Anda di halaman 1dari 18

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

CASE STUDY: OXFAM FAIR TRADE Compiled by Linda Mayoux and Peter Williams Contact details: Peter Williams, Programme Standards Officer Fair Trade Programme Oxfam, 274, Banbury Rd, Oxford OX2 7DZ Website: http://www.oxfam.org.uk E-mail: pwilliams@oxfam.org.uk This case study is based on:

Oxfam Fair Trade Programme Manual (Issue 1.0 February 2001) R. Hopkins (2000) Impact Assessment of Oxfam Fair Trade, Final Report Oxfam Fair Trade Programme, Oxfam, Oxford A Fair Trade Strategy for Oxfam, October 1998 Oxfam Fair Trade (1998): a Framework for Programme Management Second Draft Fair Trade Principles and Indicators (1998)

OVERVIEW Oxfam Fair Trade (OFT) is one of the largest UK fair trade organisations. Its mission has been to target disadvantaged producers and, through a Fair Trade relationship, help them build their capacities to access markets, both export and domestic markets. At the start of 2001, the Fair Trade Programme had 140 partner organisations in 26 countries, supported by 10 local field staff. Oxfam Fair Trade has invested substantially in systems to monitor the impact of its intervention and the performance, both its own and those of partner organisations, and to build the learning from monitoring into programme practices. This led it to radically update its programme mission and ways of working over the last three years. This paper looks at how OFT has used learning from monitoring and impact assessment to improve the impact of its programme.

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

1. INTRODUCTION Oxfams Fair Trade programme started in the 1950s as an informal, voluntary activity to help poor people work their way out of poverty. The first Oxfam Shop opened in 1948 but it was not until the late 1950s that the idea of selling crafts (initially from Chinese refugees in Hong Kong) was taken seriously. In 1964 the Oxfam Council of Management registered a company, Oxfam Activities Ltd, with a subsidiary, Oxfam Trading. Since then Oxfam fair trade activities have expanded considerably. In 1975 Oxfam created Bridge based on the concept of partnership with producer groups in developing countries. By 1993 a range of policies had been written to standardise practices relating to both producers and Oxfams side of the trading partnership. In 1996 there was a major reorganisation including a change in name from Bridge to Oxfam Fair Trade Programme (Hopkins 2000). Oxfam Fair Trade (OFT) started monitoring its partners systematically against ILO core standards (adapted for the informal sector in which many small producers operate) in 1998. In 1999 it conducted a world-wide impact assessment of 18 partner organisations in 7 countries (Hopkins 2000). Oxfam as a whole has also been introducing a more systematic and formal M and E system as an integral and universal feature of the programme cycle and this is being applied to their Fair Trade activities (OFT 2000a,b). In relation to 0FT motivations have been twofold:

as a learning process for both Oxfam and partner organisations in order to improve services to producers, fulfilling its development mandate and increase commercial viability the need to respond to demands from northern stakeholders (including retail and wholesale customers) for greater accountability

A key aspect of Oxfam's approach has been the development of participatory methodologies which feed into programme interventions and attempts to integrate impact assessment with organisational learning. In 1998 The Fair Trade Programme adopted the mission that producer-partners would, through the fair trading partnership, learn to sell to export and local markets as well as to Oxfam and other Fair Trade Organisations. The key components of a project cycle with this objective (entry and exit procedures) were laid down. OFT strategies aim to promote producers ability to compete independently on local and international markets (Oxfam Fair Trade Programme Framework, 1998) A more systematic attempt to build improvements in programme practices and impact came in January 2001, with the issue of an ISO 9000 compliant Programme Manual, laying down minimum standards of field practice believed to be necessary to programme impact, which defined a series of procedures covering the complete project cycle.
2

