4c annualreport2010

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The 4C Association is the multi-stakeholder organization that brings together actorsthat are genuinely committed to addressing the sustainability issues of the coffee sectorin a pre-competitive manner.

The members of the 4C Association include coffee farmers (both big and small), traders(importers and exporters), industry players (coffee roasters and retailers) and civil society(non-governmental organizations, standard setting initiatives and trade unions).

Members also include individuals committed to the Association’s aims. This global community

works together to improve the economic, social and environmental conditions of those whomake their living from coffee.


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Sowing change

The year 2010 saw big changes for the coffee sector in general

and for the 4C Association in particular. Key developments for

the Association and its partners included efforts to help farmers

step up to other standards so as to make sustainability accessible

to the vast majority of them; multi-stakeholder dialogue on gen-

der, pesticide use and climate change as well as the kick-off of

ground-breaking projects, such as the 4C Tool Library. Moreover,

the Association undertook a major strategic revision process to

define a new business model.

When the 4C project was first initiated, the coffee sector was

in the midst of a crisis due to the oversupply of coffee in themarket coupled with the consequent plummeting of prices. As

a result, different stakeholders such as coffee producers, traders,

roasters and NGOs united to address the sustainability chal-

lenges facing the sector. Together they sowed the seeds for the

development of the 4C Code of Conduct and the 4C system.

Nearly a decade later, the challenges facing the coffee sector

have shifted considerably. For the year 2010, three key issues

characterized the international coffee scene: news of tight

supply and high demand on the market causing a significant

rise in coffee prices; increasing domestic demand in various

coffee-producing countries as well as the continued effects of

climate change on the predictability, quality and seasonalityof coffee supplies.

In view of changing circumstances, the 4C Association had

to adapt its modus operandi. The Association’s approach was

still largely determined by the context of its starting phase.

Back then, much effort went into building a supply of 4C

Compliant Coffee, training producers in the application of

the 4C baseline sustainability standard and broadening the

network of partners and members.

To align itself with the current context of the coffee market,

the 4C Association started developing a new focus anddirection in 2010. It embarked on defining a new business

model which was approved by the 4C Council during its 8th

meeting in February 2011. With this new business model, the

Association will now switch to a demand-driven approach. It

will focus on activities that serve members’ common interests

and create a favourable framework for buyers and sellers to

better connect along the 4C supply chain. The decision to

adopt a new business model required a significant amount of

thought and commitment of those members actively involved

in the development of the Association. Major roasters have

also expressed their commitment to the new model. In the

end, this courageous move was only possible because of the

strong backup and support of members.

Even at its formation, the 4C Association recognized that

only the united efforts of all stakeholders along the supply

chain would make it possible to meet sustainability chal-

lenges in the sector. Now more than ever, the Association as

the multi-stakeholder dialogue platform can play a key role in

building a sustainable coffee world.

The 4C Association is today sowing the seeds of change that

will make it possible to grow a sustainable coffee future. We

congratulate all 4C Members and units, the Council, Techni-

cal Committee and the Secretariat on staying on track in this

endeavour. We look forward to this new phase and encour-age you to continue uniting your efforts so as to enhance

sustainability practices in the mainstream coffee sector.

Diego Pizano Salazar, President of the 4C Association and Chairperson of the Executive Board 01Albrecht Schwarzkopf, Vice President of the 4C Association 02

Roel Vaessen, Treasurer of the 4C Association 03 Patrick Leheup, Chairperson of the Technical Committee 04 Hein Jan van Hilten, Chairperson of the Mediation Board 05

Hein Jan van Hilten

Roel VaessenDiego Pizano Salazar

Patrick Leheup

Albrecht Schwarzkopf

MESSAGE FROM THE

EXECUTIVE BOARD


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4C ASSOCIATION | ANNUAL REPORT 2010 – TABLE OF CONTENTS

TABLE OF CONTENTS

A DEMAND-DRIVEN APPROACH

STEPPING UP

PLATFORM FOR PRE-COMPETITIVE COLLABORATION

WORKING TOGETHER TO FIND SOLUTIONS

PROFIT & LOSS ACCOUNT 2010

LIST OF MEMBERS

THANK YOU!

DIRECTORY & IMPRINT

MESSAGE FROM THE EXECUTIVE BOARD

MESSAGE FROM THE EXECUTIVE DIRECTOR

A DEMAND-DRIVEN APPROACH

STEPPING UP

PLATFORM FOR PRE-COMPETITIVE COLLABORATION

WORKING TOGETHER TO FIND SOLUTIONS

VERIFICATION


LIST OF MEMBERS

THANK YOU!

01

02-03

04-07

08-15

16-19

20-24

25

26-27

28-29

30-31

32

SOWING CHANGE


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Uniting efforts for a sustainable future

Several voluntary standards have

developed in the past decade in

answer to the growing need for

solutions to sustainability chal-

lenges. Examples can be found

across all fields - be it cocoa,

palm oil, cotton, tea or many

other agricultural and horticul-

tural, forest and textile products.

These cases prove that solutionsto complex sustainability issues

are better addressed in multi-stakeholder and pre-competitive

platforms engaging all those that are affected by the issues at

stake. Some ten years ago, the 4C project was initiated to be

the platform for mainstream sustainability in the coffee sector.

Nearly a decade later, the 4C Association also has to adapt

itself to new circumstances in the coffee world to meet the

demands of its stakeholders.

Coffee actors are currently confronted with many pressing issues

such as climate change, lack of attractiveness of coffee grow-

ing for the youth, old coffee trees and competition for access tofinance to name but a few. There are no easy answers to such

challenges. What is clear is that when many minds are willing to

cooperate, finding realistic solutions becomes easier. In this role, in

2010 the 4C Association organized Sustainability Forums in Brazil,

Colombia and Guatemala to promote dialogue and exchange in

these regions. Through its pre-competitive approach, the 4C Asso-

ciation also continued to recognize the efforts of other sustainabi-

lity standards towards improved conditions for coffee farmers. A

key indicator of collaboration was a joint event in Brazil organized

by the 4C Association, IMAFLORA, Rainforest Alliance, Fairtrade

International and IAC in November 2010.

Similarly, in the new coffee market context, the year 2010

proved that it was time for the 4C Association to adapt its

working processes to achieve its long-term sustainability goals.

Therefore at its 7th Meeting in June 2010, the 4C Council de-

cided to set up a task force to revise the Association’s business

model. The task force presented its results to the 8th Council

which consequently approved the new business model. Even

as I write this message, the 4C Association is at a turning

point. It has just kicked off the implementation process of the

new model which will conclude at the end of 2011.

Meanwhile, 4C Membership grew by 18 new members in 2010

resulting in a membership of 148 as of December 2010. 4C

Compliant Coffee supplies reached 8 million bags (bags of 60

kg) by the end of 2010. A major challenge of 2010 was that

the available supply of 4C Compliant Coffee did not match

existing demand leading to understandable frustration among

members. This issue remains of high priority for the 4C Associa-

tion with improvement scenarios already worked out in the

new business model.

It is the diversity of stakeholders, members and partners aswell as their commitment which make the 4C Association’s

approach unique. Their united efforts have made it possible to

define a new business model and move into a new and excit-

ing phase. I thank all the 4C Members and partners for their

cooperation and support, especially those that committed their

time, knowledge and in many instances also made financial

contributions to make the change possible. I look forward to

continued cooperation in the coming years.

01 Melanie Rutten-Sülz, Executive Director of the 4C Association

Melanie Rutten-Sülz

4C ASSOCIATION | ANNUAL REPORT 2010 – MESSAGE FROM THE EXECUTIVE DIRECTOR

MESSAGE FROM THE

EXECUTIVE DIRECTOR


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A DEMAND-DRIVEN

APPROACH

Switching to a demand-driven approach

The year 2010 will be remembered in the coffee sector as one

of scarcity: the year in which many companies struggled to

find the sufficient amounts in the right qualities and origins to

make their blends. But 2010 will also be remembered as the

year when major companies fully embraced the concept of

sustainability and took concrete steps to make a difference. In

August 2010, Nestlé announced the launch of the NESCAFÉ

Plan, in partnership with the 4C Association and the Rainfor-

est Alliance. A few

months later, Sara Lee

committed to triplingits purchases of UTZ

CERTIFIED Good Inside

coffee within the next

five years. Starbucks

started serving only

Fairtrade certified cof-

fee in all its espresso-

based beverages in

Europe in March 2010.

Such engagements are echoed in the International Trade

Center’s 2010 Sustainable Coffee Report, which states that in

2009 more than 8% of all the green coffee exported world-

wide adhered to a credible claim of sustainability through

verification or certification. There is reason to believe that

the figure for 2010 can significantly increase through grow-

ing demand and large companies’ recent commitments. For

instance, Kraft Foods announced in May 2011 that it will move

towards 100% sustainably sourced beans for all its European

brands for 2015. To reach this ambitious target, Kraft will

considerably increase its sourcing of 4C Compliant Coffee and

also certified coffee from other recognized sustainability stand-

ards. This commitment

builds on the company’s

long-standing collabora-tion with the Rainforest

Alliance.

