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Aperitif
The European Union has the only major managed banana market in
the world. This has made it the centre of controversy, and is
one of the reasons why its market and impending changes to it
provides one of the main focuses for the International Banana
Conference. The EU consumes almost 40% of the bananas traded on
the world market. EU policies therefore have a major impact on
world trade.
Until recently bananas were imported into different European countries
under different terms of trade. Countries like France and Britain,
which had a history of colonialism, mostly imported the fruit
from their old colonies, paying a higher price under the terms
of the Lome agreement (between the EU and ACP countries). The
higher price generally allowed banana workers in these former
colonies to enjoy a higher standard of living and to use less
intensive production techniques than was the case for producers
outside the agreement.
Other European countries, like Germany, which had no ties with
former colonies, bought on the open market. This allowed them
to buy cheaper and in some ways better quality bananas (in terms
at least of size and visual appearance) from the efficient dollar
banana producers of Latin America. The efficiency of Latin American
production techniques came with a cost, however, of both very
poor labour conditions for workers and dramatically high levels
of agrochemical usage.
The formation of the Single European Market meant that these two
quite different approaches to banana production would potentially
come into direct competition with each other. In an open market,
the Latin American bananas, whose prices did not internalise the
social and environmental costs of production, would almost certainly
out-compete the ACP bananas, whose prices to a much greater extent
reflected the real costs of production.
Hors d'Oeuvres
In an effort to allow these two different kinds of bananas to
co-exist in a single market, the EU produced its banana regime,
whose modus operandi was laid out in Regulation 404/93. Through
a complex system of quotas and licences, the dollar and the ACP
banana (and indeed the European banana) could in principle compete
in the single market on fairly equal terms. The new regulation
allowed the interests of the ACP states to be partially protected,
but as Adelien van de Kasteele shows in Paper 1, "The
Banana Chain - The Economic Impacts Of Banana Production",
things did not work out quite as might have been expected. The
new regulation led to a crisis in the whole banana chain, as big
companies struggled for supremacy on the European market. Of the
European banana trading companies, only one, Fyffes, remains a
significant player. Three US-based companies - Chiquita, Dole
and Del Monte - still dominate world trade in bananas. They adapted
rapidly to the requirements of Regulation 404 by, among other
things, closing their less productive plantations in Latin America
and opening new state of the art plantations in ACP countries,
reproducing in the process the patterns of low wages and agrochemical
pollution which had characterised their Latin American operations.
In one way, therefore, the regulation has been successful in protecting
the interests of some ACP states. A few now have banana plantations
which can potentially compete with the cheapest Latin American
operations. However, there is a clear down-side. The entire smallholder
sector, the backbone of the banana economy in some ACP countries,
with its less damaging environmental impacts and its better working
conditions, is more threatened than ever. In the Windward Islands
almost half the 23,000 small-scale farmers have stopped exporting
since 1993, whilst in Africa there are no longer any small-scale
producers supplying the world market.
What this really implies is made abundantly clear in the next
two papers. In Paper 2, "The Environmental Impact Of The
Banana Industry", Yamileth Astorga describes the evolution
of banana production in Latin America and documents the increasingly
devastating impact which the rationalisation of banana production
has had on local environments and on the health of banana workers
and communities there. Poisonings are commonplace and levels of
dangerous chemicals in ground water are frequently many times
higher than internationally permitted levels.
The costs are not just environmental however as Gilberth Bermudez
Umana says in his paper, "Working Conditions In Latin
American Banana Plantations". Keeping the price for dollar
bananas to a minimum has been achieved at the cost of wage levels
which barely allow subsistence and often by a denial of even the
most basic human rights for banana workers.
While Regulation 404 has in any case had limited success in protecting
the interests of ACP countries and of their banana workers, it
may actually prove to be unworkable in the long term. In the short
term, the World Trade Organisation (WTO) considers that the regulation
discriminates against dollar bananas and is therefore GATT-illegal.
After a challenge in the WTO by the United States and a group
of Latin American countries, the EU regime was judged to be trade-distorting.
The EU was given 15 months to reform its system of allocating
quotas and licences.
In Paper 4, Anne-Claire Chambron answers "13 Burning Questions
about the WTO Panel Ruling". She looks at the EU's room
for manoevre, what it is likely to do, and how realistic hopes
are for a fair trade quota or for social and environmental clausing,
aimed at generating a more sustainable banana industry.
