The UN Forum on Sustainability Standards (UNFSS) - - PowerPoint PPT Presentation

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

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• 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)

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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):

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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

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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

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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

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Surveillance, Supportive and Facilitating Role

Governance/ Standard- setting Facilitating Investment Devising flanking/support policies Assuring policy coherence Facilitating stakeholder dialogue

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Pro-active Role of Developing Country Governments

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Surveillance, Supportive and Facilitating Role

Governance / Standard- setting

Facilitating Investment Devising flanking/support policies Assuring policy coherence Facilitating stakeholder dialogue

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

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Pro-active Role of Developing Country Governments

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Surveillance, Supportive and Facilitating Role

Governance/ Standard- setting

Facilitating Investment

Devising flanking/support policies Assuring policy coherence Facilitating stakeholder dialogue

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

institutions

• Directing donor funding accordingly

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Pro-active Role of Developing Country Governments

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Surveillance, Supportive and Facilitating Role

Governance/ Standard- setting Facilitating Investment

Devising flanking /support policies

Assuring policy coherence Facilitating stakeholder dialogue

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

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Pro-active Role of Developing Country Governments

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Surveillance, Supportive and Facilitating Role

Governance/ Standard- setting Facilitating Investment Devising flanking / support policies

Assuring policy coherence

Facilitating stakeholder dialogue

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

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Pro-active Role of Developing Country Governments

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Surveillance, Supportive and Facilitating Role

Governance/ Standard- setting Facilitating Investment Devising flanking / support policies Assuring policy coherence

Facilitating stakeholder 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

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• 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)

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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

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• 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
• rganizations that partner on UNFSS.
• Better coordination of activities among UN partner organizations.

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UNFSS Structure:

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Members of the UNFSS

Cluster of Activities of UNFSS

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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: info@unfss.org