NZ's apple and pear industry goes pip-squeaky clean on labour exploitation
Fear of being blacklisted by UK and European supermarkets is behind a primary industries exporter drive to stamp out labour abuses in vineyards and orchards.
Investigations by the Labour Inspectorate in the Ministry of Business, Innovation and Employment (MBIE) has revealed exploitation of migrant workers, who are sometimes paid less than minimum wage.
But supermarkets in Britain and Germany are saying enough is enough, and driven by domestic law such as the British Modern Slavery Act and concerned customers, they are ditching suppliers which cannot prove they are exploitation-free.
As a result New Zealand banks now view breaches of labour law by borrowers as a lending risk as businesses pinged by the Labour Inspectorate risk their customers vanishing overnight.
There's been a rash of high-profile abuses of contract-labour revealed in recent months with six scandals breaking in May, June and July alone, including in the Kiwifruit, asparagus and vineyard sectors.
Gary Jones from Pipfruit New Zealand, which oversees the Apple and Pear industry, said exporters now have no choice but to meet the Global GAP standards created by UK and EU supermarkets to assure shoppers their groceries weren't tainted by animal cruelty, environmental damage and abuse of workers.
NO BAD APPLES
The Pipfruit industry, which recorded $720 million in exports last year, has been quickest off the mark, in part because it is dominated by a small number of large businesses sophisticated enough to recognise the threat to their brands and businesses.
All New Zealand's pipfruit exporters are Global GAP accredited, and embraced the GRASP (Global Risk Assessment on Social Practices) commitments on worker health, safety and welfare, which includes labour standards, and which Jones has been personally involved in developing.
Naming no names, Jones said a German supermarket recently cancelled a contract with a Kiwi grower because it hadn't completed one part of its Global GAP documentation.
It was a small infringement of the regime, but the supermarket simply switched to another grower who could prove their compliance.
That sends a very clear message.
"In the last year the big retailers in Germany have made it compulsory for all suppliers to be Grasp compliant," he says.
Plant-based industries are especially susceptible to labour abuses, especially among migrant workers.
Crop-growers are seasonal employers. Orchards and vineyards need lots of workers in peak periods of pruning and picking, but far, far fewer warm bodies in between.
That led to the rise of labour contract companies, who recruit workers to supply in gangs to the growers.
Growers are a step removed from the hiring, and may have no idea whether workers' rights are being respected, or whether they can legally work at all.
Under New Zealand law, it is the contract companies, not the grower who face fines and "improvement notices", if labour law breaches are uncovered.
But, says Jones, under private standards, retailers don't prosecute, they just say 'We won't do business with you'.
"Under New Zealand law there's plausible deniability, but under Global GAP there isn't. If you plead ignorance, it doesn't matter, you will still lose accreditation."
The onus is now on growers to ensure they aren't turning a blind eye to worker exploitation.
"There's been a sea-change in the last 12 months," Jones says.
Industries are responding to the risk.
New Zealand Winegrowers, which has around 1500 members, last year created a labour strategy for the first time last year.
Two of the key points are telling: "demonstrating the industry's commitment to employing workers who already have a right to work in New Zealand", and "managing the growing international attention by retailers, consumers and government agencies on the conditions of work".
Chief executive Jeffrey Clarke says it's been educating wine-growers, and building their capabilities.
Its newly issued Working for you guide guide doesn't beat around the bush: "Some of the recent media coverage on labour breaches may feel unfair because the offending employers were labour contractors, not growers or wineries. But consumers don't care whether workers are 'employees' or 'contract workers', and neither should you."
"It is up to all winegrowers to pay attention to conditions of all the workers on our properties, and ensure that each of them is getting a fair deal," it continues.
"In the digital age, how well we walk the talk in caring for each of our workers, and treating them fairly and respectfully, is just one click away from global attention."
The members-only area of its website has a black list of labour contract companies which have run afoul of the Labour Inspectorate.
New Zealand Kiwifruit Growers Incorporated (NZKGI) has just moved to require third-party audits of all labour contract companies used be members, says chief executive Nikki Johnson.
It needed to. Just last month the Labour Inspectorate issued a media release saying half of the 62 Bay of Plenty Kiwifruit labour hire companies were breaching workers' rights when it did inspections last year.
The release came more than eight months after the inspections, giving the industry a long time to prepare for the adverse publicity.
But still Johnson says: "We are pretty unhappy in the scenario that has played out in the media in the last couple of weeks."
It was embarrassing, and did not reflect the majority of the industry, she says.
Kiwifruit are exported by Zespri, which has Global GAP accreditation, covering 937 producers whose fruit it exported under the Zespri brand.
BAD NEWS SPREADS
When the Labour Inspectorate prepares to issue a press release, industries tremble.
Jones gave the example in early 2016 when labour inspectors did some "targeted" inspections of nine packing houses.
"Seven were found to be non-compliant," he said.
Improvement notices were issued.
The press release was picked up in the papers here.
Next morning in the Northern Hemisphere the stories were read, and phones here started ringing in the middle of the night.
European and British supermarkets wanted to know their apples were not tainted.
And, Jones said: "We had a major New Zealand bank which wanted to know who was involved."
The implication was clear: Breach labour laws, and your business may no longer be bankable.
Jones notes the MBIE press releases did not include the names of growers, vineyards, or export brands, only the contract companies.
Primary industries wouldn't function without migrant labour, Johnson says.
"During our peak season, we don't have enough, even if every single person on unemployment benefit were available, we would still struggle," she says.
Jones agrees we should not demonise temporary migrant labour.
Pacific Islands rely on it, with massive temporary migrations of workers, who take money back with them to boost their home economies.
The number of temporary work visas issued every year has now risen to over 190,000.
"We are exploring how to connect the consumer with people from developing countries in real need," Jones says.
Those stories could be a tonic for the increasingly negative portrayal of temporary migrant workers.
Just three months of Labour Inspectorate media releases indicates breaches of labour law for low-paid migrant workers are not isolated cases.
* July 2017: Labour Inspectorate reveals half of Kiwifruit contractors breached labour laws.
* June 2017: Labour hire company in Asparagus industry BBS Horticulture Limited caught twice failing to keep employment records, and employing workers in breach of their visas.
* June 2017: Vineyard labour contractor KRSVP Limited fined for labour law breaches. "It seems to suggest some vineyard owners aren't seeking any assurance from their contractors," the Labour Inspectorate's Kevin Finnegan said.
* June 2017: A West Coast dairy farm owned by White Developments Limited is fined over failing to pay minimum wages to migrant workers.
* May 2017: Vineyard labour contractor Precise Contracting fined for not providing workers with minimum wage, and altering employee timesheets.
* May 2017: Auckland courier company DK Transport found to have breached minimum employment standards 58 times for migrant workers.