is unrealistic to expect the work to be done by producers in isolation. In recent years we have seen the benefits that a network of professional Liaison Officers can bring in helping producers enter and remain in the Fairtrade system. We will build on this work and invest more in producer-facing resources, as well as backing-up this work by connecting producers to technical services, such as strengthening organisational capacity and improving access to finance. However, technical services will generally be delivered through partnerships and collaborations rather than directly by Fairtrade operating units – we shall only engage directly in this work where we add value and complement the work of existing service providers. We will also increase the effectiveness of producer-facing elements of the Fairtrade system through decentralisation and also its accountability to producers by devolution of decision making. The regional producer networks representing Fairtrade-Certified producers in Africa, Asia and Latin America/Caribbean will be supported in building their capacity to represent all the certified producers in their regions and to take on more responsibilities within the system so that over time they are on a more equal footing with the Labelling Initiatives as members of Fairtrade. Leveraging Change in Markets There will also be changes in the way our market-facing activities, which have up to now been the sole remit of the Labelling Initiatives, are managed. We propose to introduce two new core activities that will operate across national boundaries so that we can operate more strategically, scale up our work in key markets and product categories and leverage more change from industry by working as a single global system. These new activities will improve the way we work with products and through business relationships. FTL Strategic Review Summary, March 2009 Page 11 of 17 pages  Product Management will enable us to work more pro-actively in product categories by working with producers and traders to develop a clear statement of our strategic development goals. The resulting strategy will influence Fairtrade product standards, and ensure they are aligned with those goals. It will enable producer services and FLO-Cert to put the resources in place to meet anticipated demand and it will also guide the work of those managing relationships with industry. We will start by investing in this work for the major Fairtrade product categories such as coffee, bananas, cotton, cocoa and tea, but will extend it where possible and useful across the entire Fairtrade product range. Key Account Management will ensure a co-ordinated approach in the market to business partners who are critical to realising our strategic objectives. At the moment our engagement with businesses that work with many products or which operate in several national markets is fragmented, which limits the service we can offer and our ability to leverage change. By reducing the administrative burden for these companies of working with Fairtrade, we can in return ask for greater commitment from them in deepening their relationships with producers.  These changes will impact on the role of the Fairtrade Labelling Initiatives (LI’s) so that we become a more streamlined global system with less duplication. But we must not ignore the grass-roots social support for Fairtrade that exists in many countries because of the efforts of the LI’s and the coalition of civil society organisations that are behind them. This support is a key asset for Fairtrade and we must nurture and develop it wherever we can. However, establishing an LI is not an easy or quick process and we currently restrict the reach of the Fairtrade label in countries where there is not yet an LI. We will develop and implement a new model for licensing and market development that builds on our existing strengths but allows us to innovate in new markets for Fairtrade, especially to support producers’ business in their domestic markets and trade between developing countries rather than just “South to North” trade as at present. Managing Change from the Centre We will strengthen our internal operations in the following ways –  Producer Support Services will be expanded and equipped with the capacity to develop and manage local partnerships and share knowledge and expertise across the Fairtrade system. It will also work more strategically, formulating country and regional strategies that are aligned with both producer needs and our forecasts of market trends. Standard Setting will be based on the operational strategies developed throughout the organisation and approved by the Board. We will benchmark our Production Standards against other relevant norms and investigate ways and means whereby reciprocal “equivalence” agreements with other certifiers could reduce the overall certification burden for producers without compromising credibility. The Standards Unit, will work with Producer Support Services to develop templates that will guide Fairtrade Certified Producers in setting their own development objectives as part of the Business and Development Standards. We will set up a new Strategy and Policy Unit that will help create the environment for the rest of the system to implement our strategy effectively and in a well-co-ordinated way. The unit will have a crucial role in providing the Board with research, analysis and an understanding of our operating environment in reaching clear decisions on strategy and policy. It will also take a lead role in developing external partnerships and will be the focal point for monitoring, evaluation and impact assessment.   