Slow Pace of Starbucks Criticized; Guatemalan Coffee Worker Survey Released

March 2000 

Starbucks' lack of progress on implementing its code of conduct is the subject of a new campaign organized by Global Exchange and other groups. The primary demand of the Global Exchange campaign is that Starbucks offer "fair trade" coffee in all of its 2,300 stores. The campaign also urges Starbucks to move forward on implementing its code of conduct, released in 1995 in response to a campaign organized by the U.S./Labor Education in the Americas Project.

The code, called a "Framework for a Code of Conduct" by Starbucks, states that Starbucks will seek to buy coffee from producers who respect freedom of association, pay a decent wage, and abide by sound environmental practices as well as other criteria. The code applies to all countries, but initial, pilot project work was begun in Guatemala.

While a code of conduct for coffee companies is intended to benefit workers on medium and large-scale plantations, "fair trade" coffee is intended to benefit small farmers and cooperatives by ensuring that they are paid an acceptable minimum price for their coffee, sufficient to maintain an adequate standard of living.

USLEAP supports the goals of "fair trade," which benefits small farmers and sees the fair trade initiative as complementary to its initiatives that would benefit workers. USLEAP also strongly agrees with Global Exchange's position that Starbucks has moved far too slowly in implementing its code of conduct. However, there are currently new discussions with Starbucks underway regarding what steps it can and should take in Guatemala, and at this time USLEAP itself is not campaigning against Starbucks.

Coffee Survey Finds Massive Labor Law Violations and Appalling Conditions

Meanwhile, a Starbucks-financed study of conditions of coffee workers in Guatemala released in February confirms the appalling conditions that exist in the coffee sector. The study, conducted by the Commission for the Verification of Codes of Conduct (COVERCO), represents what is probably the most comprehensive study of working conditions in the Guatemalan coffee industry to date.

Key findings of the survey, in which 600 people in three different "departments" (i.e. states) of Guatemala were interviewed, include:

• almost half report failure to pay the legal wage (Q19.65 or $2.48 at 7.90 exchange rate) and 15% paid less than Q16 ($2.02);
• over 80% are not paid overtime as required by law; and
• 58% are not covered by legally-required Social Security (which includes access to the national health care service).

Unfortunately, due to delays in funding, the survey only covered permanent workers on plantations and was not able to include the migratory workers who travel to the plantations from their villages during the harvest season. These "temporary" workers are treated the worst, being paid less, provided fewer benefits, and having to live in one-room wall-less huts with a dozen or more other families. Were temporary workers included, the findings would no doubt have been much more negative.

The study, which was not a part of the original demands of USLEAP's 1994-95 and 1997 campaigns against Starbucks, was commissioned by Starbucks because it said it needed more than anecdotal (or observed!) information about conditions in the sector. Starbucks has argued that it needed this information to provide a benchmark by which to measure progress and to demonstrate to others (and themselves) the extent of the problems faced by workers. Starbucks has also said that this information would be important in helping them move forward on implementation of its code of conduct.

To its credit, Starbucks has moved quickly to bring the findings of the study to the attention of the U.S. and Guatemalan governments and human rights organizations. However, Starbucks has not yet announced what it is going to do to move to the next stage with regards to actual implementation of its "framework" code of conduct.

USLEAP on Starbucks

USLEAP's basic position on Starbucks has been that it is ahead of all other major U.S. coffee companies with respect to accepting responsibility for the treatment of coffee workers on plantations from which it buys and that other coffee companies must join in this endeavor if widespread changes are to occur in the coffee sector. On the other hand, Starbucks has failed to take important steps that it can take by itself towards implementation of its code, and has moved just about as slowly as it could and still be moving forward.

For example, Starbucks has failed to take any steps forward in providing independent monitoring for its"incentives" project, in which Starbucks pays an extra premium to Starbucks suppliers who use the premium to benefit coffee workers on plantations from which Starbucks buys. To date, this project in Guatemala has consisted of building five health clinics and two school facilities. This project is providing some tangible benefits to real workers, but Starbucks has not disclosed the identity of these plantations. Consequently, it is not known to what degree these plantations respect Guatemalan labor law, let alone the criteria established in Starbucks code. In short, Starbucks has not begun actual implementation of its code of conduct.

Discussions between Starbucks and Guatemalan-based organizations over the next few months on next steps will determine whether or not USLEAP ends the suspension of its Starbucks campaign.