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

Oxfam is now moving towards a broader market access programme, integrated within its Sustainable Livelihoods programme, aimed at helping poor producers improve their access to and bargaining power on markets, but not (necessarily) linked to products and sectors appropriate for the UK export market. This will be linked to Oxfams advocacy goals. Business efficiencies are to be optimised through strategic alliances with other commercial actors, both from the fair trade and commercial sectors. The new Market Access Programme which replaces the Fair Trade Programme will be informed by the learning from 30 years of fairly trading, lessons which continue to be relevant to other Fair Trade Organisations. 2. OBJECTIVES, ACTIVITIES AND POLICY QUESTIONS 2.1 Definition and Purpose of Fair Trade Oxfams definition is similar to other accepted definitions, for example that of FINE 1, but aims to reflect more precisely Oxfams vision of how Fair Trade may function as a tool in development: Fair Trade is trade which promotes sustainable development by improving market access for disadvantaged producers. It seeks to overcome poverty through a partnership between all those involved in the trading process: producers/workers, traders and consumers. The purpose of Fair Trade in Oxfam GB is defined as: "To help to overcome poverty by enabling poor producers or workers to access markets on terms which enable them to obtain a fair return from the product they grow or make." The Fair Trade Programme attempted to target disadvantaged producers, often from the informal and non-waged sectors. However it was recognised that Fair Trade would not be able to tackle poverty amongst the poorest of the poor, who invariably lack the assets (skills, physical assets) necessary to produce for export markets. Access for producers to the UK market on fair trade terms was seen as complementary to improving their access to local markets. Support was given particularly to build the business capacities of poor producers business organisations. A drop in sales in the mid-1990s taught Oxfam that it should seek to help producers diversify their sales base, reducing dependency on Oxfam. Oxfams own inability to expand sufficiently the market it was able to offer brought it to the conclusion that the proper function of fair trade was for producers to learn to compete on open markets. This would permit a
1

FINE is the acronym for a loose network of umbrella bodies and is comprised of the first letters of the 4 network members: FLO (Fair Trade Labelling Organizations) International, IFAT (International Federation for Alternative Trade), NEWS (Network of European World Shops), and EFTA (European Fair Trade Association).

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

throughput of partner organisations and beneficiaries and would mean that improvements in livelihoods would not be restricted to those lucky few existing partners of Fair Trade Organisations. This was a long way from the initial vision of Fair Trade, which was of a gesture of solidarity with poor producers. The mission thus adopted in 1998 by the Oxfam Fair Trade Programme was to empower poor producers to access commercial export markets in their own right and improve their insertion and bargaining position on local and regional markets. This implied a natural trajectory for Fair Trade partnerships. As producer groups succeeded in accessing and competing on commercial markets, Fair Trade orders and inputs would become less significant and partners would eventually leave the programme to make space for the entry of new producer groups. This would allow a dynamic programme with a constant through-put of producer groups. Such a project cycle is orthodox in other development fields, but is only slowly entering the practice of Fair Trade (see below for details of the project cycle). Underlying Oxfams Fair Trade work are six principles, the Fair Trade Principles, which producer partners should aspire to meet. These are based on the ILO core labour standards, interpreted for the informal sector, and are used to measure the fairness of partners business activities, for selection and monitoring of trading partners, for example. Box 1 summarises the approach of Oxfam Fair Trade. BOX 1: OXFAM FAIR TRADE PRINCIPLES 1. Fair wages in the local context 2. Participation in decision- making. 3. Safe working conditions and practices. 4. Positive/improving situation for women. 5. Protection of children and young workers. 6. Protection of the natural environment These principles are not used as pre-entry criteria for producers, which would only serve to exclude marginalised producers from partnership, but as a process standard, towards which producers must commit to make progress. 2.2 Activities and the Project Cycle Oxfam Fair Trade had a direct trading relation with more than 140 suppliers in Asia, Latin America and Africa. These comprise producer organisations who export their own products and Non-Government Organisations (NGOs) and Alternative Trading Organisations (ATOs) acting as intermediaries and providing services to producer groups. In addition, food products, which involve substantial expertise and investment in product development, were and continue to be sourced through specialist Fair Trade Organisations, often in joint ventures. Processing and packaging services may be bought in from specialist companies. Such co-operation
4

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

affords economies of scale. Through this strategy, the best UK example of which is CafDirect a joint enterprise between four UK fair trading organisations including Oxfam 2 high quality fair trade products are available at prices which are not disproportionate, despite the extra value paid to producers, both through Oxfams outlets and in mainstream retailers. The European Fair Trade Association (EFTA) was set up to facilitate this kind of co-operation. As well as achieving economies of scale EFTA, invests considerable efforts in reducing duplication through joint sourcing, joint monitoring and information-sharing. Oxfam Fair Trade Project Cycle The objective of empowering poor producers to access and improve their bargaining position on commercial markets implies a natural trajectory for Fair Trade partnerships. As producer groups succeeded in accessing and competing on other markets, Fair Trade orders and inputs would become less significant and partners would eventually leave the programme to make space for the entry of new producer groups. This would allow a dynamic programme with a constant through-put of producer groups. Such a project cycle is orthodox in other development fields, but is only slowly entering the practice of Fair Trade.