It would have been

difficult to imagine

this scenario only one

decade ago. Back then,

an oversupply of coffee

led to the plummeting of international coffee prices, pushing

millions of coffee farmers into poverty.

The 4C project was initiated precisely in response to this crisis.Its goal was to bring sustainability into the mainstream and

enable as many farmers as possible to implement sustainable

production practices.

Therefore, the 4C Association adopted a supply-driven ap-

proach during its starting phase. The young Association stead-

ily built up a supply of 4C Compliant Coffee, trained producers

in the application of the 4C baseline sustainability standard

and broadened its network of partners and members. The

approach was a successful one resulting in great availability of

4C Compliant Coffee in the market today and 67 licensed 4C

Units in 17 countries.

4C ASSOCIATION | ANNUAL REPORT 2010 – A DEMAND-DRIVEN APPROACH

01

Record-keeping of 4C Compliant Coffee at FNC unit, Colombia: The 4C 01Association now moves from a supply-driven to a demand-driven approach

“The journey towards a sustainable future has many steps and requirescontinuous re-appraisal to stay on course. The standards that form the4C Code of Conduct represent a positive next step for the whole coffee

industry to adopt sustainable practices. Therefore Kraft Foods will beconsiderably increasing its purchases of sustainable coffee which meets

at least the standards held within the 4C Code of Conduct”

— Hubert Weber, President, Coffee, Kraft Foods Europe —


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However, this success met with some challenges for both

producers and buyers. On the one hand, producers invested

a considerable amount of time and effort to comply with

the Code, pass 4C Verification and produce 4C Compliant

Coffee. And yet this coffee did not always meet the specific

purchasing requirements of traders and buyers in the system.

For instance in the coffee year 2009/2010, the purchases

of 4C Compliant Coffee amounted to 386,000 bags, while

the production potential of 4C Units reached over 8 million

bags. Naturally, such a gap created a no-win situation for

all involved. The 4C Association therefore began to discuss

a new working approach. As per the mandate of the 7th

Council in June, the Association formed a task force withmembers’ representatives to define a new strategic direction.

The task force began its work in November 2010 and results

were approved during the 8th Council Meeting in February

in Tanzania. Through a new business model, the focus of the

Association will now become demand-driven. The emphasis

will now be on activities to serve members’ common interests

and creating a favourable framework for buyers and sellers to

better connect along the 4C supply chain.

The purchasing commitments of 4C buying members, some

already publically announced such as the NESCAFÉ Plan, Kraft

Foods or Coop’s and Tchibo’s purchasing initiatives, add mo-mentum to these efforts.

Moving towards a sustainable coffee world bypromoting all sustainability standards

In 2009, approximately 8%1 of all the green coffee exported

worldwide had been sustainably produced. While this figure is

promising, the sector is still far from reaching that critical mass.

1 Source: International Trade Center’s 2010 Sustainable Coffee Report

To create a coffee world in which sustainability is the norm, it is

imperative that all actors involved cooperate, especially sustain-

ability initiatives and standards. Therefore, the 4C Association

will strengthen its role as a pre-competitive initiative and actively

promote all sustainability standards. Additionally, it will encour-

age its members to continuously improve their performance

and step up from the 4C baseline to more demanding schemes.

Such an approach provides an efficient way to manage supply

chains. It also allows buyers more flexibility in reaching their

specific sustainability goals by combining coffee that meets the

requirements of different standards in their product range.

To reduce the burden of multiple audits and maximize benefitsfor farmers, the standards and systems of the 4C Association

and the Rainforest Alliance were benchmarked in 2008. Since

then, both organizations have extended their cooperation to

help farmers to step up from the 4C baseline to the SAN Stand-

ard and obtain Rainforest Alliance certification. In September

2010, the two initiatives started partnering with Nestlé on the

NESCAFÉ Plan. Also in 2010, the 4C Association strengthened

its collaboration with other standards. In November, it co-organ-

ized a Symposium on Sustainable Coffee Production in Poços

de Caldas, Brazil, with Imaflora/ Rainforest Alliance, Fairtrade

International and the Instituto Agronômico de Campinas (IAC).

Other collaborators were Certifica Mina and UTZ CERTIFIED.


02

02 In the mainstream sector, consumers can choose coffee products fromvarious brands, origins, and with different sustainability attributes


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The NESCAFÉ Plan – a major step to broade-ning the sustainability impact by making adifference in the mainstream coffee sector

At the end of August 2010, Nestlé CEO, Paul Bulcke,

announced in Mexico the NESCAFÉ Plan, an ambitious

international coffee initiative creating shared value

throughout the coffee supply chain from farmers to

consumers. The NESCAFÉ plan will extend technical as-

sistance and agronomy services, provide expert advice on

sustainable farming

practices, and postharvest treatment

techniques to over

10,000 coffee farm-

ers per year. Farmers

will also receive 220

million high yielding,

more disease and

drought resistant coffee plantlets by 2020 to help them

rejuvenate their plantations, increase their yields and

improve livelihoods. Over the past ten years, Nestlé has

already distributed 16 million of these coffee plantlets

to farmers in a number of countries, including Mexico,

Thailand, the Philippines and Indonesia.

One of the main problems currently faced in the coffee

sector is an ageing tree population. In addition, the

younger generations are predominantly migrating to

urban areas seeking

employment in thecities as they see a lack

of economic incentives

to grow coffee. The

NESCAFÉ Plan aims to

address these issues by

further encouraging the

renovation of coffee

plantations and providing adequate access to train-

ing for farmers. Additionally, it will be key for Nestlé to

make coffee growing an attractive proposition for future

generations.

With this Plan, Nestlé is assuring 4C Compliance by 2015

for all coffee purchased through their Farmer Connect/

Direct Procurement network. This amounts to approxi-

mately 180,000 tons of green coffee per year, benefiting

over 170,000 farmers and their families.

In the coming months and years, an increasing number

“Nestlé is a 4C Founding Member and we believe that 4C is a verynecessary stepping stone towards long-term sustainability. To addressthe mainstream, as 4C Association does in its principles and in its ap-

proach, is the right first step in this journey.”

— Nicolas Huillet, Project Leader NESCAFÉ Plan —

Distribution of high yielding plantlets in Puebla, Mexico 01


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02 Training on 4C system, December 2010, Vietnam:Participants included Nestlé procurement countries‘ representatives andRainforest Alliance representatives


of Nestlé suppliers will continue to create 4C Units work-

ing in accordance with the principles of the 4C Code of

Conduct. As part of this extensive journey accompany-

ing these suppliers on this expedition, the Nestlé agrono-

mists have already started training farmers in agricultural

practices that comply with the Code.

With a specialfocus on the set

up and manage-

ment of 4C Units,

the 4C Association

provided informa-

tion regarding its

system to Nestlé

staff and partners

involved in the

Plan’s implemen-

tation. The first training session was held in Mexico in

November 2010 with a total of 26 participants, includingNestlé representatives, several coffee mills, and NGOs. At

the beginning of December, 15 participants took part in

a second training in Vietnam. These included representa-

tives from Nestlé’s Farmer Connect/Direct Procurement

markets of China, Vietnam, Indonesia, Thailand, Ivory

Coast, Philippines and India, as well as representatives

from the Rainforest Alliance.

The NESCAFÉ Plan will positively impact the coffee sector

by reaffirming the 4C Code as the baseline sustainability

standard and turn sustainability mainstream from farm-

ers to consumers. In fact, farmers in the project may use

the Code as an instrument to step up to the certification

standard of the Rainforest Alliance (SAN Standards). In

addition, Nestlé

will source 90,000tonnes of coffee in

line with the inter-

nationally recog-

nized sustainability

standards of the

Rainforest Alliance

and the Sustain-

able Agriculture

Network (SAN) by

2020.

“Nestlé fully supports the 4C Association. It is important that as an industry,coffee has a forum that allows producers, trade, roasters and civil society toexpress their needs and desires on sustainability. The 4C Code of Conductis an important outcome as it shows the outside world that these are thestandards that the coffee world is working towards. Nestlé as one of the

founding members of the 4C Association and a company committed to sus-tainable agricultural development fully supports the new business model to

ensure the long-term viability of the 4C Association.”

— NESCAFÉ Plan team —


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Enabling producers to advancein the sustainability journey

A variety of voluntary social and environmental standards in

agriculture have been developed during the past 20 years.

Governments have been or become involved in some of

them, most obviously in organic agriculture and the relatedlabelling. However, most social and environmental standards

have been developed by non-governmental organizations

such as Fairtrade International, Social Accountability Inter-

national (SA-8000 standard) or the SAN/Rainforest Alliance

Standards. For the coffee sector, the 4C Association, founded

in 2006, is the youngest standard setting initiative.

Sustainability standards offer producers opportunities for

increased market access or even price premiums in some in-

stances. Their application also helps to protect the natural en-

vironment and create a positive economic and social impact

for the local communities involved. However, farmers oftenlack access to information, know-how and training on the

application of sustainable agricultural practices. Moreover,

compliance with standards often has economic implications

for producers as they need to make investments to fulfill the

requirements. It can also prove to be time consuming be-

cause it requires changes in the way they work. The 4C Code

of Conduct, as a baseline standard, provides farmers with

a first step in their sustainability journey and allows for pro-

gressive improvements, easing farmers’ compliance efforts.

