South African wine, fruit and cut-flower growers are employing a web application developed by Tesco to track labour standards to ensure they retain market access in the UK and don’t scare off the growing number of ethical consumers. Food safety traceability ‘from farm to fork’ is being made easier by a range of information technologies. The tracking of labour standards along the supply chain – the working conditions of those who grow, pick, manufacture and package farm products – is no different.
Food safety traceability ‘from farm to fork’ is being made easier by a range of information technologies. The tracking of labour standards along the supply chain – the working conditions of those who grow, pick, manufacture and package farm products – is no different.
Supermarkets are very concerned about revelations of poor labour standards somewhere along their supply chains. A damning exposé from an NGO or campaign group can have a detrimental effect on their corporate image and, ultimately, on their market position.
In spring 2005, the international development agency ActionAid and the South African NGO Women on Farms published a highly critical report about labour conditions on deciduous fruit farms in the Western Cape province that the groups alleged were part of the Tesco supply chain.
The report condemned Tesco and other retailers for their practice of squeezing local growers on price. This in turn forces growers to pay poverty wages to their workers and to cut their permanent workforce, replacing them with cheaper seasonal and contract workers, many of them women. In addition to sub-minimum-wage pay, the ActionAid report highlighted the use of spray pesticides while women were still working in orchards, food insecurity, and dismal housing conditions, with some casual workers living in shacks made out of cardboard.
The report made a big splash and pushed Tesco to improve their approach to labour standards tracking on South African fruit farms, and on vineyards in particular. The supermarket reacted by stepping up its requirement that all suppliers of Tesco-brand goods undergo regular external social audits, at their own expense, and to register the results using a web application developed by Tesco and other UK food retailers.
Sedex and Wieta’s social auditing programme
South African NGOs and trade unions insisted that if social auditing – the examination of compliance with accepted international labour-standard norms – were to be introduced down the supply chain in South Africa, then it must be performed by the Wine and Agricultural Ethical Trade Association (Wieta), at Tesco’s expense and not the suppliers’. So Tesco approached Wieta to see if we could satisfy their auditing standards. Tesco has been a member of the UK-based Ethical Trade Initiative (ETI) from its inception in 1998. Wieta meanwhile is a South African nonprofit voluntary multi-stakeholder social auditing body that promotes the ETI Baseline Code on minimum labour conditions in the wine sector and the fruit and cut-flower industries. Wieta represents key sector stakeholders, including NGOs, trade unions, growers, processors, packers, retailers and government.
In concert with other UK supermarkets in 2004, Tesco developed a web-based data management tool, the Social and Economic Development Exchange (Sedex), with which retailers can track ethical practices along their supply chains. In late 2005, the Sedex organisation – the non-profit body of the same name set up to manage and promote the software – approved Wieta as a social auditing body to be incorporated into the system.
Wine-grape growers that are members of Wieta pay the Sedex organisation a fee to register. Tesco then requires the growers perform self-assessments of their own compliance with the ETI code. Wieta measures producer and grower compliance with its own code, which is derived from the ETI code but adapted by local stakeholders to the South African context. The growers upload this assessment to the online Sedex system under their own password and username.
Wieta then visits and audits each grower. The audit begins with a joint management-employee briefing. We always select the members of our audit team so that they mirror the racial, gender and language profile of the labour force, and are able to interview workers in their own language – Afrikaans, isiXhosa or Sesotho.
We interview managers individually and inspect the workers’ contracts and other related documents. We also make a visual inspection and conduct walkaround discussions that cover health and safety issues. At the end of the day, we hold a second meeting with management and employees where we give our preliminary findings of compliance with the ETI code. We facilitate a discussion between the two sides on whether they accept what we say is accurate, and whether we all can agree on the main areas of noncompliance.
