Tobacco firm must act on possible labour abuse

11 May 2011

11 May 2011 | Angeline Albert

A lack of formal purchasing agreements between Philip Morris International’s (PMI) Kazakh subsidiary and its suppliers puts workers rights at risk.

A report produced by non-profit group Verité, and commissioned by PMI, found the use of child workers, and other violations of labour rights, at tobacco farms that supply Philip Morris Kazakhstan (PMK) indirectly. PMI commissioned the report after claims of worker abuse at vendors in the country.

However, they did not breach local law or policies put in place by PMI to safeguard against such issues, because the farmers had not signed formal contracts with the company.

Although PMI has agreed to establish written contracts - known as leaf purchasing agreements - between PMK and farmers as per Kazakh law, Verité’s investigation found 11 per cent of farmers had not signed such an agreement with PMK in 2010.

Purchasing agreements require farmers to adhere to the law in regard to workers’ rights. Verité said these uncontracted farms put PMK at risk of breaching labour standards and workers were at risk because what happens on these farms is not monitored. Workers at non-contracted vendors were also found to be earning considerably less money, because they must sell through contracted ‘middlemen’ who take a cut of earnings. Although Kazakh law stipulates working a maximum of 36 hours per week, staff often reported working more.

“As Verité’s report shows, many challenges remain,” said Martin King, senior vice-president operations at PMI in a statement. “In Kazakhstan and elsewhere, PMI is committed to work with governments, NGOs, farmers, workers and other stakeholders to progressively eliminate child labour and other labour abuses in tobacco farming.”

He added the company would set up specific training programmes with suppliers, farmers and workers to improve labour practices.

The report also said PMK’s contractual focus on the owner of the land, as per Kazakh law, sometimes creates a contractual ‘gap’ in the chain where the landowner delegates daily operations to a manager - even though the farmer is contractually committed to observing labour laws. Verité said these sub-contracted farm managers may not adhere to obligations, and recommended PMK identifies farms run by managers and train them as well.

PMK was also urged to build up the capacity for staff to visit farms to identify underage workers. The report also said the relationships between children and adults on farms needs to be established to avoid the possibility of child trafficking.

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