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Education and Employment References Committee
14/07/2015
Australia's temporary work visa programs

BON, Ms Vicki, Government and Industry Relations Manager, Coles

CURRIE, Ms Andrea, Policy and Brand Standards Manager, Coles

[10:43]

CHAIR: Welcome. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I now invite you to make a short opening statement, and at the conclusion of your remarks I will invite members of the committee to put questions to you. The committee has your Coles ethical sourcing policy.

Ms Bon : Thank you for giving Coles the opportunity to contribute to this Senate inquiry. We are committed to sourcing products in a responsible manner and in accordance with all relevant standards, so we share the concern of the committee about allegations of mistreatment of migrant workers. Before we speak further about this issue, I would like to provide you some key points about Coles as an employer and as a buyer of fresh local produce.

Coles is an Australian owned company and is part of the Wesfarmers group, which has some 500,000 shareholders. Today we employ more than 100,000 team members across Australia. Ninety-six per cent of our fresh fruit and vegetables are sourced from Australian growers, and 100 per cent of the fresh meat sold in our stores is from local farms. We are always looking to improve the way we do business with our suppliers. Last year we introduced the Coles supply charter, which sets out what suppliers can expect when they work with us, and this year we became a signatory to the Food and Grocery Code of Conduct.

Workplace safety and regulatory compliance are amongst our highest priorities. We do not accept or condone unfair treatment of workers. For this reason we take very seriously the allegations made about the mistreatment of workers in the farm sector supply chain.

We would now like to run through how we do business to ensure that we and our suppliers are compliant with the relevant laws and legislation. We will not tolerate unscrupulous or illegal treatment of workers in our supply chain and we are not prepared to name and shame suppliers in a public forum, but rest assured we are committed to doing the right thing. When and where we find irrefutable evidence of malpractice we will take immediate action. Ultimately, that can mean the severing of commercial ties. Our current standard terms and conditions for the supply of goods include an obligation for our suppliers to comply with our ethical sourcing policy and to ensure wages and benefits meet the minimum requirements. We expect our suppliers to comply with these terms and conditions. We make a substantial investment to ensure that our suppliers adhere to all Australian workplace laws. Our priority is to ensure that our products meet the expectations of our customers, including fair treatment of workers. We also work with relevant regulators to enforce these laws.

This committee has spent time examining allegations made by the ABC, and now I will address how we have responded. First, we have met with businesses identified in the program who supply to us.

CHAIR: Can you name those for the committee?

Ms Bon : Yes, I will go through that. Each supplier has been asked to confirm that it has a process in place to ensure contracted workers are legally entitled to work, contracts with labour hire companies comply with award rates and suppliers pay labour hire companies enough money to allow workers' pay and entitlements to comply with the relevant award. In addition to the suppliers named in the program we have written to all of our direct fresh product and meat suppliers to reinforce with them the importance of meeting their obligations in relation to immigration laws, wages, entitlements, working hours and other benefits.

We are also progressing discussions with key stakeholders to develop an industry-wide response. The National Farmers' Federation has proposed a best-practice scheme for agricultural employment: an employer accreditation scheme to ensure workers are legally entitled to work to ensure compliance with minimum pay, provision of clean and comfortable accommodation facilities, safe farming practices and acceptable recordkeeping standards. While this industry response is being developed we will continue to take action to ensure our suppliers are complying with our ethical sourcing policy and all relevant laws. We have appointed an independent third party to audit nominated Australian suppliers and we are also improving and developing systems and processes to facilitate receiving, investigating and reporting on underpayment complaints.

Our willingness to work with the industry to develop solutions extends to our overseas supply chain. Coles is a buyer partner of the ILO's Better Factories Cambodia and along with other international retailers is providing a daily meal to garment workers in one of our apparel factories, improving their health and wellbeing. We participate in the buyers forum in Thailand for the ILO's Good Labour Practices program for supporting migrant labour. It is aimed at addressing people trafficking and eradicating modern slavery. We have delivered training to Malaysian and Singaporean suppliers based on ILO and Malaysian Employers Federation principles for supporting migrant labour. Coles will continue to work with regulators, suppliers and other industry participants to ensure that all workers are treated fairly.

CHAIR: Which are the suppliers that you have been talking to?

Ms Currie : We have spoken to our direct suppliers: Baiada; D'VineRipe, who is part of Perfection Fresh; Akers; and Covino.

CHAIR: In relation to Baiada, are you aware of the report the Fair Work Ombudsman published a couple of weeks ago?

Ms Bon : Yes, we are.

CHAIR: I appreciate your good efforts, but evidence the committee is receiving hearing after hearing—and we heard this in Sydney just last week—is that the employment practices of Baiada, particularly in relation to the labour hire companies, remains appalling. Are you asking them directly about their labour hire practices?

Ms Bon : Yes, we are. As we have said, we have met with each of the suppliers that were named in the ABC program and we are conducting through an independent third party an audit of all of the work practices at Baiada. Our inquiries will be a bit broader than the Fair Work Ombudsman. We will have a look at all of the premises of Baiada. If we find that there is basis in fact, initially we would like to work with our suppliers to put corrective measures in place to ensure that we can protect the jobs of the many people that they employ. In addition, we have a supplier code of conduct and we also have the grocery code of conduct, which basically guarantee our suppliers that we will deal with them fairly and equitably. Therefore, we are working on the basis that, if we do discover anything that does have basis in fact, initially we will work with them to take corrective action.

CHAIR: But are you talking to Baiada directly about its use of labour hire companies?

Ms Bon : We are, yes.

CHAIR: You said where you discover fact, and the Fair Work Ombudsman report of a couple of weeks ago sets the facts out. It talks about phoenixing and a whole raft of things. Just a couple of weeks ago in Sydney we heard evidence, particularly from 417 visa holders, and they told us of appalling practices working for Baiada in New South Wales. I met with a range of 417 visa holders yesterday which the National Union of Workers facilitated, and all of those workers, bar three, were being underpaid—all of them; and there were more than 25. So I have two questions. What are you saying to Baiada about its use of these dodgy labour hire companies? Secondly, have you actually met with the affected workers, particularly the 417 visa workers working for Baiada, who can tell you the stories that they have told us?

Ms Currie : Certainly we have spoken with Baiada since the Fair Work Ombudsman's report came out and specifically with regard to their use of contract labour. We are also eager to understand the circumstances behind which they hire workers and how those workers get paid and treated. It is a focus of the independent audit that we have undertaken. So we are not speaking directly with the workers, but the auditors are.

CHAIR: Who is the auditing company?

Ms Currie : It is PricewaterhouseCoopers.

CHAIR: So they are going to talk directly to 417 visa workers working for labour hire companies?

Ms Currie : Yes, they are talking to workers who operate under—

CHAIR: How are you getting access to those workers?

Ms Currie : We are asking to speak to workers.

CHAIR: You are asking Baiada to supply you?

Ms Currie : No, we are asking Baiada if we can speak to workers. Obviously it is then up to the workers themselves as to whether or not they want to speak to us.

CHAIR: Of course. Are you speaking directly with the labour hire companies?

Ms Currie : We are not speaking directly with them, other than to facilitate the process of speaking with the workers themselves.

CHAIR: Will PricewaterhouseCoopers speak directly to the labour hire companies?

Ms Currie : They do speak to the labour hire companies to retrieve records.

