Marfrig Global Foods SA

South American Operations For its South American operations, Marfrig reports on its Whistleblowing Channel, "HelpLine", which expressly condemns retaliation toward whistle-blowers and allows anonymous reporting. Company disclosure on the mechanism indicates good accessibility and availability. Reports can be made via website, telephone, or email. US Operations In the US, National Beef operates an independent channel which appears to have good availability and access for employees and other stakeholders. Reporting is available by telephone or website, including the option to remain anonymous. Other reporting platforms Marfrig operates an open-door policy in its Uruguay-based operations, where workers can report cases related to labour issues, internal conflict resolution, and worker support. It is unclear which level of management workers have access to through this policy and how the company ensures workers can access this channel without fear or threat of retaliation.

Marfrig discloses its plans to conduct an employee survey to assess satisfaction with the HelpLine. However, it has not yet publicly confirmed whether the survey has been completed or disclosed any outcomes. The company does not disclose how it assesses the effectiveness of National Beef’s grievance channel.

Since 2022, Marfrig has expanded the number of reported grievance categories from 13 to 21. The company discloses it received 520 cases in 2022, breaking these down by category and region. It reported 470 grievance cases in South America, with the majority of complaints related to moral harassment (47.87%) and sexual harassment (23.19%). Further, the company has improved its disclosure since 2022 by reporting US grievance cases. It received 52 reports in the US, with other (33%, misconduct/inappropriate behaviour (23%), and violations of internal policies (17%) being the most commonly assigned categories. In addition, Marfrig breaks down the most frequent users of the grievance channel in South America. Employees (64.89%) were the most frequent users of the channel, followed by anonymous users (18.30%), “uninformed” (9.15%), and former employees (4.89%).

Marfrig makes clear that human rights-related grievances can be reported through HelpLine, disclosing that 274 cases in the reporting year were related to human rights. This now includes data for National Beef, which received 19 complaints concerning human rights. Users of the company’s grievance channel can also report concerns related to health and safety. In the reporting year, 2.55% of cases in South America and 1.92% in the US were related to health and safety. Further, Marfrig discloses that concerns related to health and safety can also be reported to immediate leadership and its health and safety committees.

Marfrig now provides good disclosure on its grievance resolution process. It details the following steps: 1. Complaint recorded and registered. 2. Complaint analysed and classified. 3. Meeting of the Compliance Committee to discuss the case. 4. Identify the party responsible for the investigation. 5. Implementation of measures following the investigation. 6. Closure and filing of the case. The investigation process must be completed within 90 days, and investigation measures may include face-to-face interviews and a “climate survey”. If the investigation finds the grievance to be substantiated, the Compliance Committee and the relevant department will follow up on corrective actions and present a plan to mitigate the risk of similar non-compliance issues arising in the future. Marfrig also reports that, in complex cases, the Board may approve the employment of a third-party specialist to address the issue.

Marfrig reports that it makes paid sick leave available to workers across its South American operations under the laws and regulations of each country. Workers are required to submit a doctor's note to access sick pay in Marfrig's Brazilian operations, which can be obtained free of charge from on-site outpatient clinics available at all plants. The company's disclosure does not include US operations under National Beef.

Marfrig reports that workers can access a variable remuneration programme, leadership bonuses, long-term incentives, and a profit-sharing programme (determined by collective bargaining agreements). All these bonuses are based on annual or financial targets, depending on seniority. National Beef offers workers at beef processing units additional days off based on their attendance. FAIRR highlights that this kind of attendance-based benefit can create conflicting incentives for workers to attend work while sick.

Marfrig discloses the size of its workforce across its operating regions and breaks these figures down by permanent versus temporary and full-time versus part-time employees. The company’s workforce is predominantly permanent and full-time; 100% of its directly employed workers in Brazil and Chile are employed under these terms. In its remaining markets, Marfrig employs all or almost all workers full-time and relies heavily on permanent employees. Further, in response to Phase 2 (2022) of this engagement, Marfrig now discloses the size of its subcontracted workforce by geography. The company reports employing 672 outsourced workers, with 399 in Argentina, 146 in Brazil, 11 in Chile, and 116 in Uruguay. The company reports that no subcontracted labour was used in the US in 2022. While National Beef does use Packers Sanitation Services Inc (PSSI) to provide night shift cleaning workers, FAIRR assumes the company counts this as a service rather than subcontracted labour. However, we highlight that similar risks arise for this group of workers as to those subcontracted workers face.

The company's Ethics and Compliance Committee reports to the Board. The Committee comprises representatives from Human Resources, Legal, and Operations and meets regularly to discuss ethics and conduct issues. The Committee also meets quarterly with executives to discuss the number of complaints, broken down by category and location, received by the company's grievance mechanisms.

Board-level representation Marfrig discloses that Board advisory committees, such as the Compensation, Corporate Governance and Human Resources Committee and the Ethics and Compliance Committee, regularly discuss employee issues as an agenda item at meetings. Whilst no elected plant-level worker representatives sit on these committees, the committees are advised by other internal structures, which include employee representatives, such as the company’s Workplace Safety Committees. Internal committees Marfrig discloses that it has health and safety committees comprising worker representatives in all its operating regions. The committees cover 100% of plants in Brazil, Chile, Uruguay, and the US and 80% of plants in Argentina. Dialogue with trade unions Marfrig discloses the unionisation rates for its five operating geographies: Argentina (75.54%), Uruguay (65%), the US (58%), Brazil (38%), and Chile (0%). The company discloses evidence of engaging in constructive dialogues with unions, such as negotiating collective bargaining agreements with unions in Brazil. Further, the company reports that it has employed measures to support workers in utilising their rights to freely associate and bargain collectively. For example, in Brazil, the company provides bulletin boards in all its facilities to disseminate information on labour contracts and unions. In Argentina, the company provides dedicated spaces for employees to participate in union elections and assemblies.

Marfrig discloses that 100% of its workers in Brazilian plants are covered by collective bargaining agreements, 80.57% in Argentina, 0% in Chile, 80% in Uruguay, and 58% in the US. The company does not disclose whether it extends the terms of any collective bargaining agreements to all workers regardless of their contract type or involvement in the negotiations.

Automation Marfrig reports that it has invested in the automation of its plant in Liberal, Kansas, in the US and has been progressing in applying process automation to its corporate and industrial operations. The company does not disclose having assessed the impact of its automation strategy on its workforce. Climate risk Marfrig discloses that it is diversifying its protein portfolio by expanding its production of alternative proteins. Further, the company has an SBT aligned with 1.5°C by 2035. However, corporate disclosure does not comment on whether Marfrig has conducted a formal social impact assessment of its climate strategy.

The company does not disclose evidence of conducting levelled dialogues with workers or their representatives on its automation and climate mitigation efforts.

Marfrig reports that it supports its cattle producers in transitioning to low-carbon livestock farming through its Verde+ programme. Further, the company’s public reporting displays its recognition that cutting ties with suppliers in instances of non-compliance with the company’s ESG policies can have negative social and environmental consequences. To avoid these consequences, the company reports it has helped address non-compliance issues with 3,036 suppliers through its Verde+ programme since 2021. However, the company does not state that its Verde+ programme is part of a company-wide effort to support a just transition.