Moreover, farmers receive support from the members of

the 4C Association along the supply chain. After complying

with the 4C Code, farmers are in a better position to further

improve their performance to meet the compliance criteria

of more demanding standards. The 4C Association is already

working with the Rainforest Alliance on this approach.

The practicability of the 4C Code of Conduct in this respectwas demonstrated through a pilot exercise in 2010, in El Sal-

vador. Through the pilot, in cooperation with the SalvaNAT-

URA Foundation, 132 farmers stepped up from the baseline

4C Code of Conduct to SAN Standards. As the exercise was

a successful one, discussions are currently underway to do

similar projects with other sustainability schemes. The new

business model reaffirms the ambition of the 4C Association

to collaborate with and actively promote other standards to

achieve broader impact for coffee farmers.

4C ASSOCIATION | ANNUAL REPORT 2010 – STEPPING-UP

STEPPING-UP

Field training exercise, Vietnam, June 2010: Applying the 4C Code can enable 01farmers to step up to more demanding standards with time


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1 Any other sustainability scheme (also with a national or regional scope) whose standards prove to be more

demanding than those of the 4C Association and that recognizes the 4C Code of Conduct as the baseline


C O N T I N U O U S I M P R O V E M E N

T T O W A R D S S U S T A I N A B I L I T Y

ADVANCED PERFORMANCE

BASELINE PERFORMANCE

NO COMPLIANCE WITH

SUSTAINABILITY STANDARDS

Eradication of

Unacceptable Practices

Entrance into the

4C system

Implementation of the

4C Code of Conduct

Average yellow

4C Verification as preparation

for certification

Compliance with more

demanding sustainability standards1

STEPPING UP WITH THE 4C ASSOCIATION

UNACCEPTABLE PRACTICES

“The 4C Code of Conduct provided us with a solid basis to step up from the 4C baselinestandard to the SAN Standards. We already had an advanced awareness of the importanceand value of implementing environmental and social friendly practices. For instance, aware-

ness had been raised about the need to protect the natural resources, provide better treat-ment for workers as well as equal salaries and more.”

— Engineer Próspero Trejo, coffee farmer and Managing

Director of Cooperative Ciudad Barrios, 4C Member in El Salvador —


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Pilot project in El Salvador: 132 farmers step upfrom the 4C baseline standard to SAN Standards

It was during a seminar organized by Christian InitiativeRomero (CIR) in Munster, Germany, in September 2007 when

Engineer Próspero Trejo, learnt for the first time about the 4C

Code of Conduct. Mr. Trejo is a coffee farmer and Manag-

ing Director of the Cooperative Ciudad Barrios in El Salva-

dor. When he returned to his country, Mr. Trejo decided to

introduce his fellow members to the sustainability approach

of the 4C system. In September 2009, his cooperative began

the process of forming a 4C Unit and starting the implemen-

tation of the 4C Code of Conduct.

In February 2010, Ciudad Barrios received a license to sell 4C

Compliant Coffee with a 4C Unit made up of 256 business

partners.

After successfully passing 4C Verification, 132 famers in the4C Unit were prepared to undertake the additional efforts of

complying with the SAN Standards of the Rainforest Alliance.

From September to December 2010, these farmers received

technical support from SalvaNATURA to step up from the 4C

baseline standard to the SAN Standard. SalvaNATURA carried

out several diagnoses at farm level before the stepping-up

process kicked off. The analyses demonstrated that major

progress had already been made in sustainability practices as

a result of implementing the 4C Code. Significant improve-

ments could be seen in terms of, for example, better quality

of drinking water, safer working conditions and workers’

health as well as more gender equality in the payment of

wages.

After four months of hard work, the efforts of the farmers

paid off when they passed the Rainforest Alliance certification

audit. Thanks to the certificate they obtained, they are now

able to sell their coffee as Rainforest Alliance certified, open-

ing new marketing opportunities for their product.

“Compliance with the 4C Code gives us more credibility,greater acceptance of our product and the ability to makemore business in the future since the buyers have theassurance that we comply with baseline sustainabilitycriteria,” explains Mr. Trejo.

Members of the Cooperative Ciudad Barrios hold up signs on 01environmental protection to be displayed on the farms

Engineer Próspero Trejo of the Cooperative Ciudad Barrios in El Salvador. 02 The Cooperative successfully stepped up to RA certification from 4C compliance


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4C Units delivered over 1,500 trainings in 2010

By the end of 2010, there were 67 4C Units in 17 coun-tries. This represents a total of over 280,000 farmers and

workers who are working in accordance with the 4C

Code of Conduct. But farmers and workers are not alone

in their efforts. The 4C Units’ Managing Entities provide

them with trainings and advice all year around. In 2010,

over 1,500 trainings were reported by the 4C Units (see

map on next page). These trainings covered a wide range

of issues such as good agricultural practices, environmen-

tal protection, labour

safety and safe use of

pesticides. Some are

also specifically aimed

at familiarizing farmerswith the 4C system and

its Code of Conduct. To

support the 4C Units in

their training efforts, the

4C Association organ-

ized eight Training-

of-Trainers workshops on the implementation of the 4C

Code in 2010. Training sessions were organized in Brazil,

Colombia, Guatemala, Kenya, Mexico, Uganda and

Vietnam. Trainers who participate in these sessions canfurther disseminate their knowledge on the 4C concept

to farmers and workers in their respective 4C Units. To

improve efficiency and serve the specific needs of those in

the 4C system, the Association will from now on provide

training services as demanded by individual members. This

goes in line with the demand driven approach of the newly

approved 4C business model.

“Since I started working in the framework of the 4C project, I have receivedtechnical assistance from CISA Exportadora to improve the quality of my

production, as well as advice on wet processing systems. During the 2009 -2010harvest, we were able to treat the wastewater from the coffee beans’ fermenta-

tion and wet processing. The wastewater was stored in wastewater tanks de-veloped with technical support from CISA. In previous harvests, the wastewater

was discharged directly into the stream that passes through the farm.”

— Arnulfo Chavarría González, coffee farmer at CISA Exportadora 4C Unit, Nicaragua —

“At the beginning we did not have an idea of the work cof-fee involved, we basically harvested the coffee as it cameand not much emphasis was given to quality and all the

benefits. Attending training sessions enabled the farmers inthis 4C Unit to realize their production potential and how

to manage resources efficiently. Women are also becomingmore involved. At the beginning only men participated inthe trainings, now women farmers have their own farms

and they can work them independently as they havelearned how to take care of them.”

— Minerva Pérez Gonzalez, farmer, 4C Unit Agroindustrias Unidas de

Mexico S.A. de C.V. —

03 CATI´s technicians receive training on 4C Code of Conduct in July 2010to disseminate knowledge among Sao Paulo farmers


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These trainings refer to sessions organized by the 4C Units themselves in

contrast to Training-of-Trainers (TOTs) workshops organized directly by

the 4C Association (see page 17). These trainings are aimed at providing

farmers with information and skills on sustainable coffee production.

They cover a wide range of issues such as good agricultural and harvest-

ing practices, environmental protection, labour safety and safe use of

pesticides, as well as quality management and market orientation. Some

are also specifically aimed at familiarizing farmers with the 4C system

and its Code of Conduct.

Note: This is not a comprehensive list from all 4C Units. it only includes those4C Units that shared their information regarding trainings. The countries col-

oured in orange are those in which 4C Units are located. The 4C Association

would like to thank those 4C Units that provided the information above.

Name of4C Unit

Country Number ofworkshops/trainings

Number offarmers andworkers trained

Cocatrel Brazil 2 1,240

Cocapec Brazil 6 Est. 1,300

Cooparaíso Brazil 202 5,500

Stockler Brazil 6 141

FederaciónNacional deCafeteros de

Colombia(FNC)

Colombia 668 20, 045

BeneficiosVolcafe CR

Costa Rica 26 1,639

BorgonovoPohl

El Salvador 4 75

Coex El Salvador 2 Est. 90

ExportadoraEl Volcan, S.A.de C.V.

El Salvador 16 378

Sertinsa NKG Guatemala 3 417

Waelti-ShoenfeldExportadores

de Café

Guatemala 18 359

Agapeco Honduras 7 Est. 400

ExportadoraCaliforniaNKG

Mexico 3 15

PROMIZAP Mexico 4 50

CISA Nicaragua 5 126

Exp. Atlantic1 and Exp.Atlantic 2(part of ECOMgroup)

Nicaragua 4 331

Pueblosen AcciónCommunitaria(PAC)

Nicaragua 50 766

TRAININGS &

BY 4C


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Name of4C Unit

Country Number ofworkshops/

trainings

Number offarmers and

workers trained

Tropical FarmManagement(Rothfos)

Kenya 4 120

Ibero(Uganda)Bigasa

Uganda 92 1,647

KyagalaniCoffee Ltd.(Volcafé)

Uganda 24 2,200

CoffeeManagementSercices Ltd.(Volcafé)

Kenya 20 2,000

Kofinaf Kenya 3 250

RwacofExports SARL(Sucafina SA)

Rwanda 43 1,200

WORKSHOPS

UNITSName of4C Unit

Country Number ofworkshops/trainings

Number offarmers andworkers trained

AtlanticCommodities(ECOM Group)

Vietnam 10 1,050

Ea Kmat Vietnam 4 240

Vinacafe BMT(VinacafeBMT)

Vietnam 12 700

Thai HoaLam Dong(Thai HoaCompany)

Vietnam 11 740

Olam LamDong

Vietnam 8 680

Dakman BMT(Volcafé)

Vietnam 15 775

Mercafe Co.Ltd.

