1st-Grade (producer) Organization describes a small producer organization whose legal members are exclusively individual small farmers.
2nd-grade (producer) organization describes a small producer organization whose legal members are exclusively 1st-grade organization affiliates.
3rd-grade (producer) organization describes a small producer organization whose legal members are exclusively 2nd-grade organization affiliates.
The term accreditation describes a procedure by which an authoritative body formally recognises the competence of a certification body to provide certification services, against an international standard.
An additional entity describes any entity including, but not limited to, sub-operators, additional sites and sub-contractors that are involved with the Fairtrade products of an operator, and whose activities are controlled by the operator through ownership or by contract.
An affiliate is a producer organization (eg 1st grade, 2nd grade or plantation) that operates under an umbrella body such as a 2nd- (or 3rd-) grade organization or multi estate which is involved in the production of Fairtrade products.
An agent is an organization or individual who provides services to operators and does not take legal ownership of a product.
An allegation is an accusation, made by a third party, against a Fairtrade operator, claiming that this operator violated the Fairtrade Standards, FLO-CERT policies or other contractual obligations with Fairtrade International/FLO-CERT. Such an allegation can be filed by any party, including but not limited to, a Fairtrade operator, a non-governmental organization (NGO), a labour union, a worker or a member of the public.
An appeal is defined as the request of an operator/WFTO member to change a certification/monitoring decision. (See also Appeals Committee, Certification Decision.)
The Appeals Committee controls decisions that affect the certification/monitoring status of a FLO-CERT operator or WFTO member, including application decisions. FLO-CERT operators/WFTO members can challenge these decisions by submitting a request to the committee, which then re-evaluates the respective decisions (See also Certification Decision, Evaluation Decision, Review Committee and WFTO Monitoring System.)
The definition of artwork approval is the process by which prospective users apply for and receive written permission to use trademarks, such as the Fairtrade Brand Mark and the FAIRTRADE Certification Mark.
An audit describes an evidence-gathering process that aims to assess the compliance of an operator and/or a product with certain standards. There are three types of audit: first-party audit, second-party audit and third-party audit.
An auditor is a person qualified to carry out audits on behalf of a certification body.
A blended product is made up of components of the same agricultural commodity, but of different types and/or origins. An example would be a mix of Coffea canephora and Coffea arabica, or a mix of cocoa from different geographical locations.
Flocert employee who is the point of contact for customers. Certification analysts coordinate and administer the Fairtrade certification for the customers and in the regions they are assigned to.
Certification Body (CB)
A certification body is an independent entity authorized by a specific standard setter to certify that its clients comply with the requirements of the respective standard.
Certification Committee (CertCom)
The Certification Committee is a controlling body within FLO-CERT, advising the Certification Department on decisions and certification policies. It also performs quality tests on certification decisions taken internally. The committee is made up of relevant stakeholders in Fairtrade certification.
A certification cycle is the period from the point of initial certification to re-certification, or from re-certification to the following re-certification. At FLO-CERT one certification cycle lasts three years.
A certification decision is always made on the basis of a previous evaluation of audit results, or assessment of other compliance status-related.
A FLO-CERT certification policy is a further clarification of one or more compliance criteria. Requirements specified in policies are binding requirements that must be met by any operator to whom the policy is relevant. Failure to meet any requirement of the policy will be recognized as the operator not fulfilling the compliance criteria.
At FLO-CERT, certifier refers to the staff member who, in contrast to an evaluator, has the authority to take certification decisions. The term is also commonly used as equivalent to certification body.
Chain of Custody (CoC)
A chain of custody, in the economic context, describes the stages a raw material passes through. It starts with primary production, moves through growing, handling, processing, transportation and retailing, and finishes with the sale of the finished product to the consumer. In contrast to the supply chain, the focus is on the original raw material, its changing ownership and the stages it passes through, rather than on its transformation.
Fairtrade defines child labour as all work performed by children under the age of 18.
Fairtrade differentiates between the employment of children below the age of 15 by the producer and members of producer organizations, and children helping out on family farms. Children sometimes carry out small tasks which could be beneficial to their development, such as learning a skill, having a responsibility, and/or contributing to their or their families’ well-being or income. However, if children are helping out on family farms, Fairtrade requires that they do so only if they work after school or during holidays, the work they do is appropriate for their age, they do not work long hours and/or under dangerous or exploitative conditions, and are supervised and guided by an adult family member. In Fairtrade no child below the age of 18 can undertake any type of work which, by its nature or the circumstances under which it is carried out, is likely to jeopardize their health, safety or morals, and their school attendance. Examples of child work considered to be unacceptable are work that involves slave-like practices; recruitment into armed conflict; sex work and/or illicit activities. Examples of activities that are potentially damaging to a child include work in an unhealthy environment; excessive working hours resulting in tiredness or lack of sleep; work that involves handling or any exposure to toxic chemicals; work at dangerous heights; operation of dangerous equipment; and work that involves abusive punishment.
Fairtrade standards on child labour are based on the International Labour Organization (ILO) Convention 182 concerning the worst forms of child labour and ILO Convention 138 concerning minimum working age.
