COCOA ORIGINS PROGRAM - Prospectus - February 2018 - Sustainable Trade Initiative
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
COCOA ORIGINS PROGRAM Prospectus February 2018
2 Cocoa Origins Program
Contents
Introduction 3
The concept of Cocoa Origins program 4
Goal, Objective & strategy of the program 4
Program structure 4
The application process 6
Criteria 8
The eligibility criteria for project applicants 8
Criteria for project proposal selection 10
Co funding principles & guidelines for reporting 12
The Program Governance 14
Annex A: Template for concept note 15
Annex B: Scenarios of possible projects 15
Annex C: Letter of Intention 15
Annex D: IDH IP Guidelines for Monitoring & Reporting 15
Quick overview of the Cocoa Origins Program 16
Cocoa Origins Program 3
Introduction
IDH – the sustainable trade initiative and Equipoise have
developed the program called Cocoa Origin Program. The
Cocoa Origins Program supports the companies using
relatively small volumes of cocoa to become involved in
sustainability projects at the origins of their cocoa supply
chain and contribute to the overall sustainability of cocoa
products linked to the Dutch market.
In 2010 the most important parties involved in the cocoa
supply chain in the Netherlands signed a letter of intent,
committing to 80% sustainable cocoa consumption in the
Netherlands by 2020 and 100% by 2025 (the “Letter of
Intent”- Annex C). Since the signing of this Letter of Intent,
industry, NGO’s governments, unions, business associations Cocoa Origins Program targets companies that have signed
and others have been actively working on improving or will sign the Letter of Intent and that use small or medium
conditions for sustainable cocoa production. Several years volumes of cocoa. Although SMEs are the main target group
later the distinction between small and large volume cocoa for private partners, large enterprises, such as retailers, can
using companies is becoming clear: it appears to be easier also benefit from Cocoa Origins since they lack the capacity
for the larger users to transform the intent into real action. to invest in sustainable cocoa consumption because of the
As they are by nature internationally active, they are in a relatively small quantities of cocoa they use.
good position to initiate activities contributing to sustainable
production. The smaller cocoa users often don’t source the The projects will be implemented in the cocoa origins.
cocoa directly in the production areas and are therefore Traceability throughout the supply chain is necessary to
not involved in sustainability in the cocoa origins. At their demonstrate the link between the activities in the cocoa
small scale it is much more risky to engage in origins. This origins and the final product. This traceability might either be
limits their potential for direct contribution to sustainability through identity preserved, full segregation (both are physical
goals. The full potential impact of Dutch players in the cocoa traceability procedures) or mass balance (administrative)
industry has not been reached. procedures.
Proposals can be submitted to the Program by any private
party or other stakeholder active in the cocoa supply chain
with linkage to the Dutch market. All proposals require a
minimum level of private co-funding of 50%.
4 Cocoa Origins Program
1.0
Goal, Objective & strategy of the program
Goal Program structure
The goal of Cocoa Origins program is to build on The Cocoa Origins Program will be a combination
the Letter of Intent by supporting smaller cocoa of a variety of projects with each project feeding
users to live up to the commitment and bring into the overall program goal. On the program
THE CONCEPT OF COCOA ORIGINS PROGRAM
sustainable cocoa products to the Dutch market level, there will be 2 calls for proposals, one in
for consumption. The program is based on public- February 2018 and one at the end of 2018 offering
private partnerships to establish stable commercial the opportunity for the submission of project
relations between cocoa producers and cocoa proposals for the Cocoa Origin Program. The total
users and to improve sustainability at the farm and amount available for project implementation is
community level. 1.9 Mio EUR. All projects under the Cocoa Origins
program will end at the latest by end of December
Objective 2020.
To increase sustainable cocoa production by
This call of proposal is addressed to the following
encouraging the private sector to develop new
audience:
cocoa supply chains or re-arrange / expand
existing ones and to improve availability of
Project applicants that are directly involved in the
sustainable cocoa products on the Dutch market.
supply chain, like:
Strategy
ΟΟ traders, processors, B2B manufacturers
The strategy of the program to deliver on the of semi-finished products such as
above-mentioned objective is to support a variety couverture and industrial chocolate,
of projects that will help the smaller chocolate B2C manufacturers of cocoa products
users develop projects that have a positive (in-) (chocolate, cosmetics, ice creams,
direct impact upon the economic, environmental confectionery), bean to bar chocolate
and social conditions of cocoa production and makers, craft chocolatiers, retail and others
therefore on the sustainability level in the Dutch
Project applicants that are indirectly involved in
consumer market. The definition of sustainability
the supply chain, like:
should be linked as far as possible to the 10
elements for sustainable cocoa production of the
ΟΟ Industry associations, banks, NGO’s, risk
Letter of Intent (Annex C).
investors
The Cocoa Origins Program will promote Core criteria for the eligibility for project applicants
cooperation throughout the supply chain, to the Cocoa Origins Program is the supply of
contributing to closer and more stable, long-term cocoa products to the Dutch market.
trade relations. Additionally, the program seeks
to limit the risks, by providing funding for initial
investments in creating, re-arranging or expanding
cocoa supply chains from the cocoa origin to the
final cocoa product and/or for (accompanying)
projects with impact on economic, social and
environmental conditions for cocoa production.
