Tesco: progress on public commitments on living wages

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This is a statement that has been jointly agreed by Banana Link and Tesco on the progress made against the pioneering commitments made by the supermarket chain.
In 2014, Tesco became the first retailer to commit to paying a living wage to banana workers by 2017, covering sourcing sites that only supplied Tesco. Banana Link welcomed this commitment as a progressive statement of leadership in the urgently needed task of bridging the gap between the actual wages earned by banana workers and their real costs of living.
This commitment has driven a challenging journey, partly because living wage benchmarks have not yet been agreed for the relevant countries (It was expected they would have been in place by now). Tesco’s banana sourcing has also evolved so that it now has fewer ‘exclusive supply’ arrangements, and it has become clear that paying a living wage is very challenging to achieve in isolation. As benchmarks are created in coming months to calculate the living wage levels in key banana exporting countries, including Ecuador, Costa Rica and Ghana, all industry stakeholders have to collaborate together to both validate these levels and to develop strategy of how the required wage increases can be met. In Costa Rica, a key source of fruit for Tesco, the UK retailer is playing a lead role in this work. We understand it is unlikely that any retailer, no matter their size can ensure living wages at plantation level when they only buy a proportion of fruit from a producer.
Although Tesco cannot assess directly against the living wage pledge it made in absence of living wage benchmarks being agreed, we understand that the company is monitoring progress against what they believe the benchmarks may be set at, based on information currently available, and that their assessment reports promising progress for the majority of workers against those levels. Banana Link expects that validation of these benchmarks will reflect this progress.
We welcome anecdotal evidence from other industry actors in Costa Rica that some of the higher prices offered to their core supplier by the British supermarket have enabled wage increases for some of the lowest paid workers. But we also underline the importance of the mechanism of collective bargaining between independent trade unions of workers and employers as the most democratic means of securing better wages and conditions that can be sustained and defended in national legislation. The freedom to bargain collectively is one of the basic rights enshrined in the Ethical Trading Initiative (ETI) Base Code, but is still not sufficiently understood and supported by many companies.
Tesco recognises this, but also recognises that this is not possible in all countries, and that other democratically elected worker organisation structures exist and can help give voice to worker concerns.
In Ecuador, it was the proactive role of the national government between 2008 and 2015 that enabled the gap between the lowest actual wages in Tesco supplier plantations and living wage levels to be all but closed, although current moves by the new government to reverse some of the positive changes made over the period in employment and labour legislation are of deep concern to Banana Link.
We also welcome Tesco's continued broader leadership within the industry-wide multi-stakeholder initiative, the World Banana Forum, and its Working Group on the Distribution of Value along the Chain. This Working Group provides an opportunity for all actors, including the trade unions representing plantation and packhouse workers, to work together to address living wage levels, as one of the key elements that comprise the costs of sustainable production (COSP). The second public commitment made by Tesco in 2014 to cover COSP has also proved challenging to implement in the absence of sufficient progress on living wage benchmarks which are a key component of COSP. We hope progress in this regard will be made during 2018 with key suppliers to ensure global efforts are steered towards ensuring all participants in the value chain (including workers) are properly compensated.
In 2018, Banana Link looks forward to strong engagement by Tesco and other retailers in key consumer countries to establish a better understanding of the role of prices paid to growers in determining how much value exists to be distributed at the producer country level of the chain, including to workers as wages. Low and downward pressure on prices will always undermine the ability of workers to earn a living wage.
Finally, we welcome Tesco's continued key role in work towards Gender Equity within the World Banana Forum which includes recognising the need to gather gender disaggregated wage data. This is crucial in enabling companies to understand the factors that create the gender pay gap, including task allocation, piece-rate tariffs, access to promotion and the women's active role in decision making.
(Photo: Philip Wolmuth)