theunforumon$$ sustainabilitystandards(unfss) · pdf filerational for creating unfss 33 •...

Intergovernmental Forum of Dialogue on Voluntary Sustainability Standards

The UN Forum on Sustainability Standards (UNFSS)

ICCO Workshop, Douala, Cameroon June 24-27, 2013 Working group guide

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Objective:

Effective forum for policy-makers to better understand voluntary sustainability standards (VSS) and be able to utilize VSSs as potential tools to support their own sustainable development strategies and goals.

United Nations Forum on Sustainability Standards (UNFSS)

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What are Voluntary Sustainability Standards (VSS)? •  Mainly developed by private bodies (commercial and non-commercial).

•  Typically cover health, safety, environmental, economic, social and animal welfare issues.

•  “Credence characteristics”, i.e. attributes not verifiable through examination of the product (Production and Processing Methods- PPMs).

•  Most prominent in the food and agricultural sector (also significant in textiles/clothing, toys, timber products, cosmetics, bio-fuels, electronic goods).

•  Carbon & water foot-printing and energy and material/resource efficiency standards are emerging as a new frontier.

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Importance of VSS 4

•  VSS are of key importance for market entry and sustainable development.

•  Real developmental opportunities – strong market dynamics (including growing private sector interest and participation)

•  Unless pro-actively addressed, VSS can potentially become a market entry hurdle and a serious challenge in particular for small-scale producers.

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Voluntary (i.e. private) Sustainability Standards (VSS) are often viewed as a technicality, when VSS are tools that can be used to:

•  Internalize environmental and social costs.

•  Advance sustainable production and consumption methods (including opportunities for energy/ material/ resource efficiency and cost savings).

•  Promote competitiveness in the growing and lucrative “sustainability” markets.

Importance of VSS (cont’d) 5

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Market Share of VSS-certified Bananas & Coffee

Source: Food and Agriculture: The Future of Sustainability, UN Department of Economic and Social Affairs, D. Giovannucci, S. Scheer et al., NYC, 2012: 17.

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State of Sustainability Initiatives (SSI): 7

Reporting service on VSS:

 Market trends

 Program reach/structure

 Program governance

Sectors:

Forestry, Coffee, Cocoa, Tea and Banana

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Growth of VSS 8

Recent Average Annual Growth Rate of Key VSS Markets:

Global US High-value 5-10 % 10+ %

Organic 10-15 % 15-20 %

Fair Trade 35 % 40 %

Utz Certified 30 % --

Rainforest 105 % 120 %

Conventional Food Markets 2-4 % 3-5%

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Source: State of Sustainability Initiatives, 2011

Geographical distribu2on of sustainable cocoa cer2fica2on, 2011 (mt)

Geographical distribu2on of sustainable coffee cer2fica2on, 2011 (mt)

Sustainable cocoa and coffee (% of Global Produc2on in mt-‐ 2011)

Cocoa Coffee

Utz: 5% (212,690mt) Fairtrade: 3% (121,400mt) Rainforest Alliance: 2% (98,416mt) Organic: 1.4% 61,842mt)

Adj for multiple-certification: 8% of Global Production

4Cs: 11% (906,300mt) Utz: 6% (476,903mt) Fairtrade: 5% (393,000mt) Organic: 3% (286,120mt) Rainforest Alliance: 2% (191,384mt)

Adj for multiple-certification: 20% of Global Production

Sustainable cocoa produc2on vs. sales, global

•  Annual growth rate in production: 55% from 2008-2011

•  Total volume certified in 2011: 349,504mt (8% of global production)

Total volume sold as certified in 2011: 143,514 (3% of global production)

Sustainable cocoa produc2on by country and ini2a2ve (2011)

Fairtrade Global Average Organic Rainforest Alliance Utz

Reported 2011 premiums (KPMG) •  UTZ: US$152/mt in Ghana

$140/mt in Côte D’Ivoire

•  Rainforest Alliance: US$150/mt Ghana $200/mt Côte D’Ivoire

•  Fairtrade: US$200/mt in Ghana and Côte D’Ivoire

Source: KPMG. (2012). Study on the Costs, Advantages and Disadvantages of Cocoa Cer2fica2on.

