Fair Trade Certified: What Does it Mean?

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You’ve probably seen the Fair Trade Certified label on a lot of products ranging from coffee to clothing. In fact, there are currently over 42 million Fair Trade Certified products in the global market across 30+ product categories. But have you ever wondered what that certification really means?

In a nutshell, Fair Trade USA is a non-profit that ensures that products are grown or made according to rigorous social and environmental standards, AND the people who produced them earned more money with every sale. The organization has 4 main principles:

  1. Safe Working Conditions

  2. Advancement of People

  3. Protection for the Planet

  4. Consumer Activation

Let’s break each down.

Safe Working Conditions: Fair Trade Certified Factories are audited annually against the Fair Trade Factory Standard, which is a rigorous 310+ point social compliance assessment. This is to safeguard workers health and well-being while in the workplace, extending from simple cleanliness standards to more delicate subjects like child labor. Currently Fair Trade USA has 48 certified factories in 13 countries with another 35 factories in the pipeline driven by consumer demand for fair-trade product. Some 59,000+ workers workplace health and well-being are covered by Fair Trade USA.

Advancement of People: Once a factory is Certified, any registered brand can support the Fair Trade program at the factory by paying a Premium on top of the cost of each good. These funds, called the Fair Trade Premium, accumulate and are placed into a worker managed bank account. Workers democratically elect a group of their peers to represent them on a Fair Trade Committee. This committee is responsible for proposing ways to utilize the Premium money to address local needs. The workforce then votes on their favorite option, whether it’s a cash bonus, daycare, health clinic, etc. Some of our favorite stories:

  • FAIR PRICE SHOP: At Bestitch Knits, employees voted to set up a Fair Price Shop at the factory premises to buy their daily/weekly groceries at wholesale prices The workers previously had to travel to get to markets to shop. The markets typically sold products at maximum retail price. This enables workers to save money and time daily as they no longer have to shop at local retail outlets and market.

  • CASH BONUSES: At Rajlakshmi Cotton Mills, employees voted to put the money directly into each employees hands so they could do what is best for their personal families:

    • Employee Santosh Manna “With my first premium, I was able to build a permanent roof in my home. The plan is to be able to build a second floor above that in the future.

    • Employee Probir Mandal - “ In the first premium cycle, I invested in building a tube well for my house. The second year, we painted our house. The third year, we put it into savings. The fourth year, I bought life insurance through LIC and I plan to invest future cycles into the yearly payment…”

    • Employee Deepali Das - “The first year when we received the premium, I purchased a bicycle for my son, Kaushik Das. He was so happy. When he's happy, I'm happy. I never thought I would buy a bicycle before I had the extra funds from the premium. Since then, I've put my premiums into savings for the future”

    In 2017 alone, over $3 Million in Premium were sent back to factory worker communities. Since Pact’s inception, we alone have contributed north of a quarter of a million dollars in premiums.

Protection for the Planet: Environmental practices have long-term impacts on the livelihoods of producers, communities, and the planet. Fair-trade standards work to keep the planet healthy for generations to come by prohibiting the most harmful chemicals and taking measures to protect natural resources.

Consumer Activation: Every Fair Trade Certified™ product has a label on it, acting as a badge of merit for the responsibly made good. Consumers can use this as a guide their conscious consumption across many retailers and brands. For a list of brands and retailers who participate in Fair Trade, click here.

Thank you for your ongoing support of Pact and other Fair-Trade Certified companies and products. Individually we make choices, collectively we make change.



kamie kennedy