- Starbucks has become the most famous, and perhaps most controversial, brand in the global coffee industry
- Starbucks has developed a sophisticated sourcing program that seeks to ensure that Starbucks coffee comes increasingly from suppliers who treat their workers well, pay them a decent wage, and respect their rights
- Starbucks sourcing program traces its origins to USLEAP efforts that began in 1994 to ask Starbucks to adopt a code of conduct
- USLEAP is now urging Starbucks to provide documentation on how its sourcing program is improving the lives of coffee workers on plantations from which it buys (Action Suggestion)
Since 1994, USLEAP (then known as US/GLEP) has been engaged with Starbucks in an effort to persuade the company first to adopt and then to implement a code of conduct that would set minimum standards for working conditions and respect for basic rights for workers on plantations that supply Starbucks.
Starbucks agreed to adopt a code in 1995 which has evolved into C.A.F.E., an incentive-based system under which Starbucks growers receive economic incentives for following a comprehensive set of sourcing guidelines. USLEAP sees positive aspects in these guidelines, and areas that need improvement.
History of Starbucks Code of Conduct
Starbucks, like other major U.S. coffee companies, does not own coffee plantations. Starbucks sources from a variety of producers, directly and indirectly through brokers, exporters, and growers.
In 1994, USLEAP (then the U.S./Guatemala Labor Education Project) researched working conditions on plantations in Guatemala from which Starbucks was buying coffee. The miserable conditions experienced by many of the workers prompted a campaign which persuaded Starbucks in early 1995 to agree to adopt a code of conduct, the first ever by a U.S. commercial coffee company. In late 1995, Starbucks released a "Framework for a Code of Conduct." The "Framework" stated that the company would seek to buy coffee from growers who paid their workers a decent wage and respected the basic rights of its workers, and that Starbucks would establish a pilot project in Guatemala.
After Starbucks failed to move forward on implementation of a code, USLEAP initiated a second campaign two years later, charging Starbucks with not following through on its promise. In 1997, Starbucks recommitted itself to a code, started a program to pay growers an extra $500,000 for direct improvements for workers, and began advocating for corporate responsibility within the coffee industry.
In November 2001, Starbucks initiated a new strategy to implement its code of conduct and announced new "sourcing guidelines." The guidelines represented an incentive-based system under which Starbucks would reward its "preferred suppliers" financially if they met key "sustainability" criteria. In 2004, the "preferred suppliers program" evolved into C.A.F.E., Coffee and Farmer Equity Practices.
Analysis of Starbucks Code of Conduct (C.A.F.E.)
USLEAP sees positive aspects in the C.A.F.E. program but also has concerns about its design and has urged the company to make certain changes. On the positive side, a major plus of the incentive approach is that it accepts a financial responsibility on the part of Starbucks to assist in the improvement of conditions. Codes of conduct and other efforts by retailers in the North usually demand that producers meet minimum conditions but the same retailers then demand the lowest price possible, squeezing the producer.
One critical issue is that the guidelines currently do not require an adequate minimum base-level commitment from suppliers in the program. Under the complex point system Starbucks has developed, a supplier could accumulate enough points to qualify for the premium and economic incentives even if the supplier violated national law with respect to key labor issues, including freedom of association or required health insurance. In fact, USLEAP has pointed out to Starbucks that under the guidelines as currently written, a plantation grower could murder a trade unionist and still qualify as a preferred supplier.
In 2005, USLEAP began asking Starbucks to document how its decade-long set of initiatives has improved conditions for workers in Central America. Starbucks reports it has begun to develop a comprehensive reporting system but documentation of how C.A.F.E. has improved the lives of workers is still forthcoming.
Assessment of Starbucks' Efforts to Improve Working Conditions
In 1995, Starbucks was a relatively small U.S. coffee company based largely on the West Coast. It has now become an industry leader, both in terms of social responsibility and in purchasing power. Starbucks issues comprehensive corporate responsibility reports, is the leading U.S. buyer and seller of fair-trade certified coffee, and has urged other U.S. coffee companies to also address the needs of coffee workers.
USLEAP believes that Starbucks is far ahead of any other major U.S. coffee company in developing a plan to address conditions and basic rights of workers on plantations that supply Starbucks. While USLEAP recognizes that implementing sourcing guidelines in the coffee sector is complex, USLEAP also believes that Starbucks could move considerably faster than it has to improve conditions and respect for basic rights for coffee workers.