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Does Anyone Oppose Responsible Labor Practices?
PMA/United’s Joint Initiative Will Have To Navigate A Difficult Path Between Shielding The Industry And Actually Trying To Improve The Lot Of Laborers

Jim Prevor’s Perishable Pundit, June 6, 2016

The Produce Marketing Association (PMA) and the United Fresh Produce Association (United Fresh) sent a letter to their members about an initiative on labor practices:

As Chairmen of our respective associations, we would like to provide all of our members an update on an important new project we have undertaken together.

In late 2015, the Boards of Directors of PMA and United Fresh formed a Joint Committee on Responsible Labor Practices. The committee's charge is to evaluate appropriate labor practices across the produce and floral supply chain, potentially leading to an industrywide, global approach to responsible labor practices and consistent expectations among trading partners and the public.

The committee is being co-chaired by Brian Kocher of Castellini Group of Companies on behalf of United Fresh, and Wesley Wilson of Walmart on behalf of PMA. The committee was launched with 16 members, equally divided among produce suppliers and buyers. After two meetings discussing goals and objectives, the group is now being augmented to include additional specific expertise as we begin our work ahead. The entire list of members will be publicized once final. Our staff CEOs Tom Stenzel of United Fresh and Bryan Silbermann of PMA are leading the project for our associations.

Responsible labor practices are an important issue for our industry, and we recognize the growing interest of stakeholders in transparency throughout the global supply chain. This Joint Committee is working to help ensure our industry has a clear and well-defined commitment to treat all workers with dignity and respect as they work to bring fresh produce to consumers. As an industry, we want to proactively address this issue.

Members have met to discuss the wide range of information available on labor issues, which supports an industrywide approach to help drive consensus across the produce and floral supply chain and increase consumers' confidence that the produce they buy is responsibly sourced. With support from both associations' Boards, the committee now intends to engage with a broader set of stakeholders inside and outside the industry to develop specific goals and action plans to achieve those goals.

The input and collaboration of many stakeholders on this issue is important in order to drive real change. We know that multiple perspectives are critical to bringing consensus and positive movement. It is also important to acknowledge the huge diversity among commodities, growing regions and cultural practices in the broad produce and floral industry. We want to meet with grower organizations, labor employers and others serving different aspects of the supply chain to ensure that we understand their specific views and incorporate their thinking into any future action.

With foundational work behind it, the committee has now issued a Request for Proposals aimed at engaging a consultant with expertise in this field to help support the committee's outreach and work products. The consultant hired will assist the associations in arranging stakeholder engagement sessions, developing a Code of Conduct, and creating a detailed action plan for next steps. A decision on the consultant is expected by June. The committee will meet in late June, and will review and approve a workplan for the consultant.

We want our members to know that this will not be a short process or an easy one. But, we believe this is a critical discussion we need to have as an industry. We anticipate this will be the beginning of a continuing dialogue with our members, the broader global produce industry and other stakeholders.

We thank you in advance for your support, and welcome your views along the way.

Brian Koche
Castellini-Group of Companies
Chairman United Fresh Association

Russ Mounce
Sam’s Club
Chairman Produce Marketing Association

We received a number of letters on this matter, including this one from a former chairperson of one of the national associations, which seemed to summarize industry concern:

My interest was piqued today by this press release from United and from PMA.  I fervently hope that the Pundit will feel compelled to impart his usual cogent analysis about this issue.

I am genuinely concerned about this task force.  Again, I have absolutely no “inside” information about the genesis of this initiative, nor do I know anyone who is serving on this task force.  However, this certainly appears on the surface to be a very dangerous trend line getting our national associations involved in what essentially is a marketplace economic issue. 

Once again, my bet is that some large organizations are looking for someone else to do their dirty work for them.  However, this is precisely the wrong thing to have an association get involved with because this is an individual buyer/seller issue.  I know that there are some real outspoken social justice advocates out there among industry leadership.  I have a sneaking suspicion that a handful of folks are driving this agenda, and Bryan is riding it as a “legacy” initiative.

Here’s the rub: Our company, just as an example, has a very rich package of employee benefits, and we also reward our employees very generously for their hard work.  That’s something that my Board of Directors and I have decided is in the best interest of the company in order to attract and maintain a very talented team of produce/transportation professionals.  This policy has served us quite well for many decades. 

I also have the freedom as the employer to do the exact opposite.  That would be both foolish and short-sighted, but it also is my right as long as I do not violate any Federal or State laws doing so. If a buying organization did not like how we treated our labor, then they are perfectly free to discontinue buying from us until we changed our practices. That would be a marketplace decision for our company to either adjust our labor practices or walk away from that portion of our business. That’s free enterprise at work.