CafDirect is a joint enterprise between Oxfam, Traidcraft, Equal Exchange and Twin Trading.

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

The Oxfam Fair Trade Programme Cycle

source: Oxfam Fair Trade (2001) Programme Manual (Issue 1.0) Peter Williams

The stages of this Project Cycle for the Oxfam Fair Trade Programme corresponded to the following cycle.

In the entry phase new producer groups were selected following criteria aimed to maximise the impact of the programme. Selected partners may then receive the benefits of trading; Field staff would support joint planning processes aimed at building the producer groups own planning and defining joint expectations and objectives during the relationship. This includes diverse activities aimed at producer development. The results of monitoring were fed into planning, and informed the subsequent prioritisation where status of each partner is updated. Producer groups achieving export markets or those where impact is unsatisfactory were identified, and an ordered phase-out was agreed, and implemented through the exit procedure.

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

Producer Development In addition to the benefits of trading at a fair price, regular visits by local field staff were used to provide training, support and advice and to monitor progress on both economic and social fronts. Development programmes were tailored to the identified needs of producers, and implemented by staff, consultants or local NGOs. Such support covered diverse areas, including: Market information and assistance - information about market trends in the UK and other markets. Product Development to help producers to innovate and deliver a range of products which are attractive to the UK public and help producers meet the demands of the UK and other markets. Design and Technical Assistance Business and organisational development. Producers need to develop business capacities if they are to access export mainstream markets, notably quality assurance systems (obligatory in food and other sensitive products). Co-operative skills and marketing are major shortfall areas for many producer partners. Social development inputs including gender awareness, and advice, training and support aimed at setting up schemes or direct provision for literacy, healthcare, education, credit savings schemes. Networking with other organisations, bringing benefits to producers in many ways: by learning from each other, accessing other sources of financial aid, new markets, etc. Trading Policies For its part, Oxfam Fair Trade agreed to abide by a number of policies and practices, which meet (and in many instances go further than) standard fair trading agreed by IFAT, EFTA and other organisations. The cornerstone of trading was the joint agreement of a fair price for each product, which provides a reasonable return to producers, and their organisations and an acceptable margin to the marketing organisation/ exporter. Other trading policies included: Ensuring that the trading partner benefits appropriately from devaluation of the local currency by making payments in hard currency. Offering pre-financing to trading partners where this is needed by the partner organisations business, paying an advance normally at 40% of the value of orders placed. Trading partners were encouraged not to depend on advances by building their own working capital. Prompt payments for goods and of advances (the speed and effectiveness of Oxfam Fair Trade payment systems were monitored).

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

Campaigning for fairer trade Oxfams strategy for fair trade also encompasses work aimed at consumer support for fairer terms of trade, both in the strict sense and to underpin initiatives aimed at promoting ethical and social responsibility by the Corporate Sector and advocacy aimed at reforming unfair trade rules. 3. MONITORING AND IMPACT ASSESSMENT Demands from northern stakeholders (including retail and wholesale customers) mean monitoring and impact assessment have to be central to Oxfam Fair Trades purpose. This is also in line with policy within Oxfam development programmes in general where M and E and IA are seen as integral parts of the organizational learning process as part of the project management cycle (Roche 1999). A key aspect of this is Oxfams work with participatory monitoring. 3.1 Methodologies Monitoring Visits to producers have always had monitoring and evaluation as a component but reporting was largely intuitive and anecdotal which made comparison difficult. In 1988 OFT introduced a more systematic monitoring system as an integral and universal feature of the programme cycle, based around a series of questionnaires and agreements (See Appendix 1):

The Partner Appraisal describes the profile of beneficiaries at outset, against which future impact can be assessed. Fair Trade Principles monitoring records performance against the ILO Base code, and also agreed objectives for improvements in any shortcomings and an agreed timeframe, thus allowing progress in meeting objectives to be monitored at subsequent visits.

