TransFair USA | Fair Trade Certified™ Apparel & Linens FAQ from Public Comment Period on Draft Pilot Standards

Living Wage: A wage that meets the basic needs of workers and their families. Basic needs include food, housing, education, transportation and health care. A living wage also provides for discretionary income and savings.

Market Basket Formula: It measures the local cost of food and other basic needs, and multiplies by the number of people in the family and the number of family members that work.

Fair Trade Premium: The Fair Trade premium is a separate payment designated for social and economic development in the producing communities. The farmers and workers themselves decide how these funds are to be spent.

Artisan Apparel Producers: We use the term “artisan” to refer to worker-owned cooperatives and other small-scale apparel producers with fewer workers and different production methods than traditional factories.

ANSWERS

Program Overview

Q: What is the Fair Trade Certified Apparel pilot all about?

A: We’re extending the benefits and protections of Fair Trade that are already available on cotton farms into the sewing factories that manufacture our clothing. For the first time in history, consumers will know that no one was exploited in the process of making the clothing items they purchase. They can simply look for the Fair Trade Certified label.

Q: Where will consumers be able to buy the products?

A: In addition to retail outlets across the country, Fair Trade Certified apparel will be available for purchase online. For simplicity, visit www.FairTradeCertified.org for retail information.

Q: How will consumers benefit from Fair Trade Certified apparel?

A: For the first time, U.S. consumers can vote with their dollars for an alternative to sweatshops by choosing the Fair Trade Certified label.

Q: How will Fair Trade Certified Apparel benefit the businesses who sell them?

A: Research shows that consumers care about social and environmental justice. According to the Hartman Group (2009), more than three-fourths (76%) of consumers consider environmental and social aspects when they make purchasing decisions. And based upon a recent quantitative study commissioned by TransFair USA with Corporate Social Responsibility research experts GlobeScan (2010), half of all Ethical Consumers (or 33% of Americans) are aware of and familiar with Fair Trade Certified. And 93% of these Ethical Consumers believe that seeing the Fair Trade Certified label positively affects their perception of the host brand.
Q: How will farmers, factory workers and consumers benefit from Fair Trade apparel?

A: Buying or producing a product made from Fair Trade Certified cotton contributes to fighting poverty and to sustainable development for some of the world’s most marginalized cotton farmers and factory workers.

For the first time in history:

Small-scale cotton farmers can earn as much as 30 percent more with Fair Trade with a guaranteed minimum price for their crops to cover the costs of sustainable production and access to global markets
Sewing workers will earn a premium on every Fair Trade order to the United States and have a voice in the workplace
Consumers can vote for an alternative to sweatshops by choosing the Fair Trade Certified label

Q: What types of products will be available?

A: This summer, blank T-shirts, and men’s and women’s polo shirts are available. Later in the year, the products will expand dramatically to include tote bags, aprons, women’s sweaters, knit baby clothes, women’s casual wear (e.g., hoodies, wrap tops, dresses, knit pants, camis, and tanks), plus men’s and women’s lingerie.

Q: What brands are involved? (Updated June 2010)

A: Right now, we’re working with more than a dozen mission-based brands. We’ve completed supply chain certification for two, which will introduce the first-ever Fair Trade Certified products in the U.S. market at the end of June.

The brands are HaeNow (El Sobrante, CA), which stands for Human, Animals and Environmental Now, and Tompkins Point Apparel. HaeNow supplies wholesale blank and printed tees to companies, nonprofit organizations and individuals. The products are 100 percent Fair Trade Certified and organic. Tompkins Point Apparel (Boston, MA), designs classic American styles in a socially-responsible manner, by ensuring that everyone who produces its clothing has a better life because of its business. In addition to its commitment to Fair Trade, the company donates 25 percent of its profits directly to the people who make its products.

Fair Trade Factories

Q: What specific benefits does this program offer to factory workers?

Factories making Fair Trade Certified products must meet strict social and environmental standards that include no child labor, no forced labor, no discrimination, a safe and healthy work environment, and progress toward a living wage that meets a family’s basic needs. Each facility is regularly audited and workers can alert TransFair USA between audits if they feel that Fair Trade standards are not being met.
Fair Trade certification promotes worker-owned cooperatives and protects workers’ right to organize:

Workers must be democratically organized
Workers receive training on their rights, in particular the right to join a union
Facilities must have channels for workers to communicate concerns to management or to an outside organization, if a problem cannot be resolved within the factory.