Cocoa Origins Program 5
Two categories of projects are in general eligible for Cocoa
Origins:
The first category contains projects aiming for innovation in
the supply chain (relocation of production, shortening the
supply chain, new supply chain).
The second category are Field level Projects (FLP) with
activities in the cocoa origin, including:
ΟΟ investment in productivity and quality of the cocoa
(e.g. training, GAP, post-harvest services),
ΟΟ projects costs towards income diversification, gender
equity, improved nutrition or other and other social
factors
ΟΟ projects related to mitigating environmental impact of
cocoa production and other environmental factors
Please note that a combination of the both categories is
also possible (please see Annex B for examples of project
scenarios).
6 Cocoa Origins Program
2.0
The application process
The selection of the projects will be done by the Project Review Committee (PRC) in
a 2-step approach together with the Program Management team. Firstly, the project
applicant will be assessed for the eligibility to receive funding from the program. The
proposals will be assessed against project criteria (please see section below criteria
for project proposal selection). Once selected, the Program Management team (IDH
and Equipoise) will oversee the implementation and monitoring of the projects.
The application process has a two-step approach:
Step 1) Concept note phase:
The project applicants develop a concept note with the provided template.
Once finalized the concept note is submitted to the Project Review
Committee for assessment and review. The submitted concept note will be
assessed against the defined criteria in the concept note template on a points
basis. The Program Management team can reach out to project applicants for
some further clarifications if needed. Once the concept note is approved the
applicant is invited to develop a proposal. The concept note phase expected
to take no longer than 3 weeks to be completed.
The template for the concept note can be found in Annex A.
THE APPLICATION PROCESS
Step 2) Full proposal phase:
The project applicants are invited to develop a full proposal including a
detailed budget, activity plan, objectives, intended results and criteria to
measure the success of the project 9KPI’s). Throughout this phase the
Program Management team is available for support and clarification if
needed.
Once the full proposal has been submitted, it will be reviewed and assessed
by the Project Review Committee against the defined partner eligibility
and project proposal criteria in the section the eligibility criteria for project
applicants. The strategic approach of each project will be shared also with
the Program Advisory Committee to ensure that the projects are strongly
aligned and contribute to the Program objectives.
Once the project proposal is approved the applicants will be contracted
as Implementing Partner (IP) by IDH. Contracts will be based on standard
IDH templates. This step is expected to take no longer than 2 months to be
completed.
Cocoa Origins Program 7
Legal aspects
Please see below a proposed timeline: By participating in this procedure, the participant
declares to unconditionally agree to the contents of
CONCEPT NOTE PHASE these guidelines and its annexes.
IDH is not obliged in this procedure to conclude a
contract with a participant.
Submission by project applicant:
end March 2018
IDH reiterates its right to update, change, extend,
postpone, withdraw or suspend the guidelines, the
Feedback from Program time schedule, or any decision with regard to the
Management Team: contract.
mid April 2018
No claim for compensation can be made towards IDH,
its employers or third parties acting on their behalf, for
FULL PROPOSAL PHASE example in the following cases:
1. not following up on a selection award
decision;
2. not concluding the contract;
Submission by project applicant:
25. May 2018 3. suspension and/or postponement and/
or attachment of further conditions to the
contract decision; or
4. suspension and/or cancellation of the
procedure
CONTRACTING
The documents provided by or on behalf of IDH will be
handled with confidentiality. The participant will also
impose a duty of confidentiality on any parties that it
engages. Any breach of the duty of confidentiality by
Approval by PRC: the participant or its engaged third parties will give
07. June 2018 IDH grounds for exclusion of the call for proposals,
without requiring any prior written or verbal warning.
All information, documents and other requested or
provided data submitted by the participant will be
handled with due care and confidentiality by IDH. The
provided information will after evaluation by IDH be
IDH reserves the right to change all dates, and will inform
filed as confidential. The provided information will not
participants in a timely manner of such changes.
be returned to the participant.
