VI. BANANA-EXPORTING CORPORATIONS
At the World Economic Forum, Davos, on 31 January 1999, UN Secretary-General Kofi A. Annan challenged world business leaders to "embrace and enact" the Global Compact, both in their individual corporate practices and by supporting appropriate public policies. The Secretary-General asked world business to uphold: Principle 3: freedom of association and the effective recognition of the right to collective bargaining; . . . Principle 5: the effective abolition of child labour. -United Nations Global Compact.307 International law establishes labor rights and standards that states are required to uphold. If states fulfilled this obligation, they would demand that corporations also respect these rights and standards. Corporations, however, are not directly regulated by international law. Nonetheless, as reflected in the United Nations Global Compact, cited above, there is an international consensus that corporations have a duty to uphold workers' rights. There is also an emerging consensus, evidenced in various corporate codes of conduct, that corporations have a responsibility to take steps to ensure that labor rights are respected not only in their directly owned corporate facilities but throughout their supply chains as well. When countries, like Ecuador, do not adequately enforce labor laws or lack sufficient legal protections to guarantee workers' rights, the government fails to fulfill its duty to protect labor rights. These governmental acts of omission enable employers to commit labor rights violations with impunity and thereby allow them to benefit from workers' rights abuses. Exporter corporations may enter into direct contractual relationships with these employers in whose workplaces workers' rights are violated to purchase product for export. When those financial or contractual relationships are forged and the exporting corporations fail to use their influence to demand respect for labor rights in those workplaces, in some cases contravening their own codes of conduct, the exporting corporations also facilitate and benefit from the labor rights violations because they receive goods produced under abusive conditions. Human Rights Watch believes that, in such cases, the exporting corporations have a fundamental responsibility to ensure respect for labor rights in the workplaces of their suppliers and are complicit in the workers' rights violations when they fail to do so. And when the exporting corporations sanction for use on their third-party supplier plantations pesticides that may be toxic for children, Human Rights Watch considers the corporations to be highly complicit in the human rights violations suffered by the child workers exposed to those chemicals while laboring on the supplier plantations.
We do not have jurisdiction over that. They have to follow the law. It is their discretion. Here contracting minors is prohibited, . . . [but] we do not intervene in that. Absolutely not. It's their business. . . . We do not have that responsibility. Nothing to do there. Our contract is limited to quality and technical assistance. . . . We give technical assistance to obtain the optimal quality. We have inspectors to oversee the quality of fruit. . . . The only obligation we have with respect to those plantations is that we buy [bananas] and pay the official price [set by] the government, but the responsibility with regard to contracting personnel and health and safety corresponds to the plantation owner, the owner of the property.318 These responses are disappointing. Exporting corporations exercise the power of the purse and could insist that high labor standards be met on their supplier plantations. As discussed, Ecuadorian representatives from all five exporting companies ultimately renounced any responsibility for labor conditions on the plantations of third-party suppliers. Nevertheless, Dole has publicly pledged to work towards the adoption of a code of conduct that explicitly requires the corporation to accept responsibility, through oversight and monitoring, for labor practices on both its directly-owned plantations and its independent, third-party suppliers. And Chiquita has already adopted such a code. Both Dole's public commitment and Chiquita's code of conduct, however, fail to require immediate respect for workers' rights on the companies' third-party supplier plantations. Therefore, on plantations primarily or occasionally supplying Dole and on plantations occasionally supplying Chiquita where the workers interviewed by Human Rights Watch labored, these public promises have had minimal impact on labor conditions. Similarly, the International Finance Corporation (IFC), a member of the World Bank Group that financed a project for Favorita, has published an "Interim Guidance" to its "Policy Statement on Harmful Child and Forced Labor" that encourages, but does not require, companies that receive IFC financing to review major supplier relationships and ask suppliers to "address" instances of harmful child labor.319 That policy came into force in March 1998. Although UBESA's director of human resources, responsible for the labor policies of Dole's Ecuadorian subsidiary, asserted that the company lacks jurisdiction over labor practices and conditions on its supplier plantations, Dole's web site states, "Dole does not knowingly purchase products from any commercial producers employing minors."320 In a letter to Human Rights Watch, Dole also stated: It is Dole's policy to comply with all applicable regulations and laws of any country in which it or its affiliates operate, including those relating to labor practices. . . . Dole audits its suppliers in a number of areas, including labor rights.321 The company, however, would "not comment on monitoring or inspections of a specific producer or plantation."322