Oxfam Fair Trade compliance with its own fair trade policies was monitored with a small sample of trading partners, using indicators based on the Trading Agreement, as a way of ensuring its implementation. Oxfam aims to work with disadvantaged poor producers, typically from the informal sector, which is characterised by low wages, poor social benefits, lack of access to investment and credit and consequent poor working conditions, home-working etc. Monitoring the social performance of suppliers against the FT principles is seen not as an enforcement activity but as a framework for improvement around what may be difficult social issues, such as gender or participation by producers in decision-making. Non-compliance in a particular area is not a barrier to partnership, although lack of progress in addressing an agreed problem is.

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

Monitoring against FT principles was done by Programme Co-ordinators during regular visits on a two year cycle. The results of monitoring inform programme cycle decisions about where to invest resources, and the reporting of impact. The experience has encouraged Oxfam to seek to develop this way of working, and a new tool is under pilot to measure business capacities, for diagnosis to identify areas for capacity building and through sequential use, as a robust mechanism for reporting impact. As far as possible OFT seeks indicators for monitoring which are both meaningful and useful to producers. OFT seeks to reduce the burden of monitoring (to all stakeholders: producer, trader and customer) through cooperation with other fair trade organisations aimed at sharing the costs or information, and is investigating systems of self-assessment by partners. Impact Assessment OFT recently conducted a pilot impact assessment study (Hopkins 2000) comprising 18 producer groups in seven countries. Groups were selected in order to facilitate comparison e.g. type of enterprise, gender, number of years with OFT and degree of success. The study was carried out by local consultants, and aimed to address the following key questions:

Under what conditions does Fair Trade result in improved livelihoods amongst producers in their communities? Who are the beneficiaries at producer group level? With which categories of producer is OFT having the greatest impact on poverty? Are the gains from OFT's interventions sustainable? Are benefits evenly shared between men and women and within different social and ethnic groups? Is the position of women, within the producer groups in society at large, strengthened? The study comprised a standardised core data set covering livelihoods. Consultants were given a set of quantitative and qualitative tools which they could select and adapt according to local circumstances. Reporting covered 5 chapters: The producer's view of fair trade activities (initial informal discussion or interviews) Income and livelihoods (Economic Impact Ratio: the ratio of earnings from fair trade activities to the opportunity cost of labour; increase in physical capital and human capital eg childrens education)

Capacity building (based on assessment of new knowledge and skills generated; increased market access; changes in the nature of the organization and diversification)3
3

The questions were:

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

gender environment

There was also an analysis of the statistical relationship between the characteristics of producer groups (type of producer groups, size, percentage of female members, length of time in operation and percentage of sales going to Oxfam) and their effectiveness in terms of the Economic Impact Ratio (the ratio of earnings from fair trade activities to the opportunity cost). 3.2 Findings Monitoring shows that most producer partners have weaknesses in one or more areas. A full report will be published shortly. In a small number of cases the primary producers were not reaping full benefits of fair trade, whether in terms of incomes or prices paid, or in terms of capacity building, especially where trading was through commercial intermediaries. A number of partnerships were modified, and others terminated, as a result. The experience of carrying out monitoring revealed the complexity of many supply chains and convinced Oxfam of the necessity of monitoring directly at the level of primary producers upwards. Previously partnerships with intermediary level (national fair trade organisations) were substituted for, or complemented by, direct relations with primary producer groups. The impact assessment (Hopkins 2000 henceforth referred to as the IA) found rather mixed impacts. Increased income The IA findings suggest a generally positive impact on incomes, which were on average 28% higher than other available alternative sources of income. For highly specialised artisans the impact seems to be large. Fair trade generates an alternative livelihood that substantially increases the income level of these producers and their families. Impacts for some producers were much less, but these producers often had limited alternative employment opportunities and any monetary income provided by fair trade activities was therefore significant. Many producers increased their stock of financial and physical capital, including workshops, machinery and equipment. Investments in these and other assets, including housing, livestock and other productive assets, decreased producers
1) What new knowledge and new skills have been generated by OFT and other fair trade organisations (such as product design, quality improvements, and financial capabilities)? Which has been the most beneficial? 2) Have producers gained direct access to market would not otherwise have been accessible? Have they developed specific connections with commercial traders and business fairs? 3) How is capacity building reflected (or not) in the organisation of the business? These answers were then ranked according to: partial or full attribution to OFT and significance ie whether OFT interventions were critical or not in the progress made.

