Fair Trade Certification

After nearly fifty years of different approaches to Fair Trade, an international system of Fair Trade certification and labelling began to emerge in the late 1980s.

It was an opportune time to establish a set of standards and labelling as there was both growing consumer and commercial interest in Fair Trade products. Consumers wanted a guarantee that their purchases were truly benefiting producers and workers, and businesses selling Fair Trade products were eager for a system that engendered consumer trust.

Standards were developed to clearly define the obligations for producers and businesses who buy from them in order for a product to be called Fair Trade Certified, and a rigorous third-party monitoring system was implemented to ensure standards were being met.

Finally, a label was created that would appear on products that had been independently Fair Trade Certified. Different labels have been used around the world over the years, and the two most of commonly found in Canada today are those found throughout this website in the top left corner.

How it Works

Photo: Mr. Didier Gentilhomme

Fair Trade certification begins with producers - usually democratic associations of small-scale farmers who grow the raw ingredients in Fair Trade Certified products. Producers have to meet a variety of criteria that focus on a range of areas including labour standards, sustainable farming, governance, and democratic participation.

Producers report their sales of products to Fair Trade buyers to FLO-Cert, the Certification arm of the Fairtrade Labelling Organizations (FLO) International, which also conducts on-site audits to ensure producers continue to meet the standards.

Companies that buy products from Fair Trade Certified producer organizations must also adhere to strict standards, regularly report, and submit to on-site audits. These standards focus on the terms of trade - specifically they spell out the minimum prices that can be paid to producers, the expectation for longer-term contracts, and the requirement to provide up to 60% of the value of a contract in advance should the producers request.

These companies are also audited to ensure the Fair Trade Certified products they sell to their customers match the Fair Trade Certified products they purchase from producers, as are companies further along the supply chain who don't deal directly with producers.

If those companies are located outside of Canada, they report to and are audited by FLO-Cert or one of TransFair Canada's sister organizations.

In Canada, companies register with TransFair Canada to deal in Fair Trade Certified products. They must sign an agreement with us obliging them to report their purchases, processing and sales of anything that has been certified as Fair Trade.

In addition, the agreement spells out how they can and cannot use the Fair Trade Certified label on packages and promotional materials.

As with other actors in the Fair Trade supply chain, they are also required to open their books to us when we conduct on-site audits.