21.1.2013CHEAP HAS A HIGH PRICEFinnwatch, 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.