These four papers lay out the background for the May conference.
They are, if you like, the Hors d'Oeuvres. Now comes the main
course!
The Main Course
The considerable success of the GATT/WTO in liberalising agricultural
trade has helped to create a movement in the direction of the
much fabled "level playing field" in which producers
can compete on equal terms. The theory is that those with the
greatest comparative advantage will win and those with the least
will fall by the wayside. This is excellent news, according to
the theory, as those who do fall by the wayside will find new
ways of making a living. In time everyone will end up doing what
they do best and everything will be produced as efficiently and
cheaply as possible, making us all better off. As Master Pangloss
in Voltaire's Candide puts it so succinctly: "…everything
[will be] for the best, in the best of possible worlds".
When the economists who espouse the theory check out their bank
balances, they may well concur with Pangloss' rapturous assertion.
The banana workers of the world might well have a different view
however!
For in the real world, the key to comparative advantage is cutting
costs, and the easiest way of doing this in the agricultural sector
is by not paying workers enough to live on and by disregarding
environmental impacts - in a nutshell, by externalising the social
and environmental costs of production. In the process, the danger
is that we will all end up in the worst of possible worlds.
Today many European consumers are well aware of this danger and
a great many are only too happy to pay more for products which
allow workers to be adequately paid and which keep environmental
pollution to acceptable levels. Paradoxically in a world where
the consumer is, we are told, "King", it is still difficult
to buy products which are sustainably produced rather than those
which are simply produced cheaply. The rules of international
trade, enshrined in the WTO articles, actually disallow discrimination
on the basis of methods of production, so that countries, like
the EU member states, who may wish to encourage sustainability
in their trade relations are effectively barred from doing this
through trade policy.
At the same time there is widespread acceptance in the international
political community, following the Brundtland report and the Rio
Earth Summit, that production systems have to become more sustainable
if there is to be any common future for humanity at all. But how
can production become more socially and environmentally sustainable,
when all the economic pressures and even the very rules of the
international trading system conspire to lower standards at every
turn? Can social and environmental clauses in international trade
agreements change the nature of the level playing field, so that
the game which is played respects, at least, certain minimal rules
for the treatment of people and nature? Can Fair Trade labels
ensure that consumers are given the freedom to make the choices
which they quite clearly demand? Should there be auctioning of
import licences to allow the Fair Trade market share to expand
to meet real demand? Can the big trading companies be encouraged
to adopt codes of conduct which effectively internalise social
and environmental costs? Could an International Banana Agreement
help to achieve this? These issues form the meat of the next three
papers.
In Paper 5 "The Importance of Social and Environmental
Clausing for a Sustainable Banana Industry", Herman van
Beek presents the arguments in favour of the inclusion of such
clauses in trade agreements. Now is the time to push for their
inclusion in the European Generalised System of Preferences and
in negotiations for a renewal of the Lome Convention, he maintains.
While the Multilateral Agreement on Investment should in itself
probably be opposed, if it does go through, it will also need
binding clauses, he argues, as will in the long term, the WTO.
In the case of the WTO, however, there would be considerable difficulties
in achieving this at present, as such clauses would call into
question the whole basis for international trade law.
In Paper 6, "The Role of Fair Trade and the Social and
Environmental Responsibility of the Private Sector",
Herman van Beek (again) points out that Fair Trade labels have
proved their worth and viability but that more could be achieved
with EU support. He points out how this could be done. Corporate
codes can also help to raise the overall standard, but are often
not implemented in practice. An EU statement on the desirability
of independent monitoring could encourage companies to adopt and
adhere to higher social and environmental standards. A precedent
has already been set in the US by President Clinton in this respect
(although the standards in question do not go very far).
Given that, as Paper 4 shows, the EU's response to the WTO panel
ruling, has been to undertake a reform of the Regime rather than
to go for a complete rethink (as in the so called 'Tariff Only'
option) and given that the most important stumbling-block for
the current Regime is its method of allocation of import licences,
the most pressing task for those who wish to support Fair Trade
is to find some way of ensuring that Fair Trade importers can
get access to import licences in future. In Paper 7 "Reforming
the EU Banana Import Regime: Auctioning Import Licences as the
Best Option for a Sustainable Banana Industry", Jeroen
Douglas explains the two options available to the EU, according
to its current thinking - "grandfathering" and "auctioneering".
