working-conditions

Unpacking Labour Risk in Global Meat Supply Chains

The FAIRR Initiative is leading a collaborative investor engagement to address labour risks in global protein value chains. The impact of COVID-19 on production line workers around the world has exposed the materiality of working conditions, including supply chain disruptions, reputational risks, fines, prosecutor investigations, and lawsuits from employees.

This engagement addresses the fundamental and structural human capital risks in the animal farming industry, which have contributed to the disastrous response to the pandemic. We encourage seven of the largest global protein producers to implement long-term changes while empowering workers to support risk mitigation in three key areas: Health and SafetyFair Working Conditions and Worker Representation.

Please note that the sign-on period for Phase 2 has now closed. For more information, please contact Cristina Figaredo.

Latest Findings

The Phase 1 progress report, Unpacking Labour Risk in Global Meat Supply Chains, is now available to download. Phase 2 of the Working Conditions engagement is now underway, with a progress updated being expected at the end of 2022.

3 / 7 companies

report the total number of grievance cases received annually

0 / 7 companies

report on their approach to elevate worker voice at board level

Only 2 companies

report on their policies for paid sick leave

Background

The meat industry is an important contributor to the GDP of leading world economies, including Brazil (8.5% of GDP), the US (5.8% of GDP) and the European Union (0.7% of GDP), whose combined production along with China’s represents ~68% of total meat products globally (i.e., beef, pork and chicken for the year 2020). The sector relies on labour-intensive value chains that directly and indirectly employ over 6.1 million people in the US, about 9.5 million in Brazil, and one million in Europe. Collectively, the companies in this engagement employ over half a million workers.

Workers in the industry, however, face hazardous conditions and exposure to risks from factors such as dangerous machinery, fast line speeds, repetitive tasks and biological agents. Companies do not effectively empower employees to report such risks, largely lack proper oversight of workers in their value chain, and fail to disclose important labour metrics publicly.

Material Risks

The Phase 1 progress report, Unpacking Labour Risk in Global Meat Supply Chains, shows how the livestock industry’s heavy reliance on human capital amplifies the material impact that labour issues have on the business. The report also highlights how failing to protect meat workers drives labour shortages that cause immediate material damages to producers, including unexpected costs, contracted production capacity, disruption of operations and food supply chains globally. To avoid these outcomes, greater recognition is needed from companies in their policies, disclosures and practices as to the importance and significance of Worker Voice in identifying risk within operations.

Hence, there is a clear need to strengthen labour standards and corporate practices among animal protein producers beyond the pandemic to mitigate labour risk in the industry. This is particularly pressing in the face of broader industry trends that pose serious human capital challenges, such as the transition to a green economy and automation. Strong labour management strategies will be instrumental in defining the social impact of future food production.