Criteria 3.1: Criteria 3.1: Prices paid for natural raw materials are fair
3.1.2 Cost calculations consider the average time spent by producers on cultivation or wild collection activities related to the raw material, at a rate proportional at least to the national minimum wage or, in absence of a national minimum wage, the local opportunity cost for labour. Calculations are based on amounts of natural raw materials collected or harvested during regular working hours
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look at whether calculations have been made to understand cost of production, including overall time spent in the activity (including family members) - external assessments conducted by professional organisations can be used, when credible and developed in the local context
define the average time spent by producers/pickers for the respective activities by conducting interviews with these actors - ideally, this data is supported by working hours registers together with piece rate information (unit achieved in a specific period of time and price applied), when relevant
hours need to be valued at least at minimum wage levels in force in the sector; additionally, please consider whether there is a price floor defined for the raw material, whether by governmental or non-governmental entities (e.g. Fairtrade minimum price available at https://www.fairtrade.net/standard/minimum-price-info)
in the price calculations, in-kind benefits cannot be counted as income to reach the minimum wage level.
for productivity-based payments (quotas or piece rate), a calculation is made considering how much a labourer can produce in a determined period of time (day or hour), respecting a reasonable workload and with no undue pressure. The average productivity of the labourers, which needs to be a representative average based on the characteristics of the laborers (e.g. age, experience), must ensure that an equivalent of a minimum wage is paid. This minimum wage equivalent (per hour, day or week) must be ensured both in the lean season (when productivity is lower) and peak season independently
if sub-suppliers are negotiating and directly involved in pricing with producers, this requirement also applies at their level
The following UEBT tools are available tools to help assess this criterion (contact us at certification@uebt.org for more information):
fair prices guidance document including a cost calculation annex
cost calculation tool
The scope of this indicator is the price paid by the OaS to the producers (not the prices paid along the supply chain).
This indicator is applicable to the relationship between OaS and producers, when they're both involved in the scope of the assessment. If the OaS is the producer in the supply chain, this indicator is not applicable.
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DOCUMENTATION
breakdown of prices paid to producers/collectors
price calculation method
documentation on national minimum wage
external assessment on local opportunity cost for labour
working hours registers by producers/collectors
receipt of paid amount to producers/collectors for raw materials (per day/week/month)
INTERVIEWS
with OaS:
about the price calculation definition and process
about national minimum wages and local opportunity cost for labour
about ratio time/amount of collected raw material
with producers/collectors:
time spent per day on cultivation/collection activities, or per period, according to the context
their knowledge of national minimum wages or local opportunity cost for labour
their awareness on the price calculation definition
Scoring guidance
0 - There is no information on producers/collectors' average time spent to source the raw material
1 - Information on producers/collectors' average time spent to source the raw material is known, as well as minimum wage or local opportunity cost for labour, but they've not been considered in the price definition and/or price paid is lower than this ratio
2 - It is evidenced that the prices paid to producers/collectors are at least proportional to the national minimum wage or local opportunity cost for labour considering the average time spent in the activity, or the average productivity of laborers. However, some producers/collectors/laborers with lower productivity do not reach this minimum wage equivalent
3 - All producers/collectors are being paid a price (considering the time spent in the activity and/or their productivity) that is at least the equivalent to a minimum wage (for example, a corrective factor is applied to the average time/productivity to make sure all of them - even the ones with lower productivity - reach at least the minimum standard)
Score 2 to be reached by second year
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Importance
Critical stepwise
ApplicabilityCultivation & wild collectionOaSSub-suppliersField operators |