Grandfathering would, he argues, perpetuate the current oligarchy,
whereas auctioneering could allow Fair Trade importers to increase
their market share. Auction fees could also be recycled to support
sustainable production and to help the most vulnerable ACP countries,
without at the same time becoming GATT/WTO illegal.
The Dessert
There are additional institutional frameworks, which could be
taken into account in considering overall strategy:
The International Organisation for Standardisation (ISO), for
example, could provide an appropriate structure for harmonising
labels and using them to influence companies. Monika Egger explains
how in Paper 8: "Are ISO Standards a Suitable Instrument
for Supporting a Sustainable Banana Industry?".
The Codex Alimentarius, on the other hand, may impact negatively
on sustainable banana production by raising standards relating
to visual appearance, increasing the pressure for agrochemical
treatments. Paper 9 by Dr Rainer Engels is entitled: "Possible
Consequences of International Standards set by the Codex Alimentarius
Commission on the Sustainable Production of Bananas".
And a coffee?
The intention of the International Banana Conference is to help
clarify what instruments and means could be effective in enabling
the banana industry to become more sustainable. One instrument
which cannot be described as feasible in the short or medium term,
but to which the organisers would like to draw participants' attention
for the longer term, is the idea of an International Banana Agreement,
similar to other multilateral commodity agreements (e.g. coffee,
rubber..) .... with the important difference that such an Agreement,
backed by a new International Banana Organisation, could incorporate
minimum standards and mechanisms for supporting a transition to
a sustainable banana economy. The final paper, "An International
Banana Agreement to Reconcile Market Benefits, Development and
Ecological Sustainability" to be made available at the
Conference itself, is by Dr Henk Kox and examines the potential
for such an Agreement.
At the end of the conference, delegates will be invited to adopt
an International Banana Charter, a draft of which will be discussed
at the conference itself. The Charter will start with a preamble;
go on to call for and define the elements of a sustainable trade
in bananas; and lay out short, medium and long term actions aimed
at making sustainable banana production a reality.
In addition to the plenary sessions on May 4th and May 6th, the conference workshops on Tuesday 5th May will provide key opportunities for debate, allowing delegates to feed into and shape the final form of the Charter, and laying the foundation for different actors to move systematically towards a shared goal, using the methods and instruments, which are agreed at the conference.
Delegates may find that reading the papers before the conference
helps them to contribute more fully to the process than would
otherwise be the case. The full papers will be available from
20th April on the Internet, at Banana Link's home page. The internet
address is :
The papers are available in Spanish, French or English. Text can
be printed-off directly, or the files can be downloaded to your
computer (MSWord format).
Copies of the papers will also be available at the IBC in Brussels.
The authors
Adelien van de Kasteele has worked in independent analysis
of sectors and major companies in the agri-food industry for over
10 years, and since 1994 as a partner of Food World Research &
Consultancy in the Netherlands. This paper is based on work commissioned
by the International Union of Food and Agricultural Workers in
1996.
Dr. Yamileth Astorga is an environmental scientist who has been working in the Pesticides Programme of the National University of Costa Rica. She now heads the newly created Regional Institute for Toxic Substances (IRET). She is also active in the Ecological Association of Costa Rica, which regroups a number of environmental organisations.
Gilberth Bermudez Umaña is a former banana plantation
worker from the Pacific coast of Costa Rica. He is currently Secretary
General of the trade union, SITRAP and Deputy Coordinator of the
Coordination of Latin American Banana Workers' Unions. he has
also been responsible for the Southern Secretariat of the Conference.
Anne-Claire Chambron was trained in economics and art history.
She has worked in the fresh fruit import industry and is currently
the Publications and Research officer of Banana Link, a British
NGO. She is also the author of "In Search of a Sustainable
Regime: Towards Sustainable Production and Trade in Bananas".
Herman van Beek is an independent consultant on issues
relating to trade and labour and environmental standards. He has
worked, inter alia, for the Dutch National Committee for
International Cooperation and Sustainable Development, Fair Trade
Organisatie, the Dutch Association of World Shops and the Dutch
India Committee.
