Telco infrastructure company Chorus has promised to do better, after finding subcontractors building the UFB network regularly breached employment laws.
One-in-three subcontractors "may have breached labour standards", the independent MartinJenkins review and an internal Chorus investigation found.
The UFB rollout saw Chorus contractors Visionstream and UCG subcontract much of the work out to meet the demand "at a time of near full employment in New Zealand", said Chorus CEO Kate McKenzie.
This, she says, "led to a substantial change in the mix of the subcontractors working on our behalf, with more subcontracted migrants and small businesses than before" - mostly from India and the Philippines.
"Chorus, Visionstream and UCG needed to step up what we were doing in order to identify and mitigate the risk of breaches in employment law, which can be very difficult to identify, particularly when working with migrants.
"We underestimated that risk as it emerged, instead focusing on productivity, health and safety and quality. When issues arose we relied too heavily on the assurances given, which are not appropriate checks in a situation where there are a large numbers of migrants."
MartinJenkins said in its report while subcontracting was "appropriate given the rapid increase in volume of fibre connect activity", the risks were "not well understood or managed" by Chorus and its contractors.
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During the UFB rollout, Chorus' field workforce almost doubled to 3800 people, the report said, and neither Chorus nor its service partners Visionstream and UGC fully realised how dependant they'd become on migrant workers.
"We found, with the benefit of hindsight, that Chorus relied too heavily on a model whereby workforce risk, including the risk of migrant exploitation, was managed by the service companies without sufficient oversight."
The report made a number of recommendations, including that:
- "workers engaged in the Chorus UFB supply chain should be able to earn a decent wage for a fair day's work"
- "suppliers must respect the labour rights of workers and take steps to ensure their supply chain is free from discrimination, harassment, corruption and bribery"
- "suppliers must handle all business dealings and transactions with the highest standards of integrity, transparency and honesty"
- "management systems must support good practice and clear accountability"
- and productivity improvements… "should strike the appropriate balance between the needs of the customers and the needs of the workers".
"While the report finds the vast majority of employment law breaches were low level, the way the supply chain is set up means it could still be vulnerable and this will be fixed," said Chorus board chairman Patrick Strange.
A long list of changes Chorus said it would make included:
- publishing a code of practise all suppliers must adhere to
- requiring contractors to "provide assurance and reporting on subcontractor compliance with labour law obligations"
- reviewing what it pays contractors "to ensure they are not creating unintended impacts for subcontractors and workers"
- trying to figure out five years in advance what size workforce it needs, to "enable better long-term planning"
- introducing "minimum business standards for subcontractors"
- making its own support programmes available to sub-contractors and their employees, including help with visa issues and understanding their rights
- setting up a fund for "workers who are unable to secure payments due from their employer".
"We will make the necessary changes to ensure fairness in line with employment laws no matter where in the supply chain workers are contributing," said McKenzie.
"We know that Chorus is not alone in facing supply chain challenges, so we are also working to share what we learn with other businesses and government to help inform wider policy choices."
Chorus said it fully endorses MartinJenkins' findings and recommendations.
The full report, authored by Doug Martin, Sarah Baddeley EeMun Chen and Ben Craven, can be read on the MartinJenkins website.