Held at the end of the audit. During this closing meeting the auditor explains all non-conformities to the customer and also informs about the achieved score on Development Criteria (only applicable in renewal audits of Small Producer Organizations and Contract Production and from 1 July 2014 of Hired Labour).
Closing Meeting and Closing Report
The closing meeting is the final meeting between the auditor and the board/management of an organization, carried out at the end of an audit to relay the audit findings. The closing report, signed by the operator, is the outline of non-conformities identified during the audit and presented during the closing meeting.
Code of Conduct or Code of Practice
A code of conduct or code of practice, in the context of ethical trading, is a set of rules concerning labour practices adopted by a company. The code should apply internationally, and, in particular, to the labour practices of its suppliers and subcontractors.
A complaint is a formal expression of dissatisfaction with the quality of services delivered by FLO-CERT, FLO or WFTO, and can be registered by any third party or member.
The term compliance criteria describes a translation of the requirements of the Fairtrade Standards, binding guidance documents and FLO-CERT certification policies into verifiable control points. These criteria are evaluated in the certification process to determine compliance with the Fairtrade Standards and with certification requirements. CCs are in accordance with minimum and progress requirements of the Fairtrade Standards, and therefore every CC is linked to a specific timeline indicating when it needs to be fulfilled. CCs are classified into major compliance criteria and regular compliance criteria. All CCs are published by FLO-CERT on the public compliance criteria lists.
The compliance timeline defines the point within the certification cycle at which a specific compliance criterion becomes valid and needs to be fulfilled. Conformity with all valid compliance criteria is required for certificate issue or renewal.
A contract number is a unique identification number for a contract.
Contract Production (CP)
The term contract production has a different meaning within WFTO and Fairtrade. It is therefore important to distinguish the meaning in relation to its context.
In Fairtrade contract production is a production set-up (regulated by Fairtrade Standards) which involves small producers who don’t have a formal structure, or who are organized into structures without legal status. These can join Fairtrade if they partner with an intermediary organization such as an exporter, processor, private enterprise or non-governmental organization (NGO) (see Promoting Body) to which they contract for the production and sale of a product. The intermediary organization contributes to the producer’s social and economic development with the aim of helping them become autonomous and, over time, comply with the Fairtrade Generic Standards for small producer organizations.
In contrast to the above, WFTO uses the term contract production to refer to a production set-up where producers have an agreement with a buyer, sometimes before harvesting and most often before starting cultivation. Defined conditions might concern prepayments, delivery inputs by the buyer, cultivation methods, delivery period and price. The (small) producers either don’t have a formal structure or are organized into structures without legal status.
Cost of Sustainable Production (COSP)
The cost of sustainable production is the cost of producing a product sustainably and in a socially, economically and environmentally responsible way that conforms with Fairtrade Standards. The Standards Unit assumes that the COSP reflects sustainability.
Cost, Insurance and Freight (CIF)
The term cost, insurance and freight means that the seller delivers their part of the contract when the goods pass the ship’s rail in the port of shipment. The seller pays the costs and freight necessary to bring the goods to the named port of destination. The risk of loss or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer. The CIF term requires the seller to clear the goods for export.
Cross-Border Sale (CBS)
A cross-border sale is the sale of a licensee’s product outside the country of the licensing labelling initiative, or outside their country of business registration (in the case of non-LI countries).
Under certain circumstances (e.g. non-fullfillment of corrective measures, non-payment of fees), the certificate of a customer may be withdrawn. The customer is not allowed to sign new Fairtrade contracts nor is a decertified customer allowed to fulfill existing contracts.
A derogation is a generic or product-specific requirement in the Fairtrade Standards that describes a deviation from a Fairtrade principle or aim. Derogations are provided for a given period of time and under specific circumstances, providing a route towards the applicable Fairtrade principle or aim.
Evaluation of compliance only in case a physical audit is not possible due to regional conflicts, natural disasters, outbreaks of disease, or other high-risk circumstances.
The term development requirements describes the continuous improvements that producers within small producer organizations and contract production set-ups must make. Average scores are awarded in a scoring system (that also defines minimum average thresholds) defined by the certification body.
A draft standard is a proposed version of a standard available for stakeholder comment. This term is used as ‘Draft Fairtrade Standard’ related to Fairtrade, and ‘draft Fair Trade standard’ related to WFTO.
Web Portal used by Flocert to facilitate the work of auditors and customers. Customers can e.g. get an overview of the audit results, suggest corrective measures or provide objective evidences, see their certification status and request updates of their contact information. The portal is password-protected and can be reached here.
An end-of-chain sale is a sale, at the end of the Fairtrade supply chain, of the final packaged and labelled Fairtrade product (eg sale from licensed company to retailer).
An evaluation decision is taken by FLO-CERT within the process of an application or audit evaluation. Evaluation decisions are the basis for the certification decision and include confirmation of non-conformities and corrective measures, and evidence sent in by the operator.
Ex Works (EXW)
The term ex works means that the seller delivers their part of the contract when the goods are placed at the disposal of the buyer, either at the seller’s premises or another named place (works, factory, warehouse, etc). Goods are not cleared for export and are not loaded onto any collecting vehicle.
