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Starbucks To Establish Code For Suppliers Company May Set Requirements For Wages, Housing And Safety

MONDAY, FEB. 20, 1995

Starbucks, whose stores have been the target of a nationwide campaign citing poor working conditions among Guatemalan coffee growers, said last week it will devise a code of conduct for its suppliers of green coffee beans.

“We are committed to establish a code of conduct, but we also need more time to study the issue because this is a very complex situation,” Howard Schultz, chairman and chief executive, said during the company’s annual meeting.

A code of conduct, usually designed to set minimum wage, health and safety standards for workers, would make Starbucks the first specialty coffee retailer to use its purchasing power to promote social change.

Starbucks would follow U.S. companies in the apparel industry, such as Levi Strauss and Nike, that already have codes for their Third World manufacturers.

Schultz’s announcement, which followed a question from a shareholder, drew immediate praise from human rights activists, who launched a campaign at Starbucks stores in 24 cities on Dec. 3.

“We’re very excited about it,” said Roberta Ray, a member of the Coalition for Justice for Coffee Workers, a Seattlebased coalition of religious, human rights and Central American solidarity groups.

“Hopefully, Starbucks’ decision will have a ripple effect among other specialty coffee retailers and importers of other agricultural products,” she said.

Guatemala has one of the worst records for treating coffee workers, according to the U.S./Guatemala Labor Education Project in Chicago.

Reported human rights abuses include the murder of agricultural workers calling for change, while 70 percent of the population in the country’s coffee-growing areas live below the poverty line, said Stephen Coats, the project’s executive director.

Starbucks’ green bean purchases account for one-half of 1 percent of the country’s total coffee exports, and Guatemalan coffee makes up 2 percent of the company’s retail sales, Schultz said.

Schultz pointed out to shareholders that Starbucks is the largest corporate sponsor of CARE, contributing $200,000 last year to the relief organization that coordinates community development projects in the coffee-growing regions of Ethiopia, Guatemala, Kenya and Indonesia.

Starbucks, which has more than 500 stores nationwide, reported sales of $285 million and net earnings of more than $10 million for fiscal 1994.

Schultz said the company will take about six months to study the situation in Guatemala and meet with human rights groups to discuss the content of its code of conduct.

Such a code should include wages above the poverty line, healthy and safe working conditions, access to decent housing, freedom from discrimination and freedom of association, Ray said.

Starbucks could start with a pilot project in Guatemala and later expand it to other countries from which its buys coffee, she said.

Schultz and one other industry representative, however, warned that a code of conduct is no guarantee of social change.

“We’re somewhat limited to what we can do about it,” said Ted Lingle, executive director for the Specialty Coffee Association of America in Long Beach, Calif. “The journey of a thousand miles begins with a single step,” Lingle said.

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