According to Dutch TV show ZEMBLA, the Ethiopian employees of the Dutch rose grower Sher are living in poverty. Allegedly, the company also evades taxes and uses too much water and harmful substances. The item was broadcast on Dutch TV on 18 May 2016. Sher Ethiopia distances themselves from the ZEMBLA broadcast.
Before the broadcast, ZEMBLA spoke with employees in Ethiopia who earn an average of 1 euro per day; according to Caroline Wildeman from development organisation Hivos, this is a quarter of the a salary that is needed to make a living. Apparently, use of water by Sher has caused the nearby river to dry up, so the villagers’ cattle can no longer drink there.
ZEMBLA compared the Ethiopians in the north of the country, who have to survive on five litres of water per person per week, with roses that use seven litres of water each. According to the experts involved, Sher produces between 3 and 4 million roses on an area of 600 hectares every day.
ZEMBLA had access to reports that proved that substances had been found in Sher’s waste water that are harmful to the environment. A laboratory, commissioned by Zembla, had analysed the Sher roses and found the same pesticides.
Fairtrade stands for fair trade and sustainability. According to ZEMBLA, Fairtrade recently expressed their concern about the very low wages in the East African rose sector in a confidential report. Sher has carried the Fairtrade label for four years.
Questioning the consequences for Sher of underpaying their workers, Peter D’Angremond from Max Havelaar/Fairtrade explained in ZEMBLA: ‘The good thing about Fairtrade is that we invest time and effort to work towards a plan to improve wages. It’s not our goal to decertify organisations.’ According to Fairtrade, Sher met all the requirements at their last check, including those for pesticides.
Sher’s owner, Peter Barnhoorn, did not want to speak on camera. In a written statement, he informed ZEMBLA: ‘The use of pesticides is equivalent to what is permitted in Europe. Furthermore, we have Fairtrade and other certificates. So, everything is in compliance with the requirements.’
A tax expert, Boudewijn Janssen, explained in the ZEMBLA broadcast that Sher had apparently used ‘tricks’ to avoid Ethiopian taxes. He concluded from the 2014 annual report that Sher borrows money from the company’s owners at an interest rate of 9%. This interest is deducted from the profit, so no tax is paid over this amount. Another tax gimmick is the fact that Sher ‘activates’ their own brand name on the balance sheet, Mr Janssen explained. This way, the brand name acquires a monetary value that can be deducted from tax on profits. Mr Janssen stated: ‘They push the boundaries of what is legally permitted. The Dutch tax authorities would expose this, but the Ethiopian tax authorities do not.’
ZEMBLA received Sher’s tax records through an anonymous Ethiopian source. The records show that the company paid a total of 420,000 euros in taxes over the years 2011 to 2015 and had an average annual turnover of 50 million euros. When asked, Peter Barnhoorn states in writing that tax avoidance or evasion is out of the question.
Sher Ethiopia distances themselves from the ZEMBLA broadcast
Staff and management of Sher Ethiopia say that the Dutch TV programme ZEMBLA painted a picture full of gross inaccuracies and untruths about the management of their rose company in the TV series Hollandse Handel (‘Dutch Trade’) on 18 May 2016. Peter Barnhoorn of Sher said: ‘It’s an attack on the whole of the flower industry.’
On the advice of different parties, Sher did not appear in front of ZEMBLA’s camera to respond to the allegations. Their sources were informed that the ZEMBLA editors critically choose which commentary they broadcast and are chiefly concerned with achieving the highest possible ratings.
CEO Peter Barnhoorn told the Vakblad voor de Bloemisterij/ Hortipoint that he talked with the ZEMBLA reporters for one and a half hours. ‘No word of this interview was mentioned in the broadcast. We were warned in advance, by the Dutch Embassy in Ethiopia among others, so I saw the anger and hatred in the airing of the ZEMBLA broadcast coming. It is a deliberate attack on the whole of the flower industry and Fairtrade. We would have liked to tell the real, honest story, together with other parties.’
Sher is currently considering taking possible action or legal action against the editors of the programme ZEMBLA and the broadcaster BNN-VARA to enforce the correction of the inaccuracies and untruths.
Sher states in a comprehensive statement on their site that much to their regret, the excellent reputation regarding sustainability and corporate social responsibility have been reported in the Dutch media in a completely erroneous and unacceptable manner. The statement gives a general outline of the company in Ethiopia, followed by details of the issues of water management, pest management, remuneration, taxation, and ground allocation. Sher would like to use this statement to portray the actual situation and remove any possible misunderstandings which might have arisen as a result of this broadcast.