Jeroen Douglas was trained as a theologist and has
worked for the Dutch NGO Solidaridad since 1995. He is currently
Education and Projects Officer of Solidaridad and has been closely
involved in the launch of fair trade labelled bananas on the Dutch
market. He is also an acting Director of the fair trade importing
company, Agrofair.
Dr. Henk Kox is an economist working at the Economic and
Social Institute of the Free University of Amsterdam. His previous
work includes a 1995 paper entitled "International Commodity-Related
Environmental Agreements as an Instrument for Sustainable Development".
He has also advised the International Cocoa Organisation on its
new Environment Fund.
Monika Egger is an economist based in Switzerland. She
works as a consultant in the field of development cooperation.
One of her recent studies, published as a discussion paper in
collaboration with the organisation Brot fur Alle (Bread for All),
is entitled: "ISO 21000? - International Private Standards
for Corporate Social Responsibility".
Dr. Rainer Engels is Secretary of GERMANWATCH, a coalition
of NGOs monitoring German government policy and its international
impact. He is an agricultural scientist and has been NGO representative
in the German delegation at the Codex Alimentarius Committee meeting
in June 1997.
Paper 1 - Summary
The Banana Chain: The Macro-economics of the Banana
Trade
By Adelien van de Kasteele, The Netherlands
"The term 'global' to us means more than
'worldwide'. It also means free from government interference."
Jonathan Bass, Dole Chile in Eurofruit, November 1997
Five major companies control the world banana market:
Dole Food (USA), Chiquita Brands (USA), Del Monte Fresh Produce
(United Arab Emirates/Mexico), Noboa (Ecuador) and Fyffes (Ireland).
The first three are the 'dollar companies' that have control over
65% of world banana trade. These companies cover the whole chain:
from production and transport, to ripening facilities and distribution.
Noboa and Fyffes together control another 15%.
The EU banana regime has had a major impact on the
banana sector in this decade. The importance of the EU market
- in volume about 30% of world imports, and in value about 45%
of the world market - has forced companies to deal with the regime
in order to maintain or improve their market share. The need for
future access to licenses has intensified the vertical integration
in Europe through take-overs of importers, ripeners and distributors;
and, externally, companies have been diversifying their banana
supplies between ACP and Latin American ('dollar') sources. But
unequal access to licenses - and European consumption which is
growing again after the decline in 1993-94 - has led to a lively
trade in licences, estimated to be worth over $1 billion dollars.
The situation of over-supply following the implementation
of the EU regime has forcedcompanies to expand into other markets.
Companies have also been expanding into otherfruit and vegetable
business, thus becoming less dependent on bananas. In general,
aprocess of constant international restructuring and rationalisation
of the banana sector isseen in all parts of the chain, comparable
with other food sectors. To enhance the potentialof their worldwide
strategy companies have been putting on pressure for further liberalisation
of the world market, and pressure will therefore continue on the
EU banana regime through the World Trade Organisation (WTO).
To modify the EU regime again will bring its consequences:
ACP producers will have to confront a far more difficult situation,
and the additional financial support from the EU will only partially
compensate this loss.
The discussion of the banana economy is essential
as the sector forms a clear example of the contradictions arising
from the liberalisation of the world markets: a growing division
between regions with a potential for low-cost, large-scale banana
production, and the other regions which do not have this potential,
and where the economic interests of thousands of farmers and workers
are at stake.
Paper 2 - Summary
The Current Environmental Impact of the Banana
Industry
By Dr Yamileth Astorga E., Costa Rica
This paper provides an up-to-date contribution
on the theme of banana production and its environmental impacts,
considering both traditional methods of production and the modern
methods used by the rapidly expanding banana sector in Latin America,
particularly in Costa Rica.
According to one commentator, Moises Soto, three
historical phases in the development of the Latin American banana
industry can be identified. The first phase, which he named 'Gros
Michel' after the dominant variety, and covers a period of 90
years from 1870 to 1960. It can be defined as intensive but shifting
cultivation, characterised by very low productivity, high levels
of deforestation of primary forests, low consumption of agrochemicals
and a high environmental impact. Productivity in this period averaged
about 20 tonnes per hectare per year.
The second phase, lasting around 20 years, was characterised
by a transformation of the plantation into perennial intensive
cultivation, with moderate to high yields (40 to 50 tonnes per
hectare per year). A change of variety from Gros Michel to Valéry
(also known as 'the robust' or 'the strong' one) brought with
it a plant of greater vigour but low resistance to pests and diseases.
