Needles and the damage done
This Week – Strawberry industry update, Chinese pressure on Canada and industrial relations narratives
Strawberry crisis financial impact
In mid-November the Trebuchet Pivot Weekly Update reviewed the crisis that hit the Australian strawberry industry. The financial effects of the crisis are now able to be measured with recent analysis reporting that the Queensland strawberry industry had dropped in value 14%.
Following a product tampering crisis in which sewing needles were found in strawberries, supermarkets pulled the products from shelves.
A recent Department of Agriculture and Fisheries report forecast the Queensland industry to be worth $148 million in 2018-19. This is 14% down on the average for the past five years.
The fear generated by the product tampering had an immediate reduction in consumption and price that led to large quantities of strawberries being dumped and many crops destroyed.
Figures from other states are yet to be released to determine how the nation’s $500 million dollar strawberry industry has fared.
While the incident has cost the industry tens of millions, it is likely to recover from this crisis.
It can be argued that the crisis was well-handled, gaining strong public support including vocal and financial support from the Prime Minister and Premiers of both Queensland and Western Australia.
This incident indicates how even a well-handled crisis can hit an industry hard, bankrupting farmers through ongoing reduction in demand. However, it must also be considered that the product tampering only affected a small number of strawberries and the needles only caused minor injuries. If the crisis was not as well-handled, a larger quantity of produce was affected or if the ramifications of the tampering were more dangerous – the consequences and long-term industry damage could have been significantly greater.
Chinese, US and Canadian relations affect individuals
A Canadian citizen has been handed the death sentence and two other high-profile Canadians have been detained in China. These incidents continue to fuel claims that China is attempting to apply pressure on Canada following the arrest of a Huawei executive in Vancouver.
In China, Robert Schellenberg had his drug trafficking sentence increased from 15 years jail to death, while at the same time two Canadians were detained and accused of harming Chinese national security.
Canadian Prime Minister, Justin Trudeau, has expressed his belief that Beijing is arbitrarily applying the death penalty while experts in Chinese law claim that Schellenberg's death sentence is unprecedented.
Relations between China and Canada have deteriorated rapidly since the arrest of Huawei CFO, Meng Wanzhou, in Vancouver on 1 December. Meng now faces extradition to the US. China has denied the sentencing of Schellenberg and the detention of the two is linked to Meng’s arrest, but many analysts believe it to be retribution from Beijing.
By way of background, Huawei has been accused by the US of being a conduit for Chinese spying and cyber theft. The US alleges that Huawei has worked with Iran to bypass sanctions through a subsidiary, Skycom. Meng is personally accused of lying to US banks about the relationship between Huawei and Skycom – claiming it was unaffiliated. The US is seeking her extradition from Canada to face a range of charges that could see her imprisoned for 30 years.
If the claims are true that China is using Canadian nationals to leverage trade and political outcomes, this case is an interesting study in how crises can come from circumstances well outside an organisations influence. It means that any western organisations with employees working within China must consider the vulnerability of their staff and operations to political influences beyond their control.
Industrial relations - controlling the narrative
There have been two industrial relations related crises this week that show the importance of controlling the narrative.
The first involves workers at Hutchinson Ports Australia who are planning industrial relations action which could disrupt operations at international container terminals in Sydney and Brisbane.
In this instance the narrative appears better controlled by the employer rather than the union. While a union executive was quoted saying “we will not accept an agreement that rips us off and reduces our standard of living”, the same article reports workers are earning up to $150,000 a year for working 33-hour weeks.
The resulting narrative appears that the workers and unions, rather than the employer, are being unreasonable and … dare it be said … greedy.
The second involves a WA prison where 50 guards walked off the job as tensions over staffing shortages reached boiling point. The WA Prison Officers' Union claimed the prison was understaffed and it was only the goodwill and additional hours being worked by the guards that kept the prison running.
In this instance the narrative appears well controlled by the union and designed to garner public support. Of note, they communicated key messages such as: staff would only be off-the-job for four hours, this was the first industrial action taken in five years, and the operation of the prison and welfare of prisoners would not be compromised.
These two incidents, while similar in nature, show how a strong public affairs campaign can make or break your organisation’s ability to control the narrative and achieve objectives.
Local, national and global events could impact upon your business at any time. Trebuchet Pivot provides your business with the skills and knowledge to work through crises when your business is at its most vulnerable.
Exceptional leadership and comprehensive crisis and incident planning is now not just a good idea, it is critical to the organisations’ people, operations, assets, reputation and ultimately the financial value.
Now more than ever Australian businesses must take crisis management seriously. Trebuchet Pivot provides the insights and experience needed to address potential threats faced by boards and executive teams as they lead their organisations into the next decade and beyond.