Vietnam 2 194

NedcoffeeVietnam

Vietnam 98 800

NeumannGruppe Viet-nam Ltd.

Vietnam 9 270

NestléThailand

Thailand 23 1,350

Nestlé VN(Nestlé Group)

Vietnam 16 1,279


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01 02

“ICCRI highly appreciates the efforts of the 4C Association in making the mainstream coffee sectora sustainable one and looks forward to continued partnership in this area, also in terms of trainingactivities and project implementation. The new Tool Library is a major asset to this goal and ICCRI

will support its development with suitable tools in Indonesian.”

— Dr. Teguh Wahyudi, Indonesian Coffee and Cocoa Research Institute (ICCRI) —

4C Tool Library: easy access to a steadily growingnumber of resources

One of the major challenges facing coffee farmers in the switch

to sustainable practices is the lack of information to guide them

through the process. To overcome this challenge, the 4C As-

sociation launched the 4C Tool Library in June 2010.

The library is currently an online collection of 262 documents

related to the 10 Unacceptable Practices and the 28 Principles of

the 4C Code of Conduct. The tools include training documents

on good agricultural and management practices as well as onsocial, ecological and economic sustainability. The training mate-

rial consists mostly of manuals, handbooks, useful brochures

and booklets, material such as posters and flyers, as well as key

internet resources. 4C Members, coffee farmers in the 4C Units

and other business partners have quick and easy access to the

Tool Library through a personal login system.

The Tool Library is a collaborative effort between the 4C Secre-

tariat, 4C Members and partner organizations. All have made

their resources available to benefit coffee farmers, workers

and other business partners of 4C Units. Members are strongly

encouraged to continue sharing their training materials withthe Association. Their contributions will make it possible to

continuously enlarge this important source of information for

the benefit of all members.

The 4C Tool Library is currently an online collection of 262 documents on 01 coffee and sustainable production and processing practices An agricultural extensionist conducts a training session with the 02 help of a manual developed by FNC, Colombia, now in the Tool Library


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An Illustrated Guide to explainthe 4C Code of Conduct

The 4C Code of Conduct is the key tool of the 4C As-

sociation to help producers take their first steps in the

implementation of economic, social and environmental

sustainability practices. It is fundamental that farmers and

those working with them understand correctly what the

Code’s princip les

stand for. This is

not always easy,

especially for thosefarmers who have no

previous experience

with sustainability

concepts as it is often the case with most farmers entering

the 4C system. In an effort to make the 4C Code of Con-

duct more accessible, to those who are illiterate or have

limited literacy, the 4C Technical Committee developed an

Illustrated Guide in 2010. The Guide includes full colour

illustrations depicting each of the 10 Unacceptable Prac-

tices and 28 Code Principles. The Guide was produced in

English and then translated into Portuguese, Spanish and

Vietnamese. It was

widely distributed

among 4C Members

and their units inthe different coffee

producing regions.

The Illustrated Guide

as well as other 4C information materials can be translated

into other languages if there is a demand from members.

“The Illustrated Guide combines the two main characteristics that areneeded to effectively spread awareness about good practices. It is dy-

namic and didactic at the same time - definitely an excellent tool.”

— Humberto Chacur , EISA/ECOM 4C Unit, Brazil —

03 The Illustrated Guide is a new information tool on the 4C Code with fullcolour illustrations in a simple, accessible language.

04 A farmer at a workshop on climate change organised by GIZ in Kenya,flips through the new Illustrated Guide

03 03


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01

Participants at the Sustainability Forum in Guatemala, February 2010 01

4C ASSOCIATION | ANNUAL REPORT 2010 – PLATFORM FOR PRE-COMPETITIVE COLLABORATION

Strengthening the platform for pre-competitivecollaboration

In 2010, the coffee market was characterized by the in-

creasing shortage of coffee supplies.

This situation of scarcity was only made worse by chal-

lenges such as an ageing tree population, lack of inter-est in coffee farming by the younger generation, climate

change, competition from other commodities for land use

and access to financing among others.

Challenges like these make it more important to find

long-lasting solutions to issues facing the coffee sector. A

pre-competitive platform to jointly address such common

challenges is needed now more than ever. Under its new

business model, the 4C Association will expand the scope

of its activities to continue to fulfil this essential role.

Sustainability Forums: building synergiesin the coffee regions

Throughout 2010, the 4C Association organized Sustainability

Forums in Brazil, Colombia and Guatemala. The forums brought

together the key stakeholder representatives from producers’ or-

ganizations, trade and industry, NGOs, trade unions, government

and sustainability initiatives in these regions. As such, the forums

represented unique opportunities to discuss sustainable coffee

production and exchange lessons learned and best practices.

Over 40 stakeholders attended the 4C forums in Guatemala

and Brazil and over 30 in Colombia. The Sustainability Forum in

Colombia was organized in cooperation with the National Fed-

eration of Coffee Growers of Colombia (Federación Nacional de

Cafeteros de Colombia - FNC). This forum was innovative in the

sense that it brought together key stakeholders from different

coffee producing countries, including Brazil, Colombia, Hondu-

ras, Kenya, Mexico and Peru. Participants presented perspectivesfrom their own communities bringing new ideas to the table.

Following the successful exchanges in 2010, the Association or-

ganized the first African Coffee Sustainability Forum in Arusha,

Tanzania in February 2011. The event was organized in collabo-

ration with the Eastern African Fine Coffees Association (EAFCA)

on the backdrop of the Annual Africa Fine Coffee Conference

and Exhibition. With over 120 participants, this was the largest

4C forum to date.

A PRE-COMPETITIVE

PLATFORM


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02


These forums lay groundwork to achieve one of the major ambi-

tions of the 4C Association under its new business model: to

become THE platform to address challenges in the mainstream

coffee sector in a pre-competitive manner.

Cooperating with the government to enhancesustainability in the Vietnamese coffee sector

Throughout 2010, the 4C Association continued its fruitful

cooperation with Vietnam’s Ministry of Agriculture and Rural

Development (MARD), the provincial Departments of Agriculture

and Rural Development (DARD) as well as the Vietnam Coffee

and Cocoa Association (VICOFA). Together they organized a

series of information workshops for farmers on sustainable cof-

fee production.

The workshops were held in coffee regions of the Dak Lak,

Gia Lai, Dak Nong and Lam Dong provinces. In the framework

of these trainings, 4C Technical Coordinator, Mr. Ngoc Sy Do,

explained how the 4C Code of Conduct is implemented in

practice. Through this cooperation MARD continues to work

towards making the 4C Code of Conduct the baseline for all

coffee production in Vietnam. Moreover, with MARD’s support,

more farmers can learn the correct application of fertilizers and

best practices such as water management, balance of inputs

application and soil fertility improvement. The ultimate goal is

to help farmers raise income by improving efficiency, herebyincreasing the coffee yield and its quality.

Based on an initiative proposed in the World Economic Forum,

a Public Private Partnership was initiated in Vietnam. The “PPP

Coffee Project” in sustainable coffee development is co-chaired

by MARD and Nestlé, a 4C Member. The PPP brings together

national and international companies in Vietnam’s private sec-

tor, international organisations such as the 4C Association and

Rainforest Alliance, farmer and coffee associations, traders and

“The forum offered a unique opportunity to bring farmers,exporters and industry together, talking to other actors in

the coffee sector, learning from them and sharing experi-ences. It is the first time that we have such an exchangeplatform in Brazil. The very open and constructive atmos-phere was inspiring and I look forward to continuing withthis exchange. The 4C Association can play a key role inbringing us all together to advance sustainability in the

Brazilian coffee industry.”

— Milene Pereira from Tres Corações, 4C Trade and Industry Member

from Brazil on the occasion of the first Brazilian Sustainability Forum —

02 4C Technical Coordinator, Mr. Ngoc Sy Do, facilitates an 4C informationworkshop organized in cooperation with the Department of Agriculture andRural Development in Dak Lak Province, Vietnam, July 2010


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01


processors as well as local government bodies (MARD, IPSARD,

WASI). A series of multi-stakeholder meetings were held in

which participants sought to identify the major challenges tothe sustainable development of the coffee industry in Vietnam.

They also worked on a key strategic approach for sustainable

development based on the 4C Code and stepping up to the

Rainforest Alliance standard in the long run. Members of a task

force set up to drive the PPP have now agreed on the implemen-

tation of two pilot projects in 2011 in Dak Lak and Lam Dong

provinces. The partners aim to scale up these successful pilots

for the international and national scopes.

