The German wholesaler Metro has Cash & Carry stores in five major Indian cities. But Oxfam Germany accuses it of violating workers’ rights and says that its strategy could jeopardize millions of jobs.
Metro is one of the top retailers in Europe and has expanded to Asia
In a recently-published study, Oxfam Germany quotes Metro workers as saying that if there is work, they have to stay - regardless of whether this means ten, 12 or 16 hours a day - and they do not get extra money.
Union members also report discrimination with regard to salary increases and promotions. Moreover, agricultural laborers have been found to receive wages below the poverty line, according to Franziska Humbert from Oxfam Germany.
Metro workers in India report having to do overtime without extra pay
"If we look at Metro's standards of corporate social responsibility, there is a considerable gap between the idea and the reality," Humbert explained.
Metro committed to social code of conduct
The accusations weigh all the more heavily, as the Metro Group is supposedly committed to a social code of conduct.
Metro spokesman Michael Inacker has dismissed the findings from Oxfam's study. "All providers have to comply with the company's social and ecological standards. This means that they accept to pay their workers the legal minimum wage," he said.
However, he did add that it was impossible to control how much the thousands of farmers they employ paid their hands each day.
Supermarkets are becoming increasingly popular in India among the middle-classes
Humbert from Oxfam said that Metro should assume responsibility for everybody in the supply chain. "Agricultural workers often earn no more than 85 euro cents per day. This is well below the legal minimum wage. They work for small-scale farmers and thus belong to the Metro supply chain. It is their right to receive the minimum wage. Therefore we can talk about violations."
Future of retail trade in India?
Oxfam is not only worried about compliance with labor laws but also about the future of the retail trade in India. Over 40 million people earn their livelihood as street vendors, small traders or shopkeepers in India.
They used to be protected by strict regulatory laws but liberalization policies have taken away their safety net.
The livelihoods of small traders are at risk from supermarkets and liberalization policies
"Millions are losing their livelihoods, and since there is no other social safety net and no other employment opportunity available for them, we are definitely heading towards a social disaster," warned Dharmendra Kumar, the director of India FDI Watch, an NGO that opposes Foreign Direct Investment in the retail sector.
Metro says it is promoting Indian small-scale farming. It has received help from the DEG, a German development finance institution, to provide training programs for suppliers. This has led to claims that Germany's development policies primarily serve the private sector.
Human rights organizations insist that the social responsibility of multinationals has to go beyond a corporate code of conduct.
They also warn that official development aid should only be granted to foreign companies if wages are fair and people's livelihoods are protected. However, Oxfam Germany says that this is not the case when it comes to Metro.
Author: Ana Lehman
Editor: Anne Thomas