BWI Targets Multinational Companies

Over the last 20 years, many multinational companies (MNCs) in the building and wood industries have transformed into global conglomerates operating throughout the world. They have expanded to include new areas such as real estate investment and facilities management. The MNCs of the newly industrialised countries of the BRIC (Brazil, India, China and South Africa) dominate their respective regions. Five of the 10 world’s largest construction companies are now Chinese companies, increasingly undertaking largescale infrastructure projects in developing countries. At the same time, the practice of sub-contracting, out-sourcing and precarious employment is spreading widely, both in the construction, building materials and wood and forestry industries. The ILO estimates there are 65,000 MNCs employing 90 million people or 1 out of 20 of the global workforce. MNCs are also indirectly responsible for millions of jobs through global supply chains and sourcing. BWI’s core mission remains firmly in place: to recruit and organise new members, to make trade unions stronger, to negotiate collective bargaining agreements, and to improve living and working conditions of workers in BWI sectors. However, as the industry changes, so too must BWI’s strategies. That’s why almost 15 years ago, BWI along with other Global Unions started to sign International Framework Agreements with MNCs.

What is an International Framework Agreement? An International Framework Agreement (IFA) is a negotiated commitment signed between a global union federation and a multinational company to respect the ILO four fundamental principles and rights at work, throughout its operations. These fundamental rights are the right to freedom of association and the effective right to collective bargaining, non-discrimination and equal opportunities and no forced labour or child labour. The IFAs also include other commitments on decent wages and working conditions, protection of workers’ representatives, skills training and occupational health and safety. The agreements set up joint compliance monitoring mechanisms, known as reference groups, and extend to suppliers and sub-contractors. “IFAs help affiliates gain access to work sites, and initiate dialogue between management and the subsidiaries, suppliers and subcontractors. IFAs do not replace national legislation or existing collective bargaining but are designed to create a framework within which all workers are guaranteed a minimum level of international labour standards.” Ambet Yuson, General Secretary BWI

BWI signed its first IFA in 1998 with IKEA, Sweden. By January 2013, it had signed 18 IFAs. They are all with MNCs based in European Union countries.

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BWI’s organising strategy and MNCs BWI strategy has evolved and was redefined throughout the years since its first IFA. BWI Conference on Organising in Multinational Companies and Infrastructure Projects in October 2011 in Madrid with 220 activists from all over the world contributed to the latest fine tuning of the different blocks of the strategy: Among others, IFAs as an organising tool, global and regional networks, building alliances in the frame of global campaigns, investigative missions, monitoring mechanisms, OECD guidelines and forestry certification schemes, European Works Councils and comprehensive communication strategy.

IFA as an organising tool It is true that the value of an IFA is its global reach, both geographically and throughout the supply chain. In its home country, a MNC generally respects workers’ rights; however, when they operate in developing countries, or indeed in the USA, they can often take fiercely anti-union positions and condone exploitative working conditions. An MNC may not ensure compliance with workers’ rights in subsidiary companies, by its sub-contractors or when it enters a joint venture. However, when signing an IFA with the BWI, it is committing to changing its practices. The challenge is to make those commitments a global reality. It is in this context that the BWI strategy has been focusing on IFA as a key organising tool to open doors and help establish a dialogue.

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Royal Bam, the Netherlands: IFA leads to Organising at Royal BAM road project in Tanzania Royal Bam is the leading construction group in the Netherlands and employs around 26,000 people. It signed an IFA with BWI in April 2006 and set up a compliance monitoring group. A high-level mission led by Dutch trade unionists to ensure compliance with the terms of the IFA and to gain access to a construction site to organise workers. In April 2011, when the new Sumbawanga-Laela road construction project was started, which is a joint venture between Aarsleff Denmark and Bam/Interbeton, a BWI delegation, comprising Dutch trade union leaders, the Tanzanian construction union, TAMICO, and BWI staff, was able to visit the construction site camp. The delegation commented on the open and cooperative attitude of the BAM/Interbeton project managers, and it was agreed that TAMICO could have access to the camp in order to organise workers and to establish a branch. There were 636 workers at the camp, including 130 women and the project at its peak is expected to employ 1,500 workers. The union has now signed a collective agreement and been able to improve wages, occupational health and safety, including HIV and AIDS prevention measures, and ensure equality of treatment, particularly for women and migrant workers. However, the company is still employing workers without written contracts for as long as two months and there are frequent arbitrary dismissals. These issues are before a Commission of Mediation and Arbitration. “The BWI framework agreement with the Royal Bam has played a great role in assisting TAMICO carry out recruitment, negotiate for better terms of service and establish a cordial relation with the Royal Bam in Tanzania. The mission organised by BWI and Royal Bam Netherlands assisted to change the projects management attitude towards the Union and workers in general.” Hassan Ameir, General Secretary, TAMICO

