Our Fair Trade System
Our Fair Trade System & Verification Label
In contrast to commodity certifiers, the WFTO Guarantee System assesses the entirety of a business, not just a specific product, ingredient or supply chain. It includes an assessment of the whole enterprise’s structure and business model, its operations and its supply chain. Our verification and monitoring system is also fully in line with the SDGs and the principles of the 2030 Agenda for Sustainable Development.
our Guarantee System
The WFTO Guarantee System (GS) is built to verify that an enterprise is led by its mission, focused on the interests of its workers and producers, protecting the environment and that this is represented and facilitated by the business’s governance and practices.
In 2011, the membership of WFTO decided to develop a Fair Trade Enterprise verification scheme to differentiate our members in the local and international market as enterprises that do good for the collective good.
The Guarantee System was approved and implemented by the WFTO Membership in May 2013.
our fair Trade standard
The WFTO Fair Trade Standard specifies criteria for assessing if an enterprise truly implements the 10 Principles of Fair Trade. Demonstrating compliance earns Fair Trade Enterprises the designation "Guaranteed Fair Trade". This Standard is the heart of the WFTO Guarantee System, focusing on the management and operation of Fair Trade Enterprises.
The WFTO Standard comprises of a set of compliance criteria based on the 10 Fair Trade Principles and International Labour Organisation (ILO) conventions. Many of these criteria must be met before Guaranteed status is approved, while others must be met within 2 to 4 years after approval for guaranteed membership or require continuous improvement.
A member is expected to apply the WFTO Standard and implement the requirements in a diligent and transparent manner, and constantly refine their Fair Trade practices. The aim of continuous improvement is to encourage the highest level of achievement for WFTO member organisations over time, with measurable advances in the way their organisation operates.
Compliance with this Standard is periodically assessed through four means:
To learn more about the process and the components of the Guarantee System, get the handbook here.
What is the Fair Trade Accountability Watch?
The Fair Trade Accountability Watch (FTAW) is an online watch system that allows all members as well as concerned stakeholders and the public to raise issues or concerns about a WFTO member’s compliance with the WFTO Standard.
Why does WFTO include this tool in its Monitoring System?
It creates a platform for shared responsibility and is a cost saving mechanism. The Fair Trade Accountability Watch is another tool for the Guarantee System to ensure the system is robust. It shares responsibility for the reliability of the system among all stakeholders.
How can you file an Alert?
Everybody can use this tool to alert WFTO to possible breaches of the WFTO Fair Trade Standard. You search for the member concerned using at least one of the fields (name, type, region and/or country) and click on “post alert” next to the name of the organisation you would like us to investigate. We then ask you to link your alert to a Fair Trade principle. It is not mandatory to leave your name and contact details, but anonymous complaints carry less weight.
What happens when an alert is filed against a member?
WFTO investigates and draws conclusions. When an alert is received, it is shared with the member organisation concerned to ask for their side of the story. Please note that we do not disclose who filed the alert. All information is then forwarded to the Guarantee System Committee. If the alert is deemed minor because it relates to non-mandatory requirements, or the organisation can provide sufficient evidence the alert is unfounded, it is filed for extra attention in the next scheduled audit. If the alert is found to raise a major compliance issue, an extra audit may be scheduled. The costs for this audit are paid by the organisation that is audited.
Do you have knowledge on compliance issues with one of our members? If you do, please report it.
Our Fair Payment System
The WFTO Fair Payment System has been developed to improve the lives of workers, the success of businesses, and the overall transparency towards consumers too. The process, which includes Fair Prices, Fair Wages and Income plus Local Living Wages, allows organisations to achieve these goals through on-going dialogue, participation and awareness of the local context.
FAIR PAYMENT TOOLS
The Fair Payment Tools, which consist of the Local Living Wage Calculator, Living Wage Ladder and Local Context Notes, were developed to provide in-depth knowledge of the Fair Payment process. The tools are used together to understand the local living wage in unique geographical contexts. A Living Income tool is available for organisations buying (semi) finished Fair Trade products.
LOCAL LIVING WAGE CALCULATOR
The Local Living Wage Calculator is a tool of transparency that is used to calculate the cost of living. Workers, buyers, and end consumers subsequently all benefit from this transparency. Successful promotion of Fair Trade hinges on our ability to share how the lives of workers are related to the price of products. Rather than relying on outside data sets, loosely calculated from afar, these numbers reflect the specific reality of WFTO Members and the needs of their workers.
LIVING WAGE LADDER
The Local Living Wage Ladder takes a number of Living Wage metrics into account to show how WFTO Members compare to benchmarks set both internally and by other organisations. What are the wages in comparable industries in this location? How do other organisations quantify a living wage in this region? The Living Wage Ladder then depicts these different reference points in a graph to see how the wages WFTO Members pay compare to the other calculations.
LOCAL CONTEXT NOTES
Local Context Notes allow WFTO Members to quantify how local influences affect their organisation, as well as explaining to external parties the reality on the ground. Some of the factors that were considered include regional unemployment, access to housing, political environment, and substance abuse rates. These are circumstances facing every society, with the lowest wage workers often feeling the greatest effect. WFTO Members are taking the initiative to work with their employees to identify both opportunities and obstacles, and put practices in place to guarantee workers a better, more just, future.
WFTO Members Calculated living wage
WFTO members complete and update the Fair Payments tools every 2 years as part of their Self Assessment Report. Members review costs of living by collecting information on food costs. These food costs are used as the basis and a formula includes all other costs of living such as housing, education, health care, transportation while accommodation for average number of people dependent on one income. We also ask members to review alternative employment wages and the minimum wage.