Wine Industry Ethical Trade Association on its members application of South African Labour Laws

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Labour

20 February 2012
Chairperson: Mr M Nchabeleng (ANC)
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Meeting Summary

The Wine Industry Ethical Trade Association (WIETA) presented the work the association had done to ensure its members applied South African Labour Laws. WIETA’s main objectives were to formulate and adopt a code of good practice and encourage producers and growers to adopt and adhere to that code. The WIETA Code was based on the Ethical Trading Initiative (ETI) Base Code, the United Nations and the International Labour Organisation (ILO) conventions. It enforced labour and health and safety standards, such as no child labour and safety training.

In terms of engagement with other sectors, WIETA engaged with the Fresh Produce Exporters’ Forum (FPEF) two years ago in a series of committee meetings. They did not reach consensus with the fruit industry, however, and created separate programs.

The WIETA process for internal capacity building and audit was comprised of informal and self-assessments, review of internal management systems, assistance with internal work procedures and policy development, and audits. The aim of the audits was to develop a respectful understanding of the respective situations of employees and workers, to build a trusting relationship between the parties, and to create a collaborative partnership in addressing the issues and non-compliances at the vineyard or in the cellar.

Poor practices were still present, however, but better practices were seen as well. Typical labour non-compliances were also detailed.

WIETA introduced a seal still in development that certified that health and safety practices were in place. In addition to the seal, the industry planning of this year encompassed a partnership with Cellars SA, which involved 68 cellars and over 2000 growers.

During the discussion, members expressed concern that the presentation did not match what they saw on the 21 farms they visited. It also was asked what obliged farms to join WIETA, how WIETA was financed, and how closely WIETA worked with the Department of Labour.

A member asked what issues gave rise to not reaching consensus in WIETA’s meeting with the fruit industry.

Several members inquired why the required compliance rate was 60%. It was asked if WIETA would allow a member to buy grapes from a farm that did not comply with their terms.

A member asked what percentage of the industry were members of WIETA and how WIETA planned to increase membership. It was proposed that the Committee visit farms that were WIETA members in order to gain better insight of the industry.

Meeting report

The Chairperson commented that it was unfortunate that the Committee did not receive a copy of the presentation prior to the meeting. The Committee’s lack of preparedness for the presentation posed some challenges, and a follow-up in the form of written questions or an additional meeting might be required.

WIETA Report to the Portfolio Committee on Labour
Ms Linda Lipparoni, the Chief Executive Office of the Wine Industry Ethical Trade Association (WIETA), thanked the Committee for allowing her to present.

She explained the structure of the WIETA board. It was a multi-stakeholder forum established in 2002 that provided an opportunity for a social dialogue between producers, growers, exporters, unions, farm workers, farm worker organisations and government. It identified joint critical areas for improvements in worker conditions. The implementation of solutions was based on consensus.

WIETA’s objectives were to improve working conditions of employees in the wine industry and supply chain through:
- the formulation and adoption of a code of good practice
- encouraging producers and growers to adopt and adhere to the code
- creating awareness of the code within the industry
- conducting social audits to monitor compliance with the code
- support members with projects and programmes to improve ethical performance

The WIETA Code was based on the Ethical Trading Initiative (ETI) Base Code, the United Nations and the International Labour Organisation (ILO) conventions. Its standard was grounded in legislation, regulations, protocols and recognised best practice guidelines, with ten principles and fully benchmarked with 111 compliance criteria. In terms of labour standards, the WIETA Code enforced the following:
- No child labour – only over the age of 15
- No forced labour
- Freedom of association and right to bargain collectively
- No unfair discrimination against workers
- Fair disciplinary measures
- No excessive working hours
- A living wage
- Regular employment

The Code’s health and safety standards included:
- A Health and Safety System in place
- OHS Training
- Disease, Injury, and Emergency Management
- Risk Identification and Assessment
- Risk control
- Emergency procedures
- Conditions of buildings and equipment
- Chemical handling and storage
- Social support facilities

Ms Lipparoni reported that there were over 200 members of WIETA. The funding for WIETA came from the operational costs funded by Wines of South Africa, project funding from donors, and capacity building funded by members through audit fees.

