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No. 55 | August 2016

PERU HORTICULTURAL EXPORTS: A BOOM FOR WHOM?
 
Between 2005 and 2015 Peru's agribusiness exports more than tripled in value and volume. Valued at US $4.3 billion in 2015 they were worth more than double the country's oil exports that year. The hectarage and diversity of crops grown has increased dramatically over the period with a vast land bank of irrigable hectares that the industry counts on bringing into production for export by 2020. 

Here we will focus on bananas and other horticultural crops. The main non-banana horticulture exports being asparagus (fresh and processed), table grapes, mangoes, avocado, mandarins and - the rapidly rising star – blueberries, which grew by a massive 200% year on year in the first semester of 2016.

The increase of exports has of course gone hand in hand with an increase in formal employment - at least half of the hundreds of thousands of new jobs have been taken by women. Most of the jobs in large-scale agribusiness therefore mean regular incomes for rural families for the first time, at least for the length of workers' contracts. However, this does not necessarily mean that all these people have escaped the poverty trap, as some have claimed. Wages and conditions for many remain far from any definition of decent work.

As a new President takes office, it is time to look at the dangers and opportunities facing Peru’s booming horticultural exports. What could Pedro Pablo Kuczynski, a former World Bank economist and a finance minister back in the 1980s, contribute to efforts to ensure that the boom is not just for those who have put up the capital required to make Peru’s deserts bloom?

The water taboo

A subject which seems rather taboo in many circles, is that the water on which much of this rapidly burgeoning production capacity along the Pacific coast depends comes from rapidly disappearing glacial melt in the Andes. Nearly a decade ago – at the beginning of the vertiginous expansion of large-scale irrigated agribusiness, a report funded by USAID and written by the Foundation for Environmental Security & Sustainability sounded a warning that nobody in government or industry seems to have dared to pick up, at least not in public: 

“Peru’s highly populated arid Pacific coast depends on water from glacial melt to compensate for the region’s lack of rainfall, but Peru’s glaciers are retreating at a rapid—and increasing—rate.“

This fundamental issue concerning the unsustainability of the natural resource base on which the whole boom depends is set in a broader national context in the same 2007 report: 

“In the coming decades, Peru will face a water crisis as chronic, unaddressed problems and environmental change combine to undermine the water security of the entire country.  (…) a number of protests and conflicts have arisen in recent years over the privatisation of the public water system and water pollution from mining. These clashes are a harbinger of the instability that a national water crisis could produce.”

This is not an alarmist NGO report that seeks to criticise the mining of copper and gold or the existence of industrial-scale asparagus per se, but it does highlight that agriculture is the biggest user and that water insecurity – already an issue for many years in districts of Lima – must be addressed before agribusiness expansion can be seen as being in any way sustainable.

Five years ago, a Canadian university study concluded that “the water supplied by the glaciers of the Cordillera Blanca, vital to a huge region of northwest Peru, is decreasing 20 years sooner than expected”.  Surely it is time that the industry and those who buy Peruvian products in rapidly increasing quantities looked at this issue and drew conclusions that cannot just be in the technical domain.

Struggling with labour issues?

Any new industry that is growing fast is going to have to overcome a wide range of issues and complexities in order to develop a model of decent work and promote mature industrial relations.  In rural areas that have never known waged employment, with women as half the workforce at least, this is even more likely to be the case, for very practical reasons related to the previously prevailing culture and to the sheer scale on which people are recruited into the industry.  But in the case of Peru, the historical inequalities in the countryside that go back centuries, coupled with the particularly violent recent history, especially towards independent labour unions, explain – although can in no way excuse – some of the violations of workers’ rights that are present in today’s agribusiness sector.

Having said that, it should be made clear that attempts to develop real social dialogue - between the men and women employed in the industry on the one hand and the companies that are leading the rush to fill counter-season supermarket shelves – are painfully slow. For workers who are sacked because they have chosen to exercise their constitutional rights to come together with fellow workers in the same workplace and form an independent trade union, the reality of having their livelihood curtailed, with no alternative in view, is harsh? It is not a reality to which the management staff or owners of the businesses concerned can relate. 

