March 23, 2011

Global labor coalition to urge South African Competition Tribunal to reject Walmart or set conditions and standards

(Pretoria, 22 March 2011) — South African workers, together with workers’ representatives from around the globe, will assemble outside the South African government’s Competition Tribunal hearings today, demanding that it protects the local economy and reject Walmart’s unconditional entry into the country. Shareholders have accepted Walmart’s offer to acquire a 51 percent stake in South African retailer Massmart for $3.2 billion. Walmart, with sales of more than US$405 billion in 2010, is the world’s largest company, giving it substantial power to dominate the world’s global supply chains, shape the local retail sector and dictate the conditions of trade to thousands of supply firms in other sectors.

“We will tell the Competition Tribunal that we believe it is not in the best interest of South Africa for Walmart to be allowed into our country.  We will also outline the conditions that must apply in the event that the Tribunal believes differently and or otherwise rules that the company may enter. Those conditions must contain protections for workers, suppliers, and the wider South African community,” said Bones Skulu, General Secretary of the South Africa Commercial, Catering and Allied Workers Union (SACCAWU).

The South African Government, through its Departments on Economic Development, Trade & Industry and Agriculture, Forestry and Fisheries, expressed great concern about the impact of the merger of the size of the proposed Walmart / Massmart transaction on employment and competition. It has demanded that binding conditions be put in place to hold Walmart accountable to the promises it is making the South African people in relation to, amongst others, trade union rights and existing collective agreements, job security, local procurement and support for small business, respect for the rule of law and non-discriminatory practices in order to ensure that the deal does not undermine the New Growth Path that is addressing the high levels of unemployment and abject poverty in the country.

“We are urging the Competition Tribunal to take the experience of workers from around the globe under advisement as they deliberate on this vital matter,” said Christy Hoffman of UNI Global Union, the worldwide umbrella union representing 20 million workers. “In many of the countries where Walmart workers have union representation, the company cuts back on the rights of workers at every opportunity. In countries where Walmart was not forced to accept a union because it acquired a company without an organised workforce (such as the United States and Canada), Walmart employs severe tactics to silence workers and keep them from having a voice on the job. It is clear that if the Competition Tribunal takes the rights of Massmart’s workers in particular and South African workforce in general seriously, they must set conditions now to protect those rights.”

“In North America we have witnessed the devastating effect that the Walmart model has upon small businesses, suppliers, and communities,” said Michael Bride of the North American United Food and Commercial Workers International Union (UFCW). “We are here today to urge the South African Competition Tribunal to place the needs of South Africa’s citizens at the centre of its deliberations and ensure that if Walmart does enter the country, that it does so on a basis that will promote economic development rather than destroy it.”

To demonstrate Walmart’s devastating effects, SACCAWU in conjunction with the UFCW solicited written testimony from ten international economists and labour experts. This testimony was submitted to the Competition Tribunal. Three experts, Nelson Lichtenstein of the University of California, Sofia Scasserra of FAECYS Union in Argentina and Claudio Avarena of the CONATRACOPS union in Chile were invited to testify at the Tribunal.

“Walmart has employed a consistent business model of downward pressure on suppliers and workers throughout its history,” said Lichtenstein.  “This pressure often has a devastating effect on suppliers that sell to the company. They may see their volume go up, but their profit margins go down. Many find themselves pitted against suppliers from countries with poor labor standards such as China and Bangladesh. Ultimately, many are unable to compete and forced to either move jobs offshore or close all together.”

SACCAWU, UNI and UFCW, together with the other members of the Anti-Walmart Coalition, including COSATU, are demanding that the Competition Tribunal ensure that, should Walmart be granted the opportunity to acquire Massmart, conditions are imposed on the company that serve to make its entry more sustainable for South African suppliers and workers as well as the economic growth and development.

The Competition Act of South Africa empowers the South African Competition Commission to recommend to the Competition Tribunal the blocking or setting of binding conditions on parties in a proposed merger. The commission is charged with considering public interest factors such as the effect of a possible merger on employment, small businesses, or particular industries or geographic regions. The Tribunal on the other hand has a duty and authority to decide whether or not to accept the Commission’s recommendations. It is with this in mind that the Anti-Walmart Coalition expects and accordingly demands that the Tribunal acts responsibly and reject the proposed merger.