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In light of the developments mentioned above it becomes clear that the Dutch coffee sector is facing considerable challenges in the process towards promoting sustainable development throughout the coffee value chain. Whereas the Dutch coffee sector can be seen as a global frontrunner in the stimulating the process of sustainable development, it is important to recognize that for continuous improvement the leverage can be found in international cooperation between a wide variety public- and private players and civil society organizations. The following sections will place the Dutch coffee sector in the context of international challenges to the process of sustainable development throughout the coffee value chain.

7.3.1 Increased leverage through international cooperation

Even though the mainstream coffee industry in the Netherlands has generally embraced the issue of sustainable development as a key driver in their businesses, it is important to consider the relative importance of the Dutch coffee market within the global coffee industry. The Dutch coffee consumption per capita is in relative terms (5th _in the world) is quite high. Nevertheless, when put in perspective, among the global consumption markets the Dutch coffee sector is a relatively small market. This automatically raises the question to what extent the sector can effectively make a difference in the international industry to stimulate the process of sustainable development. In other words, one can question to what extent the Dutch sector’s efforts to promote sustainable development are effectively making a difference in the context of the global coffee market. However, the relative strength of the Dutch coffee sector can be found in the fact that, in comparison to other commodity sectors as well as to coffee

for sustainable development51_{. It is exactly in this context where the Dutch coffee sector can function as a} frontrunner and set an example an international level. However, to effectively enhance the process of sustainable development and tackle the challenges facing the global coffee market, the Dutch coffee sector, given its size, cannot do it alone. Consequently, stakeholders should acknowledge that the challenges are too big to tackle for any individual player, and needs more international cooperation is increase the effectiveness of initiatives on a larger scale.

In this context, the IDH Coffee Program should be seen as a promising tool, through which a Dutch initiative can promote sustainable development on a large international scale rather than setting targets with a strict national focus. The close involvement of the Dutch actors, including public- private-, and third sector, in the development- and implementation stages of the IDH program, shows the continuous involvement of the Dutch coffee sector to promote sustainable development in the international coffee industry. An important issue to be tackled in stimulating international cooperation is the lack of assurance and guarantee of success of these large multinational initiatives (Kwan, appendix B. 2, p. 9). Kwan argues that it is not necessarily the amount of money which players invest, but more the risk management attached to it. Especially large industry players can be heavily affected by reputation damage. Nevertheless, not investing in sustainability is also not an option. One can safely say that industry players will continue to invest in sustainability simply because they want to make money (Jansen, appendix B. 4, p. 31). However, to address the challenges in the process of sustainable development, stakeholders in the global coffee industry should not treat sustainability as a separate business activity (satisfier), but as an integral component of their business conduct and a qualifier to do business.

7.3.2 Continuous role of public institutions in sustainable development

In line with neo-liberal thinking, the Dutch government is not actively involved in private sector activities. Nevertheless, various respondents have indicated that the Dutch government could more actively facilitate the process of sustainable development in international value chains. Four different ways of government involvement are being identified:

First, regulation can be put in place to stimulate sustainable development in the coffee sector. As long as regulation is supportive and in line with the efforts of the industry, it can be very influential to enhance the process and will pressure laggards in the industry (van den Bosch, appendix B. 7, p. 68). In addition, enhanced governmental legislation will also increase levels of legitimacy and accountability in the process towards sustainable development. Currently, the process of sustainable development is often measured in terms of the shares of certified coffee, holding a certificate of one of the various standard setting initiatives, which themselves are ‘private’ while at the same time guaranteeing the control of core ILO and environmental conventions. The latter clearly indicates how, through international governance mechanisms, public and private control can become

51 _{As pointed out by Ted van der Put, IDH Program Director, during a public conference on sustainability in the coffee market}

blurred. In this context it should be taken into account that the issue of sustainable development in the international coffee sector historically has been driven by (international) private sector players. Especially considering the strong focus on self-regulation of the market, the government is, currently, sharing its role of ensuring food-safety and food-security with private actors. Self-regulating markets for (globally sourced) sustainable products, can be seen “[…] as a key feature of multi-actor governance situations, especially when business actors, civil society and government agency, independently and simultaneously can initiate new approaches” (Vermeulen & Kok, 2012, p. 194). However, the outcome of these new multi-actor governance situations, including the manifestation of a wide variety of new ‘governance’ arrangements, which mirrors the continuous shift in the relation between the state, the market and civil society (Bitzer, 2011).

