Examination of Witnesses (Questions 180
- 189)
TUESDAY 13 MARCH 2007
MS JUDITH
BATCHELAR, MS
HILARY PARSONS
AND MS
EMMA REYNOLDS
Q180 Joan Ruddock: I am afraid I
want to pursue a similar line of questioning. You may recall that
you were also the subject of ActionAid's report, which was called,
I think, Rotten Fruit, and that was published in 2005.[17]
This concerned the trade that Tesco have as the biggest buyer,
I think, of South African fruit in the UK, and that report looked
in particular at women employees, who complained of getting less
than the minimum wage in South Africa, where they were picking
the fruit, and also being exposed to pesticides. I understand,
since that has happened, as in the case that Ann McKechin was
referring to, some changes have been made by the company, but
those changes, I believe, are about the conditions short of the
wages. I wonder if you can give us chapter and verse on that?
Then I want to ask specifically about the role of trade unions.
Ms Reynolds: ActionAid brought
some concerns to our attention with regard to fruit in South Africa.
We met with them a couple of times last year in South Africa,
to discuss those concerns in more detail and ask them to share
the evidence that they had for them, because obviously we wanted
to investigate them and understand what they were. Again, we have
not had any evidence which has been shown to us or third parties
which corroborates the allegations which were made on pesticides,
and more generally. We have not got a direct relationship with
the farmers but do undertake visits to make sure that we are happy
with the standards which are in place.
Q181 Joan Ruddock: If I can interrupt
you, I understand you have established some voluntary codes, as
a result of this report?
Ms Reynolds: We set up a forum
with representatives of the South African Government, workers,
our suppliers, and Women on Farms, the partner organisation to
ActionAid, to work out how to respond best to their concerns.
We are doing a series of independent audits; we are starting on
apples and pears and we should be finished by May. It is 150 farms
that are being inspected, to make sure that we have got the reassurance
that all our standards are being met, and similarly so too have
the other stakeholders involved, and really it is a multi-stakeholder
approach, to make sure we all have that degree of comfort and
security. Then we will be rolling that out to other fruit once
this wave of inspections is complete. Everything that we have
found has shown that our standards are being met, in terms of
living wage as well as trade union representation and the other
principles of the ETI Base Code with which we comply.
Q182 Joan Ruddock: When you brought
the stakeholders together to develop the voluntary codes, did
you bring trade unions into that stakeholder group?
Ms Reynolds: They were involved
via the individual workers, yes. Women on Farms is the organisation
with which we are having ongoing dialogue.
Q183 Joan Ruddock: Is that a unionised
organisation?
Ms Reynolds: I understand so,
yes, to the best of my belief, but I will double-check.[18]
Q184 Joan Ruddock: Perhaps you could
just check, because I think we are really keen to know, particularly
given that American advertisement, and we know very well there
are companies trading in the UK today which have that US philosophy
"Keep trade unions out" and they employ people as managers
to do just that. Clearly it is not the way we would expect a company
like Tesco to behave and so I think we do need clarity on it.
It would be very useful, as part of that clarity, to understand
the situation which has developed in South Africa and the extent
to which the workers who made these complaints to ActionAid now
have more effective representation through trade unions?
Ms Reynolds: It is not my experience,
through my work at Tesco, that we have a policy which is anything
other than open and honest in terms of relations with trade unions,
but I can try to get more information to give you that reassurance
too.[19]
Joan Ruddock: That would be helpful.
Q185 Chairman: All three of you are
in fairly big companies, although not big in everything that you
are involved in, and the first problem that you have, presumably,
is that you can respond to the niche, and the now rapidly expanding
Fairtrade market, but you have to buy an awful lot of things on
the open market. Given that is what customers are expecting, how
realistic is it for you to be able to establish exactly the conditions
in which everything you sell is produced, and is it not in fact
what your customers, as the Committee is doing, are asking you
to do? How possible is it for you to be able to stand up and say,
ultimately, "All our products meet certain standards"?
Ms Batchelar: The reality is we
have huge numbers of policies and those policies are more detailed
for the own-brand products that we sell—that is products
which have got Sainsbury's name on—than they are for branded
products. If we were dealing with a large, branded manufacturer,
we would expect a certain level of due diligence from them, in
terms of what they do and how they operate their business, which,
depending on their size, we put a check on and risk assess. We
have a huge number of policies; basically we divide them into
policies around quality, safety and ethical standards and we audit
against those different policies on a risk-assessed basis, but
essentially all people that supply to us would have some kind
of audit on a regular basis. Those are things which customers
would expect us to do but which we do not communicate necessarily
through a logo or a scheme or an accreditation. Where we are making
a claim, and that claim could be an ethical claim or a claim around
the environment or a claim around health, then the due diligence
we put into that is heightened. We tend to work with suppliers
that we know well, and with whom we have a long-term relationship,
when we work in those kinds of areas, so when we are putting a
logo, whether it is organic, whether it is Fairtrade, whether
it is FSC[20]
wood, we work in a slightly different way, because the expectation
is so much greater.
