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I. INTRODUCTION
In response to a campaign initiated by the U.S./Guatemala Labor Education Project, the Starbucks Coffee Company committed itself in February 1995 to adopting a code of conduct for its suppliers, with Guatemala as its pilot project. In October 1995, Starbucks issued its "framework for a code of conduct," entitled "Doing Our Part, " representing the first effort by a U.S. commercial coffee company to set forth standards for its coffee suppliers with respect to working conditions and worker rights.
At the Starbucks February 5, 1998 shareholders meeting, the company released its 1998-99 Framework for Action for Improving the lives of People Who Grow, Harvest and Process Coffee. This Framework for Action' represents the company's progress report to date on adopting and implementing its code of conduct and describes its future plans. It also represents a significant advancement over Starbucks previous efforts, which in March 1997 prompted US/GLEP to accuse Starbucks of reneging on its commitment. While the 1998-99 action plan falls short of fully implementing a code of conduct for Starbucks suppliers, it takes major steps toward laying the groundwork for doing so in the future.
In the 1998-99 Framework for Action, Starbucks describes four
major areas in which it is trying to improve the lives of coffee
workers, their families, and small producers. The four areas cover
large farms, industry advocacy, community development, and small
producers. Starbucks also says it will support a study of coffee
farms in Guatemala this year.
II. DESCRIPTION AND ANALYSIS
A. Large farms: An Incentives Project
Starbucks most concrete new initiative is an "incentives" project to pay growers an extra premium to improve working and living conditions of its workers. At its shareholders meeting, Starbucks estimated that this premium would total approximately $500,000 in the first year of the program. This pilot project has begun to provide tangible benefits to workers, primarily in the areas of education, housing and health care. The project is not limited to Guatemala but includes "incentive" arrangements with growers in several other countries in the Central American region and could become a model for Starbucks efforts in other regions.
The incentive project is a very significant step forward, and Starbucks should be congratulated for initiating it. However, US/GLEP is concerned that Starbucks has not yet designed a way to verify that the premiums are being used as promised and, perhaps more importantly from US/GLEP's view, being used by growers who are not engaged in egregious worker rights violations. It is clear that at this stage, most of the premiums will be used for health, housing, and education purposes but not, say, for increasing the wages of workers.
As US/GLEP has pointed out to Starbucks, growers who provide additional education or health benefits to workers while simultaneously paying subminimum wages or violently intimidating workers trying to organize a union would not meet the standards set out by Starbucks in its 1995 "framework" for a code. Starbucks agrees that there is a need to resolve what is it calls the "transparency" issue, and has pledged to try to resolve this issue over the coming months. US/GLEP believes doing so is essential to the integrity of the incentives project.
Nevertheless, the incentives project represents a very significant
advance in efforts to persuade U.S. coffee companies to take responsibility
for the conditions under which their coffee is grown because it:
acknowledges that Starbucks has direct business relationships
with at least some of its suppliers (a matter of some debate previously),
establishes the principle of taking direct responsibility for
the conditions of workers on plantations from which the company
buys, and
takes credible and substantial steps to concretely improve working
conditions on plantations from which it buys.
These developments are important not only with respect to Starbucks
own efforts but as an achievable goal that other U.S. coffee companies
can and should follow.
B. Industry Advocacy
Starbucks reports it has been active in pushing the issue of treatment of coffee workers both within the Specialty Coffee Association of America (SCAA) and the National Coffee Association (NCA). The SCAA includes not only gourmet retailers but also growers (e.g. ANACAFE, the Guatemalan coffee growers and exporters association). The NCA is dominated by the large-scale coffee retailers (e g. Folgers, Maxwell House, etc.). Starbucks Vice President Dave Olsen co-chairs the SCAA sustainability committee and worked successfully in 1997 to include respect for worker rights in the SCAA's definition of sustainability. Starbucks says it will continue to be an advocate for worker concerns within both the SCAA and NCA, and will work with groups like the Council on Economic Priorities and Business for Social Responsibility to examine how to apply codes of conduct to the agricultural commodities sector.
