In addition to these FAQs about our Supply Chain Requirements, we also have specific FAQs for other areas within our 2020 Certification Program:
FAQ: Supply chain requirements
What are the key changes in the 2020 Supply Chain Requirements? How do they compare with the previous Chain of Custody from UTZ and Rainforest Alliance?
With the Supply Chain Requirements as part of the Rainforest Alliance’s 2020 Certification Program, we’re aiming to foster not only transparency but also responsible business practices by companies throughout the supply chain.
As the first step towards our Reimagining Certification vision, the Supply Chain Requirements demonstrate an ambition to go beyond a traditional ‘chain of custody’ model that only looks at capabilities to track certified volumes along supply chains. This is accomplished through several innovations that are found not only in the requirements but also the overall structural approach. These include a contextualized package of requirements adapted to the circumstances of each supply chain actor, strengthened risk assessment to identify and manage sustainability risks, and shared responsibility requirements to reward farmers for sustainable production and target investment to achieve sustainability goals.
A detailed exploration of these innovations can be found in the “2020 Sustainable Agriculture Standard – Introduction” document.
What is the scope of the 2020 Supply Chain Requirements?
The scope for supply chain certification begins with the first change in legal ownership after the farm. In the context of increasing shared responsibility through certified supply chains, the scope for certification includes any supply chain actor further upstream – including retailers.
For actors in the supply chain that combine characteristics of both farm and supply chain operations, requirements of both the Farm as well as the Supply Chain Requirements may apply. For example, some farm operations that buy from other producers will need to comply with traceability requirements. Likewise, farm operations that sell directly to retailers may need to meet requirements for seal use etc. Similarly, supply chain actors with a high risk of negative social impacts will need to comply with relevant requirements related to social topics such as working conditions, health and safety, etc. The Supply Chain Risk Assessment (SCRA) will support the contextualization of standard requirements.
What is the frequency of the audits for supply chain actors?
The verification level of a supply chain actor will determine the audit frequency and type of verification required over the certification cycle as shown in the table below.
YEAR 1 YEAR 2 YEAR 3
|A||Rainforest Alliance review||Rainforest Alliance automated check||Rainforest Alliance automated check|
|B||CB Desk Audit||Rainforest Alliance review||Rainforest Alliance automated check|
|C||CB ||CB Desk Audit||Rainforest Alliance review|
|D||CB||CB||CB Desk Audit|
How is multiple certification addressed in the 2020 Supply Chain Requirements? Can I claim and sell volumes under multiple certification systems?
Production of crops under multiple certification schemes results into products carrying multiple certifications. If administered correctly, supply chain actors may claim and sell products certified against other schemes in addition to the Rainforest Alliance certification. They are however not allowed to sell the same volume more than once. A volume equivalent carrying the Rainforest Alliance and the Fairtrade certification (e.g.) can therefore not be sold once as Fairtrade certified (only) and once as Rainforest Alliance certified (only) but only as Rainforest Alliance and Fairtrade certified together. The requirement 2.1.6 of the Sustainable Agriculture Standard therefore mandates that there shall not be any double selling of volumes and that products sold as conventional or sold under another scheme or sustainability initiative are not also sold as Rainforest Alliance certified. In addition, requirement 2.2.3 requires the supply chain actor to remove any volumes not sold as Rainforest Alliance certified from the traceability platform.
Does my company need to comply with the 2020 Supply Chain Requirements even if we sell product originally purchased as certified without the Rainforest Alliance Seal?
Companies making claims on product certified against the 2020 Agriculture Standard as well as any other claim made in scope of the Rainforest Alliance Program need to comply with the 2020 Supply Chain Requirements. In addition, companies not applying the Seal may still perform activities that are in scope of the Rainforest Alliance Program and therefore still need to go through the certification process.
What are the consequences of not complying with the 2020 Supply Chain Requirements?