CHAIR: How do they find the labour hire companies, when the Fair Work Ombudsman cannot? In that report they say that make an appointment to see the labour hire company and then it closes, disappears, because they basically have a car and a mobile phone. So how do PricewaterhouseCoopers find them?

Ms Currie : I am not aware of the detail of how they are running the process. But, through the updates they have been providing to us, they have been successful in speaking to, say, the supervisor of the workers—the onsite representative of the labour hire company.

CHAIR: But won't the supervisor just tell you what you want to hear: that all is rosy in the meatworks?

Ms Currie : We then also request payroll records, both from the labour hire company and from Baiada.

CHAIR: But the Fair Work Ombudsman report says that there are no payroll records. So, again, how is PricewaterhouseCoopers getting these records?

Ms Currie : Obviously, if there is a circumstance where they could not find the records, that would be a finding that would be recorded as part of the audit.

CHAIR: Does Coles have confidence in the Fair Work Ombudsman?

Ms Bon : The Fair Work Ombudsman is a regulatory agency, and, yes, we do.

CHAIR: Why wouldn't you accept their report on Baiada? Why would you go ahead and commission PricewaterhouseCoopers to undertake the same work that Fair Work has just done.

Ms Currie : We had actually commissioned that audit before the Fair Work Ombudsman's report had been issued.

CHAIR: Okay. Last week, in Sydney, a Baiada worker gave us his payslips, which consisted of envelopes with squiggles on them, which, I am absolutely confident, is a far cry from the sort of information Coles gives to its workforce. Is PricewaterhouseCoopers reporting back to you that that is the sort of information they have received?

Ms Currie : If they find that sort of thing, yes, they do report it to us.

CHAIR: What have they told you to date and how many reports have you had from PricewaterhouseCoopers?

Ms Currie : Given that we have agreed the circumstances of the audit are confidential between Baiada and us, I am not in a position in a public forum to be able to provide that information.

CHAIR: When does Baiada actually step up to the plate and take responsibility for what is happening, with its full knowledge? It is just protected all around. It gets off the hook in relation to these dodgy labour hire companies and now you have entered into a confidential agreement with Baiada. Sooner or later Baiada has to take some action here to stop doing what it is doing. And Coles has a responsibility, because you are the end product. You are buying their chickens and meat. Why was it a confidential agreement?

Ms Currie : That is essential the way we operate our ethical sourcing policy. It is a program whereby any auditing we do is done as a confidential arrangement between us and our supplier. The intent is that, if there are issues that are found to have a basis in fact, the first step we always focus on is working with the suppliers to correct those issues. We do not want to be in a circumstance where we further imperil those workers' circumstances by potentially having them sacked or having the company go under, in which case they would no longer have employment at all.

CHAIR: But we have a finding of fact from the Fair Work Ombudsman in relation to Baiada.

Ms Currie : Yes.

CHAIR: Did you give that report to PricewaterhouseCoopers and say to them to use it as a basis for their investigations?

Ms Currie : They certainly have a copy of the report, yes.

CHAIR: How long is PricewaterhouseCoopers engaged for? When would you expect a final report?

Ms Currie : We are expecting a final report at the end of July.

CHAIR: If they produce a report in relation to Baiada that is similar to the Fair Work Ombudsman's, what happens then?

Ms Bon : In the first instance we will work with Baiada to ensure that they correct their workplace practices. Again, we have a supplier charter and a food and grocery conduct in place, and we cannot, and nor will we, arbitrarily terminate contracts. If, however, corrective action is not taken with any supplier, Coles has the right to end its commercial relationship.

CHAIR: Baiada has not seen fit to adjust what it is doing, post the Four Corners program, post your investigation, and post the Fair Work Ombudsman's report, so what is going to force them to stop employing these dodgy labour hire companies, to stop phoenixing. Surely you, as the buyer, have the ultimate control over Baiada, but you have this confidential agreement.

Senator McKENZIE: And a code of conduct.

Ms Currie : That is correct.

CHAIR: Are you saying to Baiada right now that they have to stop ripping workers off—you have to stop using these layers of labour hire companies?

Ms Currie : They have engaged in the audit process on the understanding that if anything untoward surfaces then the first step would be that they work towards addressing that issue.

CHAIR: But we have already seen those practices in the published report of the Fair Work Ombudsman. So the dodgy practices, the unlawful conduct, has already surfaced. So what are you saying to Baiada right now?

Ms Currie : We have met with Baiada and we have asked them to ensure that the workers they have contracted are legally entitled to work and that the contracts they have with labour hire companies enable those companies to pay their workers the award rates of pay. In addition to that we have reminded them of our ethical sourcing policy. We have met with them. They have consented to an audit, and if we find basis of fact in the allegations we will take corrective action in the first instance. And ultimately, as with any supplier, Coles has the right to terminate a commercial arrangement.

CHAIR: What has Baiada said to you in response to that message?

Ms Currie : We engage in regular dialogue with Baiada as the audit is going through. I am obviously not at liberty to provide you with the detail of those conversations but they are fully committed to doing better in this space.

CHAIR: But, again, we have witness evidence from our Sydney hearing last week that Baiada are continuing their dodgy practices with labour hire companies—just last week. When did you first engage with Baiada? Was it straight after the Four Corners program?

Ms Currie : Yes, it was.

CHAIR: We are weeks since the Four Corners program and we still have, as of last week, Baiada continuing to use these labour hire companies that are not paying workers, that are ripping them off, that are using substandard accommodation. We just continue to hear that in evidence before the committee.

Ms Currie : We are in a circumstance where we obviously need to let the audit take its course and then discuss with Baiada and take action on the information that the audit brings forth.

CHAIR: Are you aware that Baiada declined to attend the Senate inquiry hearing today?

Ms Currie : No, I was not.

CHAIR: Did you know they had been invited?

Ms Currie : No.

CHAIR: So they did not tell you?

Ms Currie : No.

CHAIR: Have you met with the National Union of Workers?

Ms Bon : Yes, we have.

CHAIR: What did they tell you?

Ms Bon : The purpose of the meeting was to discuss a broader industry response. That is the response that they are working with the National Farmers Federation on. We advised them what we have advised you today: of the audit and the inquiries that we are making and what the results of those may be.

CHAIR: What are you working on with the National Farmers Federation? Again, we had them in Sydney last week and they did not tell us that they were working with Coles. Is that another confidential discussion?

Ms Bon : No.

CHAIR: They did not give that in evidence to us. Does that include the National Union of Workers or any of the unions that you deal with?

Ms Bon : My understanding is that the National Union of Workers have been invited to participate in developing an industry response, yes.

Senator McKENZIE: I think the NFF did actually talk about the development of an industry-wide policy with regard to this.

CHAIR: They did not particularly mention it was Coles. The NUW has given evidence as well and they have not told us either. Is this more than a thought bubble? Is there a letter you can put to the Senate inquiry? How do we know this is underway, given that the NFF, the NUW and the AWU—which unions have you spoken to about this?

Ms Bon : We have met with the National Union of Workers. We have not met with any other unions.

CHAIR: Is there a document you can provide to the committee?

Ms Bon : I cannot provide a document today but I would be pleased to follow up.

CHAIR: That would be good. Is that a document that was sent to the NUW and the NFF?

