| Draft Two SFTMS Standard |
| 01 March 2010 | |
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Page 8 of 11
6. Implementing and structuring the Sustainable Fair Trade Management System
6.1 allocation of human resources and responsibilitiesThe Organisation must designate a senior member of its management team as the person responsible for administering the Sustainable Fair Trade Management System. Appropriate resources must be allocated to enable staff at all levels of the organisation to take an active part in the various functions of the management system. 6.2 capacity Building and Empowerment for the Organisation and its Producer Groups The organisation must identify and document a yearly Training and Support Programme to assist producer groups in their business skills, environmental stewardship and organisational development. The objectives shall be derived from the baseline assessment and any other relevant requirements. The organisation shall provide adequate human and financial resources to deliver the training and support programme. The organisation's internal staff shall also have access to education, training and development programmes specific to their job. 6.3 Sustainable Business processes and procedures The Organisation must develop in writing or visual form a set of working rules governing its internal and external operating and business practices. This covers key aspects of the Organisation's day-to-day work. It includes, but is not limited to, Environmental Routines, Capacity Building, Design of Products, Health and Safety issues, Export Activities, Packaging, Transport, Green Procurement, Organisation of Events and Trade Fairs. All stakeholders should understand the rules governing operating and business practices. The producer groups should be encouraged to mirror this good practice by developing their own codes of good housekeeping, effective operational procedures and internal control practices appropriate to their organisational culture. 6.4 Fair Price and Wage policy 6.4.1 The Organisation shall have a documented procedure to demonstrate how the agreement on prices is reached with trading partners. This procedure shall be based on a transparent and verifiable calculation of costs and profit margins along the value chain in the country of origin. The Organisation shall ensure that a fair wage is always paid to its employees and encourage this process with its producer groups. It must provide documentary evidence of fair wage practices. A resulting social dividend to be used by the final producers of the goods / products for community development or business development has to be demonstrated. 6.4.2 Moving producer groups up the value chain If the existing stage of development of a producer group or the price of its products does not currently allow minimum wages to be achieved, the Organisation shall demonstrate the existence of a programme designed to:
The Organisation shall ensure that payments are made within a time period mutually agreed with its producer groups. Cash payments may be made to small suppliers on delivery. 6.5.1 In situations where the costs of production put an unreasonable burden on producers, the Organisation must offer interest free pre-financing to them. The terms of pre-financing must be mutually agreed. 6.5.2 The Organisation shall negotiate with its producer groups a mutually agreeable contract period for deliveries. 6.5.3 Contract periods for deliveries shall not be altered except by negotiation and mutual agreement. 6.5.4 Where the Organisation produces direct copies of existing designs that have not been produced by its own designers, it obtains and retains documentary evidence that the copying of a design is agreed upon by the original designer or producer group. 6.5.5 The Organisation shall implement a policy regarding the cancellation or rejection of orders and products which should be communicated to, and understood by, producer groups. Where orders are cancelled through no fault of the producer group, the Organisation shall provide adequate compensation for all completed work, and purchase of raw materials in cases where prepayment has not been undertaken. 6.5.6 In trading relationships with mainstream wholesalers and retailers the organisation shall ensure the correct use of the logo which may not support branding of non-certified organisations. 6.5.7 Contracts must be elaborated within busi- ness relationships if Fair Trade principles are compromised in the supply chain. 6.6 Internal communication On a regular basis the Organisation shall communicate in an appropriate way the results of its trading activities and any variations of its trading policy to its staff and workers. 6.7 Communication with relevant Stakeholders The organisation shall communicate in an appropriate manner and at regular intervals with its suppliers, producers and/or artisan groups. Information on general contract performance, capacity building achievements and any changes in market requirements shall be provided. In order to demonstrate its commitment to continuous improvement, the organisation shall plan and execute a programme of producer visits. Visits shall occur at least once a year with national producers and at least once every two years in the case of international business relationships. 6.8 records and record Keeping The Organisation shall have effective procedures for writing, amending and archiving all documentation, including performance records and trading contracts. It shall keep copies of documentation in order to provide an effective audit trail and to verify information if required by stakeholders. Records should either be kept in secure storage in hard copy, or in a secure and suitably backed-up electronic form. The records shall be kept for a minimum of 3 years. 6.9 Preventive Management of Incidents and accidents The Organisation shall develop and apply good management practices to prevent and manage accidents and environmental pollution. The Organisation shall provide support to all its workers or producer groups on the management and prevention of risks, especially where good management practices are not yet in place. © WFTO March 2009
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