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In 2015, SASK and Kesko initiated a study to examine working conditions in the production chain of grapes. This was a unique project, as no supply chain of an agricultural product had before been assessed from the viewpoints addressed in the study.
“Our goal is to know the supply chains of all of our products and to ensure they are sustainable. This is challenging, as our selections comprise tens of thousands of products purchased from around the world. Moreover, food products, for example, often contain a multitude of different ingredients. Grapes were chosen as the subject of the study as they are one of the biggest sellers in K Group’s fruit and vegetable departments. Grapes are also purchased from different countries depending on season. We focused on three countries from which we purchase grapes: India, Brazil and South Africa. All three have been classified as high-risk countries, meaning they are countries in which there is a high risk of violations of human rights,” says Matti Kalervo, Kesko’s Vice President of Corporate Responsibility.
Kesko imports grapes into Finland from different countries depending on season: Brazil in November-December, South Africa in December-March, and India in April-May.
The extensive study first gathered general information on legislation in the target countries, and then more detailed information on the workers and their working conditions. Data was collected in particular on work contracts, wage and compensation, working hours, the right to organise, child labour, forced or compulsory labour, and discrimination. The study examined the supply chain of grapes from harvesting to the loading of the grapes into cargo vessels in export ports in the origin countries.
The study highlighted the vulnerability of workers in agriculture: international human rights are not known or implemented, there are inadequacies in monitoring and auditing, and workers are not able to organise. The project also revealed the challenges of collecting comparable data from different countries.
“The issues identified in this study have come up in previous studies as well. That does not, however, mean we should just accept them. It is our experience that many problems can be solved if workers are given a chance to genuinely guard their interests through unions, which is why we recommend that companies ordering from high-risk countries pay special attention to the freedom of assocation,” says Janne Ronkainen, Executive Director of SASK.
The project shed light on the complexities linked to the monitoring of supply chains, and acted as a reminder of how a company with tens of thousands of products in its selection needs to rely on general risk management processes and mechanisms, such as BSCI audits.
The study confirmed that in high-risk countries special attention should be paid on issues such as forced or compulsory labour, child labour, the position of migrant workers, discrimination, living wage, and the health and safety of the workers.
As a new finding, the project revealed that in addition to working conditions on farms, attention should also be paid to the working conditions of people engaged in logistics and port services.
“Up until now, we have focused on working conditions on farms and in production facilities, while our supply chain monitoring has not extended to working conditions during transport. It seems that in Brazil, for example, there are problems related to the poor working conditions of the drivers and to roadside prostitution. We will be taking these findings to BSCI and will propose to them that audits in high-risk countries are extended to cover logistics as well,” says Matti Kalervo.
As K Group operates in many countries and purchases goods from around the world, it must comply with various international agreements and recommendations in its operations. In 2014-2016, Kesko completed a human rights impact assessment in compliance with the United Nations Guiding Principles on Business and Human Rights, and published a human rights commitment in September 2016.
The assessment was based on an extensive survey, which involved listening to the views of customers, personnel and factory workers in high-risk countries on human rights and the implementation of human rights in K Group's operations. SASK interviewed workers at Kesko’s supplier factories in high-risk countries to hear their views on the implementation of human rights in the purchasing chain.
The human rights assessment was not a one-off project for K Group, but a continuous process. The assessment will be reviewed every three years, with the next review taking place in 2019.
The study on the supply chain of grapes carried out by Kesko and SASK was a continuation to K Group’s human rights assessment and the group’s work to ensure sustainability in its supply chains. The UN Guiding Principles on Business and Human Rights were used as the reference standards in the project.
“Kesko is undisputedly one of the leading companies in Finland in implementing the UN Guiding Principles on Business and Human Rights, despite the fact that they have an extremely large network of suppliers extending to various high-risk countries. Kesko’s human rights commitment and the level it sets for securing the human rights of workers in the value chain can act as an example for other Finnish commercial operators,” says Janne Ronkainen.
All member states of the United Nations have an obligation to follow the UN Guiding Principles on Business and Human Rights published in 2011. For companies, this involves respect for human rights; in other words, companies must avoid infringing on human rights, and address negative human rights impacts of operations with which they are involved. This is what Kesko strives to do.
“We have a duty to bear responsibility for human rights in the purchase chains of our products, especially in high-risk countries. We will continue our work to improve the transparency of our supply chain and the working conditions of the people involved. No company alone can change the world. For working conditions to improve permanently, all actors – from governments to non-governmental organisations and the entire production chain – must work together,” says Matti Kalervo.
The grape study was carried out by Merja Pentikäinen, Doctor of Laws (LL. D.), corporate human rights specialist, Opinio Juris.
Collaboration with SASK
The Trade Union Solidarity Centre of Finland SASK is an expert organisation established by the Finnish labour movement, whose aim is to improve the conditions of workers in developing countries by supporting local labour movements and boosting their competences. Kesko has done concrete work to promote the rights of workers in developing countries in collaboration with SASK since 2006. The work began with a training project with Kesko’s suppliers in Vietnam.