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Fonterra & New Zealand Unions Sign Agreement

Joint Statement

Fonterra Co-operative Group Ltd (Fonterra)

International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco, and Allied Workers’ Association (IUF)

New Zealand Dairy Workers Union Incorporated (NZDWU)

Monday 8 April 2002 New Zealand Time

Fonterra And International & New Zealand Unions Sign Agreement On Labour Standards & Changes In Business Activities Affecting Employment

Wellington, New Zealand – The world’s fourth largest dairy company, New Zealand’s Fonterra Co-operative Group Ltd (Fonterra), has signed an agreement with the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco, and Allied Workers’ Association (IUF) and the New Zealand Dairy Workers’ Union Incorporated (NZDWU) to ensure minimum labour standards for all employees of Fonterra and its subsidiaries and to require consultation with employees’ unions when it contemplates major changes in business activities likely to result in job losses.

The Agreement was signed by Fonterra CEO Craig Norgate, IUF General Secretary Ron Oswald and NZDWU National Secretary Ray Potroz at Parliament here today, and will be witnessed by the Director General of the International Labour Organisation (ILO), Juan Somavia, and the New Zealand Minister of Labour, Hon. Margaret Wilson.

The Agreement applies globally to Fonterra, and subsidiaries controlled by Fonterra, and also requires Fonterra to advise Joint Venture partners of its obligations. It does not apply to contractors or suppliers.

The Agreement commits Fonterra to respecting the principles in various key ILO conventions. Among these principles, Fonterra shall provide for the right to freedom of association and collective bargaining for all its employees. This includes ensuring that Fonterra’s employees are free to join the workers’ organisation of their choice and to participate in its activities without discrimination or harassment.

Where Fonterra is engaged in collective bargaining with employees, it shall continue sharing information about the business as a whole and its local operations with union representatives that is reasonably required to bargain effectively. Fonterra shall provide safe and healthy working conditions for its employees and shall not use child labour, forced or compulsory labour or discriminate against any person in respect of their employment.

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The Agreement also requires Fonterra to provide affected employees’ trade unions with relevant information and to consult with these unions when it contemplates changes to business activities likely to result in a loss of jobs. This information includes the reason for the major changes contemplated, the number and categories of employees likely to be affected and the intended timeline for changes.

The implementation of the Agreement will be overseen by a Review Committee consisting of up to five people appointed by Fonterra and five by the IUF/NZDWU.

Mr Norgate said Fonterra was committed to financial, environmental and social performance, and saw the Agreement with the IUF and NZDWU as contributing to all three.

“These aspects of performance are entirely complimentary and we are pleased to commit to ILO principles not just in New Zealand but globally, and determined to work constructively with the NZDWU and other relevant unions to promote them,” he said.

Mr Oswald said that the agreement represents the company’s and the IUF’s joint commitment to guarantee full respect for trade union rights, decent work and decent treatment for Fonterra workers around the world

Mr Potroz said that the DWU sees this as a serious commitment by Fonterra to respecting basic human rights wherever it operates

END

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