Starbucks Reneges on Code, Campaign for Coffee Workers to Resume

April 1997 

The U.S./Guatemala Labor Education Project is launching a new Starbucks campaign because the company has failed to take credible steps to implement its code of conduct for growers in Guatemala.

Over two years ago, in response to a US/GLEP campaign, Starbucks announced at its February 1995 shareholders meeting that it would adopt the first-ever code of conduct for a U.S. coffee company in an effort to improve working conditions for those who produce the coffee the company buys. In October, 1995, the company issued its "framework for a code of conduct," entitled Starbucks Commitment...To Do Our Part, with Guidelines for Coffee Selection that state it is Starbucks goal to purchase coffee from growers who share Starbucks values.

Starbucks defined these values to include a commitment to treating employees with respect and dignity, fair wages, safe and healthy work conditions, decent housing and freedom of association. Guatemala was selected as the first country in which the code would be implemented. For this path-breaking code, Starbucks received significant positive press coverage and awards, including the 1996 Corporate Conscience Award for International Human Rights from the Council on Economic Priorities.

Starbucks 1997 Action Plan

However, the Starbucks 1997 Action Plan issued February 28, 1997 (five months after the start of Starbucks 1997 fiscal year) fails to demonstrate any credible effort by Starbucks to implement its code for the growers of its coffee in Guatemala or anywhere else. On the contrary, the Plan represents an apparent effort by Starbucks to renege on its Commitment and redefine what it said it would do.

The center piece of the Starbucks 1997 Action Plan is a new initiative that consists of a $75,000 donation to a development aid project run by Appropriate Technology International (ATI) that is intended to help small family farmers increase their production of gourmet coffee beans. Starbucks portrays its contribution to the ATI project as constituting its major step in 1997 toward implementing its code.

US/GLEP's position is that the ATI project may be fine for small-scale family farmers but it has nothing to do with implementing the company's code of conduct that seeks to improve conditions for coffee workers. The vast majority of the estimated 700,000 Guatemalan coffee workers are employed on plantations, source of most Guatemalan coffee. Less than 15% of Guatemalan coffee comes from the small-scale family farms targeted by the ATI project, most of which are too small to employ workers.

Starbucks Reneges

Even more problematically, Starbucks has told US/GLEP that it does not see a need to identify the growers of its coffee or to set up a system to monitor conditions on coffee plantations from which it buys. Obviously, it is impossible for Starbucks to hold coffee growers to any minimum social or environmental standards unless it monitors conditions on the farms from which the company buys.

Over the past two years, Starbucks has consistently cited obstacles to implementing the code. First, Starbucks said it doesn't know the identity of its growers since the company buys primarily through coffee export houses. But coffee export houses are required by law to know the farms of origin, so US/GLEP has proposed to Starbucks that it simply require coffee exports houses to tell Starbucks from where its coffee comes. Starbucks has not responded to this proposal.

Then, Starbucks said it doesn't have the capacity to monitor the hundreds if not thousands of farms from which its coffee comes. But the Catholic Church has offered to work with Starbucks to use its extensive network to develop a pilot monitoring system. Starbucks has refused to meet with the Catholic Church to pursue this offer.

While US/GLEP has worked to identify ways to overcome these obstacles, Starbucks has now back-tracked completely on taking the two steps without which any code for suppliers is meaningless: identify the suppliers and monitor their conditions.

The excuses offered by Starbucks are very similar to those put forth by U.S. clothing companies a few years ago when they were asked to adopt and implement codes of conduct for their suppliers abroad. Thanks to public pressure, many U.S. retailers now require suppliers to identify every factory and subcontractor where their clothing is made and to allow for monitoring and inspections. US/GLEP believes Starbucks can set the pace in the coffee industry, just as Levi's, the Gap and Liz Claiborne are doing in the apparel sector.

Seattle Press Conference

A broad range of religious, environmental and social justice groups joined US/GLEP at a March 5, 1997 press conference in Starbucks home base of Seattle, Washington, that called on Starbucks to move forward. Hosting the press conference was Rev. John Boonstra, Executive Minister of the Washington Association of Churches. Other participants in the press conference included Aaron Ostrom, Vice President of the Washington Environmental Council, Roberta Ray of the Coalition for Justice for Coffee Workers, Bruce Herbert of the Northwest Coalition for Responsible Investment, and Armando Paxtor of the Guatemalan Mayan Organization of Seattle and a former coffee worker in Guatemala. Representatives from the Washington State Labor Council and the King County (Seattle) Labor Council were unable to attend but expressed similar concerns in a letter to Starbucks the previous week.

The press conference was covered by most of the Seattle media, including four TV stations, the three local daily newspapers, radio stations, local alternative press outlets, and the Journal of Commerce. The media attention prompted a defensive reaction the following day from Starbucks Chief Executive Officer Howard Schultz who, at the company's annual shareholders meeting, threatened that Starbucks would pull out of Guatemala if activists continued to "hound" the company.

Latin American Working Group Letter

Pressure on Starbucks built up in February with dozens of organizations contacting the company urging it to move forward on implementation. The Latin American Working Group with the assistance of the Alliance for Responsible Trade in Washington, DC circulated a letter that was signed by 50 religious, consumer, human rights and trade union organizations calling on the company to move forward on implementation. Among the groups signing the February 19, 1997 letter to Starbucks were the Consumer Federation of America, Bread for the World, the AFL-CIO, the United Church of Christ, the United Methodist Church Board of Global Ministries, UNITE!, and the Teamsters.

Plantation Conditions Surveyed

At the Seattle press conference, US/GLEP released a set of February, 1997 interviews on a Guatemalan plantation outside of Antigua from which Starbucks has purchased coffee for several years. Workers report earning as little as $1.25 a day for an entire family's work, far less than the $10-a-day needed for a family to meet its essential needs. Other abuses uncovered include child labor, no protection for workers using pesticides, not enough latrines for workers, and lean-to housing made of plastic sheeting and sticks. Starbucks has previously said that this plantation is one of the better plantations in Guatemala. In March 1997, March Starbucks told Seattle reporters that the company has now stopped buying from the plantation. (Ed. So, Starbucks does know from where its coffee comes!).