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Fairtrade Foundation Response To Guardian article „Fairtrade Kenyan roses project audited amid corruption fears“

Response to article outlining historic issues of financial mismanagement at a Fairtrade certified flower farm.

Oserian Development Company Limited is a Fairtrade certified flower farm based in Kenya. They have been a Fairtrade certified estate since 2002 and have a workforce of 4,733 employees.    

Over the last two years, Oserian Management and the Fairtrade Premium Committee of Oserian Development Company Limited have been working closely with Fairtrade Africa to overcome challenges related to financial mismanagement of the Fairtrade Premium and to strengthen the capacity of the Fairtrade Premium Committee which distributes the Premium to individual producers.    

Like all Fairtrade certified suppliers, Oserian Flower estate is audited by FLO-Cert on an annual basis against the requirements of the Fairtrade Standards including the use of the Fairtrade Premium.     FLO-Cert is one of the leading global sustainability audit companies. They conduct regular Fairtrade audits using local qualified auditors and have mechanisms for issuing non-compliances against Fairtrade Standards, a formal complaints and allegations procedure and a mechanism for whistleblowing.    

This process covers all Fairtrade certified producer groups in 74 countries and includes over 1.66 million farmers and workers.    

Oserian were issued a number of non-compliances by FLO-Cert highlighting that there were concerns about some aspects of how things were operating.  These non-compliances required Oserian Management and the Fairtrade Premium Committee (FPC) to put in place an action plan to correct these non-compliances.    
In 2015 Fairtrade Africa, Management of Oserian Development Company Limited and Oserian Fairtrade Premium Committee agreed that due to the issues of financial irregularities a forensic audit by Clyde & Associates was to be carried out in June 2016. The Forensic Audit report focused on the group’s financial transactions for the years 2012, 2013, 2014, 2015 and 2016.    

The report made a number of recommendations including strengthening the Fairtrade Premium Committee’s structure; improvement of the filing system to ensure that records are preserved and classified; and the introduction of payment vouchers to support payments as an accounting system tool and an internal control system.    

Fairtrade is committed to continue working with both Oserian Management and the FPC in order to make sure they continue to put in place robust policies and safeguards around financial management, planning and procurement.
The British public can be confident in their trust in Fairtrade. We work in challenging areas with some of the world’s poorest farmers and workers. As this case demonstrates where things fall short of our standards we learn and adapt in order to improve every aspect of our work.    

Fairtrade takes any allegations about issues within our system very seriously and will take appropriate action. Formal allegations are investigated when brought to our attention and the processes and policies are initiated when any complaints or allegations are raised.     

Notes to editors    
Fairtrade is a movement that is committed to its vision of improving the lives of workers, farmers and their communities around the world.  

After over 25 years of expertise, we know this is a journey that requires collaborative approach to achieving that vision and overcome challenges reliant on long term relationships and in-depth expertise.    

This particular case is an example of where we have been proactively working with both the management team of the Fairtrade flower estate and the Fairtrade Premium Committee to address issues that they have been facing, even prior to the more recent report  This has involved putting in place increased training and support including hiring a team dedicated to supporting Fairtrade certified flower estates in East Africa, and the strengthening of two Fairtrade standards that will give greater support to all Fairtrade certified groups.

Fairtrade Standard for Hired Labour (.pdf)

Fairtrade Standard for Cut Flowers & Plants (.pdf)