What I cannot accept is having our joint national organizations set a group of standards that our company has to meet. Obviously, our company would far exceed anything determined to be a minimum by this group, but this is such a dangerous precedent whereby a 501(c)3 organization determines how an industry should structure their labor practices. 

This is the old complaint surfacing once again about the operational arrogance whereby a trade association that has the temerity to deem what is appropriate for all organizations in the industry.  Obviously, I am not advocating for anything less than fair treatment for all workers in our industry.  However, it’s not up to a 16-member Task Force to determine worldwide work standards. 

I know there is no one else in the trade press industry with the courage to write about this issue.  Perhaps you vehemently disagree with me.  Fair enough.  However, I’d love to hear how this Task Force came to fruition and who is the driving force behind it. 

Obviously, we have had a multitude of buying organizations with a litany of questionnaires asking about a whole host of “social” issues. Do I like these inquiries into our business practices?  No, because I do not view them as a value-added and I am very proud of how we conduct our business. 

However, I do feel that any buyer has the right to ask us how we do business before a relationship is established.  However, I also strongly believe that this is a marketplace decision between buyers and sellers -- not something that a Task Force determines will be the minimum requirements for. 

Sorry to be long winded, but this just smacks of overregulation by industry volunteers.  There’s enough of this garbage coming out of DC.  We don’t need it from our trade associations.

We found the press release rather confusing and reached out to both Bryan Silbermann, CEO at the PMA, and Tom Stenzel, President and CEO at the United Fresh. Bryan was on a plane, so Tom provided some context, which Bryan later endorsed when he landed. We had asked three sets of questions:

At one point the memo refers to “the global supply chain” – does this imply that one of the goals of the initiative is to define appropriate labor standards for, say, workers on farms in Senegal that ship green beans to the US? What about if they ship the green beans to Kuwait?

There is also a reference to working with “grower associations,” but not retail or foodservice operator associations – as you know there has been a great deal of attention to worker pay issues in fast food, etc. Is this to imply that retailers and restaurants are considered “post” produce industry and are not included in this initiative?

Finally, is this initiative encompassing office and warehouse workers in produce firms that do not work on farms? What about vendors to the produce industry? Truckers for example?

And Tom responded this way:

Probably the first thing we should say is that we are at the very beginning stage of an extensive dialogue with the industry. We anticipate many questions, and in fact, plan to create a list so that we can work with the committee to make sure we address everything.  We likely can’t answer everything, especially because we won’t know many of the answers until we go down this path.  But, we felt transparency with the industry was important to say we are embarking on this effort and welcome their views.

Having said that, I’ll try to provide clarity to your questions where I can.

We do mean “global produce industry,” while recognizing that’s a hugely complex task.  But, there’s little intellectual space to say that workers shouldn’t be treated appropriately wherever they are.  Of course, there are tremendously different laws and cultures around the world, and anything we do must recognize and respect that. 

We definitely intend to work with all sectors of the produce supply chain, including wholesale, retail and foodservice organizations as well as grower organizations.  This is probably an oversight in our letter.  These groups will be an important part of our efforts to dialogue with all sectors to understand and take into account their views.

But I will also clarify that we are looking specifically at the produce and floral supply chains, not worker issues in another sector such as restaurants.  We are focused on companies and people who work directly in the produce and floral supply chain.  That can certainly include off-farm workers directly in the produce/floral supply chain.

Two other thoughts that might be helpful in clarifying goals:

First of all, we all believe the produce industry has a very positive story to tell about workers in our industry.  We all probably know thousands of companies that are committed to the welfare and responsible treatment of their workers.  But, we as an industry don’t currently have a framework to tell that story.  We want to be able to talk about what our industry stands for in worker welfare, and reinforce that produce industry jobs are good jobs with dignity and respect.

Second, we also know that many consumers and companies are interested in learning more about their food, how it is grown and distributed, etc. That can inadvertently lead to companies seeking to verify practices in their supply chains in many different ways.  The last thing we want to see is another balkanization of multiple audits and verification schemes in the social accountability space similar to what happened with food safety. 

So for those trading partners who do want to discuss those issues, our second goal is to see if we can find common ground across the industry that can serve both ends of the supply chain with greatest efficacy and efficiency, without adding needless cost.

As I said at the beginning, we are anticipating many more questions and lots of learnings as we go.  The fact is that we don’t have all the answers now.

