Our 10 Fair Trade Principles

Our 10 Fair Trade Principles

The 10 Principles of Fair Trade specify the ways that Fair Trade Enterprises are set up and behave to ensure they put people and the planet first. WFTO carries out verification and monitoring to ensure these principles are upheld.

The WFTO Principles are not isolated efforts for creating a more sustainable and equitable world, but deeply align with the Sustainable Development Goals (SDGs) and contribute to their achievement. Fair Trade Enterprises recognise that achieving the SDGs requires system changes in how we conduct business and WFTO members participate in this transformation by committing to the 10 Principles of Fair Trade, thus developing alternative business models that prioritise people and planet. By embracing our Fair Trade principles, businesses become integral practitioners and pioneers in the collective effort to realise the SDGs and create positive, lasting impacts on a global scale.

Very much like the SDGs, the WFTO Principles can’t be applied in isolation; they must be considered holistically to provide a roadmap for transformative change. Addressing fair prices, wages, environmental sustainability, social development, and democratic decision-making collectively creates a framework that tackles systemic issues in global trade.

 

Create positive, lasting impact on a global scale.

The 10 Principles of Fair Trade specify the ways that Fair Trade Enterprises are set up and behave to ensure they put people and the planet first. WFTO carries out verification and monitoring to ensure these principles are upheld.

Feel free to contact us if you would like to use our 10 Fair Trade Principles in any media, publications or website.

Principle One: Creating Opportunities for Economically Marginalised Producers

Poverty reduction through trade forms a key part of the organisation’s aims. The organisation supports marginalised small producers, whether these are independent family businesses, or grouped in associations or co-operatives. It seeks to enable them to move from income insecurity and poverty to economic self-sufficiency and ownership. The organisation has a plan of action to carry this out.

Principle Two: Transparency and Accountability

The organisation is transparent in its management and commercial relations. It is accountable to all its stakeholders and respects the sensitivity and confidentiality of commercial information supplied. The organisation finds appropriate, participatory ways to involve employees, members and producers in its decision-making processes. It ensures that relevant information is provided to all its trading partners. The communication channels are good and open at all levels of the supply chain.

Principle Three: Fair Trading Practices

The organisation trades with concern for the social, economic and environmental well-being of marginalised small producers and does not maximise profit at their expense. It is responsible and professional in meeting its commitments in a timely manner. Suppliers respect contracts and deliver products on time and to the desired quality and specifications.

Fair Trade buyers, recognising the financial disadvantages faced by Producers and Suppliers of Fair Trade products, ensure orders are paid on receipt of documents or as mutually agreed. For Handicraft FT products, an interest free pre-payment of at least 50 % is made on request. For Food FT products, pre-payment of at least 50% at a reasonable interest is made if requested. Interest rates that the suppliers pay must not be higher than the buyers’ cost of borrowing from third parties. Charging interest is not required.

Where southern Fair Trade suppliers receive a pre-payment from buyers, they ensure that this payment is passed on to the producers or farmers who make or grow their Fair Trade products.

Buyers consult with suppliers before cancelling or rejecting orders. Where orders are cancelled through no fault of producers or suppliers, adequate compensation is guaranteed for work already done. Suppliers and producers consult with buyers if there is a problem with delivery, and ensure compensation is provided when delivered quantities and qualities do not match those invoiced.

The organisation maintains long term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. It maintains effective communication with its trading partners. Parties involved in a trading relationship seek to increase the volume of the trade between them and the value and diversity of their product offer as a means of growing Fair Trade for the producers in order to increase their incomes. The organisation works cooperatively with the other Fair Trade Enterprises in country and avoids unfair competition. It avoids duplicating the designs of patterns of other organisations without permission.

Fair Trade recognises, promotes and protects the cultural identity and traditional skills of small producers as reflected in their craft designs, food products and other related services.

Principle Four: Fair Payment

A fair payment is one that has been mutually negotiated and agreed by all through on-going dialogue and participation, which provides fair pay to the producers and can also be sustained by the market, taking into account the principle of equal pay for equal work by women and men. The aim is always the payment of a Local Living Wage. Fair Payment is made up of Fair Prices, Fair Wages and Local Living Wages.
  • Fair Prices

    Fair Prices

    A Fair Price is freely negotiated through dialogue between the buyer and the seller and is based on transparent price setting. It includes a fair wage and a fair profit. Fair prices represent an equitable share of the final price to each player in the supply chain.

