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.

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.

May 9, 2011

Walmart

Pretoria, South Africa – A global coalition of trade unions will present its arguments on why Walmart should only be allowed to enter the South African market if it abides by certain conditions that will safeguard the economy and South African workers.

The South African Competition Tribunal resumes its hearings today on the proposed entry of Walmart into South Africa via the takeover of Massmart.

The global coalition of unions 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 will present evidence showing that the Tribunal should only allow the deal to go through if Walmart agrees to conditions on treatment of workers, union rights and sourcing products locally.

“We have prepared a clear case that shows that Walmart has a history around the world of suppressing union and worker rights,” said Christy Hoffman of UNI Global Union, the worldwide union federation representing 20 million workers. “In countries where the company has not been legally obligated to accept a union, like the United States and Canada, it has brutally suppressed all of workers organising attempts. Even in countries where it was forced to accept a unionised workforce, Walmart has been attacking their rights every chance it gets.”

The South African Government will join the union coalition in presenting its concerns about the impact of the merger of the size of the proposed Walmart / Massmart transaction on employment and competition.

The government has demanded that binding conditions be put in place to hold Walmart accountable to the promises it is making the South African people, including respect of 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.

To demonstrate Walmarts devastating effects, SACCAWU in conjunction with the UFCW solicited written testimony from international economists and labour experts to submit to the Competition Tribunal. This includes a new affidavit from Kenneth Jacobs, Chair of the University of California Berkeley Centre for Labour Research and Education. Jacobs has studied extensively Walmarts effects on workers and the local communities where it operates in the United States.

“Given Walmarts well-documented history of violations of labour and employment law elsewhere,” Jacobs said in his report, “if the Tribunal does elect to permit Walmart to acquire Massmart Holdings, Inc., conditions should be attached to the acquisition that would prove legal backing to Walmarts commitments to the Commission.”

Jacobs says that Walmart has depressed retail wages in the communities it operates and in many cases has put more costs on taxpayers because its employees are more likely to need public assistance for healthcare and other costs. He also says Walmart’s procurement model puts tremendous pressure on suppliers to cut costs, with the result that many suppliers have been shown to pay employees below the legal minimum wage or otherwise violate the law in order to meet the targets.

“In the United States, we have clearly seen the race to the bottom as the Walmart Model has come to dominate the industry,” said Michael Bride of the UFCW. “The Competition Tribunal has the opportunity to stop this from happening in South Africa and to impose conditions that will protect economic growth.”

The Tribunal hearings began in March but were postponed in order to allow the unions and government to share their evidence. Arguments will be heard for the next week.

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.

March 23, 2011

Union coalition welcomes decision by Competition Tribunal to stay proceedings

(Pretoria, South Africa)–The proposed entry of Walmart to South Africa via the takeover of Massmart was due to be heard this week by the Competition Tribunal.

The global coalition of unions opposed to 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–came to the hearing ready to proceed today.

The South African Government then applied for a postponement in order to present evidence to challenge the economic evidence of the companies.

The Tribunal issued a ruling which would have essentially made a fair process impossible. The government would have been allowed to present its evidence in the future, but the unions would not be allowed to see or use this evidence before going forward today.

SACCAWU protested this unfair decision and asked for the hearing to be suspended while the decision was under appeal.

In a dramatic reversal, the Tribunal stayed the entire case until May 9.

“”It is only fair that all evidence be on the table before we go forward,” said Christy Hoffman, Deputy Secretary of UNI Global Union. “It was the best outcome in a difficult situation.”

“”It is paramount that a decision of this magnitude—whether to give a giant like Walmart access to the South African economy—is made with care and through due process,” said Michael Bride of UFCW. “While today’s decision was far from perfect, we applaud the Tribunal for creating a fairer process in the end.”