Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents

Supplementary memorandum submitted by Tesco

  During my recent oral evidence to the Committee I promised to set out in writing the background to both our decision to stop taking cotton from Uzbekistan and our approach to our people and the unions in our US business, Fresh & Easy. I therefore enclose supplementary written evidence on both these issues which I hope you and your Committee find useful in your ongoing deliberations. Indeed, if you or any of your colleagues plan to visit the west coast of the US we would be delighted to arrange for you to visit one of our stores so you can speak to some of our employees and see for yourself how the business operates.

  I very much look forward to seeing the final report when it is published in the autumn and if in the meantime I can be of further assistance, please do not hesitate to let me know.



  1.  We have been boycotting Uzbek cotton since January 2008 to ensure that our garments are free from cotton grown using government sanctioned, forced child labour. We were the world's first major retailer to do so.

  2.  We hope that the boycott will be a short term measure and that the Uzbek government will start genuine reforms and rescind forced child labour.

  3.  To be certain where our cotton comes from we have adopted tracking systems that show, for the first time, that it is possible to trace the country of origin of conventional as well as Fairtrade and organic cotton. We plan to roll out the tracking system to our entire UK cotton supply in 2009.

  4.  We now sell five million Fairtade cotton items a year—at no extra cost to our customers compared to non-Fairtrade cotton products. Sales increased fivefold in the last year and we are the world's second biggest retailer of Fairtrade cotton.

  5.  In autumn 2008 we were recognised for our industry-leading efforts on cotton at the ReFashion Awards, and were the only major retailer to be nominated in any category.


  6.  Cotton is grown across every continent and is traded as a commodity so traceability of origin has historically been difficult to establish. The length and location of global textile and clothing process chains—from cotton producer, ginner, spinner, fabric mill, dyer, garment maker, to brand or retailer—adds to this complexity.

  7.  We began detailed research into cotton production in 2007. This was prompted in part by the launch of our organic and Fairtrade ranges which meant we had to understand the backward supply chain in more depth to be able to verify claims about the cotton in these products. It also reflected growing concerns about conditions in the cotton supply chain.

  8.  As part of this research we engaged with experts such as the Environmental Justice Foundation (EJF), as well as building relationships with cotton merchants to understand better the issues around cotton production.

  9.  In the autumn of 2007 (before the Newsnight programme aired) a member of our Clothing Technical Team visited Uzbekistan to look at garment facilities there and to understand current practice in relation to child labour in cotton production. We also tried to identify a credible partner to work with in Uzbekistan to help improve working conditions and tackle the issue of child labour. This did not prove possible.

  10.  What our visit confirmed was that unlike other developing countries, the child labour in the cotton sector of Uzbekistan is a result of a deliberate policy of coercion adopted by the central government.

  11.  Every year, starting in September, schools across the country are closed for a minimum of two months. Students collect cotton by order of the central and local authorities. Children work at least eight hours a day on the cotton fields and maybe exposed to chemicals, pesticides and defoliants.

  12.  In 2007 we also began working with Historic Futures, the supply chain traceability experts, to establish whether we could trace the country of origin of the cotton used in our products. By working with them we established that by using their online String traceability system we were able to track the country of origin for conventional cotton.

  13.  During the December of 2007 we then worked with key suppliers to understand what the implications of a ban of Uzbek cotton would be (in terms of availability, lead time and price) and continued to work closely with the EJF about the practical implications of ensuring full traceability.

  14.  Once we knew we could credibly trace cotton country of origin and had assessed the implications of a ban we took the step to stop the use of Uzbek cotton in our clothing and home products in January 2008.


  15.  Following our decision to ban Uzbek cotton we have worked with the Ethical Trading Initiative (ETI) and other brands internationally, as well as the National Retail Federation in the US and the Retail Industry Leaders Association, to share our experience with other clothing brands and retailers. This has included co-hosting a cross industry meeting in May 2009 with EJF and the ETI to discuss cotton sourcing and assisting the EJF on their guidelines on how to track cotton:£other

  16.  Following a trial period we have rolled out the online String traceability system for suppliers in Bangladesh and Pakistan and have recently trained suppliers in Turkey, Morocco, Egypt and Romania, with the system going live shortly. We plan to roll out this tracking system to our entire UK cotton supply this year. In advance of this roll-out and as an interim measure suppliers are required to hold a paper copy of a certificate of origin for their cotton on file to be randomly inspected.



  1.  Fresh & Easy Neighborhood Market is the subsidiary of Tesco in the United States. Fresh & Easy opened its first store in November 2007. It currently employs just over 3,000 people and operates 120 stores in California, Arizona and Nevada.

