Starbucks Faces Angry Brew Of Workers And Activists

by Emad Mekay

(IPS) WASHINGTON -- U.S. coffee retailer Starbucks is encountering increasing pressure from a group of its employees and human rights and environmental activists to improve working conditions for coffee growers and store workers worldwide.

The Starbucks Baristas Union, formed in May in New York State, and Global Exchange, an international human rights and environmental group, say the corporate icon should demonstrate its commitment to all of its workers by using more "fair-trade coffee."

The groups, which announced their new alliance earlier this month, say the Seattle-based company should buy at least five percent of its coffee from "fair-trade-certified" sources instead of its current level of one percent.

"We see our struggles for humane wages and working conditions as united," said Daniel Gross, a member of the still to be certified union. "No longer will Starbucks be allowed to run roughshod over its baristas or coffee farmers."

"Barista" refers to both the coffee machine and the people who operate it. The Starbucks employees say they formed the union to protest their working conditions, which include low wages and difficulty getting health benefits from the world-famous coffee roaster.

Starbucks says that for the 39 weeks ended June 27, 2004, its net revenues were $3.8 billion, an increase of 28 percent from the same period in fiscal 2003.

"The plight of coffee farmers is very analogous to our own," Gross added in an interview. He said Starbucks pays "lip service about being a socially responsible company, but in the case of coffee farmers and in the case of domestic cafŽ workers, it's just not true; it's not borne out by the facts. So we are united for humane working conditions."

But Starbucks argues that it has unrivalled employee relations and training programs, and offers health insurance and stock options, among other benefits, to workers who accumulate 20 hours a week. Each employee is also entitled to one pound of free coffee each week.

The issue of fair-trade coffee has been a recurring publicity problem for Starbucks, which operates 8,119 retail locations with some 80,000 employees in North America, Latin America, Europe, the Middle East and the Pacific Rim.

Activist groups like Rainforest Alliance, Fair Trade and Oxfam, have relentlessly pushed it and other large coffee sellers to pour more "fair-trade" product.

To become Fair Trade-certified, an importer must meet criteria that include paying a minimum price of $1.26 per pound for coffee, providing much needed credit to farmers, and offering them technical assistance, such as help in making the transition to organic growing.

"Sustainable coffee" must meet additional environmental standards. To be deemed "sustainable," coffee plantations must protect the surrounding habitat and use traditional methods as opposed to chemical-intensive, open-field, full sun plantations, which produce a higher quantity but inferior quality of coffee.

International development charity Oxfa, launched a campaign in September 2002 to press coffee companies -- known as "roasters" -- to use more sustainable coffee and to pay farmers in the developing world enough to send their children to school, afford medicines and buy sufficient food.

After petroleum, coffee is one of the world's most important commodities. It represents more than 20 percent of export earnings for nine developing countries and it accounts for more than one-half of all export earnings in four countries.

Approximately 25 million farmers in more than 50 developing nations depend on coffee for their income and face economic ruin as a result of the current collapse of prices, which fell 50 percent from 2000 to 2003. Coffee now sells for 60-70 cents a pound.

Because of that drop, farmers in developing countries, mostly poor smallholders, are forced to sell their crop for less than the cost of production, with many in Africa and Latin America deserting their plantations altogether.

The World Bank and the International Coffee Organization (ICO) say they have been working together to analyse the problems associated with the coffee crisis. But the bank says average sales growth for sustainable coffees in recent years has easily been five times greater than that of conventional coffees in most of the world's major markets.

Yet despite Starbucks' financial success, currently less than one percent of its coffee is fair- trade certified, one reason for the poverty of coffee growers, say activists.

"The result of that, of course, is that the vast majority of their coffee farmers are living in quite stark poverty," said Gross.

Late in June the company said it was joining the United Nations Global Compact, an international network of corporations, UN agencies, trade unions and non-governmental organizations that pledge to voluntarily adhere to nine principles, which include workers' rights.

"Starbucks and the fair-trade movement share common goals -- to ensure that farmers receive a fair price for their coffee and to protect their farms for the future," said Dub Hay, the company's senior vice president for coffee, in an e-mail interview.

The company says it is one of the biggest customers of fair trade coffee, buying 2.1 million pounds of the product in 2003, approximately twice the amount of the previous year. This, the company says, represents approximately 10 percent of all fair trade coffee certified in the United States in 2003.

Starbucks also says it paid an average price of $1.20 per pound for all of its green unroasted coffee last year, which is almost double the commodity market price and near the fair trade "fixed price" of $1.26 per pound.

Other coffee retailers are also buying more sustainable coffee, in part because of pressure from activists.

Consumer giants like Procter & Gamble, Dutch food retailer Ahold and U.S. food giant Sara Lee have all said they are selling increasing amounts of the sustainable coffee. P&G, the largest U.S. seller of coffee, for example, now markets a line of fair-trade coffee called Mountain Moonlight to its institutional clients -- including universities and hotels -- and online.

Earlier this year, the largest food and beverage company in the United States, Kraft -- which produces Maxwell House and Carte Noire brands -- also committed to sustainable coffee.

Reducing poverty has been a missed goal of many development plans, especially those concocted by western-led global financial institutions. But according to Oxfam, fair trade certified coffee could secure farmers enough income to overcome the spectre of poverty.