Reynolds American takes step

reynolds

Reynolds American Inc. took a step Friday toward finding common ground with groups representing migrant farm workers in addressing laborers’ work and living conditions.

The company pledged to use an independent, third-party monitor to assess the working conditions at U.S. tobacco farms that supply product to Reynolds.

The company also proposed a council that would involve tobacco manufacturers, growers, the N.C. Labor Department, agricultural scientists, farm workers and their representatives, such as the Farm Labor Organizing Committee, and possibly other stakeholders.

The issue has been raised for at least four years at Reynolds’ annual shareholders meeting, including the one held Friday in Winston-Salem. Groups wanting to protest Reynolds’ policies typically buy its shares to be able to speak at the meeting.

Reynolds repeated its stance that it is not the company’s role to negotiate on behalf of non-Reynolds workers. In February 2010, Reynolds’ board of directors announced a “Statement on Human Rights” — on its website — for how it and its operating companies conduct their businesses.

There was some scoffing among farm-worker representatives when Daniel Delen, who took over as chief executive and president of Reynolds in March, said, “We believe no company has done more than R.J. Reynolds to promote farm-worker safety and improved working conditions on tobacco farms in North Carolina and beyond.”

However, Reynolds’ two updates to its policies appeared to take some tension out of the room because they were acknowledgments that the company is willing to take a more visible role in worker conditions. Both address the requests of farm-worker representatives.

It was not clear whether the proposals were a reflection of Delen’s role as top executive compared with Susan Ivey, who retired Feb. 28, or an evolution of Reynolds’ stance on the issue. Delen could not be reached for comment after the meeting.

The FLOC has been demanding that Reynolds use its clout to pressure its suppliers to improve conditions and raise wages for the state’s 30,000 tobacco farm workers.

Reynolds said its suppliers are required to certify they have received training from the Good Agricultural Practice program before its subsidiaries buy tobacco from them.

In proposing a council to examine the issue, Delen said, “Formation of such a council, when properly constituted, might well make a significant contribution to the improvement of worker safety and living conditions on the farms.”

“We believe that making progress on ensuring a safe and legal work environment for U.S. farm workers can best be achieved by taking this broader view of the situation.”

Delen said its legal officials are meeting Monday with Oxfam America and FLOC officials to begin the process of determining the lead official of the council.

“We want a leader who is independent, socially conscious and with no financial conflicts,” Delen said.

FLOC held a protest downtown Friday with about 130 participants. The group also was armed with a report that it said documented sub-minimum wages, needlessly dangerous conditions in the fields and inhumane living conditions at some N.C. tobacco farms last year.

Both Delen and Tom Wajnert, Reynolds’ chairman, referred to the report and its multi-party proposal several times during the meeting. Reynolds has suggested a multi-party approach on its website.

“This research reveals an industry that systematically exploits farm workers’ fears of arrest and deportation to deprive them of their basic, internationally recognized human rights,” said Minor Sinclair, the director of Oxfam America’s U.S. regional office.

“We hope the people who can truly influence Reynolds American will review this meticulously documented, first-hand research and take the suggested actions contained in the report. Nothing less is acceptable.”

The N.C. Labor Department has said that most farmers in North Carolina adhere to the worker standards. Some protesters have questioned how active regulators and enforcement officials have been in addressing working and living conditions.

“As for Reynolds Tobacco, in our experience they have been very proactive when it comes to safety and health training,” said Dolores Quesenberry, department spokeswoman.

The Rev. Michael Crosby, representing the Interfaith Center on Corporate Responsibility, said Reynolds is following the path taken by Altria Inc. and Philip Morris International in coming to the table. “I see a glimmer of hope on an issue we having been raising for a number of years,” Crosby said at the meeting. “For your willingness to participate with stakeholders, I sprinkle holy water on you.

“Yet, because these discussions are going on at the highest levels with Altria and Philip Morris International, I would urge you to take it to the same level here.”

The response to Reynolds’ proposals by many protesters was simply “prove it.”

“There remain questions on whether this council will look pretty and pretend to look into the labor issues, or it actually does address the issues and push for changes in a timely fashion,” Viridiana Martinez said.

“It is progress and it is about time, but we will continue to put pressure on them to do the right thing. It’s not enough to decide to be nice now. I still don’t know how these Reynolds leaders sleep at night.”

After the meeting, the board of directors declared a quarterly cash dividend of 53 cents a share. The dividend is payable July 1 to shareholders registered June 10.

Shareholders approved the reappointment of five directors and voted down three shareholder proposals that Reynolds did not support. The proposals were for annual director elections, eliminating flavoring in tobacco products and a request for human-rights protocols related to the firm and its suppliers.

By RICHARD CRAVER | Winston-Salem Journal

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