Unilever has improved workers’ conditions in its Vietnam manufacturing operation but must step up its efforts to ensure gender equality and do more to influence the wider system affecting labour rights, Oxfam has recommended.
The call came as the international charity today published a report suggesting Unilever’s commitment to labour rights in its Vietnam operations and supply chain has improved over the past three years. However, significant challenges remain.
The document – which follows a similar study carried out in 2013 – shows the food and drink giant has ramped up dialogue with trade unions, assured better sourcing policies, and increased trust between workers and management. It has also made a commitment to more direct employment in its manufacturing operations, bringing greater job security and employment benefits.
Wages of a typical semi-skilled worker in Unilever’s factory in Cu Chi, near Ho Chi Minh City – which manufactures personal care, homecare and food products – increased 48% from July 2011 to July 2015, helped by government increases in the minimum wage, but lower skilled workers with dependants said they still struggled to make ends meet.
The Oxfam review also points to weaknesses in the multinational’s Vietnam operation, where more people are directly employed in the factory, but the proportion of women is down to 13% in 2015 from 19% in 2011. At the same time, female employees make up two thirds (67%) of the workforce at a third party supplier that offers lower wages and fewer benefits.
And, while suppliers are now more aware of Unilever’s expectations on labour standards, they lack guidance on how they can deliver on these while meeting commercial requirements at the same time, with four out of five suppliers believing improved standards would cost them more money.
Oxfam said Unilever should put greater focus on improving worker representation and business practices, and engage more with governments to force positive change. The company allowed the charity access to its staff, operations, data and key suppliers at its Cu Chi factory – which Rachel Wilshaw, Oxfam’s ethical trade manager, said was an “unusual” move that showed “great transparency and openness to improve”.
She went on to urge Unilever to “use its power to influence other companies, and governments, to tackle the root causes of poor labour standards”.
Unilever welcomed Oxfam’s report of “significant improvements” and acknowledged the call for continued and sustained positive change for workers in Vietnam and beyond.
“The complexity of some of these issues means they can only be effectively addressed by engaging with peer companies, civil society, trade unions and governments,” said a spokeswoman.
“We remain committed to playing our part in both dialogue and driving action to create positive, lasting change and to partnering with stakeholders and rights holders to tackle the root causes of such systemic issues,” she added.
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