This brought about an increase in the use of agrochemicals; in
addition, cardboard boxes and plastic bags were introduced in
order to conserve the fruit better and to improve its appearance.
The third phase is characterised by very high productivity:
from 60 to 80 tonnes per hectare per year. It is also distinguished
by the introduction, from 1980, of a new variety known as Gran
Enano. This banana is very vigorous, but has low resistance to
pests and diseases, and is greatly dependent on agrochemicals.
Soto also recognises that achieving an output of 80 tonnes per
hectare has only been possible thanks to high levels of agrochemical
consumption and to the implementation of very advanced technologies
which lead to significant ecological deterioration.
Paper 2 documents in particular the environmental
impact of this third highly productive but also highly polluting
phase. It ends with two appendices, describing very different
more ecologically friendly approaches to banana production.
The first appendix is an ecological report on the
work of Volta River Estates Ltd. in Ghana, which cooperates with
the Max Havelaar Foundation and with Solidaridad and which uses
no herbicide treatments. The second describes organic production
in the Philippines and the co-operation between the Balangon Growers'
Association and Alter Trade Corporation to supply Japanese consumer
cooperatives.
Paper 3 - Summary
Working Conditions in Latin American Banana Plantations
By Gilberth Bermudez Umaña, Costa Rica
Banana production is a business which brings multi-million
dollar profits to companies based in the countries of the North,
at the cost of the natural environment and the most fundamental
rights of banana workers. In banana plantations human labour is
abused, demanding working days of 14 hours or more from some workers,
paying low salaries with no overtime, and without the most basic
social benefits. Conditions are especially difficult for women
workers who are single mothers, and for migrant workers who have
no access to basic services like healthcare, housing or education.
The indiscriminate use of pesticides is causing continual damage
to plantation workers' health.
Latin American banana workers' unions are struggling
to improve these conditions, training workers about their rights
as well as health and safety issues, in order to be able to meet
the need for improvements through the negotiation of collective
agreements. In some countries, the right to such collective bargaining
is violated, but there have been some recent advances with new
agreements being negotiated and signed in different plantations
across the region.
The unions face diverse obstacles, such as direct
repression and black-listing of union members, and company strategies
designed to weaken the independent organisation of workers.
In order to strengthen the trade union movement,
the Coordination of Latin American Banana Workers' Unions was
created in 1993. The Coordination has organised regional conferences
in which analysis is shared of the current situation and joint
strategies are developed; important collaboration agreements have
been signed with unions in Europe, whilst workers' rights and
fair trade campaigns are coordinated with a range of organisations
in Europe.
The trade union movement is in a process of renewal,
especially because of the growing participation of women workers,
who have been making considerable headway within their own organisations.
Most unions now have Women's Secretariats, Committees or Departments.
Document 4 - Summary
Thirteen Questions You Were Dying to Ask about
the Interpretation of the WTO Panel Ruling
By Anne-Claire Chambron, Britain
I 'Tariff only' model or 'constitutional reform' of the existing regime?
In October 1997, the European Union announced its
decision to comply with the conclusions of the WTO on the banana
trade issues, and requested 15 months to bring its banana import
regime into line with WTO rules. This decision was endorsed by
the Council of Ministers. The College of Commissioners then had
to decide which of the two main options for reform to recommend
to the Council of Ministers: the 'clean tariffication' or 'tariff
only' model favoured by the USA, or the option of 'constitutional
restrictions' which involved devising a new, WTO-compatible tariff
quota and licensing system. The Commission chose the latter option
and published its proposals in January 1998.
2 Consequences of the WTO panel ruling for devising a new regime
Most of the findings and conclusions of the original
WTO Panel were confirmed by the WTO Appellate Body. Some of the
aspects of the 404/93 regime have not been called into question
(including: the compensatory aid awarded to Community producers,
the absence of custom duties for ACP bananas within the limits
of traditional quantities, the reduction of the out-quota tariff
by 100 ECU for non-traditional ACP bananas, and the access to
90 000 tonnes of the tariff quota for duty-free movement of non-traditional
ACP bananas). Some others have been clearly prohibited, like the
'B' licences, the 'discrimination' among operator categories,
the inconsistency of the Framework Agreement, and the hurricane
certificates.