10

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

vulnerability to shock. Despite local variations producers had a positive view of the role played by OFT and wanted operations to be expanded and to increase their supply of handicrafts to OFT. For many producers, fair trade production complemented cyclical patterns of employment, particularly subsistence agriculture and the wide array of household activities. Activities (principally it should be said, craft production) were often more flexible and adaptable than other sources of income and employment. The nature of working extended networks and increased social capital. An important non-tangible impact of OFT was said to be its local demonstration effect setting ethical standards of working with small handicraft producers. Capacity building OFT has been very active in capacity building activities. This has led to new skills and greater access to international markets created by fair trade organisations. Nevertheless dependency on Oxfam Fair Trade as a market continues despite the active process of capacity building activities and a phasing out process is not taking place. The study did not show that the percentage of sales to Oxfam Fair Trade was declining over time. Diversification in terms of customers was happening but this was generally within the fair trade sector. Around 75% of the sales in the groups under study went to fair trade organisations (more than 50% to OFT) and only 4% to mainstream buyers. Gender The impact on gender relations was mixed and there were significant differences across groups. Some examples of womens responses are shown in Box 2. In some partner organizations (SHARE in India and the womens groups in Puno, Peru, among others) the development of fair trade activities led to remarkable results in terms of the role taken by women in their communities. There were general improvements in womens self-esteem and their role in the decision making process within the household and the community. Women valued their ability to pay for their children to go to school, buy better food for their family or invest in electrical appliances. Many felt their opinion now carried more weight. Nevertheless gender inequalities persist and in some groups the impact on gender relations was shallow and limited. Some groups had a strict hierarchical gender division of labour leading to wage inequality as shown by the cases in Box 3. In the Philippines although several members of each producer group attended Gender Sensitivity Seminars, the awareness and understanding of gender issues was reported to be very limited among both male and female
11

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

respondents. Employment of women in fair trade activities often increased their workload because there was no corresponding decrease in household work. Women often saw Fair Trade employment as having advantages for them because it fits with their existing activities and is regarded as reputable work. For most of those who expressed an opinion, earning their own income compensated for any additional hardship. In a focus group discussion meeting in Bangladesh, women engaged in craft production emphasised that the most important advantage of fair trade was that women could combine their traditional role as housewife and mother with earning an income. They were also allowed to bring children to work or take work home. Parents and husbands encouraged them to take part in fair trade activities because of the increase in household income and also because other members of the family or people with the same religion were involved in the same profession. However in terms of gender equality and empowerment and social integration this is not necessarily a good thing. These very advantages may serve to reinforce an existing unequal and discriminatory value system. BOX 3: GENDER IMPACT: WOMENS RESPONSES Positive impacts I think I have some voice in our family decisions since I earn something for my family. Now I can buy from grocery shop on credit, which none of the female neighbourhood could have. Now I can treat a guest from my own income. ...unmarried girls, are considered [in the region] a big expense burden on the family. Women are now seen as contributing to the families, a little exposure has given women courage to overcome their fear of men. I turned down my marriage proposal because I was required to stay with the boy who was working in a big factory in Dhaka City. I feel more secure to continue working for Action Bag Handicrafts rather than accepting an uncertain life only because I have to have a family. Fair trade gave [women] the possibility of offering their products in a market that was more demanding but secure. This initiative led their women leaders to consolidate themselves as regional leaders and to seek positions in the local government. In this organisation, a group of women from poor, generally lowercaste background had been given the opportunity and skills to manage staff, inventory and overall direction of an organisation with
12

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

hundreds of workers, to travel throughout India and speak publicly on behalf of their organisation, and to become prominent members of their community, as demonstrated by the election of nine of these leaders to local government office. For these women, participating in the development organisation was life transforming... Examples of gender hierarchy in work In the case of RTU, in India there was a clear separation between salaried staff, who are all men and who control the day-today running of the units, and the piece-rate workers who are almost all women (there are only 2 men out of 70 workers).

At Bahay, in the Philippines, men are usually working with machines but women are employed in the lower skilled manual jobs of sanding, finishing and assembly which require careful attention to detail. There are equal wages for the same work but as only men run the machines, they receive the higher wages.