Global and regional company networks The BWI strategy has also set up many global and regional company networks to map the presence of MNCs and large-scale infrastructure projects; and to identify organising targets where existing IFAs can be used. The networks allow for the transnational exchange of information about working conditions in an MNC, including collective bargaining agreements. Sometimes, they also aim to sign an IFA.

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Odebrecht, Brazil: A regional network to demand compliance with workers’ pension rights in Dominican Republic Odebrecht is the biggest construction company in Latin America, carrying out public infrastructure projects and private contracts, sometimes in joint ventures with European construction companies. It employs 91,000 workers, with approximately one tenth of the workforce on precarious contracts. It has operations in 20 Latin American countries, and also in Africa, Asia and Europe. In September 2011, BWI formed an Odebrecht company network for Latin America. The construction unions from 7 countries met to draw up a picture of working conditions in the different Odebrecht projects, identifying the high incidence of contract work, low salaries and poor working conditions, and anti-trade union practices. In 2012, the network has expanded with the addition of unions in Mozambique and Angola. The plan is to develop an integrated strategy with the aim of signing an IFA, also covering Odebrecht suppliers. The Odebrecht network has already achieved some positive results. In Dominican Republic, the BWI affiliate, FENTICOMMC, had filed a complaint against the company for violation of the pensions laws which stipulate that 1% of the value of all construction projects, including State funded projects, should be paid into the Construction Workers Pension Fund. Odebrecht had evaded this responsibility, claiming it had paid the funds into the National Social Security Fund. In 2012, following interventions from the BWI regional office and with the additionally authority afforded by the new network, Odebrecht has acknowledged the debt and is taking measures to rectify the issue. This success has also enhanced the position of FENTICOMMC among the workers on the Odebrecht construction sites in the country. The global and regional company networks strengthen union to union contact within an MNC, and allow the home country union to assist unions in the overseas operations to ensure compliance with labour standards and company policies. These networks also seek to build alliances with other sectors, consumers and the general public.

Building alliances in the frame of global online solidarity campaigns Using the company network to build support, working with the home union and unions in the target country, developing an on-line petition with other unions, consumers and the general public, holding actions outside of company stores and denouncing violations at the ILO Conference. BWI regularly mobilises national and international support through global online solidarity campaigns.

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IKEA / Swedwood, Sweden: A global campaign based on building alliances with other sectors, consumers and the general public IKEA is a home furnishing company with procurement operations in over 50 countries and over 1000 suppliers. It is owned by the Swedish Kamprad family, through a series of foundations based in Liechtenstein for tax reasons. IKEA also owns Swedwood, one of the world’s largest manufacturers of woodbased furniture, which produces exclusively for IKEA. In 1998, Ithe International Federation of Building and Wood Workers , IFBWW - former BWI -, signed an IFA with IKEA concerning their wood suppliers. In 2001, IKEA drew up its own code of conduct for wood suppliers, which includes labour rights and the IFA was amended to make reference to this code. The revised IFA set up a monitoring group to review compliance. IKEA is a clear example of a global company that is operating double standards. There is no union recognition in many of their suppliers in Central and Eastern Europe, and it was July 2011, before the first union was successfully formed in the USA at an IKEA Swedwood factory. Since 2008, BWI and the International Association of Machinists and Aerospace Workers (IAMAW), which organises workers in the wood industry, have been in a dialogue about allowing access for union representatives to the more than 300 workers at the newly-established plant, in Danville, Virginia, where issues of health and safety and racial discrimination were reported. Swedwood management was extremely hostile to the union, hired a notorious union-busting law firm, dismissed union activists and sought to divide the workforce through the promise of bonuses and spreading rumours about the plant closure. After 1000 days of failed negotiations, the unions decided to file for elections on whether to form a union. BWI, together with the Swedish wood union GS, consistently supported the organising campaign over the three year period. Taking advantage of IKEA’s concern for its public image as a socially responsible company, the campaign was designed to expose IKEA’s double standards to union members, consumers and the general public. Over 100,000 signatures were collected in a petition to the IKEA CEO, organised together with change.org and American Rights at Work. BWI affiliates organised actions outside IKEA stores throughout the world and there were high-profile protests in Switzerland, Sweden, Germany and Denmark, which received much publicity. These actions included taking pictures in front of IKEA stores with a sign stating, “I Vote for IKEA/Swedwood Union”, sending video solidarity messages, writing personalised letters to the workers in Danville, and calling IKEA stores urging IKEA to stop its interference in the election campaign. The BWI highlighted the issue at the ILO conference in June 2011 and distributed campaign stickers and leaflets to the worker delegates. In the US, there was considerable media coverage on both TV and the mainstream newspapers. In July 2011, the elections were successful conducted, with a vote of 76% in favour of the union. Following that, three out of six IKEA suppliers in the USA have recognised the union. “This struggle was truly global with support and assistance from every continent by more than 120,000 workers, various social partners, and many other global union federations.” Per-Olof Sjöö, Vice-President of BWI, and President of Swedish union, GS