WTO panel decisions are based on an aggregate of
interpretations given to WTO general Articles by previous panel
rulings. These rulings form what is called the 'jurisprudence'
of GATT/WTO. Where there is a conflict over the interpretation
of an Article, these 'judicial precedents' prevail over general
principles. Thus, an exact interpretation of the panel's recommendations
is only possible when there are judicial precedents in similar
cases. In the absence of any such precedent, lawyers debate, and
the more convincing ones impose their views on the others. Such
precedents are not numerous in GATT's history. In many respects
the banana case is likely to serve as a precedent for other products
in the future. The interpretation of the panel's ruling in the
banana case will be a reference for many other products, particularly
for those products of the ACP countries covered by the Lomé
Convention. This explains why the issue is of such importance
for so many countries today.
In this perspective, and after having consulted a
wide range of observers, this paper tries to give an overview
of the interpretations which can be given to the main recommendations
of the panel, knowing that even if some of them appear to be WTO
compatible, their application will mainly depend on the degree
of risk that the EU (or any other member state of the WTO) is
willing to take in the future (risk of being challenged again).
The paper is set out in the form of a questionnaire to facilitate
both reading and understanding.
Paper 5 - Summary
The Importance Of Social And Environmental Clausing
for a Sustainable Banana Industry
By Herman van Beek, The Netherlands
Social and environmental clauses in trade and
investment treaties can make an important contribution to a more
sustainable banana trade and production. Three developments are
important in this respect.
1. A social and an environmental clause in the world
trade system, that is in the WTO, is essential to guaranteeing
basic environmental and labour standards worldwide in the long
term. That is also true for the banana trade. However, at this
moment, after the WTO Ministerial Conference in Singapore in December
1996, the probability seems small that such clauses will be adopted
in the WTO in the very near future. Given that situation, the
question arises as to what is a viable course towards a more sustainable
banana trade in the short term.
2. The present discussion in the EU on the implementation
of the social and environmental clause in the European GSP and
in the renewal of the Lomé Convention are of considerable
interest from this point of view, as they co-incide with the necessity
of formulating a new European banana regime.There are strong arguments
for the inclusion of a GSP-type social clause in the Lomé
treaty, since implementing the social and environmental clause
in the GSP while at the same time differentiating among groups
of countries in the framework of a new Lomé Convention,
implies a danger of trade discrimination and would create two
'windows' for ACP-countries for (extra) preferences. The inclusion
of a social and environmental clause in the GSP and in the Lomé
Convention sets a precedent for a comparable social and environmental
clause in a new banana regime.
3. The Multilateral Agreement on Investment (MAI),
which is being negotiated at the Organisation for Economic Co-operation
and Development (OECD), could endanger the potential for improving
social and environmental conditions in the banana industry. As
the MAI now stands, it would probably be in the best interest
of developing countries and their potential for sustainable development
if it were not accepted. But if the MAI is agreed upon, then it
should at least include a separate and binding labour clause and
incorporate the text of the OECD Guidelines for Multinational
Enterprises. Environmental standards should be included as well.
Governments should be able to use performance requirements for
investors, in order to effectively protect the environment and
enforce labour standards.
Paper 6 - Summary
The Role Of Fair Trade And The Social And Environmental
Responsibility Of The Private Sector
By Herman van Beek, The Netherlands
Private sector initiatives - fair trade, codes
of conduct and collective labour agreements - can play an important
role in moving towards sustainable banana production and trade.
Fair trade is also especially important as an instrument to prepare
the public and politicians alike for more far-reaching steps which
set binding rules for the private sector to act in a socially
and environmentally responsible way.
1. In the short term, fair trade labelling is the
most promising strategy to make the banana trade fairer, as the
success of Max Havelaar in Holland, Belgium, Denmark and Switzerland
shows. The European Commission is investigating ways of providing
additional support for Fair Trade bananas. The EU can support
Fair Trade bananas in the following ways:
2. Corporate codes of conduct establishing social
and environmental corporate policies and standards can also contribute
to a more sustainable banana trade. They should be based on ILO
conventions, cover all buying and sub-contracting relationships,
and include the right to organise and to collective bargaining,
the right to a living wage and to safe and healthy working conditions
and conformity with the ILO conventions relating to maximum hours
of work, child labour and non-discrimination. They will have to
be independently monitored.