We detail the non-compliances in a written report that is submitted to both the farm management and the workers. All parties must consider the report jointly. The management must then draft an improvement plan to address these issues. Subsequently, if Wieta agrees that the improvement plan will address the non-compliances, we ask for verification of the actions taken. This verification can be in the form of photographs, documents, letters or any other documentary proof.
Next, the grower records on Sedex that the audit has been carried out. After this, we register the results of the audit with the Sedex site and the growers upload their corresponding improvement plan, and then over a variable period of time address the non-compliances.
The Sedex system automatically notifies Wieta that the farm has uploaded its improvement plan and asks that we verify the actions specified in the plan have taken place.
Once we have verification that all the non-compliances have been addressed, the entire document trail is also taken to the Wieta multi-stakeholder committee, which decides whether to accredit the farm. The accreditation assessment committee never knows which company it is dealing with, as the audit documentation it considers is anonymous. When the committee is satisfied that all non-compliances have been addressed, Wieta offers the farm accreditation for three years. The farm management uploads to the Sedex site documents (as PDF files) confirming that the changes have been made. Wieta offers assistance in this process, particularly for growers who have little computer or internet experience, ensuring that the audit documentation is uploaded as it should be. The growers then have the entire social audit trail and verification in document form, along with the Wieta accreditation, available on the Sedex site. Now Tesco or any other international retailer or buyer nominated by the growers can access this document trail.
The data collected on the Sedex site is vitally important to Tesco and other retailers. They can inform their customers that within their global supply chain, compliance with, for example, the occupational health and safety requirements of the ETI code is, say, 48%.
Wieta does have some concerns about the system, however. Uploading to Sedex all the audit trail data at certain sites has been difficult due to the limited IT infrastructure. Wieta has an interim agreement with another UK retailer, Marks and Spencer, and Sedex under which they will accept offline data capture from some sites.
Nevertheless, all new Sedex and Wieta members must capture their audit data online. Sedex is also discussing developing an offline data management system that will be suitable for countries where the IT infrastructure is not so advanced. Tesco recognizes Wieta as a multi-stakeholder auditing body within Sedex, but it also accepts audits performed by commercial auditing firms. The supermarket has criteria with which they assess whether the auditor conforms to what they require, but we feel these criteria are not completely transparent.
Although Tesco’s intention with Sedex was to improve the standard of social auditing, it potentially can work in the opposite direction. The more rigorous the auditing body, the greater will be the incidence of noncompliance in the early part of the document trail. With Wieta members, for example, we have often been to estates where there are as many as 35 areas of non-compliance at the audit stage. The entire process of complying with standards can take up to three years between the time a farm joins
Wieta as a member and comes out the other side with accreditation. In those three years, a lot of things are done at the farm to change practices and to put in new management systems, sometimes requiring considerable capital expenditure. Growers know that the Wieta audit process is extremely rigorous and that it will have a considerable impact on their operations. The growers can themselves choose who to ask to do the social audit from a range of auditing agencies via a drop-down menu on the Sedex website.
Thus rather than Wieta, they may well choose a commercial auditor who will do a ‘quick and dirty’ assessment that does not take note of many non-compliances, so that they look good on the Sedex site to current and potential buyers. Potentially, then, Sedex could end up promoting the growers who actually have no intention of taking the time to correct non-compliances and want to appear on Sedex as quickly as possible in order to sell their produce.
The task ahead of us is substantial. Working conditions remain poor on too many South African farms. More than a million farm workers have been evicted from farm housing in South Africa since 1994, according to national estimates. Furthermore, upwards of 30% of farm workers are HIV-positive, according to AgriSA, the largest agricultural employers’ association in the country.
Since its launch, Wieta has audited 65 vineyards and others are signing on all the time, but there are as many as 4500 vineyards in South Africa and many more deciduous and citrus fruit sites. This is just the tip of the iceberg. Ethical consumerism is forcing growers to improve their labour standards and to track these improvements. Wieta is here to stay and will grow rapidly as this form of consumerism grows in countries that buy South African agricultural products.