Ending Exploitation in Supermarket Supply Chains

Thangam Debbonaire Excerpts

Thursday 18th October 2018 Commons Chamber

[Kerry McCarthy]

I was not actually aware of that point, so I thank my hon. Friend for bringing it to my attention. I am very concerned to hear that that is the case.

As I was saying, supermarkets now keep as much as 50% of the money their customers spend, while the share that reaches workers and food producers has fallen, sometimes to less than 5%. Oxfam’s research has found a direct correlation between drops in the prices paid by the supermarkets to suppliers and the risk of increasing human rights violations in supply chains. This is basically propelling a race to the bottom on wages and rights. Slavery and labour exploitation typically happen towards the bottom of supply chains, where things can get very murky and there is a lot less transparency. It is not just the cost savings that are not passed down; there is also a greater risk in that we are much more likely to see pesticide poisonings and other health and safety violations.

For example, the import price for pineapples from Costa Rica to Germany, primarily for supplying Aldi and Lidl, fell by about 45% between 2002 and 2014, despite increasing production costs. Oxfam has documented conditions on two pineapple farms in Costa Rica, which included poverty wages, subcontractors demanding monthly commissions, penalties or dismissal for workers who wanted to organise, and pesticides being sprayed while workers were in the fields.

There are other unfair practices that contravene the groceries supply code of practice’s principle of fair dealing. Fairtrade’s research into the banana sector found that banana farmers bear the cost if the retailers’ forecasts are wrong. In the worst instance, banana farmers reported receiving late changes to orders in 40 out of the 52 weeks in the year. Feedback Global has revealed the unrealistic specifications buyers use to reject produce from vegetable producers in Kenya, where on average 30% of production is discarded at farm level and another 20% prior to export—that is 50% of their produce—largely on cosmetic grounds. There is virtually no domestic market for these crops and alternative buyers cannot be found at short notice.

What can we do about this? For a start, we as consumers can do more. We can buy Fairtrade, which is the only initiative that requires a minimum price for producers and has a mandatory trader standard. We can use our consumer power to demand more of our supermarkets, using the Oxfam “Behind the barcodes” scorecard to track their progress. As the chief executive officer of Divine Chocolate has said:

“We live in times where, on the one hand, the turnover of the world’s biggest supermarket group is higher than the Gross National Income of Norway or Nigeria, and, on the other, where most of the world is dependent on smallholder producers for at least 80% of its food. Supermarkets have a responsibility to those producers, and we have more power than we think to call them to account.”

The food sector can certainly do more. In the EU, just 10 supermarket groups account for over half of all food sales. Just 50 food manufacturers account for half of all global food sales. If they act, that will make a huge difference.

[Thangam Debbonaire (Bristol West) (Lab)]

My hon. Friend is making a very powerful and, actually, a very upsetting speech. In particular, she mentioned Kenyan bean farmers, and a lot of us thought we were doing some good when we bought those beans. Does she agree that, along with the supermarkets, we need to look at the wider catering industry, food processing and cafés, which often like to portray themselves as fair and good trading environments? Does she also agree that we need some system that enforces such regulations across the sector?

[Kerry McCarthy]

I very much agree with my hon. Friend. I am focusing today on supermarkets because that is where it is easiest for customers to interface and because they so powerful within the market. However, there are many big food manufacturers and others throughout the supply chain, as she says, that need to step up to the mark as well.

--- Later in debate ---

[Kerry McCarthy]

If we can get 100% on gender pay gap reporting, we ought to do an awful lot better on modern slavery reporting.

The Home Office review of the Modern Slavery Act is welcome, and I hope it will result in much-needed measures to strengthen it and its implementation. I welcome the appointment as chairs of the right hon. Member for Basingstoke (Mrs Miller) and my right hon. Friend the Member for Birkenhead (Frank Field), who unfortunately has had to go back to his constituency, where “Songs of Praise” is being recorded, otherwise he would be here.

If the Government want to lead on this issue internationally, a law of due diligence, whereby companies need to demonstrate they are actively seeking to end slavery in supply chains, would be a good place to start. A wider definition of supply chain liability is needed, so that real or feigned ignorance is not a justifiable excuse when instances of slavery are revealed. We also need better support for victims. I very much support Lord McColl of Dulwich’s Modern Slavery (Victim Support) Bill, which would extend the proposed 45 days of additional support to 12 months. We can see how victims of slavery are terrified of coming forward because of the risk of deportation.