All workers in the factory earn a Fair Trade premium of up to 10% of the cost of the garment (when it leaves the factory). Workers decide democratically how to allocate these funds, either as a social investment or a cash bonus. In factories where workers choose a cash bonus, a Fair Trade premium of 10 percent of FOB, the cost the buyer paid to the factory, doubles the return to labor on a per-product basis (as labor typically represents 10% or less of the cost of the garment). This supports a living wage, as workers’ rights organizations and trade unions often estimate a living wage to be about double the minimum wage.

Fair Trade Cotton

Q: What are the difficulties faced by cotton farmers in the developing world?

A: An estimated 100 million rural households are involved in the production of cotton in 70 countries around the world. Two-thirds of this cotton is produced in the developing world. For most cotton farmers in cotton-producing communities it is their only means of income and their only cash crop. In West Africa for example, cotton makes up to 40% of export income. Many cotton farmers also live in poverty – trying to survive on less than $2 a day. World prices on cotton have been unstable for a long time and farmers have been severely affected by the falling prices. Things are getting harder – not easier. Cotton farmers are under pressure from rising input costs of fuel, pesticides and insecticides. This means that few farmers can cover the cost of production, because they cannot pass these costs on when cotton is sold at such a low price. The Cotlook A Index (22.17KB) shows that in real terms cotton farmers received five times more for a kilo of cotton in 1973 than they did in 2007.

Cotton farmers in the United States, the EU and China are highly subsidized leading to overproduction. When their huge volumes of cotton are dumped on world markets, prices are driven down by as much as 15% and small scale cotton farmers cannot compete.

Q: What is Fair Trade cotton? How is it different from ordinary cotton?

A: Fair Trade cotton is the same high quality and type as conventional cotton. The real difference is that the farmer at the very end of the textile supply chain who has grown the cotton earns a guaranteed minimum price that covers the cost of production and an additional premium for community investment.

Q: Is Fair Trade Certified cotton organic?

A: Fair Trade cotton can be, but is not required to be, organic. This is because Fair Trade aims to support the most marginalized farmers, those who cannot always afford to convert to organic farming or who lack the knowledge about organic agriculture. It can take years to convert a crop to organic, but this transition is something that many Fair Trade cotton farmers work towards as they earn more income through the Fair Trade minimum price. There is added incentive to convert as well since Fair Trade pays a higher price for organic cotton.

Fair Trade maintains very strong and clear environmental standards based on the international recommendations of the United Nations Environment Programme, such as the strict control of chemicals and reductions in pesticides on the Pesticide Action Network’s Dirty Dozen list*, because they can be harmful to the farmer’s environment as well as their own health. We also encourage sustainable farming so farmers establish their own environmental development plans to ensure that where possible, waste is managed, materials are recycled, and steps are taken to avoid soil erosion and water pollution. Genetically modified seeds are also strictly forbidden.

Wages, Premiums & Worker Democracy

Q: How does Fair Trade promote higher earnings for workers?

A: This pilot aims to promote higher earnings for workers through the Fair Trade pillars of INCOME and EMPOWERMENT.

For every Fair Trade Certified™ shirt, pants, sheets, or towels, the workers that stitched it earn a Fair Trade premium of up to 10 percent of the cost of the garment. Then all the workers get a choice, to earn a cash bonus or to invest together in a community need. This direct payment is the best and way to ensure that workers benefit.

A prominent anti-sweatshop activist once said,

"The most fundamental criterion for sweat-free status should be that workers have a collective voice in the determination of their wages, benefits and working conditions - in other words, real power in their workplaces, and a democratic process for determining how to use that power."

http://lrights.igc.org/projects/conference/conferencepercent20backgroundpercent20paper.pdf

We agree, and we have written the standards for this pilot test to help workers find their voice and their power in the workplace. Fair Trade certification promotes worker-owned cooperatives and protects workers’ right to organize. It requires training for all workers on their rights, in particular the right to join a union. And it requires that workers have channels to communicate concerns to management and know that their concerns will be heard.

Q: How is “living wage” defined for Fair Trade Certified™ apparel?

A: We agree with the universally accepted definition of living wage: a wage that meets the basic needs of workers and their families. Basic needs include food, housing, education, transportation and health care. A living wage also provides for discretionary income and savings.