The EU could make an explicit political statement
on the desirability of independently monitored voluntary codes
of conduct guaranteeing fundamental labour rights and encourage
the realization of such codes.
3. International collective labour agreements between
the large international banana companies and trade unions can
also be important as a step towards better working conditions.
Document 7 - Summary
Reforming the EU banana import regime: auctioning
import licences as the best option for a sustainable banana industry
By Jeroen Douglas, The Netherlands
This paper reviews the EU banana regime (404/93)
and the decisions of the WTO from a fair trade perspective. It
is followed by an Annexe detailing the common position of the
main organisations involved in the development of a European fair
trade market over the last three years.
The members of EUROBAN (European Banana Action Network)
and of FLO (FairTrade Labelling Organisations International) believe
that the reform of the European banana import regime is an important
opportunity to replace the current system of import licence allocation
- based on traditional trade flows - by a fairer system based
on auctioning of licences.
We think it is possible to design a system of auctioning
EU banana import licences that would offer equal chances for all
interested parties to acquire an adequate import quota. A properly
designed system of auctioning could give new parties, including
fair trade organisations, a fair chance to offer their products
to consumers.
As well as this, a well-designed system of auctioning
could open channels to reserve part of the 'quota rent' (i.e.
the 'auction fee') for a very much larger 'diversification fund'
for ACP countries affected by the changes in the regime (at least
three times what is now proposed by the European Commission),
as well as a general investment fund - open to all producers -
to promote sustainable banana production.
Paper 8 - Summary
Are ISO standards a suitable instrument for supporting
a sustainable banana economy?
By Monika Egger, Switzerland
The ISO is an organisation recognised worldwide for
the development of standards which serve as a basis for certification.
It is an instrument of private industry and follows the neoliberal
economic theory according to which the market controls supply
and demand. The ISO initiative to develop environmental standards
aims to curb environmental legislation by the state and to base
the environmental behaviour of companies on spontaneity and self-interest.
In this sense, the work of the ISO is clearly differentiated from
the work of the WTO, ILO or other UN specialist agencies or government
bodies. The incentive for adhering to ISO standards is the prospect
of an improved corporate image, and therefore improved market
performance.
Environmental standard development is in accordance
with the challenges of our time, and has awakened very great interest
in ISO environmental certification worldwide.
In principle, the ISO is suitable for the certification
of all enterprises, including those involved in 'fair trade';
ISO standards - or the certificates relating to them - could reflect
fair trade criteria, although this is certainly not the case today.
The globalisation of the economy, the accompanying 'whirlpool'
effect on the world market, and the resulting pressure on developing
countries, are leading development and environment NGOs to criticise
the ISO and to contemplate a strategy to influence the organisation.
The challenge would be to include ethical criteria - in the social
and environmental fields - in ISO standards.
The tendency for the ISO management systems certification
points in the future towards "Total Quality Management",
i.e. the entire behaviour of a company will be analysed and all
areas of management, including social and environmental policies,
will be assessed. The banana market is dominated by large conglomerates
for whom a relevant ISO certificate would mean responsible behaviour
towards people and the environment. In today's world, however,
these aspects of management can still be ignored.
The proposal here would be that non-governmental
organisations should start to engage critically with the ISO,
indeed that this may become unavoidable. WWF, for example, does
not rule out the possibility that the ISO 14020 series standards
will, to all intents and purposes, set the framework for eco-labelling.
However, this in no way means that the elaboration by pressure
groups of environmental and social standards in specific sectors
should be abandoned. Experiences with voluntary eco-labels, rather
than being kept separate from the ISO, should be fed into the
process of developing international ISO environmental standards.
It is recommended that the fair trade organisations should consider the following:
In the short term: gather information and analysis of the ISO's work, and consider participation as an observer at the national and international meetings of thematic ISO committees.
In the medium term: broad, low-level discussion about the ISO and possible joint lobbying with developing country representatives, trade unions and other NGOs.
In the long term: participation
and active cooperation in the ISO standard development process
in the environmental and social fields.