The Exceptions Committee is responsible for providing guidelines for the granting of exceptions to the Food Composite Product Standard, and for granting Type II exceptions. Exceptions to the Generic Trade Standards (GTS) or Type I exceptions are granted by FLO-CERT or the local labelling initiative respectively.
The exporter is the party who makes (or on whose behalf an agent or broker makes) the export declaration. The exporter sells its goods to someone in another country, known as the importer.
Fair Trade (FT)
The term Fair Trade defines a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in developing countries.
Fair Trade Advocacy Office
The Fair Trade Advocacy Office in Brussels is a joint initiative of FLO and WFTO Europe. Its role is to coordinate advocacy (public support for a course of action or way of doing things) and campaigns to improve the livelihoods of marginalised producers and workers, especially in developing countries.
Fair Trade Label / Fairtrade Label
A Fair Trade label means any recognized Fair Trade product or organizational certification label referring to the relevant Fair Trade standard. A Fairtrade label means any product certification label owned by Fairtrade International eV that is used to denote compliance with the Fairtrade Standards.
Fair Trade Movement
The Fair Trade movement is the combined efforts of Fair Trade organizations, campaigners and businesses to promote and activate the Fair Trade principles of empowering producers, making trade more fair, and sustainable livelihoods.
Fair Trade Organization (FTO)
A Fair Trade organization, also called an alternative trade organization (ATO), has Fair Trade as part of its mission and at the core of its objectives and activities. Fair Trade organizations follow the Fair Trade principles. They are actively engaged in supporting producers, trading, raising awareness of Fair Trade issues and advocating the integration of Fair Trade principles into all international trade practices.
Examples of alternative trade organizations are Asha Handicrafts Association (India), Undugu Fair Trade Limited (Kenya), Level Ground Trading Ltd (North America and Pacific Rim), CIAP-Intercrafts Peru SAC, Pachacuti, Oxfam and Traidcraft (Europe).
Fair Trade Principles (FT principles)
The Fair Trade principles (five principles) were developed by FLO and WFTO (2008) as a common understanding of the basic principles of fair trading. They are defined within the ‘Charter of Fair Trade Principles’ and are approved by the Board of FLO and the General Assembly of WFTO. To find out more visit www.fairtrade.net or www.wfto.com.
Fair Trade Producer / Fairtrade Producer
A Fair Trade producer is a producer organization complying with WFTO Fair Trade standards, or a producer/producer organization that is a member of WFTO. A Fairtrade producer describes a producer set-up located in a producing country as classified by Fairtrade International that has obtained product certification as per the relevant Fairtrade Standards.
Fair Trade Support Organizations
Fair Trade support organizations are legal entities whose primary mission is to promote Fair Trade through the provision of technical, financial and business advisory or other services to Fair Trade producers and/or Fair Trade organizations.
Fairtrade refers to all or any part of the activities of Fairtrade International eV, FLO-CERT, Fairtrade producer networks, Fairtrade labelling initiatives and Fairtrade marketing organizations. Fairtrade is used to denote the product certification system operated by Fairtrade International (FLO).
Fairtrade Brand Mark
The Fairtrade Brand Mark is a registered trademark owned by FLO and sub-licensed to labelling initiatives (LIs). It is for use only in corporate applications by Fairtrade International member organizations and in approved campaign applications.
Each customer that was granted Fairtrade product certification by FLO-CERT receives a certificate. This document is valid for a time period of 4 years (Small Licensees: 6 years) and indicates the products producers are allowed to sell as Fairtrade or the product category traders are allowed to buy as Fairtrade.
Fairtrade Certification / Fair Trade Certification
Fairtrade certification is a product certification system where social, economic and environmental aspects of production are certified against Fairtrade Standards for Producers and Traders. The Fairtrade system monitors the buying and the selling of the product until it is consumer packaged and labelled. Certificates are only issued after a physical inspection has confirmed that all relevant Fairtrade Standards have been complied with.
FAIRTRADE Certification Mark
The FAIRTRADE Certification Mark (‘FAIRTRADE Mark’ or ‘Mark’) is a registered trademark owned by Fairtrade International and sub-licensed to labelling initiatives (LIs). The FAIRTRADE Mark is only for use on consumer retail products that have met the Fairtrade Standards, and for the promotion of such products by licensees, certified operators and third parties.
Fairtrade Composite Product
A Fairtrade composite product is a product composed of more than one ingredient, of which at least one is Fairtrade certified. In Fairtrade composite products, all ingredients for which there are Fairtrade Standards must be Fairtrade certified. So, in the case of chocolate, the cocoa and the sugar must be certified. In the case of single-ingredient products like coffee, 100% of the coffee must be Fairtrade certified to carry the label.
In order to carry the FAIRTRADE Certification Mark on packaging there needs to be at least a minimum specified amount of Fairtrade ingredients in the product. At least 50% of the volume of liquid composite products must be Fairtrade certified. For all other composite products the significant ingredient (for example cocoa in chocolate, sugar in conserves) must be Fairtrade certified, and must be at least 20% of the products’ dry weight.