In BAMPCI and RBPA men were involved in framing, which involves welding and considered a higher skilled job, and were also better paid. Framers take twice as long per basket than weavers do but received more than double the pay. Women were asked if they would like to learn framing but they are afraid of the job. But recently women in BAMPCI have become more interested in framing after they found out about a woman-welder who had earned an award as one of Asias outstanding workers.

An extreme case of unequal pay between men and women was found in SES, in El Salvador. Two strata of workers were distinguished in the plant. Earnings per day in the second level, in which 83% of the workers were women, were nearly 50% lower than in the first level, in which men were the majority.

Relations in the household To all intents and purposes, gender relations within the household remain traditional. Respondents either expressed the view that the man was necessarily the head of the family or if they said it was joint and consultative leadership, he was the ultimate decision maker. In addition, chores within the household were divided in the traditional manner, with wives and female children doing the bulk of the chores. There were a few exceptional cases, where relations were more egalitarian and also a few exceptional cases where views expressed were outright chauvinistic or family relations clearly oppressive. (Philippines). my husband does everything, from getting orders to making terra cotta through to selling. He collects the money and keeps it with him. He maintains the accounts. I help him in business as well as do all
13

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

work at home. I think that as a wife these are my duties. (Bangladesh) Environment Many reports did not include a specific section on this. Some concerns were raised about possible negative environmental effects of activities, for example:

the sandstone used in stone products is extracted from quarries, and stoneworkers are constantly inhaling dust, but they also fear that they might lose their livelihoods if they mention environmental concerns. woodworkers may be putting further pressure on forest resources. In other cases, planting schemes (eg for bamboo) had been initiated to ensure environmental sustainability of production.

4: REDESIGNING THE PROGRAMME 4.1 Changes in Programme Design and Practice The 1999 and previous impact assessment studies showed that Fair Trade has an immediate impact on poverty. Orders generate employment and fair trade prices improve the incomes of poor producers while they are working on orders. To have a long-term sustainable impact on producers livelihoods, however, the practice of Fair Trade must result in improvements in producers business capacities and/or bargaining power in markets. The impact in this sense was extremely variable between producers. There was also a gulf between the policies and practice (of trading and by field staff). Many practices had grown up over three decades of fairly trading, a period during which the programme mission has evolved substantially. A mechanism was needed to inform trading and field staff about best practice. Another major question needing to be addressed is the dependency 4 generated by offering producers a higher price and protected market and the resultant disincentive to their entering mainstream markets. How to create incentives for producers to diversify markets and thus improve the sustainability of impacts? The solution to these problems was the issue, in February 2001, of an ISO9000 compliant Programme Policy and Procedures Manual. This described the project cycle for the Fair Trade Programme. A procedure is devised corresponding to each stage, identifying the key actions which were understood to be essential if the Programme is to have sustainable impact.

Much has been made of the question of dependency within Fair Trade. Other development approaches (e.g. grant-funding) of course may be associated with even greater degrees of dependency.

14

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

Key programme procedures Entry procedure Selection of partners, both producer groups and intermediary organisations, is a critical phase in achieving impact. This procedure ensures that appropriate partners are selected and approved, and that information is gathered to enable programme impact to be assessed. Information is gathered about the producers social, commercial and developmental potential to inform the selection decision and enable future impact to be assessed.

Oxfam staff visit the organisation in person to carry out an appraisal using the Partner Appraisal Checklist. An analysis of the market potential of products is carried out using the Product Appraisal Checklist. If entry to the Programme is agreed, the organisations social performance is monitored using the Fair Trade Principles Monitoring Tool. Partners receive a Policy statement for producers and suppliers which explains Oxfams objectives and ways of working, and other information which Oxfam has learned help establish a healthy partnership and prevent dependency. Joint Planning procedure OFT partners vary from informal producer groups with no experience of planning, to sophisticated social businesses, intermediary organisations which carry out trading and development work in their own right. The trading relationship, (as opposed to a donor:project relationship) also complicates the agreement of a plan for working together. The purpose of this procedure is to create a framework for agreeing mutual expectations with partners in a way that is empowering (i.e. builds producers understanding and planning skills) and enables progress and impact to be measured. Where the partner already has planning mechanisms this procedure should be adapted to avoid duplication of work.

