Week of 12 October 2020
Food and beverage companies are ranked once again: greater effort needed on purchasing practices and worker voice
As the COVID-19 pandemic puts new stressors and renewed focus on our food systems, workers along the value chain are facing increased risks of forced labour and other human rights abuses. In non-profit coalition KnowTheChain’s 2020 sector benchmark, “the majority of the 43 largest global food and beverage companies fail to address forced labor in their supply chains—a litmus test of minimum fair treatment of workers.” Tesco, followed by Unilever, topped the list for its responsible purchasing practices. Meanwhile, poor working conditions in the meat industry were spotlighted by the pandemic, and the food and beverage sector overall scored lowest on purchasing practices (17/100) and worker voice (16/100).
Key takeaways from the benchmark
- Forced labour risks are growing and workers are disproportionately impacted by COVID-19: “While eight of the largest food and beverage companies paid out over US$18 billion to shareholders between February and July 2020, workers in food supply chains are reportedly at risk of exploitation or even of going hungry, including in developed countries such as Canada. They are also disproportionately exposed to Covid-19, and the sector remains a center of infection in many countries.”
- Meat companies scored especially low, in line with declining progress in worker welfare: “As meat companies come under the spotlight across the world for poor working conditions and Covid-19 outbreaks, meat industry giants WH Group (1/100), Tyson (9/100), Hormel (12/100), and JBS (12/100) continue to show little effort to address forced labor in their supply chains.” In addition, the scores of JBS and Tyson have declined since KnowTheChain’s first measurement in 2016, “demonstrating disregard for workers’ rights and their minimum welfare.”
- “Freedom of Association, a Safeguard for Workers’ Rights, Is Under Threat”: Workers are increasingly prevented from organising by laws and by companies citing the health crisis. This eliminates a crucial channel for workers to share concerns about wages and working conditions, increasing their vulnerability to exploitation. By contrast, facilitating worker voice creates positive outcomes for workers: for example, “[i]n May 2020, a Colombian union negotiated an agreement covering comprehensive health and safety measures for 22,000 workers on banana plantations. The new measures are jointly monitored by the union, the employers, and public authorities.”
- Company purchasing practices increase worker vulnerability: Few companies have improved in the areas of purchasing practices since the previous benchmark, even though responsible purchasing is more important than ever in the COVID-19 context when companies are increasing downward pressure on food supply chains. “[P]rompt payment, longer-term contracts, and incentives such as price premiums are needed for suppliers to continue operations and ensure decent working conditions.”
- Investors must step up action: “The KnowTheChain benchmarks are supported by more than 160 global investors with US$6 trillion in assets under management. Investor action can send strong signals to current and future portfolio companies on the importance of respecting human rights.” For example, shareholder resolutions on human rights topics have been introduced by respective investors of Monster Beverage and Tyson Foods in 2018, 2019 and 2020.
Key recommendations for the food and beverage sector
- On Purchasing Practices: “Adopt and disclose responsible purchasing practices in supply chains, such as prompt payment, and incentivize strong labor practices at suppliers, such as price premiums.”
- On Worker Voice: “Engage with independent local or global unions to support freedom of association in supply chains to ensure workers are able to organize and collectively bargain (or, where restrictions on freedom of association exist, ensure that workers can pursue alternative means of organizing and bargaining). Address increased suppression of this right during the pandemic. Involve workers in the design, implementation, and monitoring of supply chain labor rights programs.”
Read KnowTheChain’s full 2020 Food & Beverage Benchmark Findings Report, including details about the methodology and individual company scorecards.