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IUF and New Zealand Dairy Workers' Union Sign International Union Rights Agreement with Fonterra

Posted to the IUF website 08-Apr-2002

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IUF and New Zealand Dairy Workers' Union Sign International Union Rights Agreement with Fonterra

The IUF and its affiliated New Zealand Dairy Workers Union (NZDWU) today signed an agreement on international trade union rights and minimum labour standards with the New Zealand-based Fonterra Co-operative Group Limited, the fourth largest global dairy company. The agreement was signed in the national Parliament building by IUF General Secretary Ron Oswald, NZDWU National Secretary Ray Potroz, and Fonterra CEO Craig Norgate. ILO Director General Juan Somavia and New Zealand Prime Minister Helen Clark will sign on as witnesses enhancing the profile of the agreement. New Zealand Labour Minister Margaret Wilson attended the signing ceremony on behalf of Prime Minister Helen Clark who had had to leave for the UK for the Queen Mother’s funeral.

The agreement commits the company to respect international labour standards as defined in ILO Conventions 87 and 98 (freedom of association and the right to collective bargaining), 135 (worker representatives), 29 and 105 (forced labour), 138 and 182 (minimum age, child labour), and 100 and 111 (equal remuneration and employment discrimination).

In addition, the agreement establishes the company's obligations towards the unions representing its employees in the event that business changes with adverse employment consequences are under consideration. In these circumstances, the company undertakes to provide the affected unions with precise information on the nature and potential consequences of the changes, and to consult with the unions on measures to minimize the consequences for employees.

Fonterra was formed in October 2001 through the merger of the two largest New Zealand dairy co-operatives with the company responsible for export marketing, the New Zealand Dairy Board. The New Zealand Dairy Board, at the time of the merger, maintained subsidiaries in some 100 countries, including three dozen manufacturing sites outside New Zealand. Since the merger, Fonterra has extended its geographical scope through joint ventures and other arrangements, including in North America where it now has a major joint venture with Nestlé as "Dairy Partners America". Under the terms of the international agreement, Fonterra will inform joint venture partners of its obligations.

A joint Review Committee made up of representatives of the IUF/NZDWU and the company will meet annually to review the application of the agreement, as well as other issues of mutual interest.

The NZDWU has a history of active international work and support for unions inside the company's foreign subsidiaries. In 1996, the union negotiated an innovative collective agreement with the former Dairy Board in 1996 under which the company contributes to a fund for the union's international co-ordination and solidarity work. Union members have been involved from the outset in reviewing the successive forms of the just-signed international union rights agreement as it evolved through the negotiating process.

International framework agreements with transnational companies have been a central element of IUF policy since it began the process of negotiating a series of precedent-setting agreements in the 1980's with what is now the French-based Danone food group, and since extended to other transnational food and hotel groups. "With this agreement with Fonterra", said IUF General Secretary, "We have established an excellent basis for building healthy industrial relations practices within this increasingly global company. For the IUF, the NZDWU, and our worldwide membership inside the company, it is essential that this work can now go forward within an international framework which has itself been established through the negotiation process."

To see the agreement in full in English click here.

To see the poster that has gone up in a series of langauges in Fonterra plants world-wide click here.

To see the agreement in full in Spanish click here.