FLA SYNGENTA PROJECT REPORT 2007 - 2008 THE FAIR LABOR ASSOCIATION THE SYNGENTA PROJECT REPORT 2007-2008 MONITORING THE AGRICULTURE SECTOR Syngenta sponsored child to school poster on the wall of a local school REPORT PREPARED BY RICHA MITTAL Page 1 FLA SYNGENTA PROJECT REPORT 2007 - 2008 TABLE OF CONTENTS I. EXECUTIVE SUMMARY……………………………………………………3 II. BACKGROUND…………………………….………………………………..4 III. KEY EVENTS……………………………………………………….………6 IV. FLA INDEPENDENT EXTERNAL MONITORING…………………….7 • FINDINGS…………………………………………………………………..9 V. HIGHLIGHTS FOR REMEDIATION………………………………..……11 VI. KEY LEARNINGS………..………………………………………………...11 VII. SYNGENTA AND FLA OBLIGATION OF COMPANIES…...……….12 VIII. FURTHER RECOMMENDATION……………………..……………...15 IX. REFERENCES……………………………………………………………..15 Page 2 FLA SYNGENTA PROJECT REPORT 2007 - 2008 EXECUTIVE SUMMARY The FLA began a pilot project in the agriculture sector in 2004 when Syngenta Seeds Inc. a Swiss agro-business company approached the FLA to help them monitor working conditions in their Indian hybrid cotton seed supply chain. Though the project was initiated in the cotton seed sector, Syngenta sold its global cotton seed business in 2005. The FLA and Syngenta continued the project in the hybrid vegetable seed sector, beginning in 2006,1 and have made significant progress in past two years. The FLA built an in-depth understanding of the tasks and risks involved in the hybrid seed production. Through this process, the FLA developed and field tested a set of benchmarks and a monitoring system with relevant tools for the agriculture sector, based on ILO conventions and the FLA’s Principles of Monitoring. In keeping with the FLA 3.0 philosophy, five multi-stakeholder consultations were jointly held by the FLA and Syngenta at different stages of the process to share the project with stakeholders and solicit their advice. Stakeholders prioritized monitoring of child labor, health and safety, and wages and benefits, as well as remedial actions on child labor and health and safety. Many stakeholders, who attended the consultations and provided candid opinions, viewed the meetings as successful and appreciated Syngenta’s willingness to integrate recommendations into their internal compliance program. In 2008, FLA conducted unannounced independent external monitoring (IEM) visits of Syngenta’s farms. Each IEM was conducted on a cluster of approximately 25 farms each selected at random from farm lists provided by Syngenta. This was done as the farms are small and ranged between 0.25 – 1 acre. Health and safety, code awareness and hours of work emerged as top three non-compliance issues in external monitoring. FLA as part of its transparency initiative, designated web space for the project on its website under special projects, where progress reports, research studies, monthly newsletters and monitoring reports with remediation plans are published. Syngenta submitted corrective action plan for the issues uncovered in both internal and external monitoring. Syngenta has made efforts to fulfill FLA’s company obligations as prioritized by stakeholders in the consultations. Although there are areas for improvement, the project has tested Syngenta’s commitment towards improving working conditions in their supply chain. Syngenta has internally monitored 1727 farms for all code of conduct elements in contrast to other seed companies operating in India, which only monitor for child labor,. This pilot project demonstrates that the FLA’s independent external monitoring methodology can be adapted well to the hybrid vegetable seed sector. The experience and learning from the Syngenta project suggest that the FLA system may have the capacity to go deeper into the supply chain of the apparel sector, such as home-based work, cotton seed production, and more. As the methodology emerging from the Syngenta project is further refined, it may prove to be adaptable to other supply chains involving small rural land holdings. Page 3 FLA SYNGENTA PROJECT REPORT 2007 - 2008 BACKGROUND The concern about unfair labor practices prevailing in the agriculture sector has been well documented in a range of studies by the International Labor Organization (ILO) 2, independent researchers 3, international 4 and national non government organizations (NGO) and media campaigns. There are several reports on poor working conditions in cotton production in Uzbekistan, Pakistan and India, cocoa farms in Africa and coffee estates in Central America. Some studies have also reported on child labor issues in the hybrid seed production sector in India 5. One such media campaign in 2003 regarding the presence of child labor in the Indian cotton seed farms of Syngenta Seeds Inc. brought that company to the Fair Labor Association (FLA). Syngenta Seeds Inc. is a