Exclusive interview with Coffee Politics (CP) (in Seattle): Samuel Assefa, Ethiopia’s Ambassador to the US (in Washington, DC) and Getachew Mengistie, Director of Ethiopian Intellectual Property Office (in Addis Ababa, Ethiopia.)
The news regarding the settlement of the dispute between Starbucks and Ethiopia over that country’s famous coffee marks received mixed responses. While the majority of people felt that was a relief, some people, especially those who have been closely following the story were skeptical. The skepticism emanated mainly from the unnecessary level of secrecy the negotiating parties hurdled themselves with. To add to the confusion, the joint press release issued on June 20, 2007 was as vague as it could be. The release which was supposed to announce the end of the dispute read:
“Representatives of the Government of the Federal Democratic Republic of Ethiopia and senior leaders from Starbucks Coffee Company today announced that they have concluded an agreement regarding distribution, marketing and licensing that recognizes the importance and integrity of Ethiopia's specialty coffee designations.”
Many skeptics pointed out that the word “concluded” is not similar to “signed.” There was no indication anywhere in the press releases, except that by Oxfam America, to suggest an existence of a signed agreement. This led many to suspect that the press release might be another public relations act designed by Starbucks.
Ambassador Samuel, however, says the dispute is indeed over; a distribution, marketing, and licensing agreement was signed by Howard Schultz and Dub Hay on one side and himself and Getachew Mengistie on the other. The Ambassador passionately speaks about the positive outcome of the negotiation process and what Ethiopia gained out of it. He sounds puzzled that people question the very existence of a signed agreement while “Ethiopia has gotten more than what she is ready to deliver.”
The interview was conducted on a three-way telephone connection. Our connection with Getachew [Ethiopians go by their first name] was lost before we concluded the interview. This interview is not exhaustive n part because of scarcity of resources on my part but I hope it sheds light on the government’s perspective of the story.
In the coming days, I will try to get complete information from the other side and also parties involved in this campaign. I will publish my assessment of the situation and, above all, the readiness of Ethiopia to capitalize on the wind-fall gain and support realized following the dispute with Starbucks.
For now, enjoy the transcript of the interview below.
CP: The joint press release between you and Starbucks states that you “have concluded an agreement regarding distribution, marketing and licensing that recognizes the importance and integrity of Ethiopia's specialty coffee designations.”
What’s the difference between this agreement and the one that was announced in February, 2007? What does “designation” refer to here? Is it related to “certification” or “Geographic Indication?” We learned from your letter published on Addis Fortune that there is a signed agreement with Starbucks, is that true?
Getachew: Yes, a signed document is in place. “Designation” is a term broader than “trademark” and protects Ethiopia’s benefits as it encompasses some of the trademarks that are still pending registration. "Designation" is not related to certification.
Amb. Samuel: "Designation" was preferred for a variety of reasons. The term covers both specialty coffees which are trademarked and the ones that have not been trademarked. If we said “trademark,” we would have left out the ones that are not registered as a trademark. We got more in “designation.”
Getachew: Ethiopia has at least the rights in Common Law.
Amb. Samuel: The term “designation” is broadening the scope for Ethiopia – broaden the horizon that is. Starbucks [on its part,] wanted to ensure all specialty coffees are covered. So, the choice of “designation” was mutually agreed upon.
CP: Getachew, you mentioned Common Law. Could you explain what it has got to do with the agreement?
Getachew: There are some countries where Common Law is recognized. For example, in Canada trademarks, not Common Law, is recognized. Common Law is recognized in Japan but not in France. So, the recognition of Ethiopia’s Common Law rights enhances the position of Ethiopia [where the trademarks are pending.]
Amb. Samuel: Starbucks is global, operating in different legal systems. We didn’t want to loose the advantages in all continents. Common Law applies in countries where it is recognized.
CP: So, what’s the difference between the agreements referred to in your joint press releases in February and that on June20, 2007?
Getachew: Two important accomplishments were achieved in February, 2007: first, Starbucks recognized Ethiopia’s rights to promote the licensing agreement; that they will not oppose the designation and licensing efforts. Secondly, we agreed to resolve our differences through on going negotiations. In June 2007, we reached a settlement.
Amb. Samuel: In February, there was a mutual satisfaction where Starbucks said it will not oppose EIPO’s initiative; it wouldn’t undermine it. What Starbucks said in June is “I agree to commit myself to recognize and protect the integrity of Ethiopia’s specialty coffees.”
CP: The February joint press release gave the wrong impression that you had settled your dispute while there was no real agreement. That created a great deal of confusion among campaigners. Many believe Starbucks, a company with professional communication experts, has worded the press release so carefully that it sent wrong information as though the dispute was over. Do you agree that it was wrong for you to sign on Starbucks’ press release?
