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.
TESCO SUPPLEMENTARY INFORMATION ON UZBEK
COTTON, JULY 2009
OVERVIEW
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.
BACKGROUND
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.
FURTHER ACTION
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: http://www.ejfoundation.org/page93.html£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.
TESCO SUBMISSION ON FRESH & EASY NEIGHBORHOOD
MARKET, JULY 2009
INTRODUCTION
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.
WORKING ENVIRONMENT
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".
PAY AND
BENEFITS
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.
TRADE UNIONS
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.
HUMAN RIGHTS
IN THE
FRESH & EASY
WORKPLACE
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
| 
