Options for Code of Conduct IFOAM traders
The relationship, obligations and rights of the Fair Trade Labelling Initiatives members of FLO-International and of the organizations inscribed in the FLO-International Coffee Producers' register:
FLO-INTERNATIONAL CONDITIONS FOR THE PURCHASE OF COFFEE
(Annex 2 to the Agreement)
1. In any commercial document this set of conditions will be referred to as the "FLO-International Conditions".
2. Only organizations of small coffee producers inscribed in the FLO-International Coffee Producers' Register (FLO-CR) will be entitled to sell green or processed coffee to be marketed under one of the Fair Trade labels promoted by the signatories to the FLO-CR.
3. Buyers and sellers will procure to establish a long term and stable relationship in which the rights and interests of both are mutually respected. Buyer and seller will sign contractual agreements for the first part of the season and a letter of intent for the rest of the season, to be confirmed by purchase contracts as the harvest progresses, which stipulate basic conditions such as: volume, quality, procedures to establish differentials and fix prices, shipment schedules, etc.
4. All other customary conditions applicable to any international transaction will apply, such as the conditions of the European Contract of Coffee, latest edition (hereinafter to be referred to as ECC-conditions), unless overruled by any of the special FLO-International conditions as specified herein.
5. All buyers functioning in the FLO system use international standards when they fix prices and consider to include "price fixation at seller's call" (against the relevant position of the futures market) into their policy.
6. Price fixation, once effected and confirmed, cannot be changed, neither by the buyer nor by the seller.
7. For Arabicas the New York "C" contract shall be the basis of calculation. The price shall be established in US$-cents per pound, plus or minus the prevailing differential for the relevant quality, basis F.O.B. origin, net shipped weight.
8. Over the under '7' established prices, there shall be a fixed premium of 5 US$-cents per pound
9. For certified organic or biological coffee with officially recognized certification, that will be sold as such under the mark of one of the marking organizations signatory to the agreement governing FLO-CR of which these FLO-International conditions form part, an additional premium of 15 US$-cents per pound green coffee will be due, on top of the FLO-International price as determined under points 7 and 8.
10. To protect the producers, minimum prices have been defined which overrule FLO-International prices as defined under 7 and 8 when these are lower than the relevant minimum price. The minimum prices vary according to the type and origin of the coffee. The next minimum prices, including quality differentials, the fixed FLO-International premium of 5 US$-cents per pound and the organic premium of 15 US$-cents per pound, apply: (all prices in US$-cents per pound F.O.B. port of origin)
11. Payment shall be net cash against a full set of documents on first presentation. The documents to be presented will be those stipulated in the contract and the ones customary in the coffee trade
13. In case of dispute, parties are held to inform the involved marking organization signatory to the agreement governing the FLO-CR, of which these FLO-International conditions form part. If possible, mentioned marking organization will work out a settlement proposal to be presented to both parties. If this settlement proposal is not acceptable to either of the parties, the dispute will be submitted to arbitration according to the ECC conditions, latest edition.
last updated: 24 october 2000