Trust between Standards: From
Competition to Cooperation on Living
Wage and Living Income
Global Sustainability Standards Conference 2014
Project partners:
Supported by:
Makaibari Tea Estate, India © Didier Gentilhomme, Fairtrade International
Speakers and panellists
Moderator
›Vanessa Linforth, Forest Stewardship Council
Speakers:
›Oliver Bach, Rainforest Alliance
›Noura Hanna, UTZ Certified
›Eberhard Krain, GIZ
Panellists:
›Heleen Bulckens, Ethical Tea Partnership
›Edwin Koster, Social Accountability International
›Andreas Kratz, Fairtrade International
Session objectives
› What are these standard
organisations doing on living
wage?
› How did this collaboration
come about?
› What could be done on
living income?
› What is the broader
significance of this work and
this collaboration?
Nepalese workers © Robin Romano, Goodweave
What are these standard systems doing
on living wage?
How did the collaboration come about?
Project partners:
Supported by:
Assessment © Forest Stewardship Council
How did the
collaboration start?
Pathway towards Living Wage
Fairtrade International,
Goodweave, Social
Accountability International:
› Agreed in 2012 to collaborate
on living wage definition,
methodology, and database
UTZ Certified, SAN / RA, Forest
Stewardship Council:
› Joined collaboration in mid2013
Bio Farmers Tea Club, Vietnam © Didier Gentilhomme, Fairtrade International
ISEAL AGM 2013 - Living Wage: Towards
an ISEAL-Wide Approach?
Oliver Bach, Standards & Policy Director, SAN
Wilbert Flinterman, Senior Advisor, Workers Rights and Trade
Union Relations, Fairtrade International
Rik Kutsch Lojenga, Executive Director, Union for Ethical
BioTrade
Britta Wyss Bisang, Standards Director, UTZ Certified
Facilitated by Kristin Komives, Senior M&E Manager, ISEAL
Visit: www.iseal.org/conference
Follow us @ISEALalliance | #iseal2013
First Steps as a Group of Six
ISEAL facilitation and Senior Experts Richard and Martha Anker
› Living wage is:
“The remuneration received for a standard work week by a
worker in a particular place sufficient to afford a decent
standard of living for the worker and her or his family.
Elements of a decent standard of living include food, water,
housing, education, health care, transport, clothing, and other
essential needs including provision for unexpected events.“
First pilots test the
Anker methodology
› South Africa - Grapes
› Dominican Republic – Bananas
› Malawi – Tea
› Kenya - Flowers
Certified flowers © Sustainable Agriculture Network
Our joint statement
Joint Statement – What do we commit to do?
› We commit to adopt a common definition of living wage and to apply a common
methodology for setting living wage levels and for evaluating wages and other forms of
remuneration against those levels.
› We commit to applying all functions of our organizations towards the long term goal of
improving wages.
› We commit to seeking support from brands, buyers, and retailers to make wage growth at
the primary production level possible.
› We commit to working together and working with the relevant stakeholders in these
processes.
The art of rugmaking © Scott Welker, GoodWeave
Looking forward: four pillars
› Finalize
› Equip
› Increase
methodology
standards to
meaningfully
reference living
wage
transparency
• Manual
publically
available
• Testing
application to
audits
• Training on
methodology
• Auditor
guidance
• Living wage
benchmarks in
50 countries
› Leverage
standards and
• Public database benchmarks to
for benchmarks support wage
• For some
growth
countries and
products, wage
ladders and
analysis of
potential for
wage increases
• Explore and
test strategies
• In partnership
with other
organisations
• In small
number of
sectors
What could be done on living income?
Fueling the discussion with field experience from
cocoa smallholder farm households in Africa
Project partners:
Supported by:
Cocoa harvest improvements © UTZ Certified
Introduction and Definitions
Living Wage
›The remuneration (in cash and kind) received for a standard
work week by a worker, sufficient to afford a decent standard
of living for the worker and her or his family.
Elements of a decent standard of living include food, water, housing,
education, health care, transport, clothing, and other essential needs
including provision for unexpected events.
Living Income
› Income (in cash and kind) sufficient to afford a decent
standard of living for the income earner and his family.
Applies to entrepreneurs, and/or self-employed people, such
as small-holder farmers.
Important Wage/Income
Reference Lines
(Anker Living Wage Benchmark)
Asia Floor Wage
International Poverty Lines
National Poverty Lines
Tea picking © Sustainable Agriculture Network
Factors Determining a Living Income
PRODUCTION
•
•
•
•
•
Volume and price of a range of agricultural products
Available work force (labor units)
Available land
Natural conditions: e.g. rain, soil fertility
Socio-economic conditions: farmer’s knowledge and skills;
infrastructure, access to inputs and financial services
CONSUMPTION
• Number of household members (consumption units)
LEVERS
• Price = small (farmer is “price-taker”); perhaps indirectly influenced
through cooperatives, ensuring economies of scale and better
negotiation power
• Increased Volume and improved Quality = Main Lever
• Switching from one commodity to another (diversification)
Ecotourism © Lara Koritzke, ISEAL Alliance
HH Income of diversified cocoa model farms (Ghana)
(per person per day)
6 HH members
3.6 ha total farm size
5 HH members
2.0 ha total farm size
(constructed on WCF Study & SCB Programme data)
(constructed on Harvard Study & SCB Programme data)
Measures & Activities
towards a Living Income
Standards
• Put more emphasis on the economic dimension of
Farmers
sustainability, while not compromising ecological and
social concerns
• Establish guidelines and standard requirements that
Towards a
• Provide mechanisms to set production, pricing and
Companies
NGOs
living income
values for typical farm
household
Living
models of typical cocoa regions under normal natural
conditionsIncome
• Make participating farmers monitor production and
provide capacity building to advance them to higher
Public levels
production
Standards
Sector
• …
Tea harvesting in China © UTZ CERTIFIED
Conclusions
1. Model farm household income reference lines need to be worked
out and agreed at a production level that is attainable by a good
proportion of farmers
2. Private & public sector as well as farmers to engage in and fund
capacity building towards GAP to bridge the gap between low & a
good (not best) production level
3. If prices are so low that even under good (not best) agricultural
practices no living income can be reached in model farm households,
higher prices must be set and attained if a produce shall be called
„economically sustainable“ under a reputable standard
Photo © Forest
Stewardship
Council
Photo
© UTZ CERTIFIED
Acknowledgements
› In Cooperation between
GIZ Sustainable Cocoa Business
Programme West Africa and
GIZ Programme on Social and
Environmental Standards
› A Collaborative Work of
Marie-Theres Findeisen
Eberhard Krain
Annemarie Matthess
Sophie Grunze
Jennifer Schuchmann
› Contact
Dr. Eberhard Krain
[email protected]
Tel. +49 6196 79-1467
Thank you!
Jennipher Wettaka, Gumutindo, Uganda © Simon Rawles, Fairtrade
International
What is the broader
significance of this work
and this collaboration?
Project partners:
Supported by:
Textiles Manufacturing © Scott Welker, Goodweave USA
Views from….
› Ethical Tea Partnership
› Fairtrade International
› Social Accountability
International
Safety © UTZ Certified
Thank you!
Project partners:
Supported by:
Sifting Coffee In Brazil ©Rainforest Alliance