Fairtrade Explanatory Documents
Fairtrade explanatory documents describe how the Fairtrade Standards should be interpreted and put into practice.
Fairtrade Generic Standards
The Fairtrade Generic Standards are the requirements that producers and traders must meet, irrespective of the product produced or traded, in order to obtain a Fairtrade certificate.
Fairtrade Generic Trade Standards (GTS)
The Fairtrade Generic Standards are the requirements that producers and traders must meet, irrespective of the product produced or traded, in order to obtain a Fairtrade certificate.
Fairtrade International (FLO) member
A Fairtrade International member is a member organization as defined in the Fairtrade International constitution. Full members have voting privileges in the General Assembly and are represented on the Board of Directors. Associate members are recognized as part of the system, but do not have voting privileges and do not have Board representation.
Fairtrade International / Fairtrade Labelling Organizations International (FLO)
Fairtrade International is a multi-stakeholder, non-profit organization focusing on the empowerment of producers and workers in developing countries through trade. Fairtrade International provides leadership, tools and services needed to connect producers and consumers, promote fairer trading conditions and work towards sustainable livelihoods. Fairtrade Labelling Organizations International eV is the legally registered name for ‘Fairtrade International’.
Fairtrade International Board
The Fairtrade International Board is responsible for the strategic direction of the organization, financial and risk management, and relations with the organization’s Chief Executive Officer (CEO). Its composition is regulated in the Fairtrade International constitution. To find out more visit www.fairtrade.net.
Fairtrade Marketing Organization
A Fairtrade marketing organization is a national or regional organization normally created in a country where there is no labelling initiative. They are responsible for promoting awareness and support of the Fairtrade system and Fairtrade products within their country or region.
They are similar to labelling initiatives, but are not full members of Fairtrade International. In countries or regions covered by Fairtrade marketing organizations, FLO licenses companies directly to use the FAIRTRADE Certification Mark. Fairtrade marketing organizations handle the use of the Mark for third parties (journalists, campaigners, etc.) in their country or region.
Fairtrade Minimum Price (FMP)
The Fairtrade Minimum Price (where it exists) is the minimum price that must be paid by buyers to producers for a product to become certified against the Fairtrade Standards. The FMP is a floor price which covers producers’ average costs of production and allows them access to their product markets. The FMP represents a formal safety net that protects producers from being forced to sell their products at too low a price when the market price is below the FMP. It is therefore the lowest possible price that the Fairtrade payer may pay to the producer.
All operators must designate one key contact person, a Fairtrade Officer, within their organization. The Fairtrade Officer will be the main point of contact for certification and audit issues. They will be responsible for ensuring the operator’s compliance with all certification requirements and for keeping the certification body updated with contact details and other relevant information.
Fairtrade organizations refer to Fairtrade Labelling Organizations International e.V., FLO-CERT, Fairtrade producer networks, labelling initiatives, associate members and Fairtrade marketing organizations that comprise and support the Fairtrade system.
Fairtrade payers are the buyers responsible for paying the Fairtrade Minimum Price or agreed commercial price and/or the Fairtrade Premium. Buyers must check their status as Fairtrade payer with the Fairtrade certifier.
Fairtrade Premium (FP)
Fairtrade Premium is an amount paid to producers in addition to the payment for their products. The use of the Fairtrade Premium is restricted to investment in the producers’ business, livelihood and community (for a small producer organization or contract production set-up) or to the socio-economic development of the workers and their community (for a hired labour situation). Its specific use is democratically decided by the producers.
Fairtrade price means the total price paid to producers and includes the Fairtrade Minimum Price (or relevant market price where applicable) and the Fairtrade Premium.
Fairtrade Product-Specific Standards
The Fairtrade Product-specific Standards are requirements that apply to a specific product category, in addition to the Fairtrade Generic Standards. Product-specific Standards supersede Fairtrade Generic Standards if any contradictions occur.
Fairtrade Purchase Transaction
Purchase transactions which must be reported to FLO-CERT by Fairtrade Price and/or Premium Payers on a quarterly basis. Only transactions which are already considered “closed” (both price and premium already transferred to suppliers) should be reported.
In the context of Fairtrade, the term stakeholders refers to all those actively involved in the Fairtrade system. This includes, but is not limited to, producers, traders, labelling initiatives, Fairtrade marketing organizations, producer networks, FLO-CERT and FLO itself.
Fairtrade Standards, comprising Fairtrade Generic Standards and Fairtrade Product-specific Standards, are requirements that producers and traders have to meet in order to obtain Fairtrade product certification.
A Fairtrade trader describes an operator that buys, sells and/or manufactures/processes and that has obtained product certification as per the relevant Fairtrade Standards.
Finance Committee (FLO/FLO-CERT) (FC)
The Finance Committees of FLO and FLO-CERT assist and advise the respective Boards on all financial matters within FLO/FLO-CERT and are accountable to them.
Organizations use first-party audits (internal) to audit themselves for internal purposes. They can also be carried out by an external organization on their behalf. First-party audits can be used to declare that the organization complies with an ISO standard; this is called a self-declaration.
