Page 61 - Ecuador's Banana Sector under Climate Change

chapter 2: economic and policy analysis of the banana sector in ecuador and implications for social and environmental sustainability
power to correct these externalities. The response has been the emergence
of niche markets, such as organic and Fairtrade Certification bananas that incorporate some measures of labour protection. Retailers also have established their own voluntary environmental or social norms, but to little effect, given that they were embroiled in a conflict of interest between pushing for strong social and environmental norms and preventing these from resulting in higher costs
and lower margins. Ultimately, the retail sector has outsourced verification and compliance of its own norms (GlobalGAP, originally known as the EurepGAP) to third-party certification bodies that work on their behalf as their main clients (since the retailers select the certification body with which to work). While Fairtrade Certification bananas may generate slightly higher prices for plantation owners and workers, evidence to date has shown that neither organic nor Fairtrade Certification have had any significant impact on the vast majority of banana workers in developing countries due to the continued small share of fair trade and organic bananas in the total market. At best, these niche markets have
had a marginally positive effect, since they continue to go through the same marketing channels as conventional bananas and are subject to the same market and price-setting conditions imposed by the concentrated retail sector. This has resulted in a substantially distorted distribution of value in favour of the retailer (35-40 percent), with only a very small share flowing to banana workers (below
3 percent).
A detailed study that documents the treatment of banana employees in Ecuador was issued by Human Rights Watch in 2002. Although somewhat dated, the study represents one of the most detailed analysis relating to the issue. Since Ecuador enacted its new, ambitious Banana Law in 2011, however, the situation for employees and the extent of child labour - also an issue - may have changed. The law requires that all plantation owners register their employees
with social security and, thus, formalize employment contracts. Moreover, the Government of Ecuador has insisted on adhering to the minimum wage and providing other benefits (e.g. social security and health) for all workers. To date, however, no formal or independent evaluation has been undertaken of current conditions and there is no rigorous method on how to gauge whether or not there has been an improvement since the Human Rights Watch study. To fully assess current working conditions, it is necessary to include the prevailing national daily minimum wage for a banana worker, the basic monthly cost (in US dollars) of a basket of food, as well as other basic household needs in rural Ecuador. These facts would determine whether or not a household of two or four can subsist on the minimum wage.
To ensure fair wages for workers, it is important to encourage and protect their right to form unions and engage in transparent wage negotiations with plantation owners. While owners are now subject to registering their employees and providing formal contracts under the Banana Law, it is equally important that these measures safeguard the right to form unions in adherence to the Minimum Wage Convention of the International Labour Organization.
The conditions to allow banana workers to organize themselves to extract higher wages have been stymied in Ecuador for a long time, as documented in
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