just assurance1 was commissioned by Traidcraft2 to provide assurance of its 2007/08 Social Accounts. just assurance was paid £16,000 for this work. just assurance has no other relationships with Traidcraft that might compromise its independence.
just assurance has sought to act impartially with respect to Traidcraft’s various stakeholders. Statements of independence, impartiality and conflict of interest, together with the qualifications of the Principal Assurance Providers, are detailed at www.justassurance.org.
The Directors of Traidcraft are responsible for the content of the Traidcraft Social Accounts 2007/08. This statement represents the just assuranceview of the Social Accounts and is primarily concerned with the interests of Traidcraft’s stakeholders. Preparation for our audit was excellent and we wish to record our thanks to the Executive Team and the Social Accounts Liaison Group.
To prepare this statement, we reviewed the scope of the Social Accounts, assessed areas of risk, interviewed managers, scrutinised the Social Accounts, the underlying data and documents and considered the efficacy of the management systems. We are satisfied that we have been allowed unhindered access to the financial accounts, documentation and reports covering its activities and stakeholder engagements and to managers and staff. We did not visit any overseas sites or contact suppliers. Our approach to assurance is in accordance with AA1000 Assurance Standard, which requires us to review the completeness, materiality and responsiveness of the Social Accounts.
Opinion
On the basis of the work undertaken, and subject to the more detailed commentary below, we believe the Social Accounts properly describe Traidcraft’s relationships with its stakeholders.
Overall, we believe the Social Accounts are based on the consideration of Traidcraft’s full set of stakeholders and on a reasonably complete set of management systems and that they deal with the material issues facing its stakeholders and demonstrate responsiveness to their concerns.
Observations
We have set out below our detailed observations on the quality of the 2007/8 Social Accounts using the three key principles for the quality of reporting established by AccountAbility’s AA1000AS Assurance Standard.
Completeness
Traidcraft has identified its key stakeholders and continues to engage with them through a variety of means. All Traidcraft’s stakeholders and, as far as we are able to ascertain, all the activities of the organisation have been included in the accounting process.
Traidcraft plc has developed a far more systematic evaluation system of suppliers consistent with IFAT and EFTA principles in connection with its supplier visits. This includes not only the assessment of the supplier against fair trade principles, providing an insight into producer conditions, but also an assessment of Traidcraft by the supplier. This is a very welcome development which also enables the voice of the supplier to be heard far more directly.
In addition to suppliers and staff, this year’s report also includes the voices of other stakeholders, such as donors and some Exchange programme beneficiaries. This is a helpful development.
This year’s report has maintained, and better structured, its reporting of the organisation’s direct environmental impacts. We understand that Traidcraft prioritises the benefits of its trading activities over addressing adverse environmental impacts of producer activity, given its mission and the views of those stakeholders that have been consulted on this matter. However we believe it would be beneficial if Traidcraft’s overall approach to environmental issues and reporting, including the determination of priorities, were given more attention in future reports.
Materiality
We believe the Social Accounts address the material impacts of Traidcraft on its stakeholders. In large part this is because its activities are built around the Foundation Principles.
There has been valuable work in assessing the impacts and benefits of Traidcraft’s activities, in particular the review of the East Africa regional office, a few of Traidcraft Exchange’s programmes, the Market Access Centre’s training programmes and Traidcraft plc’s Producer Review process. However there is a general lack of quantified and specific monitoring of impact and benefits.
Economic and social improvement of the lives of Traidcraft’s producers and project partners and their beneficiaries, and quantifiable improvements to trading opportunities, volumes and income, is at the core of Traidcraft’s objectives.
This information is material to the interests of project partners and producers, shareholders, donors, Traidcraft plc’s Fair Traders and customers, campaigners, the Foundation Trustees and Traidcraft staff. We recommend that future Social Accounts have a greater focus on impacts and outcomes and believe that the discipline of reporting will encourage the development of appropriate measures and monitoring processes. We welcome evidence that this critical issue is being addressed.
It would be helpful to address Traidcraft plc’s food products more fully. Although the numbers of food producers is smaller than non-food producers, the much larger volume of sales makes this an increasingly important area for future reports. A fuller picture of food purchases, comparing those made directly by Traidcraft against those procured through other parties, would also be helpful.
Traidcraft plc’s Purchasing Policy is based on three critical commitments: the payment of fair prices; the development of long term partnerships and ensuring that producers and their communities benefit from fair trade. We acknowledge that it is difficult to assess the impact of Traidcraft’s activities on producers. This has been addressed to some extent through studies of specific situations, which has provided positive reassurance. However the wider, quantifiable picture of producer impact is one which Traidcraft will need continually to pursue. Part of this effort could be to report on the levels of Fair Trade premium for FLO certified products.
Traidcraft overall is fortunate in having many committed stakeholders. In order to maintain and develop their trust and support, management will need to ensure that impact evaluation is co-ordinated and embedded across the organisation, relevant targets set and outcomes reported.
Responsiveness
Responsiveness is concerned with Traidcraft’s reactions to stakeholder issues, including the quality of communication with them.
We found that concerns staff had identified in previous staff surveys regarding the way some new HR policies were introduced have been addressed and that while some scores in the 2007/8 staff survey were lower, we accept the validity of the explanations in the commentary. Some issues staff had have been addressed through a comprehensive and on-going ‘Rights and Responsibilities’ training programme for all staff. This has had real benefits for staff in improving their work environment and resolving sometimes long standing problems.We recognize the strong, developing role of the Traidcraft Staff Association in supporting the staff as a whole and in counseling individuals.
We welcome the evidence that the restructuring of Traidcraft plc management has devolved clear responsibilities to middle management and improved cross departmental and cross functional co-operation.
The nature and quality of targets varies considerably across the different sections.Whilst some variation is inevitable, there would be benefit in working to provide some quantitative and measurable targets for each stakeholder.
Structuring the report around the key activities of Trade, Support and Development Work, Influencing and Awareness Raising, and Environment, together with the International Development focus on themes has made the report much more accessible. Clarity has also been improved by setting out at the beginning of each section summaries of Goals for the preceding and current years, an account of Progress and Approach and a selection of Stakeholder Views.
The Web Communications Manager has made a major contribution in redesigning the web report, briefing contributors and co-ordinating the report writing process.This year’s report represents a significant advance over previous years in its clarity and structure.
Just Assurance Network Ltd
Bath, UK, June 2008
Mark Line, Director, just assurance
Adrian Henriques, Principal Assurance provider, just assurance
Richard Evans, Principal Assurance provider, just assurance
1. "justassurance" here refers to Just Assurance Network Ltd, trading as justassurance. See www.justassurance.org/
2. "Traidcraft" here refers to both Traidcraft plc and Traidcraft Exchange.
