Fyffes is preparing to answer allegations of worker exploitation at its Central American operations just as its €751 million takeover by a Japanese group is completed.
The UK government-sponsored Ethical Trading Initiative (ETI), of which Fyffes has been a member since 2002, had called on the company to present an action plan by February 3rd concerning working conditions of melon plantation workers in Honduras.
However, Fyffes has exercised its right as a member to present its case to a disciplinary committee drawn from ETI’s board, rather than submit an action plan.
“We expect the meeting to be sooner rather than later, but we are not in a position to say when, as that depends on getting everyone around the table,” said a spokeswoman for the ETI in London. “It’s been a long, drawn-out process as it is.”
The escalation of the dispute to the sitting of an ETI disciplinary committee, some 10 months after the body received an official complaint and calls for Fyffes to be expelled from the organisation, will come as an unwelcome headache for the Irish company’s new owners.
High Court approval
Tokyo-based Sumitomo Corporation's planned purchase of Fyffes was approved by the High Court on Thursday morning, having already been cleared in the past four weeks by shareholders of the tropical fruits distributor and European competition authorities.
Shareholders registered as of the close of business on Thursday will receive a 2 cent final dividend on 2016 earnings, which comprises part of Sumitomo’s €2.25 per share offer for Fyffes announced in early December.
Trading in Fyffes shares will be suspended on Friday morning and cancelled on the Dublin and London stock exchanges on Monday, ending its 3½ decades as a listed company. The firm originally floated on the Irish bourse in 1981 as FII plc.
A spokesman for Fyffes declined to comment on specifics of the workers’ dispute, which flared up outside last month’s shareholder meeting to vote through the takeover. About a dozen protestors demonstrated outside the meeting in a Dublin hotel about conditions faced by mainly seasonal female workers at Fyffes’ Anexco pineapple subsidiary in Costa Rica and two melon units in Honduras.
The demonstrators, led by UK not-for-profit organisation Banana Link and trade union GMB, highlighted alleged instances specific to Fyffes' Suragroh subsidiary in Honduras. It is alleged that workers failed to receive minimum wages and social insurance, were allegedly exposed to hazardous agrochemicals, and allegedly sacked for being union members.
“Fyffes fully respects the rights of its employees, but as the ETI process is ongoing, we don’t feel it’s appropriate to comment,” the Fyffes spokesman said.
The ETI has been looking into the claims put forward by Banana Link and unions since last April. After an initial attempt at mediation proved unsuccessful, ETI executive director Peter McAllister reviewed evidence submitted by all parties to the dispute and “upheld key aspects of the complaint, deeming them substantive and robust”.
Fyffes was then asked to prepare a remediation plan, which, Mr McAllister decided, failed to fully address the issues raised by the complainants. The ETI spokeswoman said complaints “very rarely” get to the current so-called disciplinary stage.