Investor Presentaiton

MVO NEDERLAND that 2.1% of the workers in the fruit industry were subject to forced labour. 28 There have been cases of debt bondage in the citrus production, which also takes place in Minas Gerais, often through 'liders' (labour contractors). These liders recruit the workers, usually from poorer areas or from other countries, and monitor them constantly. 29 Labour conditions Informality is just like in the coffee sector - a problem in the fruit sector. In 2013, almost 60% of the agricultural workers did not have a formal contract, according to a survey. This number was higher in the north and the northeast of Brazil.30 The pressure on workers is strong, especially when there is a lider involved. But without a formal contract, the worker has a weak position. Furthermore, the labour reforms of 2018 have weakened the labour unions, adding to a more fragile position of the informal worker. Farms in the fruit sector have been fined for excessive working hours for their employees and for not providing correct safety measures. The use of pesticides also poses risks to the health of the workers.3¹ In the banana sector, contracts are mostly flexible and temporary which affects the local communities that need the security of a permanent contract. Wage and remuneration The most important challenge for the worker in the fruit sector is to have a consistent salary. As workers are paid based on their productivity and as the work if often seasonal, workers don't have a stable monthly income. The flexibilisation of labour regulation has also allowed for more flexible hours and seasonal work, adding to uncertainty around salaries. Wages in the banana sector do often not provide a subsistence income for farmers. This is among others due to high costs of agricultural machinery, fertilizers, packing and transport, which in turn lead to lower wages in compensation.32 Environmental challenges Biodiversity and deforestation The decrease in biodiversity is already impacting for example the citrus production, for example, which depends on pollination by insects. However, these insects and the other parts of their ecosystem are impacted by the wide- spread use of fertilisers. Pesticides and fertilisers For the sectors that were visited during the mission, bananas are one of the most pesticide intensive crops, since they are very sensitive to fungi, like Black Sigatoka. However, due to the wide-spread use, the fungus becomes resistant to these pesticides.33 Water use and availability Various Dutch trading companies mentioned water use as one of the major issues, especially related to decreasing groundwater levels and recent accidents in the mining sector polluting river water used for irrigation. 28 https://www.ilo.org/wcmsp5/groups/public/---ed_norm/--- declaration/documents/publication/wcms_111297.pdf 29 Global2000, Squeeze out: The truth behind the orange juice business, 2016 SOMO, Sap met een bittere bijsmaak, 2017 30 https://canalrural.uol.com.br/noticias/quase-dos-assalariados-rurais-nao-tem-carteira-assinada-diz- pesquisa-contag-7716/ 31 SOMO, Sap met een bittere bijsmaak, 2017. 32 Fairtrade, Britain's Bruising Banana Wars (2014) 8. 33 Wageningen UR, 'Mechanisme ontdekt waarmee Black Sigatoka-schimmel in banaan minder gevoelig wordt voor gewasbescherming', 2017. 25

View entire presentation