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PepsiCo India and the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Association (IUF)
Lead NCPUnited States
Supporting NCP(s)None Selected
DescriptionSpecific instance notified by the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Association (IUF) regarding the activities PepsiCo India, a subsidiary of PepsiCo Inc., operating in India.
Theme(s)Employment and industrial relations
Date18 Nov 2013
Host country(ies)India
SourceTrade Union
Industry sectorManufacturing
StatusConcluded
Summary

Read the first final statement issued by the US NCP concluding the specific instance - 19 May 2014

Read the second final statement issued by the US NCP concluding the specific instance – 15 April 2016


In November 2013, the US NCP received a specific instance from the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Works’ Associations (IUF) alleging that PepsiCo India, a subsidiary of PepsiCo Inc. did not observe the Guidelines in India.

Specifically it was alleged that between 5 January and 30 April 2013, 162 workers of 170 employed at 3 West Bengal warehouses contracted exclusively by PepsiCo were dismissed or compelled to resign solely as a consequence of exercising their right to join a union. IUF stated that PepsiCo, through its subsidiary in India, contracts these workers through Radhakrishna Food Land Pvt. Ltd. (RKFL), and in this capacity has facilitated workers’ rights abuses through this subcontracting relationship. According to the IUF, PepsiCo had failed to perform the required human rights due diligence and therefore tacitly allowed these violations to persist. 

In response, PepsiCo emphasized that the IUF’s complaint focused on the alleged actions of its contractor, and not PepsiCo or its subsidiary. PepsiCo maintains that the strike that led to the termination of the workers was illegal, as the strikers did not provide the required notice under Indian law. Regardless, PepsiCo stated that it did in fact use its relationship with RKFL to secure offers of re-employment to 28 of the workers that the IUF claims were specific victims of human rights violations. PepsiCo claims that the ultimate reason for the IUF complaint rests not on the alleged violations of the Guidelines in its relationship with RKFL; rather it stems from PepsiCo’s refusal to enter into a formal global “relationship” with the IUF. Because it had already engaged in multiple discussions with the IUF and investigated their claims, PepsiCo declined the NCP's offer of mediation.

The NCP offered its good office for mediation with the view that it might further dialogue between RKFL and its employees, supported by the IUF and PepsiCo.

On 14 March 2014 PepsiCo responded that it had already engaged in discussions directly with the IUF and because of the inability to reach an agreement on the issues in question, PepsiCo declined the NCP’s offer of mediation. The NCP therefore concluded the specific instance and issued a public statement regarding the outcomes.

In November 2015, PepsiCo reached out to the NCP to ask if mediation would still be available. The NCP agreed to mediate the case and both parties returned to the table.

Although they were not able to reach a mediated agreement, the parties and the USNCP found the dialogue and mediation process to be productive and useful.

On 15 April 2016, the NCP released a final statement concluding the specific instance in which it recommended that PepsiCo update its Human Rights Workplace Policy, committing itself explicitly to the Guidelines and incorporating the human rights and labour chapters of the Guidelines as the standard for PepsiCo activities. PepsiCo has informed the USNCP that an update is already underway.

The NCP commends both parties for their willingness to continue to work to resolve these issues and for their decision to return to the Specific Instance, even after it had been declared concluded, to make an attempt at a mediated solution.