Two major reports have been presented to the United Nations Forum on Sustainability Standards (UNFSS), which was set up in March 2013 “to respond to growing interest in sustainability standards that can reduce poverty in developing countries”. The Committee on Sustainability Assessment (COSA), which prepared the first of these reports, noted that there are now “no fewer than 435 sustainability standards or ‘eco-labels’ claiming some aspect of sustainability”. COSA’s president commented that some of these standards “are a response to the failure of public policies to deliver results in the most critical aspects of our food supplies”, but stressed that it was now important to know just how effective these standards are in attaining their stated objectives and ensuring sustainability.
The COSA report on measuring sustainability in the coffee and cocoa sectors of 12 countries highlights how the impact of VSS has varied according to the context, with great impacts in some areas and but little impact in others. It notes that multiple certification can lead to more income, “but only up to a point”, and that more training leading to greater efficiency and improved yields is a real benefit of VSS. Higher yields, meanwhile, “can correlate with better environmental practices”, but can still leave smallholder farmers lacking adequate food.
The second of the reports was the 2014 State of Sustainability Initiatives (SSI) Review, which is jointly produced by five partner organisations. The review – the fifth since the 2010 edition – found that the use of “eco-labels or voluntary sustainability standards (VSS)” (excluding biofuels) increased by 41% in 2012. The growth in VSS was “strongest in palm oil, which experienced 90% growth in 2012; sugar (74%), cocoa (69%) and cotton (55%)”. The SSI review focuses on “the 16 most prevalent standards initiatives – such as the Forest Stewardship Council, Organic, and Rainforest Alliance – across ten leading commodity sectors”. According to the review, “VSS-compliant products attained significant market penetration in several major commodity markets”:
- coffee – 38% in 2012 (up from 9% in 2008);
- cocoa – 22%;
- palm oil – 15%;
- tea – 12%.
Despite growing demand, the SSI review notes a “persistent oversupply of VSS-compliant products on the market”, with “on average, only 42% of VSS-compliant production… actually sold as such on the market”. Significantly, “uptake in standard-compliant production is led by the more developed of the export-oriented producers,” with this “raising questions about the effect on poverty reduction”.
The SSI review maintains that VSS “have been successful in establishing:
(i) more inclusive governance across global supply chains;
(ii) third-party monitoring as the minimum norm for conformity assessment;
(iii) compliance with labour standards as minimum requirements for market entry.”
The review notes that “as VSS have moved into the mainstream, the average breadth and depth of sustainability requirements covered by such standards has declined, pointing toward the importance of understanding the impacts of mainstream adoption.”
The overall conclusion from the COSA and SSI reports was that mainstreaming voluntary standards can make a positive contribution to transformational change, but that “a better understanding of field-level impacts”, as well as of the strategic policy choices and measures required, is also needed if the poverty reduction effects are to be maximised.
A number of issues arise from these reports that are of potential concern to ACP exporters. The first relates to the growing importance of voluntary sustainability standards (VSS), which now cover multi-billion-dollar market segments, in which ACP producers have a major export interest (fruit and vegetables, tea, coffee, cocoa, cotton, palm oil, fisheries products, etc.).
The second issue arises from the fact that standards compliance is largely being achieved by “the more developed of the export-oriented producers”, with smallholder producers being left behind in terms of sustainability certification standards. This potentially has important poverty implications, as sustainability certification increasingly becomes a prerequisite for participation in mainstream market components.
This raises the issue of the long-term social and economic sustainability of VSS, if smallholder producers are finding it difficult to participate in such schemes. This suggests a need to more effectively build social and economic sustainability considerations into VSS.
This would appear to be particularly important in view of the observation that as voluntary sustainable standards have become more prevalent, so “the average breadth and depth of sustainability requirements covered by such standards has declined”. This would appear to raise the danger that smallholder producers will become less able to serve major market components, while there is less and less benefit for the environment and in other areas of concern that sustainability certification is intended to address.
Against this background, there could well be scope for the launching of a dialogue between the ACP and the EU on how to ensure that voluntary sustainability schemes increasingly build issues of social and economic sustainability into their design. This could potentially take the form of a code of conduct or guidelines on the social and economic objectives of VSS, designed to ensure that such schemes more effectively contribute to poverty reduction in ACP countries.