Ms Bon : The NFF are coordinating a response and Coles is part of that response, as are other industry stakeholders. We have had a number of meetings with the NFF. We have a letter in writing from the NUW when they asked to meet with us. We met with them. But there is no formal document inviting us to be involved in an industry response.

CHAIR: Would you expect the NFF to invite the relevant unions?

Ms Bon : You would have to ask the NFF.

CHAIR: Sorry. I thought you said at the beginning that the industry response included the NUW and whatever other unions there might be across the country, and the NFF.

Ms Bon : It includes the NUW. Your question was: had we met with the NUW? We have. And part of the discussion with the NUW was that the NFF are developing an industry response which they have invited to be part of.

CHAIR: They have invited the NUW to be part of it?

Ms Bon : Yes.

CHAIR: They were not very flattering in their evidence towards the NUW at the Sydney hearing. In fact, I think they said in evidence they did not believe they were the relevant union. That is beside the point, because, as I am sure you understand, Ms Bon, unions have different coverage across the country.

Senator McKENZIE: I think the evidence was that the NUW was trying to cut another union's grass in this space.

CHAIR: As far as you are concerned, you would expect the NFF to invite the relevant unions, including the NUW, to be part of an industry response?

Ms Bon : You would have to ask the NFF who they are inviting. As the NFF testified, they are working with major retailers. We have been invited to be part of the solution and we have accepted. We are working with them.

CHAIR: What happens if the NFF, the National Farmers Federation, do not include any unions?

Ms Bon : Coles's response is occurring regardless of whether or not there is an industry-wide response. So we will continue along that path, which is having our suppliers independently audited. If we find basis in fact, we will work with them to take corrective action.

CHAIR: As I keep saying, the basis in fact has already been established by the Fair Work Ombudsman. Would you be concerned if the National Farmers Federation developed a response that did not include any of the unions, given that you work with your union, as I understand it?

Ms Bon : We do not condone the unfair treatment of any workers. What we do want to see is that this sort of treatment of workers is not continued. We are responding as a company and we are working broadly with the industry to respond.

CHAIR: Sure. But my question was: would you be concerned if the National Farmers Federation industry response did not include any unions?

Ms Bon : My concern would be if there were no industry response. I can only speak for Coles, and we are responding.

CHAIR: So you do not want to answer that question directly?

Ms Bon : We are very concerned about this issue. That is why we are here today to assist in developing a response and to provide you with information. We immediately begun conducting inquiries into the allegations that were made.

CHAIR: I think it is fair comment to suggest that if the National Union of Workers had not brought this to national attention these workers would still be being ripped off through labour hire companies, because it is the National Union of Workers and the meat union as well who have provided for these 417 visa workers who have clearly been ripped off. We have heard evidence through our committee processes. Yesterday I met with 25 of them. Out of that group only three were being paid correctly and they were working in industries such as meat, chicken and agricultural—where you source from. We have a Fair Work Ombudsman's report, which clearly says the facts are that these workers are being ripped off, yet you have engaged PricewaterhouseCoopers to do presumably the same work, who cannot actually force a labour hire company to give them any records in the way that the Fair Work Ombudsman can.

Ms Bon : Sorry. I am not sure what the question is.

CHAIR: The Fair Work Ombudsman in the Melbourne hearing, for example, said: 'Certainly if it becomes evident through community debate or news stories coming out of current affairs television shows that there is something to look at and they'—meaning the supermarket chains—'continue to not look down the supply chain, it beggars belief that there is not something that they should be informing themselves of.' That is the evidence from Ms James from the Fair Work Ombudsman in relation to your responsibility as a buyer.

Ms Currie : I think that is exactly what we have done. We are now looking at our supply chains. We are looking to establish the facts with the growers and suppliers that we work directly with, and should we find evidence of mistreatment or malpractice our expectation is that that is addressed.

CHAIR: But that evidence is already there with the Fair Work Ombudsman report. Have you gone specifically to Baiada and said, 'What do you say about this Fair Work Ombudsman report of two weeks ago?'

Ms Currie : Yes, we have.

CHAIR: What have they said about that?

Ms Currie : That is something that is a confidential discussion between us and Baiada. I am not able to speak on Baiada's behalf in this regard.

CHAIR: Can you sense, certainly, my frustration? We have had a Four Corners program; we have had the National Union of Workers bring evidence after evidence of workers who tell the Senate inquiry, under oath, that they are being ripped off; we have a Fair Work Ombudsman report which clearly establishes that there is an issue of significant underpayment at Baiada; and you tell me that you cannot say anything because it is confidential. There is nothing confidential about what has happened here. It is the media, it is the Four Corners program, it is the Fair Work Ombudsman's report.

Ms Bon : And that is why we take those allegations very seriously, and that is why we have conducted our own inquiry. Just as the Fair Work Ombudsman's inquiry has concluded, ours is still in progress. When we do have the outcome of that, if we do find basis in fact, then we will take corrective action. We are not in a position to, nor would we, arbitrarily terminate a supplier's contract.

CHAIR: No, and you should not. But the proof is there. So when we get to the end of this process with PricewaterhouseCoopers and a report is produced which is confidential, and your dealings with Baiada presumably continue to be confidential, where do I—as a person who shops at Coles—get confidence about the products I am buying? Despite what has been in the news, despite the Fair Work Ombudsman's report—which are all public—you are now conducting secret talks with Baiada.

Ms Bon : We are not conducting secret talks. What we are doing is independently auditing the work practices of our suppliers, not just of Baiada.

CHAIR: Which you said are confidential in relation to Baiada.

Ms Bon : They are confidential in relation to all of our suppliers, and it would not make sense to us today to basically put our suppliers on notice and let them know what we are looking at when investigations are still ongoing.

CHAIR: But the report, I think you said to me, would be confidential—the final report from PricewaterhouseCoopers.

Ms Bon : Yes, it will. But I have also said that we will take corrective action with our supplier and, if we find that that corrective action has not been put in place, Coles has the right to terminate our commercial agreement. There is no benefit to Coles in selling products that are not sourced ethically and that involve the unfair treatment of workers.

CHAIR: I understand that and that is certainly what your sourcing policy says, but will any action you take as a result of the PricewaterhouseCoopers report also be confidential?

Ms Bon : We will take corrective action with our supplier and, if we find that that corrective action does not result in the desired changes, we have the right to terminate the contract.

CHAIR: Yes. But will the corrective action be confidential?

Ms Bon : We have already explained what some of the work that we are doing has been. We have said to Baiada that we want to ensure that their workers are legally entitled to work. We have said to them that we want them to ensure that the workers are being paid award rates and that they are paying their labour hire company sufficiently to enable those award rates to be paid. And now we have an independent third party in there auditing those practices to ensure that that is occurring. If we find it is not, then we will take corrective action. But we will not arbitrarily terminate any supplier contracts. It has impacts for the many people that they employ, not just the people on visas, and also more broadly for their business.

CHAIR: But don't you think it is in the public interest that if I walk into Coles supermarkets in two months time when the report is final and you have done your corrective actions—because clearly Baiada, by the Fair Work Ombudsman's report, are not doing the right thing—there should be some notice up in your store to assure me that the chicken or the agricultural produce that I am buying is ethically sourced and I can have confidence that the workers who produced the food that I am buying were paid 100 per cent correctly? That is not the case currently. Wouldn't that be a good exercise?

