May 16, 2011

Push for conditions on Walmart buy of Massmart

As the South African Competition Tribunal wound down hearings on the proposed merger of Walmart and Massmart on Monday, the country’s Competition Commission changed its recommendation on the deal. The Competition Commission said the merger should only go through if Walmart hires back 503 workers fired by Massmart as it prepared for Walmart’s offer.

The global coalition of trade unions contesting the merger have demanded that if the Tribunal approves Walmart’s entry it should only do so with strict, enforceable conditions that promote the interests of domestic suppliers and place the interests of Massmart workers at their core. Central to this are the reasonable demands for post-transaction group centralized bargaining, a closed shop and reinstatement for dismissed workers.

During the hearings, Walmart repeatedly refused to make any commitments on its post-merger behavior but on Monday it offered a few. The multinational said it wouldn’t cut staff for two years; it would honor labor agreements for a period assigned by the Tribunal, and after the merger it would volunteer 100 million rand ($US 14 million, or about 0.003% of annual sales) to develop a three-year program to develop local suppliers, with trade unions sitting on the committee.

“It’s a positive step that Walmart recognizes that it needs to accept conditions on the deal,” said Christy Hoffman, deputy general secretary of UNI Global Union, which is part of the global union coalition. “While welcoming the commission’s recommendation, we question how serious Walmart is when it puts an offer on the table that falls far short of what is needed to ensure local procurement and protection of union and workers’ rights.”

The South African Competition Tribunal heard the final arguments today as it considers whether or not to allow retail giant Walmart to buy local chain Massmart and enter the African market. If it allows the deal to go through, it can decide what conditions are necessary to protect the local economy.

Walmart said on Monday that it will appeal any conditions set by the Tribunal or walk away from the deal, according to media reports.

Throughout the weeklong hearing, a global coalition of trade unions is contesting the merger – South Africa Commercial, Catering and Allied Workers Union (SACCAWU), UNI Global Union, and the United Food and Commercial Workers International Union (UFCW) of North America— supported a call to block Walmart’s entry into South Africa. They presented testimony on Walmart’s anti-union and anti-worker policies in other parts of the world, most notably the USA, with the company attempting to explain these away by virtue of “”cultural norms.”

“Walmart cannot run from its history or current anti-worker behavior in many parts of the world,” said Michael Bride of UFCW. “What it is finding as it continues to try and expand business in urban centers in the US and other countries around the globe is that its anti-worker stance is not serving it well.”

The announcement from the Competition Commission was a notable reversal after it originally recommended the deal proceed without restriction.

“”We were heartened to discover that the Competition Commission, having weighed the evidence, changed its recommendation on the basis that it now agreed with the union’s consistent view that the retrenchment of workers prior to the merger was connected with the merger, contrary to the claims of Walmart and Massmart,” said Bones Skulu, SACCAWU General Secretary.

The coalition says that the Tribunal should not be bullied into accepting the deal. Their responsibility is to protect the local economy and to encourage Foreign Direct Investment that will develop the economy in a positive way for the benefit of all South Africans.