  • Fair Wages

    Fair Wages

    A Fair Wage is an equitable, freely negotiated and mutually agreed wage, and presumes the payment of at least a Local Living Wage.

  • Living Wages

    Living Wages

    A Local Living Wage is remuneration received for a standard working week (no more than 48 hours) by a Worker in a particular place, sufficient to afford a decent standard of living for the Worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transport, clothing, and other essential needs, including provision for unexpected events.

Principle Five: Ensuring no Child Labour and Forced Labour

The organisation adheres to the UN Convention on the Rights of the Child, and national / local law on the employment of children. The organisation ensures that there is no forced labour in its workforce and / or members or homeworkers.

Organisations who buy Fair Trade products from producer groups either directly or through intermediaries ensure that no forced labour is used in production and the producer complies with the UN Convention on the Rights of the Child, and national / local law on the employment of children. Any involvement of children in the production of Fair Trade products (including learning a traditional art or craft) is always disclosed and monitored and does not adversely affect the children’s well-being, security, educational requirements and need for play.

Principle Six: Commitment to Non Discrimination, Gender Equity and Women’s Economic Empowerment, and Freedom of Association

The organisation does not discriminate in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, HIV/AIDS status or age.

The organisation has a clear policy and plan to promote gender equality that ensures that women as well as men have the ability to gain access to the resources that they need to be productive and also the ability to influence the wider policy, regulatory, and institutional environment that shapes their livelihoods and lives. Organisational constitutions and by-laws allow for and enable women  to become active members of the organisation in their own right (where it is a membership based organisation), and to take up leadership positions in the governance structure regardless of women’s status in relation to ownership of assets such as land and property. Where women are employed within the organisation, even where it is an informal employment situation, they receive equal pay for equal work.  The organisation recognises women’s full employment rights and is committed to ensuring that women receive their full statutory employment benefits. The organisation takes into account the special health and safety needs of pregnant women and breast-feeding mothers.

The organisation respects the right of all employees to form and join trade unions of their choice and to bargain collectively. Where the right to join trade unions and bargain collectively are restricted by law and/or political environment, the organisation will enable means of independent and free association and bargaining for employees. The organisation ensures that representatives of employees are not subject to discrimination in the workplace.

Principle Seven: Ensuring Good Working Conditions

The organisation provides a safe and healthy working environment for employees and / or members. It complies, at a minimum, with national and local laws and ILO conventions on health and safety.

Working hours and conditions for employees and / or members (and any homeworkers) comply with conditions established by national and local laws and ILO conventions.

Fair Trade Enterprises are aware of the health and safety conditions in the producer groups they buy from. They seek, on an ongoing basis, to raise awareness of health and safety issues and improve health and safety practices in producer groups.

Principle Eight: Providing Capacity Building

The organisation seeks to increase positive developmental impacts for small, marginalised producers through Fair Trade.

The organisation develops the skills and capabilities of its own employees or members. Organisations working directly with small producers develop specific activities to help these producers improve their management skills, production capabilities and access to markets – local / regional / international / Fair Trade and mainstream as appropriate. Organisations which buy Fair Trade products through Fair Trade intermediaries in the South assist these organisations to develop their capacity to support the marginalised producer groups that they work with.

Principle Nine: Promoting Fair Trade

The organisation raises awareness of the aim of Fair Trade and of the need for greater justice in global trade through Fair Trade. It advocates for the objectives and activities of Fair Trade according to the scope of the organisation. The organisation provides its customers with information about itself, the products it markets, and the producer organisations or members that make or harvest the products. Honest advertising and marketing techniques are always used.

Principle Ten: Climate Action and Protection of the Environment

Fair Trade Organisations support and practice production, agriculture, service and trade activities that are natural resource conserving, low-emitting, culturally sensitive, socially just and economically viable. They work on adapting and building resilience to climate change and reducing the greenhouse gas emissions of their operations. Where they work with groups of agricultural producers and indigenous people, FTOs contribute to the conservation of their territories, strengthen their systems of land use (cultural landscapes) and protect their biodiversity with the aim of preserving the ecosystem and strengthening their agricultural models to gain resilience to climate change.