An FLO ID is a unique identification number assigned to all Fairtrade operators by FLO-CERT. The existence of an FLO ID does not necessarily imply that an operator is certified.
FLOCERT GmbH (FLOCERT)
FLOCERT GmbH is the independent Fairtrade certification body offering Fairtrade certification services to clients in more than 70 countries. FLOCERT, a private limited company, evaluates Fairtrade certification applications, verifies compliance with the Fairtrade Standards during audits, and decides whether Fairtrade certification can be granted or not. Certificates are issued as proof of successful Fairtrade certification, and as authorization to trade Fairtrade products. FLOCERT holds an ISO65 accreditation and follows best practice in all of its certification operations.
FLOCERT Supervisory Board
The FLOCERT Supervisory Board oversees and appoints the members of the company’s management Board. It also approves major business decisions including company strategies and budgets.
Flow of Goods Report (FoG)
A flow of goods report records transactions of purchases and sales of Fairtrade products throughout the supply chain.
A follow-up audit is the result of an evaluation or certification decision. The goal of a follow-up audit is to follow-up on all non-conformities which can only be verified during a physical audit.
The term force majeure describes an overpowering force and/or event characterized as external, unpredictable and unavoidable. The term is frequently used in contracts; in general it is included in a common clause that frees both contract parties from liability or obligation in the case of an extraordinary event or circumstance beyond the control of the contract parties (eg war, strike, riot, crime or natural disasters such as flooding, earthquake or volcanic eruption). However, the clause of force majeure is not intended to excuse negligence or other breaches of duty, or where non-performance is caused by the usual, natural and predictable consequences of external forces.
The term forced labour describes work or services undertaken by a person under duress or threat, in circumstances where the person has not offered him/herself voluntarily.
Free Alongside Ship (FAS)
The term free alongside ship means that the seller delivers their part of the contract when the goods are placed alongside the vessel at the named port of shipment. This means that the buyer has to bear all costs, and risk of loss of or damage to the goods from that moment. FAS requires the seller to clear the goods for export.
Free on Board (FOB)
The term free on board means that the seller delivers their part of the contract when the goods pass the ship’s rail at the named port of shipment. This means the buyer has to bear all costs and risks of loss or damage to the goods from that point. FOB requires the seller to clear the goods for export.
Freedom of Association
The term freedom of association describes the right of all workers to join or form an organization of their own choosing without prior authorization from their employer or public authorities.
A funding partner is a partner who, as a general rule, commits financial resources to a project/programme for a specific period of time.
The aim of a gap analysis is to define discrepancies in an operator’s conformity levels and to identify improvements required for the next certification cycle.
Generic Environmental Standards (GES)
The term Generic Environmental Standards includes requirements for environmentally sound agricultural practices. These standards are integrated within Fairtrade Generic Standards and Fairtrade Product-specific Standards.
Genetically Modified Organism (GMO)
A genetically modified organism is a plant, animal or microorganism that is transformed by genetic engineering.
Hazard Analysis and Critical Control Points (HACCP)
The term hazard analysis, including the identification of critical control points, describes a methodology to identify, evaluate and control hazards. Its original scope is food safety, but it can be broadened and applied to other (social/environmental) quality objectives.
Hired Labour (HL)
The term hired labour is used to describe workers.
Hired Labour Set-up
The term hired labour set-ups describes producing companies that are not membership-based (farms, plantations, factories, manufacturing industries, etc) and where the main share of the work is carried out by hired labour.
A home worker is a worker who produces or delivers services on order and against payment. They work at home, and the products or services are sent to the principal who decides their further use and destination.
An importer is the party who makes (or on whose behalf an agent or broker makes) the import declaration, and who is liable for the payment of duties (if any) on the imported goods. Normally, this party is named either as the consignee in the shipping documents and/or as the buyer in the exporter’s invoice.
An ingredient is any substance, including a food additive, used in the manufacture or preparation of food and present in the final product, although possibly in a modified form.
In order to get Fairtrade certified a company needs to apply for certification first. Based on the information received during the application phase and if the application is accepted, the initial audit is planned. After the initial audit, the audit results will be evaluated and Flocert will decide whether the applicant can be certified.
Internal Control System (ICS)
An internal control system measures an organization’s improvement over time with specific, individual control points.
International Labour Organization (ILO)
The International Labour Organization is the international organization responsible for drawing up and overseeing international labour standards. The main aims of the ILO are to promote rights at work, encourage decent employment opportunities, enhance social protection and strengthen dialogue on work-related issues.
An International Labour Convention has the force of international law. States that ratify the convention are required to incorporate its principles into national law and to ensure the implementation of the law
Joint Body (JB)
A joint body is the body within a hired labour set-up that consists of democratically elected worker representatives and company delegates. It is mainly responsible for the management of the Fairtrade Premium.
Labelling Initiative (LI)
A labelling initiative is a full member of Fairtrade International as defined by the Fairtrade International constitution. The LI is responsible for licensing, marketing, business development and awareness raising in a defined geographical area. An LI has the right to sub-license the FAIRTRADE Certification Mark to licensees and third parties within their area. Some LIs are responsible for trade audits in their territories.