Swiss multinational headquartered in Basel. It ranks third in high-value commercial seeds market in the world with sales of approximately $9.2 billion in 2007. Syngenta employs over 21,000 people in more than 90 countries. Until 2004, Syngenta was the largest producer of hybrid cotton seeds in the world with business accounting for USD 3 million. The FLA at that time had monitoring and remediation experience in the apparel, footwear and sporting goods sector. The FLA advised Syngenta to develop a project wherein both organizations would work in collaboration to map, assess, analyse, monitor and remediate the issues in Syngenta’s hybrid seed supply chain. FLA organized the first activity under the project in 2004. It developed a task and risk mapping methodology and mapped Syngenta’s hybrid cotton seed supply chain. Two Task and Risk Mapping Studies were commissioned by the FLA in April 2004 6 and October 2004 7 to identify the tasks undertaken in production of the hybrid cotton seeds and the risks associated to each task. The outcome of the first study was shared with stakeholders at a consultation held in Brussels in July 2004. The objective of the consultation was to put the corporate social responsibility commitments made by Syngenta into practice, to engage with stakeholders, to take the lead in several social and environmental issues, and to give stakeholder an opportunity to engage with the company. As requested by key stakeholders, such as the Indian Committee of Netherlands, a follow-up consultation was organized by Syngenta along with the FLA and Phillias in Hyderabad in July 2005.8 The objective of this consultation was to identify potential problems, reduce inherent risks of long production chains, and helping to assure sustainable social and environmental practices. Based on recommendation provided by the participants of both consultations, Syngenta and FLA’s staff in India started developing a monitoring program for the cotton seed sector. The company staff undertook certain preliminary steps such as drawing up written contracts with growers with clauses against employment of child labor, sponsoring education items in the village schools, and conducting awareness programs in the villages. As the project progressed, Syngenta took the business decision to sell their global cotton seed business. Nevertheless, they decided to continue their engagement with the FLA and start monitoring their hybrid vegetable seed farms, the second most important business for them. Most learning from the cotton seed sector could be well applied to the vegetable seeds. Therefore a program was initiated in the vegetable seed sector in June 2006. Similar methodology of task and risk mapping was used to Page 4 FLA SYNGENTA PROJECT REPORT 2007 - 2008 identify high risk areas in the vegetable seed sector.9 The FLA and Syngenta then jointly developed the seed production practices document 10 (benchmarks) to be adopted by the Syngenta growers and an internal monitoring program based on the FLA’s obligations of companies.11 Syngenta conducted internal monitoring of their farms in 2007. By the end of 2008, they had monitored a total of 1727 farms. Child labor was a problem during peak season, when 8-10 workers were needed for cross-pollination activities. Health, safety and environment (HSE) also emerged as a priority issue as workers were not aware of personal protection during chemical use. Syngenta developed comprehensive health and safety remediation plans. To tackle the child labor issue, the FLA and Syngenta invited a selected group of experts to the Hyderabad consultation in November 2007, to discuss the child labor issue in Syngenta’s okra and pepper farms.12 Based on expert recommendations, Syngenta developed an additional child labor monitoring tool for the farms. They also introduced an incentive scheme 13 and piloted it with their okra growers in April 2008. Syngenta monitored their farms three times in one production season as prescribed by the task and risk mapping. Growers who were in compliance at all three monitoring events were given a bonus of up to 5 percent of the total procurement price. The maximum leverage, in the incentive scheme, was given if there was an absence of child labor. Additionally, a progressive disciplinary policy was introduced, wherein after repeated reminders and remediation, a grower would be blacklisted if found delinquent on child labor for two consecutive production seasons. Several awareness building programs were mounted in the field. Pre-season meetings with the growers were organized to make them aware of the COC and Syngenta’s relationship with the FLA. Written contracts with fair working conditions clauses were drawn with growers. A labor monitoring tool was integrated with the existing