  2.  This submission details Fresh & Easy's approach to its people and employment practices.


  3.  As with Tesco as a whole, we believe that our people are one of the key strengths of the Fresh & Easy business. The Tesco core value of "treating people how we like to be treated" is applied throughout its network of stores, its Riverside California distribution facility, and at the head office in El Segundo Los Angeles.

  4.  We have sought to establish a positive team-based culture. This is borne out in employee satisfaction surveys that are among the best in the Tesco Group. In the most recent survey, which was conducted anonymously, 90.1% of staff said that they "enjoy working at Fresh & Easy".


  5.  Fresh & Easy offers a very competitive pay and benefits package. Starter rates are above the minimum wage requirements as well as above the starter rates of many of our key competitors. Rates rise with service.

  6.  Every employee is entitled to work at least 20 hours, so they are eligible for comprehensive healthcare, with Fresh & Easy paying at least 75% of the cost. The past year has seen substantial increases in costs for employer sponsored medical plans in the U.S. Fresh & Easy has kept the cost to our employees flat, and in some cases has reduced it.

  7.  During the economic downturn Fresh & Easy has not gone the way of some other companies in reducing benefits. Fresh & Easy has enhanced its company-sponsored retirement plan (401(k) plan). Beginning on 1 January 2009, Fresh & Easy began matching up to a maximum of 4% of pay, and team members are immediately vested in the company contributions.


  8.  Fresh & Easy complies with all U.S. legislation relating to labour practices and trade unions.

  9.  All our employees have the right to join a trade union and we believe it is very important that they are able to exercise this right.

  10.  There has been coverage in the UK of attempts by the US United Food and Commercial Workers Union (UFCW) to secure collective bargaining rights with Fresh & Easy.

  11.  Tesco has positive relations with unions around the world, including USDAW in the UK, Solidarity in Poland and Katz in Hungary. Elsewhere in the Tesco group, where we have constructive union relations, we support unions communicating with staff in our stores. In Poland, Hungary and Slovakia this is part of a partnership agreement we have with the Union. In the Czech Republic it is more of an informal arrangement. In the UK, USDAW also have an employee representative among store staff, a store notice-board and advise on store policies and procedures.

  12.  We had hoped to have good relations with unions in the U.S. as we recognise the benefits union representation can bring. But it is difficult to develop relations with an organisation which has set out to damage our business from day one. The evidence submitted by the UFCW to this inquiry completely misrepresents the truth about the way Fresh & Easy treats its staff. It further confirms to us there is no room for a national dialogue with the UFCW.

  13.  Fresh & Easy is not therefore currently prepared to let UFCW officials meet with our staff in store. This does not breach any legal requirements, and reflects, we believe, the views of a large majority of our staff. Allowing unions into our stores to recruit members is something requested by only a very small number of our staff.

  14.  Our position is by no means exceptional in the US. A number of other retailers, including Whole Foods and Aldi do not have a collective bargaining agreement with a union.

  15.  In September 2008, at one store, Huntington Beach, Fresh & Easy received a letter from a store employee stating the necessary threshold of support had been reached and the majority of the staff had requested a union. Fresh & Easy responded to the letter suggesting the appropriate next steps clearly laid out by U.S. law should be followed. This involves asking the electoral commission to run a secret ballot. We in no way obstructed this legal process that would achieve union recognition at this store. We have not heard anything further on this matter.

  16.  Our staff remain free to join a union should they choose to and have many ways in which they can find out about and get in touch with unions if they want to—from reading their leaflets to visiting their website.


  17.  Fresh & Easy recognises the importance of employee rights in the workplace.

  18.  Fresh & Easy regularly exceeds the standard in U.S. law. There is no requirement to have contracts in the U.S. and most employers do not. At Fresh & Easy, however, no member of staff is dismissed without warning, as a company policy, with the exception of severe cases, like stealing or fraud. Furthermore, unlike many of our competitors in the U.S., we offer equal access to full time benefits to both full and part time staff.

  19.  Fresh & Easy regularly briefs employees and managers on their rights under U.S. legislation and ensures that they have information about joining a union.

  20.  Fresh & Easy's "Open Door Policy" gives staff a voice in the workplace. The policy provides for a number of things including: monthly staff forums giving staff an opportunity to share what is on their mind; a hotline which staff can call and share their concerns anonymously; a bi-annual anonymous employee satisfaction survey; and a designated employee relations manager for each functional area independent of operation line managers.

Lucy Neville-Rolfe

Executive Director

13 July 2009

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