April 2023

ALDI successfully pilots an innovative living wage verification process on banana farms

The ALDI SOUTH Group together with ALDI Nord and other sectoral stakeholders, including Heartwood LLC, Banana Link, Dole, Grupo Iren and Banafem, have initiated and led a pilot project to understand worker-led living wage verification in major banana production countries in Latin America.

Person with banana stock on back walking up truck ramp

The aim of this report is to share the learnings with other stakeholders in the banana sector to help them improve the verification process. The project included suppliers, traders, farms, workers, Banana Link, and trade unions. This initiative engaged three farms who supply the ALDI SOUTH Group indirectly via exporters.

In one case, verification was led by an independent trade union and represented workers. They were able to verify the average wages and at the same time point out that the wage averages tend to mask wage fluctuations (sometimes below minimum wage) at certain points in the year. Farm management was receptive to the feedback and open to continuing the dialogue to find solutions. As a result, there was a high level of transparency and confidence in the results and clear remediation measures were identified.

In another case, verification was led by farm worker groups and Fairtrade worker committees. The meetings between the representatives and farm management achieved transparent dialogue around other related topics, such as informal labour, holiday work, and seasonal pay differences. This produced positive results that would not have normally been identified during remote checks or routine audits.

The following learnings are recommended next steps for other stakeholders:

Include requirements around the tracking of wages in procurement policies and contracts with suppliers to increase transparency and simplify the verification
Engage in pre-competitive collaboration to support large-scale capacity building on living wage application for trade union and worker representative groups
Engage on-the-ground partners to repeat similar processes with more farms. Start by focusing on similar projects where independent trade unions are operational
Facilitate and support open dialogue between trade union members and farm management. On non-unionised farms, aim to strengthen dialogue between farm management and worker representatives, with increased protection for the worker representatives
Work with partners to build further capacity of trade unions on living wage verification
Include relevant standard organisations in the delivery of capacity building and training

Overall, the pilot demonstrated that by establishing dialogue, collaboration and building trust among all the relevant stakeholders, farms were more open to share sensitive information. This enabled more accurate wage calculations as well as an effective verification mechanism. This process worked most effectively when an independent trade union was present and involved. Ultimately, the pilot demonstrated potential of worker-led verification. To ensure scalability for such an approach, investments into large-scale capacity building for local trade unions and worker representative groups are needed. The learnings are not country-specific but relate to the type of worker organisation involved.

This joint effort is a step towards ALDI’s Vision 2030 and its commitment to respecting human rights while improving living and working conditions throughout all our supply chains.