4 October, 2010
Last week, the ICEM was involved in meetings in Ecuador to get acquainted with unions whose interests coincide with the Global Union Federation. These meetings were unfortunately overshadowed by events on Thursday, 30 September, in which a small band of disgruntled police officers attempted a futile coup.
The Ecuador meetings were sponsored by the FNV, the Dutch trade union national centre, which also supported a study on Chinese investment in Latin America, carried out by social research organisations of the Red Lat network. The study was presented on 28 September, also in the presence of the Chinese ambassador to Ecuador.
China portrays itself as a soft power, a promoter of development, but the harder side of Chinese investment is its quest for natural resources. Brazil, Chile, Argentina, and Peru are the countries that are the most attractive to China. Mining, oil, gas, and the accompanying infrastructure are the targets of Chinese investment.
Unfortunately, China concentrates investments in areas that do not generate great employment. And even then, worker participation and decision-making in the production process are not considered. The sectors in which China invests primarily entail greater risks for precarious work, that is, mining and energy. For example, practices in the mining industry in Peru worsened after the arrival of Chinese investors.
One further concern involves Chinese workers who accompany the investments. If there were more Chinese workers, most likely their presence would lead to a serious decline in labor standards.
In general, trade unions expect an employment boost from foreign investment, and if the investment is not followed by greater employment, then the country could be even worse off.
What needs to be considered is the balance between environmental, labor, economic, social, and even gender aspects. The investments must be followed by decent work and decent pay. What has to be prevented is the replication of the bad practices on the part of most European and North American multinationals in connection with labor relations.
Trade unions have learned that they must be involved in the design of industrial policies as well as demanding a commitment to their implementation. Trade unions in Latin America must increase their exchanges in order to track the investments, since effects may prove to be similar. The best way to face the onslaught may be increase regional coordination. What is at stake is ultimately the Latin American model of development which provides for national sovereignty, followed by job creation and social inclusion.
On 29 September, a study was presented on a Friedrich-Ebert Foundation (FES) commissioned on post-subcontracting. It concerns mining, the oil industry, and electric power, and is the only study to date to deal with the effects of Ecuadorean legislation on the issue.
Ecuador is the only country to pass a law banning subcontracting. Chile, moreover, has a law from 2006 that intends to regulate subcontracting, and legislation is still pending in Brazil, but Ecuador's law prohibits it.
Trade unions in Ecuador had been suffering from flexibilization of labor, but there had not been any analysis of it, there were no proposals to combat it, and no strikes had been called to fight it.
The mining industry in Ecuador is geographically dispersed with little organizational capacity. Ninety percent of mining in Ecuador is informal. Thus, there is no need to make the miners any more precarious.
Subcontracting has vital effects on health and the environment.
Mandate 8, as the legislation is called, is not likely to have much effect in mining because there are no strong unions to implement the measure. In the oil sector, it is a state enterprise was responsible for subcontracting. Companies have found ways to circumvent the legislation. When they were required to reinstate the regular workers, they were reinstated at lower salaries with no seniority.
The electric power industry was dismantled and many workers left. Very few were left over from the previous regime, others again came back as contract workers, with new and younger workers hired. What is certain is concern on the part of trade union for contract workers. The union also created a branch for contract workers.
What the legislation shows is that it is possible to fight subcontracting successfully. Nevertheless, the effects can be reversed, and the problem may reoccur under another name. That is why strong trade unions are necessary more than ever to monitor and ensure implementation of legislation.
The study will be revised with information from the unions and presented soon to the government.