This is itself is not peculiar to Peru, but it needs to be said, because it is the reality to which an increasing number of women and men in the industry are being subjected. In the case of some companies, this now goes as far as making allegations of criminal action against their employees, just because they are involved in a trade union that valued its independence. Some employers seem to have a real hatred - or fear - of any independent trade union emerging in their company. This makes exercising a basic constitutional and human right very risky for workers who rarely have just themselves to feed from their wage.

What is peculiar to Peru, though, is the derogation that the whole of agroindustry obtained from the government at the outset for a package of labour legislation that means less rights and benefits for workers employed in the sector than for their fellow citizens employed in other private sector activities. This law is known by its number – 27360 – and allows, in practice, for workers to be hired on a string of short-term contracts. When the number of years that it is permitted to rehire somebody on another temporary contract is exceeded, experience shows all too often that the authorities turn a blind eye. Workers only have 15 days annual leave, half of the holiday to which other private sector workers are entitled.
 
  Common labour law regime Agricultural promotion regime (Law 27360)
General features Common regime Labour regime, of a temporary and special nature applicable to both natural and legal persons dedicated to agriculture and/or animal husbandry in rural areas (with the exception of the forestry industry), as well as natural or legal persons engaged in agro-industrial activities.
Working day Maximum 8 hours per day and 48 hours per week. Beyond those limits overtime is to be paid. Cumulative working day: overtime is only paid when it exceeds on average the maximum limits permitted by law.
Remuneration Salary not lower than the Legal Minimum. Plus Employee Severance Indemnities (CTS) and Bonuses. Salary not lower than the Legal Minimum but does not include legal Bonuses and Employee Severance Indemnities.
Holidays Paid holidays for 30 calendar days every year. Paid holidays for 15 calendar days per year.
Legally required bonuses Two bonuses a year: one in July and the other in December, in each case of an amount equivalent to the monthly remuneration the worker receives at the time of the bonus. Both bonuses are considered as being included in the wage already.
Employee severance indemnities Employers deposit as many twelfths of the calculated severance pay as received by the worker for complete months he/she has worked. Considered as already paid as part of wage.
Indemnity for arbitrary dismissal Payment of 45 days (1½ remunerations for each year of effective service) up to a maximum of 360 days. Only 15 days (1/2 a remuneration) paid for each year of effective service up to a maximum of 180 days.
Health insurance 9% employer contribution 4% employer contribution
Source: adapted from PLADES, Lima, 2012, by International Commission of Jurists, 2014

At present, this officially sanctioned derogation from normal labour law that has been secured in the Parliament runs until 2021.  However, even discussing the modification of this law is deemed to be a “red rag” by many, let alone proposing its abolition.  It is clear that respecting normal labour legislation will cost the companies more, but nobody appears to have done the sums as to how much more, to what extent profitability will really be jeopardised. If the current complaint lodged with the United States Department of Labor is upheld under the Free Trade Agreement between the two countries, the Peruvian government may come under stronger pressure to look again at the special regime.

Beyond this debate on legislation and employment practice, though, are bigger questions that could form the basis of a dialogue with the Peruvian industry. What is the relationship between decent work and productivity? What is the price of respecting the principles of decent work that the buyers are increasingly requiring? Who should be paying this price? And what is the cost of not respecting the principles of decent work to the seller as well as to the employee?  Is the stability provided by regular bargaining between free parties not the way forward for the industry, with the cost of this internalised into prices?

These are increasingly the questions that consumers and retail buyers are asking, and this trend of expecting good practice and transparency is unlikely to go away.  In any case, decent wages and reasonable margins along the chain would not make much difference to the final price to consumers, for sure.

Can the small organic banana farmers show the way?

Although in many horticultural sectors, small farmers have not had the opportunity to formalise their employment practices, not least because of the challenges of fluctuating seasonal needs, in the banana industry, small farmer associations have come to be  employers of a very considerable number of formal employees. For over a decade now, several thousand workers have been hired by more than 20 small-scale organic banana farmer associations in the Chira Valley district of Northern Peru to undertake harvesting and packing activities.
 
