Retailer groups from four European countries have made a public statement acknowledging the crucial role of workers’ unions in achieving improved wage and working conditions on farms and plantations in their supply chains. The group of twenty retailers – including European giants Aldi, Lidl, Tesco and Ahold Delhaize and the UK’s Sainsbury’s – acknowledged the importance of collective bargaining in achieving wage improvement with the following statement:
Collective bargaining is the most sustainable approach to wage improvement, balancing worker rights and economic interests. We respect the fundamental human rights to freedom of association and collective bargaining and expect our supply chain partners to do the same. We will support building the capacity of unions and employers to engage in social dialogue and to negotiate collective agreements.
The statement also recognises the need for responsible purchasing practices to be normalised among buyers in order to enable producing companies to engage in actions towards closing living wage gaps. These include ensuring that producers are paid a fair price and that contracts work for both buyers and producers, and a commitment to working in partnership with producers to close gaps:
While in some cases living wages are already being paid, where there are gaps we do not expect farms to close these overnight. We commit to not moving away from direct supply chain partners solely due to the initial size of their producers’ living wage gaps. We will also make this clear to our supply chain partners, therefore trying to minimise negative consequences down the supply chain. We invite these farms to share data with us so that we can collaborate on measures that help to reduce the gaps.
The retailers have chosen to move forwards with a single living wage assessment tool – the IDH Salary Matrix – aiming to collaborate with voluntary sustainability standards in order to verify wage data.
Sainsbury’s sidesteps union engagement in living wage implementation
The joint retailer statement came the day before Sainsbury’s made their own announcement that they have committed to paying the Fairtrade Living Wage Reference Price in order to close living wage gaps in their banana supply chains.
Sainsbury’s stated that the price paid per box of bananas ‘now covers the cost of the fruit’, and that they will be paying an additional premium to be invested into workers’ wages, helping them to ‘to cover food, housing, education and healthcare costs’. The premium will also be used towards implementing sustainable agricultural practices on supplier farms in Cameroon, Colombia, Dominican Republic and Ghana. In addition, Sainsbury’s says they have transitioned to four-year contracts, ensuring producing companies have financial security and stability.
Sainsbury’s announcement seems to contradict the joint retailer statement’s aims of working together with trade unions in order to reach lasting wage improvements for workers. Collective agreements exist between plantation companies and trade unions in three of the four countries that the supermarket’s initiative is targeting.
Banana Link’s International Coordinator, Alistair Smith, commented:
Although we welcome the move to invest additional resources in workers’ wages and sign longer-term contracts with producers, Banana Link is not convinced of the sustainability of Sainsbury’s chosen means of transferring extra value to workers. Rather than transfer extra money as a ‘windfall’ premium to the workers’ committees in producing countries, the company could have chosen to dedicate funds to collective bargaining which would ensure that higher wages are enshrined for good. Putting the extra value into the collective bargaining process between producers and the trade unions present would ensure that living wages are backed in local legislation and that both workers and the company enjoy the benefits of good industrial relations that do not just depend on the goodwill of an overseas buyer.