General Feedback on Starbucks’ Preferred Supplier Program/ CAFE Practices
Submitted to Starbucks by Global Exchange on March 8, 2004
Strengthen the Baseline (Baseline = Conditions required to meet the 1 Point level and Criteria designated as performance at minimum level required”)
Raise the baseline according to Global Exchange’s point-by-point feedback. Essential factors include a fair and stable income and affordable credit for small-scale/family farms and cooperatives; access to basic education and health care; self-sufficient community development; a living wage and the right to organize for plantation workers; use of environmentally-sustainable methods in growing and processing; and supporting educational opportunity over child labor. The highest standards in the PSP should harmonize with FLO, Organic, and Shade-grown guidelines. This will ensure the highest level of responsibility in coffee purchasing and allow producers to move between these systems without additional verifications or costs,
Expand the baseline to define more conditions as “performance at minimum level required,” specifically those so noted in Global Exchange’s point-by-point feedback. Confer with the Smithsonian Migratory Bird Center and the Rainforest Alliance to determine which environmental criteria should also be designated as “performance at minimum level required.”
Attention to small-scale/family farms and cooperatives of small-scale/family farms
In general, the language in the PSP refers overwhelmingly to plantations and vendors/intermediary sales. As such, it is unclear how the PSP relates to and will benefit small-scale/family farms and cooperatives. Specific criteria are needed for these groups. Such criteria must be developed by referring to relevant existing models (e.g., FLO) and consult with relevant experts (including FLO, Global Exchange, Oxfam, Jonathan Rosenthal, TransFair USA, Jason Potts - UNCTAD commodities project).
Small-scale/family farms and cooperatives are the most vulnerable members of the supply chain and thus warrant special support and consideration. Add such special considerations in the PSP according to Global Exchange’s point-by-point feedback.
Develop a written commitment to small-scale/family farms and cooperatives, focusing on building self-determination and self-sufficiency. This should include efforts such as preferential sourcing from small-scale/family farms and cooperatives of small-scale/family farms over plantations and vendors, prioritizing direct long-term contracts, supporting cooperative formation, encouraging the establishment of community-controlled social funds, facilitating education around quality improvement and marketing, support vertical integration of the supply chain within the cooperative structure.
The Evaluation guidelines must specify how assignment of “Maximum points” will be determined. As currently written, the assignment of the 4 or so additional points is open to subjective interpretation resulting incorrect evaluation outcomes. Developed a more detailed scoring matrix specifying how each additional point would be earned.
The Guidelines must include a cost floor (refer to organic and FLO certification policies) as well as a breakdown of who will be responsible for the verification costs.
The costs of verification will weigh differently on small-scale/family farms, cooperatives, plantations, processors, and vendors. Thus, a variable cost structure must be developed, in line with the financial status of the entity to be verified. If verification cost is to be passed down the supply chain, cost breakdown must be structured accordingly.
Verifiers must also be subject to independent audit and must follow conditions of equity. This is particularly a concern given that verifiers can be for-profit or not-profit entities.
Validity of verifiers’ potential to return truthful, comprehensive, and fair reports must be established as a prerequisite to serve as a verifier. Validity can be established by pilot testing potential verifiers on approximately three suppliers that have already been verified by accepted verifiers, and then comparing the resulting data sets.
Potential verifiers should be reviewed by a multi-sector advisory board including organizations such as those invited to the stakeholder meeting on 26 February 2004.
Design and Future Revisions of the PSP
Establish advisory board for continued development and revisions, including experts on social, economic, labor and trade issues: Coverco, Co-op America, Fairtrade Labelling Organization International, Global Exchange, Interfaith Fair Trade Initiative, Oxfam America, Jonathan Rosenthal, TransFair USA, Jason Potts (UNCTAD commodities project), US/LEAP. Initial development of the PSP was done primarily with Conservation International and without collaboration with social, economic, labor and trade experts. As a result, the PSP is heavy on environmental aspects while social and economic criteria are insufficient in many areas.
Public Education and Industry-Wide Promotion
Develop a written plan for public education around the social, economic, and environmental costs of coffee production, as well as the savings realized through the implementation of the PSP. Work with advocacy groups including Co-Op America, Global Exchange, Interfaith Fair Trade Initiative, Oxfam America, TransFair USA.
Develop a written commitment to promote these standards among the industry and challenge others to adopt and improve upon them. Work with industry groups such as SCAA to do this