November 01, 2004

Coffee code

Sara Lee, Nestlé, Kraft Foods and Tchibo on September 10 signed an agreement to improve working conditions and environmental standards in the coffee industry. Producers and traders who accept the Common Code for the Coffee Community will have to pay minimum wages, cease using child labour, allow trade union membership and adhere to international standards on pesticides and water pollution. The voluntary code, which will apply to coffee producers from Brazil, central America and Africa, will also be signed by NGOs including Oxfam International and Greenpeace, and a federation of trade unions. Contact Ulrich Sabel-Koschella, CCCC 00 49 6196 79-1437 (

Proactive approach

BT is taking a new approach to improving the ethical management of its supply chain, based on an idea it received from institutional shareholders. The company is to form a stakeholder panel, comprised of trade unionists and NGO representatives, to advise it on how to improve its ethical supply chain monitoring and workplace standards. BT says the group will hold a one-day session every six months, allowing stakeholders to contribute to the company’s future CSR strategy. The sessions will also enable BT to have advanced warning of emerging supply chain issues that stakeholders wish to see resolved. Contact Steve Kelly, BT 020 7356 5000 (

Fair of face

The Fair Labor Association on August 19 published is second annual report, which highlights the progress made by 25 of its apparel and footwear member companies in improving factory conditions. According to the FLA’s Year Two Annual Public Report, the organisation’s accredited monitors made 110 unannounced factory visits in 20 countries and conducted more than 3,000 interviews with factory workers. Contact Anne Lally, Fair Labor Association 00 1 202 262 0665 (

Child labour challenge

The Chocolate Manufacturers Association recently announced that it is to launch a pilot programme to eradicate child labour in West Africa. Due to begin this November, the monitoring system will affect over 80,000 children in the region. In 2001, the CMA introduced a protocol to develop industry-wide labour standards and to provide transparent monitoring of the industry’s supplier farms. The industry concedes that it may miss the scheduled deadline of July 2005 to launch the certification system. Contact CMA 00 1 703 790 5011 (

Uniform progress

Cintas, a US-based uniform maker, is supporting a shareholder resolution calling for an audit on the company’s overseas suppliers’ workplace standards including work hours and pay rates, it was announced on September 1. Last year the company rejected a similar proposal from Walden Asset Management and New York-based Domini Social Investments, asking Cintas shareholders to request that the board prepare a report evaluating vendors’ compliance with Cintas’ code of conduct. Contact Mike Wallner, Cintas 00 1 513 754 3564 (

Water wars

Supply chain interruptions, poor product quality and even loss of license to operate are among the risks posed to business by growing water shortages, according to a new report by the US-based Pacific Institute. Freshwater Resources outlines a range of problematic trends in the wake of skyrocketing demand, such as community concerns about industrial water use and pollution, and potential changes in water availability and quality stemming from climate change. Contact Nicholas Cain, Pacific Institute on 00 1 510 251 1600 (

Editorial Comment

The publication of the Common Code for the Coffee Community hardly sounds like an event to get excited about. But it is – because it provides a rare example of a whole industry approach involving representatives of all parts of the supply chain working with the voluntary sector and government. Eighteen months-work by the producers, NGOs, government and the processors, crucially including four big processors Kraft, Nestlé, Sara Lee and Tchibo, has gone into the production of the Common Code. Between them these four companies buy 40% of the world’s green coffee. Effective buy-in from these significant firms means that the floor standards in the code ought to establish a reasonably level playing field within the industry.Overall the code aims to achieve greater sustainability in the production, post-harvest processing and trading of green coffee. The intended impact is to improve environmental protection, living conditions for farmers and economic efficiency. One of the code’s great merits is that it recognises the importance of traceability. To reassure consumers the coffee manufacturers need to be able to trace their product back to as close to the point of origin as possible. The code sets out a measurement framework for each of the economic, social and environmental dimensions of coffee production. Against each of thirty principles it defines good, acceptable and unacceptable practice. There is provision for verification and a set timeframe for correcting unacceptable practice. If the code proves a success then it could provide a robust framework for voluntary regulation of other commodities. For the moment, however, the code lacks teeth.While welcome, the code cannot solve the fundamental problem of the industry: overproduction. The real price of coffee has been falling for the last half-century. This is fully explored in the Nestlé coffee report Faces of Coffee. Unless consumption increases then some of the 25 million people reliant upon coffee production will be priced out of the market. The code can improve conditions and sustainability but cannot reverse that unwelcome economic reality. Assisting marginal producers to diversify and leave the market is surely not a job solely for the industry but must also engage governments, international agencies and non-profit groups.