Alignment with International Standards

1. No explicit commitment to international human rights standards or covers some but not all salient human rights
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​2. No explicit role for rights holders in standard setting

Scope

3. No requirement of brands to share responsibility with suppliers

​4. Does not adequately account for vulnerable people
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5. Does not adequately account for gender

Audits

​6. Allows the company or supplier being audited to pay directly for and/or choose the auditor

7. No requirement for auditors to have human rights competencies and knowledge of the local context

8. Audits not carried out in person, among other procedural weaknesses
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9. Audit passed on a non-representative sample or insufficient sample size

Grievance Mechanisms

10. No grievance mechanism at the initiative level and/or no requirement for a grievance mechanism in the standard
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11. No controls to ensure grievance mechanisms provide effective remedy

Governance & accountability 

12.  No or poor communication of the initiative standard and requirements to all stakeholders
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13. No process to suspend or withhold membership or certification until corrective action plans are adopted and implemented
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​14. Does not make information on audits, complaints, or compliance public

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12. No or Poor Communication of the Initiative Standard and Requirements to All Stakeholders

• What this means 
• Why inve​stors should care
• What to look for 
• Checklist

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For an initiative to be effective, nurture best practices, and build a culture of accountability,  all stakeholders, including rights holders and those responsible for upholding the standards — for example, farmers, farmworkers, mill workers, and mill managers—need to know the objectives of the initiative. 
 
ISEAL’s 10 Credibility Principles captures this idea through its “Transparency” principle, designed to enable “stakeholders to understand and evaluate the system’s processes, decision-making, results, and impacts,” because “stakeholders [should] have the information they need to actively participate in decisions or raise concerns.”[1]

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[1] ISEAL Alliance, ISEAL Credibility Principles - Version 2 (June 2021), 
​https://www.isealalliance.org/sites/default/files/resource/2021-06/ISEAL-Credibility-Principles-V2-2021_EN_ISEAL_June-21.pdf.

Where rights holders are not aware of the initiative or its requirements, they may not support a change in practices undertaken to meet the standards. In 2023 Corporate Accountability Lab (CAL) reported that workers in the Mexican produce industry faced retaliation for reporting abuses including wage theft and other signals of forced labor, on farms certified by the Equitable Food Initiative (EFI) and Fair Trade USA (FTUSA): 

Few farmworkers who work on plantations certified by EFI and FTUSA know their rights under federal labor law. Neither certification[‘s] standards emphasize know-your-rights training for workers.[1]

CAL also spotlighted the importance of adequately communicating the initiative standards to key participants in a 2021 lawsuit it brought against the Hershey Company and Rainforest Alliance: “Farmers that sold their cocoa to certified cooperatives were often unable to explain what labor standards they were supposed to be complying with and how these standards differed from the standards for non-certified cooperatives.”[2] In the year prior to the lawsuit, Rainforest Alliance revised its certification program to ensure the policy is communicated to all stakeholders whether through training or ongoing engagement.[3] 
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→ Demonstrates: Reputational risk, legal risk

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[1] James Daria and Anna Canning, Certified Exploitation: How Equitable Food Initiative and Fair Trade USA Fail to Protect Farmworkers in the Mexican Produce Industry (Corporate Accountability Lab, October 2023),  https://corpaccountabilitylab.org/certified-exploitation.
[2] Corporate Accountability Lab v. The Hershey Company: Complaint Demand for Jury Trial, Superior Court of the District of Columbia (2021), 16,  https://static1.squarespace.com/static/5810dda3e3df28ce37b58357/t/618167d28dd7f307c90da0e4/1635870679248/CAL+v.+Hersheys+and+RA_Stamped+Complaint.pdf.
[3] Rainforest Alliance, 2020 Sustainable Agriculture Standard: Supply Chain Requirements (last corrected February 6, 2023), 6,  https://www.rainforest-alliance.org/resource-item/2020-sustainable-agriculture-standard-supply-chain-requirements/

Investors can look for a statement on the website of the initiative that details how requirements are explained or shared with key participants. Here are two good practice examples: 

➔    Education is a central part of the Fair Food Program. The Coalition of Immokalee Workers (CIW) conducts on-the-clock education sessions for workers at all of the growers’ farms throughout the season. The sessions are led by farm workers for farm workers using the curriculum they developed. Workers also receive a booklet and video training in either English, Spanish, or Haitian Creole detailing their rights and responsibilities as part of new employee orientation.
 
➔    ​Lesotho-based trade unions and women’s rights organizations and US-based workers’ rights organizations worked together to create the Program to End Gender-Based Violence and Harassment in Lesotho (Anti-GBVH Program). As detailed in the Program’s 2021-2022 annual report, implementation includes a two-day GBVH worker education workshop, jointly facilitated by union leadership and women’s rights advocates. The workshop is focused on the program’s complaint process and provides payment for the workers time to attend.

Does the scheme require member companies to clearly communicate the purpose and expectations of the scheme to all actors throughout the supply chain? 

• Tier 1
• Tier 1 and 2
  
• Beyond tier 2 
• Scheme has not such requirement