Trace Talks #2: 5 questions on the relation between certification and traceability
Last week we organised the second edition of Trace Talks, a webinar series in which we invite different food professionals to discuss the future of food. In this edition our very own Sander de Jong and Channa Brunt discussed the future of certification with Peter d’Angremond, director of Fairtrade Netherlands, and Daan de Vries, founder of Chaineffects. Below you can find the answer to the most pressing questions asked by the webinar audience.
Missed it? Not a problem! Click here to watch the replay.
I would like to hear more about the elephant in the room. I think we all know why certification in many cases is not effective. So, for example, in what way can blockchain or other tools help fix floppy audits?
Certifiers like Fairtrade set standards to support the sustainable development of small producer organisations and agricultural workers in developing countries. Rigorous standards like Fairtrade incorporate a holistic blend of social, economic and environmental criteria and help create shared value between producers and businesses. The value of certification is relevant and certification in some respects, is not challenged by the trend toward greater traceability and transparency. In the greater scheme of things, certification, traceability and transparency can actually be of great addition to each other.
For example, auditing and verifying workers conditions against the standard can and needs to be done regardless of the level of traceability of a product. The other way around, as discussed during the webinar, a decentralised anonymous digital verification system could be applied using encryption technologies and blockchain, potentially allowing workers with a cell phone to securely and anonymously report any violation of the sustainability and human rights policies.
The concepts of traceability and transparency are often wrongfully used interchangeably. Transparency is not equal to assurance either. Technical solutions don’t always translate into guaranteed claims. This is why a robust system relying on all levels of verification is so important to credibly back up claims being made. Blockchain technology can enable certifiers to make key improvements to current systems: it enables them to trace the full history of a product, offers more control and security of data and helps to prevent data manipulation.
How do we democratise real time data that can accelerate supply chain transparency in ways that are more collaborative, less resource-intensive, and more decision-useful. Not only corporate driven but farmers having some control over parts of the data generation?
We already touched on this one in the webinar but let’s elaborate, since it’s a rather interesting one. It is important to understand the preconditions of democratising supply chain transparency. As highlighted during the webinar this only works when there is a genuine level playing field, i.e. when all people at all times have equal access to data, by means of a well-developed infrastructure globally, access to internet, equal smartphone technology and so on. The world at the moment is simply not equipped to come to democratisation at this level.
We need to make sure we prevent the exact opposite, namely colonialisation of data. This starts with getting farmers in the know when it comes to the relation between inputs and outputs. We must support them in collecting the data related to their farm performance and understanding those data so they are able to run an efficient farm.
New encryption technologies, like blockchain, allow us to more easily maintain control over our data. We now have the possibility to build a data sharing platform with parties that don’t trust each other. A technology like blockchain allows every participant to decide what data they want to share with whom and under which conditions. This also makes it easier to take it a step further and potentially allow a farmer to monetise her or his data.
Interesting, huh? We think so too, which is why our next webinar will be exactly about this question – how do we prevent data colonisation and protect a farmer’s privacy? You can sign up already!
Auditor reviewing data, blockchain, teaching farmers to collect data to gain on efficiency… All are great ideas, but is going to do it? And more important: who is paying for that? With the prices of coffee as low as they are, the reality seems to crash with the big ideas we all have. Solutions proposed?
Fairfood already is working with frontrunners such as Trabocca and Verstegen, who see (added) value in transparency, and who are actively exploring the concept of data monetisation on the farmer’s end. That is one short and overly simple answer to this question. We also understand where this question is coming from, and sometimes get frustrated ourselves with the pace we are moving with.
Which brings us to a point we also arrived upon during the webinar: we can’t get where we want to go without a little help from legislation. Peter actually called it a flaw of current certification systems: the fact that they are voluntary.
Companies currently aren’t willing (just yet?) to pay more for transparency. Companies for example fear competitive disadvantage if they have to be transparent about their sourcing routes. Moreover, we need a level playing field (internationally) for doing good, so companies don’t face that other competitive disadvantage – the one on price. Make ‘doing good’ mandatory, and ‘doing even better’ a USP.
How well do you think certification is affecting the issue of child labour in cocoa in West Africa? Are certification efforts on child labour really working?
If you want to solve child labour then this is not so much in certification but in taking away the root causes. Recent research from Unicef shows that with poverty comes child labour as households use every available means to survive. Prospects vary by country, but causal estimates of elasticity are mostly above 0.7. In other words, a 1 percentage point rise in poverty leads to at least a 0.7 percentage point increase in child labour.
On this page you can read more about the work of Fairtrade on this issue.
Where do you see opportunities and/or the need for harmonisation and collaboration of digital compliance tools?
Blockchain traceability systems are really good at making data immutable and transparent. Certifications are really good at doing the hard work, checking up places, companies and documents at a large scale. In essence, blockchain technology can enable certifiers to make key improvements to current systems: it enables them to trace the full history of a product, offers more control and security of data and helps to prevent data manipulation. The other way around, many of the product claims that companies can make using our Trace platform, require physical auditing, which could potentially be done by certifiers.