Ms Bon : What we are doing, and it is very public, is inquiring into the allegations made about Baiada. We are saying that to you here today. We have engaged an independent third party. We expect all of our suppliers to abide by the terms and conditions of their contracts, which include complying with our ethical sourcing policy, which very clearly states that all workers must be treated fairly and paid in accordance with Australian workplace legislation. If we find that that is not occurring and if we find corrective action does not correct that, then we have the right to end our commercial agreements.

CHAIR: But paying in accordance with Australian law and abiding by Australian law was already required and was already part of your ethical sourcing policy. There is an issue with the fruit and veggie source and with the meat and chicken that you source, and you are conducting this secret negotiation, and you will take some corrective action. When do consumers have confidence that the Australian products we buy from Coles are ethically sourced? Right now, today, they are not.

Ms Bon : First of all, we are not conducting secret negotiations with anybody. We are conducting inquiries into these allegations that are very serious and we were not aware of them. As soon as they were brought to our attention, we began inquiring into them. With our suppliers, they are allegations. If they are proven, in fact, we will take corrective action. In the first instance, that is working with our suppliers to ensure that workers are treated fairly and paid in accordance with workplace legislation.

CHAIR: Which they are currently not. But you will not inform consumers?

Ms Bon : They are allegations that we are investigating. The moment they were brought to our attention, we began inquiring into them.

CHAIR: I am not suggesting Coles has not acted, Ms Bon. It is good that you have come here today. You have done more than Woolworths are doing. You get a tick. But, at the end of the process, it all remains secret. It is secret if it is confidential. It is not available to me as a consumer. What confidence does the consumer have? We are your customers and we have the right to be assured that the products we are buying are ethically sourced. It would seem to me that it would be a very good PR exercise to advertise that, because currently you cannot—neither you, Woolworths or ALDI can confidently say that Australian products are ethically sourced, because they are not.

Ms Bon : What we can say is that our expectation is that our suppliers treat their workers fairly and comply with Australian workplace laws. What we have demonstrated is that, when instances of that compliance is potentially not there, we will take immediate action.

CHAIR: Confidential action.

Ms Bon : We will take immediate action.

CHAIR: But it is confidential.

Senator McKENZIE: Given we have Fair Work coming before us straight after, I am sure we can give them a regular grilling about what they are actually doing about the issues highlighted in their report and what action they are taking as the regulator and the body charged with ensuring these illegal practices are brought to light and dealt with. How does Coles work with the Fair Work Ombudsman?

Ms Bon : We are in discussions with the Fair Work Ombudsman in relation to these allegations and have been invited to a meeting by the Fair Work Ombudsman later this month where we can discuss these very serious issues in more detail and work together to develop a response.

Senator McKENZIE: Excellent. In terms of the grocery code of conduct, how important is that to consumers to ensure integrity and ethical practice throughout the supply chain? It was a long time to fruition, and there is the fact that we have everybody's finger on the page. What is the importance of keeping that code of conduct in place and abiding by it? Could you make some brief comments given its importance in what we are talking about at the moment?

Ms Bon : In terms of the Food and Grocery Code of Conduct and the supplier charter, they both clearly detail how retailers should conduct themselves in their relationships with their suppliers, and that is in a fair manner. It is very important to us that we abide by those and, therefore, that is why we are conducting inquiries into the allegations. If we do find any basis in fact, rather than summarily terminating a contract, which would not comply with the Food and Grocery Code of Conduct or our own supplier charter, we will work with our suppliers in the first instance to take corrective action.

Senator McKENZIE: Thank you. In the interests of time, I know other senators have questions.

Senator RICE: Once the PricewaterhouseCooper's report is completed, do you expect that Coles will be making any statement about what that report has found?

Ms Bon : What we will be doing is we will be working with our suppliers. If any of these allegations are found to be true—

Senator RICE: You have said that. So you do not intend to make any public comment, even if you do not release a confidential report.

Ms Currie : I think what we need to do is let the process take its course, and then obviously we need to confer—

Senator RICE: So you do not intend to make any public statement?

Ms Currie : To be absolutely honest, we do not know, because the inquiries are not finished yet, so we can only make decisions on what we know. We cannot really strictly speculate at this stage.

Senator RICE: How long do you expect to give Baiada to undertake the corrective action?

Ms Currie : Should any issues surface—

Senator RICE: We know that there are issues that are outlined in the Fair Work Ombudsman's report, so we have got a fair idea of the sorts of things that are going to be potentially revealed. Given the evidence in Sydney last week, we understand that these practices are still occurring, so what period of time do you expect to allow Baiada to take corrective action?

Ms Currie : Should issues surface, we have an agreement with Baiada that they will commence work on those issues immediately. We also have an agreement with them that they will have those corrective actions formally closed out. I cannot give you the detail around how long, because it is very dependent on what the specific issue is.

Senator RICE: What would be your expectations, given the evidence that is in the Fair Work Ombudsman's report? What period of time do you think would be reasonable to allow Baiada to take that corrective action?

Ms Currie : It is very dependent on the specific issue concerned.

Senator RICE: Are we talking one month? Three months? Six months?

Ms Currie : It is dependent on the issue concerned.

Senator RICE: So we are in a situation where for the foreseeable future we cannot have confidence, as consumers, that proper work practices are being applied at your suppliers.

Ms Currie : I think we are now delving into the realm of speculation. We have to be in a circumstance where we work with our supplier.

Senator RICE: Would you like to have this resolved by the end of the year?

Ms Currie : If we were in a circumstance where there were issues found, certainly before the end of the year would be excellent.

Senator RICE: Would you have an expectation that it would be resolved by the end of the year?

Ms Currie : I do think we are delving into realms of speculation. It really does depend very much on the specific issues. There are some things that potentially could be fixed immediately—this week, tomorrow. But there are some things—

Senator RICE: But that is our concern, because they have been identified in the Fair Work Ombudsman's report, and Baiada could have fixed them immediately but they have not chosen to. We know from evidence presented last week that they have not chosen to. So I am just wondering what period of time you are going to give them to continue to operate with these work practices.

Ms Currie : As I have said, I believe it is very dependent on the individual issue.

Senator RICE: Okay. Can you give me some more information about the other audits with the other companies that we have been investigating that you named before that were identified in the Four Corners program?

Ms Currie : What specifically would you like to know?

Senator RICE: I would like to know about the audit process. We have heard a lot about the PricewaterhouseCoopers audit process with Baiada, so what is the process that is happening with the other companies?

Ms Currie : Essentially the process is the same. It is intended to confirm that the workers have a legal right to work and that they are receiving their appropriate pay and benefits.

Senator RICE: Is PricewaterhouseCoopers undertaking all of those other audits?

Ms Currie : We have two pieces of work underway, one with PricewaterhouseCoopers and one with AUS-MEAT.

Senator RICE: Who is undertaking each of those audits of the companies that you named?

Ms Currie : I would prefer not to go into the detail, just from the perspective that some of that information is confidential. I can provide it on notice confidentially, if you would like.

Senator RICE: That would be useful—thank you.

Senator O'NEILL: Could I ask about Coles's perspective on the Fair Work Ombudsman's report. What is your view of that report?

Ms Bon : Our view of the report is that the conclusions drawn are of great concern to us. Prior to this report coming out, we had commenced our own inquiries into Baiada, which are continuing. Should we find that there is basis in fact in these allegations, then we will take corrective action.

