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Investor Relations

Labour

We depend on the engagement, motivation and safety of our workforce to create responsible growth. Equally, we are working with suppliers to ensure that human rights are respected in their supply chains.

Key 2016 focus areas

  • Employee engagement and talent development
  • Zero‑harm workplace
  • Human rights across our own and third‑party supply chains

Key sector collaborations and commitments

  • CocoaAction – help eradicate child labour
  • International Cocoa Initiative
  • Fair Labor Association (FLA) partnership to eliminate exploitation in the cocoa and hazelnut supply chains

We are guided by

In this section we cover:

Nurturing regional talent

Wherever possible, we are committed to employing locally and building capacity, although it can be a challenge in emerging markets. We invest from the ground up and, over

the years, we have built a robust early career hiring and training programme. In 2016, we hired more than 50 trainees across Africa in Sales, Manufacturing and Finance. We believe that this pool of talent will be our pipeline for the future. The Africa Finance Trainee (AFT)

Programme is one such initiative and is designed to provide meaningful experiences through exposure to a variety of Olam operations. In 2016, we recruited 8 qualified accountants from Kenya and Cameroon.

Catalysing change in Africa through scholarships

Olam’s scholarship programme supports up to 10 African post‑ graduates each year to study at Harvard Business School, the London School of Economics and Political Science, INSEAD and the Lee Kuan Yew School of Public Policy. Our ambition is to see these graduates catalyse change through business, economic development and good governance in Africa.

Bankole Makanju is a Master of Business Administration Student at the Harvard Business School in Massachusetts. Read his article here “How to maximise Africa’s demographic dividend”.

Global gender breakdown in our primary workforce (%)

Designing top class courses and an academy

Our shared values

Ensuring a safe workplace

Olam is committed to providing a healthy and safe workplace for our employees, contractors and visitors. Our vision of embedding a ‘zero harm culture’ is delivered through safety leadership and embodied in ‘Our Shared Values’.

By the end of 2016, most employees had received training through our internal programme ‘A Safe Olam’ which is based on the elimination of unsafe conditions and unsafe behaviours. The remaining employees had localised focused training relating to specific risks and hazards. For new or returning seasonal workers, we have developed a new Safety Induction Programme. Some emerging market countries do not have the same regulatory frameworks for safety so we must be constantly vigilant and reinforce the importance of safe behaviour including regular audits and review.

Our top 100 facilities now report leading and lagging safety indicators and we are progressively extending this to all our key sites – processing, warehouses and plantations. Whilst still not where we want to be, we are making steady progress in changing behaviours and reducing safety incidents. The Lost Time Injury Frequency rate was reduced to 0.43 in 2016 (from 0.60 in 2015 and 1.15 in 2014). This data now starts to include a wider view of the Olam world and includes some key primary upstream processing plants, warehouses and plantations in addition to the 69 core manufacturing plants which are known as Tier 1 (See the goals table for the specific targets for processing and Olam‑managed plantations, concessions and farms.) Unfortunately, while it was our lowest incident fatality rate in 5 years, we experienced 4 fatalities in 2016, which all took place in Africa. Three were due to non‑observance of safe working practices, and the fourth was due to a road accident. All incidents are fully investigated and any action points addressed.

Respect for diversity

Although diversity has always been encouraged in Olam, we recognise that we did not have a formal policy or strategies for implementation. By 2020, all businesses with more than 100 employees must have a documented and reported diversity strategy. A draft policy with strategy guidance is currently being reviewed.

Respect for workers’ rights

Our commitment to human rights is guided by the United Nations Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work and related international covenants.

We commit to the following labour practices across our supply chains:

  • Compliance to relevant labour national laws and international agreements (covering wages, working hours and conditions, freedom of association, collective bargaining, no discrimination, gender and age equality)
  • A grievance mechanism accessible to all workers without retribution
  • An accessible communication framework of policies for the workforce
  • The application of these requirements to contracted, seasonal and migrant workers where relevant.

As with any business, restructuring is sometimes necessary. Whenever this occurs we seek to ensure that employees and their representatives are given notice of any significant changes. This may vary between countries and also on the significance of the change, so it might be 2–4 weeks or a few months. Based on data from our key operating countries, at the end of 2016, about 30% of our primary workforce were covered by collective bargaining agreements. In early 2017, Olam Gabon signed a collective bargaining agreement with our palm and rubber plantation workers – over 9,500 people.

Following the introduction of mechanisation to increase output and efficiency at our Bouaké cashew processing facility in Côte d’Ivoire, our team met with union and government representatives regarding the redundancy of around 150 employees from the 2,000‑strong team. At the end of 2016, the union had made a formal representation to the Ministry of Labour over the redundancy process. However, the independent advisory body on labour affairs (Le Conseil National du Dialogue Social) cleared our process as fair and correct.

Wages and incentives for workers

A considerable proportion of Olam’s workforce are engaged in relatively low‑skilled plantation work or manual to semi‑manual processing. These are often located in regions that have had very little structured work experience, which can mean that, after payment, a few workers may not return until they have spent their wages. Couple this with high labour needs for products such as cashew (we employ around 15,000 people in processing across Asia and Africa) and we have to balance wages with the cost of productivity and what the customer, and ultimately the consumer, is willing to pay. We operate in accordance with all payment laws but, rather than just relying on the minimum wage, we are exploring productivity‑based incentives to make our operations more sustainable and better able to withstand competition. This in turn secures jobs in the region.

Indeed, this has been recognised by the Government in India, where the Labour Department has classified the cashew industry under productivity‑ linked wage to help motivate workers. This is definitely helping to improve productivity as seen in our 3 cashew processing facilities at Amalapuram, Janakiramapuram and Gajapathinagaram. We are paying  our workers above the Government stipulated wages over unit of output.

More HR information can be found in our GRI report here.

Addressing human rights issues in third-party supply chains

Olam’s sourcing network of over 4.3 million farmers, of whom the vast majority are smallholders in emerging markets, means that eliminating poor labour practices in our supply chains is an ongoing focus. Poor practices include the potential for:

  • Forced adult labour
  • Child labour
  • Poor management practices, such as not providing protective  equipment or unfair working hours or pay.

Tackling exploitation of adult workers in third-party supply chains

A number of investigations by NGOs into the palm industry have uncovered human rights abuses. In 2016, we reduced our suppliers from 48 to 14 based on our Supplier Code risk factors. Although our Supplier Code clearly stipulates that third‑party suppliers should ensure human rights are protected, we are updating our policies in 2017 to include the explicit industry term ‘no exploitation’ and will roll out third‑party verification of mills at risk.

Update on Uzbekistan cotton

Cotton is a key source of income for Uzbekistan. In recent years, the country has made progress in eradicating child labour from its cotton harvest, thanks to a programme supported by ILO and the World Bank. However, the international community continues to be concerned by reports of civil servants being forced to pick cotton due to a lack of mechanisation. Along with other international cotton merchants, Olam has chosen to maintain our sourcing (at low levels) and attempt to influence positive change in the supply chain. As well as lobbying collectively with our peers, we will be stepping up engagement with the ILO and the World Bank directly in 2017 to maintain momentum in changing labour practices.

For more information on these issues, please contact crs@olamnet.com

The full report is available to download here.

Next section: How we tackle child labour