DEAR T-MEC: New Standard for Agricultural Labor under USMCA

Alianza Hortofrutícola Internacional para el Fomento de la Responsabilidad Social (AHIFORES) was founded by agricultural companies in 2015 with the goal of addressing labor and social challenges in the sector. It designs standards and certifications and provides training for their implementation

Q: When did you start working on the DEAR standard?

A: Last June, we started working on the Distintintivo Empresa Agrícola Responsable Tratado Mexico Estados Unidos Canada (DEAR: Distinction for Responsible Agricultural Company USMCA). It was created specifically for Chapter 23 of the USMCA agreement, which relates to labor conditions. Before this, we already had a certification scheme in place, which contained several of the elements DEAR addresses. In deciding which elements needed to be covered, we meticulously studied the Mexican labor reform of 2019 and international labor treaties. This standard is designed specifically for agricultural producers and any other party in the supply chain to ensure it can fully comply with every aspect of the USMCA agreement regarding labor rights.

Q: How specific is USMCA in its instructions regarding labor conditions?

A: From my point of view, USMCA is clear. There are three principal topics in Chapter 23. The first is unionization and collective contracting and the details there are very straightforward. The second topic is forced labor. This is a practice that is particular to each industry. This means every industry and each partaking country has to evaluate the forms in which forced labor takes place. In the agricultural sector, the nature of contracting is often informal, which adds to a lack of transparency on what is forced labor. With respect to child labor, the third topic, Mexico also has a particular context. Agricultural work is considered a health risk, which forces companies to take a better look at child employment. In our standard, we also included other rights that Chapter 23 mentions, including salaries, overall work conditions (affecting health and safety) and discrimination.

Q: To what extent did the existing Mexican law already cover labor rights standards?

A: Everything is in accordance to Mexican legislation, specifically the Federal Labor Law. If there is something not clearly dictated by Mexican law, we had to refer to international norms. During the negotiations on labor rights for USMCA, it was established that the three countries must meet International Labor Organization (ILO) norms. Apart from these frameworks, there is also the Mexican law on human trafficking. Forced labor is typified as a human trafficking crime, which makes this law relevant.

Q: How ready is Mexico to meet these new standards?

A: In all three areas, there are significant opportunities for the country. The biggest challenge in the country is child labor. To eradicate this, there must be a parallel effort between business and public policy. If a parent works in the field, they must have a place to leave their child. There are nearly 1 million agricultural workers permanently moving between areas of the country and they are taking their children with them. Before, there was a government program that funded special kindergartens in these areas but the current administration eliminated this program. This has left parents with the option of either leaving their child at their rented home or taking them to the field. In the field, it is very easy for children to do small tasks. However, this is child labor. This is not well-understood by many agricultural workers. The risk of child labor depends on the crop. With avocado, for example, the way it is harvested offers little chance for child labor practices. However, chili, which is a crop that has been flagged for child labor practices, grows close to the ground and can be picked by small fingers.

The federal government must sit down with companies and come up with a joint strategy to protect children. The government may think that with an education scholarship they can solve these issues, but if there is no kindergarten with staff, children cannot attend and money will be spent elsewhere by parents. In Sinaloa, there have been very important advances in private schemes to protect children. There are other regions in the country where companies have made important advances. However, the country is still lacking such practices.

Q: Recently, the National Agriculture Council (CNA) hinted at lowering the legal working age to avoid child labor disputes. How did this issue shape your standard?

A: In 2014, the minimum working age was modified by Mexican legislators from 14 to 15 years old. They did this before Mexico ratified ILO Convention 138. When Mexico ratified it, the Ministry of Labor labeled agriculture activities as a health risk, threatening the health and life of children. Considering that the National Convention on Children’s Rights establishes that anyone under the age of 18 is a child, anyone under 18 was then no longer allowed to work in agriculture. There were protests from youth who were working in agriculture earning money for their education. Often, these children work on the weekends or during vacations. On the other hand, there is a large number of people working in agriculture from indigenous communities. In their communities, it is very common for children to marry around the age of 12 or 13, and have kids soon after. How are these people going to maintain their children and family if they cannot work in agricultural jobs? Businesses consulted with the Ministry of Labor to seek an exception for 16 and 17-year-olds who would be allowed to work with their parent’s permission and authorization from the states’ labor authorities. Now, we need to wait and see what Mexican legislators decide to do. The current law still stands at 18 years old and we stick to that in this standard.