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Now, the IKEA supplier in Poland has recognised the BWI affiliated unions, Solidarnosc Building and Wood Workers Union and Budowlani, and signed a collective agreement. However, there are still many IKEA suppliers where the union has not been recognised – so the challenge continues in Latvia, Lithuania, Hungary and Russia! For that, BWI has set up an IKEA global company network.

Investigative missions are key The BWI strategy includes investigative missions to highlight violations of workers’ rights, international protests and publicity campaigns.

Lafarge, France: Using investigative mission to end subcontracting in Indonesia Lafarge is a global conglomerate in the cement and roofing industry, employing around 68,000 people in 64 countries, with 1600 production sites. The company is based in France and signed an IFA in September 2005. Lafarge is also a member of the UN Global Compact. Since the signing of the IFA, BWI has set up Lafarge shop-stewards networks in Southern Africa, and elsewhere, used the agreement to support union demands in the USA, and in March 2011 held a joint mission to China. In Indonesia, a high-level investigative mission exposed abusive subcontracting practices and BWI launched an international protest and publicity campaign. Over the last two years, the IFA has been successfully used to support the demands of contract workers at the PT.SAI-Lafarge cement plant in Banda Aceh, Indonesia. The company employs over 200 contract workers, the majority of whom have worked for many years on short-term contracts. Under Indonesian labour laws, a temporary contract can only be renewed twice and then the worker is entitled to a permanent contract. Wages were reported to be as little as US$50 per month, well below the Indonesian minimum wage of US$110 per month, with no social security benefits nor written employment contracts and no safety equipment provisions. The Chair of the FKUI contract workers union, Tengku Nantasyah,who had worked for 18 years as a contract worker, loading and cleaning ships, submitted a report to a BWI investigative mission about conditions for contract workers. A few weeks later, the company charged him with stealing a rope, and he was dismissed and then arrested in August 2011 and put in prison. BWI launched a solidarity campaign, calling for letters of protest to be sent to Lafarge and accusing the company of the “criminalisation of union leaders.” The campaign received considerably international publicity and support from Lafarge union networks around the world. In February 2012, PT.SAI-Lafarge agreed to set up a Joint Compliance Committee to monitor compliance of sub-contractors and service providers with the labour and social standards as laid down in the IFA. This has lead to the recognition of the contract workers’ union, payment of the legal minimum wage, written employment contracts, social insurance coverage and provision of safety equipment.

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“I always told my union members that this experience has shown us the importance of the union. Without the efforts and solidarity from the union, I would not have been able to fight back. Also it is important to have unity among workers. When one suffers injustice, the rest should come forward to defend their fellow workers,” Tengku Nantasyah, Chair of FKUI contract workers

The role of the monitoring mechanisms The BWI strategy also focuses on accessing workplaces to monitor working conditions and organise workers; and if there is non-compliance, send a report to the company monitoring group.

