Ministerial Conference Aid for Trade Roadmap for

Ministerial Conference Aid for Trade Roadmap for SPECA 1 -2 December 2010 - Baku, Azerbaijan Emerging Standards Issues for Trade Capacity Building: UNIDO Actions in Management Systems and Private Standards Dr. Lalith Goonatilake Director Trade Capacity Building Branch United Nations Industrial Development Organization 1 UNIDO/TCB/LG/140910/ISO Oslo No. 1

Presentation Overview v Role of Standards in Global value Chains v Quality Infrastructure for Conformance v Changing Drivers of Standards v Guide to Private standards v Trade Standards Compliance Report v Global Food safety Initiative v Certification -Impact of ISO 9001 Survey v Conclusions UNIDO/TCB/LG/140910/ISO Oslo No.

Global Value Chains: Defining Market Access Auditing the Value Chain – Compliance to Standards ü Product/Process standards (ISO/IEC) ü Quality Standards (ISO 9001) ü Environment Standards (ISO 14001) ü Food Safety Standards (ISO 22000) ü Labour Social Standards (SA 8000) UNIDO/TCB/LG/140910/ISO Oslo ü Safety Standards (OSHAS) ü Testing (ISO/IEC 17025) ü Calibration ü Traceability (Farm-to-Fork) ü Private Standards (Global. GAP) No. 3

QUALITY & CONFORMITY ASSESSMENT INFRASTRUCTURE Source: UNIDO TCB UNIDO/TCB/LG/140910/ISO Oslo No. 4

“Fair Trade for All”: Priority Areas to meet Product Standards Requirements UNIDO/TCB/LG/140910/ISO Oslo No. 5

Changing Drivers of Standards ISO 14000 SA 8000 UNIDO/TCB/LG/140910/ISO Oslo No. 7

Emerging Multitude of Ethical/sustainability claims* * Presentation of Mr. Alan Bryden at UNIDO General Conference, December 2009 UNIDO/TCB/LG/140910/ISO Oslo No. 8

UNIDO GENERAL CONFERENCE 2009 Round Table: “Sustainability Standards: Hurdles or Opportunities? 9 December 2009, Vienna Moderator: Mr. Paul Hohen - International expert on sustainable development & international standards (Australian Diplomat) Keynote speaker: Mr. Alan Bryden - Former Secretary General - ISO Panelists: – Mr. Markus Arbenz (CEO, IFOAM) – Ms. Yasemin Basar (Social Compliance Director, Yesim Textiles, Turkey) – Mr. Echard Cordes (CEO, Metro Group) – Dr. Lalith Goonatilake (Director, UNIDO, Trade Capacity Building Branch) UNIDO/TCB/LG/140910/ISO Oslo No. 9

Sustainability/ Private Standards Increasing role of private standards – Moving away from international standards !! Can they be de-facto trade barriers? Are they WTO Compliant? – How to deal with dispute settlement? (Role of TBT/SPS agreements) How objective/ How fair? – FAIR TRADE – Benefit vs. removing EU/ US Agriculture subsidies (CAP each cow $2 a day) – Carbon foot print – Is it only food miles? EU-Green houses; Africa less mechanized farming, less inputs; Loss of export jobs- more-deforestation – If California has a public transport system lesser carbon footprint? UNIDO/TCB/LG/140910/ISO Oslo No. 10

• EMERGING ROLE OF PRIVATE STANDARDS Contents • • The landscape of Private Standards in the apparel, footwear and furniture sectors Buyer Codes of conducts Strategies for developing country suppliers Trends UNIDO/TCB/LG/140910/ISO Oslo No. 12

Developing Country System certification issues: • ISO Management Systems – ISO 9001 Quality Management system – ISO 14001 Environment Management system – ISO 22000 Food Safety Management system • Significant benefits - quality assurance • Increasingly demanded in global trade • Number of ISO 9000 certificates issued in Asian region Application in developing countries? UNIDO/TCB/LG/140910/ISO Oslo No. 13

Joint UNIDO-ISO-IAF project: “Implementation of ISO 9001 Quality Management System in Asian developing countries: Survey covering system development, certification, accreditation and impact” Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka + Indonesia, Malaysia, Philippines, Thailand, Vietnam Budget: € 450, 000 Donor: Norway (Norad) ISO and IAF: in-kind contribution Objective: To assess the ISO 9000 certification process in the SAARC and South East Asian countries through an impact assessment study and to build synergy in the certification process and to facilitate improvements in the accreditation scheme of the certification bodies. Project Outcomes: • Improved empirical evidence on economic impact of management system certification in industries in SAARC & South East Asian countries • Best practices and policy guidelines for improvement of functioning of management system certification bodies and accreditation boards. UNIDO/TCB/LG/140910/ISO Oslo No. 14

Global Food Safety Initiative GFSI Mission & Objectives • GFSI launched at the CIES Annual Congress in 2000, following a directive from the food business CEOs. “Continuous improvement. . . Confidence in the delivery of safe food to consumers” ü Convergence between food safety standards ü Improve cost efficiency throughout the food supply chain ü Provide a unique international stakeholder platform “Once Certified, accepted everywhere” Convergence of Standards means CONFIDENCE 650 Major Global CEOs- Retail/manufacturing Sectors US$ 2. 1 Trillion sales UNIDO/TCB/LG/140910/ISO Oslo No. 15

GFSI Benchmarked Food Safety Standards? ’Once certified, accepted everywhere’ UNIDO/TCB/LG/140910/ISO Oslo No. 16

GFSI Breakthrough – June 2007 The following companies came to a common acceptance of GFSI benchmarked standards UNIDO/TCB/LG/140910/ISO Oslo No. 17

Trade Standards Compliance Report 2010 Project Objective: Design and establish an innovative annual publication on compliance challenges and advocating related technical assistance Publication date: December 2010 UNIDO/TCB/LG/140910/ISO Oslo No.

Overview of contents Chapter Content Rationale I – Perspectives and emerging priorities on compliance issues Contributions from WTO, UNEP, FAO, ISO, ILO II – What do border rejections tell us about compliance capacity? Analysis of border rejection data (USFDA and EU-RASFF data) III – Big or small money – how significant are border rejections for developing countries Quantification of export losses IV – Can developing countries detect noncompliance? • Standards Compliance Capacity Index • FVO Inspection Report analysis V – How can technical assistance stimulate the integration into global value chains? • Value chain analysis • Case study VI – Towards measuring the impact of Trade Capacity-Building Case study Synthesis Cost/Benefit Model – Outline UNIDO/TCB/LG/140910/ISO Oslo No. 19

Detention Analysis- US-FDA; EU-RAFFS Example: Country Analysis Indonesia E U D e t e n t i o n s Reason for detention U S D e t e n t i o n s UNIDO/TCB/LG/140910/ISO Oslo No. 20

Standards Compliance Capacity Index Array of compliance capacity, standard-setting UNIDO/TCB/LG/140910/ISO Oslo Array of compliance capacity in country 15 No. 22

CONCLUSIONS • Standards & Conformity capacity Important for trade • Standards landscape and drivers changing – Sustainability issues – Supplier driven private standards • Certification & conformity capacity • Important areas for AFT intervention in SPECA UNIDO/TCB/LG/140910/ISO Oslo No. 23

Thank You for your attention! UNIDO/TCB/LG/140910/ISO Oslo No. 24