LI Registered Operator
LI registered operators are operators who are not FLO-CERT certified, but are monitored by labelling initiatives on their compliance with Fairtrade Standards.
Liaison Officer (LO)
Liaison Officers are consultants that assist Fairtrade International Fairtrade producers and applicants in understanding and meeting certification requirements, and are involved in supporting producers in capacity building and gaining market access. Liaison Officers are based in the Fairtrade producing countries and also forward product and regional information to Fairtrade International, helping the organization to anticipate demand and the needs of producers.
A licensee pays a licence fee for the use of the FAIRTRADE Certification Mark.
A License Agreement is the contract between the licensee and a Labelling Initiative or Fairtrade International which regulates their commercial relations and the use of the FAIRTRADE Certification Mark on the Licensee’s products.
A licensee is a company licensed by a labelling initiative or Fairtrade International to use the FAIRTRADE Certification Mark.
A licensing body is the organization that draws up and signs a licence contract with a licensee. In countries where a labelling initiative (LI) is located, the LI serves as the licensing body. In non-LI countries and in countries where there is a Fairtrade marketing organization, Fairtrade Labelling Organizations International eV serves as the licensing body.
Major Compliance Criteria
A limited number of compliance criteria have been classified as major. Fulfilment of these criteria implies compliance with the fundamental principles, which are mainly linked to minimum requirements of the Fairtrade Standards. If non-conformity with major CC is identified during an audit (renewal or surveillance), this may lead to a suspension of the current certificate or decertification.
A manufacturer or processor is a company transforming a product to make it ready for sale.
Mark Supervision (MS)
The Mark supervision group is a group of brand experts, nominated by labelling initiatives and appointed by the FLO Board. Mark supervision is responsible for developing the strategic use of the trademarks owned by FLO, including the creation and maintenance of usage guidelines, and the review and granting of permission for exceptional use.
Within Fairtrade, minimum requirements are requirements that all producers within hired labour set-ups must initially meet in order to comply with the Fairtrade Standards.
Within WFTO, minimum requirements are requirements that all producers must initially meet in order to comply with the WFTO Fair Trade principles.
Monitoring & Evaluation (M&E)
Together, monitoring and evaluation provide the knowledge for effective programme management and reporting, including accountability and responsibility. M&E uses sets of tools to assess projects, taking into account the project’s relevance, effectiveness, efficiency, impact and sustainability.
Multi Estate (ME)
Companies that structurally depend on hired labour and are composed of more than one plantation with independent administration are called multi estates. A central management body is responsible for the labour conditions of the workers on all of the plantations.
Nomination Committee (NC)
The Nomination Committee recommends candidates for FLO Board committees, trader and independent boards to the FLO Board of Directors. There are three FLO Board committees: the Standards Committee, the Finance Committee and the Nominations Committee.
A non-conformity is the non-fulfilment of a specific standard requirement.
Objective Evidence (OE)
The term objective evidence describes any means of proving compliance with a (standard) requirement. At FLO-CERT, objective evidence is requested from operators in order to verify compliance during audits, or to prove fulfilment of corrective measures in the case of non-conformity.
Meeting held at the beginning of an audit.
The term out-of-home describes a sales situation where a product is consumed on site. This includes, but is not limited to, hotels, restaurants, cafés and vending machines.
Permission to Trade
Intermediate, temporary allowance to start trading under Fairtrade conditions. It does by no means represent a valid Fairtrade certificate and it is linked to certain conditions. There is a difference in the Permission to Trade for traders and producers: Traders, upon receipt of payment of the initial certification fee, receive a preliminary Permission to Trade valid for nine months. For producer organizations, the Permission to Trade will be issued if there are no major non-conformities identified during the initial audit of the producer organization until the audit evaluation is completed and a certificate is issued.
A plantation is an agricultural company that structurally depends on hired labour. It is a single estate that might comprise of single or multiple production sites, but only one central management and administration body.
A pre-assessment is an audit that aims to assess the ability of potential Fairtrade operators to be certified against Fairtrade Standards. It also identifies the gap between the current and the required status.
The practice of providing funding in advance of delivery or receipt of a product is known as pre-financing.
A primary product is an agricultural or non-agricultural product as it is extracted or harvested. Fairtrade Minimum Price and/or Premium are generally set for the primary product.
A processed product is a product that originated as a primary product, but that has been modified.
Producer Certification (PC)
Within Fairtrade, producer certification refers to the certification of producers against the Fairtrade Standards relevant to them.
Producer Executive Body (PEB)
A producer executive body, in the context of contract production, comprises elected representatives of the individual contracted producers. The PEB is the intermediary between the individual producers and the promoting body. It also represents the producers’ interests and ensures that the Fairtrade Premium is handled properly.
Producer Networks (PN)
A producer network is a regional network of producers and/or regional associations who work together for their common interest. The focus of those efforts may vary depending on the context.