FTL Strategic Review Summary, March 2009 Page 12 of 17 pages The priority areas for further elaboration of strategy and policy as we begin to implement our strategic plan are:  Working with different types of producers. The “FTL White Paper” of December 2007 reiterated our commitment to help producers who are disadvantaged and marginalised by conventional trade, whether they are smallholders or landless labourers. We also want to expand our reach to producer set-ups that currently outside the scope of Fairtrade’s two generic standard models. However, we need to understand the different context in which different groups experience hardship and ensure that we are providing the right sort of support to each and not supporting one group at the expense of another. We need to change the way we engage with employing businesses and their workers, ensuring that we complement and support the work of other organisations seeking to improve labour rights, ensuring particularly that we support and complement the work of independent trade unions. Achieving fairer competition among producers of different scale and capacity. We must also address the concerns of small producer organisations about fair market access within the Fairtrade system itself and ensure that Fairtrade is not just about certification of specific supply chains but is a set of tools to encourage business commitment to Fairtrade relationships. We will analyse the different types of supply chains we work with and identify factors that discriminate between different producer set-ups and ways of addressing them. Ensuring “fair” trade practices between the different producer set-ups will go a long way in expanding our reach and increasing our impact. Developing a clear framework for extending the product scope of Fairtrade. We have learnt the value to all producers of a vibrant and dynamic market for Fairtrade products in which new products are introduced on a regular basis. We are also aware of the needs of producers who are currently outside the Fairtrade system and who are eager for us to extend the scope of standards and certification. On the other hand there are concerns that rapid engagement in new product areas has costs and risks. There are questions about Fairtrade’s competency to fully understand new areas of production and trade and the reputational risks this could create. There are also concerns about resource utilisation and how we ensure that expansion in new products is not at the expense of existing ones. For all of these reasons, a comprehensive policy framework for engaging with new product categories is essential. Finding a new approach to Fairtrade economic criteria. The Fairtrade guarantee of a minimum price that covers the cost of sustainable production has been a lifeline for Fairtrade producers in the past decade. Even today, when world market prices for many commodities are at record highs, there is a continuing need among primary producers for fair pricing and stable revenues in order to support the long-term investment decisions that are crucial for development. As markets become more volatile and uncertain we need to improve Fairtrade’s ability to set prices more quickly and work in a way that adapts more quickly to trading conditions. We will therefore prioritise ways in which we can streamline our current model, and in the longer-term investigate alternative approaches to meeting our objectives.    FTL Strategic Review Summary, March 2009 Page 13 of 17 pages  Understanding the impact of climate change on our work . The communities with whom we work are among the most vulnerable to the worst effects of climate change. As awareness of environmental issues rises up the agenda of consumers and businesses in the developed world, there is a risk that the burden of reducing the impact of economic activity on the planet will fall disproportionately on those least responsible for the problems and most in need of sustainable trade. We must ensure that the social justice dimension of dealing with climate change is recognised and that the voice of our producer partners is heard. At the same time, we must recognise the legitimate concerns of all our stakeholders in this area and ensure that our approach to environmental management and climate change reflects our ambition to be a beacon for sustainable trade. 