In terms of international engagements, WIETA engaged with United Kingdom (UK) retailers, all of which had ethical trade codes that they adhered to. WIETA also engaged with Europe, particularly in Scandinavia, Germany and Belgium. WIETA was involved with non-governmental organisations (NGOs) as well, such as the Fair Food, ETI and the Business Social Compliance Initiative (BSCI).

In terms of engagement with other sectors, WIETA engaged with the Fresh Produce Exporters’ Forum (FPEF) two years ago in a series of committee meetings. They did not reach consensus with the fruit industry, however, and created separate programs. As for engagement with the wine industry, there was a task team set up last year to make recommendations on fast-tracking WIETA in the wine industry and down the supply chain.

The WIETA awareness process started with awareness raising, usually by partnering with a wine champion, a winery, a seller, a co-op, or a brand which had developed their own ethical standards and in-house codes awareness, and mapping out a supply chain and building relationships down that chain. The biggest challenge was how to access resources to actually implement the compliance requirements.

The WIETA process for internal capacity building and audit was comprised of informal and self-assessments, review of internal management systems, assistance with internal work procedures and policy development, and audits. The important thing was to develop trust between workers and employers. In regards to audits, the audits required one-day audits of health and safety systems and labour systems. Following that, it required members to submit an improvement plan within four-month period, which then launched them into an improvement-planning phase which needed to be a collaborative phase between management, workers, and employers. All corrective actions needed to be submitted, and then a multi-stakeholder review took place. If the plan was approved, then the member was certified and issued a seal. Currently, the seal was reviewed on a three yearly basis, but this was in the process of changing.

One of WIETA’s programs was an initiative run with ETI and Comic Relief which brought managers, supervisors, and workers together for three-day sessions to promote equal treatment by looking at diversity issues. There was also a focus on sexual harassment and discrimination in the workplace by interactively developing policies and procedures and ensuring that supervisors understood their role.

Other projects that WIETA had collaborated on was the ‘TESCO Ruggie’ project to develop an alternative dispute resolution by creating best practice models on disciplinary policies procedures to get people to self-communicate with one another around grievances.

WIETA audits were not a ‘paper or tick box exercises’; their aim was to develop a respectful understanding of the respective situations of employees and workers, to build a trusting relationship between the parties, and to create a collaborative partnership in addressing the issues and non-compliances at the vineyard or in the cellar.

Ms Lipparoni reported that WIETA found fear, negativity, competition, farms that have already put standards and measures in place, demotivation, and great expectations from workers down the supply chain.

The reaction of the audits included:
- Workers actually felt empowered and able to train and raise awareness to others
- Workers were given the opportunity to express their opinions on areas of work that need improvements
- Workers who have previously not had a voice in the workplace felt able to participate without fear of intimidation
- Worker organisation was encouraged and many women attained positions of representative committees
- Farm management had never entered workers’ homes, and when they did, they found the conditions unacceptable and started organising improvements
- Workers in neighbouring farms wanted to be ‘WIETA’ed’

Though only 95 audits were completed out of 4000 farms and wineries, there had been much progress.

In terms of audit outcomes, poor practices still persisted, such as:
- Documentation for reporting injuries
- Material Safety Data Sheets for all pesticides and chemicals used
- The chemical spray employees’ overalls must be washed at work and not at the residence of the employees
- Employees and management needed to be trained how to utilise the fire equipment
- An asbestos inventory needed to be implemented
- Physical medical examinations
- Safe Working Procedures
- Signage was required
- Names of First Aiders must be displayed
- Unauthorised entry signage at the workshop
- Exit sign in the store needed to be erected
- No Smoking signage at the diesel pump
- Toilets in vineyard and orchards

Typical labour non-compliances included:
- No documentation in place or on file for seasonal temporary workers when using contractors,
- Seasonal workers were not properly informed and communicated with
- Abusive behaviour by supervisors
- Not all policies in place, especially concerning discrimination, maternity, and grievance policies and procedures
- Overtime during peak season
- Consulting widely on Employment Equity Plans
- Supplier awareness on ethical issues lacking
- Housing, especially regarding accommodation and housing policies, upgrading requirements, and no formal monitoring of condition

Better practices had also emerged from audits. In terms of benefits, improvements included:
- Free Weekly Food hampers
- Free doctor’s visits for the family
- Regular clinic visits with full transportation
- Subsidised Provident fund up to 75%
- Payment in full of funeral policy and disability fund
- Full Unemployment Insurance Fund (UIF) paid
- Various forms of bonuses given
- Offsite allowances
- A vehicle available to attend private outings
- Children’s school fees, school clothes and books paid
- Crèche facilities with trained Early Childhood Development (EDC) staff

Working hours also improved, with a 40-hour work week with Friday as a half-day with full pay. Housing improved, including free modern upgraded housing, housing maintained at the cost of the owner, free or subsidised electricity up to R200 per month, and land and housing ownership schemes.

