May 19, 2011

In big reversal, South African Competition Commission calls for conditions on Walmart entry

The South African Competition Tribunal hearings, which ended on Monday, offered enough proof to the South African Competition Commission that it reversed its earlier decision to recommend the Walmart deal for Massmart go through without conditions.

The Commission now says that if the merger is approved, a condition should be applied compelling Walmart to reinstate the 503 retrenched workers that Massmart cut in anticipation of the merger. It also recommends a condition stating that existing labour agreements with Massmart must be honoured for three years.

Explaining the turnaround, the Commission said there were many documents that it hadn’t seen when it made its original recommendation to the Tribunal that Walmart enter the market without conditions. After listening to the evidence and seeing various documents through the discovery process, it formed a new conclusion.

In the hearings, when questioned directly by the Competition Tribunal Chair, Massmart CEO Grant Pattison offered to sit down and discuss with the union the possibility of offering preferential re-employment on new terms and conditions. This is much weaker than the Competition Commission’s recommendation to reinstate the workers in their old jobs. Massmart could offer new jobs to the workers based on its own discretion and could walk away from talks if the union doesn’t accept their offer.

“What Massmart has offered so far is an insult to South African workers,” said Bones Skulu, General Secretary of the South Africa Commercial, Catering and Allied Workers Union (SACCAWU). “We won’t accept a shallow, noncommittal offer that only gives workers the possibility of being hired for new jobs without any guarantee of their former positions and working conditions. We expect the Tribunal will take this into account as it deliberates.”

Walmart has offered a few voluntary conditions on the deal that fall far short of what trade unions are calling for. The company has also threatened to walk away from the deal or take the Tribunal to court if it imposes stronger conditions.

“The Walmartization of Massmart has already begun,” said UNI Global Union General Secretary Philip Jennings. “Before the offer was finalized, Massmart was already changing its corporate behaviour to entice Walmart and it was workers who were hurt in the process. This deal should only go through if there is protection for local workers and the local economy.”

SACCAWU, UNI Global Union, and the United Food and Commercial Workers International Union (UFCW) of North America, who have formed a global coalition to contest the merger, say that if the deal is approved, strong conditions are necessary to ensure that there’s not further bad news for South African workers. This is echoed by COSATU, FAWU and NUMSA who are in support in the application. COSATU has in advance filed a section 77 notice with NEDLAC in preparation for rolling mass action should the tribunal in its findings not include conditions as put forward by the Unions and the three Government Ministries.

“At the hearings Walmart unsuccessfully tried to run from its record in the USA and Canada,” said Michael Bride of the UFCW. “This should send a clear message to Walmart that our global union network will ensure that an assault by Walmart on workers’ rights in one country shall be known by those in all countries.”

The Competition Tribunal has day 10 days to issue a decision on whether it will approve the merger or not and, if so, what conditions it places on the deal.