8 Cocoa Origins Program
3.0
The eligibility criteria for project applicants
General requirements for project applicants:
ΟΟ Project applicants shall be legal entities that are involved in the cocoa supply
chain or that represent a group of legal entities that are involved in the
supply chain. Project applicants may be an individual legal entity or a group
of legal entities (coalitions).
ΟΟ In case a project application is filed by a group of entities, one of them shall
be the lead contact for the project management and shall be responsible and
liable for ensuring that the group meets all obligations of the project.
ΟΟ The project applicants need to show that they are directly or indirectly
involved in a supply chain that serves the Dutch market.
ΟΟ The project applicant is not required to be based in the Netherlands.
ΟΟ The project applicant shall guarantee the absence of unacceptable activities
or behaviour directly or indirectly linked to the project, included but not
restricted to:
• Slavery, forced labour
• Child labour
• Deforestation
• Sexual harassment
• Unlawful activities or behaviour
• Bribery and corruption
• Fraud
Should any of the above appear or occur or should there be any suspicions of the
above before or during the implementation of the project, the Program Management
team shall be entitled to terminate the project agreement without the risk of
incurring liability for damages or compensation.
CRITERIA
Cocoa Origins Program 9
GROUNDS FOR EXCLUSION
Applicants shall be excluded from participation in the call for proposals and
Cocoa Origins Program if:
ΟΟ they are bankrupt or being wound up, are having their affairs
administered by the courts, have entered into an arrangement with
creditors, have suspended business activities, are subject of proceedings
concerning those matters, or are in any analogous situation arising from a
similar procedure provided for in national legislation or regulations;
ΟΟ they or persons having powers of representation, decision-making or
control over them have been convicted of an offence concerning their
professional conduct by a judgment which has the force of res judicata;
ΟΟ they have been guilty of grave professional misconduct proven by any
means which the IDH can justify;
ΟΟ they have not fulfilled obligations relating to the payment of social
security contributions or the payment of taxes in accordance with the
legal provisions of the country in which they are established, or with
those of the Netherlands or those of the country where the contract is to
be performed;
ΟΟ they or persons having powers of representation, decision making of
control over them have been the subject of a judgment which has the
force of res judicata for fraud, corruption, involvement in a criminal
organization, money laundering or any other illegal activity, where such
illegal activity is detrimental to the MFA’s financial interests.
Project applicants must confirm in writing that they are not in one of the
situations as listed above.
10 Cocoa Origins Program
Criteria for project proposal selection
For the project proposal there are a range of criteria. Before Activities carried out under this program will be assessed as
assessing any proposal, every project partner has to meet the exempt for from VAT and any non-reclaimable VAT will be
eligibility criteria for project applicants specified in section included in the expenditures.
eligibility criteria for project applicants.
In the project evaluation there will be 5 core aspects that the
Some core project criteria must be met for the proposal to project proposal will be assessed against. These are:
enter into the project selection process of the Cocoa Origins
Program. If the proposal does not meet these core criteria, it 1. Sustainability
is excluded from the project selection process.
2. Traceability
These core criteria are: 3. Strength of linkages to the objectives of the Letter of
Intent
ΟΟ Project applicant is part of the cocoa value chain
and is the addressed audience of the call of proposal 4. Implementation in the selected regions
(described in section Program Structure)
5. Level of impact on the Dutch market
ΟΟ Project applicant is connected to the Dutch market to
6. Auditability
be able to improve availability of sustainable cocoa
products on the Dutch market. Please find below a short description of each aspect.
ΟΟ Ability to minimum co-fund 50,000 EUR by project
applicant, either alone or by combining other private 1. Sustainability
sources into one proposal, please see the section The projects will be assessed on a range of criteria in respect
below with further information to sustainability that is addressing within the project. These
are the 10 recognised elements from the Letter of Intent,
Finance criteria namely on the following items related to the Letter of Intent:
All proposals require a minimum level of private/public
1. Transparency
co-funding of 50%. The program allows for the submission of
small and large projects application: 2. Compliance with laws and regulations
ΟΟ Small projects are projects with a minimal private 3. Good price for cocoa quality, improved productivity
sector contribution of €50.000, where the Cocoa and incomes for farmers
Origins Program would add a maximum contribution
4. Access to credit and rural development services, and
of €50.000.
