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Fruit Processing Factory: Supply chain

Provided by IFC Sustainable Business Advisory


Fruit Processing Factory, South Africa

Case

A factory in South Africa produces juice and packaged fruit, with a variety of products across different seasons. The factory has recently expanded operations, installing new equipment and adding 100 new workers, for a total of 300. With the expansion, the factory expects to quadruple its production, mostly exports to the European market. To meet production targets, it needs to add new suppliers of fruit, mostly from the Western Cape area. There has been increasing demand from both domestic and European con­sumers for ethically made products, and the factory participates in the ethical trade program recently launched by the South African fruit industry. The program involves labor standards audits at the factory, and training for workers and managers. However, the factory management is concerned about recent reports of wide-scale labor abuses in South African farms and vineyards.

Impact

Social and labor violations in supply chain including forced labor, child labor, inadequate remuneration, excessive working hours, discrimination, poor disciplinary practices, restric­tions on freedom of association and health and safety risks at supplier farms

Avoid

  • Develop well-defined labor policies based on international norms in the supply chain; communicate policy to purchasing managers and supplier farms
  • Make policies contractually binding under purchasing agreements with supplier farms
  • Provide training to purchasing managers and supplier farms on the organization’s labor policies and procedures
  • Periodically monitor and audit the supplier farms for their labor performance as per the organization’s own policies and procedures

Minimize

Select and reward supplier farms on price and quality but also on labor criteria

Offset

  • Assist the supplier farms in remediation of labor violation cases
  • Assist the supplier farms in identifying the root causes for identified labor violations and assist them in implementing suitable corrective action and preventive actions
  • Ensure that the affected workers at the supplier farms are suitably remediated and com­pensated as per established policies and procedures

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