Definitions

Workplaces in which companies take effective steps to prevent potential health and safety incidents and occupational injury or illness arising out of, associated with, or occurring in the course of work.^*

^{* Source: ILO Constitution}

Human rights issues that stand out because they are at risk of the most severe negative impact through the company’s activities or business relationships.^*

^{* Source: UN Guiding Principles Reporting Framework}

A chain of custody model under which materials with particular characteristics of interest are kept physically separate from materials that may lack these characteristics, although materials are not necessarily traced and controlled back to a single identifiable source and may be mixed from among multiple sources. Segregated chain of custody is used commonly but not exclusively in the context of certification.

Small-scale agricultural or forest products producers that are distinct from larger-scale producers found in similar contexts by virtue of many or all of the following characteristics:

• high degree of dependence on family labour
• profits accrue primarily to the farm’s or forest’s owner(s) and their family
• the farm or forest provides a primary source of livelihood for the smallholder
• production units have a relatively small land footprint (relative to the range of production unit sizes for the given commodity and region)
• household resources are allocated to both food crops and cash crops
• relatively low use of agricultural inputs and generally low productivity and yields
• significant economic constraints, such as lack of capital assets and low access to finance
• significant information constraints, including lack of technical knowledge and low access to market information

Consistent with the criteria and parameters outlined in the above definition, numerous governments, international agencies, policies, and sector initiatives provide more specific and quantitative definitions of smallholders, which may differ depending on location, land use type, and commodity. Where companies participate in certification programmes, sector programmes, or jurisdictional initiatives that define smallholder production, they may adopt those definitions when they appropriately reflect the above characteristics as relevant in the given context.

A producer group whose membership is composed of smallholder producers.

An area or region from which materials in a supply chain originate.

• Sourcing areas could include a sourcing radius or a supply-shed around a first point of collection or processing facility (eg, a radius from a palm oil mill); a defined set of production units supplying a particular aggregator or buyer (eg, the area covered by a smallholder cooperative); or a landscape or subnational jurisdiction (eg, municipality) from which materials are sourced.

A market in which commodities are bought and sold for immediate delivery.

A person, group, or organisation with an interest in a company’s production, sourcing, and financial investments, the ability to influence the outcomes of these activities, and/or the potential of being impacted by these activities.

A producer or company that supplies raw materials, processed materials, or finished products to a buyer.

• Suppliers can include producers, processors, traders, and manufacturers. For instance, farms or processing mills supply raw or processed materials to traders, while manufacturers supply consumer products to retailers.
• A given company can be both a supplier and a buyer.
• A supplier may either be a direct supplier (selling directly to the buyer) or an indirect supplier (selling to an intermediary that is one or more steps removed from the buyer).

Documentation of the actions that a buyer intends to implement to support its suppliers and help ensure that these suppliers comply with the buyer’s social and environmental commitments, policies, goals, targets, and other obligations.

The actual or potential places of origin of materials in supply chains. The supply base includes: (i) production units; (ii) primary processing facilities; and (iii) sourcing areas. 

The process of identifying the actors in a company’s supply chain and the relationships among them.

Action by a buyer to temporarily pause purchasing from a supplier while continuing to engage the supplier to resolve and remediate non-compliance or other identified issues.