With regards to better practice in occupation health and safety, improvements included:
- Full PPE given annually at no costs
- Caps, t-shirts, boots, and raincoats
- Bonuses for promoting health and safety
- Tractors being used for chemical spraying equipped with closed cap units
- Comprehensive risk assessments
- Regular safety talks and refresher training
- Regular Occupational Health Services (OHS) induction

Ms Lipparoni explained WIETA’s introduction of a seal that certified that health and safety practices were in place. The seal was still in development and expected to be in place in three to four months. There were three levels of proposed accreditation changes. The first required the completion of WIETA assessment forms and the attendance of WIETA Compliance Workshops. The second level involved commitment to an inspection on site, possible recognition of prior audit to be discussed, audit undertaken with 60% compliance success rate, and a management plan in place within six months without accreditation. The third level was comprised of a full WIETA audit and the member’s commitment to supplier requirement for the use of the seal.

The industry planning of this year encompassed a partnership with Cellars SA, which involved 68 cellars and over 2000 growers. Major brands now contractually required suppliers to get certified over next two years, such as KWV, DGB, Robertson Winery, Accolade Wines, Spier Wines, and Origin Wines.

She stated that WIETA had made an impact, but biggest challenge obtaining the right amount of resources to achieve their goals.

Discussion
The Chairperson thanked Ms Lipparoni for the presentation and reiterated that it was a challenge to address the presentation without preparation. He added that more should have been invited, such as the Committees on Agriculture and Trade and Industry, the provincial office, and labour movements.

He said that the Committee and labour unions were invited to many meetings internationally, and matters of labour were taken ‘very seriously’ in those settings. If the Committee ‘spoke with forked tongues in those meetings’, problems would be created for the wine industry and the country.

Mr Michael Moholo, Ms Linda Lipparoni’s colleague at WIETA, introduced himself and agreed with the Chairperson that other Committees and groups should have been invited to the presentation.

A member asked for clarity on the point regarding child labour standards, where the presentation stated ‘over the age of 15’. He said it sounded like children over 15 should work, and he thought the legal age to work was 16.

He inquired as to how WIETA enforced compliance. He also commented on Ms Lipparoni’s reference to ‘a living wage’ and asked how that was determined and if it could go below minimum wage. He wanted to know what ‘PPE’ stood for.

Mr A Williams (ANC) asked what obliged farms to join WIETA.

He observed that the Deputy Chairperson of WIETA was Mr Donald Mouton, and he wondered if that was the same person who owned a farm in Citrusdal that the Committee found ‘a bit dodgy’.

He observed that though there was ‘freedom of association’ on the farms, in reality, it was not practiced on the farms they visited.

He asked how WIETA checked on the small suppliers, since compliance on small farms was a problem. These smaller farms supplied larger farms that were WIETA members.

He wanted to know how closely WIETA worked with the Department of Labour.

He said that some of the ‘poor practices’ listed in the presentation were illegal, and he asked if WIETA reported these practices or ‘covered them up’.

In terms of ‘better practices’, he indicated that these could be misleading and empirical and statistical evidence was needed.

He inquired if WIETA was going to visit the same farms that Committee visited.

Mr D Kganare (COPE) asked how WIETA was financed. In many cases, those who financed projects determined the objectives and outcome. He noted that WIETA seemed more uncertain about the workers on the farms than anything else.

He asked what the issues gave rise to not reaching consensus in WIETA’s meeting with FPEF.

He also wanted to know why their acceptable rate of compliance was only 60%.

Mr A Van der Westhuizen (DA) asked what percentage of the industry were members of WIETA and how WIETA increased membership. He also asked if WIETA looked at the safe transport of workers in their inspections.

He was concerned about the practices that protected the children of the workers, and wanted to know if they already included this in their inspections.

The Chairperson asked if WIETA would allow a member to buy grapes from a farm that did not comply with their terms.