diversification
ΟΟ Larger projects are project with a minimal private
5. Market access and market information
sector contribution of €100.000, where the cocoa
origins program would add a maximum contribution of 6. Decent working conditions
€100.000. The maximum contribution from the Cocoa
Origins program per project application is €300.000,-. 7. Support for farmers and labour organizations
Only projects that have a viable business case and that are 8. Unique land use planning and good infrastructure
likely to continue to be successful after the initial co-funding
9. Wise management of natural resources
will be supported. This allows the private sector partners to
develop trade relations that impact permanently upon the 10. Conservation and wise use of biodiversity
economic conditions of cocoa production.Cocoa Origins Program 11
Please note that the proposed project does not have to the Western region, with focus on Sierra Leone, Liberia and
address all 10 areas but should at least touch upon 2 areas Cameroon.
mentioned above. In the project application there should be
a clear description on how the project applicant intends to The Cocoa Origins Program management team is willing to
address the selected element/s. have conversation with projects outside of the defined regions
if there is a relevant and strong linkage to the Dutch market.
2. Traceability
5. Impact on the Dutch market
There shall be a link between the project at the origin of the
supply chain and the product on the Dutch market. This link The Cocoa Origins Program allows project applicants to sell
is called traceability. In the framework of Cocoa Origins three the cocoa products related to the origin projects on the Dutch
levels of traceability are recognised, identity preserved, full market as well as elsewhere. However, the higher the share of
segregation and administrative traceability (mass balance). the production related to the project that is sold on the Dutch
market, the more likely it is the project will be accepted.
3. Linkages to the objective of the Letter of
Intent 6. Auditability
The Cocoa Origins Program contributes to the sustainability of The Program Management team wants to have an emphasis
cocoa consumption on the Dutch market. Submitted project on the concept of guaranteed sustainability. By guaranteed,
applications must therefore show a clear link to support we mean to emphasize that these principles have been
on how their project can contribute to one or more of the put into action in an internationally proven and externally
objectives listed below: verifiable way. There are different ways for this to be done.
One way can be with internationally recognized labels, such as
1. Improve the market share of sustainable cocoa of Rainforest Alliance, UTZ Certified, Organic and Fairtrade.
2. Improve the level of traceability of sustainable There is no formal restriction to cocoa that is certified by one
cocoa of the voluntary certification schemes mentioned above, there
is a requirement proof of audit by an independent third party.
3. Improve the impact of the sustainability of the cocoa
These third parties need to be approved by the Program
4. Improve the public awareness of sustainability Management team.
4. Selected regions Besides the audits by third parties, the Cocoa Origins program
will organise its own monitoring and evaluation. This requires
The Cocoa Origins Program allows users of small volumes
auditable key performance indicators, KPI’s. The project
of cocoa to initiate sustainability programs at the origins of
applicant shall define the KPI’s related to the proposal and will
their supply chains. As some of these companies may not
score points for the SMART character of the KPI’s.
have experience in cocoa producing countries, the program
will propose a small number of preferred regions where small
projects can be initiated and showcased as examples.
In order to reach out to a wide group of potential project
applicants, the Cocoa Origins Program, is open for one region
in Latin America and another region in Africa. The preference
for projects in Latin America is for the Northwest region, with
focus on Colombia. Projects in Peru and Ecuador will also
be considered. The preference for projects in Africa is for12 Cocoa Origins Program
4.0 Co funding principles & guidelines for
reporting
Co-funding principles
ΟΟ All proposals require a minimum level of private/public co-funding of 50%.
ΟΟ All projects must meet the requirements of EU policies on competition and
government procurement. This means that funding is only available for part
of the extra costs that occur because of the development of a new supply
chain or the re-arranging/expansion of an existing chain, costs of preparing
and implementing the changes, but not the ‘going concern’ expenditures and
the costs of the input, the cocoa.
ΟΟ The second category of subsidies is available for part of costs for the
technical support projects with impact on social, environmental and or
economic conditions for cocoa production and /or part of extra expenses
that occur for project applicants because they participate in the project.
ΟΟ Overhead costs (including all administrative personnel) of the project should
not exceed 10% of the total project costs. All personnel and costs associated
with administrative coordination and activities must be included in this
threshold. Higher overhead costs may be considered in exceptional cases.
GUIDELINES FOR REPORTING
Guidelines for reporting
CO FUNDING PRINCIPLES &
ΟΟ The Cocoa Origins Program will follow IDH’s standard reporting cycle
as depicted below. If a project is selected with that consists of a group,
the chosen representative is responsible to make sure that the report
requirements can be fulfilled. A more detailed instruction on planning and
reporting & the IDH Audit Protocol will be shared when an applicant is invited
to prepare a full proposal.
ΟΟ Annual report & revised budget due Feb 1
ΟΟ Progress report due Sep 1
ΟΟ If needed upated Annual plan due Oct 1
ΟΟ Partners of the Cocoa Origins Program are required to submit bi-annual
reports. These reports have two components; a narrative report and a
financial report. The template will be provided for both types of reports in the
step of development of the full proposal.