Senator O'NEILL: I almost know those lines myself now. Can I ask you not to repeat them again, Ms Bon. 'Our inquiries will be broader than the Fair Work Ombudsman's. We will inspect every workplace.' This is a significant cost to Coles, isn't it?

Ms Bon : Yes.

Senator O'NEILL: So how do you feel about having to do the work of the Fair Work Ombudsman?

Ms Bon : We are not doing the work of the Fair Work Ombudsman. We are conducting our own inquiries. We do not want to rely only on an audit or an investigation that has been conducted by another party.

Senator O'NEILL: So do you do this as a matter of course? Is this going to be your new business practice moving forward that you are going to continue to undertake audits in this area?

Ms Bon : If allegations are brought to our attention such as these, yes, we will inquire into them immediately.

Senator O'NEILL: In a way, Coles is now setting out to duplicate the work of the Fair Work Ombudsman.

Ms Currie : I think it would be fair to say that the allegations have concerned us greatly. It is probably reasonable to say that they were surprising to us as well. To be realistic, in order to be certain that we were responding and working with our suppliers in a way that was going to be helpful and beneficial in the long term, we needed to understand what was going on. That is the basis of the inquiries that we are making at the moment.

Senator O'NEILL: The Fair Work Ombudsman is resourced and it is a government agency. We have been constantly hearing how everything should be referred to the Fair Work Ombudsman, but there are a couple of problems with that. The first one is that in much of the evidence that we have received we have heard over and over that visa programs are inadequately monitored:

… compliance monitoring is under-resourced and overly integrated with immigration, such that workers fearful of being deported do not raise concerns about employment conditions. Further, we observe that workers have been deported without independent legal advice and make informed decisions about filing complaints.

Workers who are culturally and linguistically diverse are more vulnerable in the workplace …

This is the tenor and the tone of the evidence that we have been receiving. That submission was from the Salvation Army, who we spoke to in Sydney. You had the opportunity prior to Four Corners to be reassured that the practices of your sources of food were acting ethically. What resources were you putting into it before Four Corners unearthed this story? What checks and balances did you have in place?

Ms Currie : Prior to the allegations that were aired by the ABC, our approach with regard to ethical sourcing in Australia was that, because of Australia's robust workplace law, we considered that poor ethical sourcing practices in this country were unlikely to occur. Australia was regarded as a low-risk sourcing country.

Senator O'NEILL: So you were relying on a policy, but there was limited policing or no policing or checking of that policy's implementation by Coles at a company level.

Ms Bon : We have contracts with our suppliers and the terms and conditions in those contracts include our ethical sourcing policy, which is that they comply with all Australian workplace laws. Our category managers also regularly speak with our suppliers and visit their farms. We have also written to our suppliers, reminding them of their obligations. If allegations do come to our attention, we react immediately, as we have done in this case.

Senator O'NEILL: Given what we read constantly about people being fearful of being deported, how likely are they to be contacting Coles and saying, 'I have a problem—I am not being paid properly'?

Do you have a hotline for people who are working for companies that are supplying you to let you know there is a problem?

Ms Bon : We do have a customer care line. We have a website. We also have various social media. Part of the solutions that we are having a look at now, as part of the improved practices internally, is the establishment potentially of such a hotline.

Senator O'NEILL: So there is some learning after the fact from the Four Corners report and the ombudsman's report. Could I offer to you a couple of pieces of evidence that we received in Sydney—if the secretary could provide these to Ms Bon and Ms Currie. What I am putting in front of you are two time sheets. One is a real time sheet, and one is a fake time sheet. They were given to us at the Sydney inquiry. The other item is a picture of the sorts of conditions in which people who are working for Baiada, one of your suppliers, are actually living. In your answers to Senator Lines you indicated that you have not actually taken action to state at this point in time that the sorts of practices that I am showing you there cease immediately. Is that correct?

Ms Currie : I am not sure that I did say that. But what I did say was that, should we discover evidence that poor practices are taking place, the expectation—and the discussion that we have had with Baiada and that we would have with other suppliers who were part of this process—is that those circumstances cease and that corrected action is taking place.

Senator O'NEILL: Ms Currie, it seems to me you are in a remarkable position to immediately get the details of the contractors, the labour hire companies, from Baiada. You are in a really powerful position to say: 'I want to know who all these contractors are. I want to write to them immediately and say: this must stop'. It is not just the Four Corners report; it is not just the ombudsman's report; it is the evidence we are gathering as we go around the country that is telling you, prior to PricewaterhouseCoopers giving you this information, that it is pretty clear there is a problem. Have you chosen not to write a letter to all of your suppliers that have been named in these public hearings and let them know that you want whatever is happening that has been reported to cease immediately?

Ms Bon : We have met with them all and done exactly that.

Senator O'NEILL: You have contacted all of them?

Ms Bon : The suppliers that were named we have spoken with.

Senator O'NEILL: And are you aware of all of the labour hire companies that are working for them. Have you contacted the labour hire companies?

Ms Bon : We have engaged an auditor to work with us.

Senator O'NEILL: I know you told me that. Have you written to the labour hire companies whose names could be easily provided to you?

Ms Bon : No.

Senator O'NEILL: Have you got a list of the employees who are working for those labour hire companies? Have you requested such a thing?

Ms Currie : With respect, that information is confidential. We do not have direct contractual relationships with people who are suppliers to suppliers of ours.

Senator O'NEILL: We have heard there is a distance between you and them, but I am putting it to you that you are in a position to actually demand—in a range of languages that match the cohort of workers who are currently working for Coles at a distance—information about what is happening in this country right now. They could get information from Coles about their rights and obligations and could feel welcomed to advise Coles about what is going on. That would be a lot cheaper than putting PwC on the job.

Ms Currie : I am happy to take that as a suggestion and consider it as part of our response. But, due to the terms of our supplier code of conduct, the grocery code of conduct, we can 'respectfully request' but we cannot require people to do things for us when we do not have direct contractual relationships with them.

Senator McKENZIE: Does the Fair Work Ombudsman require that?

Senator O'NEILL: Can I continue my questions, please, Chair?

CHAIR: Yes.

Senator O'NEILL: Can I go to the 417 workers. Let's just go through the process of PwC. You are going to get them to do an independent audit in every workplace that Baiada is a part of. Is that correct?

Ms Currie : That supplies Coles.

Senator O'NEILL: So they are going to physically go into those workplaces?

Ms Currie : Yes.

Senator O'NEILL: They are going to ask to speak to some workers?

Ms Currie : Yes.

Senator O'NEILL: What cultural competency demands have you placed on PwC in terms of the languages that need to be available on site, in terms of dealing with this cultural problem of fear and intimidation, and in terms of the fears that people who engage with the PwC process will be asked to leave the country?

Ms Currie : That has been considered as part of development of the workplaces.

Senator O'NEILL: Can you tell me what consideration? What ethnographic research have you based that on? What sort of contingencies are there to make sure that people who are going to get kicked out of the country if they speak up about unfair pay are not going to be kicked out of the country if they speak up to PwC about more than unfair pay and incredible living conditions?

Ms Currie : We have required PwC to provide people who have language skills the same as the workers that are employed at those sites.

