Labour standards agreement signed at Chiquita

An international agreement on labour standards, freedom of association and consultation rights in the event of corporate restructuring in the Latin American operations of the international fruit and vegetable producer and distributor Chiquita Brands International Inc, was signed by the company and trade union organisations in June 2001.

On 14 June 2001, an international agreement on workers' rights was signed by the US-based fruit and vegetable producer and distributor, Chiquita Brands International Inc, the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF) and the Latin American Coordinating Committee of Banana Workers' Unions (COLSIBA). The IUF/COLSIBA and Chiquita agreement on freedom of association, minimum labour standards and employment in Latin American banana operations covers all of the company's subsidiaries which employ workers in banana operations in Latin America. The accord was signed at the International Labour Organisation (ILO) in Geneva, and witnessed by the ILO director general Juan Somavia. Chiquita employs a total of around 40,000 workers worldwide.

Minimum labour standards

The first part of the agreement sets out a number of joint commitments by the signatories in the area of minimum labour standards. as follows:

  • they acknowledge the right of each employee to belong to and be represented by the trade union of their choice and to bargain collectively;
  • they state that "reinforcing democratic forms of cooperation in the company" is the responsibility of both management and trade unions;
  • they agree to seek to identify opportunities for continuous improvement in employment conditions at Chiquita, recognising that this is a necessary condition to advance the common interests of both the company and its employees; and
  • they respect the responsibilities of local Chiquita managers and unions to address issues of concern through collective bargaining and to put into practice the general principles set out below.

In particular, Chiquita agrees to respect the following ILO Conventions:

In addition, Chiquita makes the following commitments:

  • to respect the rights of freedom of association and collective bargaining as well as all laws governing the application of these rights;
  • to respect the right of all personnel to form and join trade unions;
  • to ensure that trade union representatives are not discriminated against and that they have access to employees in the workplace. The practical details concerning access should be determined through national negotiations and agreements. The company guarantees that employees will not be discriminated against and not receive any threats or sanctions following a trade union representative's visit;
  • where Chiquita is engaged in collective bargaining with unions, it will share with them the corporate information, both relating to the company as a whole and to local operations, that they reasonably require to bargain effectively;
  • it acknowledges its responsibility to provide a safe and healthy workplace. All parties to the agreement make a commitment to collaborate in order to improve health and safety; and
  • Chiquita and IUF/COLSIBA will publicise the accord in all the company's banana operations in Latin America.

Employment

A section of the agreement entitled "employment" deals with corporate restructuring. The company states that, in the event of any situation which would seriously affect the volume of employment, working conditions or employment contracts, such as changes or transfers in production or the closure of all or part of a facility, it will:

  • respect local laws and regulations;
  • consult local trade unions which have been appointed as the representatives of the affected workers "as soon as possible", particularly where the proposed change affects a significant number of employees - ie a partial or total closure; and
  • if the workers are represented by a trade union, the company will, at the same time, notify the local union, COLSIBA and IUF, giving details such as an explanation of the company's decision and a clear indication of the consequences of the decision for the workers affected, in terms of changes in employment contracts, working conditions or job reductions. The company will seriously consider alternative proposals presented by representative trade unions. It gives a commitment to respond to proposals within an agreed timeframe on a case-by-case basis.

Commitments regarding suppliers

With regard to its suppliers, contract growers and joint venture partners, Chiquita states that it will require them to provide "reasonable evidence" that they respect national legislation and the minimum labour standards contained in this accord. The parties to the agreement agree, however, that the effectiveness of this clause is dependent on factors such as Chiquita's relative influence over its suppliers and the availability of "appropriate and commercially-viable supply alternatives". The accord therefore states that its implementation will be jointly assessed by a review committee (see below), taking into account these factors.

Monitoring the accord

In order to oversee the agreement, a review committee will be set up, comprising up to four members each representing Chiquita and IUF/COLSIBA. In the event of major conflict, one representative each of a local union and local management may be included in meetings. The parties stress, however, that this accord is not a substitute for effective local bargaining and commit themselves to doing "everything reasonable to encourage effective local bargaining".

The committee will meet twice a year, although extraordinary meetings may be convened to examine a situation urgently. However, the agreement states that any conflicts should ideally be resolved at local level if possible. The review committee is, it is stated, intended to examine alleged serious and/or systematic violations of the provisions of the accord. The parties will each appoint a contact person to facilitate communication and the resolution of emergency issues arising between regular review committee meetings.

Fair dealing and continuous improvement

The parties to the accord make a commitment to negotiate in good faith, "with the best interest of all parties in mind", and to communicate openly, honestly and in a straightforward manner. Further, they agree to avoid any actions which may undermine this accord. These could include "public international campaigns or anti-union retaliatory tactics", until a declaration has been made that there has been a failure to agree on a specific issue under discussion. The parties also commit themselves to agree a time-frame for negotiations and "mutually satisfactory" resolution of issues.

The parties also give a commitment to working towards a common understanding of effective labour-management relations, recognising that this is linked to: the quality of the company's products; the productivity, efficiency and flexibility of workplace practices; employees' quality of life at work; the social and environmental health of the communities in which the company's employees live; and the commercial success and sustainability of the company's operations.

The agreement will run until either party gives at least three months' written notice to terminate.

Commentary

All parties to the Chiquita accord have welcomed the agreement. The IUF general secretary, Ron Oswald, characterised it as "historic in the truest sense, meaning that it offers the possibility for workers and employers to seek a new basis for the resolution of problems in an industry which has throughout its history been highly confrontational". Steve Warshaw, the president and chief operating officer of Chiquita, commented that the accord "signals our new partnership with the IUF and COLSIBA, based on mutual respect and openness, and it sets a new leadership standard for social responsibility in the banana industry".

This is the latest accord in a growing list of international labour standards agreements in multinational companies. The most recent accords of this type include deals at three major European multinationals: Carrefour (France, commerce), Skanska (Sweden, construction) and Telefónica (Spain, telecommunications) (EU0105213F). This particular agreement is significant both in terms of its detail and its scope - Chiquita is the largest employer of unionised banana workers in Latin America. It may well make a significant contribution to improving industrial relations in the banana growing and distribution sector in Latin America. Most similar agreements reached in other multinationals have been global, rather than regional, in scope. While it is restricted to Latin America and involves a US-based company, IUF at least hopes that the Chiquita deal's significance will be wider - according to Mr Oswald, "we hope that this agreement will serve as a model for relations generally between international union organisations and transnational companies."

As with all agreements of this type, monitoring its implementation will be the most difficult part. The parties to the accord recognise this, particularly in terms of the company's suppliers, which will be influenced by a varying degree by Chiquita. However, the fact that provision for a joint monitoring body has been made and that this body will meet regularly, with the option of extraordinary meetings, will help to provide a solid framework for overseeing the operation of the accord. (Andrea Broughton, IRS).

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