Faber-Castell, Germany: Using monitoring mechanisms to reopen a plant in India and improve conditions Faber Castell is a leading company in the manufacture of writing instruments. It is present in over 100 countries and has a workforce of around 7000. BWI signed an IFA in March 2000, which was up-dated in October 2008 in order to strengthen the monitoring mechanisms. There is now a multi-stage procedure including self-assessments, internal and external audits. The audit mission has proved a valuable mechanism for engaging in constructive dialogue. Following a fire in one of the units, Faber Castell decided to close its plant in Goa, India. The Goa Trade and Commercial Workers’ Union, which represented the workers, challenged the decision and levels of compensation, which were below the legal minimum. BWI raised the issue with Faber Castell headquarters, and it was agreed to conduct a site audit in 2011. The outcome of the audit was that the management agreed to keep the Goa plant open and to meet the union demands concerning wages, annual increments, seniority grading and to give preference to the employment of regular not contract workers. “It is an agreement.., which will motivate the workers to put their best foot forward and ensure discipline, productivity and harmonious industrial relations. We commend the Faber-Castell management for going beyond short-term interests and setting a new paradigm in industrial relations.” Christopher Fonseca, President of the Goa Trade and Commercial Workers’ Union In 2012, a social audit of the Faber Castell plants in Brazil, Colombia, Costa Rica and Peru was conducted by the management, BWI and IG Metall, the German union. Brazil is the only country where there is a recognised union at the plant, so members of that union took part in the audits in the other countries to discuss union recognition and collective bargaining. The audit also reviewed compliance issues in the supply chain, particularly in forestry.

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FCC Spain: Monitoring fair working conditions for construction workers with SUNTRACS, Panama FCC, Fomento de Construcciones y Contratos, Spain is a major Spanish construction, energy and urban services company, present in over 50 countries in Europe, the Americas and Asia. 50% of its operations are now outside Spain and it employs a global workforce of 90,000. FCC is also a member of the Global Compact and recognises the OECD Guidelines on Multinational Enterprises. It has a number of on-going corporate social responsibility initiatives, including an advanced code of ethics and a gender equality plan. BWI signed an IFA with FCC in February 2012, together with BWI’s Spanish affiliates, FECOMACC.OO y MCA-UGT, the first IFA with a Spanish company in the construction industry. The IFA sets out the commitments to protect fundamental workers’ rights, mechanisms to prevent abuses, including in the procurement and supply chains, a formula for the publication and dissemination of the agreement and a joint reference group to study and resolve conflicts. It includes an extensive clause on the rights of migrant workers. Both FCC and Odebrecht are part of the Panama City Line 1 Metro Consortium, a major project to build a 14km metro line through the centre of the city. The SUNTRACS construction union has negotiated that the workforce will be covered by the terms of the existing sectoral collective agreement with the Panamanian Construction Chamber, with some additions for specific skills. A delegation from BWI and the Spanish affiliate, FECOMA, have inspected the construction sites and will continue to monitor progress under the terms of the IFA joint reference group.

Using OECD guidelines and forestry certification schemes With some MNCs, the BWI used other international standards, such as the OECD guidelines for multinational enterprises, and forestry certification schemes. These guidelines are annexed to the OECD Declaration on International Investment and Multinational Enterprises. They are recommendations providing principles and standards for responsible business conduct for MNCs operating in or from countries adhered to the Declaration. The OECD Guidelines are legally non-binding.

Holcim, Switzerland: Using an OECD complaint on treatment of contract workers to open dialogue in India Holcim is one of the 5 giants of the cement industry worldwide. It has an estimated 80,000 employees and over 2000 plants in 70 countries. In India, it supplies an estimated 25% of the market for cement. Holcim is a member of the UN Global Compact and has produced a Corporate Social Responsibility annual report since 2002. In its home country, Holcim respects workers’ rights, while in developing countries, its subsidiaries have sometimes failed to comply with national legislation and are clearly anti-union. In addition, Holcim operations have been accused of serious damage to the health