In terms of standards, he asked if they went to farms for inspections, how they completed inspections, and what their relationship with labour inspectors was. He added that ‘workers’ rights were human rights’.

Response by WIETA
Ms Lipparoni said the age to work was indeed 16, and WIETA required that those between 16 and 18 worked a maximum of 36 hours a week and were never exposed to hazardous materials.

In terms of the lack of consensus with FPEF, Mr Moholo said that the moment discipline became involved, it scared all people to become members. Their whole association was based on voluntary association, but WIETA’s responsibility was to encourage everyone to comply with them. They also worked with ‘reputational impact’, and once this was damaged, it was hard to repair it.

Ms Lipparoni said that they required 100% compliance. If there were non-compliances, they required the site to put in an improvement plan within 4 months, and then send through the evidence of the improvement. WIETA wanted to see a sustainable plan implemented, and they monitored the site on an informal basis to ensure compliance. If there was a conflict issue or continued violations, WIETA had a remedial system in place and a mediation session would be organised to see if the violation could be resolved.

With regards to the question of the ‘living wage’, WIETA looked at minimum wage plus bonuses plus benefits.

Historically WIETA was voluntary, so farms were not obliged to join. However, over the past two years, it was decided that this was not enough, so the seal was introduced to promote membership.

She said that the Deputy Chair Mr Donald Mouton was the estate manager at Fairview, the cheese farm in Paarl. She was not sure of his association with Citrusdal.

On the issue of freedom of association, the industry itself was unionised. The principle of freedom of association originated from the Labour Relations Act.

Small suppliers were not historically voluntary members of WIETA, but two years ago about 400 audits pf small suppliers were completed in the fruit industry. With new agreements with sellers and co-ops, WIETA planned to check small suppliers. The challenge was not only the undertaking of inspections, but also the use of time and resources to make sure farms understood workers’ rights and had sustainable development plans.

The Department of Labour was one of WIETA’s critical stakeholders and she acknowledged that it was very important to work with them.

With regards to illegal practices, it depended on the severity. WIETA did not support any poor or illegal practices, and required quick turnover of improvement plans in those cases. She added that they had gone to sites with unions before.

In terms the doubt about the validity of ‘better practices’, she wanted to look at statistics and report back to the Committee. She said that with support, training and awareness, improvement was seen.

She said that WIETA was ‘absolutely prepared’ to visit the 21 farms the Committee saw to understand exactly what the conditions on those farms were, to work out an improvement plan, and to regularly monitor the sites.

WIETA relied on a percentage of the Common Customs tariff, which was a levy on imports of wine into the UK. Much of that money was used to subsidise the cost of audits. From this year, WIETA was funded through WOSA, other international organisations, and the Department of Agriculture and the Department of Labour for certain programs.

She said that WIETA was not a collective bargaining council and that was not a particular policy of the organisation. They were concerned about workers as well as managers, and sought to develop the relationship between the two parties.

On why there had not been consensus at the meeting with FPEF, she said there were several issues debated over a period of 14 months, such as the establishment of a multi-stakeholder forum, the adoption of a code of ethical best practice for the country, and other issues around the cost of audits in the sector. To an extent, there was consensus around the use of WIETA as a possible South African-based code. What the committee did not get a consensus on was whether WIETA would be that custodian given that WIETA had historically been in the wine industry. In terms of going forward with the WIETA code, the consensus was split between the fruit industry and the wine industry.

WIETA did not certify a site unless it had 100% compliance. In order to receive the seal, a farm’s supply chain had to meet certain requirements as well. Out of all the suppliers, 60% of those suppliers needed to achieve 100% compliance, and 40% of them needed at least 60% compliance.

In the past, WIETA had some of the major wines companies as members, such as Distell, KWV, and Spier Wines. Going forward, there were now agreements in place with Cellars SA, which would increase membership. In terms of the overall industry being represented, a lot of growth was seen over the last year. There was added pressure from Scandinavian countries who wanted consumers to buy ethical and fair products.

Safe transport was one of the compliance criteria that WIETA looked at. There were also practices to protect children on the farms. WIETA looked at living conditions in the Code, particularly in terms of dams. There were swimming programs, regulations for spraying practices around homes, required social programs for substance and alcohol abuse, and support programs.

