New Oxfam Report: Big Wines’ Human Rights Abuses

The COVID-19 pandemic has exposed inequalities between and within countries. It has also shown us how much we rely on each other to stay safe.

Workers and farmers across the world have helped ensure that we get the food we eat everyday amidst the pandemic. Unfortunately, the global food system remains tilted against their rights, specifically for women and migrant workers.

Systembolaget, the government-owned alcohol retail monopoly of Sweden, commissioned Oxfam to conduct a human rights impact assessment (HRIA) of their Italian wine supply chains. The HRIA aimed to evaluate the actual and potential human rights impacts at the wine production stage of the value chain in Italy, to identify their root causes, and to provide recommendations to relevant stakeholders concerning their prevention, mitigation and/or remediation.

The report by Oxfam revealed grave human rights violations of the wine industry in Italy, one of the largest wine exporters in the world.

Oxfam’s methodology aligns with the UN Guiding Principles on Business and Human Rights (UNGPs) and is informed by the OECD Due Diligence Guidance for Responsible Business Conduct. Oxfam conducted the assessment between September 2019 and April 2021 in four wine-producing regions of Italy: Tuscany, Piemonte, Puglia and Sicily.

The main data sources of this report included:

• academic and grey literature,
• semi-structured interviews with staff at Systembolaget and sub-suppliers,
• 79 interviews with workers across the four regions,
• documents shared by Systembolaget, and
• quantitative analysis of supply chain prices.

The report revealed poverty wages are a major human rights violation in all four regions. Since workers cannot meet basic needs with their wages, they are forced to work overtime. This can have a major impact on health, including death of workers, as seen in the case of Paola Clemente, who died while working on a vineyard in the Puglia region in 2015. Compounding these problems are the fact that workers do not have adequate access to remedy as they do not feel confident to raise their concerns in fear of job loss or reprisals from the company.

Major human rights violations of the wine industry

Oxfam found the following major human rights violations in the Italian wine industry:

Forced labor in Big Wine

According to Human Rights Watch, caporali, or gangmasters, ask workers for thousands of euro to facilitate contracts with employers, for example in the wine industry. Workers are depending on these gangmasters for securing employment, but also for other (non-)work related areas, such as transportation, food, phone top-ups, accommodation, and money transfers – where gangmasters are absorbing 40% to 50% of a worker’s daily pay, yet are ‘often the worker’s only means of survival,’ according to the Ethical Trading Initiative (ETI).

There is a high risk of workers in the wine industry being under the influence of caporali and experiencing horrendous labour exploitation that goes hand-in-hand with labour brokerage.

Poverty wages in Big Wine

Low wages paid as piece rates rather than according to collective wage agreements are common in the wine industry. The problem is not new. Already in 2015, a media investigation in the Langhe area of Piemonte found that for the most vulnerable workers, namely migrants from Africa and/or Eastern Europe, wages can be as low as €3 per hour in Piemonte, and €2.5 in Sicily.

The International Business Times reported that “Despite a gross hourly minimum wage of just more than €7, set by Italy’s national agriculture contract, many cooperatives pay workers as little as two to three euros per hour.” They exposed that “only one out of two dozen cooperatives operating in Canelli was reported by local media as charging wine producers 12 euros last year, a price that covers the basic wage, overtime pay and reimbursement for housing and meals, as required by the Italian national contract.”

Poverty wages is a widespread practice across the Italian wine industry. Many workers in the production of wine report that their earnings from one employer were not enough to cover their basic needs.

Big Wine uses exploitative arrangements to produce high-profit products where the workers need to work overtime or supplement the job to make ends meet.

There is also a high risk of pay disparities between men and women, and between Italian and migrant workers.

Excessive working hours in Big Wine

A significant proportion of workers in Italy’s wine industry, producing massive amounts of wine exported all around the world, is subjected to workinng long and/or excessive working hours. The Oxfam reports found that this is a widespread practice.

In addition, the report finds, there is a high risk of overtime work being either unpaid or not paid at a premium rate.

Big Wine exposes workers to health and safety risks

Workers in vineyards are at risk of a number of health issues, such as musculoskeletal problems from pruning vines, respiratory problems from allergies, or asthma due to exposure to insects and pesticides. Wine production workers face different health risks, including “working in confined spaces with low oxygen and high carbon dioxide levels” which can cause death. For these workers, for example, the schedule also includes the hottest part of the day, between 12pm and 3pm, which causes numerous cases of fainting.

The combination of harsh working conditions and the hazardous nature of the work means that it is likely that a significant proportion of workers in the wine industry are subjected to health and safety risks.

The reported cases of death and evidence of inadequate or complete lack of professional protection equipment provision by employers strongly indicate that workers are rarely protected from harsh working conditions in the wine industry.

Pervasive Human Rights abuses by Big Wine – an overview

This track record of human rights abuses by the wine industry is growing. Already in 2017, an investigation by IOGT-NTO’s members’ magazine Accent, exposed human rights abuses of Big Wine in Italy.

