Fair Trade is a movement not a brand.

* * * Public Statement for Immediate Release * * * United Students for Fair Trade Withdraws Support from Fair Trade USA/Transfair - Calls for Reform to Fair Trade Standards 25 October 2011 As an independent and integral voice in the Fair Trade movement, United Students for Fair Trade has held many meetings to conclude on where we stand on Transfair/Fair Trade USA’s recent decision to leave FLO. We are deeply concerned by FT USA’s move to leave FLO and many other decisions made preceding it. We have analyzed the potential consequences of the new changes and have decided that the moves FT USA is making will be detrimental to the progress the movement has achieved for producers and artisans all over the world. These lowered standards undermine the Fair Trade values producers, activists, and consumers have advocated for since the inception of the Fair Trade movement in the late nineties. Since this time, public outcry from community stakeholders to uphold the integrity of the standards have repeatedly fallen on deaf ears at Transfair/Fair Trade USA. We have therefore concluded that until these community stakeholders – small scale farmers, producers, workers, community and student activists, and 100% Fair Trade businesses - can reconvene to assess these changes, we can no longer in good conscience promote Transfair/Fair Trade USA products. We hereby pull our support from Transfair/Fair Trade USA and encourage others in the movement to do the same until drastic reforms can be made. We fear that without such action from Fair Trade supporters, Fair Trade will entropy into a little more than a cheap marketing ploy. Increasing fair-label washing which will cause more consumer distrust and confusion and cripple the power of the movement to make real changes in farmers’ lives. Fair Trade standards should not be tailored to business or corporations. Corporations should tailor their businesses to meet the needs of farmers! If these entities would like to associate themselves with having ethical products, they should have to make the same commitment to these values and the producers who deserve it that those smaller businesses before them have successfully made. Why would we sell out on Fair Trade values at the point of entry to this market – the very moment when our movement’s bargaining power against corporations is at its peak? We believe that Transfair/Fair Trade USA’s willingness to bend standards is the consequence of a conflict of interest in their funding structure and a lack of accountability on their board. It seems obvious to us that their desire to take on more lucrative certification contracts, more so than any purported issues with supply, are motivating the alarming deviations from the founding-principles of Fair Trade, such as the inclusion of plantation-grown commodities, lower multi-ingredient standards, and their launch into commodities like apparel and bananas that activists have asked them not to pursue www.usft.org | 8125 48th Avenue #313, College Park, MD 20740 | 443.883.5226

Fair Trade is a movement not a brand.

without more cautious forethought. While we look forward to discussing these points with our fellow activist supporters, farmers, and 100% Fair Trade businesses in the near future, we’ve outlined some of our main critiques below: 1. Sourcing commodities from plantations in unacceptable. When 90% of cocoa producers and 70% of the world’s coffee producers are small-scale farmers, many of whom would like to access Fair Trade markets, the argument that Fair Trade needs to source from plantations to expand is illogical. If large companies would like to sell Fair Trade products, they may do so by sourcing coop-grown commodities from small-scale farmers who would be eager to sell to them. The hierarchical structure of land-ownership plantations perpetuate is notorious for trapping workers and farmers in a cycle of poverty. Fair Trade will not have the intended impact on plantation workers because of the structural imbalance of power and inequities on plantations. Fighting this gross inequality is one of the main reasons the Fair Trade movement was created to begin with. Gross inequality remains a fact of life on plantations, which are infamous for poverty wages, the use of dangerous chemicals, violence against union leaders and many more abuses. Also, Fair Trade tea, flowers, and other products being harvested on plantations have yet to yield the intended positive impacts that are mentioned time and time again by Fair Trade USA. The inclusion of plantations in Fair Trade standards is ironically, a complete reversal of a founding pillar of Fair Trade. This cannot be tolerated. 2. Percentages of Fair-Trade sourced ingredients must be substantially higher, and any certifyees must be required to source all Fair Trade commodities available. It is unacceptable that a company be allowed to produce a Fair Trade chocolate bar with nonFair Trade sugar when such sugar is available. It is unacceptable that a company be allowed to “blend” Fair Trade cocoa with non Fair Trade cocoa. The most recent lowering of multi-ingredient Fair Trade requirements of 11% is appallingly low. If we allow companies to reap all the benefits of positive PR that a Fair Trade label provides without following through in all markets they touch, companies will have no incentive to ever implement better standards when media spin has died down and the public eye is averted. We cannot prematurely reward companies with labels and depend on “goodwill” alone to incentivize transitions to higher levels of support from there. While USFT recognizes that well-intentioned business owners exist, if “goodwill” were sufficient to change the inequality ravaging farmers, producers, and workers across the globe, there would be no reason for Fair Trade to exist to begin with. Plenty of well-intentioned companies are willing to tie their hands and submit substantially large portions of their supply chain to a system of checks and balances up front – this should be demanded of all Fair Trade businesses alike. USFT would advocate for a 100% Fair Trade ingredient requirement when Fair Trade certified commodities exist, but would like to discuss this www.usft.org | 8125 48th Avenue #313, College Park, MD 20740 | 443.883.5226

