Westland Milk's ethical management award tainted by court-required association with Glorivale's dairy farm. WMP price dives. Impressive progress eliminating M. bovis

Westland Milk has just received a “top 5%” rating from EcoVadis for ethical management. One of the aspects which helped them to achieve the ranking was stated by: Mark Lockington, General Manager Environment and Milk Supply who said; "the involvement of Westland suppliers in signing on to the company’s new Code of Conduct was one of the major factors behind the company being awarded a Gold ranking for its sustainability credentials”.

EcoVadis, the company behind the creation of the ratings process says on its web page that over 1.6 million companies are screened and of these over 100,000 are rated. Among their stable of ‘customers’ are included the likes of Air France to Mars (bars), so obviously businesses see them as a credible and worthwhile rating organisation which can add value to a firm’s reputation.

I have no doubts that Westland probably deserve the accolades and wish them well and certainly don’t wish to rain on their parade. However, more than one person has found that the “suppliers Code of Conduct” being one of the drivers behind the awards somewhat ironic given the relationship Westland has with Gloriavale farms who have had probably one (or more) of the highest profile court cases regarding employment relations. These were over the way Gloriavale were treating its ‘members’ (or employees as the Employment Court found) in the workplace. In the latest case the Employment Court found in favour of the women (staff) who claimed that they were employees and their work was not “voluntary”. The Gloriavale hierarchy said they believed the decision was wrong and they planned to appeal. This case didn’t necessarily extend to the dairy farms however, the same ‘management’ that extended over the women in the employment court case also was the same management that is over-top of the dairy farms as far as can be ascertained.

Westland obviously have been aware that being associated with the “Christian Community’, especially in regard to these employment matters, has its downsides. As in June last year when the last employment case was ratcheting up, there was also another case regarding that which concerned children being used to work on the farms and described by an AUT professor as;  “Now that it is clear that not only was child labour used, but such children suffered physical and psychological abuse, no company should want to be associated with Gloriavale”.

Westland sought to distance themselves from the ‘community’ by suspending milk collection until the community "meets the standards and values" required.  Perhaps unfortunately for Westland Milk a court ruled against the suspension, in a decision;  “Justice Jan-Marie Doogue ordered Westland to continue to collect milk from Canaan's farms Bell Hill, Gloriavale and Glen Hopeful subject to the condition that Canaan does not employ any minors or associate partners under the age of 18 on its farms”. This seems ironic given that the court had found in favour of employees who in the past had worked on the farms and the women’s case was found in favour a further 12 months later. And, it make you wonder what levels have to be reached before a company can disassociated itself from someone who may drag down its reputation.

So, to be fair Westland has tried to put distance between themselves and Gloriavale but it raises the issue of just how credible and valued the EcoVadis award should be considered and whether EcoVadis seem as equally blind to employment practices as at least some in the Employment Court and certainly the Labour Inspectorate have appeared to be.

The damage is probably more against EcoVadis rather than Westland in this this case and you would hope that not too much has had to be paid to belong to such ‘esteemed organisations’. Westland who has been a ‘member’ for five years, joined at the behest of some of its international customers. No doubt to ensure they could rely on not being caught up in any bad publicity from a suppliers poor practices.

In the meantime, the GDT has continued its lacklustre performance with a -4.3% auction fall with the results below:

Butter index down -0.7%, average price US$4,680/MT
Cheddar index down -1.4%, average price US$3,910/MT
SMP index down -1.4%, average price US$2,454/
WMP index down -8.0%, average price US$2,864/MT

Of particular concern is the continued fall in Whole Milk Powder which has had close to 12 months of continuous falls in the GDT.

The falls are leading Westpac at least to wonder if their already reduced $7.80 forecast for next season is too bullish and a trim may be in store. Given that China has increased home production by 4% over the previous season and with much of this going into WMP it raises the question as to how much China can be relied upon as the main ‘go to’ market for much longer. No doubt if New Zealand didn’t supply cows to China someone else would have, but perhaps some similarities are starting to be seen with other primary industries.

On a more positive note it appears that M. Bovis may be gone with no farms currently under any controls. When the eradication programme began, I was among those that was highly sceptical eradication could be achieved. But 4 years on what seemed an impossible task has been done. Well done and congratulations to all concerned.