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of local communities and the environment. Holcim has recently indicated it is willing to start discussions with the global unions on a global agreement on occupational health and safety. Using the OECD guidelines on multinational enterprises; carrying out an investigative mission, working in alliance with other GUFs and environmental groups; exposing abusive practices by holding protests outside the annual shareholders meeting; organising a speaking tour in the home country. Pragatisheel Cement Shramik Sangh (PCSS) represents contract workers at ACC Holcim Jamul Cement Plant, one of the major plants in the country. This company employs about 300 permanent workers and over 1,200 contract workers in all parts of the production process, which is illegal under the terms of the Indian Contract Labour Act. Over 800 of the contract workers have daily contracts and many have been employed for over 20 years! The PCCS took up the case of contract workers, arguing they should be part of the permanent workforce and in March 2011 won the case in the High Court. In August 2011, the BWI and ICEM held a solidarity mission to the plant to express concern at the continued use of contract workers for core work at the plant. PCSS then submitted a complaint against Holcim’s Indian subsidiaries to the national contact point in Switzerland, under the OECD guidelines on multinational enterprises. The BWI, in partnership with its Swiss affiliate UNIA, and Swiss- NGOs MultiWatch, and Solifonds and the Global Union INDUSTRIALL organised a speaking tour for PCSS leaders in Switzerland to coincide with Holcim’s 100-year anniversary celebrations in April 2012. A demonstration was held outside Holcim’s Annual General Shareholders meeting on 17 April 2012 which received wide publicity in Switzerland. The coalition presented Holcim management with a report documenting the group’s abuses around the world, and a manifesto with signatures from Switzerland and elsewhere. Additional meetings were organised with the National Contact Point of the OECD in Switzerland and with the ILO. The main demands presented to Holcim are that its Indian subsidiaries end all abusive treatment of union representatives, recognise the trade union and enter into effective collective bargaining, observe national labour laws, convert temporary contracts into permanent contracts, participate in social dialogue as full members of the employers’ association of the Indian cement industry, and sign and fully comply with the collective labour agreement for the Indian cement industry. BWI and IndustriALL have also raised concerns about the impact of Holcim’s plants on the local environment and communities. “The solidarity campaign launched by the international unions and solidarity groups has succeeded in creating some pressure on Holcim and we must find further effective ways of keeping this pressure up. Without such a campaign, Holcim could easily have ignored a small union of vulnerable contract workers in a poor region of a developing country. It is only such a campaign that would bring them round to negotiating with the PCSS on its very legitimate, justified, and reasonable demands.” Bansi Sahu, President, PCSS There are also two forestry certification schemes that can be used like the Forest Stewardship Council (FSC), an international not for-profit, multi-stakeholder organisation established to promote responsible management of the world’s forests. Its main tools for achieving this are standard setting, certification and labeling of forest products. The organisation provides a tool to influence how forests worldwide are managed. The other scheme is the Programme for the Endorsement of Forest Certification (PEFC) which promotes sustainable forest management through independent third party certification. It is considered the certification system of choice for small forest owners.

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European Works Councils European Works Councils also have an important role to play as they give representatives of workers from all European countries in big MNCs a direct line of communication to top management. They also make sure that workers in different countries are all told the same thing at the same time about transnational policies and plans. Lastly, they give workers’ representatives in unions and national works councils the opportunity to consult with each other and to develop a common European response to employers’ transnational plans.

CICA The BWI maintains regular dialogue with employers through the Confederation of International Contractors Association (CICA) on labour policies and practices.

BWI affiliate Ghana Construction Union successful with Chinese companies in Africa The BWI affiliate in Ghana, the Construction and Building Materials Workers Union (CBMWU) reports that it has negotiated collective agreements with 8 Chinese companies: • Sinohydro Corporation • China Railway Wuju Corporation • China International Water & Electric Corporation • China Geo Engineering Corporation • China Jiangsi Jianda International Inc. • China Jiang International Economic & Technical Corporation • China State Hualong Construction Company • China Top International Corporation “There was initial resistance but now the companies have opened up. They allow unionisation, enter into collective bargaining with our union and they respect the labour laws and the union contracts. We have seen tremendous improvements and have had a 30% increase in our membership as a consequence.” CBMWU General Secretary, Pius Quainoo

BWI Company Monitor blog BWI also adopts a well–resourced and comprehensive communications strategy, including regular up-dates on the BWI blog on MNCs, the BWI Company Monitor, as an information tool.

