Canada-Indonesia Trade and Private Sector Assistance Project (TPSA) - - PowerPoint PPT Presentation

This programme has been made possible through the generous support of the Caribbean Export Development Agency and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

\\\\\\\\\\\\\\\\\\

Canada-Indonesia

Trade and Private Sector Assistance Project (TPSA)

Presenter: Rita Lindayati, Senior Environment Specialist, TPSA Project Conference Board of Canada lindayati@conferenceboard.ca Tuesday, February 20th, 2018

Environmental Standards & Ecolabels An Overview

WHAT?

Standards are “agreed criteria by which a product or a service’s performance, its technical and physical characteristics, and/or the process, and conditions, under which it has been produced or delivered, can be assessed.”

(Nadvi and Waltring, 2001)

Why Im Important?

Global standards are important in smoothing trade relations and promoting efficient markets

• Reduce transaction costs (by

transmitting information efficiently)

• Facilitate coordination and

communication between chain actors

• Can be an important way to add value

to a product

• Lower risks for various actors in the

chain

Source: Nadvi and Waltring (2001)

Standards can be distinguished according to the following criterion

Scope process, product standards Geographical reach national, regional, global Function environment al, social, labour, quality, safety Forms management standards, company codes, labels Coverage generic, sector specific, firm/value chain specific Regulatory implications legally mandatory, voluntary

Source: Nadvi and Waltring (2001)

Typology of Standards

Fact ctors contrib ibuting to the proli liferation

• f

f glo lobal envir ironmental standards

• Growing consumer environmental

awareness/sustainability issues

• Globalization of production and trade
• Concern over weak national

government capacity in environmental law enforcement (especially in developing countries)

• Recognition of the limitations of global

intergovernmental cooperation in promoting sustainable production and consumption

Th The Im Importance of f Envir ironmental l St Standards to Develo lopin ing Co Countrie ies

• Standards have become a major determinant of market

access, particularly in high income market.

• Many high margin market segments are defined by product

and process standards (for example, organic foods)

• In developing the capacity to achieve standards, many

producers develop capabilities which enhance their efficiency and their capacity to systematically increased productivity

• Meeting standards is generally a costly process, and this can

act as a barrier to entry for small scale and informal producers .

• Many standards require coordinated actions along the value

chain, and this systemic performance may be difficult to achieve.

• Developing countries lack adequate technical infrastructure

to engage in standard formulation, or promote compliance

• Small firms/ producers in developing countries lack of

technical and financial resources needed for compliance are the most disadvantaged in meeting global standards

Source: Kaplinsky (2010: 1)

Types of f Actors Engaged in in Defining and Im Implementing St Standards

Types of Actors Local/National Global Private Local or national firms, trade associations and certification firms Trans-national corporations, global certification firms Civil society Local or national NGOs, consumer groups and trade unions Global NGOs, international trade union federations Public Local and national government and standards

• rganizations

International and regional

• rganizations

Source: Nadvi and Waltring (2001)

The Dy Dynamic of

• f Environmental

l St Standards an and Its Its Gr Growin ing Di Diversit ity

Generic business defined standards Business sector specific codes/ labels Firm specific codes/ labels NGO + business defined sector-specific codes/ labels

Source: Nadvi and Waltring (2001)

Increase

• f

compliance requirements Increasing complexity

• f

network arrangement /governance Vulnerability of lead firms to consumer and NGO pressures

Ecola labels ls: An Overvie iew

• "Ecolabelling" is a voluntary method of environmental performance

certification.

• An ecolabel identifies a product (i.e., good or service) that meets a

wide range of environmental performance criteria or standards.

• Ecolabel criteria usually focus on the lifecycle stages where the

product has the highest environmental impact, and this differs from product to product.

• (https://globalecolabelling.net/what-is-eco-labelling/)

There are over 400 ecolabels in today’s global market, see: http://www.ecolabelindex.com/ecolabels/ More information: http://www.globalecolabelling.net http://www.standardsmap.org Ecolabels are tools to convey information to consumers about the environmental attributes of the product/ service

Types of f Environmental Perf rformance La Labelling (IS (ISO category ry)

• A voluntary, multiple-criteria based, third party program that awards a

license which authorises the use of environmental labels on products indicating overall environmental preferability of a product within a product category based on life cycle considerations

Type I

• Informative environmental self-declaration claims

Type II

• Voluntary programs that provide quantified environmental data of a

product, under pre-set categories of parameters set by a qualified third party and based on life cycle assessment, and verified by that or another qualified third party

Type III

Source: https://globalecolabelling.net/what-is-eco-labelling/

• Reducing risk
• Differentiating products from

competitors

• Finding new efficiency and cost

saving opportunities

• Ensuring long-term supply
• Reputational gains
• Potential price premium for the

product

Source: Golden (2010)

Potentia ial l Driv rivers for r Bu Busin iness to Adopt Ce Cert rtif ific icatio ion

S Example les

Sustainable e com

• mpli

liant producti tion as a per ercen entage of

• f glob

global l producti tion 2008 & 2012

Commodity 2008 2012 Coffee 15% 40% Cocoa 3% 22% Palm Oil 2% 15% Tea 6% 12% Cotton 1% 3% Sugar 1% 3% Soy Beans 2% 2%

Source: Potts (2014)

Coffee production of major ecolabels 2008-2014

500 1000 1500 2000 2500 4 C Fairtrade Organic Rainforest Alliance UTZ CAFÉ Practice

Thousands metric tons Source: International Trade Centre (2015)

2008 2009 2010 2011

Most popular ecolabels in Canada

Le Leading ec ecolabels in in maj ajor gr grocery ry stores in in Ot Ottawa, Can anad ada

Major grocery store Total brands Fairtrade Organic Rainforest Alliance CAFÉ Practices (Starbuck) Brands with ecolabel Walmart 15 1 27% Loblaws 19 3 (2 Organic) 2 (2 Fairtrade) 6 1 53% Metro 21 1 (1 Organic) 1 (1 Fairtrade) 5 1 33% Food Basics 15

• 2
• 13%

Farm Boy 6 3 (1 Organic) 1 2 83% Average 42%

21

Source: Primary data from Ottawa major grocery stores (Rita Lindayati, March 2017)