Starbucks to offer ethics bonus

Associated Press

SEATTLE — Starbucks Coffee unveiled a plan Monday to pay coffee suppliers up to 10 cents more per pound if they protect the environment and abide by local minimum wage and worker safety laws.

The test program, scheduled to be announced at a coffee suppliers conference in Costa Rica Monday, comes as the coffee industry faces a worldwide glut that has pushed wholesale prices down 40 percent, to around 40 cents per pound.

With prices so low, Starbucks Senior Vice President Mary Williams said, some coffee producers are not being paid enough to grow the high-quality coffee Starbucks needs.

"We want to ensure our supply line into the future by making sure the people who supply our coffee are paid well for it and cared for," Williams said.

The Seattle-based coffee chain, one of America’s largest coffee buyers, says it already pays more than the industry average per pound, but refuses to say how much it pays.

For years, the company has made commitments encouraging environmentally and socially responsible practices among coffee suppliers. Critics charge that Starbucks doesn’t provide information to verify those efforts.

"Maybe it’s working, but nobody’s seeing it," said Deborah James, Fair Trade director for the activist group Global Exchange.

With the new program, Starbucks said it will provide information to third-party auditors and government officials to ensure that suppliers are following Starbucks’ recommendations.

The program will reward coffee suppliers for such practices as preventing water pollution, saving energy and reducing pesticide use.

The suppliers also will be paid more for complying with the local laws regarding minimum wage, benefits, and health and safety conditions.

Asked whether Starbucks’ suppliers break local laws, Williams said, "I would not make such a sweeping statement as that." She would not be more specific, saying only that the company encourages its vendors to follow the law.

Starbucks will reward coffee suppliers for providing details of how they reimburse growers, millers and others in the supply chain, Williams said.

Many activists have complained that efforts such as these end up benefiting coffee vendors, but not growers.

The pilot program was developed with the Center for Environmental Leadership in Business, a group funded by Conservation International and Ford Motor Co. The center promotes environmentally friendly practices among major corporations.

It will run through the 2003 crop season, after which Starbucks plans to review it.

James said Starbucks is likely the first multinational coffee company to enact such an incentive program. Some smaller companies have long used a similar reward system, she said.