The Rainforest Alliance may decide to immediately cancel the current certificate of companies and/or decide not to certify the companies if they do not comply with the process for getting certified/endorsed or refuse to close non-conformities. They will not be able to sell products as Rainforest Alliance certified. For specifics around non-conformities, please see the Certification and Auditing Rules.
How is Living Wage addressed in the 2020 Supply Chain Requirements?
The Rainforest Alliance 2020 Sustainable Agriculture Standard requires that all workers receive at least the applicable minimum wage in their country and are afforded all the protections under the ILO Conventions and Recommendations setting out basic principles and rights at work. Going further, all producers are required to measure prevailing wages in comparison to the living wage benchmark, and gradually increase workers’ wages to reach at least the level of a living wage. They will accomplish this by setting a wage improvement plan with a specific timeline and targets in consultation with workers’ representatives.
The requirements in chapter 3.4 are there for those supply chain actors and farm owners/producers who agree to work together to achieve improvements in wages according to the targets set in the producers’ wage improvement plan. Our aim with this is to help certified producers and supply chain actors discover and bridge the gap between prevailing wages and living wages. The data we gather in the process will be used to foster collaboration across the supply chain and will enable us to report on and verify progress made in a consistent standardized manner over time.
What are the costs of the new Certification Program for other supply chain actors?
Risk assessment fee
The new Certification Program will have a Supply Chain Risk Assessment fee for supply chain actors for each site that is to be included in the certificate scope.
The auditing fees will be determined by the Certification Bodies.
As per the Supply Chain Requirements and Annex 6, some supply chain actors are required to pay the Sustainability Differential and Investments over and above the market price.
The Rainforest Alliance charges a royalty at one point in the middle of each major supply chain benefiting from our certification. The amount is based on the volume of all company transactions of Rainforest Alliance Certified crops. Find out more here.
How do I know which requirements of the Sustainable Agriculture Standard my company has to comply with? Is there any guidance based on my activities (i.e. retailer, roaster, bottler, etc)?
During registration for the new Certification Program, each organization will be asked to provide details in the Rainforest Alliance Certification Platform about their location, crop, activities, volumes, number of workers, claiming preferences etc. The platform will use the information provided along indices built into the background such as the Rainforest Alliance risk maps and the Corruption Perceptions Index to determine the applicability of requirements from the Sustainable Agriculture Standard for each individual site.
Based on the specific role in the supply chain and the scope of certification, each site will be informed of the applicable requirements as well as the verification steps needed to get certified. For multi-site operations, the multi-site administrator will be able to view all of the applicable requirements for each site within the scope of their certificate, including subcontractors.
This contextualization allows Rainforest Alliance to identify the highest risk operations within a supply chain and target those areas with the appropriate level of verification. Generating a list of requirements that are only relevant to the activities performed at site level also provides clarity to organizations.
What kind of subcontractors are included in the Supply Chain Requirements (e.g. company that cleans the factory)? How is the confirmed compliance of e.g. subcontractors evaluated, i.e. how can a subcontractor prove they comply with the certification rules? What are the consequences if the subcontractors do not comply with the certification rules?
Subcontractors are organizations or individuals contracted to carry out one or more specific operations on the certified product. Subcontractors at supply chain level are for example those organizations that process, store, package and/or label products. Cleaning companies (e.g.) are service providers and are not included in the scope of the 2020 Supply Chain Requirements.
A supply chain actor that makes use of subcontractors is responsible for the verification that subcontractors comply with any relevant requirement of the Standard. This compliance can be confirmed through different ways; either through the audit of the supply chain actor contracting the subcontractor OR by the subcontractor’s own certification audit. We leave it up to subcontractors to choose their preferred option of certification: some organizations are subcontracted by various supply chain actors and rather than receiving several audits as subcontractors prefer to get their individual certification. For more details, please see the Certification and Auditing Rules
What is the difference between the current UTZ premium and the new Sustainability Differential?
