The UN Forum on Sustainability Standards (UNFSS) Intergovernmental Forum of Dialogue on Voluntary Sustainability Standards ICCO Workshop, Douala, Cameroon June 24-27, 2013 Christopher Wunderlich: UNFSS coordinator Jutta Steinmann: UNFSS support team In name of the 5 UN agencies that have formed the UNFSS I would like to thank the ICCO for this opportunity to be with all of you during this important workshop. All of the 5 agency: FAO, ITC, UNCTAD, UNEP and UNIDO are working directly on the issue of Voluntary Sust. Standards and certification programs. Therefore it is a pleasure to be here with the ICCO who has also identified the impact and importance of sustainability cert, and is constructively and proactively addressing this issue. The 5 UN agencies forming the UNFSS, as intergovernmental organizations, believe that these programs are increasingly having an impact on international trade and on sustainable development, and that governments need to take a more proactive role in addressing them. We believe that governments need to have more information about these programs, and opportunity to discuss their benefits and constraints and a mechanism to proactively engage with them. We believe that the ICCO is also taking a similar approach and so are very pleased to be participating with the ICCO and its members in this process of understanding these programs better and to examine how sustainability certification can be potentially used as important tool to promote sustainable development. 1

United Nations Forum on Sustainability Standards (UNFSS) 2 2 2 2 United Nations Forum on Sustainability Standards (UNFSS) Objective: Effective forum for policy-makers to better understand voluntary sustainability standards (VSS) and be able to utilize VSSs as potential tools to support their own sustainable development strategies and goals. 2

What are Voluntary Sustainability Standards (VSS)? 3 3 What are Voluntary Sustainability Standards (VSS)? Mainly developed by private bodies (commercial and non-commercial). Typically cover health, safety, environmental, economic, social and animal welfare issues. “Credence characteristics”, i.e. attributes not verifiable through examination of the product (Production and Processing Methods- PPMs). Most prominent in the food and agricultural sector (also significant in textiles/clothing, toys, timber products, cosmetics, bio-fuels, electronic goods). Carbon & water foot-printing and energy and material/resource efficiency standards are emerging as a new frontier. What are VSS? Focus in general is on voluntary private standards which are developed by commercial and non-commercial private bodies and typically cover health, safety, environmental, social and animal welfare issues- with many addressing economic issues as well. These are credence characteristics, attributes which can not be seen or measured on the end product- often related to production and processing methods. These are not legally mandatory, but because of their size are becoming de facto market entry requirements Most prominent in the the food and agriculture sector, but expanding to others including Carbon and water foot-printing. But also significant in Textiles and clothing, footwear, toys, timber/Timber products, natural cosmetics, liquid bio-fuels and electrical and electronic goods Also standards for energy and material/resource efficiency are are supplementing other market-based and fiscal instruments.

4 4 4 4 Importance of VSS 4 VSS are of key importance for market entry and sustainable development. Real developmental opportunities – strong market dynamics (including growing private sector interest and participation) Unless pro-actively addressed, VSS can potentially become a market entry hurdle and a serious challenge in particular for small-scale producers. Have raised a lot of interest because of their market growth. Rapid exponential, annual growth. This has created real opportunities, but can also be a serious challenge for many producers (i.e. marginalization of small-scale producers and considerable compliance costs due to multiplicity of standards and their lack of interoperability as well as lack of credible information).

Importance of VSS (cont’d) 5 5 5 5 Importance of VSS (cont’d) 5 Voluntary (i.e. private) Sustainability Standards (VSS) are often viewed as a technicality, when VSS are tools that can be used to: Internalize environmental and social costs. Advance sustainable production and consumption methods (including opportunities for energy/ material/ resource efficiency and cost savings). Promote competitiveness in the growing and lucrative “sustainability” markets.

Market Share of VSS-certified Bananas & Coffee 6 6 6 6 6 Market Share of VSS-certified Bananas & Coffee One of key issues discussed is market growth. A recent UN study on food security also highlights this importance- growth rates for the exports of certified products from two sectors (coffee and bananas) from 2/3% respectively in 2002 to 9 and 15% in 8 years, with a projected market share of 2015 of 18 and 22% Source: Food and Agriculture: The Future of Sustainability, UN Department of Economic and Social Affairs, D. Giovannucci, S. Scheer et al., NYC, 2012: 17.

Growth of VSS Recent Average Annual Growth Rate of Key VSS Markets: 7 7 7 7 Growth of VSS 7 Recent Average Annual Growth Rate of Key VSS Markets: Global US High-value 5-10 % 10+ % Organic 10-15 % 15-20 % Fair Trade 35 % 40 % Utz Certified 30 % -- Rainforest 105 % 120 % Conventional Food Markets 2-4 % 3-5% Have raised a lot of interest because of their market growth. Rapid exponential, annual growth. This has created real opportunities, but can also be a serious challenge for many producers (i.e. marginalization of small-scale producers and considerable compliance costs due to multiplicity of standards and their lack of interoperability as well as lack of credible information). Source: State of Sustainability Initiatives, 2011

Geographical distribution of sustainable coffee certification, 2011 (mt) If we look at the coffee sector comparatively it was 20% in 2011

Committee On Sustainability Assessment Impact Assessment Tools to measure the costs and benefits of implementing sustainable certification programs Committee On Sustainability Assessment COSA

Economic Social Environment Farmer Livelihoods Risk & Resilience Competitiveness Management Organizational Economic Health & Safety Working Conditions Education & Training Basic Rights & Equity Inclusive Value Chains Social Resource Use Waste Soil Conservation Biodiversity Climate Change Environment Committee On Sustainability Assessment COSA