A fundamental tenant on which WIETA was formed was the understanding that self-regulation was needed.

On the issue of buying grapes from a non-compliant grower, there were contractual agreements between growers and sellers. An improvement plan would be put in place and if the grower did not comply, the grapes would not be bought.

WIETA inspections were different from other auditors’ inspections, such as the Labour Inspectorate. WIETA’s audits were participatory and collaborative, so they not only investigated the site, but also interviewed all echelons of workers and held focus groups with workers. The audits were undertaken by labour auditors and health and safety auditors.

With regards to consultation with Department of Labour inspectors, the inspectors had been invited many times but had not participated as of late.

Discussion
The Chairperson mentioned that not a single farm the Committee had visited, complied 100%. The closer the farms were to the city, the worse the conditions were.

Mr E Nyekemba (ANC) wanted confirmation that with matters of health and safety, WIETA was informed by the Occupational Health and Act. Ms Lipparoni confirmed this.

He asked whether WIETA represented all the employers in the industry. He also inquired at which stage WIETA was now in terms of establishing a marketing council.

Ms L Makhubela-Mashele said the presentation seemed so promising and it looked too good to be true. She compared that with what the Committee experienced during their farm visits, and wanted Ms Lipparoni to look at the list of those 21 farms and indicate which ones were members of WIETA. She commented that workers were told that they did not need unions, and they lived in fear on the farms.

Mr Van der Westhuizen mentioned that members had only been exposed to one side. He asked if it would be possible for Ms Lipparoni to speak to WEITA’s members and organise for the Committee to visit more farms.

He inquired as to how the Committee could support WIETA’s efforts.

A member said that from his own understanding, it seemed they were just a multi-stakeholder forum whose purpose was to clean up the wine industry. The implementation of solutions should be on a consensus basis. He also said to make sure that WIETA’s members could function with a clear conscience. He asked if WIETA could take away the seal if a member was contracted to farmers that were not compliant.

Mr Maserumule asked what WIETA was and if they were an employer organisation. What was their mission and vision?

Mr Williams mentioned that after South Africa became a democracy, Europe issued some conditions in order for South Africa to export there. He asked if WIETA applied those conditions.

He commented that the presentation was a pretty picture, but the actual farms were living in abysmal conditions. He said they should not try to mislead Committees in Parliament.

The Chairperson said that as human beings, farmers had the right to belong to organisations of their choice. What mattered was if the workers upheld the laws of the country.

He said that at one of the farms the Committee visited, the Dop system of paying workers with alcohol ended in December 2011, and some of the workers pleaded with members to get the system back. These people were now dependent on alcohol and that addiction was caused by farmers. He also mentioned that houses were about to collapse. Many incidents that occurred were due to sheer ignorance or negligence.

He indicated that maintaining a relationship with labour unions was important.

Response by WIETA
Mr Moholo wanted to know which farms the Committee had visited so that WIETA could facilitate change. It had not been communicated in advance that the Committee would visit the farms.

Chairperson said from now on WIETA was invited to their meetings and visits.

Ms Lipparoni said that WIETA was not an employer’s association, and there was no intention for WIETA to become a bargaining council.

A follow-up on the reports on the 21 farms was welcomed and action plans would be put in place. She also said that invitations could be extended to the Committee to visit farms in the future.

She confirmed that WIETA would ‘absolutely’ take the seal away from those with non-compliant farmers. The seal was to be examined on a yearly basis.

On the topic of WIETA’s multi-stakeholders, she explained that WIETA was composed of members, with a Board comprised of 10 members. Five were representatives of civil society and five were representatives of the wine industry.

There was full compliance with Europe’s condition, since South Africa’s reputation needed to ‘be clean’ internationally.

The pictures that were shown in the presentation were not ‘pretty pictures’; they were pictures of members who had gone through the WIETA process. A lot of work needed to be done in the industry and there was a lot of fear and ignorance. WIETA required support and resources in every region in order to be successful. Technical support and staff were needed to conduct the inspections of farms. She said WIETA might look at a public-private partnership in the future to obtain more resources.

Charges needed to be laid against the farmers who practiced of the Dop system. She believed it was a criminal act. WIETA would act against any farmer who practiced the Dop system, even if the farm was not a WIETA member.

The Chairperson thanked WIETA for taking the initiative to present to the Committee.

The meeting was adjourned.


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