establish and maintain appropriate procedures to evaluate and select suppliers/subcontractors (and, where appropriate, sub-suppliers) based on their ability to meet the requirements of this standard. . . . The company shall maintain appropriate records of suppliers'/subcontractors' (and, where appropriate, sub-suppliers') commitments to social accountability . . . and reasonable evidence that the requirements of this standard are being met by suppliers and subcontractors.331 The "Social Accountability Requirements" established by SA8000 ban companies from hiring children-defined as persons under fifteen, unless local minimum age law stipulates a higher age or the country meets the developing country exception under the ILO Minimum Age Convention, in which case children are defined as persons under fourteen. SA8000 also requires companies to establish procedures to "provide adequate support to enable [the child worker] to attend and remain in school until no longer a child as defined above."332 SA8000 also establishes that "the company shall not expose children or young workers to situations in or outside of the workplace that are hazardous, unsafe, or unhealthy."333 In addition to setting forth child labor protections, SA8000 requires: That the company shall provide a safe and healthy working environment; . . . That the company shall respect the right of all personnel to form and join trade unions of their choice; . . . That the company shall not allow behaviour, including gestures, language and physical contact, that is sexually coercive, threatening, abusive or exploitative; . . . That the company shall ensure that labour-only contracting arrangements . . . are not undertaken in an effort to avoid fulfilling its obligations to personnel under applicable laws pertaining to labour and social security legislation and regulations.334 Despite Dole's professed commitment to achieve compliance with SA8000 standards, as stated above, of the forty-five children with whom Human Rights Watch spoke, thirty-two stated that, at some time, they had worked on plantations primarily producing for Dole and an additional three on plantations producing sporadically for Dole. The average age at which these children began working on plantations supplying Dole was approximately eleven and a half, with two starting at age eight and two at age nine. Most of the children, as described, labored in conditions that violated their right to health, and the majority no longer attended school. Three of the young girls interviewed also described sexual harassment they had experienced in the packing plants of one of Dole's primary suppliers-the plantation group Las Fincas in Balao. Several adults also told Human Rights Watch about the "permanent temporary" contracting arrangements they had with Dole suppliers or subcontractors hired by those suppliers that impeded their enjoyment of labor rights. Although Human Rights Watch wrote to Dole to confirm the company's contractual relationships with these plantations, Dole asserted that information regarding these relationships is "proprietary business information, which Dole does not publicly disclose."335
Chiquita
and we will ask them to adhere to the standards of conduct we demonstrate in our owned operations. . . . [W]e will establish a program to work with our principal suppliers . . . to assess their current Social Responsibility performance and to establish plans to meet these standards within a reasonable period of time.339 Similarly, in its 2000 Corporate Responsibility Report, Chiquita asserts, "We are committed to achieving the same quality standards, including standards for social and environmental responsibility, on all bananas marketed by Chiquita, whether we produce them on our own farms or purchase them from independent growers." According to the report, Chiquita "[u]ltimately . . . will decide whether to initiate or renew contracts with growers based not only on quality and cost but also on their demonstrated achievement of these standards."340
Chiquita will include the terms of the agreement in the purchase contracts in such a way that they will have serious leverage on suppliers who do not respect the agreement. Such a contract can in an extreme case be relatively easily rescinded by Chiquita if it becomes clear that a particular supplier fails to respect the terms of the IUF/COLSIBA-Chiquita workers' rights agreement.343 If such a contract term had been included in contracts negotiated between Chiquita and the independent Ecuadorian suppliers from which it purchases occasionally, it could have helped to prevent the labor rights abuses described to Human Rights Watch by workers employed on those plantations.