To measure a living wage, the Fair Trade Certified™ apparel pilot uses methods and tools that have been researched and tested by nonprofits, wage experts, and workers rights advocates.

For artisan sewing producers, the Fair Wage Guide by World of Good translates the Fair Trade pillar of a fair price into a time measurement for people who sew with a machine rather than sowing the land.

See the Fair Wage Guide in action: http://www.fairtradecalculator.com/about.php

For factory workers, the factory wages will be benchmarked against the “market basket formula” used by the Asia Floor Wage Alliance. It measures the local cost of food and other basic needs, and multiplies by the number of people in the family and the number of family members that work. Calorie needs in the formula will follow levels recommended by the UN Food and Agriculture Organization.

Learn more about the Asia Floor Wage: www.asiafloorwage.org

Factory wages are required to increase to living wage levels and will be benchmarked using the wage ladder developed by the Joint Initiative on Corporate Accountability and Workers Rights (Jo-In).

Learn more about the Wage Ladder: http://www.jo-in.org/pub/docs/Jo-In-percent20Explanatorypercent20Notepercent20forpercent20Livingpercent20Wages.pdf

Q: Does the Fair Trade Certified™ label mean that every worker in the facility that stitched it earns a living wage?

A: The Fair Trade label is testing the idea that a product can pay a fair wage, and when Fair Trade grows so that all the products in a factory are Fair Trade, the factory will also be paying a fair wage. This change does not happen overnight, but it will empower consumers to make a difference when they to choose to buy Fair Trade Certified™ products. For every Fair Trade Certified™ product, the company that makes it pays a Fair Trade premium to a worker-controlled fund. Then all the workers that stitched the item get a choice, to earn a cash bonus or to invest together in a community need.

Q: Will the impact to workers be diluted if Fair Trade represents a small percentage of a factory or cooperative’s total production?

A: We know that workers will benefit the most when all the buyers in a factory are producing Fair Trade Certified™ products. That’s why when a supplier wants to produce Fair Trade, we will reach out to many of their customers about Fair Trade. Long-term trading relationships are also a core Fair Trade value, so asking brands to switch suppliers so that all Fair Trade products are made in a few factories would violate our intention to support long-term relationships. We encourage companies to leverage their strong partnerships with committed suppliers, and will not turn away a supplier that applies for certification if they can meet the rigorous standards.

Our experience with Fair Trade farmers is that when they first get involved with Fair Trade, they may sell a small percentage of their harvest at Fair Trade prices. Over time, this percentage grows as demand grows and consumers in the United States buy more Fair Trade Certified™ products. This is the best way to ensure that workers benefit – buy more Fair Trade Certified™ products.

Q: How does TransFair USA ensure that workers decide how Fair Trade premiums are invested, not factory managers?

A: Behind the Fair Trade Certified™ label is a rigorous inspection and monitoring system. TransFair USA and its partners conduct third-party audits to verify how Fair Trade premiums are managed and spent.

See examples from Fair Trade farms: http://www.transfairusa.org/content/certification/profiles.php

Each factory producing Fair Trade Certified™ apparel and linens for the United States is required to set up a Fair Trade Committee, with a separate bank account to manage premium funds and track how they are earned and spent.
Workers must constitute the majority of the Fair Trade Committee. Worker representatives are elected independent of management influence, through a democratic process.
The Fair Trade Committee consults with all workers to decide how the Fair Trade premium funds are distributed or invested.
The Fair Trade Committee makes available to all workers an annual financial report with information on Fair Trade premium income and expenditures, and information on the progress of existing Fair Trade premium projects.

Q: How does Fair Trade work with the union movement?

A: Fair Trade encourages worker representation and empowerment, regardless of how workers choose to organize. We know that between one and three percent of apparel workers worldwide are unionized. Trade union leaders in India and other pilot countries have said clearly that they support Fair Trade certification as a way to strengthen freedom of association amid such low rates of unionization in apparel. The Textile Workers Federation of India, an affiliate of ITGLWF (the international textile union) has said the pilot “has strong provisions to protect freedom of association, to educate workers about their rights, and to increase wages over time.”

“Through Fair Trade, workers can begin to truly have a choice about how to be represented in the workplace and how to communicate with their employer.”

Gopinath Parakuni, Cividep-India

Trade unions and labor rights groups participate at multiple points in the certification process, including monitoring, worker training, living wage benchmarks, and the complaints process.

