Standards & Policies

Fair Trade Certified standards are set by Fairtrade Labelling Organizations International (FLO), in consultation with Fair Trade Certified stakeholders, such as producer organizations and licensees, and organizations such as TransFair Canada. FLO publishes a standards workplan each year.

Trade Policies are set by the certifiers, FLO-CERT internationally and TransFair Canada in Canada.

Producer Standards

Producer standards cover organisational transparency, as well as environmental and social norms. There are generic standards for small farmers and for hired labour situations. There may also be small farmer product specific standards and hired labour product specific standards (e.g Part B of the Nuts and Oil Seed standard).

The Generic Trade Standards govern the terms of trade for all Fair Trade products. Product specific requirements are found in Part C of the small farmer product specific standards and hired labour product specific standards.

FLO has produced "explanatory documents" to help understand and apply the standards

Trade Standards have special requirements for companies that buy from the producing country.

They must:

Pay a price to producers that aims to cover the costs of sustainable production: the Fair Trade Minimum Price;
Pay an additional sum that producers can invest in development: the Fair Trade Premium;
Partially pay in advance, when producers ask for it;
Sign contracts that allow for long-term planning and sustainable production practices.

To become and remain licensed, companies selling products bearing the Fair Trade Certified mark must fulfill these requirements:

If they sell conventional products in addition to Fair Trade Certified products, maintain business systems that distinguish between the two
Have records that trace finished Fair Trade Certified products back to raw materials
Report transactions with traders/producer organizations on a quarterly basis including payment of a set license fee per product in relation to sales for that quarter
Submit to an audit of records
Use the Fair Trade Certified mark according to norms designed to protect consumers