Forgot your password?
FLO reviews Business Model
Nearly 10 years into its development, FLO has fallen increasingly under scrutiny as actors in the world of Fair Trade are becoming more and more wary of the organization's commitment to the well-being of small-scale producers. In response to the criticism, FLO has recently agreed that change should happen...now we all wait with eager anticipation to see how their plans unfold.
Producer networks such as the Latin America Producer Coordination (CLAC) question FLO’s loyalty to small-scale producers as well as the high costs of FLO certification for producer groups. Many dedicated Fair Traders and retailers – including CoopCoffees – have supported the producers’ push for greater accountability in FLO and insist that transactions from contract-signing to delivery of the product should be conducted with transparency. The debate over the “fairness” of the current certification process has crept into private conversations and public critique by organizations across the Fair Trade map. The writing on the wall appears clear to all concerned: the FLO system as it currently functions must change with the times.
In 1997, 17 Fair Trade Labeling Initiatives joined forces to create an international umbrella organization, FLO (Fair Trade Labeling Organization). Since then, FLO has held one of the most influential positions in the growing Fair Trade market. The policy and guidelines set forth by FLO steer the international and national inspectors in the certification process.
But policy-making is never an easy task – even less so when the decision-makers s being made will directly affect thousands of lives, all over the world. It isn’t something that is easily agreed upon either. We can all subscribe to a particular conception of “Fair Trade” – fair wages, direct communication, social development... – but when the policy leaves the page and becomes a reality, the seemingly straightforward ideas suddenly become debatable procedures.
As the “leading standard setting and certification organizing for labeled Fair Trade” (www.fairtrade.net), FLO has taken on the huge challenge of defining international standards - with all its associated nuances, variables and intricacies. But today's spectrum of Fair Trade is broad – now spanning from the historical Fair Traders to the most notorious transnational corporations – and FLO decisions invariably can satisfy only a small part of the gamut of interested parties.
As the market continues to expand, the standardization and certification processes have only become more complicated – a reality that small-scale producer groups have repeatedly said is working against their interests.
A collective call for change in FLO’s fundamental strategy has prompted FLO’s BoD and staff to respond earlier this year with a Strategic Review of its Business Model. In their 17-page summary, FLO recognizes the need to change as a necessary reaction to the movement’s growth: “We need to broaden, deepen, and strengthen our operations so that we scale up in a way that is true to our core beliefs” (p. 4). And a deep-cleaning of the operative side of things in order to better reflect the essential principles of Fair Trade is what many disaffected Fair Traders want to see happen.
The summary begins by restating FLO’s core mission – “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” (p. 5) – which hasn’t changed much from when the organization was founded. But within the familiar language and vocabulary, FLO incorporates several “hot topics” that have permeated recent and ongoing discussions among Fair Traders. Over and over, FLO talks about producer empowerment. From reforming the certification process in order to make it less costly to decentralizing and “localizing” operations, FLO appears to be refocusing its efforts on the development and strengthening of producer groups.
Other considerations in the FLO proposal include collaborating with other certification schemes (organic, environmental, bird-friendly etc) in order to streamline and reduce producer costs for obtaining multiple certifications, connecting producers with technical and financial services to better facilitate development projects, and encouraging business partners to be more engaged and committed to the principles of FT. Perhaps their most ambitious goal is to put regional producer networks on equal footing with the strikingly independent and powerful Northern-based Labeling Initiatives.The verdict is still out on the review but Board members are already busy presenting the key concepts at a number of assemblies. Cooperative Coffees was able to attend both the CLAC meeting in October and a FLO traders’ meeting in D.C. in November, where Christophe Alliot, FLO Board member and leading author of the revised plan, presented the document. Though the audience varied greatly from one meeting to the next, the message was consistent: FLO is reaffirming its commitment to producer interests.
"We are pleased to see the renewed interest in FLO to listen and to
reorient practices to improve performance to the benefit of small-scale
producers," says CoopCoffees Producer Relations Manager Monika Firl - following FLO feedback sessions. "We are poised and ready to support the first steps towards greater producer empowerment!"
The proposal is up for approval by the FLO board this month… after which a final and more detailed plan should be forthcoming by the end of January 2009.