Strengthening ties with other

sustainability standards

All sustainability initiatives recognize that closer collabora-

tion is needed to get a significantly larger part of coffee

production on the road towards sustainability.

An indicator of this enhanced cooperation was the organi-

zation of a Symposium on Sustainable Coffee Production

in November 2010 in Poços de Caldas, Brazil. The event

was organized by the 4C Association, Imaflora/Rainfor-

est Alliance, Fairtrade International and the Instituto

Agronômico de Campinas (IAC). The event also counted

with the collaboration of Certifica Minas and UTZ CERTI-

FIED Foundation as well as other important players in the

Brazilian coffee sector.

Participants in the symposium discussed common chal-

lenges to good agricultural practices and farm manage-

ment and how to enhance cooperation among the differ-

ent standards.

The organization of the joint symposium was the result

of the increasing dialogue taking place between the dif-

ferent standards setting initiatives. With its new business

model, the 4C Association aims to further strengthen this

cooperation. The Association will increasingly promote all

sustainability standards among coffee buyers and produc-

ers alike.

With its baseline Code of Conduct, the 4C Association

provides the first step towards sustainability for coffee

farmers who have no previous experience with any stand-

ard or certification. This is especially relevant because

these farmers still constitute the vast majority of coffee

producers worldwide. The 4C Code of Conduct acts as a

tool for them to step up to more demanding standards

International Civil Society Workshop, Hamburg, May 2010: 01 The 4C Association will actively promote other standards to achieve sector

compliance to at least baseline sustainability

“The 4C Association can facilitate improvement by helping

farmers improve their value chain. The farmers need sup-port in organising themselves into farmer groups in whichthey can learn to share experiences on sustainable coffeeproduction, exchange resources, as well as acquire access

to credit and market information.”

— Mr. Huynh Quoc Thich, Head of Cropping Section, Department of

Agriculture and Rural Development, Dak Lak, Vietnam —


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02

02 Visitors to the International Conference on Coffee Sciencein Indonesia, October 2010, at the 4C booth

03 A farmer in Lampung, Indonesia, gestures with a working knife: Through a newpartnership project, sustainable production in the province can be enhanced


such as the SAN Standards. The usability of this approach

has been confirmed by the positive results of the pilot

project “Stepping up from the 4C baseline to SAN Stand-ards” that was carried out with smallholder coffee farmers

in El Salvador between August and December 2010 (see

page 10). The Association is currently in dialogue with

other standard initiatives to carry out similar “stepping

up” exercises in further coffee producing regions.

Laying the groundwork for a sustainablecoffee sector in Indonesia

During 2010, the 4C Association continued to strengthenits long-standing cooperation with the Indonesian Cof-

fee and Cocoa Research Institute (ICCRI). In this regard,

the 4C Association participated and held a presentation

in the Coffee Symposium (Kopi Symposium) organized

by ICCRI in October 2010. The Association also partici-

pated in the International Conference on Coffee Science

organized by the Association for Science and Information

on Coffee (ASIC) in Bali in October 2010. Both events

provided the Association with an excellent opportunity

to present the 4C sustainability approach and build newcontacts with relevant stakeholders in the Indonesian

coffee sector.

Likewise, the year 2011 will be decisive to lay the ground-

work of the 4C Associat ion in this Asian country. As a

result of the preparation activities undertaken in 2010,

Kraft Foods and the ECOM Group have recently initiated

a project in partnership with the 4C Association in the

regency of West Lampung, South Sumatra. The project,

which has a life cycle of 13 months, is aimed at enhancing

sustainable coffee production in the region. As part of the

plan, some 300 coffee farmers will be organized into a 4C

Unit under PT IndoCafCo (ECOM). The farmers will receivetraining to help them improve sustainable practices and

once they are ready, the 4C Unit can apply for 4C Verifica-

tion. At a second stage, the project plans on bringing

farmers from the 4C baseline standard to the SAN Stand-

ards level. To ensure the overall organisation of activities,

the 4C Association has hired a coordinator for Indonesia,

Ms. Melanie Landthaler, who is based in the country.

03


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01

Kerstin Linne, Sangana PPP Project Manager, facilitates a workshop 01 on climate change in Ruiru, Kenya, November 2010

4C ASSOCIATION | ANNUAL REPORT 2010 – WORKING TOGETHER TO FIND SOLUTIONS

Cooperating to meet sustainabilitychallenges in the coffee sector

The 4C Association in 2010 actively sought out synergies with

other organisations to address various issues affecting the coffee

sector, such as climate change, optimising gender-based benefits

of coffee production and trade, and dealing with the challenges of

pesticide use.

A collaborative effort to combateffects of climate change

The negative effects of climate change include unpredictable and

erratic rains, and changes in pest and disease patterns. These

affect the productivity and quality of the crops. Unfortunately, it

is the people least prepared to cope with climate change that are

affected most. These are smallholders who produce the bulk of

the world’s coffee but often lack the necessary resources and/or

knowledge to meet the challenges of a changing global climate.

In 2008, the German Technical Cooperation Agency - GTZ (now

part of the Deutsche Gesellschaft für Internationale Zusam-

menarbeit - GIZ) and Sangana Commodities (Ecom Group)began a three-year Public Private Partnership (PPP) in Kenya. The

objective of this pilot project was to investigate new ways to sup-

port farmers in combating and adapting to climate change. The

4C Association and the World Bank were initial project partners

and were joined by the Rainforest Alliance, Efico and Tchibo

GmbH at a later stage.

Results to date

n First version of a proposed additional module to the 4C Codeof Conduct developed, taking into account climate change issues.After project end in September 2011, the module will guide

producers on required adaptation and mitigation steps basedon a set of principles and practices in line with the 4C Code’scontinuous improvement concept.

n In partnership with the Sustainable Food Lab, the Sustain-able Agriculture Initiative and Unilever, project partners are devel-oping a coffee specific Green House Gas (GHG) calculator. Firsttests have been carried out with the Baragwi Cooperative, theSangana PPP pilot group. The finalized GHG-calculator will makeit possible to measure gas emissions from soils or processing inwet mills. Such a tool provides a credible way for coffee produc-

ers to prove their efforts on GHG mitigation.

n Training modules for coffee producers have been developedbased on experiences from the AdappCC project (Adaptationto Climate Change) carried out in Latin America. One suchmodule is an on-farm carbon monitoring manual to be avail-able in the 4C Tool Library on completion (please also refer topage 14). GIZ, Sangana Commodities Limited and Cafédirect UKhave developed a training manual for coffee organizations andextension services called Climate Change and Coffee. It containsinformation on adaptation strategies for smallholders, mitigationopportunities and more.

WORKING TOGETHER TO

FIND SOLUTIONS


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02 03

While the Sangana pilot project will end in September 2011, the

benefits are lasting. The findings and tools that were developed

in the framework of the project are replicable in other coffee

producing regions and can help other farmers that are equally

struggling to cope with climate change.

4C Working Group on Climate Change

At its 7th Meeting in Hamburg, the 4C Council approved theTechnical Committee’s recommendation to address climate

change on a strategic level and put it on the Association’s

agenda. Furthermore, it was agreed to form a working group

on the topic as a subgroup of the Technical Committee.

The working group on climate change is made up of coffee

producer representatives, roasters and traders, civil society, as

well as major research institutes and project implementers in

the field. The group, which first met in December 2010, set a

goal to steer the 4C Association’s engagement with regard to

climate change and accompany projects such as the Sangana

PPP by providing input and guidance. The working group also

will be involved in the development process of a sector wide

methodology for the calculation of GHG emissions for green

coffee. It will also guide plans for a possible benchmarking of

the SAN climate module with the add-on 4C climate module

currently being developed.

02 Field training participant observes the measuring of water usage using a drum, Eakmat Co. Ltd, Vietnam:Farmers need to adapt agricultural behaviour now to meet tomorrow‘s climate challenges

03 Climate change affects the predictability, quality and seasonality of coffee supplies:all actors along the value chain must therefore prepare for such shifts

“Deforestation, erosion, poor farming practices, pestsand diseases - the Baragwi Farmers’ Cooperative SocietyLtd (BFCS) identified these as climate vulnerabilities andchanging weather patterns as a climate risk. BFCS is nowequipping itself against such risks by implementing thevoluntary Climate Code. For example, the group set up ateam to monitor weather forecasts and land use changesand keep in touch with regional research institutions on

more suitable coffee varieties.”

— Kerstin Linne, Sangana PPP Project Manager (GIZ) —


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01

Sorting used pesticide containers at the Expocaccer 4C Unit, Brazil: 01 Ensuring proper waste management is key to improving sustainability

practices in the coffee sector


4C Working Group on Pesticides

Coffee consumers may worry that pesticide use during

coffee production could have adverse effects on them.

On the contrary, pesticide use poses human and livestock

health risks to communities in producing countries as well

as to natural resources in these countries. And yet produc-

ers themselves often lack knowledge of possible substitute

remedies and do not have the incentive to stop using these

dangerous chemicals.

