21.1.2013 CHEAP HAS A HIGH PRICE Finnwatch , Andy Hall

1. 21.1.2013 CHEAP HAS A HIGH PRICE Finnwatch, Andy Hall

2. Finnwatch Finnwatch is an independent Finnish non-profit research NGO Focus on global corporate responsibility issues Promotes socially, environmentally and economically responsible business practises Organizations behind Finnwatch include Finnish trade unions as well as environmental and development NGOs.

3. Background for the research Consumers in Europe arebuyingmoreprivatelabel products • In times of economicstressconsumersturn to lessexpensiveitems. Supermarketsconstantlysearchingcheaperprices • Retailershave set up international jointprocurementcompanies. • Increasedbuyerpowerweakens the position of producers, especially in developingcountries. Finnishretailersintegrated into the global food market • Manyprivatelabel products originatefromsocalledriskcountries.

4. How research was conducted? Researchcoordinator in Thailand: Andy Hall • Mr Hall wasresponsible for fieldresearch in Thailand. Workersfromthreefactorieswereinterviewed • Samut Sakhon: Thai Union Manufacturing, Unicord (tuna) • PrachuapKhiri Khan: Natural Fruit (pineapple) • In all 32 workerswereinterviewed Companieshad a chance to commentallfindings • Natural Fruitdidnotwant to meet the researchteam

5. Key findings: TUM and Unicord • Low wages • The factories paid 300–305 baht/day (legal minimum wage is 300 baht). • According to the workers they had to work overtime everyday in order to make ends meet. • Unlike Unicord, TUM paid significant annual bonuses. • Problems with social security & health insurance • Many interviewed workers had not received their health incurance card. • Workers complained that they had not had the possibility to choose the hospital them selves. • Hospital chosen by employer overcrowded and treatment not good

6. Key findings: TUM and Unicord Child labour Many of the intervieweestoldthatboth TUM and Unicord 2 employed 14-17-year-old migrants. Underageworkershadfalsepassportsclaimingthattheywereover 18 years of age. Employingpersonsunder 15 is illegal in Thailand, and 15-17-year-olds arenotallowed to do heavy workfulltime. No tradeunions in the factories Almostnone of the interviewedworkersunderstood the concept of a tradeunion. According to one TUM employee, a workerplanning to organizewouldbefiredimmediately.

7. TUM and Unicord: Links to other companies TUM deliverstuna products around the world, including the United States, EU, Japan, South America, Australia and New-Zealand. In Finland, nearlyallretailchainscarry TUM products. TUM'sowntunabrandsinclude John West and Chicken of The Sea. Unicordexportsfish products mainly to the US market, butitalsohassignificantexports to Europe, Canada, Middle-East, South Africa and Japan. In Finland, nearlyallretailchainscarryUnicord products.

8. Natural Fruit Co Ltd. Produces pineapple concentrate that is used in pineapple juice sold in Finland.

9. Key findings: Natural Fruit • Undocumented labourers • There were a significant number of undocumented labourers and an estimated 20–30 undocumented child labourers. • Poor wages • All of the workers interviewed said that their hourly, daily or monthly wages or overtime compensations were lower than those defined in Thai labour laws. No holiday benefits or bonuses were provided to workers as required by the legislation. • Confiscation of passports and work permits • All Myanmar migrant workers interviewed reported that Natural Fruit unlawfully confiscated their original passports, even when they had paid back all debts relating to their employment.

10. Key findings: Natural Fruit Random deductions from salary There were a significant number of random and unexplained deductions from worker salaries for electricity and water, litter, transport (that was not used), uniform, registration and NV, toilet breaks, sleepiness, ID cards, bank cards and other miscellaneous items. In addition, the workers said that Natural Fruit deducted more than what was legally allowed for their registration costs unless they informed the company of excessive social security deductions.

11. Key findings: Natural Fruit Forced overtime work All workers said that they were in practice forced to work overtime. Some workers also reported overtime work in excess of the legally allowed 36 hours per week. The workers said they were fined for falling asleep during late shifts and hit around the head or arms if they were sleepy. Most workers reported workers, particularly younger ones, sometimes fainting or crying as a result of excessive work. When work was not available or a full day’s work was not provided, the workers were not paid at all. Thai law generally requires a 70 percent payment of daily wages when an employer does not provide work.

12. Key findings: Natural Fruit Other problems There were not enough toilets for workers, particularly men, at the factory. If workers had to wait too long for the toilet or spend too long in the toilet, they were illegally deducted 30 minutes worth of overtime compensation. The workers reported that Natural Fruit did not provide work accident compensation as required by Thai law.

13. Natural fruit: Links to other companies Refresco and Prodalim Israeli based company called Prodalim buys pineapple concentrate from Natural Fruit. Prodalim sells pineapple concentrate to Refresco. Refresco is a leading global player in its field with notable customers in Europe. According to some estimates, Refresco controls 20 percent of the European private label soft drink and fruit juice market. Presently it has 26 production facilities in nine European countries. According to sources in 2011 Refresco's clients included Lidl, Aldi, Carrefour, Dia, Morrisons, Edeka, Rewe, Superunie, Ahold and Système U. It also had the exclusive right to produce PepsiCo, Coca-Cola and Schweppes in a number of European countries.