Fatal workplace accident at Indian sugar mill supplying PepsiCo

A worker at the Olam InterntionaL sugar mill in Kolhapur (Maharashtra) India was killed by falling sugar bags in a workplace accident on August 8 which also severely injured two other workers. According to the union representing plant workers, the factory has a long history of workplace accidents. But Singapore-based Olam, a major transnational commodity processor and trader, last year received a USD 120 million loan from the World Bank’s private lending arm IFC, whose lending criteria ostensibly include safety, social and environmental safeguards.

The IFC once held an equity stake in Olam but divested its shares in 2007 in response to allegations of illegal logging and environmental destruction in the Democratic Republic of Congo. Now they’re back, as lenders. Part of the IFC loan was earmarked for upgrading Olam’s sugar operations through a Public-Private Partnership involving the IFC, Solidaridad and the Bonsucro certification program which also includes work safety standards. Migrant construction workers were injured in the course of the work, and the union raised the issue of unsafe conditions at the factory. Nothing was done, and now a worker is dead.

Olam’s mills supply to major food transnationals in India, including PepsiCo. PepsiCo has a supplier code of conduct which “expects” suppliers to “provide safe and healthy working conditions”. When the union raised health and safety concerns, they were told the plant manager had resigned and there was no one to take responsibility. Are the IFC and Bonsucro certifying a phantom management? Does this arrangement meet PepsiCo’s “expectations”?

PepsiCo claimed various “audits” had determined that no human rights violations took place at its West Bengal warehouse operations when workers were sacked after forming a union and then told they could have their jobs back if they signed false statements, declared they would never again join a union and walked on their shredded union cards when they re-entered the warehouses.

Refusal to act in response to union-busting at its Indian warehousers put PepsiCo in violation of the human rights due diligence requirements of the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. Their supply chain now includes additional violations. Will these be legitimized through the World Bank and Bonsucro’s hazardous “partnership”?