Senator O'NEILL: So let's just imagine it. They roll up in the little white mini-van at a Baiada site and they all get out and say: 'We're here from PricewaterhouseCoopers to see if your workplace is doing the right thing. Would you please talk to us? We have people here who are happy to talk your language.' Frankly, if I am a 457 visa, it is not a really attractive deal to me. At the moment we are hearing the unions say that they will not even speak to them. We have reports from the ACTU and also from the Migration Council of Australia saying that two per cent of visa holders are in the most awful situations; significantly, 25 per cent of respondents do not know how much they pay. More importantly, in this context, they refused to answer, refused to say; because if they start speaking up they are going to get kicked out of the country. It sounds good on the surface—and I do applaud the fact that you are responding to this and that there is an independent inquiry—but an independent inquiry that requires people to risk getting kicked out of the country to give you assurances is not really a good inquiry for those people who are already disadvantaged.

Ms Currie : I accept your point, yes.

Senator O'NEILL: So my question is to you: what action are you going to take, as a highly reputable long-serving employer of our community, about clearly recorded breaches of what I would call the human rights of the people working to provide food through your chain? What action are you going to take, other than 'let's get another report'?

Ms Currie : If we find through the circumstances of the inquiries that there is basis in fact for unfair practices then our expectation is that those practices are corrected.

Senator O'NEILL: But what chance have you got of getting the actual facts of what is going on when the 457 and 417 visa holders are too frightened to speak about their conditions? If they are the underpinning of your research to find out whether this is true or not and they are not going to talk to you, how will you find out any more than you already know?

Ms Bon : The visa holders are clearly talking to somebody, because we are here and we are all aware of the conditions that have been alleged—which we do not condone at all.

CHAIR: They are talking to unions.

Senator O'NEILL: They are talking to unions after they leave a workplace.

Senator McKENZIE: Not just unions. It was the National Party's Keith Pitt over a year ago who raised this in a series of forums around Queensland.

Senator O'NEILL: What has the Abbott government done about it? Nothing.

Senator McKENZIE: What I am saying is that this is a bipartisan issue, Senator Lines—

CHAIR: I would like to think so.

Senator McKENZIE: and we are all concerned—not just the unions—about illegal practices in the workplace.

Senator O'NEILL: Ms Currie, the flawed nature of the PwC inquiry, I think, is something you might be a little bit more aware of going forward. If your entire action depends on the PwC report getting to people who are too frightened to speak, that is a big problem.

Ms Currie : There is also other evidence that will be examined as part of the report.

Senator O'NEILL: What is that evidence?

Ms Currie : Things like payroll records.

CHAIR: There are not any.

Senator O'NEILL: They are being destroyed. We are having reports of them being shredded—or not kept. Or they have been doctored, like the ones I put in front of you; where there is a difference between the real time sheet and the doctored one. They are so intimidated that they go to work and sign off on a time sheet that is blank, that gets filled in and sent off as the real one and then the actual one is put in front of them, which has a completely different set of numbers. We know that that is the case. So if you are looking for documentary evidence, we are aware that it has already being doctored.

Ms Currie : We are in a circumstance obviously where people like PwC, because of the reputation that they have, understand that these sorts of things can occur. They are conducting their field work accordingly.

Senator O'NEILL: Are you reassured that the conduct of the design of this inquiry has taken into account all of the problems that we have been hearing about in the course of this inquiry? The Fair Work Ombudsman cannot get the evidence. The unions are finding they can get it only after the fact. In this bipartisan spirit, Senator McKenzie says the national farmers are concerned—

Senator McKENZIE: The National Party raised this in health forums over a year ago.

Senator O'NEILL: All of these people have found that they cannot get 417 workers to speak but you believe that PricewaterhouseCoopers can?

Ms Bon : We take this issue very seriously and that is why we are here today. If you think that we should not be conducting an investigation into these allegations or you have suggestions as to what we could be doing, we would be pleased to hear those suggestions because we do not want this practice to continue to occur. We do not condone this. These practices are terrible. So what we are doing is what we have available to us, which is to conduct a thorough inquiry. If there is something else that you think that we should do or that we should suspend our inquiries, we would be pleased to receive your suggestions.

Senator O'NEILL: Have you read the evidence that has been given to this committee that is already on the record?

Ms Bon : I am broadly aware of it.

Senator McKENZIE: Did PwC read it?

Ms Bon : I do not know.

Senator O'NEILL: Can you direct PwC to look at the evidence that has been conducted in this process?

Ms Bon : PwC are aware of the inquiry.

Senator O'NEILL: Have you directed PwC to speak to the unions, which are a significant unearther and provider of this information? They have perhaps even more than we could hear in this inquiry.

Ms Bon : All of this can be taken on board as suggestions, certainly.

CHAIR: So you have not directed PwC to speak to the NUW?

Ms Bon : We have directed PwC to conduct a thorough inquiry into the allegations that were made. The allegations that were made on the ABC did have their origins from the National Union of Workers and that is exactly what we are looking into.

CHAIR: So have you specifically asked PwC to speak to the National Union of Workers?

Ms Bon : No.

CHAIR: Will you as a result of today's hearing? They have access to these workers. What Senator O'Neill has put to you is, if you have a look at the evidence, there are two timesheets there. Ms Currie, I agree with you. I am a longstanding former union official and I have been shocked at what has been put before me because, like you, I thought Australia had a robust system and for the majority of workers we do. But for certain sections of our workforce, clearly we do not. What has been given to you to have a look at is a false timesheet. PwC are not experts in industrial relations. If I was given that time sheet, with my former belief that Australia had a robust system, I would accept that timesheet. But it is fraudulent because the workers kept their own timesheets, which were very different.

I think you do need to direct PwC to look at the evidence that has come out here because it will change their mind set away from 'we have got a robust system and what I am given is correct'. Even your assumption is a quite correct assumption to make that there be payroll records. The Fair Work Ombudsman will tell you the people who get scratchings on an envelope are lucky. In fact they have told us that in evidence. The relationship with the employer is via text, not the relationship you have with your employees nor your relationship with the unions you deal with. We are dealing with something which is completely outside of our experience as industrial relations advocates. I put it to you, PwC are dealing with that as well so they need to be across the evidence that has been provided to the committee. They absolutely need to be directed to talk to the NUW, which can give access to workers as they did for me yesterday.

If you look at the Baiada chicken factory here, for example, if PwC is coming here, there are 500 workers. Only 130 of them are permanent. All the rest are employed by these dodgy labour hire companies. How does PwC get to the bottom of that if they are not across the Fair Work Ombudsman's report and all of the evidence we have heard in here and they accept that this employment is not an employment relationship that any of us have experienced before? It is a white minivan as Senator O'Neill said. It is a relationship via text.

I met workers yesterday, one who had been significantly underpaid. The minute she brought it to the labour hire company, what do you think happened? The minute the NUW went and acted on her behalf, she got no more work.

Senator O'NEILL: And if they talk to PwC on-site in the workplace that you are sending them out to, they will lose their job and will be sent back to their country. So the power differential here is so significant that the ways of practice that we have become accustomed to simply do not exist. Can I ask you what cost you have estimated for this whole process, not only the reputational damage but also the cost to undertake this PwC report to Coles?

Ms Bon : In terms of the cost, we will invest whatever resources it takes to ensure that we are able to be assured that our suppliers are treating their workers fairly. We do not have an estimate. The process is still undergoing so we do not have an estimate of what the costs will be but we will invest whatever it takes to ensure that these practices stop occurring.