The Sustainability Differential is a mandatory payment of an additional cash amount to certified producers (paid through individual farm certificate holders and farm group certificate holders) by buyers of Rainforest Alliance certified product, over and above the market price of the commodity in question and irrespective of any other (quality) premiums and differentials.
This means that the Sustainability Differential only covers additional monetary payments that are received by farmers. The current UTZ premium included a wider set of payments including in-kind payments. In-kind payments cannot be counted as payment of Sustainability Differential. These kinds of payments will now be defined as Sustainability Investments. The rules for the disbursement of the Sustainability Differential to group members (in case of group certification) are set by the Standard and not left only to the discretion of the group’s management, as was the case for the UTZ premium. In the case of large farms, the Standard prescribes that the Sustainability Differential shall benefit workers.
Why are you no longer referring to a premium?
In certification schemes the term ‘premium’ has been used traditionally to refer to an additional payment (in cash or kind) that a certificate holder receives when they sell crops coming from farms that meet the standard.
The intended use of this premium varies greatly: it can be part cash received directly by the producers for them to use as they wish; it can be cash to the certificate holder (individual or group) to help with the implementation of the standard or related costs; it can be used for community projects or other activities; it can also be used for in-kind support such as training or agricultural inputs to benefit producers in the group.
With this varied approach it is difficult to track how much of the premium is reaching the producer directly. In addition, when guidelines are too prescriptive the economic freedom of producers is diminished. In order to reward and incentivize sustainability efforts, it is critical for certified producers to receive both a price differential and financial support for the additional investments required to move towards sustainable production.
We are therefore providing more clarity and transparency around the different types of investment and payment expected of buyers. This will also enable the Rainforest Alliance to track and gather more data on the financial impact of certification for producers in a credible way, thus allowing for greater impact in the long-term.
As such we will have three distinct requirements of buyers:
- Sustainability Differential (SD) – this is a monetary payment paid to producers for sustainable products over and above market price and any other premiums or differentials. In the case of large and medium size farms the SD will be paid to the certificate holder to be used for the benefit of workers, in consultation with representatives of the workforce.
- Sustainability Investments (SI) – these are investments to which buyers financially contribute in cash and in kind that are required for producers to improve their sustainability performance and meet the costs of certification.
- Transparency – to support these requirements mandatory reporting will be required in order to ensure impact and transparency, and to provide greater data and knowledge to help drive sustainable production.
Why are you not setting a minimum price?
The Rainforest Alliance aims to make sustainability the norm. This includes ensuring the economic sustainability of the producers and workers who produce the commodities. It entails a fundamental transformation in the way the supply chains work – moving to a system where the efforts and investments in agricultural production is valued and priced as a material service over and above the cost of the commodity. This means that producers recoup the costs needed to make investments to advance sustainability practices, and that they receive a market reward.
By engaging the buyer and producer in having a shared understanding of the true cost of sustainable production, we aim to provide market actors with greater understanding of the level of investments required to achieve this, and highlight their responsibility in ensuring that those investments can be met.
Currently price and premium negotiations in all crops we are active in are heavily weighted in favor of the buyer. Rather than simply setting a price ourselves, we are taking a more structural approach by creating the requirements and transparency to support producers in their negotiations.
Intrinsic in this approach is the need to foster continuity of relationships between producers and buyers, and the understanding that the currently prevalent approaches to sourcing agricultural commodities are inherently unsustainable.
Sustainability is a journey, one that needs to evolve and respond to the needs and changing realities in the production landscape through the means of a shared vision in the supply chain. We see our role as one of creating greater transparency in supply chains and facilitating evidence-based decision making in the journey of sustainability progress.
I am not the first buyer. Do I have access to any information of the Sustainability Differential paid in my supply chain?
Sustainability Differential payments must be recorded in the Rainforest Alliance Traceability Platform. This means that downstream supply chain actors will have visibility of the Sustainability Differential amounts paid to farm certificate holders but will not be able to change or modify this amount.
