Striking Carter Holt mill worker's union puts pressure on company's 'ethical' stance

Workers from Ceres Organics protest against their conditions. Their union has threatened to challenge the company's ...

Workers from Ceres Organics protest against their conditions. Their union has threatened to challenge the company's certification on social justice grounds.

Disgruntled workers and unions who challenge a company's ethical stance might give investors "pause for thought", an investment expert says.

In Australia this week, a forestry workers union representing locked-out staff at a Carter Holt Harvey mill has threatened to challenge the company's certification with the Forest Standards Council, a credential that is used when it trades.

Two hundred workers at Myrtleford mill in Victoria have been locked out for three weeks after talks broke down over a claim for higher pay and annual leave.

The union now claims Carter Holt is breaching the ethical labour elements of its certification, and has threatened to  write to the company's supplier, which is owned by international pension funds.

READ MORE: Ceres Organics workers strike for better working conditions

"Without certification it will be difficult for the company's products to get on to building sites and on the shelves of the big timber and hardware retailers," Construction, Forestry, Mining and Energy Union secretary Michael O'Connor told the Sydney Morning Herald.

A not-dissimilar strategy was used by distribution workers at Ceres Organics in Auckland in March. 

The workers claimed Ceres should lose its "organic" status because it refused to negotiate over redundancy entitlements and overtime rates and discouraged union membership – claims the company disputes.

Ceres was certified by BioGro New Zealand, which had a social justice policy including freedom of association for union members, First Union organiser Marcus Coverdale said: 

How much sway claims like these would damage a firm's international standing is unclear.

But Andrew Bascand, managing director of Harbour Asset Management, said investors were certainly placing more focus on ethical considerations.

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Most global pension funds were signatories to the United Nations Principals for Responsible Investing which considered environmental, social and governance matters in the companies they invested in.

That usually meant that they avoided investments in the tobacco, arms and sometimes gambling or alcohol-related trades. 

"What you're talking about might cause an investor to say, actually I might still invest in this company but I might engage with this company to discuss this matter.

"Because often when these sorts of things arise, they can signal broader issues of governance or social justice."

However, if investors were convinced it was just an isolated issue of industrial action, it was unlikely to do any damage.

Sometimes industrial action was not necessarily a bad thing for a company, Bascand added. Five years ago Australian airline Qantas locked out its staff.

"That was a really tough decision on the day from that chief executive and it was very painful for those employees but you speak to Qantas now, that culture is just terrific now.

"They just had to make changes because otherwise they were going to go bankrupt."

Asked about the Carter Holt Harvey case, the Forest Stewardship Council says it had not received the union's complaint yet but if it did, it would go to its international office in Germany. 

Carter Holt Harvey did not return calls, but the New Zealand Forest Owners Association president Peter Clark said such a thing was unlikely to happen here.

The FSC's social concerns had been about protecting immigrant workers from Indonesia or Africa from exploitation. 

​"Where you have labours laws in a developed country like New Zealand or Australia, irrespective of unions or not, I would suggest that they would struggle to use those clauses in the FSC to show unethical behaviour."

It sounded like the Australian union was "grasping at straws", he said.

 - Stuff


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