Starbucks argues that the company is a relatively small purchaser with limited economic clout with coffee growers but acknowledges that its high visibility in the market gives it an opportunity to provide leadership on coffee worker issues. US/GLEP essentially agrees with this analysis. The demand for gourmet coffee in particular is rising rapidly. Coffee growers in countries like Guatemala are not dependent on selling to Starbucks and have the option of rejecting any effort by Starbucks to impose a code of conduct. We are persuaded that from a commodities standpoint, Starbucks needs Guatemalan coffee growers more than they need Starbucks. However, we believe Starbucks has considerable political leverage, especially in Guatemala in this post-peace process era. Both the Guatemalan and U.S. governments would like to be able to say that Starbucks is working with coffee growers to improve conditions of workers, and neither would want to face the threat of Starbucks pulling out of Guatemala due to lack of sufficient cooperation from coffee growers.
More broadly, US/GLEP has always seen the Starbucks initiative
as the first step in a very long process of bringing consumer
pressure to bear on coffee retailers to adopt and enforce sourcing
codes. It is absolutely essential that other coffee companies
adopt and apply codes of conduct if coffee buyers are going to
have any significant economic influence with producers. Consequently,
we are very supportive of any advocacy work that Starbucks can
do within the coffee industry to encourage other companies to
begin taking responsibility. Starbucks internal advocacy, coupled
with external campaigns and pressure, could prove to be the company's
most important contribution to improving conditions and respect
for basic rights of coffee workers.
C. Guatemala Survey
Not surprisingly, Guatemalan coffee growers are the most resistant ones in Central America to the idea of improving conditions for their workers, to the concept of a code of conduct, and to any independent monitoring of conditions on plantations. Starbucks argues that it will take time to move forward in Guatemala, although a number of Guatemala growers have signed on to the incentives project. As an additional step, Starbucks will provide support for a study this year of coffee farms in a region from which it currently buys coffee. The purpose of the study is to document working conditions and the status of worker rights, to develop ways to obtain sensitive and often controversial information about conditions on farms, and to use the findings to help Starbucks move forward on further implementation of a code of conduct and to encourage other members of the coffee industry to take positive steps.
US/GLEP's view is that no one needs to do a study to know that
working conditions are abysmal and that rights are constantly
violated on most Guatemalan coffee plantations. However, it is
true that there are no solid, "scientific" studies of
conditions on coffee plantations and consequently one is always
encountering the response from Guatemalan growers and the government
that descriptions of poor conditions are merely anecdotes, not
representative of the coffee sector. Were a study the only thing
Starbucks was doing in Guatemala, it would obviously not be a
sufficient response to our concerns. However, as part of an overall
strategy, and as long as it is clear that this study is not intended
to gather dust on a shelf or be a delaying tactic, we are supportive.
Critical to our support for study is the fact that we expect it
to be contracted with non-governmental organizations in Guatemala
in whom we have confidence and trust .
D. Small Producers
As announced shortly before last year's shareholders meeting, Starbucks is providing financial assistance to a project by Appropriate Technology International (ATI) to assist small producers grow and market gourmet coffee. Starbucks report says that two new processing facilities have been built in Jalapa, Guatemala for use by 200 small coffee farmers. Starbucks says a similar project in El Salvador increased family incomes by 40%. US/GLEP is certainly supportive of efforts to improve incomes of small coffee producers, and especially welcomes Starbucks pledge "to investigate fair trade cooperatives as potential suppliers."
However, the vast majority of coffee workers in Guatemala labor
on large and medium-sized coffee farms. As US/GLEP argued last
year, helping small producers it Guatemala grow gourmet coffee
does not fulfill Starbucks pledge to hold suppliers accountable
for their treatment of workers.
E. Community Development
Starbucks has long been a major contributor to CARE, and in recent
years the largest corporate giver to CARE. Previously, CARE projects
supported by Starbucks were not necessarily directed at coffee
workers but rural development more broadly. In 1998-99 Starbucks
will work with CARE to develop a new project that directly benefits
families of coffee workers. US/GLEP's position is that soundly-designed
development projects can be quite important but if workers were
paid a living wage, there wouldn't be near as much need for aid
projects.
F. Consultative Process
Starbucks reports that it has established a working relationship
with representatives of Guatemalan non-governmental organizations
and that in the coming year it will meet regularly with human
rights organizations to review Starbucks plans and maintain regular
communication with individuals and organizations concerned about
Starbucks buying practices. One of US/GLEP's criticisms in the
past has been that Starbucks had failed to take advantage of offers
by the Catholic Church and others in Guatemala to work with them
in implementing a code of conduct. Starbucks is now working and
consulting with leading religious and human rights organizations
in Guatemala. US/ GLEP's recent experience is that Starbucks has
been committed to dialogue and problem-solving in a way that does
not characterize the behavior of most corporations, and encourages
Starbucks to continue and deepen these efforts.
