Reduce Food Waste in Supply Chain
Clause to redress the balance in the food chain by promoting fairness for the producer whilst supporting the customer to ensure produce is not wasted at any point throughout the supply chain.
What this clause does
A clause to help reduce food waste in the supply chain. This can help businesses achieve their sustainability goals, including reducing greenhouse gas (GHG) emissions. The financial benefits of properly considering food waste in the supply chain are considerable.
Recitals
(A) [Consider including Roberto's Recitals here.]
(B) [The parties acknowledge that the performance of this Agreement will provide opportunities to reduce Food Waste and each party’s impact on climate change.]
(C) [The parties agree to work together to identify Food Waste reduction opportunities as an ongoing part of the management and implementation of this Agreement.]
Clauses
[Drafting note: Capitalized terms relate to either a defined term in this clause or a defined term in the main agreement that this clause is designed to be inserted into.]
1. Each of the parties agrees to use [all] reasonable endeavors, and cooperate in good faith with the other party and its contractors, to minimize and reduce the Total Food Waste.
2. Each party shall:
2.1. so far as reasonably practicable, measure and record any Food Waste related to this Agreement that it generates, describing its extent and stating its cause (if known) and provide such measurement to the other party each year [and more frequently as the other party may reasonably request, providing that such request is not exercised more than [once per quarter]];
2.2. keep up to date complete written records of the Food Waste reduction activity it undertakes and any associated data and provide the same to the other party each year [and more frequently as the other party may reasonably request, providing that such request is not exercised more than [once per quarter]];
2.3. attend regular meetings (at least once every [●] months) with the other party’s sustainability manager or other designated representative to present, to consider and discuss their respective plans and current progress towards achieving the Food Waste Reduction Target;
2.4. so far as reasonably practicable, avoid any act or failure to act that may result in Food Waste;
2.5. work with the other party to ensure that the Customer’s requirements and orders for the Goods are fulfilled by the Supplier in such as a way as to minimize any Food Waste;*
2.6. ensure that any Rejected Goods will be rejected in a timely manner to allow the Supplier to attempt to avoid the risk of the Goods becoming Food Waste (including by the sale of Goods to a third party).
3. The parties agree that the Projected Total Food Waste related to this Agreement will be quantified in the Initial Food Waste Report and then (together with the Total Food Waste) in the subsequent Annual Food Waste Reports.
4. The Supplier shall, subject to [reasonable] access to the Customer’s Food Waste data in accordance with clauses [2.1 and 2.2]:**
4.1. collate its own data and the Customer’s data on Food Waste, and analyze that data as required in order to produce the Initial Food Waste Report and the Annual Food Waste Reports;
4.2. provide the Customer with the Initial Food Waste Report within [60 (sixty)] days of the Commencement Date and the Annual Food Waste Reports by the applicable Food Waste Report Date; and
4.3. arrange, at the Customer’s [reasonable] request and [sole] cost, for a Food Waste Consultant to undertake an independent assessment and verification of the Initial Food Waste Report and the subsequent Annual Food Waste Reports, and make a copy of the results of that assessment and verification available to the Customer as soon as reasonably practicable after receipt.
5. The [Supplier shall] [OR] [parties shall work together to] develop and implement a plan of continuous improvement with the objective of reducing Food Waste throughout the term of this Agreement [by [set percentage reduction target] per Food Waste Reporting Period] (the Food Waste Reduction Target).
6. Each party warrants and agrees that:
6.1. all Food Waste data and reports it provides to the other party (including, without limitation, the Initial Food Waste Report and the Annual Food Waste Reports) are and will be, to the best of their knowledge and belief, in all material respects complete, accurate and not misleading and will be promptly updated or corrected if a party determines that any such data or report contains a material error[; and
6.2. it will not offer preferential terms to third parties who do not require a Food Waste reduction target or similar obligations in their contracts.]***
7. All information, data and reports shared by the parties pursuant to clauses [1 to 6 above] shall be deemed to be [Confidential Information] for the purposes of this Agreement.
* [Drafting note: This is drafted only to cover food waste, however users may wish to combine it with other TCLP supply clauses to include consideration of carbon emissions.]
** [Drafting note: This obligation may be given to the Customer or to both parties jointly. It is possible that either a discount or increase in price may be necessary to cover the additional expense in creating the necessary reports.]
*** [Drafting note: Do not use the bracketed text at clause from the end of clause 6.1 and at clause 6.2 without first obtaining antitrust and consumer protection law advice, as applicable, to ensure that this provision is not at risk of being considered a restraint of trade.]