Q: How has the standard been received by the Mexican government?

A: The standard was developed with funding from agricultural producers, in a collaboration with AHIFORES and CNA. AHIFORES is an organization that was created by Mexican agricultural producers. There was no funding from the government to create the standard. However, the administration has made funds available for its promotion. Furthermore, the Ministry of Labor and the Ministry of the Interior, as well as the US Department of Labor, all provided their opinion on the standard. They said the standard is good and that it meets the norms for legal labor.

Any company can implement our standard. It is like a methodology, with indicators and metrics. It tells you where your business stands. Some conditions have zero-tolerance indications. If companies do not meet them, they will receive a red alert. Other conditions pose a higher or lower level of risk to labor conditions if not implemented. There are some indicators that do not apply to all companies, depending on their size. In some cases, criteria will not be relevant because of the form of their business.

Q: Do you think parties in the US and Canada will require a certain level of compliance with this standard?

A: No. We were already told by authorities from the US Department of Labor that they will require no certification or recognition of any kind from a private or government entity. The value of this standard is that it demonstrates companies comply with the norms established by USMCA. It will act as a preventive measure against trade issues.

The other thing we have been very careful about is that the standard indicates how to generate evidence of compliance. Companies always have to be ready to show, either through regularly updated documentation or through frequent third-party inspections, that they are doing things well. USMCA includes a rapid response mechanism that forces companies to show within a determined period of time that noncompliance accusations are not real. This is why having the evidence readily at hand is essential.

Q: How much of an investment does DEAR represent for companies?

A: To improve labor rights of workers certainly requires an investment. Obviously, this depends on their level of compliance. If you already contract your workers appropriately, offer formal salaries, periodic studies of conditions, protective gear and other things, your investment will be lower. For some companies, it is a challenge to come up with this investment. Some have to broaden their compliance team to integrate new areas.

Q: What does this standard mean in terms of Mexican producers’ competitiveness?

A: It is fundamental. If the company wants to continue being competitive, it must comply with the standard. This does not just apply to the company that exports directly but the whole supply chain. In our meetings with officials from the US Department of Labor, they told us that because there were not only cases of domestic labor issues but also US distributors that store Mexican products, US parties must also work to implement these standards. Another party that must comply are the intermediaries that contract personnel for agricultural companies.  

Q: Have US threats on potential punitive measures due to labor issues gone down with the launch of this standard?

A: The pandemic has delayed some of the mechanisms that US officials are putting in place to evaluate practices in Mexico. COVID-19 has not allowed a lot of mobilization. Likewise, the Mexican government is also in the process of implementing evaluation mechanisms in collaboration with their US counterpart. The Mexican government is aware of the importance of labor rights and good labor conditions in international trade. Without a doubt, there are still many areas that need improvement in the Mexican agricultural sector and this standard is a good move in that direction.

Q: How might the standard be upgraded in the near future?

A: We are permanently upgrading the criteria and the means available for agricultural producers to meet requirements. At the moment, there is an ongoing legislative process in Mexico in the area of subcontracting. When this reform is approved, we will have to modify the standard. Overall, in unions and collective contracting there have been some radical changes over the last years. Now, the authority presiding over issues in this area will be the Federal Center for Conciliation and Labor Registration. Besides this, there are also ongoing changes in health and safety at work, which apply to all sectors. AHIFORES also offers another certificate called Certificado de Empresa Agrícola Responsible (Responsible Agricultural Business Certificate). We are recommending companies to adopt this as well as DEAR USMCA, leading to broader compliance. 

To see the full DEAR T-MEC, click here