Discrimination based on . . . sex . . . is not permitted; . . . Employees should be hired directly by the company. The hiring of temporary or seasonal employees through an intermediary for specific activities is only permitted in special cases, and these employees must be guaranteed the same rights and benefits as permanent employees; . . . Hiring minors is not permitted. The definition of minor is based on national law regarding agricultural activities, but may not be lower than 14; . . . Workers' right to organize and negotiate freely with their superiors must be guaranteed; . . . Work conditions must meet safety and health requirements.347 However, unlike SA8000 and Chiquita's code of conduct, the ECO-OK seal has no implications for a corporation's supply chain. Therefore, certification of all thirty-three of Reybancorp's banana plantations in Ecuador does not mean that Favorita's third-party suppliers, with whose administration Favorita has stated it "cannot interfere," are also ECO-OK-compliant. Furthermore, according to Jeffrey Zalla, although Chiquita stipulates in its contracts with Reybancorp "that the Chiquita fruit they provide must, as much as possible, be supplied from these certified farms," at times that is not possible.348 Zalla notes, "In 2000 and year-to-date June 2001, 56% and 63%, respectively, of the fruit supplied to Chiquita from [Reybancorp] . . . came from these certified farms."349 Ricardo Flores, general manager of Chiquita's Ecuadorian subsidiary, explained that when fruit supplied to Chiquita does not come from certified Reybancorp plantations, Chiquita sends "people in the fields to check these plantations . . . the level of quality and agricultural practices . . . [but] nothing with regard to the rest. That part about workers and safety and health, we do not check."350 Nonetheless, Zalla wrote to Human Rights Watch that "since 1999 Chiquita has . . . conducted its own periodic sample assessments of the social and environmental performance of the [Favorita] . . . farms and those of its suppliers in Ecuador" [emphasis added].351 Thirty-three children with whom Human Rights Watch spoke reported working on such supplier plantations. According to information provided to Human Rights Watch by Zalla, however, Chiquita was supplied by plantations that Human Rights Watch determined employed only four of those thirty-three children.352 As discussed above, Reybancorp's thirty-three directly owned plantations are ECO-OK certified. According to an ECO-OK manual produced by the Conservation and Development Corporation, a member of CAN administering the ECO-OK program in Ecuador, all the above-listed ECO-OK conditions must be fulfilled by Ecuadorian certified plantations.353 In practice, however, Reybancorp's plantations are ECO-OK certified despite their admitted use of subcontractors to employ approximately 87 percent of their workforce. Far from "special cases," subcontracted workers are used, according to Favorita's executive vice president, as part of everyday operations at Reybancorp, to obtain "flexibility" and for "reasonable administrative management."354 Nevertheless, these ECO-OK standards do not govern the independent plantations supplying Favorita on which workers interviewed by Human Rights Watch allegedly labored, as ECO-OK certification has no implications for Favorita's third-party supplier plantations. Favorita and the International Finance Corporation On May 29, 1998, the International Finance Corporation approved investment of U.S. $15 million to "expand production capacities . . . and enhance international competitiveness of Reybanpac."355 Project summary information indicates that environmental and occupational safety and health conditions on plantations of Reybancorp, Favorita's banana-producing subsidiary, were reviewed prior to project approval, including pesticide use, handling of hazardous materials, and "general worker health and safety."356 This project was formally appraised by the IFC according to its policies in place at the time, which did not include the "Policy Statement on Harmful Child and