The daily, all-year-round labour requirements of banana production for export were initially met by workers hired by the exporters, using sub-contracted labour. An independent trade union of workers in the industry emerged from struggles for regular direct contracts and payment of Sunday rates just ten years ago. As the associations have taken on the role of employing workers on their members’ farms, so the SITAG union has sought to develop good relations with the management of the associations now employing their members. This has not always proved easy, given the lack of experience of the small-scale producers in their role as employers, and the lack of experience of the union in its key role of bargaining collectively. 

In the last couple of years, after a series of labour conflicts, both the associations and the trade union have attracted the support of outside agencies – notably Fairtrade International and the Latin American Agroindustrial Workers’ Union Coordinating Body (COLSIBA) – for establishing a sustainable basis for permanent and constructive dialogue. The associations, together with the national coordinating body of Fairtrade producers in Peru and the embryonic banana producers’ body, on the one hand, and the union with the support of COLSIBA and Banana Link on the other, have now established a formal dialogue process.  It is hoped that this process will lead to an institutionalisation of good relations between the parties, with functioning grievance mechanisms at ground level when conflicts emerge.

Although the big companies who dominate non-banana horticultural production along the Pacific coast – from the Chira Valley in the North to Ica in the South – do not share that much in common with the small-scale organic banana producers in Piura, both are employers of formal agricultural labour, a good proportion of which is on a year-round basis.  The interest in establishing a framework for regular social dialogue between producers and workers is another area where there is a common interest, although it will need one or two leading companies to take the initiative. This does not seem beyond the realms of the possible, even in a country with such a relatively recent history of conflict.

Maybe the main psychological leap of faith required is the acceptance that the boom should not just be for the benefit of a few owners of capital, but can be shared with a substantial section of the rural population who had been excluded from any social or economic development for too long.
 

FRESH BANANA AND PINEAPPLE IMPORTS TO THE EU-28 IN 2015



 
LIVING WAGES, OR THREE WAYS TO SKIN A CAT!

‘Peace and harmony in the world require an adequate living wage’. - International Labour Organisation Constitution (1919)
 
The English have some strange expressions. One of them is: ‘There is more than one way to skin a cat’ (although some historians suggest that the phrase came from US English). Here we use it to mean that a problem has more than one solution. In this case the problem is low wages that do not permit a worker and his/her family to afford a decent standard of living. The solution involves an employer paying higher wages.

However, all this begs another question which has occupied much time and energy in recent years: how can we agree on what is a ‘living wage’. The issue of low wages and the need to pay higher wages becomes diverted into a discussion – that can easily lead nowhere - about definitions and methodologies.

Raising low wages

Although for the first decade or more of multi-stakeholder focus on the labour dimension of international trade in goods – fresh produce, garments, consumer electronics etc. - the issue of wages remained taboo, we can safely assert that the issue is now out on the table and we are seeing the first initiatives leading to higher wages for low-paid workers employed in global value chains.

Before going into what is happening in the banana industry, it is first worth attempting to describe how wages can be raised in practice in global value chains.
 
3 Ways to raise low wages

Source: Oxfam GB, 2014.
 
Three ways highlighted in the Oxfam diagram can be described as follows:
  • Empowered/unionised workers engage in collective bargaining: This includes sector wide work to remove barriers to freedom of association and collective bargaining, such as in the Indonesian sportswear sector; and the example of mature industrial relations in the Colombian banana industry.
  • Greater entitlements in law: This includes work by the government of Ecuador to raise the legal minimum wage to a living wage level; but also campaign work and business advocacy for a rise in the minimum  wage, as in the case of Bangladeshi and Cambodian garment industries.
  • Increased/shared value from the chain: This includes sharing of savings through enhanced productivity and leaner operations at factory level, more value coming from the retailer earmarked for wages (as in the Florida tomato industry), and enhanced or better targeted in-kind benefits.
Some initiatives combine these approaches, as in the case of the Florida tomato workers, who mobilised retailers to pay more for the final product in order to increase wages, at the same time as mobilising workers to join together in a trade union to make the gains sustainable in the longer term. 