Financial report: The financial report is activity based and reports on
actual expenditures against budgeted activities. Both budget and
actuals are specified per project partner. A standard financial planning
and reporting format will be provided with the Full Proposal Package to
applicants that have been selected on the basis of their concept note. The
financial report is subject to a financial audit1.Cocoa Origins Program 13
Narrative report: The narrative report includes a
quantitative KPI report and a qualitative narrative
report against target. The applicable KPI’s are listed
in the table below. For the KPI report a standard
planning and reporting format will be provided in
the Full Proposal Package.
In the qualitative narrative, partners will be asked
to reflect on the general progress of the project,
obstacles encountered and strategies to overcome
these obstacles. The partners will also be asked to
reflect on their key learnings more information on
the purpose and type of information can be found
in the learning chapter.
_____________
1. This audit should be conducted by an independent qualified
auditor and in compliance to the IDH Audit Protocol, which
is issued every year to the grantee. The scope of the audit
covers both the grant from IDH as well as the investment by
the private sector.
The financial report and audit is on accrual basis, and not
on cash basis; any other accounting principles are further
clarified in the Audit Protocol.14 Cocoa Origins Program
5.0
The Program Governance
The governance of the program consists of the Project Review Committee
following bodies:
This committee will consist of 3 nominated
1. Program Advisor Committee (PAC) members from the Program Management team,
IDH staff and PAC. Their main responsibility is to
2. Program Management team evaluate the projects against the define criteria and
share this with the Program Management.
3. Project Review Committee (PRC)
4. Implementing Partner Implementing Partner (IP)
Upon approval of the proposal, applicants will be
Program Advisor Committee (PAC) contracted and become an Implementing Partner
The Program Advisor Committee is composed by (IP) to the Program (see Appendix D). IPs are
sector experts from private sector and government. responsible for the implementation of approved
The PAC is chaired by the IDH. The main role of the projects that are co-funded by the Program.
PAC is to provide strategic guidance to the Cocoa IPs must be able to comply with the required
Origins Program with their experience in different procedures for monitoring, reporting, financial
aspects of the cocoa sector. management and auditing as requested by the
Fund (in line with the Guidelines and the RMF).
Program Management team As such, they are responsible for gathering the
THE PROGRAM GOVERNANCE
necessary evidence of private sector contributions
The Program Management team is composed
from all partners involved in the project.
by IDH and Equipoise. IDH has the overall
responsibility for the implementation of this
Annex A: Template for concept note
program and is jointly implementing this program
with Equipoise.
Annex B: Scenarios of possible
projects
IDH will take up the role of:
Annex C: Letter of Intention
ΟΟ overseeing the program implementation
ΟΟ contracting party of the project applicants Annex D: IDH IP Guidelines for
Monitoring & Reporting
ΟΟ Program monitoring
Equipoise will take up the role of:
ΟΟ Support companies in developing quality
proposals
ΟΟ Project monitoring
ΟΟ Run the secretariat of the PACCocoa Origins Program 15
Quick overview of the Cocoa Origins Program
Total budget EUR 1.9 Mio public funding
Overall Program
Increase sustainability of the cocoa production on the Dutch market
objectives
Latin America: Colombia, Peru and Ecuador
Africa: Liberia, Sierra Leone and Cameroon
Selected regions
Large projects in other countries/regions can be considered if there is a strong link to
the Dutch market
Minimum 50% public/private co-funding
Minimum 50% private sector co-funding for small projects (min value of 50,000 EUR
Funding principles private sector contribution)
Minimum 50% private sector co-funding for large projects (min value of 100,000 EUR
private sector contribution)
Types of projects Supply chain innovation
eglidable Field level projects
Private partners or any organization with a legal status
Direct:
Who can apply (lead traders, processors, B2B manufacturers of semi-finished products such as couverture
applicant) and industrial chocolate, B2C manufacturers of cocoa products (chocolate, cosmetics,
ice creams, confectionery), bean to bar chocolate makers, craft chocolatiers, retail and
others
1st call of proposals: Feb 2018
Program timelines 2nd call of proposals: End 2018
End of all projects: December 2020
Projects co-financed by the Cocoa Origins Program must comply with the IDH
Guidelines for Monitoring & Reporting (Guidelines, Annex D) and set specific farm-
Monitoring FLPs
level Key Performance Indicators (KPI), time-bound delivery targets and a robust data
collection system to demonstrate that improvements have occurred.16 Cocoa Origins Program
You can also read