307 United Nations. (January 31, 1999). The Global Compact. [Online]. Available: http://www.unglobalcompact.org/gc/unweb.nsf/content/thenine.htm [August 1, 2001]. The Global Compact is not a regulatory instrument nor a code of conduct. Instead, it identifies nine "universal principles" and asks companies to act on these principles in their own corporate domains, become public advocates for the principles, and participate in the activities of the Global Compact, including thematic dialogues. Participating companies are asked to post, at least once a year, on the Global Compact website concrete steps they have taken to act on any of the nine principles and the lessons they learned from doing so. United Nations General Secretary's Office. (January 17, 2001). The Global Compact: What it is. [Online]. Available: http://www.unglobalcompact.org/ gc/unweb.nsf/content/whatitis.htm [August 23, 2001]. 308 Social Accountability International (SAI). (No date). SA8000 Signatory Program. [Online]. Available: http://www.cepaa.org/membership.htm [January 30, 2002]. 309 With the exception of four adult workers laboring on Alamos-Rey Rancho, owned directly by Noboa, the workers interviewed by Human Rights Watch were not employed on plantations directly owned by any of these five corporations. 310 Human Rights Watch telephone interview, José Anchundia; Human Rights Watch interview, Francisco Chávez; Human Rights Watch interview, Ricardo Flores; Human Rights Watch interview, Marco García; Human Rights Watch interview, Vicente Wong. 311 Letter from Dr. Segundo Wong to Human Rights Watch, July 17, 2001. 312 Human Rights Watch interview, Vicente Wong. 313 Human Rights Watch interview, Francisco Chávez. 314 Human Rights Watch interview, Marco García. 315 Human Rights Watch interview, Ricardo Flores. 316 Ibid. 317 Human Rights Watch interview, Ivan Bermúdez, agricultural engineer, supervisor of environmental security, UBESA, S.A., Guayaquil, May 17, 2001. 318 Human Rights Watch telephone interview, José Anchundia. 319 IFC. (June 30, 2000). IFC-Financed Company First Recipient of Environmental Certification. [Online]. Available: http://wbln0018.worldbank.org/IFCExt/pressroom/ ifcpressroom.nsf [September 10, 2001]; IFC. (March 1998). Harmful Child Labor: Interim Guidance. [Online]. Available: http://www.ifc.org/enviro/enviro/childlabor/ child.htm [September 10, 2001]. 320 Dole Food Company, Inc. (No date). Labor Policies. [Online]. Available: http://www.dole.com/company/business/lbr.policies.ghtml [June 23, 2001]. 321 Letter from Freya Maneki to Human Rights Watch, October 8, 2001. 322 Ibid. 323 Human Rights Watch telephone interview, Matthew Shapiro, marketing director, SAI, New York, NY, July 16, 2001. 324 SAI. (No date). SA8000 Signatory Program. [Online]. 325 Human Rights Watch telephone interview, Matthew Shapiro, September 6, 2001. According to the SA8000 Signatory Program fee schedule, a member with an annual revenue of between $1 billion and $10 billion, such as Dole, must pay a $10,000 annual fee. SAI. (No date). Application for SA8000 Signatory Status. [Online]. Available: http://www.cepaa.org/membership.htm [January 30, 2002], p. 6. 326 SAI. (No date). SA8000 Signatory Program. [Online]. 327 Ibid.; SAI. (No date). Application for SA8000 Signatory Status. [Online]; Human Rights Watch telephone interview, Matthew Shapiro, July 16, 2001. 328 Human Rights Watch telephone interview, Matthew Shapiro, July 16, 2001. 329 SAI. (No date). Application for SA8000 Signatory Status. [Online]. . . . , p. 1. 330 SAI. (No date). SA8000 Signatory Program. [Online]; Human Rights Watch telephone interview, Matthew Shapiro, July 16, 2001. 331 SAI. (2001). Social Accountability 8000. [Online]. Available: http://www.cepaa.org/SA8000%20Standard.htm [January 30, 2001], pp. 7-8. Records of suppliers', subcontractors', and sub-suppliers' commitments to social accountability shall include their written commitments to: a) conform to all requirements of this standard . . . ;
Ibid., pp. 7-8, para. 9.7. 332 Ibid., p. 5, para. 1.2. 333 Ibid., p. 5, para. 1.4. SA8000 defines "young worker" as any worker over the age of a child and under eighteen. Ibid., p. 5. 334 Ibid., pp. 5-7. 335 Letter from Freya Maneki to Human Rights Watch, October 8, 2001. 336 Ibid. The award was presented to Dole in June 2000 after Dole's Spanish subsidiary, the largest fresh fruit and vegetable producer in Spain, became the first agricultural operation in the world to obtain SA8000 certification. SGS International Certification Services. (June 2000). Dole Food Company Honored With First-Ever Ethical Workplace Award. [Online]. Available: http://www.ics.sgsna.com/news/Dole.htm [October 10, 2001]. 337 Stanflico, a banana growing and packing division of Dole Philippines, Inc., has been certified SA8000 compliant. SAI. (August 2001). SA8000 Certified Facilities. [Online]. Available: http://www.cepaa.org/certification.html [September 6, 2001]. 338 Chiquita Brands International, Inc. (May 2000). Code of conduct . . . Living by our Core Values. [Online]. Available: http://www.chiquita.com [June 23, 2001]. The Code of Conduct excepts from the child labor provisions "family farm suppliers in the company's seasonal, non-banana business." Ibid., p. 8. 