21.1.2013
CHEAP HAS A HIGH PRICE
Finnwatch, Andy Hall
Finnwatch
Finnwatch is an independent Finnish non-profit research
NGO
Focus on global corporate responsibility issues
Promotes socially, environmentally and economically
responsible business practises
Organizations behind Finnwatch include Finnish trade
unions as well as environmental and development
NGOs.
Background for the research
Consumers in Europe are buying more private label
products
–
In times of economic stress consumers turn to less expensive items.
Supermarkets constantly searching cheaper prices
–
Retailers have set up international joint procurement companies.
–
Increased buyer power weakens the position of producers, especially in developing
countries.
Finnish retailers integrated into the global food market
–
Many private label products originate from so called risk countries.
How research was conducted?
Research coordinator in Thailand: Andy Hall
–
Mr Hall was responsible for field research in Thailand.
Workers from three factories were interviewed
–
Samut Sakhon: Thai Union Manufacturing, Unicord (tuna)
–
Prachuap Khiri Khan: Natural Fruit (pineapple)
–
In all 32 workers were interviewed
Companies had a chance to comment all findings
–
Natural Fruit did not want to meet the research team
Key findings: TUM and Unicord
Low wages
The factories paid 300–305 baht/day (legal minimum wage is 300 baht).
According to the workers they had to work overtime everyday in order
to make ends meet.
Unlike Unicord, TUM paid significant annual bonuses.
Problems with social security & health insurance
Many interviewed workers had not received their health incurance card.
Workers complained that they had not had the possibility to choose the
hospital them selves.
Hospital chosen by employer overcrowded and treatment not good
Key findings: TUM and Unicord
Child labour
Many of the interviewees told that both TUM and Unicord 2 employed
14-17-year-old migrants. Underage workers had false passports
claiming that they were over 18 years of age.
Employing persons under 15 is illegal in Thailand, and 15-17-year-olds
are not allowed to do heavy work full time.
No trade unions in the factories
Almost none of the interviewed workers understood the concept of a
trade union.
According to one TUM employee, a worker planning to organize would
be fired immediately.
TUM and Unicord: Links to other companies
TUM delivers tuna products around the world, including the United States,
EU, Japan, South America, Australia and New-Zealand. In Finland, nearly
all retail chains carry TUM products.
TUM's own tuna brands include John West and Chicken of The Sea.
Unicord exports fish products mainly to the US market, but it also has
significant exports to Europe, Canada, Middle-East, South Africa and Japan.
In Finland, nearly all retail chains carry Unicord products.
Natural Fruit Co Ltd.
Produces pineapple concentrate that is used in pineapple juice sold in Finland.
Key findings: Natural Fruit
Undocumented labourers
There were a significant number of undocumented labourers and an
estimated 20–30 undocumented child labourers.
Poor wages
All of the workers interviewed said that their hourly, daily or monthly wages
or overtime compensations were lower than those defined in Thai labour
laws. No holiday benefits or bonuses were provided to workers as
required by the legislation.
Confiscation of passports and work permits
All Myanmar migrant workers interviewed reported that Natural Fruit
unlawfully confiscated their original passports, even when they had paid
back all debts relating to their employment.
Key findings: Natural Fruit
Random deductions from salary
There were a significant number of random and unexplained deductions
from worker salaries for electricity and water, litter, transport (that was
not used), uniform, registration and NV, toilet breaks, sleepiness, ID
cards, bank cards and other miscellaneous items.
In addition, the workers said that Natural Fruit deducted more than what
was legally allowed for their registration costs unless they informed the
company of excessive social security deductions.
Key findings: Natural Fruit
Forced overtime work
All workers said that they were in practice forced to work overtime. Some
workers also reported overtime work in excess of the legally allowed 36
hours per week.
The workers said they were fined for falling asleep during late shifts and hit
around the head or arms if they were sleepy. Most workers reported
workers, particularly younger ones, sometimes fainting or crying as a
result of excessive work.
When work was not available or a full day’s work was not provided, the
workers were not paid at all. Thai law generally requires a 70 percent
payment of daily wages when an employer does not provide work.
Key findings: Natural Fruit
Other problems
There were not enough toilets for workers, particularly men, at the
factory.
If workers had to wait too long for the toilet or spend too long in the
toilet, they were illegally deducted 30 minutes worth of overtime
compensation.
The workers reported that Natural Fruit did not provide work accident
compensation as required by Thai law.
Natural fruit: Links to other companies
Refresco and Prodalim
Israeli based company called Prodalim buys pineapple concentrate from
Natural Fruit.
Prodalim sells pineapple concentrate to Refresco.
Refresco is a leading global player in its field with notable customers in
Europe.
According to some estimates, Refresco controls 20 percent of the European
private label soft drink and fruit juice market.
Presently it has 26 production facilities in nine European countries.
According to sources in 2011 Refresco's clients included Lidl, Aldi, Carrefour,
Dia, Morrisons, Edeka, Rewe, Superunie, Ahold and Système U. It also had
the exclusive right to produce PepsiCo, Coca-Cola and Schweppes in a
number of European countries.