Starbucks Case

THE STARBUCKS COMMITMENT TO DO ITS PART (1995)

The Starbucks code of conduct, which the company calls a "framework for a code of conduct," was released October 20, 1995 and entitled, "Starbucks Commitment...To Do Our Part."

In its section entitled "Guidelines for Coffee Selection," Starbucks states that:

"It is our goal to purchase coffee from those who conduct their business in a manner that reflects an understanding and appreciation of our mission, values and principles, and in each of the following specific dimensions."

These "specific dimensions" include:

"Quality of Work Environments. It is our goal to purchase coffee from people who share our commitment for treating employees with respect and dignity."

"Environment. It is our goal to purchase coffee that is grown in a manner that reflects our environmental mission."

Starbucks "values" and "principles" are identified in the code's Statement of Beliefs section that says, among other things, that:

o "We believe that wage and benefit levels should address the basic needs of workers and their families."

o "We believe that people should work in safe and healthy places that are free from hazardous conditions."

o "We believe that people should have access to safe housing, clean water, and health facilities and services."

o "We believe that children should not be unlawfully employed as laborers."

o "We believe that people have the right to freely associate with whichever organizations or individuals they choose."

o "We believe that hazardous materials such as chemicals and pesticides should be used safely and responsibly, if at all."

Source: Starbucks Commitment...To Do Our Part, October, 1995.

II. ANALYSIS OF STARBUCKS 1997 ACTION PLAN FOR GUATEMALA

Description: On February 28, 1997, Starbucks released its 1997 Action Plan to implement its code of conduct for Guatemala, the country targeted for initial implementation of the Starbucks code. The 1997 Plan consists of a $75,000 contribution an Appropriate Technology International (ATI) project intended to improve the quality of coffee beans produced by small-scale family farmers. The project would benefit 200 small-scale family farm owners in 1997, according to Starbucks.

Analysis:

The Starbucks 1997 Action Plan for Guatemala does nothing to implement Starbucks commitment to seek to buy coffee from growers who share its values, as stated in its Coffee Mission/Framework for a Code of Conduct issued in October, 1995.

Its focus is small-scale family farm owners, not the vast majority of coffee workers who are employed on plantations that the code of conduct was intended to benefit.

In its 1996 Status Report, Starbucks recognizes the most fundamental fact of Guatemalan coffee production and then ignores it in its 1997 Action Plan: the vast majority of coffee workers are employed on medium and large scale plantations. Starbucks 1996 Status Report notes that 85% of Guatemala's coffee production is dominated by 15% of its farms; less than 1% of the farms account for 45% of total production. While small-scale family farm owners comprise 90% of the total number of Guatemalan coffee farms, they represent a small fraction of overall coffee production and workers.

The Starbucks-ATI initiative appears more concerned with increasing the availability of high quality coffee beans than improving the lives of coffee workers. For example, in describing the criteria in identifying which family farmers will be the beneficiaries of this project, no mention is made of Starbucks values, other than their capacity to produce gourmet coffee beans.

If Starbucks increased its commitment to this project ten-fold, it still would do nothing to benefit the vast majority of the workers living in poverty who produce most of the coffee that Starbucks buys in Guatemala.

There are two other points that raise concern regarding the company's commitment to implementing its code. As inadequate as it is, the 1997 Action Plan is late and was put together quickly. It was issued February 28, 1997, five months after the start of Starbucks 1997 fiscal year that began September 30, 1996. And it appears to have been put together in some haste as the number of typos indicate that Starbucks didn't take time to run a spell-check or proof-read the plan. Another indicator that it was put together quickly is that the material identifies its ATI partner in some places as Applied Technology International and in other places as Appropriate Technology International (the latter is correct).

III. EVALUATION OF HOW STARBUCKS MET ITS 1996 ACTION PLAN

The 1995 Starbucks Commitment included an Action Plan for FY 1996 (that ended September 29, 1996) which includes among its Specific Objectives that Starbucks will

"... develop a strategic plan for implementation of the coffee mission for each selected origin coffee [Guatemala, Ethiopia, Indonesia and Kenya]."

For Guatemala, Starbucks said it would, in FY 1996,

"... focus on Guatemala in a manner that demonstrates a special commitment to innovative ways of implementing our coffee mission." More specifically, Starbucks says:

"We will provide staff time and resources to research coffee worker conditions in Guatemala. No information is provided in the company's 1996 Status Report that Starbucks researched coffee worker conditions in Guatemala nor is there any indication that the company plans to do so in 1997. The Status Report does include information that has long been available on the farm ownership, size and share.

We will enter discussions with Anacafe (the Guatemalan coffee producer organization) regarding development of industry standards, and No information is provided in the company's 1996 Status Report that indicates that any progress was made in developing industry standards nor is there any indication that the company plans