VZCZCXYZ0001
OO RUEHWEB

DE RUEHSJ #1375/01 1672218
ZNR UUUUU ZZH
O 162218Z JUN 06
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5399
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SAN JOSE 001375 
 
SIPDIS 
 
WHA/CEN 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: BEXP EINV ETRD ELAB SENV KSEP CS
SUBJECT: COSTA RICAN NOMINATION FOR THE SECRETARY OF STATE'S 
AWARD FOR CORPORATE EXCELLENCE 
 
REF:  A) STATE 082043 B) STATE 064726 
 
¶1.  Embassy San Jose is pleased to nominate Starbucks for the 
Secretary of State's Award for Corporate Excellence (ACE) in the 
 
SIPDIS 
Multinational Enterprise (MNE) category (refs A and B).  The goal 
of the ACE is to 1) highlight the good works of the winners, and 
2) inspire others to follow their example.  Few firms have 
corporate social responsibility so intertwined with the company's 
DNA, and the ability to so widely spread that message.  It is 
telling that almost half of their one-page "Company Fact Sheet" 
(http://www.starbucks.com/aboutus/Company_Fac t_Sjeet_Feb06.pdf is 
devoted to Corporate Social Responsibility.  They also publish a 
"Corporate Social Responsibility Annual Report" that describes 
the firm's projects in great detail.  It can be reviewed at 
http://www.starbucks.com/aboutus/csrannualrep ort.asp.  They also 
take advantage of their ability to expose hundreds of thousands 
of people a day to their corporate responsibility message in more 
than 7,300 stores.  Post nominates Starbucks specifically for 
implementing new purchasing and technology assistance programs 
within Costa Rica that have changed the lives of 11,000 local 
coffee growers.  Both programs demonstrate Starbuck's good 
corporate citizenship, responsible environmental stewardship 
policies, and commitment to improving the overall technical 
capabilities of Costa Rican coffee growers, the company's primary 
coffee-producing partner. 
 
The Starbucks Story 
------------------- 
 
¶2.  Producing coffee beans, the second most valuable commodity in 
the world, employs an estimated 25 million people worldwide. 
However, the coffee market can be very volatile, often 
impoverishing farmers and creating incentives for coffee 
suppliers to cut costs at the expense of the environment.  During 
the 1990s, market trends radically lowered the price companies 
were willing to pay farmers, so that in 2003 wholesale coffee 
prices were at their lowest levels in 100 years.  Starbucks 
implemented two main programs to assist farmers hurt by erratic 
coffee prices: the Starbucks Coffee Agronomy Company - Farmer 
Support Center, located in Costa Rica, and the Coffee and Farmer 
Equity (C.A.F.E.) Practices.  Due to Starbuck's large market 
position, the company can play an especially important role in 
steering market decisions towards more sustainable purchasing 
practices, especially in their primary supplying country, Costa 
Rica. 
C.A.F.E. Practices Implemented 
------------------------------ 
 
¶3.  The C.A.F.E. Practices aim to create a sustainable future for 
coffee farmers and their communities.  Significantly, they are 
the result of a collaborative effort between coffee growers and 
Starbucks.  In 2001, Starbucks, together with Conservation 
International (CI), conducted a two-year pilot project and then 
applied their own experience and stakeholder feedback to develop 
coffee buying standards. To receive the C.A.F.E. Practices 
approval, suppliers must pass a two-part assessment.  First, all 
coffee farmers and suppliers participating in C.A.F.E. Practices 
must meet minimum requirements of coffee quality and economic 
transparency.  Next, they are scored on critical social, 
economic, environmental and quality criteria for growing and 
processing coffee.  The criteria are rigorous, quantitative, 
independently verified, and can be applied to any part of the 
coffee supply chain. Finally, the farmers and suppliers that 
score high are offered preferred supplier status, long-term 
contracts and other economic incentives. 
C.A.F.E. Practices Benefit Local Communities, Receive Acclaim 
--------------------------------------------- ---------------- 
 
¶4.  Implementing C.A.F.E. Practices helps coffee farmers invest 
in and sustain their farms for the future.  By producing high- 
quality coffee, farmers are better positioned to earn more and 
have greater economic security, enabling them to invest in their 
farms and communities.  Starbucks has witnessed farmers who 
benefit from C.A.F.E. Practices giving back to their communities 
through projects such as health clinics and education programs. 
C.A.F.E. Practices have received global recognition, winning the 
2005 World Environment Center Gold Medal Award for International 
Corporate Achievement in Sustainable Development and the 
Specialty Coffee Association's 2005 Sustainability Award.  Also, 
C.A.F.E. Practices resulted in Starbuck's invitation to join the 
UN Global Compact in 2004, a voluntary international network of 
corporations, UN agencies, trade unions and NGOs that support 
worker rights and environmental sustainability.  In Costa Rica, 
C.A.F.E. Practices served as a model for the government when it 
created a national Sustainability Seal for local coffee producers 
who use sustainable methods. 
Starbucks Educates and Supports Coffee Growers 
--------------------------------------------- - 
 
¶5.  The Starbucks coffee Agronomy Center, opened in 2004, 
 
provides coffee growers with local support.  The Center houses a 
team of experts in quality coffee production and sustainability 
practices.  This team works closely with coffee farmers and 
suppliers in Central America, Mexico and South America, visiting 
farms to help build long-term mutually beneficial relationships 
and help farmers improve the quality of their coffee while 
lessening environmental impact.  Starbucks's presence in Costa 
Rica allows them to engage directly with local suppliers, gain 
ongoing feedback and collaborate on business best practices that 
help ensure local farms will be strengthened for the future.  In 
Costa Rica over 11,000 farmers have been approved under C.A.F.E 
Practices program; the majority of these are small holders and 
members of a cooperative and all of them have received some sort 
of assistance from the Farmer Support Center. 
 
Starbucks Offers Affordable Credit and Looks to Expand Projects 
--------------------------------------------- ------------------ 
 
¶6.  Starbucks also provides access to affordable credit to Costa 
Rican coffee farmers.  This policy is invaluable to farmers who 
must deal with the uncertainties of the upcoming year's coffee 
yield as well as the uncertainties of the world market for 
coffee.  Affordable credit helps farmers weather the downswings 
of the market to they can survive until market upswings, as well 
as provides farmers with the ability to borrow money in order to 
make technological improvements.  Due to the success of the Costa 
Rica Agronomy office, Starbucks is currently investigating the 
expansion of the Agronomy Center model and further implementation 
of C.A.F.E. Practices in other countries to spread sustainable 
best practices throughout industry.  Since the price of coffee 
depends on the worker and environmental standards of other 
countries, ensuring C.A.F.E. Practices worldwide benefits Costa 
Rican farmers as well. 
 
¶7.  Comment:  Post cannot think of another U.S. firm that has 
served as a better ambassador in Costa Rica for the values 
Americans hold dear.  Starbucks has directly transformed the 
lives of 11,000 farmers while raising social, environmental, and 
technological standards.  The ACE would not be Starbucks's first 
recognition for the good works they do, the World Environment 
Center awarded Starbucks their 2005 World Environment Center Gold 
Medal for International Corporate Achievement in Sustainable 
Development http://www.wec.org/docs/web/2005pressrelease. pdf. 
For the reasons described above, the Embassy is pleased to 
nominate Starbucks for the Secretary's Corporate Service Award in 
the Multinational Enterprise (MNE) category.