Q: Do mill workers (ginners, spinners, dye house, etc) benefit under this pilot?

A: Farmers and cut-and-sew workers will earn a Fair Trade premium in the first phase of the pilot. Those two processes, growing the cotton and sewing the garment, have the majority of labor input, or hands touching the product. For example, making six million t-shirts employs 12,000 farmers and 2,500 to 5,000 sewing workers (depending whether mechanized or small-scale), versus only 290 workers between the middle processes of ginning and spinning.

See TransFair USA's 2006 Fair Trade Garments Feasibility Study for an illustration (p.17): http://www.transfairusa.org/pdfs/FTpercent20Garmentpercent20Standardspercent20Feasibilitypercent20Study.pdf.

Fair Trade Certified™ apparel is farm-to-finish. The entire supply chain, including mills for ginning, spinning, weaving and dyeing, is audited for traceability and basic labor compliance under Fairtrade Labelling Organizations (FLO) standards, the Generic Trade Standard and the Seed Cotton Standard, specifically Section 10. Mills will submit evidence of efforts to comply with core labor conventions of the International Labor Organization (ILO). Pilot testing and consumer willingness to pay for Fair Trade Certified™ apparel will inform whether premiums can be extended to mill workers in future phases.

See FLO Generic Trade Standard: http://www.fairtrade.net/fileadmin/user_upload/content/GTS_Aug09_EN.pdf

See FLO Fairtrade Standard for Seed Cotton: http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/EN_Sep09_Seed_Cotton_SPO.pdf

Purchasing Practices

Q: How does TransFair USA define a “fair price” for Fair Trade apparel?

A: A fair price should enable facilities to meet Fair Trade standards. We define fair pricing in line with other models such as those put forth by the World Fair Trade Organization, Workers Rights Consortium and SweatFree Communities.

Q: What purchasing practices are required for buyers on Fair Trade orders? Are they required to make a long-term commitment to suppliers?

A: Responsible Sourcing Principles are part of the contract that companies will be asked to sign when they become licensed with TransFair USA to sell Fair Trade Certified™ apparel. Companies make a commitment to align their sourcing practices, as well as their social responsibility efforts, with Fair Trade values of fairness, empowerment and sustainability. The Responsible Sourcing Principles address fair pricing, repeat orders, and increasing volume commitments for successful Fair Trade products.

Q: How are responsible purchasing practices enforced? Can a company lose the right to use the Fair Trade label if they violate responsible sourcing principles?

A: Yes. Facilities eligible to produce Fair Trade Certified™ products during the pilot are encouraged to contact TransFair USA if they feel the responsible sourcing principles are not being followed. TransFair USA will investigate and, if it is found that the company is in violation of the standards and principles, the company will lose the right to use the Fair Trade Certified™ label.

Certification & Transparency

Q: Do facilities have to meet 100 percent of Fair Trade standards to begin producing Fair Trade Certified™ product?

A: Fair Trade is a continuous improvement model. Facilities must meet all requirements classified as “major” and an increasing percentage of remaining standards over time. The aim of Fair Trade is to recognize the very best factories and to reward them with more business so that they can thrive and continue to invest in their workers. In that spirit, Fair Trade standards are time-based, with the majority of standards required at the time of initial certification, and more stringent standards required in subsequent years.

Q: How can workers register a complaint if Fair Trade standards are not being met?

A: First, workers should raise the issue with their supervisor, a confidential channel inside the factory such as a suggestion box, or a local support system (such as a workers rights NGO, a trade union, or a worker hotline number). As part of certification, we ensure that one or more of these channels are available to workers. If the issue cannot be resolved through these, workers can file a complaint directly with TransFair USA. After conducting an investigation, if we find that Fair Trade standards are not being met, the factory will no longer be eligible to produce Fair Trade Certified™ products.

Q: What information about farms and facilities making Fair Trade Certified™ products will be public?

A: The Fair Trade Certified™ label is a tool for transparency. It invites you to ask questions: “Where did this thing that I eat or wear come from? Who made it? Under what conditions?”

During the pilot test, you will be able to find information on our website about the cooperatives and factories that will produce Fair Trade Certified™ apparel and linens, and about the farmers that are growing the Fair Trade cotton. Public information will include facility names, Fair Trade audit findings, Fair Trade premium projects, and more.

