Options for Code of Conduct IFOAM traders


Working Relationships for Organic Tradersg sr


This section of the code of conduct sets out principles of ethical corporate citizenship for organic traders. This is exemplified by commitments to the organic movement in general, the organic trading community, trading partners and internally, to employees.

The Fair Trade movement has extensive experience in setting up structures to support strong and mutually respectful relationships between actors in the supply chain. As such, a document describing "The relationship, obligations and rights of the Fair Trade Labelling Initiatives members of FLO-International and of the organizations inscribed in the FLO-International Producers' Coffee register" is listed in annex 7 and the IFAT Code of Practice in annex 4 for the readers' reference.

Suggested Requirements

Relationships with the Organic Movement in General:

1. The company is organically certified according to EC regulation 2092/91 and works according to the aims and standards of organic agriculture as laid down in the IFOAM Basic Standards for Organic Production and Processing. It supports IFOAM and its policies in general terms.

2. The company sources products that are certified by IFOAM accredited organic certification bodies where possible.

3. The company is actively involved in the organic movement and contributes to its further development through sharing expertise, conducting or supporting research and participating in local, national and/or international organic activities and events. .

4. The company is a good representative of the movement by being thorough, courteous, knowledgeable, honest and open-minded when sharing information. In this way, the company aims to foster goodwill and co-operation in the organic movement.

5. The company maintains an information database appropriate to its size, with information profiles for every regular supplier (and subcontractors if applicable) including categories such as history, geography, social, economic and environmental conditions. Non-confidential information can be shared between traders, clients and NGOs to improve awareness of actors in the supply chain, including end consumers, of the conditions of production.

6. The company upholds the highest standards of product quality in buying and selling organic products.

7. The company supports the promotion and trade of local or regional organic products worldwide. Preference is given to local trade where possible.

Internal Relationships within the Organic Trading Company

1. The management and administration of the company is structured in a transparent way; employees and other key stakeholders such as members or shareholders are regularly informed about activities.

2. The company has a policy on gender issues and strives for equal representation of men and women within the organisation.

3. All employees have regular access to development, education and training activities (from SEKEM).

4. Employees refrain from negative remarks about colleagues when they are not given the opportunity to defend themselves.

Relationships between Organic Trading Companies

1. Trading companies share a IFOAM black list of non-paying clients. Before taking on trade of blacklisted clients, the payment of earlier trade by IFOAM colleagues should be settled.

2. The company passes on trade opportunities to IFOAM member colleagues in the case that it is not able itself to fulfil a given contract. Where client contacts are passed on by other IFOAM traders, this shall occur in a transparent manner.

3. The trading company helps to create an environment of supportive mutual professional development through the sharing of expertise and experiences among IFOAM traders as well as making available information regarding the company's work in as far as this is allowed.

Relationships with Trading Partners (both Suppliers and Clients)

1. The company and its trading partner enter into trading relations with an understanding to establish a long term and stable relationship in which the rights and interests of both are mutually respected (as per FLO Conditions for the purchase of coffee #3)

2. Contracts can be concluded between an IFOAM trader and a given trading partner if the organisation is registered by the Fair Trade Labelling Organisations International (FLO) or if the organisation fulfils the minimum criteria established in the IFOAM code of conduct for traders.

3. The trading partner and any intermediary traders must be able to prove, by providing documents, that the additional organic premium (and fair trade premium where applicable paid by the IFOAM trader, is received by the producer(s) directly or through a fund, over which the farmers/members have control.

4. The method and timing of payment must be clear and in agreement with the trading partner.

5. Verbal price and written purchase contracts are provided to primary producers and to all trading partners. These contracts give clear information about the price calculation.

6. The company respects the confidentiality of data owned by its clients.

7. When buying processed products, the company gives preference to products processed in the region of origin of the primary product if quality standards are met.

8. The company participates in an activity of cultural exchange with all of its suppliers and participate financially in a cultural affair at least yearly with one of its trading partners.

9. The financial responsibility of meeting basic labour rights is shared among all actors in the supply chain. The company pays a price to suppliers and subcontractors that incorporate the costs of observing the code at all levels of the supply chain.


It is suggested that in addition to paying a fair price, the organic trader can fulfil its financial obligation through a number of vehicles including the following:

  • The trading company contributes 1% of the value of total purchases every year to a fund to facilitate the implementation of the code of conduct in priority areas by trading and production partners. The trading or production partner (with representation from producers/workers) and the trader mutually decide on how to use the funds within the broad scope of issues covered in the code of conduct or in organic production and processing.
  • Where appropriate, the trading partner facilitates the process of finding funding to implement a project aimed at addressing issues covered in the code of conduct, when asked by a trading or production partner
  • If third-party certification is required for monitoring the code of conduct, the price paid by the trader will take into account the extra costs of certification beyond the costs of observing the code.
email: info@novotrade.nl
last updated: 24 october 2000
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