About 3 years ago, Jason Potts and his colleagues wrote a report entitled, “The State of Sustainability Initiatives Review 2014: Standards and the Green Economy”. The report was published by the International Institute for Sustainable Development (IISD). This was part of the State of Sustainability Initiatives project that was managed by the IISD, the International Institute for Environment and Development, the Finance Alliance for Sustainable Trade, Environment and Trade in a World of Interdependence, and the Sustainable Trade Initiative. The project was facilitated by the Sustainable Commodity Initiative.
The output succinctly described how voluntary sustainability standards have evolved prior to and eventually after the birth of Agenda 21, and the conclusion of the Rio Earth Summit in 1992. For example, the International Federation of Organic Agriculture Movements (IFOAM) began its operations in 1972 whereas the Rainforest Alliance/Sustainable Agriculture Network (SAN/RA) was organized in 1987. Both of these are member-based initiatives in the agri-food sector, and operating in a number of countries. IFOAM sets standards and the accompanying quality assurance systems. Reality on the ground showed that there can be a plethora of organic standards in a particular country. IFOAM’s role is to work with stakeholders, develop a set of standards among its members, and conduct a full assessment every year to confirm compliance of IFOAM-member businesses through third-party accredited auditors. The SAN/RA, on the other hand, adopted a bi-party approach to standards development and conformity assessment. SAN is the sole standard-setting body for RA-Certified agricultural products. All audits are conducted by third-party accredited auditors every three years. Those established after 1992 would include the Global Partnership for Good Agricultural Practice (1997), Fairtrade International (1997), Ethical Tea Partnership (1997), UTZ Certified (2002), the Roundtable on Sustainable Palm Oil (2004), and ProTerra Standard (2012), among others.
The use of voluntary sustainability standards in agribusiness is clearly a manifestation of the interest of the private sector to directly participate and invest in the implementation of sustainable development. As envisioned, these standards were established as a means of ensuring the attainment of certain sustainability outcomes or practices under two business models, namely, consumer-facing label and the business-to-business standard by agribusiness value chain players. These can include farm input suppliers, farmers, processors, logistics providers, and marketers. The business-to-business standard focuses on supply chain and risk management attributes whereas the consumer-facing label sought to stimulate consumer demand and consumption for greener products.
Multi-stakeholder representation and industry-led consultations can be pursued in the development and implementation of voluntary sustainability standards. Compliance, at the very least, is a sign that sustainable development priorities are being integrated in business operations and strategy. Proof of compliance to these voluntary standards on a consistent manner will involve the use of verifiable conformity assessment processes such as transparent instruments in self-assessment reports and/or certification by third-party accredited auditors. The latter was observed to have provided an “increased degree of independence” in the conformity assessment process.
From 2011 to 2015, Cargill, BASF and the Deutsche Gesellschaft für Internationale Zusammenarbeit jointly launched a development partnership called the “Nucleus of Change” project at General Santos City in the Southern Mindanao region of the Philippines. Reports showed that at least 1,000 smallholder coconut farmers were trained; and the first 300 of which became the world’s first RA-Certified coconut farms. The crude and refined coconut oil produced by Cargill is then further processed by BASF and Procter & Gamble. This year, the “Nucleus of Change” project gave birth to a bigger and wider initiative that will further help establish a sustainable certified and transparent supply chain of coconut oil in Southern Leyte and Southern Mindanao regions in the Philippines, and at Amurang in North Sulawesi province in Indonesia. Procter & Gamble became an additional partner in this greening initiative. An additional 3000 smallholder coconut farmers from the Philippines, and around 300 from Indonesia are the targeted beneficiaries. Approximately 800 of these smallholder farmers will receive additional training on the SAN standards in order to qualify for RA Certification. Meanwhile, farm productivity is envisioned to be improved through Good Agricultural Practices, intercropping and enhanced farm management skills, and the strengthening of farmer groups. The expanded project is implemented under the develoPPP.de program of the German Federal Ministry for Economic Cooperation and Development.