Chorus and its subcontractors should have done more to identify and mitigate the risk of breaches in employment law, an independent report has found.

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In October last year the board of Chorus commissioned company Martin Jenkins to investigate its subcontractors' employment processes.

The move followed a Labour Inspectorate report that found 73 of 75 Chorus subcontractors systematically exploited workers.


The report, released today, found the adoption of a subcontracting model for the delivery of the ultra-fast broadband network was appropriate and that use of migrant workers by Visionstream and UCG was both expected and reasonable given the significant demand for labour and time-limited and one-off nature of the work required.

But it found that as the proportion of migrant workers increased the subcontracting model became increasingly vulnerable to the risk of labour exploitation.

"This risk was not well understood nor adequately managed by Chorus, Visionstream
or UCG."

The report found the approach taken to the risk was not "sufficiently adequate" given the complex nature of migrant exploitation.

"The subcontracted model has been applied by Visionstream and UCG in such a way that the risks associated with volatility of demand for UFB connection may be disproportionately borne by the end technician."

It said Chorus and the service companies contracted to it would benefit from a more joined-up approach to workforce strategy and a "shared understanding of needs, pressures and risks, with a particular focus on potential impacts on the viability of
individual crews."

Chorus had relied on the assurance provided by Visionstream and UCG in response to specific complaints but the quality of the process was "inconsistent" and relied too heavily on assurance provided by subcontracted delivery partners by potentially exploited migrants.

The report said the quality of information that Chorus, Visionstream and UCG had about the workers contributing to the UFB programme was poor.


"In particular, we found that Visionstream and UCG did not have robust information about which workers were working for different delivery partners and whether they were in
employment or contractor relationships.

"This extended to poor information being provided to Chorus about the status of different
visa conditions under which workers were employed."

Martin Jenkins has proposed potential responses to its findings which include; making sure all worker should be able to earn a decent wage for a fair day's work, suppliers must take steps to ensure their supply chain is free from discrimination, harassment, corruption and bribery, suppliers must handle all business dealings with the highest standards of integrity, transparency and honesty, management systems must support good practice and clear accountability and productivity improvements in the supply chain should strike the right balance between the needs of the customer and the needs of the workers.

In a statement Chorus and its service companies Visionstream and UCG said they had committed to a wide range of actions aimed at creating fair conditions for all workers in the Chorus supply chain and many of the changes were already underway.

Chorus chairman Patrick Strange said the board and management were committed to doing the right thing by people working on its behalf.

"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."

Chorus chief executive Kate McKenzie said Chorus, Visionstream and UCG needed to step up what they were doing in order to identify and mitigate the risk of breaches in employment law.

"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.

MacKenzie said it would make the necessary changes to ensure fairness in line with employment laws no matter where in the supply chain workers were contributing.

"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," she said.