In close cooperation with

the 4C Member, Pesticide

Action Network (PAN UK), a

working group on pesticideswas formed within the

framework of the 4C Techni-

cal Committee. The group

collects information and

provides coffee producers

with tools and guidance on

how to tackle pesticide use

challenges efficiently. Members of the working group in-

clude representatives from major roasters, traders, research

institutes and civil society organizations.

As a first step, the working group has developed a com-

parison table for the 4C Red List and other sustainability

standards relevant to coffee. The Red List is a compilation of

all pesticides that need to be phased out to achieve the rec-

ommended level of best practices per the 4C Code of Con-

duct. The table provides an overview of which pesticides are

prohibited and restricted or phased out under which standard

and is a helpful tool for 4C Units’ improvement efforts. The

finalised tool will be published in June 2011.

There has been an ongo-

ing debate over the use of

the insecticide endosulfanin the last years. Only now

in 2011 have parties to the

Stockholm Convention on

Persistent Organic Pol-

lutants agreed to classify

it as a banned pesticide.

The Working Group has

prepared a briefing paper on the subject which wi ll guide

the preparation of a phase out timescale for endosulfan’s

use by 4C Units.

“Phasing out the use of hazardous pesticides in coffee produc-tion is a complicated matter. Coffee farmers are not alwaysadequately informed on the effects of pesticide use or onalternatives to their use. The Working Group on Pesticides,

would like to bridge this information gap so that 4C Units canadvise farmers on lowering pesticide use as much as possible

and, in any case, of respecting the 4C Code.”

— Patrick Leheup, Chairperson of the Technical Committee —


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02

02 Spreading harvested cherries out to dry in the Lampung Barat province,South Sumatra, in Indonesia

03 Jerida Sinange, Environment and Certification Officer at Neumann Kaffee Gruppe, Kenya,speaking at the 1st African Coffee Sustainability Forum in Tanzania, February 2011


03

A woman’s cup of coffee:gender empowerment along the supply chain

A woman’s cup of coffee is often hard-earned and for

women employed in the coffee sector, the significant role

they play remains unrecognised in many cases. In fact the

International Trade Centre (ITC) has noted that there is hardly

any available data on the role of women in the coffee sector.

Organisations such as the ITC, the Global Standards Initia-

tive (made of Solidaridad, Hivos, Oxfam Novib, and the

Royal Tropical Institute – KIT) or the International Women’s

Coffee Alliance (IWCA) have made significant contributions

to raising the cloak of silence over womens’ role in the coffee

sector. They steer efforts to enable women to draw more

benefits out of coffee. The 4C Association as the sector’smulti-stakeholder platform can play a pivotal role in keeping

gender empowerment on the sustainability agenda through

continued collaboration with key players like these.

Indeed in 2010, the 4C Association engaged with the Global

Standards Initiative to assess women’s role in coffee and

discuss ways in which standards can incorporate gender into

their work. Information is being collected through case stud-

ies, research and participatory workshops. The 4C Association

is supporting the development of one such study, “Gender

in Certified Coffee Chains,” the final version of which is set

to be published later in 2011. Also, in November 2010, the

Association supported the organisation of a workshop in

Nairobi, Kenya, on “Gender and Certification in East Africa.”

As next steps, the different partners need to develop perfor-

mance indicators for gender and also provide auditors with

tools for assessing gender equity amongst producer groups.

“We currently face a significant challenge in the dissemination of knowledge. It iscommon that men are regarded as coffee growers but who works on the farm? It is

the women. When you call a meeting, who turns up? It’s the men. But at the end of themeeting they go to the shopping center not back home to pass their knowledge on.”

— Dr. Joseph Kimemia, Coffee Research Foundation, Kenya —


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01

First field testing phase, Coffee Harvesting Bag Project, Nicaragua: 01 The old bag (left) was compared with the new ergonomically improved one (right)

4C ASSOCIATION | ANNUAL REPORT 2010 — WORKING TOGETHER TO FIND SOLUTIONS

Redesigning coffee harvesting bagsto improve workers´ health

The International Ergonomics Association (IEA), in collabora-

tion with the National University of Nicaragua (UNAN-León)

initiated the project “Redesign of Coffee Harvesting Basketsto Reduce Risk of Injury.” The project partners aim to create

a safer, more productive work environment by reducing the

risk of back and shoulder

injuries among coffee har-

vesters. The 4C Association

supported the development

of a new, user-friendly

harvesting bag by creating

a collaborative structure

with its regional office in

Nicaragua and its members

in the region, as well as a financial contribution to the first

phase of the project.

For the first phase, farms affiliated to the 4C Member Pueb-

los en Accion Comunitaria (PAC) in Nicaragua were involved

in the piloting of the prototype and field testing of the rede-

signed coffee bags. A professional team from the University

of Washington and UNAN-León visited different farms in

the coffee-growing region around Jalapa, Nicaragua from

December 13-18. PAC organised the contact to the farmersand dealt with the logistics of this phase.

The project team compared

the newly designed bag to

the existing sample (bam-

boo baskets) to determine

the appropriate bag modi-

fications. They interviewed

20 workers during this time

and carried out tests with

them using the old and the

new harvesting bag methods.

In a second phase, the project partners will evaluate the im-

proved bags and assess enhancements in productivity during

harvesting season 2011/2012. Production on a larger scale

can commence once the final testing of the prototype has

been done.

“When the 4C Secretariat approached us to participate in thisproject we did not really know what to expect. Now that wehave witnessed the testing phase we realize that this project

could be a milestone for improving working conditions in coffeeworldwide!”

— Jorge Armando Rivera, Pueblos en Accion Comunitaria (PAC) —


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4C ASSOCIATION | ANNUAL REPORT 2010 — VERIFICATION

25

VERIFICATION

2010 marked a three-year implementation milestone for the

4C Association with the first wave of re-verifications. Three 4C

Units in Vietnam underwent re-verification and their licenses

were renewed. Many improvements were observed in these 4CUnits. On the other hand 4C Units faced the problem of farmers

leaving the units as there was not much demand for the coffee

they produced.

Linked to the three-year milestone, the Executive Board en-

dorsed the move to analyse the Association’s verification system.

The system analysis is being carried out by an independent

accreditation company, Accreditation Services International (ASI).

The analysis will:

(1) Identify improvement opportunities for the 4C verification

system and

(2) Diagnose the compliance level of the 4C verification system

against ISEAL Alliance requirements. This would bring the 4C

Association closer to full membership in ISEAL, the global as-

sociation for social and environmental standards.

The System Analysis exercise started in October 2010 with an as-

sessment at the 4C Secretariat in Bonn. The assessment was fol-

lowed up by field witness audits in several countries to observe

how 4C Verification is carried out in reality. 4C Verifiers were

also evaluated on two levels – in terms of their performance

in the office as well as performance in the field. The system

analysis will be concluded in 2011. A summary report of the

verification analysis will be shared with 4C Members and made

publicly available as well.

REGION COUNTRIESNO. OF

4C UNITS

PRODUCTIONPOTENTIALS(IN 60-KG BAGS)

NO. OF BUSINESSPARTNERS

(FARMERS AND OTHERS)

NO. OF WORKERS (PERMANENT + TEMPORARY;

FARM + FACTORY)

NO. OF HA(UNDER COFFEE

CULTIVATION)

Brazil 8 1,971,000 2,610 25,655 126,000

Colombia 12 3,232,000 38,480 63,533 142,000

Vietnam 13 1,494,000 16,251 6,205 28,000

AfricaUganda, Kenya,Ethiopia, Rwanda,Tanzania

7 121,000 7,287 41,180 11,000

AsiaPapua New Guinea,Indonesia, Thailand

5 83,000 3,111 2,213 7,000

CentralAmerica +Mexico

El Salvador, 10 63,000 347 20,165 6,000

Costa Rica, Hon-duras, Nicaragua,Guatemala, Mexico

12 1,145,000 4,688 55,805 36,000

Total 67 8,109,000 72,774 214,756 356,000

OVERVIEW ON 4C VERIFIED UNITS (AS OF DECEMBER 2010)


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4C ASSOCIATION | ANNUAL REPORT 2010 — PROFIT AND LOSS ACCOUNT 2010

PROFIT AND LOSS ACCOUNT 2010

The financial year 2010 closed with a net loss of EUR

344.052. This sum was balanced by reserves collected in the

previous years, in line with the budget approved at the 6th

Council Meeting.

Public funding, in particular budget support from GIZ (Deutsche

Gesellschaft für Internationale Zusammenarbeit) ended in June

2010. Later on, GIZ on behalf of BMZ (Bundesministerium für

wirtschaftliche Zusammenarbeit und Entwicklung) provided EUR

50,000 for the 4C Association to hire a consultancy firm to sup-

port the Business Model Task Force.

Both the balance sheet and the profit and loss statement

reveal non-serviced membership contributions: The year 2010

brought an increase of open invoices by EUR 205,000, while

older receivables had to be written off as uncollectable to the

amount of EUR 114,000 (hence, the net increase in the bal-ance sheet was EUR 91,000).

New compliance policy on membership fees

Consequently, 4C Governance decided on a new payment

compliance policy on membership fees, and introduced new re-

strictions. The Association is already enforcing the new policy and

through it, is aiming at ensuring a sound financial basis for the

4C Secretariat. Similarly, the measures are meant to establish fair

operating conditions, especially for those engaged members that

assume their responsibilities and regularly pay their fees.