Q: How will the pilot be evaluated for impact to farmers and workers?

A: To assess the success of the pilot, we will ask three key questions: 1) Are farmers and workers earning more? 2) Do farmers have greater access to the market? 3) Do workers have a stronger voice in the workplace?

We’ve created a scorecard for each sewing facility that tracks 12 key indicators on income, empowerment, and environment. In this pilot test, each facility will be evaluated on an annual basis to track how the facility is improving against the standards and whether workers are better off.

For cotton farmers, we’ll use the same impact measures we track for other Fair Trade Certified™ farm products such as coffee, bananas, and flowers.

See our 2008 Almanac: http://www.transfairusa.org/pdfs/almanac_2008.pdf

Sewing Cooperatives & Artisan Apparel Producers

Q: Will the program be affordable for sewing cooperatives and other artisan apparel producers?

A: Several artisan groups have signed up to join the pilot to test. One thing they will test is how to make the certification process simple and affordable for artisans. Affiliation with the World Fair Trade Organization (WFTO) may be a way to prequalify these disadvantaged producers for Fair Trade certification and streamline cost, and we are exploring that option.

Q: Can cooperative-sewn products use the Fair Trade Certified™ label if they are not made with Fair Trade cotton?

A: Fair Trade certification for cotton guarantees that cotton farmers earn a Fair Trade minimum price and a social premium to invest in their communities. It also guarantees traceability of the cotton to ensure that it is not mixed with cotton from countries such as Uzbekistan, where children are forced to work in the fields instead of going to school. This certification is the best way to verify that cotton truly supports sustainable livelihoods and was not made with child labor.

Any cotton producer that meets the FLO Fairtrade Standard for Seed Cotton is eligible to apply for certification. Currently there are 37 cotton producer groups in nine countries certified by FLO-Cert.

Q: Can products like baskets be certified under this program?

A: Any apparel or linen product that uses cotton as its primary raw material is eligible for certification under this standard. Examples include knitwear, woven apparel, sheets and towels. This does not include handicrafts, jewelry, baskets or other similar products.

Q: Will there be two different standards for small sewing cooperatives and larger factories?

A: After four years of consultation with artisans and factories alike, TransFair USA recognizes the vast differences in these two production environments. It may be that in the long-term these two groups will be best served by separate standards, similar to how FLO has created separate standards for Small Producers and Hired Labor.

There are two reasons why we think it’s important to pilot test with a single standard. First, two standards could mean that hybrid production setups, for example where a network of home-based artisans working on hand looms come together in a factory setting for finishing and quality control, would fail to meet either definition and would fall through the cracks.

Second, we have heard from numerous sewing cooperatives that they aspire to become more professional organizations and to meet internationally recognized labor standards, in order to compete on a level playing field with more traditional factories. A single standard enables them to work toward that goal.

Q: How does the program support capacity-building and empowerment?

A: This pilot features a strong worker training model to ensure awareness of Fair Trade. TransFair USA surveyed experts on worker training from companies and community-based organizations, and incorporated best practices from their experience into Fair Trade apparel. Worker training features a “training of trainers” model, locally developed curriculum, local trainers, and sessions of increasing complexity that can be incorporated into the facility’s ongoing training so that training is not an isolated event.

A worker-centric model sets Fair Trade apart from other codes of conduct and factory certifications. Every year, thousands of social audits happen at factories without involvement from the people they are supposed to benefit. Fair Trade changes all this by putting workers at the center of the certification process.

Geographic Scope

Q: Can Fair Trade Certified™ apparel be made in China?

A: China is not in scope for the initial pilot test of Fair Trade apparel. Workers rights advocates do not believe that a worker’s right to organize can be adequately protected and exercised in China. However, China is the largest apparel exporter to the United States. We do feel that workers in China could benefit from Fair Trade if there was a way to ensure they had a voice in the workplace.

Q: Can Fair Trade Certified™ apparel be made in the United States?

A: We support apparel made in the USA and American workers. Because our mission is to make global trade more equitable, we will first pilot test with apparel and linens manufactured abroad. Weak enforcement of labor laws in foreign countries has perpetuated a “race to the bottom” in labor standards. By rewarding factories that don’t offer the lowest price at the expense of workers, we hope to reverse the race to the bottom and start a new “race to the top.” We may explore the possibility of domestic manufacturing for future phases of the pilot test.