Second, through enhanced economic diplomacy the focus on sustainable development in commodity value chains in both the emerging markets as well as in the producing countries can be stimulated. On the one hand, it is useful to make agreements on a global level. On the other hand, however, it is also important to be able to implement on the ground measures, which are practical on the ground (Wassink, appendix B. 5, p. 39). Via large international institutions, such as the EU and the WTO, Western countries continue to uphold tariff escalation and tariff barriers in agricultural products, “[…] which make upgrading, i.e., advancing from raw material production to processing, extremely problematic (Wilkinson, 2007, p. 237). Additionally, this causes the current situation in which no company adds value to the ‘product’ in the coffee producing countries, since it makes export to the consuming countries very expensive (van Reenen, appendix B. 2, p. 16).

Third, to maintain and enhance its role as a ‘responsible’ purchaser, thereby setting an example to its citizens, government institutions all multiple levels and scales can have a considerable influence on the environment and social aspects in the Netherlands as well as in countries of production.This closely relates to the discussions and disputes regarding the implementation of the Green Public Procurement (GPP) policies by various public institutions at different government levels, as discussed in the previous chapter. Within the Dutch coffee sector, Max Havelaar has often been seen as the preferred supplier. It has yet to be seen to what extent public institutions, at various levels, will be able to take a broader and more inclusive perspective towards the use of certification instruments.

Fourth, the current framework of short-term subsidies does not always provide a stable financial foundation for industry players to make investments throughout their value chains. Especially long-term subsidies are difficult to ensure in the context of a government which has a rather short-term perspective on policy (Wassink, appendix B. 5, p. 40). On the one the hand it is useful to set-up a system of long-term subsidies, but ,on the other hand, it is it also useful to question whether it is necessary to continuously subsidize the sector and focus on facilitation the start-up phase, while focusing on a strong business-case for the project. In the end business players are the main actors who can make a difference through sustainable sourcing of their coffee, which justifies that governments do not take the lead in the process of sustainable development in the coffee sector.

7.3.3 Role of civil society organizations in the multi-stakeholder cooperation

Even though multi-stakeholder cooperation is a key characteristic of the Dutch coffee sector’s process of sustainable development, there continues to be a certain amount of friction between various stakeholders, which can be explained based on the fact that each stakeholder has its own perspectives and objectives regarding the process of sustainable development. For instance, the industry tends to put more emphasis on the business case, through which sustainable development can be achieved and maintain a strong focus on supply chain security or the long-term availability of sustainably sourced coffees. Civil society organizations, however, naturally have a strong focus on the social well-being of the farmers.

Nevertheless, apart from the fact that civil society organizations are currently facing considerable budget-cuts, one could question to what extent is coffee still a relevant domain for them. The close involvement of the NGO’s in the development of sustainability commitments in the sector has made it rather difficult for NGO’s to campaign against the industry players, since to some extent they have become partners rather than enemies (de Groote, appendix B. 11, p. 95). As a consequence, the collapse of the TCC, which has been discussed above, can be seen as an immediate spin-off of the lack of interest among NGOs in the coffee industry since they generally tend to shift towards thematic issues rather than strictly focusing on commodities. Jansen strongly criticizes the role of NGOs, by arguing that they blow with the winds of subsidies, since “[…] when there is money they will do something, when the money dries out they follow the money elsewhere” (appendix B. 4, p. 31). Moreover, since the work in the coffee industry seems to be finished, various NGO’s have shifted their focus on other sectors. Nevertheless, “[…] the coffee sector is far from done. We have only just started” (Depuydt & Somers, 2011, p. 3). Therefore, it is important that civil society organizations continuously play an important role as a collaborative partner. However, one should also recognize that NGOs are fully dependent on donations and subsidies, which restricts their focus to the most pressing cases. Fortunately, it seems likely that civil society organization will at some point regain their interest in the sector once the industry’s progress towards the sector-wide and individual commitments is insufficient or their own new approach to have broader agenda with thematic issues does not deliver desired outcomes. Most likely, this will initiate new activities for industry ‘watch-dogs’ in civil society. In this context Simons argues “[s]ometimes existing players pull out and then we need new impulses again”, which will draw them back into discussion (Depuydt & Somers, 2011). There is, thus, a continuous need for the sector to include all players in the multi-stakeholder cooperation.