Reported 2011 audit costs (KPMG)

•  UTZ: $6,500/coop, Ghana $4,331/coop, Côte D’Ivoire (annual)

•  Rainforest Alliance: $8,500/coop,Ghana, $7,500/coop, Côte D’Ivoire (annual)

•  Fairtrade: $2,561/coop, Ghana, $2,562/coop, Côte D’Ivoire (annual)

KPMG: 2012

Impact Assessment Tools to measure the costs and benefits of implementing sustainable certification programs

Economic

1.   Farmer Livelihoods 2.   Risk & Resilience 3.   CompeMMveness 4.  Management 5.   OrganizaMonal

1.  Health & Safety 2.  Working CondiMons 3.  EducaMon & Training 4.  Basic Rights & Equity 5.  Inclusive Value Chains

1.   Resource Use 2.   Waste 3.   Soil ConservaMon 4.   Biodiversity 5.   Climate Change

Social

Environment

Colombia

Expanding each year

105%

17%

13%

35%

36%

58% 53%

36%

90%

63%

68%

Training

Yield

Price

Revenue

Net Income

Education Food Security

Protective Gear

Conservation Measures

Recycling Crop Waste

Economic Perception

KEY INDICATORS: Certified vs. Uncertified

Sample: 9 countries, over 4,000 farms, 2 crops (coffee/cocoa) with control groups (2008-2009)

Source: CRECE-COSA

Multiple Certifications and Relation to Net Income

Source: CRECE-COSA: significant improvements in a basket of environmental indicators and improvements over controls groups

Year 1 Year 4

6 Certifications: before and after

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FairTrade FairTrade Control

Utz Utz control Starbucks Starbucks Control

Organic Organic Control

Percentage of Woman's Work Time Spent on Crop

CERT - CONV CERT - CONV CERT - CONV CERT - CONV

% Women’s Time Spent on Crop: Certified vs Conventional

1053 producer samples Tanzania

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Benefits of VSS use may arise at different levels: •  Enterprise level •  Sector level •  National level •  International level

Costs and benefits might arise at different points and levels (i.e. those bearing costs might not necessarily earn many of the benefits). Thus, governmental task to even out interests.

Benefits and Costs of VSS 23

Level Potential Benefits of Standards/ Certification as tools:

Farm

Improve management capacities (farm/resource) Improve productivity and product quality Reduce costs Improve market access (and diversification) Longer-term relationships (w/ buyers & other farmers) Premiums- sometimes

National/ Sector

Increase export revenues Create jobs on farms Improvements in processing and services Economies of scale and innovation achieved Positive spillovers- quality and safety in domestic markets & occupational health/welfare of farm workers Enfranchise marginalized groups Enhanced soil fertility, water quality, biodiversity etc

Source: Draft Decision-making guide: Trade Standards Practitioners Network (TSPN), International Institute for Environment and Development (IIED)

Potential Concerns: Policy Level (Producer Countries)

Market Access:

  Threat to market access (exclusion-valuable export/new markets)

  “Sustainability” used to protect domestic markets

Standard-setting:

  Perception external non-state actors setting standards

  Threat to national sovereignty (exclusion from standard-setting)

  Whose sustainability (democratic national governments or distant consumers/brands)?

Standards applicability:

  Standards/criteria/processes, potentially inappropiate to local situation

  Too stringent for producers’ and local institutions capacities

  Inflexibility to adapt to local realities (lack of appreciation for cultural/geographical/social diversity)

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Pro-active Role of Developing Country Governments 26 26

Surveillance, Supportive and Facilitating Role

Governance/ Standard-

setting

Facilitating Investment

Devising flanking/support

policies

Assuring policy

coherence

Facilitating stakeholder

dialogue

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setting



policies

Assuring policy

coherence


dialogue

• Transparency, Inclusiveness, legitimacy, trade restrictiveness • Anti-trust • Assuring coherence between mandatory & VSS • Facilitating interoperability between VSS

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setting



policies

Assuring policy

coherence


dialogue

•  In physical infrastructure •  In SMTQ (standards, metrology, testing, quality) systems &

institutions • Directing donor funding accordingly

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setting


Devising flanking /support

policies

Assuring policy

coherence


dialogue

• Awareness raising/ training • Financial support •  Information instruments/ independent evaluation of VSS • SME support

