Alternative Investment

Blackstone-owned sanitation company ordered to stop using child labour

A sanitation company owned by private equity group Blackstone has been ordered to stop using child labour after federal investigators allegedly found workers as young as 13 employed in abattoirs in Nebraska and Minnesota, including some who had suffered serious chemical burns.

In a federal court filing this week, the US Department of Labor said it had identified 31 children who have worked at three abattoirs serviced by sanitation contractor PSSI, which Blackstone has owned since 2018.

PSSI provides cleaning services at 400 meat processing plants and other industrial facilities, and officials said there was “reason to believe” similar violations were “occurring throughout the country”.

A federal judge on Thursday signed a temporary restraining order banning PSSI from employing “oppressive child labour”. The judge also ordered the sanitation contractor not to retaliate against any employees who co-operate with the government’s investigation.

Blackstone called any violation of PSSI’s anti-child-labour policies “completely unacceptable — as PSSI has made clear”.

During interviews conducted at the three abattoirs and at local high schools, described in the DoL filing, children told of working overnight shifts that sometimes started at 11pm and could last as long as eight hours.

Conditions inside the plants were “steamy, loud, and wet”, investigators said, with limited visibility and extreme mechanical noise. Some PSSI employees had to work while standing in a mixture of soapy water and floating meat parts, according to investigators’ reports.

Children interviewed by the DoL said their duties included cleaning bone saws, meat grinders and other heavy equipment, sometimes using caustic chemicals.

One student reported quitting high school after being tired out by the work. Another fell asleep in class, school records showed. Three minors who the government claims worked at the plant said they had suffered chemical burns.

PSSI said it had “an absolute company-wide prohibition” against employing anyone under 18 and would defend itself “vigorously” in the case. It added that it conducted identity checks on new employees, although “rogue individuals could of course seek to engage in fraud”.

“We are also surprised the DoL has taken this action,” the company added, pointing to “multiple audits with the agency that found no ​issues” and “extensive documents and responses” that it had provided to the government inquiry.

Blackstone is the world’s biggest alternative investment manager, with $951bn in assets, which include real estate and lending funds as well as debt-fuelled takeovers of companies such as PSSI.

“The private equity industry can afford to be responsible employers that provide safe and fair workplaces,” said Jim Baker, executive director of the Private Equity Stakeholder Project, which tracks the impact of Wall Street investors on mass-employment industries.

In court papers detailing their investigation, officials said PSSI managers had engaged in “obstructionist conduct” that impeded their investigation, such as refusing to provide records, listening in on interviews, or “circl[ing] the room making eye contact with the interviewees”.

US district judge John Gerrard will decide whether to extend his restraining order after hearing from PSSI at a hearing scheduled for November 23.

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