In Fairtrade the promotion of dialogue and collaboration is a key objective, and the producer networks represent their members on the FLO Board. Networks include AFN for the African region, CLAC for the Latin American and Caribbean region and NAP for the Asian region. They now exist as ‘CAN’, a cluster of Fairtrade producer networks (CLAC-AFN-NAP).
In WFTO, producer networks collaborate on technical issues such as cultivation techniques and marketing. They work locally, or nationally in countries with similar production systems.
Producer Services and Relations Unit (PSR)
The Producer Services and Relations Unit at Fairtrade International advises producers on compliance with Fairtrade Standards and assists in market access and capacity building. PSR is supported by Liaison Officers who work in the producing countries and also provide training in local languages. The unit was formerly known as the Producer Business Unit (PBU).
Producing Country / Country of Origin
A producing country is a country where a product is originally grown or where a handicraft product is originally produced. In the context of fair trade, the term usually refers to developing countries. The term country of origin is used synonymously.
A product category refers to the respective Fairtrade product standard classification such as fresh fruit, banana, coffee, etc.
The term product compensation is used when a buyer purchases a product from a non-certified producer or conveyer under ordinary conditions (non-certified), and wants to convert that product into a certified product. To do this they must purchase the equivalent quantity and quality from a certified producer. The original product is then used as a non-certified product at a later date. Product compensation is only granted in very exceptional cases and needs a formal application and approval process with FLO-CERT.
The product form describes the processed form of a product and is not limited to forms mentioned in the Fairtrade Standards. The form can vary up to the point of the product becoming a final consumer end product, eg linen, a T-shirt.
The product type is always directly derived from a Fairtrade Standard and describes the different products summarized within one product category.
The term progress requirements describes requirements that producers must meet in a defined timescale to demonstrate progress towards improvement and maintain Fairtrade certification in the long run.
Promoting Body (PB)
A promoting body is defined in the Fairtrade Generic Standards for contract production, and describes a legal entity, either trade or non-trade, forming a partnership with the producers it contracts and supports. In the case of certification on the contract production standard, the promoting body is the holder of the certificate.
Regular Compliance Criteria
The majority of compliance criteria are classified as regular. The regular compliance criteria are linked to minimum and/or progress requirements of the Fairtrade Standards. Any non-conformity with regular compliance criteria needs to be remedied by the operator in a given timeframe in order to maintain certification, or in the case of a renewal certification, to qualify for re-certification.
A renewal audit describes an audit conducted at the end of a certification cycle before the linked certificate expires. The aim is to verify compliance with the requirements applicable at the time, and to determine whether certification can be renewed.
The reporting period is the period the flow of goods report corresponds to.
The term retroactive certification describes the process of retrospectively converting a Fairtrade eligible product bought from a Fairtrade producer or exporter under ordinary conditions (non-Fairtrade), into an Fairtrade International Fairtrade product by payment of the Fairtrade International Fairtrade price and/or Fairtrade Premium adjustment. Retroactive certification is only granted in very exceptional circumstances and needs a formal application and approval process with FLO-CERT.
In contrast to an appeal, FLO-CERT defines a request for review as the official demand of an operator to review an evaluation decision. (> See also Review Committee.)
The Review Committee controls evaluation decisions within FLO-CERT by re-assessing evaluation decisions challenged by operators.
A risk assessment is a component of risk analysis that involves identifying, evaluating and quantifying risk factors in any given process.
Scope Extension Audit
A scope extension audit is carried out if the operator wants to add an additional product or entity to the certification scope before the next scheduled audit and the analyst has evaluated the application for scope extension with the condition of a previous audit.
SCORE Certification Model
SCORE is the certification model Flocert has in place for Small Producer Organizations, Hired Labour and Contract Production. The main principles of SCORE are focusing on core Fairtrade requirements, empowering producers to decide on their own development path and better reflecting the realities of individual producer organizations. SCORE makes a distinction between Core and Development Compliance Criteria: while compliance is required with all Core Compliance Criteria at all times, for Development Compliance Criteria an average score of at least 3.0 is needed.
A second-party audit is an external audit. They are usually carried out by customers or by others on their behalf. They can also be carried out by an external party that has an interest in the organization.
Entity that has been granted the right to use the Fairtrade Mark by Fairtrade International or a National Fairtrade Organization and which complies with the criteria set out in Flocert’s Small Licensee Policy.
Small Producer Organization / Small-Scale Producer Organization (SPO)
The term small producer organization or small-scale producer organization describes legally registered groups and, in WFTO, other less formally organized structures whose members are primarily small producers/small-scale producers able to engage in commercial activities.
Standards Committee (SC)
The Standards Committee is a committee created by the Fairtrade International Board and made up of stakeholder representatives of the Fairtrade Standards. It acts as a decision maker and provides guidance on the development of Fairtrade Standards.
Standards Unit (SU)
The Standards Unit is the Fairtrade International business unit that manages the development of Fairtrade Standards, Fairtrade Minimum Prices and Fairtrade Premiums.
A subcontractor is an individual or company that provides product-related services on behalf of an operator, but does not take legal ownership of the product. Within Fairtrade certification, Fairtrade organizations are also responsible for assuring their subcontractors’ compliance with the Fairtrade Standards.
