Fairtrade and Poverty Reduction: ISEAL Alliance’s Response to the SOAS Report

ISEAL welcomes the report from SOAS that shows how wage workers are directly and indirectly affected by certification. Certification programmes must seek to learn from these results and to see what can be improved. However, the study has some flaws that need to be considered.


For Information Contact:
Lara Koritzke
ISEAL Director of Communications
Tel: +1 416 523 6332
Email: lara@isealalliance.org

LONDON - ISEAL welcomes the report from SOAS: ‘Fairtrade, Employment and Poverty Reduction in Ethiopia and Uganda.’  The SOAS study seeks to fill an important gap in the literature, and highlights the importance of continuing to examine how wage workers are directly and indirectly affected by certification. Certification organisations must sharpen their focus on uncovering what their efforts have truly accomplished and what can still be improved. 

However, the SOAS study, while interesting in many respects, should not be taken as the de facto verdict on Fairtrade certification or on Fairtrade’s impacts on the poor. First, the study focuses on wage workers, who are indeed among the poorest in many agricultural economies, but are not the only poor households that certification programmes like Fairtrade seek to benefit.  Small holder farmers are also often among the poor, and they are not the focus of the SOAS study. Second, the study design does not support drawing conclusions about Fairtrade’s effect on wages and working conditions. It is widely accepted within the evaluation community that comparing areas with and without an intervention like certification at one point in time does not provide sufficient evidence to conclude that that intervention is responsible for the observed differences.  Most of the study’s findings about Fairtrade are based on comparisons at one point in time.  When the study does look at wage changes over time (1 or 2 years), the “intervention” examined is a change in international commodity prices, not Fairtrade certification.

The study can raise important questions about wages and working conditions in some areas, but not draw conclusions about the cause of those differences. In addition, the analysis and report have a number of flaws, some of which have already been pointed out by Fairtrade International in its response, which raise questions about the accuracy of the information presented and the conclusions. 

We in the certification community know that it takes years to accumulate the comprehensive data we need, but we also know that the bulk of the evidence on the impacts of certification is promising, even when some reports, such as the SOAS study, find some negative results. Last October, a literature review of 24 articles, conducted by KPMG Sustainability and commissioned by three foundations looked at ISEAL members, including Fairtrade, working in coffee, cocoa and cotton, and found that certification programmes are having an overall positive impact on sustainable rural development and small holder livelihoods. The authors took a wide view, trying to assess the bulk of the evidence of certification. They found that the number of articles showing positive effects of certification greatly exceeded the number of articles citing negative effects. They also categorised studies that show ‘no effect,’ as those that describe issues that exist independently from certification or that describe problems that certification is not aiming to solve. Interestingly, the KPMG review found that certified farms tended to be safer places to work and child labour was reduced on farms.

The general conclusion that certified farms are indeed different and perform better than non-certified farms was also echoed in the 2014 report “Measuring Sustainability”, produced by the Committee on Sustainability Assessment (COSA). This report brought together information from 18,000 surveys in Asia, Latin America and Africa in coffee and cocoa concluded that on average farms participating in a sustainability initiative, such as Fairtrade, performed better on economic performance and access to training than similar farms that did not participate in such initiatives. This was not true in every case and for every aspect of sustainability, but when evidence from multiple cases is brought together this is the general conclusion.

Certainly there is further to go and negative results can be found in some studies and cases, and we must learn from these findings.  The SOAS study highlights the importance of certification systems examining how they can better benefit the poorest of the poor, who are - in many contexts - landless labourers or farmers with very little land who work on neighbouring farms to increase their incomes. ISEAL members have been working collaboratively or in small groups on many of these issues for the last few years.  For example, Fairtrade is working with its agriculture and forestry certification peers in a collaborative group focused on demonstrating and improving poverty impacts of certification, and in another ISEAL-facilitated group focused on making improvements in wage growth.

So often there are negative or unfounded reports based on isolated incidents, anecdotal or incomplete evidence, or situations that have long since been corrected.  As we all know, these sensational stories can gain easily gain traction and distract from the positive reports that are coming through. ISEAL is disappointed that UK media outlets have taken to such strong negative language about Fairtrade and have used specific headlines and emotional language to question the entire Fairtrade system, and even the entire certification model more widely, ignoring the fact that these programmes are run by mission-driven non-profit organisations, many of which have worked for decades to learn and improve how to help people and the environment.

Certification is not a guarantee. Farm inspections cannot always control for corruption or inadequate legislation. The reality is that certification and standards are often applied in places where infrastructure is poor and government weak. Certification programmes, such as those that comprise the membership of ISEAL, must do more, and they are working in ISEAL to improve and become more and more effective. But where poverty runs deep and regulation is unlikely, standards are one of the few mechanisms for improving social and environmental practices.  In the last decade alone, the baseline of acceptable practice has indisputably gone up and certification has helped to increase our expectations of companies and their purchasing.  This fact should not be lost in looking at one study.


For more details, please see Fairtrade International's Q&A and a statement from Fairtrade International.
Harriet Lamb, CEO of Fairtrade International, talks about unpeeling the impacts of poverty on the Huffington Post.

Read more information on ISEAL’s collaborative work with certification programmes to demonstrate and improve poverty impacts.
Read more information on Fairtrade’s work with other certification programmes to improve wage growth.

Additional Notes

The ISEAL Alliance is the global association of sustainability standards and certification systems.  Fairtrade International is one of the 21 ISEAL members along with many others of the world’s most recognized certification programmes.  For more details, see a full list of ISEAL members.

ISEAL's Codes of Good Practice have become the global references for developing and assessing credible sustainability standards and certification programmes. One of these Codes, the ISEAL Impacts Code helps certification programmes to better understand the results of their work.  All organisations that are members of ISEAL, including Fairtrade, commit to implementing the Impacts Code. This commitment to learning and improvement makes Fairtrade and other ISEAL members unique among their certification peers.

One of the requirements of the Impacts Code, in addition to setting up monitoring systems and creating learning mechanisms to improve the standard, is that certification organisations should also conduct, commission or submit to additional impact evaluations.