Wide agreement to improve industry practices
industry leaders from the troubled coffee sector are close to finalising the "Common Code for the Coffee Community", an initiative aimed at promoting sustainability in coffee trade. A draft code was released on September 10, 2004, and finalisations would be made by 2004 end. Although the code doesn't directly address the falling coffee prices, which has wreaked havoc on coffee growers, "reasonable earnings over time, for all in the coffee value chain" is anticipated, according to its project paper.
The Common Code is a voluntary market-based framework that outlines practice norms for the production and distribution of green coffee beans. Participating institutions include the International Coffee Organization, the intergovernmental organisation of coffee producers and consumers, non-governmental organisations such as Oxfam International and the Rainforest Alliance, labour unions and four of the five biggest coffee buyers -- the Nestle Group, Sara Lee/Douwe Egberts, Kraft Foods International and Tchibo GmbH. Proctor & Gamble is the only absentee of the "big five". Coffee producer organisations representing Brazil, Colombia, Vietnam, Mexico, and Africa are also participating in the process.
The code aims to bring working conditions and labour practices in line with national laws and international principles, establish environmental standards on water, pesticide and chemical use and ensure that markets are made more transparent. Independent auditors would verify compliance with agreed standards. According to the initiative's administrative body: "A direct improvement of incomes should not be expected to result from the introduction of the Code of Conduct. However, with the introduction of minimum social requirements, certain standards will be established." After suppliers and producers adopt the standards, sustainable livelihoods based on coffee would develop in the medium and long term.
Even the industry's traditional critics, including Oxfam International, have hailed the Common Code as the adoption of one of the most comprehensive voluntary standards by an industry. Greenpeace International is also upbeat about the initiative, although it withdrew its active participation from the process of formulating the norms, citing differences regarding the use of genetically modified crops.
India's role in the initiative is still in question. The Coffee Board of India is not a member and has refused to comment on whether it would participate in the process of setting the standards. With the finalisation of standards nearing completion, India might already have lost an opportunity to shape standards that could have significant consequences for its sizeable coffee producing community.
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