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setting


Devising flanking /support policies

Assuring policy

coherence


dialogue

• Among government agencies dealing with VSS • Between public & private requirements (e.g. perverse incentives) • Towards donors

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setting


Devising flanking /support policies

Assuring policy

coherence


dialogue

• Facilitating and engaging in stakeholder dialogue on development & implementation of VSS

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Public-Private Cooperation:

Public (public goods)

Private (business/

supplychain issues)

Find nexus based on

“mandates” Identify roles

Rational for Creating UNFSS 33

•  VSS as means to Sustainable Development, not as ends in themselves.

•  Contextualize VSS into the macro-economic development perspective (i.e. not only market access and market shares agenda).

•  UNFSS should focus on public interest & public goods related to VSS.

•  VSS need to be recognized as strategic policy issue (mitigating economic, food, climate and water crises).

•  Understood within overall life cycle of products and related services (looking at avoidance, minimization and management of ‘real’ risks).

•  Also of increasing importance for South-South trade.. •  VSS represent a new meta-governance system for international supply

chains, largely outside WTO rules.

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What is important to address is that VSS are scrutinized as: (i)  proportionate to the (real) risk they claim to address; (ii)  scientifically-based; (iii)  that the burden of compliance is distributed fairly; and (iv)  VSS should not undermine or weaken rules of the WTO’s TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary) agreements.

Rational for Creating UNFSS (cont’d) 34

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Objective:

Effective forum for policy-makers to better understand voluntary sustainability standards (VSS) and be able to utilize VSSs as potential tools to support their own sustainable development strategies and goals.

United Nations Forum on Sustainability Standards (UNFSS)

UNFSS Added Value 36

•  An unbiased and credible policy dialogue that guides and benefits from analytical, empirical and capacity-building activities.

•  Structured to promote “ownership” by developing countries and assure the “demand-driven nature” of UNFSS activities.

•  The only inter-governmental (and multi-stakeholder) forum that deals with generic and strategic issues of VSS in a consistent and pro-active way.

•  Capitalizes on the strengths and specialization of each of the five UN organizations that partner on UNFSS.

•  Better coordination of activities among UN partner organizations.

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UNFSS Structure: 37 37 37

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Members of the UNFSS

Cluster of Activities of UNFSS 38 38 38 38

Informed policy dialogue on

developmental and market-

access impact of VSS

Analytical & empirical work

(including flagship analytical report)

Upon specific request from developing countries, assist with specific analysis of VSS

and in implementing UNFSS recommendations

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Activities of UNFSS (set-up)

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• High-level advisory board (multi-stakeholder)

• Briefing sessions to consult and partner with stakeholders in building UNFSS: Several in Geneva, WTO, UNCTAD XIII China, Thailand, Panama

Cameroon (with Inter. Cocoa Org.; June 24-27) Kenya (TBC)

• Official launch of UNFSS- March 21-22nd, 2013 Geneva at Palais des Nations

• Through consultation Advisory Panel prepared draft work plan which was discussed, adjusted and confirmed at UNFSS launch event:

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Preliminary Activities of UNFSS (from launch)

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Action areas identified Status

Decision-Making tool for policy makers on VSSs

Further develop draft tool (IIED/TSPN); adapt/validate at producer country level.

Flagship Report on VSSs Initial publication almost ready for dissemination (draft shared with ICCO).

Impact Assessment working group

Work with exisiting initiatives (COSA etc.), support interpretation of results for policy

Capacity building activities Begin in pilot countries, link with exisitng initiatives (SCAN etc).

Harmonization and equivalence

Working group being set-up, building on existing program (GOMA-organic standards/Global Gap).

Emerging standard initiative

Provide information and promote their relevance and value to Sustainable Development.

National and regional Committees linked to UNFSS

Under development, build on briefings (China, Thailand, Panama under development)

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For more information:

Support for the UNFSS provided by:

Website: www.unfss.org

email: [email protected]

theunforumon$$ sustainabilitystandards(unfss) · pdf filerational for creating unfss 33 •...

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