A joint producer business review is carried out, using SWOT analysis (see Business capacity appraisal checklist) and/or the Business Skills Appraisal Tool, A joint plan is developed through business planning sessions (built onto and integrated with the partner organisations existing planning systems). A programme is agreed for capacity building addressing business development (the business plan) and meeting and agreed social objectives, if shortcomings in the situation of producer-workers were revealed during appraisal or monitoring. A written agreement covering the responsibilities of Oxfam, the partner, and other parties (e.g. other FTOs) recorded mutual expectations, including on Oxfams part, the frequency of staff visits and grant and other support they can expect.

15

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

Monitoring Procedure Monitoring is essential to the purpose of Oxfam Fair Trade for three motives: To ensure that Oxfam Fair Trade has data it needs to guarantee to its stakeholders the fair trade credentials of its partners; to demonstrate the impact of its work; to provide management information about its partners and its own operations to focus and improve these. This procedure ensures that monitoring is carried out to high standards and that data is collected and used in a manner which is inclusive and empowering to partner organisations, reducing duplication, and sharing costs of monitoring as far as is practicable. Monitoring, and use of monitoring data, is agreed in advance with partners Monitoring is carried out using the Fair Trade Principles Monitoring form The results are discussed with producers The results are distributed internally and externally Prioritisation procedure One of the findings of impact assessment was that trading practices may undermine developmental goals, for example buying too large a proportion of a producer groups production encourages dependency on Oxfam, leaving the group vulnerable to changes in the UK fair trade market. This procedure aims to optimise the impact and use of resources through improved decision-making by giving staff across Oxfam Fair Trade access to clear and up-to-date information on the developmental impact of programmes and the status of producer partners to inform ordering, NPD, business and development inputs and communications. The priority for orders and other inputs, was defined annually by field staff and communicated appropriately, as follows: 1. High priority for orders development inputs and business inputs 2. Medium priority for orders orders, developmental and business inputs needed. 3. Substitute Partner does not rely on OFT orders and few inputs needed. Static or declining orders. A replacement supplier is identified and orders are phased out as the new partner(s) achieve export quality. 4. Exit Phase-out of orders. Implemented through the exit procedure The pace of movement through the cycle - typically over a decade or more was determined by the progress made by partners and the needs of the business, which demand that exit should not be implemented until a replacement supplier has been identified and its capacities developed to an appropriate stage. Reporting Procedure Reporting is necessary to ensure that field officers and managers have information they need to manage the Programme, report impact and for institutional learning. A visit report/letter is produced for all producers visited.

16

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

The content and format of monthly reports were defined

Exit procedure OFT strategies aim to promote producers ability to compete independently on local and international markets. As producers reach this goal the relationship is phased out through the exit strategy, which may also be applied if producers do not show progress against the social and commercial goals they have signed up to in the planning process. Exit is proposed by field staff The Programme Manager may approve the decision after consultation with the Senior Buyer and ensuring that a substitution strategy is in place. An exit strategy is devised specifying arrangements for payments, grants or other inputs and to record impact. The decision will be communicated appropriately A completion report is written

Other procedures described document control; producer development and trading procedures were pending when the changes made to the business strategy rendered them irrelevant. Programme Appraisal Field staff implementation of the procedures, training, and learning around the identification of good practice (for posterior inclusion in the revisions of the Manual) was backed up by a series of Programme Appraisals, in which field staff were accompanied on partner visits by the Programme Standards Support Officer. The ISO 9000 Quality Assurance format meant that compliance with policies and achievement of minimum standards could be audited, and the appraisals often showed up a gulf between theory and field practice. As such it was a successful tool in improving programme practices. 4.2 Challenges for the future Methodologies There remains a need for a systematic comparison of differences in the range of desired development contributions between different types of partner organisation, which was only very partially addressed by Hopkins, nor were there organizational analysis or means of explaining the reasons for differences in impacts between different organizations or strategies. There is a need to develop market analysis, both by following through impacts at different points in the market chain and for market research on potential areas for expansion, particularly in the South. Programme How to achieve more consistent impact on gender relations? There was considerable impact on gender relations in some groups, notably those run by and for women; however the low value of womens work is reflected in prices
17

CASE STUDY: updated oct 01; 2 new attachments - FT princ and PA appraisal added oct 01

and therefore earnings for traditional female crafts like basketry. The use of monitoring as a means of raising gender issues (through gender sensitive data-gathering and discussion of results) has been incorporated. The challenge remains - how to foment change without imposing a further social burden on already weak producer organisations, whose own priorities may be different?

18