Expenditure

The following are the distinct features of 4C expenditures in

2010 in comparison to 2009:

Administration expenses decreased by EUR 190,000. Sal-ary, travel and meeting costs of the Executive Director were

re-assigned to “Governance.” IT and office expenses were as-

signed to the respective departments to improve controlling.

Accordingly, Governance and Membership costs increased,

which is also caused by the fact that write-offs of uncol-

lectable membership fees amounting to EUR 114,000 were

counted among the expenses of this department.

Verification expenses rose by EUR 50,000 for additional ser-

vice and travel costs incurred as a result of first re-verifications

and system verification.

Support Services, in line with decisions of the 4C Council,

were raised by roughly EUR 190,000.

Towards budget 2011

The 4C Association in 2010 embarked on defining a new busi-

ness model which was approved by the 4C Council during its

8th meeting in February 2011. The Association has to secure the

necessary funds to switch to the new model. During this pro-cess, a great number of 4C Members provided an extra financial

contribution, reaffirming their commitment to the Association’s

goals and allowing for a smooth transition phase during 2011.

Key changes are foreseen in the budget 2011 owing to the

demand-driven approach of the new business model. Member-

ship contributions can no longer be made in-kind and therefore

will not appear in budget 2011 income calculations. In terms of

expenditure, ongoing re-verifications will feature prominently in

2011 calculations.

01

CafeControl verifier team interviewing a farmer during re-verification at 01 Neumann Kaffe Gruppe Vietnam‘s 4C Unit. Re-verification costs will feature

prominently in the 4C Association 2011 budget.


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BALANCE 2010


ASSETS 2010 2009 PROPERTY & LIABILITIES 2010 2009

€ € € €

A. Fixed assets 232,521 221,423 A. Association property 537,037 881,089

I. Intangible assets 141,341 144,076 I. Equity as of 1 January 881,089 830,285

II. Tangible assets 91,180 77,347 II. Operational Result -344,052 50,804

B. Current assets 414,302 780,966 B. Accruals 38,644 51,744

I. Receivables and other assets 309,386 198,183

II. Cash 104,916 582,783 C. Liabilities 71,142 69,556

I. Liabilities to banks 0 0

II. Payables 59,950 41,232

III. Other liabilities 11,192 28,324

Total assets 646,823 1,002,390 Total property & liabilities 646,823 1,002,390

INCOME 2010 2009 EXPENDITURE 2010 2009

€ € € €

1. Membership fees 821,697 841,046 1. Administration 392,140 583,787

2.Members‘ Contributionsto Support Services

380,183 399,039 2. Governance 324,567 107,305

3.Members’ In-Kind contributionsto Support Services

201,666 273,300 3. Communication 193,481 179,024

4. Public & other funding 109,842 119,097 4. Verification 168,057 118,359

5. Interest & other income 34,904 32,272 5. Support 814,099 625,475

Thereof Services in Fulfillmentof In-Kind Contributions

120,913 144,150

6. Loss for the Year 344,052 6. Net income for the year 50,804

Total income 1,892,344 1,664,754 Total expenses 1,892,344 1,664,754

4C ASSOCIATION | ANNUAL REPORT 2010 — PROFIT AND LOSS ACCOUNT 2010


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4C ASSOCIATION | ANNUAL REPORT 2010 — LIST OF MEMBERS

PRODUCERSAssociação de Cafés Especiais do Nortedo Pioneiro do Paraná (ACENPP), Brazil

Bali Exotic Beans, IndonesiaBusaanyi Farm, Uganda

Bukonzo Joint Cooperative, Uganda

Capebe, Brazil

Cocaes Ltda., Brazil

Conaprocam, Cameroon

Cooperativa Agrícola IndustrialVictoria R.L., Costa Rica

Cooperativa Cuzcachapade R.L., El Salvador

Cooperativa de Cafeicultores e

Agropecuaristas (COCAPEC), BrazilCooperativa dos Cafeicultores da Zonade Três Pontas (Cocatrel), Brazil

Cooperativa dos Cafeiculturos do Suldo Estado do Espírito Santo (CAFESUL),Brazil

Cooperativa Regional de Cafeicultoresde Guaxupé (Cooxupé), Brazil

Cooperativa Regional dosCafeicultores de São Sebastião doParaiso Ltda. (COOPARAISO), Brazil

Eakmat Limited Company forConsulting Investment in Agricultureand Forestry Development(Eakmat CO., Ltd), Vietnam

El Saitillal S.A de CV, El Salvador

Cooperativa dos Cafeicultoresdo Cerrado Ltda., Brazil

Exportadora El Volcán, El Salvador

Fairview Estate Limited, Kenya

Federación de CooperativasAgrícolas de Productores de Café deGuatemala (Fedecocagua), Guatemala

Federación Nacional de Cafeteros deColombia (FNC), Colombia

Finca el Platanillo, Guatemala

Kagera Cooperative Union Ltd, Tanzania

KOFINAF Company Ltd., Kenya

La Esperanza Coffee Farm, Colombia

Mukasa Estates Ltd., Uganda

Mzuzu Coffee Planters Cooperative,Malawi

Nsangi Coffee Farmers Association,Uganda

Pueblos en Acción Comunitaria,Nicaragua

Rumah Tani, Indonesia

Satemwa Tea Estates Ltd., Malawi

Sociedad Cooperativa de Cafetaleros deCiudad Barrios de R.L. (CAFECIBA),El Salvador

SOPROCPCAM, Cameroon

Tade GG Highland Forest CoffeeProducer PLC, Ethiopia

Union Régionale Victoire (UIREVI),Ivory Coast

Zambia Coffee Growers’ Association,Zambia

TRADE & INDUSTRYALDI NORD, Germany

ALDI SÜD, Germany

Aliments Messidor inc. FASRS Aux MillesGrains, Canada

Alois Dallmayr Kaffee OHG (includingAzul Kaffee GmbH & Co. KG, HeimbsKaffee GmbH & Co. KG), Germany