The drivers behind this initiative are not hard to intuit:

1) Part of the general consumer interest in knowing your farmer and knowing where your food comes from is interest in knowing that the food one eats is grown with labor treated in a satisfactory, non-abusive, manner.  This is hard for consumers to know on a farm-by-farm, product-by-product basis, so if there was some kind of recognized standard that could give all consumers peace of mind, no matter what they buy or where they shop, that would seem appealing.

2) Producers are haunted by what has happened in food safety in which they are vexed by countless different standards with countless different auditors performing multiple audits. Following the big controversy of the LA Times reports on worker conditions in Mexico, which we discussed, here, here, and here, producers saw the writing on the wall. They desperately would like to avoid multiple audits and multiple standards, so an industrywide initiative is appealing.

3)  Should attacks be made by the media or advocacy groups against labor standards, it may be advantageous to have a third-party take some of the heat. Better the media reports be about the XYZ standards than to have an individual company name dragged through the mud.

This being said, we hope the committee will narrow its focus.

First, our letter writer, a highly intelligent person, read the association’s open letter and thought they were talking about his sales people, office workers, executives, etc. – that hardly seems likely. There is no known issue of abuse or complaint, so why get involved?

Second, the inclusion of restaurant, supermarkets, etc., doesn’t really make sense either. These organizations are important because, in the end, it is their insistence that vendors sign on to these standards that will give them heft in the marketplace. But no produce industry committee has any competency in setting labor standards for restaurants and supermarkets. Leave this to the National Restaurant Association and the Food Marketing Institute.

Third, setting global standards is hard enough if we constrain our interest to food that is going to wind up in America. Trying to set standards for trade between Rwanda and Burundi or the domestic trade of produce in Mali seems a bit of a reach.

It is worth noting that others have tried this approach in other industries — most notably in the textile/clothing arena. In this area the initiatives have been driven heavily by colleges and universities. Heavy lobbying by students, some with a push from unions in America that have an interest in higher wages overseas, led to heavy demand for action by universities. These universities have the power to withhold licensing rights to their names and logos if clothing producers don’t adhere to a particular standard.

There are two big organizations that have been established to deal with these issues. The largest, most reputable, most sane and sober is the Fair Labor Association:

In 1996, President Clinton convened a meeting of multinational companies and NGOs at the White House and challenged them to work together to improve working conditions in the apparel and footwear industries. This group became the Fair Labor Association, a 501(c)3 nonprofit organization incorporated in 1999. Learn more about the Fair Labor Association history in our Annual Public Reports.

Today, FLA is a collaborative effort of universities, civil society organizations and socially responsible companies dedicated to protecting workers’ rights around the world. Our work is not limited to any geographic region or industry; we operate around the world and are making a positive difference in industries from agriculture and technology to apparel and footwear.

Learn more about FLA’s mission and our work.

Of particular interest to the produce industry is that FLA has moved into agriculture. You can read here its Principles of Fair Labor & Responsible Sourcing for Companies with Agricultural Supply Chains and its FLA Workplace Code of Conduct and Compliance Benchmarks

The organization is quite strong, and the new produce effort should carefully consider its work.

Another organization is the Worker Rights Consortium. Whereas the FLA is corporate in its approach  if problems arise they try and resolve them  the WRC is very much into shaming companies and, whereas FLA has a board that includes companies as well as universities and NGOs, WRC excludes companies. Its membership is all advocacy groups and universities, academics, labor unions, etc. Greg Asbed, co-founder of the Coalition of Immokalee Workers, for example, is on the WRC Advisory Council.

Perhaps a better model for the produce industry might be Worldwide Responsible Accredited Production, or WRAP:

WRAP was formed out of the desire to create an independent and objective body to help apparel and footwear factories around the world verify that they are operating in compliance with local laws and internationally-accepted standards of ethical workplace practices. We trace our origins back to the mid-1990s when reports surfaced of sweatshop-like conditions in numerous apparel factories around the world, including excessive working hours, unsafe conditions, and the denial of several legally-mandated benefits to workers.

Recognizing that such a scenario could jeopardize the apparel industry as a whole, the American Apparel Manufacturers Association (now the American Apparel and Footwear Association) moved to coordinate an industry response to the issue. A task force was formed which received input from a variety of stakeholders including brands, suppliers, NGOs, academia, and government officials. Based on their findings, the task force recommended the creation of an independent third-party organization free of government or corporate influence that could identify and reduce the prevalence of sweatshop conditions in factories around the world. The first Board of Directors was named in 1999, and WRAP was officially incorporated in 2000.