In the case of the Ecuadorian banana industry, Tesco’s public commitment to ensuring the payment a living wage in plantations where the supermarket is the sole buyer, was made a whole lot easier when the government policy of raising the minimum wage to a living wage level achieved its goal for all waged workers across the country. Equally important is the retailer’s parallel commitment to paying prices that cover the “costs of sustainable production”, which is of course vital to ensuring the feasibility for the employer of sharing the benefits with workers.

However, if decent wage levels are to be achieved and maintained in the long term, there is no more effective and democratic mechanism than collective bargaining. Between employers and trade unions. If there is upward pressure on workers’ wages from governments raising minimum wages above inflation rates or from buyers paying fair prices that explicitly include the cost of decent wages and conditions then all the better. The route to living wages across whole industries will be much quicker if all these levers can be used.

Banana Link’s own research in the Ghanaian banana industry shows that in 2013 just over one third (35%) of workers earnt enough to meet their basic household needs. With the support of an education and empowerment programme for union representatives, unions have been able to negotiate pay increases which have seen average monthly take-home increased from GHC 198 in 2013 to GHC 380 in 2015 – an increase of 92%. More than half of workers (54%) now report that their wages are sufficient to cover the costs of daily necessities such as food, housing, utilities and their children’s education.

Although the government’s role in Ghana has been to ensure that minimum wage levels do not fall behind rapid inflation (in fact the increase in minimum wage has been faster than food inflation), the real substantive increases in the banana industry have come from collective bargaining led by trade unions. The payment of wages well above the minimum - and that have risen faster than inflation - is of course facilitated by higher value from sales of bananas through Fairtrade minimum prices. But without the bargaining process the increased wages and benefits would not be in place.

World Banana Forum (WBF): pioneering work in the industry

The first approach explored by the WBF’s permanent working group on the Distribution of Value along the Chain was a desk-based approximation using a household basket of goods and services as the basis for benchmarking a living wage. This method did not involve any field work, as it used the available statistical sources for the country concerned.

Between 2013 and 2015, the WBF Working Group commissioned four studies (one every six months) charting the evolution of national minimum wages in eight banana exporting countries. Company members of the Working Group funded the studies that were produced by the Centre for Sustainable Market Intelligence (CIMS) based at the INCAE Business School in Costa Rica. The team at CIMS were asked to produce benchmark data for living wages per household; per person; and per wage earner. This method made assumptions on average family size and on the number of wage earners per household. The data were neither tested against actual wages, nor against the perceptions of workers on the ground about the extent to which wages covered basic needs and beyond.

ECUADOR DATA produced by CIMS in May 2015
 
Sources:
          http://www.lacamaradequito.com/documentos/descargar/documento/instructivo-salarial-2014/ 
          http://www.ecuadorencifras.gob.ec/ipc-canastas-2014/ 
          http://www.ine.gob.gt/index.php/estadisticas/tema-indicadores 

Comments:
          Agricultural Minimum Wage including 13th and 14th remuneration starting 1 January 2015. 
          Familiy Basic Basket (Canasta Familiar Básica) based on 4 family members. 
          Social security represents a 9,35% of the wage. 
          World Bank 2005 PPP: US$1= US$ 0,501. Current exchange rate (15 May 2015): US$1=US$1.
   

The objective for the Working Group was not to produce a scientific figure to which all economic stakeholders would then be encouraged to align. It was much more about raising awareness of the importance of decent remuneration for plantation and packhouse workers, and particularly to put the spotlight in countries where the gap was substantial or growing.

Members of the Group and the researchers themselves were clear about the limitations of the methodology, especially as this had been highlighted in work undertaken previously in looking at the gap for workers in six types of banana farm in Ecuador. Although the average number of earners per household at national level was 1.6, a team of researchers from INCAE Business School, found that in reality in the banana districts this could be as low 1.09 per household. This factor alone, of course, makes a big difference to the income needs, especially as household size is considerably above the average of four members assumed from national statistics.

Nonetheless, the objective of ensuring that living wage was irreversibly on the agenda of the industry had largely been achieved, with a very slender budget and no resources from outside the membership of the WBF. Meanwhile, another methodology was starting to be applied to the banana industry and gaining traction because of the organisations that adopted it.