Paper 9 - Summary
Possible consequences of international standards
set by the Codex Alimentarius Commission
for the sustainable production of bananas
By Dr Rainer Engels, Germany
The Codex Alimentarius Commission (CAC) is a
UN-Commission of the Food and Agriculture Organisation (FAO) and
the World Health Organization (WHO). It was founded in the 1960s
to set international standards for food, with the goal of facilitating
international trade and securing health (in that order). Codex
Alimentarius standards are voluntary and are offered to all countries.
The CAC has become more important in the last three
years because WTO has defined (without consultation) the CAC as
the relevant international body for the setting of scientific
standards. In the case of trade disputes, Codex standards have
therefore acquired a legally binding status which was never intended
by the CAC itself. This paper considers the Codex standards that
relate to bananas, to see whether sustainable production could
be threatened by these standards.
Codex Standard for Bananas (Alinorm 97/35, Appendix III)
This standard, adopted in June 1997, sets out provisions
concerning quality, size, tolerances, presentation, marking or
labelling, contaminants, and hygiene. It is concluded that this
standard will eventually be problematic to sustainable production,
because it prescribes very narrow tolerances for technical and
appearance quality.
Maximum Residue Limits (MRLs)
There is a long list of pesticides with MRLs for
bananas. These are relevant to sustainable production, because
it is very difficult to establish a zero limit for them with scientific
substantiation, especially for developing countries. There is
only one Codex MRL for heavy metals relevant to bananas - the
lead (Pb) content shall be below 0.1 mg/kg.
Recommended International Code of Practice for Packaging and Transport of Tropical Fresh Fruit and Vegetables (CAC/RCP 44 - 1995) Vol. 5B, Supp. 1
This Code of Practice is mainly related to transport
and not to production. The provisions relevant to sustainable
production are those relating to packaging and pre-cooling.
Codex General Standard for the Labelling of Prepackaged Foods (World-wide Standard) (Codex Stan 1-1985 (Rev. 1-1991)) Vol. 1, Section 4
An important term in this General Standard is "claim".
This means "any representation which states, suggests or
implies that a food has particular qualities relating to its origin,
nutritional properties, nature, processing, composition or any
other quality". The claim, as well as other labelling terms,
shall not be false, misleading or deceptive, or create an erroneous
impression. This does not exclude the label "sustainably
produced", if it is well defined - as is, for example, the
European regulation on organic agriculture.
It is concluded that the main CAC guidelines
originating which could impair sustainable production of bananas
are the MRLs for pesticides and the quality classification. A
possible strategy could be to lobby for a Codex standard for sustainable
production. Although, in the short or medium term, it is not realistic
to achieve such a standard, an open discussion on such a standard
would make it much more difficult for opposing governments to
win a dispute in the WTO.
Paper 10 - Summary
Towards An International Banana Agreement?
By Dr. Henk Kox, The Netherlands
An International Banana Agreement is an agreement between governments to regulate common interests with regard to banana production, trade and consumption. The agreement would be created for an agreed time period (e.g. 5 years), with the possibility of renewal. The agreement would aim at reconciling a commitment to free trade, ecological sustainability of banana production and socio-economic development interests of banana-exporting countries.
Member countries would periodically convene to initiate programmes for implementation of the goals of the agreement and to assess progress with regard to ongoing projects. The agreement needs a Secretariat, called the International Banana Organisation (IBO), which implements and prepares decisions of the Council of member countries. A more specific list of potential tasks for the IBO is given in the box above. The International Banana Organisation need not become a large organisation. Specific projects and monitoring tasks can be done on a contracting basis by external organisations and consultants.
The agreement would enter into operation when a sufficient number of governments have committed themselves and have ratified the agreement. The required minimum country participation can be formulated in terms of X % of world imports (e.g. 60%) and Y % of world exports (e.g. 60%) in a reference year. Participation of large import markets like the USA, EU and Japan would greatly improve the chances of success. Initiating steps for setting up the International Banana Agreement could be taken under the auspices of UNCTAD.
There are several operating modalities of the International Banana Agreement that can only be worked out in negotiations between potential member countries. FAO or UNCTAD (or a combined task force) seem to offer the most appropriate international platform for preparing the agreement, through consultation with potential member countries, preparation of a negotiation document, and a multi-country negotiation roundtable.
The International Banana Agreement could operate under the auspices of UNCTAD, like in the case of other international commodity agreements. It would also become associated with the UN's Common Fund for Commodities which has separate financing facilities for projects that boost the position of production countries in marketing and distribution of primary commodities.
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