Recognizing that the program’s credibility depends on ensuring objectivity, WRAP is specifically organized to be independent  both financially and in terms of governance  of the apparel industry. This starts with the make-up of its independent Board of Directors. Although the apparel industry is represented on the Board to provide insight and perspective, by charter the majority of the Board is comprised of individuals not affiliated with the industry. Further, structurally, WRAP is not set up as a membership organization (yet, despite receiving no income from dues, memberships or government grants, WRAP is financially sound, with its revenue being generated entirely through facility registration fees and training revenues).

Today, WRAP has grown to become a global leader in social compliance and a trusted independent supply chain partner for dozens of companies around the world. Its comprehensive facility-based model has made it the world’s largest independent social compliance certification program for the apparel/textile industry (according to a 2010 UNIDO Study, Making Private Standards Work For You, WRAP is the “standard most often cited” for social compliance certification in the textile sector). In 2013 alone, over 2,300 facilities from 50 countries participated, and there are currently around 1,900 WRAP-certified facilities, found throughout the world, employing over 1.65 million workers.

Basically, a factory gets WRAP certification, just as many factories get ISO9000 or similar certifications, and then they can offer their services to any buyer with this assurance. We could do something very similar with farms and packing houses.

This certification is based on WRAP’s 12 Principles. These should be read carefully by the new produce committee because it is highly likely that this is very similar to what we will wind up with. Ninety percent of it is just an agreement to comply with the law.  Although even that is somewhat problematic as in many jurisdictions, the laws are honored more in the breach than adherence  the laws are written to satisfy foreigners.

To the extent this is done to make consumers feel better or avoid duplicative audits etc., that is fine. It is, unfortunately not very likely that any effort will actually net out to an improved workplace situation.

There are two big issues:

First, we need to provide better alternatives, and that really is outside the scope of any likely proposal. All these codes always, for example, prohibit child labor. Sounds right, of course, but whether it actually helps the children depends on lots of things: will the family have enough money without the children’s income? Are there safe, educational and healthy alternatives for children?

We once wrote a piece about child labor in Michigan titled When Child Labor Laws Don’t Necessarily Help Children. The gist was that parents working in the fields brought their children to work alongside them. The family made a little extra money, the kids were under the watchful eye of their parents (and often uncles, aunts, cousins, etc.) and it was entirely unclear that leaving the children home to get in trouble would have helped anyone.

Sure, if we were building beautiful schools and camps and creating great alternatives, we would want to make sure the children had the opportunity to participate, but, in their absence, banning something like child labor, without ensuring a better alternative, is just turning our eyes from the problem.

The second issue is broader and makes the whole idea of standards rather vexing. It is very difficult to produce anything – food, shoes, clothing, etc.  in many developing countries.  They may not have good port facilities or excellent roads, trained labor may be sparse, and production can be interrupted because there is a shortage of cartons or bags, and it is difficult and expensive to get these things.

So these areas enter the global marketplace by using the assets they have available  such as cheap labor  to deliver a product at a price that makes it worthwhile to deal with the problems. The reason all these codes wind up basically saying that everyone agrees to follow the laws is because that is a way of punting back the decisions as to what minimum wages should be, how many hours is OK to work, etc., to accommodate local conditions.

And it is important to let developing countries use this labor as their resource. It begins a development process where, gradually, hubs that specialize in production of clothes, shoes or produce start to develop. The areas have more trained labor available and manufacturers start pre-positioning supplies and, ultimately, some suppliers build factories. Industry and labor both become advocates for better infrastructure, etc., so their roads get better, the electric grid more stable, the ports are enhanced, etc.

If we just intervene and declare that everyone should get paid $15 an hour, they may not decide to invest there at all. Then the theoretical rise in wages and improvements in conditions never happen.

In the clothing industry, companies such as Nike all have their own standards, so it is questionable if this effort will avoid the growers’ fear for duplicative standards and audits. And, of course, no committee can definitively judge the ethics of paying a few dollars a day to workers in the Central African Republic and starting up an export industry there or paying more in an established work environment.

On the other hand, it can be a useful tool to have some kind of standard and a method, such as WRAP to ensure verification. So the committee’s work is laudable, and we should see how the process plays out.

Is it likely to much improve the lot of laborers? One is reminded of the story of Charles Parnell, a leader in Ireland who was much beloved by the masses. It is said that Parnell was on the way to Dublin to find out if he had won the Prime Ministership, and his coach passed a work crew, with pick axes breaking rock. Parnell was a man of the people, and he stopped to extend greetings to the men.

The workers were overjoyed and applauded and hooted and hollered, clapped and stomped their feet. Parnell cautioned them about this abundance of enthusiasm: ”Calm down,” said Parnell, “Whether I win or lose, you will still be breaking rocks.”

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