Senator O'NEILL: If I could just project forward, it gets to the end of the month and all of the design flaws that I have attempted to articulate with the PwC inquiry have been addressed; you get a fantastic report that does more than what the Fair Work Ombudsman has been able to do; you give a period of implementation change to Baiada or any other companies that you find problems with; and you continue to monitor that yourselves. Would you continue to have people going out and checking these workplaces?

Ms Currie : Our expectation is that we would continue to work with people like the National Farmers' Federation to develop a broad based industry solution. What we do not want to have happen is that Coles develops a solution and other retailers or quick service restaurants or people also develop a solution. We are conscious that we are one of thousands of retailers who sell fresh meat and fresh produce in this country.

Senator O'NEILL: But effectively, with your PwC report, you have created your own inspectorate.

Ms Currie : What we are doing with that report is trying to understand what is actually happening in the industry and we intend to use that information to then make decisions about what else needs to change and input some of that into the broad based industry solution.

Senator O'NEILL: So if the Fair Work Ombudsman had actually been able to get out to those places and inspect them in the way that you intend to, perhaps this situation would not be arising? This situation would not be rising because at the moment, as you said, your inquiries will be broader than that of the Fair Work Ombudsman and you are going to have bodies on the ground in each of the workplaces. Are you a bit annoyed that the law and its enforcement agency are not enough to do this job, that you found yourself in this situation?

Ms Bon : We are concerned, as Andrea has said, and surprised at these allegations. We want to conduct our own inquiries so then we can respond as a major retailer with our suppliers or anyone in the supply chain that is found to be doing the wrong thing.

Senator O'NEILL: What did you think that the Fair Work Ombudsman was doing that clearly it was not? Where is the gap there?

Ms Bon : I did not consider what the Fair Work Ombudsman was or was not doing in terms of these allegations because as soon as they were made, what we did was begin to conduct our own inquiry. We were aware that the Fair Work Ombudsman was conducting an investigation into one of the suppliers but the report was only made public at the end of June. We did not want to wait for that so we had already started to conduct our own inquiries.

Senator O'NEILL: Are you disappointed that things were not robust enough to prevent this happening to you?

Ms Currie : I think we have the greatest respect for the Fair Work Ombudsman and for its work to try and uphold work standards in this country. Really our intent with the inquiries that we are undertaking is to understand the specifics of what is happening in our own supply base and then use that to formulate our own response and input into what we hope would be a broad based industry solution.

Senator O'NEILL: Given what has happened to Coles now, do you believe that the Fair Work Ombudsman is adequately resourced?

Ms Bon : We cannot really comment on the Fair Work Ombudsman's resources. You would need to ask that agency if it is adequately resourced.

Senator O'NEILL: If it was doing a really good job, I would put it to you that you would not have to hold an inquiry that was broader than that of the Fair Work Ombudsman to find out what was going on.

Ms Bon : What we are doing is we are conducting an inquiry into each of the allegations that were made. We would do that regardless of whether or not anybody else was conducting an inquiry and not because of an inquiry that it is already occurring or one that has not.

Senator O'NEILL: When you say 'each of the allegations', what are you referring to? Are you only looking into very particular allegations here or is this a look at the system more broadly?

Ms Bon : We are looking into the allegations that were raised by the ABC and we would look into any allegations that were brought to our attention.

Senator O'NEILL: Perhaps I have been misunderstanding you. So this is a limited inquiry only into the allegations raised on Four Corners? Is that correct?

Ms Bon : This is a direct response to the allegations made by the ABC.

Senator O'NEILL: So it is not a system wide review?

Ms Currie : The terms of reference for our inquiry are focusing specifically on legal right to work and receipt of appropriate pay and entitlements.

Ms Bon : What we have done more broadly is, in addition to the contracts we have got with our suppliers in the ethical sourcing policy, we have written to all of them reminding them of their obligations. We are reviewing our current practices in how we investigate, manage and respond to these issues.

CHAIR: Last the Fair Work Commission—and I think it was a public finding—found against Royal Bay, which was one of the contractors that by Baiada use, that they were subjecting their employees to sham contracting. That was a finding last year. Were you aware of that?

Ms Bon : No I was not.

CHAIR: You said, and Woolworths said the same, that you focus on international markets. Will you change your practices now to include a much more thorough understanding of what is happening across the supply chain in Australia?

Ms Bon : We have not said that we focus on international markets. What we said was that we have contracts with our suppliers. We have clearly spelt out terms and conditions. We expect them to comply with those. If they are not complying and if allegations are brought to our attention, we will conduct inquiries.

CHAIR: How to find out about this Fair Work Commission finding against Royal Bay, which is one of the contracted labour hire companies Baiada are using. How do you become aware of that because that is a breach?

In your sourcing policy at 3.3.1 you talk about subcontractors—I presume that means labour hire companies are included in that definition. It says here they provide materials or labour that it is ethical and legal. So how do you keep yourself abreast of the issue of the finding against Royal Bay, that it was entering into sham contracting, which you would know under the Industrial Relations Act is illegal? There it is, boom, from a company you are sourcing your meat products from.

Ms Currie : Our process looks at a circumstance where our primary relationship is obviously with the person that we are contracting to supply the goods and relationship with. Our visibility and therefore our ability to influence further up the chain from there becomes more and more restricted the further up the chain we go.

CHAIR: What does that subcontracting mean, then? Not labour hire companies Baiada is using? It is in your policy. I took it to mean labour hire companies.

Ms Currie : No, what it means is—

CHAIR: It is in your policy. I took it to mean labour hire companies.

Ms Currie : But it would equally apply to, say, subcontractors who are embroidering offsite and then supplying into the garment industry.

CHAIR: Sure, but here we are talking about Baiada, where the Fair Work Ombudsman has taken months to uncover the layers of labour hire companies it is using. There was a Fair Work Commission finding last year against Royal Bay in relation to sham contracting. Baiada has done nothing about it. It is still using Royal Bay. It is still in the report of two weeks ago. It has not drawn it to your attention. You are unaware of it. You have been at pains to tell us there are factual issues. Well, here is a factual finding against sham contracting, which is illegal and which Baiada has been engaging in and has done nothing about. So how do you get to the bottom of those issues?

Ms Currie : We would expect that Baiada's labour hire arrangements would be scrutinised as part of the process we are engaged in at the moment.

CHAIR: But they have not done anything to date. You have your ethical sourcing policy. You have your regular contact with them. Here we have a finding of sham contracting which you were unaware of and they had not told you about. You are after facts. Here is a fact: there is a finding. So how do you keep on top of this? You could go back to Baiada today and ask them why they did not act on this. They have done nothing about it. Royal Bay is still one of their labour hire companies and maybe it is still doing sham contracting—who would know?

Ms Currie : If that labour hire arrangement is still in place and it is supplying labour to a Baiada factory that we are sourcing product from then that relationship would be examined as part of our inquiries.

CHAIR: Well, I am not confident of that.

Senator McKENZIE: Seeing that we have our questions going, I will go back to some that I wanted to ask. You say you have your ethical sourcing policy. What was the date of your take-up and implementation of that policy? When did you adopt that policy?

Ms Currie : It has been in place since about 2005.

Senator McKENZIE: Has it been reviewed in that period?

Ms Currie : It has been reviewed twice in that period.

Senator McKENZIE: What were the years that that was reviewed?

Ms Currie : I would have to take that on notice. I cannot recall off the top of my head.