A supply chain comprises business entities involved in the supply and purchase of materials, goods or services from raw materials to the final product. In contrast to the chain of custody, the focus is on transforming the product and creating added value.
A surveillance audit is a type of audit to monitor conformity with certification requirements within the certification cycle, to assure continued validity of the certificate. If non-conformity against valid compliance criteria is identified during a surveillance audit, the operator must perform corrective measures to avoid suspension of the certificate.
Suspension of Certifcation
If a customer does not adhere to certification requirements (e.g. Non-Conformity with Major Criteria) or contractual obligations, FLO-CERT may suspend the certificate of the customer for a maximum period of 6 months to give opportunity to the customer for corrections.
Sustainable Fair Trade Management System (SFTMS)
The Sustainable Fair Trade Management System is a certification system for Fair Trade organizations, currently under development by WFTO. It is based on 10 Fair Trade principles, and will result in the creation of a label for food and non-food products. To find out more visit www.wfto.com.
A third-party audit is an external audit performed by independent external organizations. One example of a third-party audit is the external audit performed by an accreditation body to determine whether an organization complies with an ISO standard.
The ability to identify and trace the history, location, use and processing of products and materials is known as traceability.
Trade Certification (TC)
Within Fairtrade, trade certification refers to the certification of traders against the Fairtrade Standards relevant to them.
Trademark Use Guidelines
The Trademark Use Guidelines provide detailed information on the appropriate use of the trademarks owned by FLO, including the Fairtrade Brand Mark and the FAIRTRADE Certification Mark.
Unannounced audits allow to assess what is happening at the customer’s site during a ‘typical’ day, in contrast to the potential artificial environment established for an announced audit. 2 % of Flocert customers per year will receive an unannounced audit.
Web interface which customers are required to use in order to submit their Fairtrade purchase transactions on a quarterly basis.
A WFTO applicant is an organization or individual that has formally submitted their application for WFTO membership or to be a WFTO associate.
WFTO associates fall into three categories: associate organizations, who support or campaign for more just trading conditions; individual associates, who are active Fair Trade supporters within their fields of expertise; and honorary members, who have special skills in trade, social science, culture or human rights, or who have contributed to the growth of Fair Trade, gaining international recognition.
WFTO Audit and Finance Committee
The WFTO Audit and Finance Committee assists and monitors the work of the auditors of WFTO, reports to the WFTO board about their work with the auditors, and advises the WFTO board on audit and finance matters.
WFTO External Reader
A WFTO external reader is an independent person, not directly employed by WFTO, who advises the monitoring officer whether or not to approve members’ self-assessment forms.
WFTO Global Conference
A WFTO global conference is a global networking event for debates, discussions, seminars and Fair Trade fairs. The conference takes place every two years in odd-numbered years (2011, 2013, etc.).
WFTO Logo / WFTO Mark
The WFTO logo / WFTO mark is an organizational logo/mark for registered WFTO members, who have successfully gone through the WFTO monitoring system. The WFTO logo/mark is not a product label.
WFTO Monitoring System
The WFTO monitoring system is based on biennial self-assessments, peer reviews and external verification. It gives the WFTO member insight into its level of compliance with the WFTO Fair Trade principles and its development over the years. The system invites WFTO members to take measures to improve their level of compliance and gives information to WFTO global and regional offices on services to develop to support members in their efforts to improve.
WFTO Primary Producer
A WFTO primary producer is a producer of raw materials at the first step of the supply chain.
WFTO Provisional Membership
WFTO provisional membership is the status of organizations who have been approved for provisional membership, but who have not yet gone through the monitoring process that would give them registered membership. Provisional members have limited rights.
WFTO Regional Conference
The WFTO regional conference is a regional WFTO networking event. The conference takes place every two years in even-numbered years (2010, 2012, etc.). At these events, WFTO members in each of these regions meet to discuss and vote on issues of special relevance to them.
WFTO Regional Networks
The WFTO regional networks are the regional ‘chapters’ (organizations) of WFTO. They are WFTO Asia for Asia, WFTO Latin America for Latin America, WFTO Europe for Europe, Cooperation for Fair Trade in Africa for Africa, and WFTO Pacific for North America and the Pacific Rim.
WFTO Registered Membership
WFTO registered membership is the status of organizations that have successfully undergone the WFTO monitoring process. Registered members have full membership rights.
The term workers usually describes field workers, artisans or other workers including migrant, temporary, seasonal, sub-contracted and permanent workers, and all other hired labour personnel. The term, however, is limited to personnel who are entitled to join unions and therefore normally excludes middle and senior management.
A workers’ committee is a group of elected worker representatives not affiliated to any of the registered unions in the sector that deals with workers’ rights and working conditions (see ILO convention 135 for a detailed definition).
World Fair Trade Organization (WFTO)
The World Fair Trade Organization is a global network of Fair Trade organizations and WFTO associates representing the supply chain from producer to retailer.
A world shop is an independent retailer and/or importer who sells fair trade products. They are united in their aim to bring about fundamental changes in the status of producers through fair trade retailing and campaigning.