Getachew: We were not wrong. We were forced later on to issue our own press release. In February, Starbucks had changed its position from saying that Ethiopia’s attempt to trademark the coffee marks was wrong to recognizing the rights and choices of Ethiopia. They said that they wouldn’t oppose Ethiopia’s efforts. We believe these two achievements have contributed towards the negotiation process [that followed.]
Amb. Samuel: We do not want to raise past issues, revenge, etc. Starbucks is giving us the biggest boost in promotion. There was a misunderstanding in communication. We want to be transparent with the press. I am glad we talk to you on this; you are an important blogger. We were de-escalating the situation in February. You can not shift your car’s gear to a rear-gear while driving at 80 [mph] on a highway. We wanted to de-escalate for the benefit of both of us. [Thus the February press release]
CP: Let’s briefly touch on the widespread skepticism about the recent agreement. The source of the skepticism appears to be the confidentiality agreement between you and Starbucks. Why did the Ethiopian Government agree to a confidentiality agreement? How can you enforce an agreement that is so secret?
Getachew: You don’t publicize business agreements because of the confidentiality of the nature of the businesses. It is common under national and international laws. Can you give me one example where a business agreement was placed on a public domain?
CP: But the Starbucks-Ethiopia situation is unique and should not be compared to other regular business agreements.
Getachew: What makes it unique?
CP: The fact that the dispute was public. It is all over the internet, on YouTube, on papers, you name it. You asked for international help till resolution but signed an agreement behind closed-doors.
Amb. Samuel: Confidentiality is not something we invented. It is a usual practice. The company operates in highly competitive environment and lack of confidentiality disadvantage one party over others. Disclosing details of the agreement may be harmful to either party. Confidentiality might protect us (Ethiopia) and also protect Starbucks. It is not beneficial to post details on public domains. Of course, transparency at a higher level should exist because the dispute was international and the public was involved. We are dealing on behalf of a country – not just a company. We are answerable to the public and parliament so, we don’t have the right to keep some items confidential indefinitely. Only materials that are not required to answer questions from the public and shareholders [in the case of Starbucks] are kept confidential.
CP: Then, there are some questions the public wants to know about. Say, what Ethiopia’s obligations are in the agreement. Can you answer that?
Getachew: During the contract period, we should not charge royalty fee nor do we asses any form of taxation with an effect of royalty. That is Ethiopia’s obligation.
CP: How about “traceability?” Is there any provision in the agreement that binds the coffee farmers’ revenue to requirements of tracing the coffees right to the grower?
Amb. Samuel: No. There is no provision in the agreement which requires traceability whatsoever. There is no provision that might hurt farmers’ interests.
CP: Going back to the confidentiality issue, how will you enforce an agreement that is so secret?
Amb. Samuel: All confidential terms are enforceable through arbitration or courts. More over, the major elements of the agreement include the publicly declared items. So, they are all enforceable one way or another.
CP: Is it true that Ethiopia did not ask Starbucks to invest any resources in Ethiopia? Why did Ethiopia remain silent when Starbucks decided to open two regional centers in other East African countries after despite their promises to open one in Ethiopia?
Amb. Samuel: Starbucks is a private company; we can not ask them to open a support center in Ethiopia. The support center was not a negotiating point.
CP: Are there any other sectors, outside the coffee sector, mentioned in the agreement?
Amb. Samuel: The negotiation was specifically limited to coffee. But there are some agreements with respect to other sectors as well that were included in the spirit of cooperation, though not to be enforced, in general to support the development of the country. These are basically expressions of interest to help the country. Those sectors mentioned [in the agreement] were not negotiating items though. There is cooperation and solidarity, even outside the agreement. At the initial stage of the negotiation, there was an interest to relate other sectors with the negotiation [as give-take] but we refused to accept. The spirit of solidarity was included in the agreement. Howard Schultz [Chairman of Starbucks Corporation] has personally expressed a strong interest to help the country.
Oxfam America has always been there asking us the details of our negotiating points. There is nothing in our agreement which Oxfam does not know. Here I would like to thank Ray Offenheiser [Raymond C. Offenheiser, president of Oxfam America,] Catholic Relief Services, Transfair USA, and many more activists who have supported us. (We tried to communicate this with the media; this part is always cut out of the interviews I have had with the media. I ask you to publish this.)
I am thankful of Oxfam especially for two reasons: first, they have showed that they are truly supportive and want to help farmers in the third world countries, not for bashing global corporations. They helped us. Secondly, they showed that they are real players and acted responsibly when the campaign ended. They gave credit [to Starbucks] when it is due. Even though they said the settlement was a win-win situation, I say it was a win-win-win. Our interest is to make the coffees marketable and that is the objective of the agreement. Everyone will benefit out of marketable products. Starbucks showed their interest as pro-farmers. Oxfam has showed they are communicative, supportive, and responsible. So, it is a win-win-win situation. I thank Oxfam for that.
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