The WFTO Guarantee System (GS) combines Fair Trade and social enterprise verification into one. It is built to verify that an enterprise is mission-led, focused on the interests of its producers, and this is in the structure, systems and practices of the enterprise. It was created by experts and pioneers from the Fair Trade movement so as to be credible, clear, and affordable.

In 2011, the membership of the WFTO decided to develop a new type of Fair Trade system to meet the ever-growing demand for a more trustworthy Fair Trade recognition scheme in the international market.  Developed by a group of experts in the field of Fair Trade monitoring and verification, the major aspects in the development of the GS were credibility, sustainability and robustness of the system. To achieve these three criteria, the GS has five major components: new membership admission procedure, Self Assessment Report, Monitoring Audit, Peer Visit, and the Fair Trade Accountability Watch (FTAW). The FTAW is a participative monitoring mechanism that allows the public to report compliance issues regarding Fair Trade Organisations. The GS was approved and implemented by the WFTO Membership in May 2013.

The primary goal of the GS is to improve Fair Trade practices in the supply chain. It is an accountability and development tool for organisations. Carrying out all the components allows WFTO members to be more competitive and responsive to evolving markets thereby creating the potential for increased sales.

The GS is not a product certification system. It is an assurance mechanism that an enterprise is truly mission-led and that Fair Trade is implemented in the supply chain and practices of the organisation. Members that pass the GS process attain the ‘Guaranteed Fair Trade Enterprise’ status and may use the WFTO Label on their products.

Use the Handbook to learn about the the Guarantee System process. Get a copy here.

Watch a presentation about the WFTO Guarantee System here.

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

Get a copy of the principles in English, Arabic, Spanish, Mandarin, French, German and Italian.

Download poster in English, Spanish, French, Dutch and German.

Principle One: Creating Opportunities for Economically Disadvantaged 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

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 FT 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 Organisations 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

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

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

Local Living Wage

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 Organisations 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 world 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: Respect for the Environment

Organisations which produce Fair Trade products maximise the use of raw materials from sustainably managed sources in their ranges, buying locally when possible. They use production technologies that seek to reduce energy consumption and where possible use renewable energy technologies that minimise greenhouse gas emissions. They seek to minimise the impact of their waste stream on the environment. Fair Trade agricultural commodity producers minimise their environmental impacts, by using organic or low pesticide use production methods wherever possible.

Buyers and importers of Fair Trade products give priority to buying products made from raw materials that originate from sustainably managed sources, and have the least overall impact on the environment.

All organisations use recycled or easily biodegradable materials for packing to the extent possible, and goods are dispatched by sea wherever possible.

Last revised and approved by WFTO members in November 2017.

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 a set of compliance criteria based on the 10 Fair Trade Principles and International Labour Organisation (ILO) conventions. Many of these criteria are mandatory requirements to join WFTO. There are also other non-mandatory requirements, where WFTO members must show continuous improvement over time.

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 will be assessed by various means, including the Self Assessment Report, the Peer Visit and the Monitoring Audit. These are described in the WFTO Guarantee System Handbook.

The Standard is subject to periodic review and changes by WFTO’s Standard and Guarantee System Committee.  

Get a copy of the WFTO Fair Trade Standard here.

To learn about the process of the Guarantee System, get the handbook here.

Fair Trade Enterprises exist to put people and planet first. This means they pioneer solutions to broader issues like overuse of natural resources, women’s empowerment, refugee livelihoods, human rights, inequality and sustainable farming. Fair Trade Enterprises support organic agriculture, adopt circular economy production processes, generate new models of social enterprise and create new ways to champion the dignity of workers, farmers, artisans and communities around the world. Here are some ways they are innovating to create solutions to some of the world’s biggest challenges.

Circular economy

There is a surge in upcycling waste and recycling across the global community of Fair Trade Enterprises. In Bangladesh, they are turning waste saris, paper and discarded cotton from fast fashion factories into bags, baskets and ornaments. Meanwhile, in Zanzibar, a Fair Trade Enterprise is turning waste glass and discarded magazines into lighting accessories and bead curtains. These stories are repeated the world over, as enterprises show they work for both people and planet.

Women's Leadership

When a business exists to pursue a social mission, it is often also a champion for women’s rights. Fair Trade Enterprises are pioneering new ways to empower women. Most leaders of Fair Trade Enterprises are women (CEOs, board and senior management). And most of the farmers, artisans and workers they support are women (about 74%). Fair Trade Enterprises are also active campaigners for women’s rights, including through speaking up collectively on International Women’s Day each year.

Inequality

Tackling inequality is at the core of every Fair Trade Enterprise. They focus on opportunities for marginalised producers, champion living wages, reinvest profits and ensure their business puts people and planet before profit. They explicitly exist as an alternative to exploitative models of business and trade.

Human Rights

The Fair Trade movement fully embraces human rights. Human and labour rights are embeded across the 10 Principles of Fair Trade. This includes the principle of no child or forced labour, gender equity, freedom of association and a host of other human and labour rights that have emerged over the last 70 years. Human rights is at the heart of Fair Trade.

Organic

Every Fair Trade Enterprise must put both people and planet first. This includes a focus on organic agriculture, to make sure farming doesn’t undermine the local ecology. This is why most Fair Trade Enterprises sourcing food and agricultural products are fostering organic farming methods.

What is the Fair Trade
Accountablity 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 organisation concerned to ask for their side of the story. All information is then forwarded to the Standard and 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.