[Thangam Debbonaire]

I thank my hon. Friend for giving way one more time—she is being very generous. I am interested in the point she has just made about supermarkets taking responsibility. Does she think that the onus needs to be on supermarkets, and that ignorance of slavery further down the supply chain should be their responsibility? They should be more proactive in going out there and seeking evidence that there is no slavery, rather than waiting to be caught out.

[Kerry McCarthy]

I certainly think that. At the all-party group yesterday, we heard from someone from ASOS, the online clothes firm, who talked about all the measures it takes. It has really complex supply chains, sourcing products from all around the world—not just finished garments, but material, zips and buttons—yet it seems to be able to do it, so I do not see why supermarkets cannot. They should be doing it on food safety and on other issues as well, so they ought to be doing it on modern slavery.

The Agriculture Bill will require more data from the agri-food sector on supply chain fairness. That will get some information out there that can be used, like the Oxfam scorecard, to put pressure on the supermarkets to change their practices. However, there is nothing in the Bill about such data being used for a legally enforced purpose. Having been a member of the Public Bill Committee, I hope we can change that. I raised this issue this morning at Environment, Food and Rural Affairs questions and I got a response from the Farming Minister about the Gangmasters and Labour Abuse Authority, but I am slightly concerned that he did not seem to link it in with discussions about modern slavery. I would hope that as a result of this debate he and the Under-Secretary of State for the Home Department, the hon. Member for Louth and Horncastle (Victoria Atkins), can have a conversation. The International Labour Organisation has said that the agriculture, forestry and fishing sector is the fourth largest sector for the incidence of slavery, so it certainly needs to be on DEFRA’s radar.

I also asked the Farming Minister in Select Committee whether he would support the EU’s unfair trading practices directive, covering the whole of the supply chain, which will extend to producers selling into the EU from overseas. Naturally, the Minister told me that the Government would prefer to deal with this on a national basis, but we do need a firm commitment that the Government will follow the EU’s lead and establish themselves as a good and responsible customer so that we do not end up losing the preference of suppliers post Brexit—why would they sell to us when they do not get the same protection they would get from selling elsewhere? Another step the Government can take is to support the adoption of a binding UN treaty on business and human rights that holds companies legally accountable for human rights violations along their supply chain.

There is another reason for holding this debate now. There are too many in this place who enthusiastically extol the opportunities of getting our hands on even cheaper food in the post-Brexit world, but that would come at a terrible price: a race to the bottom on food standards, food safety, animal welfare and environmental protections, and the continued exploitation of workers around the globe. The key message I want to get across today is that cheap food comes at a cost, and the cost is often met by the workers. Cheap food is not the solution to food insecurity. Food bank use is driven by low pay and insecure work, benefit freezes, sanctions and delays, and spiralling housing costs. Something has gone very wrong when a local advice centre tells me it has been helping a client who could not afford to eat, but she could not get to the food bank because it was only open when she was at work—at Tesco.

We also need to be cautious, as I mentioned at DEFRA questions this morning, about Government plans to bring in seasonal migrant workers to fill labour shortfalls after Brexit. Focus on Labour Exploitation—FLEX—has warned that temporary migration programmes that tie workers to a single employer would mean workers are unable to defend themselves if they are paid less than promised or if they are expected to work longer hours and in worse conditions than initially agreed.

In conclusion, I represent a city, Bristol, that was built on the back of the slave trade, the hideous and now unimaginable trade in Africans and in slave-produced commodities such as sugar, chocolate, coffee, cotton and tobacco. Bristol is now one of the leading fair trade cities in the world and at the forefront of efforts to stamp out modern slavery. Our city is home to anti-slavery organisations such as Unseen and TISCreport that are, like Mayor Marvin Rees, committed to stamping out this horrendous crime, making the commitment to be the world’s first transparent city at a time when most did not even know what that meant. Slavery is not just a terrible episode in history. Some 13 million people were captured and sold as slaves from the 15th century to the 19th century while slavery was legal, but the “Global Slavery Index” estimates that more than 40 million people live as slaves today.

When the current Prime Minister came to office, she vowed to personally work to eradicate this “barbaric evil” and

“great human rights issue of our time”.

But as with many promises, I fear that the Government’s ambition may be slipping. I hope the Minister can provide some reassurance today that that is not the case.