Definitions
Annual Food Waste Report means a written report [in a form acceptable to the Customer acting reasonably][using the relevant industry standard format] setting out the Total Food Waste for the immediately preceding Food Waste Reporting Period, and the Projected Total Food Waste for the current Food Waste Reporting Period.
Food* means any substance whether processed, semi-processed, or raw that is intended for human consumption (including beverages) and any substance that has been used in the manufacture, preparation, or treatment of those substances. It does not include products like cosmetics and tobacco, substances used only as drugs, and processing agents used along the supply chain, such as water to clean or cook raw materials in factories or at home.
* [Drafting note: The definition of ‘Food’ is based on the definition in the Food Loss and Waste Accounting and Reporting Standard (FLW Standard). This work is licensed under the Creative Commons Attribution 4.0 International License.]
Food Waste means*:
(a) any Food that is not fit for human consumption;
(b) any Rejected Goods;
(c) any Inedible Items removed from the supply chain to be disposed of and not eventually directly consumed by people**;
(d) any surplus Food thrown away by Food wholesalers or retailers including, for example supermarkets and restaurants;
(e) crops grown for human consumption that are spilled, damaged or otherwise spoiled [at any time after planting]; and
(f) Food that is spilled, damaged or which spoils in each case during the processes of manufacturing, transportation or storage,
and which either party in each case discards, intends to discard or is required to discard.
* [Drafting note: There is no legal or universally agreed definition of food waste. This should be tailored appropriate to the position of the Agreement in the food supply chain.]
** [Drafting note: While this element of food waste may not be avoidable, it still accounts for the waste ‘footprint’ and associated emissions and therefore needs to be measured.]
Food Waste Consultant means a qualified, impartial organization not affiliated with either party providing [the Food Waste equivalent of climate impact assessment and emissions reporting services, of a standard at least equal to those of the Carbon Disclosure Project or the Carbon Trust].
Food Waste Reduction Target has the meaning given to it in clause [5].
Food Waste Report Date means, in relation to a Food Waste Reporting Period, no later than 60 (sixty) days after the end of that Food Waste Reporting Period.
Food Waste Reporting Period means each 12-(twelve-) month period commencing on [the commencement date of this Agreement] and on each anniversary of that date.*
* [Drafting note: Consider amending to align with specific annual accounts.]
Food Waste Reporting Standard means the [Food Loss and Waste Accounting and Reporting Standard issued by The Food Loss and Waste Protocol*] [OR] [insert other relevant reporting standard] as amended or updated from time to time.
* [Food Loss and Waste Accounting and Reporting Standard (FLW Standard). Drafting note: Users of the FLW Standard shall account for the physical amount of FLW, expressed as weight. However, some users may wish to describe and convey the scale and relevance of FLW in other terms or units of measurement, in addition to weight. While doing so is not required by the standard, Appendix D of the standard provides an introductory overview to expressing FLW in terms of environmental impact, nutritional content, or financial implications.]
Goods [as defined in the Agreement].
Inedible Items means components associated with a Food that, in a particular supply chain, are not intended to be consumed by humans including bones and pits or stones but excluding packaging.*
* [Drafting note: Definition taken from the FLW Standard. Note that what is considered inedible varies among users (for example, chicken feet), changes over time and is influenced by a range of variables including culture, socio-economic factors, availability, price, technological advances, international trade, and geography, so this definition should be amended accordingly.]
Initial Food Waste Report means a written report [in a form [reasonably] acceptable to the Customer or using the relevant industry standard format] setting out the Projected Total Food Waste for the first Food Waste Reporting Period.
Projected Total Food Waste means an estimate of the Total Food Waste for the current Food Waste Reporting Period.
Quality Standards means any standards or requirements set out in any Food quality plan and quality management system and any other quality related outcomes or parameters which the parties agree must include[, in addition to any considerations of brand, consumer expectations and customer requirements, regulatory and international standards such as those of the International Organization for Standardization, and third-party certification program requirements] an equal consideration of the nutritional value of the Goods [as per the relevant nutritional rating systems and nutrition facts label that have been implemented to rank Food in terms of its nutritional value in order to reduce Food Waste].
Rejected Goods means any Goods that are rejected by the Customer on the grounds that they do not meet the relevant Quality Standards or are identified as being excess for the Customer to fulfill its order.
Total Food Waste means the sum of the actual Food Waste of each of the Supplier and the Customer arising out of the performance of its obligations under this Agreement in a given Food Waste Reporting Period, calculated in accordance with the Food Waste Reporting Standard.
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