Buyers and importers of Fair Trade products and services support their supply chain partners in adopting practices and transport options that encourage sustainable development and protect our planet at this time of crisis.

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OUR PRODUCT LABEL

The WFTO Product Label is more than just a Fair Trade symbol. It signifies not only that the practices across the supply chain are checked against the WFTO Fair Trade Standard, but it also represents support to the battle against poverty and inequality. Products carrying the WFTO Label are made and traded by Guaranteed Fair Trade Organisations dedicated to the sustainable Fair Trade economy. Every purchase of products with the WFTO Label supports small producers and their communities.

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WFTO Membership & Associate Types

  • Fair Trade Organisations (FTO)

    All trading members of WFTO. This includes all organisations that have more than half of their income and/or more than €100,000 in income from trade.

  • Fair Trade Support Organisations (FTSO)

    An organisation whose primary mission is to support Fair Trade and/or provide services to organisations that are or want to become Fair Trade Organisations.

  • Fair Trade Networks (FTN)

    An organisation which is an association of organisations committed to Fair Trade.

  • Individual Associates (IA)

    Individual Associates are supporters of the Fair Trade movement with limited rights. The WFTO Guarantee System does not apply to them.

  • Associate Organisations (AO)

    Associate Organisations align with WFTO’s values but after their application. They do not undergo monitoring and also have limited rights.

WFTO Guarantee System Monitoring Statuses

  • Candidates

    Candidates have been conditionally approved for membership but have not completed their first monitoring cycle under the WFTO Guarantee System. They have limited rights within WFTO. They may not use the WFTO Member Mark and Product Label or claim that they are monitored by WFTO.

  • Guaranteed Members

    Guaranteed members have met the WFTO Membership requirements and are monitored under the WFTO Guarantee System.

  • Member

    Organisations that have no or little income from trade go through a reduced version of the WFTO Guarantee System that does not include criteria related to trade. These organisations may use the WFTO Member Mark but cannot use the Product Label for any products they may be trading to support their mission. This status only applies to Fair Trade Networks (FTN) and Support Organisations (FTSO).

  • Renewal in Progress

    Members who are in the process of renewing their guaranteed status and are overdue on some requirements retain full rights while they work to meet the demands of the Guarantee System on an administrative or compliance level.

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WHO CAN APPLY

WFTO welcomes applications from established Fair Trade Organisations as well as organisations that support Fair Trade. Individuals in their capacity as researchers, writers, consultants and specialists in their field who can contribute solid skills, knowledge and expertise to WFTO and members are also welcome.

Add Your Heading Text Initial requirements for organisations:

  • Compliance with the WFTO 10 Principles of Fair Trade. Please have a look at the WFTO Fair Trade Standard for more specific information on compliance with these principles.

  • All applicant organisations must already be duly registered (as a legal entity) and active for at least one year.

Who can apply?

  • Fair Trade Organisations (FTO)

    All companies, partnerships, co-partnerships and other legal bodies – as determined by the legal provisions of the country of the member concerned – that are directly engaged in Fair Trade. They may be producers or northern or southern based trading FTOs for whom Fair Trade is the main activity. To qualify for FTO membership, income from sales (turnover) must account for 50% or more of the total income. Applications for FTO membership cannot be accepted from organisations with no prior sales history.

  • Fair Trade Networks (FTN)

    Legal entities whose primary function is to serve as national or international associations of Fair Trade producers and/or Fair Trade Organisations.

  • Fair Trade Support Organisations (FTSO)

    Fair Trade Organisations where trading is not the main activity (proportion of trade is less than 50% of total income). These organisations are engaged in Fair Trade indirectly, through activities that promote and support Fair Trade. These activities can include business counselling, finance, advocacy or networking.

  • Associate Organisations

    This is a special category for national or international organisations that are interested in supporting and promoting Fair Trade, including donor organisations. Organisations that do not meet the one-year legal existence requirement also fit in this group.

  • Individual Associates

    Individual researchers, writers, consultants and specialists in their field that can support WFTO. WFTO expects its individual associates to be active Fair Trade supporters whose experience and expertise in their own particular field can be of practical benefit to WFTO's members. To apply, please submit a curriculum vitae.

    While FTO, FTN and FTSO are entitled to full WFTO membership, organizational and individual associates have only limited rights.

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