Complaints over labour rights against Starwood, PepsiCo before US National Contact Point for OECD Guidelines - report on outcomes

In 2016, the US Government National Contact Point for the OECD Guidelines for Multinational Enterprises concluded two cases in which complaints were brought by the International Union of Food, Agriculture, Hotel, Restaurant, Catering, Tobacco & Allied Workers' Associations (IUF), one against PepsiCo regarding actions by a contractor in India, and one against Starwood Hotels & Resorts regarding Sheraton hotels in Ethiopia and Maldives.  These were two of the first cases before the US National Contact Point to go to mediation.

In the Starwood case, the parties reached an written agreement on resolving labour issues in both countries. 

In the PepsiCo case, the US National Contact Point stated, "While the parties weren’t able to come to a written agreement the Specific Instance did result in significant action by PepsiCo.  The company led an investigation into the allegations, reformed its supplier code of conduct, and is in the process of crafting a human rights policy in line with the OECD Guidelines."  IUF states, "Direct discussions between the IUF and PepsiCo, including mediation under the auspices of the [US NCP] for the OECD Guidelines..., have failed to remedy the abuses."

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11 May 2016

Specific Instance between Intl. Union of Food, Agriculture, Hotel, Restaurant, Catering, Tobacco & Allied Workers' Associations (IUF) and Starwood Hotels & Resorts for conduct in Maldives & Ethiopia

Author: U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises

The USNCP offered mediation to the parties...[which] resulted in an agreement... [The parties] authorized public dissemination of the following joint statement:

...[The] parties have reached full resolution of the concerns raised by IUF pertaining to the discharge of workers and the collective bargaining process at the Sheraton Addis Ababa hotel. In regards to Sheraton Maldives, the parties shall reconvene at an agreed location to continue to explore options in good faith to resolve the matter... As a follow-up measure...[in] one year...parties will be asked to separately submit a confidential response to the USNCP on the status of the agreement...

IUF claimed that...two of its Sheraton-branded properties, the Sheraton Maldives Full Moon Resorts & Spa in Maldives (Sheraton Maldives) and the Sheraton Addis Hotel in Addis Ababa, Ethiopia (Sheraton Addis) allegedly failed to recognize legitimate trade union organizations, failed to negotiate with those unions, and undertook mass employee terminations in order to intimidate workers and prevent them from exercising their rights...

The company...[stated] that it was undertaking an internal review...[and subsequently] reported that initial investigations were complete and that the company had determined that Starwood had not violated OECD Guidelines...[According to Starwood,] Sheraton Maldives [and Sheraton Addis both] did not carry out a mass employee termination to intimidate workers or prevent them from exercising their rights...

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15 April 2016

Final Statement on Specific Instance Between Intl. Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco & Allied Workers' Associations (IUF) and PepsiCo in India

Author: U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises

In November 2015, PepsiCo...[asked] the USNCP...if mediation would still be available. The USNCP agreed to mediate... The parties entered into three days of mediation under the USNCP and facilitated by the Federal Mediation and Conciliation Service (FMCS) in February, 2016. Although they were not able to reach a mediated agreement, the parties and the USNCP found the dialogue and mediation process to be productive and useful. The USNCP believes that the process did lead to greater understanding of the Guidelines and will result in a quicker recognition of and easier solution of such issues when they arise in the future...

In its submission, the IUF specifically alleged that:

  • Between January 5 and April 30, 2013, 162 out of the 170 workers employed at three West Bengal warehouses exclusively contracted by PepsiCo [and operated by Radhakrishna Food Land Pvt. Ltd.] were dismissed or compelled to resign solely as a consequence of exercising their right to join a union...
  • Union members at the warehouses were the subject of harassment, threats and intimidation at the hands of “thugs” brought in by management [and other actions by the warehouse management & staff violating workers' rights]...

PepsiCo did not...[discuss] the specific allegations...:

  • First, PepsiCo argued that...[it] had gone to great lengths to investigate the allegations. PepsiCo reported that the company had received satisfactory answers to its inquiries of RKFL regarding all of the allegations...
  • Second, PepsiCo emphasized that the Specific Instance focused on the alleged actions of its contractor, and not actions by PepsiCo or its subsidiary

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