Fair Trade is a movement not a brand.

with our allies in the Fair Trade movement. We are in consensus, however, that 11% and even 25% are atrociously low, and will not stand for these low levels. 3. The Board of whatever Fair Trade institution arises next must be comprised of a majority – and indeed, we believe it should be made up in its entirety – of farmers, producers and workers, community and student activists, academics, and 100% Fair Trade businesses. For more than a decade, Transfair/Fair Trade USA has ignored the criticisms of these grassroots stakeholders and essentially all parties besides businesses that might provide lucrative contracts. Unless all of these parties have a voice at the table, Fair Trade will be little more than an empty branding tool whereby companies can clean their reputations with little impact on the ground. 4. The conflict of interest in funding of certifiers must be addressed. We cannot expect any institution to bite the hand that feeds it. This is well recognized in accounting, politics, and general common sense. So long as Fair Trade certifiers are funded by businesses wanting access to Fair Trade markets, or even if the possibility of increasing profits by working with these businesses is a possible draw, we will see them rule in favor of businesses and management and dilute standards over time to allow access new customer certifyees until the standards entropy into meaninglessness. Even if abuses were found on the plantation of a lucrative contract, what incentive would Transfair/Fair Trade USA have to point it out and risk their ability to operate as an institution? While we respect the challenges of funding a certifier independent of business funding, we know that such structures have been achieved in other industries and are possible. We call upon the Fair Trade movement to pull together to creatively solve this problem and find a way to insulate who sets and enforces the standards from who accepts money from companies. Some possibilities include raising grant money or donations from community supporters, capping the amount any one Fair Trade certifyee can fund a certifier so that funding is more like an anonymized pool of money, or creating a layer of insulation, such as a community oversight board, between funding sources and those setting and enforcing the standards. We hope to open the debate on how we might best address this conflict of interest, but call for dramatic change. 5. Fair Trade’s apparel program is unacceptable. International Labor Rights Forum, Sweatfree Communities, STITCH, New York State Labor-Religion Coalition, Worker Rights Consortium, and United Students Against Sweatshops have raised their voices against Transfair/Fair Trade USA’s apparel program, and they have launched the project ignoring all of this input. The standards are regressive and undermine much of the work achieved by the anti-sweatshop movement in recent years rather than setting the bar higher. Minimum-wage plus premiums wage offered in no way reflect a living-wage. Minimum wages have been pushed to absurdly low levels by corporations leveraging developing country governments desperate to attract industry. In Bangladesh, the www.usft.org | 8125 48th Avenue #313, College Park, MD 20740 | 443.883.5226

Fair Trade is a movement not a brand.

minimum wage is $0.21/hour whereas a living wage would be $1.14. In Cambodia, the minimum wage is $0.29/hour whereas a living-wage would be at least $1.40. Joint committees with management on them do not recognize the asymmetrical power management has over workers – such structures would be illegal under US labor law, because it is recognized that they will rule every time in favor of management. The issue of collective bargaining has been avoided through using non-union factories. Fair trade as a model is fundamentally unsuited to raising standards in the global apparel industry. FT USA should yield to anti-sweatshop organizations and immediately end their misleading and irresponsible "fair trade" apparel program. Producers from the Network of Asian Producers (NAP), Latin American and Caribbean Network of Small Fair Trade Producers (CLAC), Fairtrade Africa and the World Fair Trade Organization have resoundingly said that they do not approve in the direction Fair Trade USA/Transfair is headed. Fair World Project, CAN, Equal Exchange and others have already issued statements disapproving of Fair Trade USA/Transfair’s recent changes. USFT echoes these valid concerns. Moving forward, we will not support Fair Trade USA until serious changes are made to the existing Fair Trade policies. We resolve to meet with our allies in the Fair Trade movement before accepting any proposed changes from Transfair/Fair Trade USA. We’ve chosen to take this step because it is our hope that openly recognizing these problems can be the first step towards healing the Fair Trade movement from a quiet deterioration that has been slowly festering over time. Our expectation for Fair Trade is to give farmers the voice that they have been promised. We’ve diagnosed the problems in this statement. We look forward to finding new solutions to uphold the integrity of Fair Trade standards with our fellows in this movement in the near future.

In solidarity, United Students for Fair Trade Coordinating Committee Members: Maria Louzon (National Coordinator) Sasha Pillow-Petroni (National Coordinator) Kim Pearson (Southwest and National Coordinator) Jackie St. John (Northeast Coordinator) Annie Wendel (Webmaster) Lisa Wong (Northwest/West Coast Cooordinator) Tim Casey (Fair Trade Universities Coordinator) Josh Eyre (Heartland/Midwest Coordinator) Alumni Allies

www.usft.org | 8125 48th Avenue #313, College Park, MD 20740 | 443.883.5226