The Accent investigation was conducted in Canelli, a small town which mostly grows nutmeg grapes. They uncovered that labor brokers control most of the labor, the farm owners paid the brokers the legal amount per hour per worker but the workers only received a small sum at most 8 euros and at worst 4-5 euros per hour.

They shoe themselves on vulnerable groups and some are hit worse than others,” said Paolo Capra from Flat-Cgil, in 2017 as per, Accent.

There is a clear hierarchy among the seasonal employees. Macedonians rank highest in rank. They can at best get 8 euros per hour. Bulgarians get 4-5 euros an hour.”

Paolo Capra, Flat-Cgil trade union

According to the trade union Flat-Cgil, in 2017, at least 1,000 people, without statutory contracts and with an hourly wage of between 3 and 5 euros, work regularly on vineyards in the region.

Much of the Accent investigation findings were corroborated in the latest Oxfam report. In some cases things have gotten worse. Following is an overview of wine industry human rights violations according to Oxfam findings.

• Forced Labor
  • In Sicily, four out of six migrant interviewees reported that they had paid someone to secure their job.
• Low wages
  • Many workers across the four regions (80% of workers interviewed in Puglia, 25% in Sicily, 15% in Tuscany) can not meet basic needs with the pay they get from vineyards.
• Excessive working hours
  • A majority of workers interviewed in Piemonte often have to work more than an hour’s overtime without pay (57%).
• Health and safety risks in vineyards and wineries
  • Many of the interviewed workers (79% in Puglia, 29% in Piemonte and 25% in Tuscany) receive no or inadequate personal protective equipment (PPE).
• Lack of access to remedy
  • A lot of workers in all four regions were not confident raising a concern or grievance at the workplace (50% in Tuscany, 43% in Puglia, 21% in Sicily, 14% in Piemonte).
  • Many said this was because of fear of losing their jobs or fear of reprisals from the company.
• Restrictions to freedom of association
  • Trade unions play the only effective role of offering a means for migrant workers to raise concerns about their treatment in the sector. However, a significant number of workers in two regions do not feel they can safely join a union or do not know what a union is (64% in Piemonte, 30% in Sicily).
    • This was specifically high for migrant workers.
• Sexual harassment and gender discrimination
  • In all regions, men who were interviewed were much more likely to feel they were being treated fairly at work, receiving the same pay as other workers, and being treated with respect than women interviewees.
  • A number of women said they were paid less than men and employed for fewer months.
  • Many women felt unfairly treated but were less likely to feel comfortable raising grievances for fear of losing their jobs.
• Poor, unsafe and unsanitary housing
  • Some interviewed workers in Sicily judged their accommodation to be ‘not very good’.
  • Given the widespread nature of poor accommodation conditions among workers in the Italian agricultural sector it is likely some workers are living in poor, unsafe and unsanitary housing.

Insights into Big Wine

Italy is one of the leading global wine producers in terms of volume. The wine industry in Italy is responsible for 18% of global wine production in 2019, compared to 16% from France and 13% from Spain.

The Italian wine sector generated revenues of approximately €13bn in 2018, around 10% of the Italian agro-food sector, with revenues projected to grow to approximately €14.9bn by 2023 – growth driven by exploitation and human rights abuses. 

The Italian wine industry is heavily dependent on exports, providing the world with alcohol made under exploitative conditions. Export accounted for around half of total revenues in 2018 – €6.2bn – making wine Italy’s most lucrative agricultural export.

Sweden is reportedly the fourth The biggest markets by value for the Italian wine industry are the USA, Germany, the UK, and Sweden.

Big Wine in Italy is increasingly concentrated and dominated by a small number of dominant producers. Just 168 Italian wine producers, or 0.4% of the total, generated 60-70% of the sector’s total revenues in 2019.

Among them is, for example, alcohol industry giant Constellation Brands, that owns Ruffino Group, which is the third biggest wine exporter in Italy. The second biggest exporter, Farnese Group, is owned by a U.S. based private equity investment firm Platinum Equity.

The companies producing more than 50,000hl increased their production capacity by 20% between 2006 and 2015, while the number of firms remained stable. Of the sector’s approximately 46,000 wine producers, 168 generate revenues in excess of €25m per year, reaching a profitability of 7.5% in 2019, and accounting for about 60-70% of the sector’s revenues – profit margins driven by exploitative labor conditions and human rights abuses.

The two most profitable companies were the Cantine Riunite-CIV, with total sales of €615m (up 3.1% from 2017), and Caviro, with a turnover of €330m (up 8.6% from 2017).

Big Wine operates like Big Tobacco

The problem of human rights abuses of agricultural workers is by no means restricted to any one country, commodity or company, but is endemic throughout global food and beverage value chains, according to the Oxfam report.

In addition to the labour exploitation described in the Italian wine industry by Oxfam, there are reports of similar conditions in the Italian tobacco industry – with Indian migrant workers reporting having to resort to opium to cope with the pain and stress of the workload.

Source Website: Oxfam