CHICAGO (Reuters) -JBS USA, one of biggest U.S. meatpackers, is creating an internal company to clean some of its processing plants after a private sanitation firm it employed was accused of hiring children for dangerous work.
The launch shows the complexities involved in replacing Packers Sanitation Services Inc (PSSI), a firm that contracts to clean slaughterhouses. The U.S. government in February said PSSI paid $1.5 million in penalties for employing more than 100 underage teenagers at meat plants across eight states.
The new company, JBS Sanitation, will "immediately begin the transition" to cleaning 10 JBS USA facilities, which produce beef and pork, according to a statement issued this week. JBS Sanitation will also do in-house cleaning for Pilgrim's Pride (NASDAQ:PPC) Corp and create "hundreds of union jobs," the statement said.
JBS USA is the North American unit of Brazil's JBS SA (OTC:JBSAY), which also owns most of Pilgrim's Pride.
"We fully expect JBS Sanitation to be cost competitive with other service providers," JBS USA spokesperson Nikki Richardson said on Thursday, without providing details.
America's largest meatpacking union, the United Food and Commercial Workers International Union, said it is working with JBS USA on in-house sanitation.
PSSI has said it has a policy against employing minors.
JBS USA previously said it terminated contracts with PSSI at "numerous" facilities, including three plants where alleged child-labor violations occurred. Third-party companies that meet employment verification standards will continue to clean some JBS USA and Pilgrim's Pride plants, according to the statement.
Meatpacking rival Cargill Inc said it was cutting all ties with PSSI but the process will take months.
U.S. Agriculture Secretary Tom Vilsack sent a letter to the largest U.S. meat and chicken processing companies last month, urging them to examine their supply chains for evidence of child labor.