Risky business

Landmark ruling highlights reputational danger for Gloriavale-linked supply chains



Stuff NZ Newspapers



Westland Milk is reviewing Gloriavale’s milk supply contract following evidence of exploitation at the West Coast Christian community. Amanda Cropp reports. Evidence of worker exploitation and use of child labour at businesses run by the Gloriavale Christian Community could see them dumped by big customers. Westland Milk Products is ‘‘investigating legal avenues’’ to suspend milk collection from Gloriavale’s West Coast dairy farms. The Unique Ma¯ nuka Factor Honey Association board will consider cancelling UMF licences for Gloriavale’s Forest Gold and Lamohka honey brands, and its Moo Chews milk treats for children. Pure Vitality deer velvet supplements also risk losing their Fernmark licences, a government stamp of approval for exporters. These moves follow a recent landmark Employment Court ruling in favour of three former community members who claimed they were employees rather than volunteers, and described children as young as 6 being hit, publicly shamed and starved if they did not work hard enough. Marjo Lips-Wiersma, a professor of ethics and sustainability leadership at AUT University, says companies that continue to do business with Gloriavale are risking reputational damage in light of the recent court judgment. ‘‘Now that it is clear that not only was child labour used, but such children suffered physical and psychological abuse, no company should want to be associated with Gloriavale. ‘‘From a reputational perspective, they would apply the newspaper headline test. Do I want it to be reported that my company directly or indirectly profits from child labour and abuse?’’ Westland Milk chief executive Richard Wyeth welcomed the Employment Court decision, saying it would further support companies to protect the rights of children, employees and others across the entire supply chain. ‘‘Dairy farms controlled by Gloriavale, like all Westland suppliers, are contractually obliged to comply with New Zealand employment law and standards, and to keep up-to-date employment records. Failure to do so could lead to termination of that contract.’’ Westland Milk Products, owned by China’s Yili Group, is reviewing its contract with Gloriavale farms. Wyeth says it would work through animal welfare and disposal of milk issues caused by an abrupt end to milk collection, but the volume of milk involved would have a minimal impact on company operations. According to its annual financial statement to Charities Services, Gloriavale’s Christian Church Community Trust owns 2960 dairy cows, but since 2009 the trust has consistently reported it had no full- or part-time employees, and last year it claimed that 40 volunteers did 23,600 hours of work over the previous year. Members of the West Coast farming community were reluctant to speak on the record, but several said they had long had concerns about employment practices at Gloriavale, and wider issues regarding the treatment of the 550 or so residents, and they were pleased to see something being done at last. One said that Gloriavale businesses had been regarded as big contributors to the West Coast economy but questioned at what cost to families who left the community and to those who remained. Another, although happy to see the local tide of public opinion turning, fears that the financial impact of Westland Milk refusing to take Gloriavale milk will result in community members having to ‘‘eat porridge for six weeks’’. Considerable evidence of the key role children played in the community’s commercial enterprises came out during the court case. Along with Gloriavale’s dairy farms, its honey, moss, and pet food operations came under scrutiny. Employment Court Chief Judge Christina Inglis said in her decision the duties described by the plaintiffs could not be classed as ‘‘chores’’ required of a child by a caregiver. ‘‘It was laborious, often dangerous, required physical exertion over extended periods of time, and it was for commercial benefit. The work was not assigned by the plaintiffs’ parents, but by the Gloriavale leadership.’’ Levi Courage, one of three young Gloriavale leavers who took the Employment Court case, gave evidence of doing morning milkings from the age of 6 or 7. He had worked before and after school in the Moo Chews business, and when the Ministry for Primary Industries (MPI) conducted a quality assurance audit on the Forest Gold honey business, he was told to hide in a chemical store for three hours until the auditor was gone, because at 14 he was an underage worker. As a 15-year-old he had put in up to 70 hours a week at the honey plant during peak season starting as early as 3am. He’d ended up exhausted and with bleeding hands after working 50 hours without sleep to fill 200,000 jars in three days. A 17-year-old who lost part of three fingers working in Gloriavale’s beebox factory in 2019 dropped his Employment Court case last year amid allegations he had come under undue pressure from family members still living at Gloriavale, and from others wanting him to proceed with it. Gloriavale also has a rendering plant, Value Proteins, which is licensed by MPI to produce bone meal from by products trucked in from meat plants and abattoirs around the country. Value Proteins is a member of the Meat Industry Association and chief executive Sirma Karapeeva said it encourages members to ‘‘meet high ethical standards and labour practices at all times’’. Court witness Faithful Disciple described how a Gloriavale leader told him not to use the words ‘‘employee’’, ‘‘employer’’ or ‘‘wages’’ when WorkSafe NZ officials visited the meal plant in late 2020, and he was ordered to keep himself busy so that officials were unable to talk to him. Others witnesses told of people being schooled to say they were volunteers when external agencies questioned their work status. The use of volunteers was central to the case before the Employment Court and the judgment noted that volunteer status could be justified only if the work was performed for non-economic reasons, and without competing with paid employees. ‘‘The fact that the same kind of work is usually performed for pay can be an indicator that it is economic in nature, and it also means that unfair competition with paid employees is likely. The work that the plaintiffs were doing fits that description.’’ Although Gloriavale could be liable for millions in unpaid wages, it faces other commercial consequences. Honey brands Forest Gold and Lamohka have licences issued by the UMF Honey Association, well recognised internationally and regarded as vital for ma¯ nuka honey exporters, but they may be in jeopardy as a result of the court findings. Association chief executive John Rawcliffe said the UMF board had the power to terminate licences, and a meeting at the end of the month would decide whether the Gloriavale brands met the terms of their licences and the association’s code of practice and values. Apiculture New Zealand represents about 2500 hobbyist and commercial beekeepers, and honey exporters. Chief executive Karin Kos said purchases were increasingly driven by ethical considerations, and the employment issues at Gloriavale could be damaging. ‘‘We have an excellent international reputation for our honey and this does have the potential to undermine the confidence of our consumers.’’ Fernmark is reviewing export licences held by Moo Chews and Pure Vitality because licensees must comply with all New Zealand laws and relevant regulations, and ‘‘be of good character and repute’’ in order to retain their government endorsement. Fernmark chief executive David Downs said the issue was complicated by the fact that Moo Chews and Pure Vitality were not among Gloriavale companies included as parties in the Employment Court case, and it may take about a month to work through a decision. Moo Chews last year experienced a backlash when it was revealed as the manufacturer of the children’s milk-based snack, leading two distributors to pull out when they learnt where the product was made because of concerns about employment practices. Moo Chews claimed production at Gloriavale company Alpine Health Manufacturing was halted while an investigation was completed, and it had since resumed. No details of the investigation or its findings were provided, and in a written statement Moo Chews said Gloriavale had challenges like any community. ‘‘Work there is ongoing, but leaders and managers are committed to upholding and protecting the health, wellbeing and happiness of all the members there.’’ The company declined to say how much of its output was exported saying the information was commercially sensitive, but its Facebook page appeared to show displays of Moo Chews in Asian supermarkets. Lips-Wiersma said the Gloriavale case highlights the need for companies to consider supply chain ethics. Publicity about employment issues at the Christian community should have been a red flag and prompted those who did business with its companies ‘‘to start asking some direct questions’’. She said being associated with poor labour practices could prompt retailers or customers to withdraw their loyalty, and share prices may fall. ‘‘Current employees may no longer be proud to work for you and potential talented employees will not apply.’’ Social licence to operate is also important, LipsWiersma said. ‘‘While the wider community might have supported Gloriavale because it is good for business, they may now rethink this and wonder if it is not better for the community if Gloriavale members get paid, pay taxes and have the freedom to purchase what they want from local retailers.’’