III. OVERALL ASSESSMENT
An overall assessment of Starbucks current plans depends a great deal on one's perspective. From the point of view of coffee plantation owners like most of those in Guatemala, Starbucks initiatives are no doubt viewed with some apprehen
sion and some opposition (and perhaps laughter at Starbucks "naivete").
From the point of view of coffee workers, only some are beginning to reap any concrete benefits. Most problematically, Starbucks has not yet taken any steps that ensure that the workers on large and medium-sized farms from which Starbucks buys are paid even the legal minimum wage (let alone a living wage) or that their basic rights, especially the right to organize, are respected. These are the fundamental goals of US/GLEP' s coffee worker economic justice initiative, and have not been met.
US/GLEP also has significant concerns with Starbucks 1998-99 plan, most especially the need to monitor its incentive program to ensure that some minimum standards are being met across the board. Finally, the pace of progress is agonisingly slow. If Starbucks were moving on its code of conduct half as fast as it is expanding its business ventures and opening new stores, the company would be much further along (although it is no doubt true that it is easier to open new stores than apply a code of conduct to Guatemalan coffee growers).
On the other hand, Starbucks is far ahead of other commercial coffee companies in taking responsibility for the conditions of coffee workers abroad. It is also far ahead of most U.S. apparel companies that have much more detailed codes of conduct but have done virtually nothing to implement them.
Starbucks has made a 150 or 160 degree turn from where it was a year ago, when its only plan was limited to working with CARE and supporting the ATI project to enable small producers grow and market gourmet coffee. US/GLEP is persuaded that Starbucks is now seriously engaged in the issue and has begun to commit significant resources to moving forward in developing and implementing a code of conduct.
Vie therefore applaud and vigorously support Starbucks current directions, with some important caveats, and believe that the basic message to the company should be strongly affirmative but conditional. The company should be encouraged to deal with the concerns outlined above and to move faster. We recognize that others may take a more critical view but US/GLEP currently has no plans to resume its Starbucks campaign work and will not as long as we are persuaded that the company is continuing to move forward in a significant way towards fully implementing a code of conduct.
Overall, US/GLEP believes that COlpOrate responsibility advocacy
in the coffee industry can be more effectively used at this point
to persuade other coffee companies to follow the lead Starbucks
has taken.
IV. NEXT STEPS
US/GLEP will begin to explore which other coffee companies to
approach in an effort to develop and implement a code of conduct
for coffee growers.3 We will also seek to ensure that Starbucks
resolves the "transparency" issue with respect to its
incentives project.
1. Copies are available from Jeannie MacKay StarbucksCoffeeCompany
P.O. Box 34067 Seattle WX 98134.
2. Starbucks 1998-99 plan notes that the company issued a framework
for a code of conduct in October 1995 and said previously that
it sees itself as still moving towards a code of conduct. The
October 1995 Framework includes what most other observers have
described as a code of conduct as it contains a commitment that
Starbucks will seek to buy
coffee from growers who abide bv certain minimal standards
with respect tc their treatment of workers. As long as Starbucks
continues to take concrete steps that explicitly acknowledge the
company s responsibility for the working conditions and basic
rights of worker. who produce its coffee this will remain mostly
a dispute about semantics.
3. It is US/GLEP s experience that C odes of conduct in othersectors especially the apparel sector by themselves have no usually translated into concrete benefits for workers unless workers organise to respect their basic rights. Codes have proven very helpful in developing political space for workers to 07gani-e tar their own rights and can be a usefidl tool in efforts of workers to empolver themselves. The fundamental changes that are needed in the coffee sector where powerful growers are even more entrenches than in the maquila sector will prohahl¢ not be accomplished unless coffee workers are able to advocate for themselves. v1 long-term objective of US/GLEP s effort to push coffee companies toward taking responsibility for the working conditions and basic rights unde
which their coffee is produced abroad is therefore to help
develop the political space for workers in countries like Guatemala
to exercise their basic right to organise.
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