Enter the Anker methodology

The second methodology also uses the cost of a basket of goods and services as the basis for calculating living wage benchmark per household and per worker in a given country, but fixing the benchmark involves a process of on-the-ground consultations and research in the rural areas concerned, including, for example, the cost of decent housing and good nutrition.

The first benchmark using this methodology, developed by the US team of Richard and Martha Anker, was undertaken in the banana exporting districts of the Northwest of the Dominican Republic in late 2013. The methodology uses some of the same assumptions on household size and the number of earners per household as the desk-based methodology described above, but the actual benchmark figure is tested against reality of the costs of living for workers in the areas concerned before it is finalised. The involvement of local stakeholders in the process of setting the benchmark obviously gives the methodology considerable credibility, although the costs of setting benchmarks is pretty high and it is necessary to find external funding to support the work.

What has propelled the methodology to the forefront in the last year or so, though, is that the methodology has been adopted by a coalition of private certifiers covering a diversity of sectors. The Global Living Wage Coalition is an emanation of the International Social and Environmental Labelling Alliance. In the banana industry, the relevant members are Fairtrade International/FLO-Cert and Rainforest Alliance/SAN. 

This collaboration is significant because of the growing take-up of these standards in the banana industry. As the Coalition states, it is not just about setting a figure and requiring compliance over time: “In the coming years the coalition will lead to the strengthening of living wage requirements in codes and criteria, but this joint effort is focused on a great deal more than the content of standards, because compliance with a certification programme will not raise wages on its own (…). They will be using all of this work to equip a range of organisations engaged in living wage, including supply chain partners, workers and trade unions, among others, to increase dialogue and take stronger action to increase wages.”

In recent weeks, the WBF Secretariat and several members have agreed to collaborate with Coalition members on developing benchmarks for several other key banana exporting countries, notably Costa Rica, Ecuador and Ghana, with the hope of extending this to Côte d’Ivoire and Cameroon.

A “decent standard of living” approach

The WBF is also now exploring a third multi-stakeholder approach that goes beyond the wage itself to look at the industry’s impact on workers’ standard of living. How can we evaluate if workers are able to live decently or not? 

Many researchers have analysed the difficulties raised by these methods: how does one construct, in practice, a standard basket of goods? What is the relevant size of household and number of workers per household? How to compare wages with incomes for people who are self-employed? What exactly should be included in the calculation of the actual wage? 

The critics point out that the methods based on the costs of a basket of goods and services are based on hypotheses, which do not always correspond to the realities of the South: the State does not always provide basic services, not everything can be bought locally, and there are often no social transfers to households from the public purse.

Based on the pioneering work by French researchers at the Research Institute for Science and Technology for Environment and Agriculture (IRSTEA) and the International Research Centre for Agriculture and Development (CIRAD), there is a proposal to develop an innovative methodology to measure the impact on the social and economic wellbeing of workers, particularly in a context where the State does not provide any or many basic services and it is the producers themselves who have invested in this area. The methodology based on the emerging field of Social Life Cycle Analysis will identify the gaps in provision and therefore enable workers and their employers to negotiate real improvements through a mixture of wages, benefits and other investments.

It is hoped to launch a pilot programme in one African exporting country involving producers and trade unions, as well as several buyers. The detailed methodology is currently in discussion with a multi-stakeholder group and the first results should be available in 2017.

On skinning cats… and decent work

Skinning cats is cruel, especially if they are still alive and the purpose was to feed luxury consumption (fur coats). This is probably not a subject of debate. However, the point is that the WBF seeks to promote good practice, so open debate based on a diversity of experiences in order to find practical solutions is essential to identifying practices that can be of benefit to the whole industry.

In an area where little or no work had been done until the last five years, it is vital for a multi-stakeholder forum not to close the door too early on any approach that looks like it will bring important learning in this priority area.  Meanwhile, of course, no player is prevented from asking for higher wages or raising them. Debate is not a substitute for action. Low wages are a reality and the global banana industry should be aiming to make them a thing of the past.
‘Living wage’ should never be seen as a box to be ticked in a list of compliance requirements. A wage is after all only a means to an end, and maybe not the best from an idealistic point of view. A wage is also only one part of the complex set of factors that make up ‘decent work’.