Senator McKENZIE: Has it been reviewed in the last year?

Ms Currie : I cannot be certain.

Senator McKENZIE: It was over a year ago, in May 2014, that the National Party member for Hinkler wrote an adjournment speech on this exact issue, calling in not only underpayments and exploitation of workers but visa breaches, racial discrimination, overcrowding in private houses et cetera, particularly in the horticultural industry, and he ran some forums in Queensland with AUSVEG et cetera to discuss the issues, which included intimidation of suppliers—the farmers—by the labour hire companies themselves. The evidence you have given us is that the Four Corners report stimulated your concern in this area. There were reports even in my home state's rural papers, which I know Coles advertises in and reads regularly, about the issue in June. I am just wondering why it took a Four Corners report to highlight this issue to you when clearly this has been going on and it has been in the public domain, from the adjournment speech to public forums, in areas that you are very connected to and with industry bodies that you are very connected to, including the NFF and the state organisations, across three levels of government. How is that you have not become aware of it? I would like to know why you were not really aware and why you were surprised and concerned as a result of Four Corners and not the previous year. I would also like to know why that has not stimulated any revision of your ethical supply or sourcing policy. Senator Lines's evidence would suggest that it is not working for you internally.

Ms Currie : I think when I said we were surprised and concerned I meant that our surprise and concern was around the allegations of how extensive the concerns were. I think it is not unreasonable for us to expect that in a country like Australia, which has robust workplace laws, those laws are effective. Our relationships realistically are with our direct suppliers. And, as I have already suggested, the further up the supply chain you go—and these issues that are alleged to be occurring are happening quite a way up in the supply chain, in some cases—visibility becomes less. All we can do is be in a circumstance whereby if allegations are raised we conduct our inquiries and react on a basis of fact around what is actually occurring within our specific supply base and address those concerns.

Senator McKENZIE: Do you undertake regular media monitoring about these issues?

Ms Bon : I would have to take that on notice.

Senator McKENZIE: Could you? And could you also look at the Weekly Times article of 27 June 2014? I would like to know if that was actually part of your media monitoring-gathering of that week.

CHAIR: Obviously your supply chain needs to be amended, because we have heard right across this country that the practice in agriculture and the practice in meat is to use labour hire companies. For Coles to continue to deal just with direct suppliers—who obviously do not tell you the truth, or who tell you what you want to hear—is not working. The fact that you missed a finding of the Fair Work Commission directly in relation to sham contracting by Royal Bay, one of the labour hire companies Baiada uses, tells you that your supply chain is not working. Yes, we would like to think we live in a robust industrial system. It is not just Baiada. But Baiada, Devine-Right—who, I understand, have reformed their practices—unfortunately did not come before us either. We have heard these labour hire stories right across the country, from Queensland to Western Australia. So obviously you need to revise your policies so that when findings are made you become aware of them. Obviously these labour hire companies are being used in agriculture and in meat and chicken, and this sham contracting arrangement is happening today. It happened yesterday, it is happening today and it will happen tomorrow. Royal Bay is still doing it. There needs to be a revision. I think Senator McKenzie asked whether you were going to revise your policy. It needs to be revised in relation to your suppliers.

Ms Currie : I think the intent we would be subscribing to is that the revision or the change in practice is this industry scheme, because, as you have all articulated, it appears to be a concern across a wide range of primary production industries, in which case a best-practice scheme around labour hire and workplace standards would be very useful. And that is the intent in the approach.

CHAIR: Sure, but, again, you cannot wash your hands of this.

Ms Currie : I was not suggesting for a minute that we were.

CHAIR: Well, you are, because I put the question to you: are you making sure that the NFF invites the NUW and whatever other unions are in the sector? And you said, 'It's not for us to comment.' If you are part of the industry solution you are saying to the NFF, 'You need to bring the union into this'—all the players, because whether you like unions or not they are players. And the NFF was very hostile to the NUW in evidence in Sydney last week. So I think Coles has a responsibility to ensure that all the players are at the table, including yourselves. You cannot sit and wash your hands of it and let the NFF deal with the issue, because actually I do not think the NFF deals with meatworks, so that would leave Baiada completely free once again to rip workers off. It is a conversation you need to have.

Ms Currie : I thank you for your suggestion.

CHAIR: And how do you get the meatworkers in? NFF is not dealing with the meatworkers; it is dealing with agriculture, so that is not an industry solution. It is an industry solution for agriculture, but it is not for meat, so what is your solution there?

Ms Bon : What we are doing, as we said, is looking into each of the allegations that are made, from a Coles point of view as a retailer who engages these suppliers. Regardless of whether or not there is a broader industry solution, we do not accept these practices, and if they are occurring we will ensure that they cease.

CHAIR: Well, you are accepting them, because they are occurring.

Ms Bon : No, we are not.

Senator O'NEILL: I have a question regarding the people you are hoping to engage with PricewaterhouseCoopers, who, in my view, are pretty unlikely to participate. But if they do participate, they would be people like Ms Amy Chang, who gave evidence to us, who has been forced to leave her employment. Can you give any assurances that people who do choose to participate in this inquiry by PwC going forward will not be dismissed? Will Coles provide them with support, housing and work and support them in further visa inquiries if they become compromised by participating in your PwC inquiry?

Ms Bon : We will not conduct an inquiry in such a way that it will put any workers' jobs in jeopardy, which is why we are not summarily ending our contracts with these suppliers. We want to work with them to take corrective action.

Senator O'NEILL: So you are not going to give them an assurance? This is what is happening; we know this is happening: if somebody speaks to the union, frequently they are dismissed. Then they need support, and that is what the unions are doing. If they speak to you or your agents, who are PwC, and they lose their job or get told by their employer that they have to leave the country, are you willing to support those people? I cannot see how you are going to get any information if you do not actually speak to the 417 holders. That makes them vulnerable.

Ms Bon : We are conducting the investigations and we will not put any workers' jobs in jeopardy. If workers do not want to—

Senator O'NEILL: It is not just about the job but about the worker themselves. The workers are in jeopardy, not just their job.

Ms Bon : That is why we will not summarily terminate any contracts.

Senator O'NEILL: How are you going to find out what they have to tell you if you are not going to talk to them?

Ms Bon : We already have information. Obviously the NUW has provided some information, and we have met with them. We now have a third party going in there, not just to talk to the workers. That is one of the ways to discover any practices that are occurring that should not be. There are other methods of investigation, such as looking at documentation as well, and that is what we will do.

Senator O'NEILL: Given our concerns about documentation—I think you are aware of that—my final question is: could you assure the committee that when you are following up allegations you are using that in a broader range than just the allegations that were raised on the ABC's Four Corners program? Many allegations have come before this committee, many allegations that are with a range of unions who you may or may not have yet engaged with. I expect that when we have further inquiries there will be more allegations. Are you committed to inquiring into all those allegations?

Ms Bon : We will inquire into any allegations that are brought to our attention that concern our suppliers.

CHAIR: Thanks very much, Ms Bon and Ms Currie. We appreciate that you have come before the Senate inquiry. We do see you as a powerful player in fixing these issues, because you are a major buyer, along with the other supermarket chains—obviously not wanting Coles to take all responsibility. We appreciate your efforts and we look forwards to these abhorrent practices being ceased.

Proceedings suspended from 12 : 09 to 12 : 18