Armajaro Trading Limited, United Kingdom

Bernhard Rothfos GmbH for and onbehalf of Neumann Kaffee Gruppe,Germany

Beyers Koffie, Belgium

C.A. Wille Handels- und Verwaltungsge-sellschaft mbH, Germany

Cafeco, MexicoCoex Coffee International, United States

Comexim Ltda., Brazil

Coop, Switzerland

DEK GmbH, Germany

Ecom Agroindustrial Corp Ltd,Switzerland

EFICO S.A., Belgium

EKAF Industria Nazionale del Caffe, Italy

Elias International, The Netherlands

Exportadora de Café Guaxupé, Brazil

Fichaux Industries, France

Finlays Beverages, United Kingdom

HACO AG, Switzerland

Hornig Kaffee, Austria

Icona Café, Spain

Instantina, Austria

J. Th. Douqué’s Koffie BV, The Netherlands

Julius Meinl, Austria

Kraft Foods Global Inc., United States

Krüger GmbH & Co.KG, Germany

Lanço - Comércio de MatériasPrimas, Portugal

Lidl Stiftung & Co. KG, Germany

Löfbergs Lila AB, Sweden

Louis Dreyfus Commodities, Switzerland

Melitta, Germany

Mercon Coffee Corp., United Kingdom

Nedcoffee B.V., The Netherlands

Nestlé SA, Switzerland

Olam International Limited, Singapore

R.J. Baiardi Café, BrazilRöstfein Kaffee GmbH, Germany


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4C ASSOCIATION | ANNUAL REPORT 2010 — LIST OF MEMBERS

Rombouts N.V., Belgium

SAS Koffie N.V., Belgium

Saza Coffee Co. Ltd., Japan

Stoiköff Coffee Company, Canada

Strauss Commodities AG, Switzerland

SUCAFINA SA, Switzerland

Tchibo GmbH, Germany

The Roastery, United States

Touton S.A., France

Tres Corações, Brazil

United Coffee, The Netherlands

VOLCAFE, Switzerland

CIVIL SOCIETYChristliche InitiativeRomero e.V. (CIR), Germany

IUF, Switzerland

Fairtrade Organisation Kenya, Kenya

Fundación Nacional para el Desarrollo(FUNDE), El Salvador

North Sumatra Coffee Forum, Indonesia

Oxfam International, represented

by Oxfam Novib, The NetherlandsPesticide Action Network UK, UnitedKingdom

Rainforest Alliance, United States

INDIVIDUAL MEMBERSJacques Aboule, Ivory Coast

Louis Ban-Koffi, Ivory Coast

David Eugenio Cantú Cantú, Mexico

Appukuttan Nair Damodaran, India

Heidi Feldt, Germany

Markus Fischer, Costa Rica

Ada Hartmann, Switzerland

Hein Jan van Hilten, South Africa

Andrew Hetzel, South Africa

Patrick Leheup, Switzerland

Diego Pizano-Salazar, Colombia

Erwin R. Roetert Steenbruggen,The Netherlands

Morten Scholer, Switzerland

Bernardo van Raij, Brazil

Sri Saroso, Indonesia

Carsten Schmitz-Hoffmann, Germany

Albrecht Schwarzkopf, GermanyRoel Vaessen, The Netherlands

Joppe Vanhorick, The Netherlands

Annemieke Wijn, Germany

Robert Waggwa Nsibirwa, Uganda

ASSOCIATE MEMBERSAsociación Nacional de Café (Anacafe),Guatemala

Associação Brasileira da Industria deCafé, Brazil

Asociación Mexicana de la CadenaProductiva del Café A.C. (AMECAFÉ),Mexico

British Coffee Association, UnitedKingdom

Café Africa, Switzerland

Consejo Salvadoreño de Café, El Salvador

Conselho Nacional do Café, Brazil

Eastern African Fine Coffees Association(EAFCA), Uganda

European Coffee Federation,The Netherlands

Federal German Ministry for EconomicCooperation and Development (BMZ),Germany

Flanders International CooperationAgency (FICA), Belgium

German Coffee Association, Germany

Norwegian Coffee Association, Norway

NUCAFE National Union of CoffeeAgribusinesses and Farm Enterprises,Uganda

Réseau Ivorien Agriculture Durable(RIAD), Ivory Coast

Swiss Coffee Trade Association,Switzerland

Unión de Cooperativas de Cafetalerosde R.L. (UCAFES), El Salvador

Vietnamese Coffee and CocoaAssociation (VICOFA), Vietnam

4C Members as of 1st June 2011

Total number of members: 134

Note: Founding Members arehighlighted in Orange

Note that the number of 4C Membershas slightly decreased in comparisonwith the previous year. Due to theapplication of the recently approved4C Policy on Membership fee PaymentCompliance, those members withoutstanding membership fees were

excluded from 4C membership in May2011.


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4C ASSOCIATION | ANNUAL REPORT 2010 — THANK YOU

THANK YOU!

The 4C Association thanks its generous partners and

donors for supporting its efforts to increase sustainabilityin the mainstream coffee sector:

The 4C Association expresses its gratitude to partners

of the Sangana PPP and Baragwi Cooperative Society as

the project’s pilot group, for collaboration on combating

climate change. Thanks also go to the Global Standards

Initiative (Hivos, Oxfam Novib, Solidaridad and KIT) for

joint efforts to address the subject of gender along the

coffee supply chain.

Furthermore, the 4C Association thanks GIZ (Deutsche

Gesellschaft für Internationale Zusammenarbeit) for its

continuous support throughout 2010. GIZ on behalf ofBMZ (Bundesministerium für wirtschaftliche Zusammenar-

beit und Entwicklung) provided financial support to the 4C

Association in the development of its new business model.

The 4C Association thanks the Crop Production Depart-

ment of the Ministry of Agriculture and Rural Develop-

ment (MARD), Vietnam, for its efforts in the framework of

MARD’s strategy on sustainabi lity. Together with regional

Departments of Agriculture and Rural Development

(DakLak, Dak Nong, Gia Lai and Lam Dong provinces), 4C

Association could organise several workshops on sustain-

able coffee production in Vietnam in 2010.

The Association thanks Cooperativa Ciudad Barrios, the

Rainforest Alliance and SalvaNATURA for collaborating

in a first stepping up exercise in El Salvador. Participating

farmers advanced from the 4C compliance level to Sustain-

able Agriculture Network (SAN) and Rainforest Alliance

Certification within the project (see page 10).

The 4C Secretariat on behalf of the ASI assessment team would

like to thank the 4C Units in Colombia (FNC), Vietnam (Neu-

mann Gruppe Vietnam) and Uganda (Mt. Elgon Washed Arabica

Project of Kyagalanyi), as well as different 4C Verifiers (Bio

Latina, CafeControl and Ceres/Ugocert) for their great support

offered to the team during the witness audits.

01 02

Getting familiar with the 4C Code during a verifier 01 training workshop in Patrocinio, Brazil Participants at the climate change workshop organized 02 by GIZ in Ruiru, Kenya, November 2010


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4C ASSOCIATION | ANNUAL REPORT 2010 — THANK YOU

The 4C Association also thanks the following partners for

cooperation with 4C Support Services in organising train-

ing activities and Sustainability Fora as well as providing

assistance in logistical matters on various occasions in2009/2010:

• Asociación Nacional del Café (ANACAFE),Guatemala

• Africa Coffee Academy, Uganda

• Coffee Board of Kenya

• Coffee development Fund (CODF), Kenya

• Centre National de Recherche Agronomique(CNRA), Ivory Coast

•

Coffee Association of Malawi (CAMAL), Malawi• Coffee Research Foundation (CRF), Kenya

• Eastern African Coffee Association (EAFCA),Uganda

• Empresa de Assistência Técnica e Extensão Ruraldo Estado do Paraná (EMATER-PR), Brazil

• Federación Nacional de Cafeteros de Colombia(FNC), Colombia

• German Coffee Association(Deutscher Kaffeeverband – DKV), Germany

• The Global Standards Initiative

• Indonesian Coffee and Cocoa Research Institute

(ICCRI), Indonesia• Instituto Agronômico de Campinas (IAC), Brazil

• Instituto Totum, Brazil

• International Trade Center (ITC), Geneva

• International Women in coffee Alliance (IWCA),Africa Chapter

• Jimma Agriculutral Research Center (EIAR),Ethiopia

• Kenya Coffee Producers and Traders Association(KCPTA), Kenya

• National Union of Coffee and Agribusinesses

(NUCAFE), Uganda• Ramacafe, Nicaragua

• Root Capital (Africa)

• SalvaNATURA Fundación Ecológica, El Salvador

• Serviço Brasileiro de Apoio às Micro e Pequenas

Empresas (SEBRAE-PR), Brazil• Serviço Nacional de Aprendizagem, Senar-PR,

Brazil

• Tanzania Coffee Association (TCA), Tanzania

• Tanzania Coffee Research Institute (TACRI),Tanzania

• Tanzania Coffee Board (TCB), Tanzania

• Uganda Coffee Development Authority (UCDA),Uganda

• Uganda Coffee Trade Federation (UCTF), Uganda

• USAID-ATEP, Ethiopia

• USAID LEAD, Uganda

To all cooperation partners of the 4C Association, pastand present, and the untold many around the worldwho generously support the Association in its endea-vours - Thank you!

APPRECIATION OF SERVICE

The 4C Association says a special thank you to its former

Office Manager, Marion Baak

Due to ongoing restructuring at the 4C Secretariat as a result

of the switch to the new business model, the team has had

to say good bye to their appreciated colleague Marion Baak.

Marion Baak joined the Secretariat shortly after the founding

of the 4C Association and supported its establishment with

great dedication. The 4C Association thanks Marion Baak for

her contribution and commitment in the four years she has

been with the Secretariat and wishes her all the best in her

new endeavours. Ms. Baak will greatly be missed as a col-

league and person.


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DIRECTORY

Executive BoardPRESIDENT Diego Pizano Salazar,

Federación Nacional de Cafeteros de Colombia (FNC),

Colombia

VICE PRESIDENT Albrecht Schwarzkopf,

Christliche Initiative Romero (CIR),

Germany

TREASURER Roel Vaessen,

European Coffee Federation (ECF),

The Netherlands

Mediation BoardCHAIRPERSON Hein Jan van Hilten, South Africa

Technical CommitteeCHAIRPERSON Patrick Leheup, Switzerland

4C Secretariat (as per 1st June 2011)

EXECUTIVE DIRECTOR Melanie Rutten-Sülz

DIRECTOR SUPPORT SERVICES Annette Pensel

DIRECTOR OPERATIONS Christian Osterhaus

SUPPORT MANAGER CO-FINANCING Lars Kahnert

COMMUNICATIONS MANAGER Verónica Pérez Sueiro

COMMUNICATIONS OFFICER Linda Besigiroha

COORDINATOR BRAZIL Luis Flavio Nascimento de Andrade

COORDINATOR CENTRAL AMERICA Alina Amador

COORDINATOR EAST AFRICA George Watene

COORDINATOR INDONESIA Melanie Landthaler

MANAGEMENT ASSISTANT Angela Stölzle

FINANCE OFFICER Thomas Müller-Bardey

IT & OPERATIONS MANAGER Vasilios Kotitsas

PARTNERSHIP COORDINATOR Andrea Brüstle

SUPPORT COORDINATOR Gabriele Schmidt

TECHNICAL COORDINATOR VIETNAM Do Ngoc Sy

VERIFICATION MANAGER Cao Thanh Van

GIZ ADVISOR TO THE 4C ASSOCIATION Dr. Eberhard Krain

IMPRINT

Publisher4C Association

Adenauerallee 108

53113 BonnGermany

The 4C Association is legally registered

with the Register of Commerce in

Geneva, CH-660-2928006-4.

The 4C Association

c/o CR Gestion & Fiduciaire SA

Route des Jeunes 9

1227 Carouge-Geneva, Switzerland

Responsible for contentMelanie Rutten-Sülz

EditorsVerónica Pérez Sueiro

Linda Besigiroha

4C CommunicationPHONE +49 (0)228 850 50 1

4c annualreport2010

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