But let’s not forget that the initial impulse to work on this area in the World Banana Forum came from banana plantation workers’ and their representatives. The rest of us owe it to these women and men on whom the whole edifice depends to leave the industry in a fairer state than we found it.
 
CAN LIDL’S DISCOUNT TROPICAL FRUIT REALLY BE SUSTAINABLE?
 
European discount supermarket Lidl announced recently that all the bananas it sells in its discount stores in Germany and the UK will, from now on, be certified by Rainforest Alliance (RA) and/or Fairtrade International, and it is expected that in time this policy will be extended to Lidl stores in other EU countries. According to Jon Covey, Head of Fresh Produce Buying at Lidl, UK: “This move is yet another milestone in Lidl’s ambition to provide its customers with sustainably sourced produce.”
 
Lidl’s aim is that by the end of 2016, the retailer’s banana supply will see 88 per cent come from RA Certified farms, with the remaining 12 per cent of supply coming from Fairtrade Foundation farms.
 
Buying Fairtrade usually means a higher price to consumers, which ensures a guaranteed minimum price for its suppliers, which finances the “Fairtrade Premium”, generating tangible social and environmental benefits for producers and workers, who decide how the premium is spent.
 
However, RA certified bananas or pineapples will still be available at the usual low prices which have made Lidl’s stores so popular, and which raises the question: is it actually plausible to claim that cheap tropical fruit, even if it is certified, can really be ‘sustainably sourced’?
 
The rise of Rainforest Alliance
 
RA certified products (which today include bananas, pineapples, coffee, tea, palm oil and a great many other commodities) are increasingly popular with retailers and other businesses which offer cheap food and drink. Among the companies selling products which carry the RA’s green frog logo are McDonald’s, Dunkin Donuts, Kraft, Unilever, Mars and a great many others not usually perceived as particularly socially or environmentally responsible.
 
To gain RA certification, banana and pineapple plantations have to comply with Sustainable Agriculture Network (SAN) standards, developed and revised by its International Standards Committee, composed of SAN’s Secretariat and currently a group of 9 experts.
 
Use of the RA label has expanded rapidly, particularly in coffee, cocoa, tea and bananas since 2010. Around 1 million Metric Tonnes of bananas were certified in 2010. Today over 6 million tonnes display the frog logo, meaning that 5.5% of world banana exports were RA certified in 2014.
 
This is an impressive achievement, but the rapid expansion of RA certification has invited a growing suspicion that much of its success can be attributed to the laxity of the standards themselves and the undemanding nature of the RA certification process.
 
SAN standards
 
Within the Sustainable Agriculture Standard, there are 100 criteria, grouped under ten guiding principles. Six of these principles involve ecological criteria, one relates to management systems and the other three contain social criteria. Of the 100 criteria, 16 are critical and have to be passed to achieve RA certification.
 
The critical environmental criteria require the protection of existing ecosystems on the farm, the non-destruction of rainforest for farming activities and an embargo on hunting wild animals. Farms may not discharge waste into natural water systems and there is a list of forbidden chemical and biological substances.
 
The critical social criteria require that:
  • farms do not employ children under the age of 15, use forced labour or apply discriminatory employment practices;
  • workers must have the right to organize freely and to negotiate their working conditions collectively;
  • farms must have and divulge a policy guaranteeing this right and must not impede workers from forming or joining trade unions or from undertaking collective bargaining; and
  • wages should at least equal the regional average or legally established minimums.
Other critical criteria include, in the area of health and safety, that workers in contact with agrochemicals should use personal protective equipment and, in the area of community relations, that farms should put in place policies and procedures which identify and take into account the interests of local populations.
 
In addition to complying with the critical criteria, farms must also comply with at least 50 per cent of the applicable criteria, relating to each of the ten guiding principles and at least 80 per cent of the total applicable criteria of the Sustainable Agriculture Standard. 46 per cent of all criteria are checked in each individual audit.
 
Although it’s not possible to analyse the SAN criteria in detail here, it is worth noting that the critical criteria are mostly requirements which are already contained in national legislation, existing company Codes of Practice and in other standards such as GlobalGAP, which are already required by EU retailers selling imported bananas and pineapples. Only one criteria relating to restoration of natural ecosystems appears to add value beyond usual pre-existent requirements.
 