339 Ibid., p. 1. 340 Chiquita Brands International, Inc., 2000 Corporate Responsibility Report (September 2001), p. 72. 341 Press Releases. (June 14, 2001). IUF, COLSIBA and Chiquita Sign Historic Agreement on Trade Union Rights for Banana Workers. [Online]. Available: http://www.chiquita.com/announcements [August 27, 2001]; Human Rights Watch telephone interview, Justo Pastor Reyes, training and workplace environment coordinator, COLSIBA, Honduras, September 25, 2001; Electronic communication from Ron Oswald, general secretary, IUF, to Human Rights Watch, September 2, 2001. The agreement was reached among Chiquita, COLSIBA, and IUF. "IUF/COLSIBA and Chiquita Agreement on Freedom of Association, Minimum Labour Standards and Employment in Latin American Banana Operations," June 14, 2001. 342 "IUF/COLSIBA and Chiquita Agreement . . . ," June 14, 2001. 343 Electronic communication from Ron Oswald to Human Rights Watch, October 16, 2001. 344 Human Rights Watch interview, Ricardo Flores; Letter from Dr. Segundo Wong to Human Rights Watch, July 17, 2001. 345 Letter from Jeffrey Zalla to Human Rights Watch, August 28, 2001; see also Chiquita Brands International, Inc., 2000 Corporate Responsibility Report, . . . p. 73. In its 2000 Corporate Responsibility Report, Chiquita also states that Favorita provides "social benefits including primary schooling, health and dental care for workers and their children up to age 15, and wage adjustments every six months to keep up with inflation." 346 CAN, Complete Standards for Banana Certification, September 1999. 347 Ibid., paras. 3.1.1, 3.1.2, 3.1.4, 3.2.1, 3.3.2. 348 Letter from Jeffrey Zalla to Human Rights Watch, August 28, 2001. 349 Ibid. Zalla explained, however, "Even more fruit would come from these farms were it not for the fact that our ships must typically be loaded within 2 days while a normal farm harvest occurs over 5 days." 350 Human Rights Watch interview, Ricardo Flores. 351 Letter from Jeffrey Zalla to Human Rights Watch, August 28, 2001. 352 Ibid. 353 Ríos F., Ed., Programa de Certificación ECO-OK, Manual de Operación para Manejo Integral de Plantaciones de Banano [ECO-OK Certification Program, Manual of Operation for Integrated Management of Banana Plantations] (Quito: Corporación de Conservación y Desarrollo (CCD), 1999), pp. 20-22. 354 Human Rights Watch interview, Vicente Wong. When asked about the subcontracting restrictions in the ECO-OK certification criteria, a representative of CCD told Human Rights Watch that the criteria did not apply in Ecuador because Ecuadorian law permits the use of subcontractors. Human Rights Watch interview, José Valdivieso, CCD, Quito, May 8, 2001. 355 IFC. (No date). Summary of Project Information. [Online]. Available: http://wbln0018.worldbank.org/IFCExt/spiwebsite1.nsf [September 11, 2001]. 356 Ibid. 357 Ibid.; Electronic communication from Dr. Kerry Connor, senior social specialist, IFC Environmental and Social Development Department, to Human Rights Watch, October 23, 2001. 358 IFC. (March 1998). Harmful Child Labor: Interim Guidance. [Online]. Before obtaining approval, the project, nonetheless, was required to fulfill the terms of the IFC's "Exclusion List," which prohibits IFC funding for "[p]roduction or activities involving harmful or exploitative forms of forced labor/harmful child labor." But this provision is narrowly interpreted as applicable to the final goods or services rendered, rather than the conditions under which they were produced or provided. For example, a project involving the production of child pornography would be prohibited because the final product is harmful to children. However, funding for a textile factory using exploitative child labor would be acceptable since the final product is clothing. The Favorita project, therefore, satisfied the list's child labor provision, as bananas were its final product. Since adoption of the IFC's child labor policy, projects continue to undergo early review according to "Exclusion List" requirements and are later appraised according to child labor policy criteria. IFC. (December 1998). Environmental & Social Review Procedure Annex A: Exclusion List. [Online]. Available: http://www.ifc.org/enviro/enviro/ Review_Procedure_Main/Review_Procedure/Annex_A/ annex_a.htm [October 3, 2001]; IFC. (December 1998). Environmental & Social Review Procedure. [Online]. Available: http://www.ifc.org/enviro/EnvSoc/ESRP/esrp.htm [October 22, 2001]. 359 Electronic communication from Dr. Kerry Connor to Human Rights Watch. 360 Letter from Dr. Segundo Wong to Human Rights Watch, July 17, 2001. |