Key points: Certifications, on average, outperform conventional but not consistently and not in all categories. (2008-11) data, multi countries, both coffee and cocoa Sample: 9 countries, over 4,000 farms, 2 crops (coffee/cocoa) with control groups (2008-2009) Committee On Sustainability Assessment COSA

Benefits and Costs of VSS 12 12 12 12 Benefits and Costs of VSS 12 Benefits of VSS use may arise at different levels: Enterprise level Sector level National level International level Costs and benefits might arise at different points and levels (i.e. those bearing costs might not necessarily earn many of the benefits). Thus, governmental task to even out interests. 12

Rational for Creating UNFSS 13 13 Rational for Creating UNFSS VSS as means to Sustainable Development, not as ends in themselves. Contextualize VSS into the macro-economic development perspective (i.e. not only market access and market shares agenda). UNFSS should focus on public interest & public goods related to VSS. VSS need to be recognized as strategic policy issue (mitigating economic, food, climate and water crises). Understood within overall life cycle of products and related services (looking at avoidance, minimization and management of ‘real’ risks). Also of increasing importance for South-South trade.. VSS represent a new meta-governance system for international supply chains, largely outside WTO rules. VSS as a tool, a means to sustainable development- not as an end. Contectualize in the macro-economic development perspective. 13 13

Rational for Creating UNFSS (cont’d) 14 14 Rational for Creating UNFSS (cont’d) What is important to address is that VSS are scrutinized as: proportionate to the (real) risk they claim to address; scientifically-based; that the burden of compliance is distributed fairly; and VSS should not undermine or weaken rules of the WTO’s TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary) agreements. VSS must be examined: proportionate to real risk, Scientifically based Burdence of compliance shared along the entire supplychain fairly. Should not undermine nor weaken the TBT and SPS agreements 14

15 15 UNFSS Added Value An unbiased and credible policy dialogue that guides and benefits from analytical, empirical and capacity-building activities. Structured to promote “ownership” by developing countries and assure the “demand-driven nature” of UNFSS activities. The only inter-governmental (and multi-stakeholder) forum that deals with generic and strategic issues of VSS in a consistent and pro-active way. Capitalizes on the strengths and specialization of each of the five UN organizations that partner on UNFSS. Better coordination of activities among UN partner organizations. Unbiased and credible policy forum Ownership by developing countries- demand driven nature Only inter-governmental and multi-stakeholder forum that addresses generic and strategic issues of VSS in a consistent and proactive way. 15

UNFSS Structure: Members of the UNFSS 16 16 16 16 Structure: The Forum will hold annual meetings (& issue specific workshops). Members primarily developing country decision makers. Led by the steering committee of 5 UN bodies and guided by a high-level advisory panel of experts (within these different categories and from diverse geographic locations). The 5 UN bodies are all actively working on VSS  not a new forum, but rooted in existing mandates and activities (thereby pooling resources, synchronising efforts and assuring policy coherence, coordination and collaboration among UN agencies and key stakeholder groups). Analysis of Key issues will be provided by the steering committee, key partners, and related programs. The Forum has a multi-stakeholder character and the UN is a neutral and credible convener of both governments, the business community and civil society and has the mandate and objective to promote sustainable development. Members of the UNFSS 16

Activities of UNFSS (set-up) 17 Activities of UNFSS (set-up) High-level advisory board (multi-stakeholder) Briefing sessions to consult and partner with stakeholders in building UNFSS: Several in Geneva, WTO, UNCTAD XIII China, Thailand, Panama Cameroon (with Inter. Cocoa Org.; June 24-27) Kenya (TBC) Official launch of UNFSS- March 21-22nd, 2013 Geneva at Palais des Nations Through consultation Advisory Panel prepared draft work plan which was discussed, adjusted and confirmed at UNFSS launch event: AP- with Karin Kreider representing the standard bodies (ISEAL Members). 17

Preliminary Activities of UNFSS (from launch) Action areas identified 18 Preliminary Activities of UNFSS (from launch) Action areas identified Status Decision-making tool for policy makers on VSSs Draft tool (IIED/TSPN), being further developed to adapt/validate at producer country level. Flagship report on VSSs Initial publication almost ready for dissemination (draft shared with ICCO). Impact Assessment working group Work with exisiting initiatives (COSA etc.), support interpretation of results for policy Capacity building activities Begin in pilot countries, link with exisitng initiatives- (SCAN etc). Harmonization and equivalence working group Working group being set-up, building on existing work (GOMA-organic standards/Global Gap). Emerging standard initiative working group Provide information and promote their relevance and value to Sustainable Development. National and regional Committees linked to UNFSS Under development and implementationBuild on briefings, link to UNFSS. What are VSS? Focus in general is on voluntary private standards which are developed by commercial and non-commercial private bodies and typically cover health, safety, environmental, social and animal welfare issues- with many addressing economic issues as well. These are credence characteristics, attributes which can not be seen or measured on the end product- often related to production and processing methods. These are not legally mandatory, but because of their size are becoming de facto market entry requirements Most prominent in the the food and agriculture sector, but expanding to others including Carbon and water foot-printing. But also significant in Textiles and clothing, footwear, toys, timber/Timber products, natural cosmetics, liquid bio-fuels and electrical and electronic goods Also standards for energy and material/resource efficiency are are supplementing other market-based and fiscal instruments. 18

Support for the UNFSS provided by: 19 19 19 19 For more information: Website: www.unfss.org email: info@unfss.org Support for the UNFSS provided by: 19