When a supply chain actor owns farms in origin, how is this indicated in the system?
Regardless of the ownership of a farm, our contextualization process will require both the farm and the supply chain actor to register separately in our system to indicate their activities. This will determine the scope of the audit and the applicable requirements for each.
What is the scope of traceability in the new certification program? Are retailers and brands included?
The scope for traceability is from production up until retail level of certified product. This means that certified product sales to retailers shall be reported into the traceability platform as well.
Are there any prescribed minimum Sustainability Differential amounts?
Currently a minimum amount for the Sustainability Differential is only prescribed for cocoa, starting July 2022. There are no prescribed minimum amounts for the Sustainability Differential for any other sectors at this time. Determining minimum amounts is complex and needs to be done taking into account the dynamics in each sector. The Sustainable Agriculture Standard does include a requirement that payments must respect the minimum amount where one has been defined (3.2.7). This allows for minimum amounts that may be introduced for specific sectors by the Rainforest Alliance at a later stage (in Annex 6 to the Standard).
Are the Sustainability Investments mandatory? Do all SCAs need to make Sustainability Investments in farms, or only first buyers?
The requirements listed in chapter 3.3 (Sustainability Investments) are mandatory requirements. In the first instance they will apply principally to first buyers. The contextualized requirements that supply chain actors receive based on the scope of their activities will indicate whether or not they are required to implement the Sustainability Investment requirements. Annex 6 to the Sustainable Agriculture Standard lists those supply chain actors to whom the requirements of chapter 3.2 (starting with 3.2.3) and 3.3 apply.
Who does chapter 3.4 (Supply Chain Contributions to Living Wage Payment) apply to?
The requirements in chapter 3.4 are self-selected, not mandatory. This means that only supply chain actors that choose to contribute to living wage payments at level of their suppliers will be verified for compliance with this set of requirements. Those supply chain actors can be first buyers or actors further down the supply chain such as retailers.
Which certificate holders is Chapter 3 applicable to?
The 2020 Supply Chain Requirements are a set of requirements extracted from the Sustainable Agriculture Standard, a document encompassing both Farm and Supply Chain Requirements. Therefore, chapter 3 (Income and Shared Responsibility) includes requirements that are partly applicable to farms, while others apply to supply chain actors, and some apply to both.
Broadly speaking, the requirements under chapter 3.1 (Production Costs and Living Income) apply to farm certificate holders, while the requirements in chapter 3.2 (Sustainability Differential) apply to both farms (3.2.1 and 3.2.2) and supply chain actors (3.2.3 through to 3.2.7) and 3.3 (Sustainability Investments) and 3.4 (Supply Chain Contribution for Living Wage Payment) apply to supply chain certificate holders. Annex 6 to the Sustainable Agriculture Standard lists those supply chain actors to whom the requirements of chapter 3.2 (starting with 3.2.3) and 3.3 apply. In case it is first buyers that are responsible for the payment of the Sustainability Differential and Sustainability Investments, farms that are purchasing certified product directly from other farms are considered first buyers as well. The requirements in chapter 3.4 are not mandatory and only supply chain actors that choose to contribute to living wage payments at level of their suppliers will be verified against compliance with this set of requirements.
I noticed that the numbers of chapter and requirements are not always complete in Supply Chain Requirements. How come?
The 2020 Supply Chain Requirements are a set of requirements extracted from the Sustainable Agriculture Standard, a document encompassing both Farm and Supply Chain Requirements. The Sustainable Agriculture Standard is comprised of six chapters, namely Management, Traceability, Income and Shared Responsibility, Farming, Social and Environment. The applicability of the different chapters and requirements within those is determined based on an organization’s activities. As most supply chain actors are not farming, chapter 4 is not included in the Supply Chain Requirements and some requirements may jump in numbering.