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Rights should have no frontiers! -2013 and beyond The IFAs have proved their value as an important entry point to gain access to sites and to raise issues of non-compliance, particularly with regard to the most vulnerable workers, such as contract workers, migrants and women workers. Unions in both developed and developing countries have mobilised and been empowered by these successes. BWI will continue to build on its experiences and strengths and undertake targeted organising campaigns, using the resources of the growing number of its global and regional company networks. New areas identified include the regional multinationals, Chinese multinationals and recruitment and hiring agencies. In the near future, it is planned to strengthen engagement with the multinationals in Brazil and South Africa to sign IFAs to cover their increasing operations in Latin America and Africa respectively. BWI will work in partnership with the global unions and in alliance with other human rights and environmental groups to document abusive situations where necessary and to engage in dialogue with MNCs. The increasing presence of Chinese construction conglomerates throughout the world, particularly in infrastructure projects, needs to be addressed, using where possible the labour clauses in public procurement contracts adopted by the International Financial Institutions and regional development banks. Whether it would be appropriate to sign global agreements with any Chinese company needs careful analysis and discussion, given the lack of independent trade unions in China and the well-documented human rights abuses committed by both government and employers. A few targeted organising campaigns can have a huge impact. BWI will continue to work with its affiliates and allies, at all levels, from local, national, regional and international, in a coordinated and consistent manner, backed by sound research and a well-resourced communications strategy. In this way, BWI has effective tools to put pressure on MNCs to ensure compliance with workers’ rights. Over the next Congress period, BWI is committed to doing just that – because rights should have no frontiers!

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List of IFAs signed with Multinational Companies 1998-2012 Year

MNC

Country

Sector

2012

OHL

Spain

Construction

2012

Ferrovial

Spain

Construction

2012

FCC Construcción

Spain

Construction

2010

Pfeiderer

Germany

Building Materials

2010

GDF Suez

French

Electricity Utility

2009

Wilkhahn

Germany

Office Furniture

2008

Italcementi

Italy

Building Materials

2006

Staedtler

Germany

Writing Instruments

2006

Royal Bam

The Netherlands

Construction

2005

Lafarge

France

Construction

2005

Schwan Stabilo

Germany

Writing Instruments

2005

Veidekke

Norway

Construction

2004

Impregilo

Italy

Construction

2002

Ballast Nedam

The Netherlands

Construction

2001

Skanska

Sweden

Construction

2000

Hochtief/ACS

Germany/Spain

Construction

2000

Faber-Castell

Germany

Writing Instruments

1998

Ikea/Swedwood

Sweden

Furniture and wood

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List of BWI networks Africa/ Middle East Networks BWI forum in construction in Africa

Anglophone African unions: Nigeria, Sierra Leone, Liberia, South Africa, Zimbabwe

Vinci Network

Burkina Faso, Tchad, Mali, Niger, Togo

Lafarge Network

Morocco, Tunisia, South Africa, Tanzania, Kenya

Cement firms

Middle East

Raiply woods network

Nigeria, Sierra Leone, Liberia, South Africa, Zimbabwe

Latin America /Caribbean networks ARAUCO

Chile, Argentina, Brazil

Holcim

 hile, Argentina, Brazil, Colombia, Ecuador, Mexico, Guatemala, El C Salvador, Nicaragua, Costa Rica

Lafarge

Brazil, Honduras, Ecuador, Mexico

ETEX

Chile, Argentina, Colombia, Peru, Mexico

Odebrecht

 rgentina, Rep. Dominicana, Panama, Venezuela, Colombia, Ecuador, A Brazil, Chile

Asia/Pacific regional networks Construction

Hong Kong, Korea, Japan, Malaysia, Cambodia, Indonesia, Philippines

Forestry

Malaysia, Indonesia, Pacific

European networks STRABAG

 erbien, Bulgarien, Montenegro, Croatia, Bosnia and European Works S Council members

Kronospan

Austria, Czech Republic, France, Latvia, Poland, Romania, Switzerland, Turkey, Ukraine, Russian Federation and the EFBWW

MH/gfk, April 2013

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BWI Targets Multinational Companies Building and Wood Worker’s International 54 route des Acacias CH-1227 Carouge GE Switzerland Tel.: +41 22 827 37 77 Fax: +41 22 827 37 70 Email: [email protected] www.bwint.org