7. – – – – – – What these changes will mean for our stakeholders Improved cost: benefit ratio of engagement with Fairtrade More freedom to use Fairtrade benefits for their particular development needs Better access to producer support Reduced burden of multiple certification Enhanced access for producers of products not currently within scope of Fairtrade Improved access to mainstream and added-value markets and better market intelligence. For Producers For consumers – – – – – Stronger connections with producers of the products they buy Stronger expression of their personal values through purchasing decisions Clearer Fairtrade development proposition and enhanced trust in the Fairtrade label Active participation in the fights against poverty and for sustainable development Wider choice of products in more mainstream outlets For our donors and institutional supporters – – – Focus on producer development via empowerment Clearer assessment of impact Improved value-for-money in terms of impact of grants For business partners (traders, licensees, retailers) – – – – Ability of Fairtrade to scale-up to meet demand Simpler operating processes with less duplication Clearer processes for extending Fairtrade to new product categories, including faster responses on simple products. Clearer requirements of commitment ensuring fairer competition within the Fairtrade market. FTL Strategic Review Summary, March 2009 Page 14 of 17 pages For Fairtrade Labelling Members (Producer Networks & Labelling Initiatives) – – – – Clearer roles and responsibilities Better support from stronger value-adding core functions Better ability to secure commitment to Fairtrade from mainstream market actors Clearer strategy and policy frameworks enabling decisions to be made faster, better (and locally where possible) 8. Ideas Into Action: Our Programme for Change The strategy outlined in this paper covers the full spectrum of activities undertaken by Fairtrade, and in many areas is a fundamental rethink of how we work. Such changes cannot happen overnight and we propose a two-year programme of transformation to implement new ways of working and embed new approaches to development and producer empowerment, and create a new innovative and entrepreneurial culture across the Fairtrade Labelling system. We will publish a more detailed implementation plan, including a timetable of key milestones. However our top priorities will be:     Establish a Strategy & Policy Unit within FLO that will support the work needed to add more detail and implement the plan internally and in collaboration with others. Introduce the new core activities around products and business relationships outlined in section 5 (Leveraging Change in Markets) Review and revise standard setting, certification and producer support activities to ensure they are aligned with our producer empowerment goals. Elaborate clear strategies and policy positions on the areas outlined in section 6 (Managing Change from the Centre), namely – – – – – – Working with different types of producers. Achieving fairer competition among producers of different scale and capacity. Developing a clear framework for extending the product scope of Fairtrade. Finding a new approach to Fairtrade economic criteria. Understanding the impact of climate change on our work. FTL Strategic Review Summary, March 2009 Page 15 of 17 pages 9. Next Steps In The Strategic Review This paper has been endorsed by the General Assembly in December 2008 as a summary of the main outputs of the Strategic Review to date. The discussion at the General Assembly marked the formal end of the Strategic Review, and the start of the implementation phase by FLO, the Labelling Initiatives and the Producer Networks, but we expect that the dialogues that have begun in the course of our Strategic Review will continue. The challenges facing an organisation as complex as Fairtrade will not be met through documents alone. We believe the strategy is stronger for having been developed collaboratively and we intend to build on that process in the way we deliver our agreed objectives. 10. Looking Back – The Context & Process of our Strategic Review Our Strategic Review was launched by the FLO Board in December 2006 and has consisted of three distinct phases: Phase 1 Objective: Output: Phase 2 Objective: Output: Phase 3 Objective: Output: (December 2006 – May 2007) Understand our environment: Develop a shared analysis of our external context (fundamental trends & driving forces) Green Paper (June 2007 – December 2007) Understand what we do: Define a coherent set of strategic options in relation to the Fairtrade context and critical issues White Paper (January – September 2008) Reshape how we operate: Define the optimal architecture for the Fairtrade systems to best deliver the strategic objectives 2009 Business Model FTL Strategic Review Summary, March 2009 Page 16 of 17 pages 11. Acknowledgements & Thanks The following non-executives and staff of the Fairtrade Labelling network have been members of the Strategic Task Force and its working groups in the course of the review: FLO Board Members Fairtrade Labelling Staff Others Yorokamu Abainenamar, Ian Bretman, Leo Ghysels, Jean-Louis Homé, Binod Mohan, Martin Rohner, Carlos Eugenio Vargas, Christophe Alliot, Rob Cameron, Simon Hunt, Andreas Kratz, Robin Roth, Coen de Ruiter, Luuk Zonneveld Jos Algra (TWIN), Robert Bood (Fair Sights), Michael Conroy (Transfair USA & FLO-Cert), Rachel Manton (Accenture Development Partnerships) We are also hugely indebted to OC&C Consultants and especially David Krucik for their research, analysis, advice and facilitation of many of the events held in the course of the Review. Finally, our thanks to all those from Fairtrade Certified Producers, Labelling Initiatives, FLO’s Central Units (Standards, Producer Business, Finance & Central Services and FLO-Cert) and other stakeholders who have been so generous with their time in reading and responding to papers, as well as participating in meetings and workshops. FTL Strategic Review Summary, March 2009 Page 17 of 17 pages