Ms Parsons: Obviously, we have
a similar approach. We start on the basis of compliance on the
corporate business principles, which set out clearly our standards
and policies in all the key areas, and we train our own employees
in the corporate business principles and also they are shared
with suppliers. Clearly then it will depend on the product, or
if there is to be a claim on pack then obviously you have to have
the certification or the independent verification; we have many
practices and principles and people on the ground who can check
that things are being produced to our satisfaction. Obviously,
we do not have necessarily direct relationships with all the farmers
who are supplying raw materials for our products, because clearly
that would be impossible, with so many small farmers, but we do
put procedures in place with perhaps co-manufacturers, or people
who are supplying a semi-finished product, to make sure that things
are produced in line with Nestlé principles. If there is
a particular product you are interested in I can provide more
information, but we do have quite extensive internal procedures
and we a compliance committee as well.
Q186 Chairman: I suppose the point
is, as Fairtrade expands, people look into every product; that
is really the point?
Ms Parsons: Yes.
Ms Reynolds: Again, similarly,
adding to what has been said, I think international supply chains
are inherently complex and more complex when you are dealing with
suppliers in developing countries based on infrastructure and
governance challenges. We have our codes in place, with the ETI
as a baseline, but beyond that, in terms of what we expect from
our suppliers, we have a process in terms of risk-assessment,
auditing and inspection to make sure that we are happy that our
standards are being met.
Q187 Chairman: Fairtrade, and I am
talking about capital f Fairtrade, has been hugely successful;
their success is phenomenal and it is growing. On the other hand,
understandably, people will say, "Well, they can't be the
only fair trade product." What is your role, if you are developing
your own standards, to ensure that what you do is as independently
audited and as credible and has the same sort of confidence as
Fairtrade, and does it in a way which does not conflict but complements
and helps the whole fair trade movement to expand to meet consumer
demand? How can you work that? At the moment, Fairtrade is ahead
of you; there is more confidence in Fairtrade, however good your
brands are, than there is in Sainsbury's, or Nestlé, or
Tesco, in terms of these things. If you are going to match that
and add to it, how confident are you that you can develop your
schemes in a way that will have the same degree of respect and
also will not inhibit the expansion of Fairtrade, because obviously
that would be counterproductive?
Ms Parsons: I think, from our
point of view, we are not necessarily looking to develop competing
product-labelling schemes with Fairtrade, because I think that
would cause confusion. I think our role, as a company, is to make
sure that the principles that we have in place are complied with,
but not necessarily then extending that into some sort of seal
which goes on the pack, in the way that Fairtrade does.
Q188 Chairman: But externally and
independently audited?
Ms Parsons: Yes. As I say, with
Nespresso, I think that is a good example of where we have the
AAA Sustainable Quality Programme, and the tool and criteria for
that were developed with the Rainforest Alliance and are independently
verified by the Rainforest Alliance. Also we have auditing programmes,
a Care programme, in our factories, for example, where we bring
in auditors like Bureau Veritas, etc. We undertake external audits
where necessary, we work on multi-stakeholder initiatives, like
the Common Code, collaborating with other industries to ensure
that there are standards adhered to, and try to do that in a way
which does not cause confusion to the consumer through perhaps
a proliferation of labelling schemes.
Ms Batchelar: I think the key
thing where this has moved on, in the last 10 to 15 years, is,
when I first started doing this it was all about auditing to make
sure your products were safe and legal, and that was very much
a minimum approach to things. We have moved way beyond the legal
minimum approach to those things now, and I think, increasingly,
making sure that those things which customers expect you to be
doing, from an ethical and social point of view, and increasingly
now an environmental point of view, we are doing. Are we planning
to talk about that in an overt way, through more labelling schemes
or through more logos or a mark, probably not, but planning to
talk about it in a much more conversational style through some
of the communications that we use, like our website, like our
magazines and our direct mail opportunities. I think probably
we are suffering, as an industry, from too many logos and too
many schemes, that it does become confusing for customers, and
we have had that feedback very clearly.
Ms Reynolds: I think the expectation
of our customers is that the products we supply to them should
meet certain minimum standards, and that is what we are committed
to doing. Again, we support the Fairtrade brand because there
is a customer demand for it, but at the same time we are working
in parallel to ensure that the standards that we expect, as a
business, and that our customers expect of us, are maintained
throughout the supply chain.
Q189 Chairman: Independently audited?
Ms Reynolds: Exactly.
Chairman: Thank you very much. It has
been both interesting and informative. Thank you for coming in.
17 "Rotten Fruit: Tesco profits as women workers
pay a high price". ActionAid, March 2005. Back
18
Women on Farms has direct links with the Congress of South African
Trade Unions. We are also working closely with the Wine and Agricultural
Ethical Trade Association (WIETA) as part of the audit process.
WIETA is not a for profit, voluntary association of many different
stakeholders, who are committed to the promotion of ethical trade,
at first in the wine sector and now in agriculture as a whole.
Stakeholders include producers, retailers, trade unions, non-governmental
organisations and government. Back
19
Ev 125 Back
20
Forest Stewardship Council (FSC). Back
|