When it comes to non-critical criteria, there is enough flexibility in the requirements to make it possible for most commercial banana and pineapple plantations to achieve certification without any great difficulty.
 
Certification
 
SAN authorizes a number of bodies to audit farms and approve certification. 84% of all certifications for all products are carried out by a division of the Rainforest Alliance, RA-Cert (also known as Sustainable Farm Certification International Ltd., SFC). The remaining 16% are mostly carried out in regions which do not export bananas or pineapples to the EU, which means that 100% (or very nearly 100%) of banana and pineapple plantation audits are carried out effectively by Rainforest Alliance itself. As a leading member of SAN, Rainforest Alliance sets its standards and as the owner of RA Cert it also audits farms.
 
Where violations are found, plantations are normally given warnings, encouraging them to improve performance in future. There is a system for whistle-blowing and RA usually responds quickly to allegations. Some complainants report however that making and following up a complaint can involve a lot of time and effort and there can be no guarantee that they will be satisfied by the outcome.
 
The only external challenges to the system tend to come from trade unions and civil society organisations which know about the daily realities of life on RA Certified farms. Neither of these agencies have the financial resources to monitor RA farms systematically. Nevertheless, when they do find the resources to investigate, violations of standards (including critical criteria) appear to be almost invariably found. This inevitably raises questions as to the overall reliability of RA and its certification system.
 
Do certified farms comply with SAN Standards?
 
It is not always easy for external agencies to get access to farms. This makes it difficult to assess RA’s environmental impacts in any detail. It is easier to assess the Alliance’s social impact as information can be obtained, if necessary, by interviewing workers and trade union organisers outside the plantation gates.
 
Preliminary investigations of RA’s performance in banana and pineapple farms have been carried out by Banana Link (UK), by Oxfam Germany, by a number of Latin American trade unions and by SOMO Netherlands – for the tea, coffee and flower sectors. Their findings are briefly outlined below:
 
In Costa Rica, in Ecuador, in Honduras and in Guatemala (and in Kenya for tea) researchers found Rainforest Alliance Certified farms where:
  • Trade union membership and activities were suppressed and unionised workers sacked
  • Wages paid were below the legal minimum requirement
  • Hours worked exceeded legal limits and overtime was not paid
  • Areas for eating and sanitary facilities were not provided
  • Migrant workers were contracted at lower rates than national workers
  • Use of subcontractors generated instability in the workplace
  • Safety equipment was inadequate and agrochemical contamination occurred
  • Workers suffered health problems associated with the use of agrochemicals
  • Contracts without social security and other social guarantees were used
  • There was evidence of environmental non-compliance
 Ecuador and Costa Rica are the biggest suppliers of bananas to the EU. Costa Rica is the biggest supplier of pineapples. Some of the farms investigated are known to supply Lidl (and also Aldi).
 
So does Rainforest certification deliver?
 
It would appear that RA certification does not provide a guarantee that even such “critical criteria” as basic labour rights or payment of minimum wages have been respected.
 
The SAN and RA aspire to offer sustainable tropical fruit and to do this at no extra cost to consumers. When supermarkets offer fruit to consumers at exceptionally low prices however they need in turn to buy from their own suppliers at the lowest possible prices.
 
“Hard discounters” like Lidl and its competitor, Aldi have driven prices down to levels not seen since the 1970s  Other supermarkets are trying to match these low prices but costs to producers have risen dramatically in this period.
 
Can it be realistic to expect banana and pineapple growers to produce sustainably when the prices they are paid barely cover the costs of production? Is it surprising that, when researchers investigate RA Certified farms, they find that SAN standards are not being met? Producers have to pay RA for certification which adds further to their costs. When low prices are paid to producers it makes it more difficult for them to meet the costs of sustainable production and this makes it more likely that production systems will lead to negative social and environmental impacts.
 
MORE FREQUENT BANANA TRADE NEWS BULLETIN
 
Following this issue of the Bulletin, we plan from now on to produce it more frequently, but with fewer articles in each edition. This will enable us to ensure our content stays up-to-date and relevant, while providing you with shorter, more easily digestible content in each edition. 
 
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