May 31, 2011

Global Union Coalition says no free pass for Walmart as South African Competition Tribunal approves its buy of Massmart

A global trade union coalition today said the decision from the South African Competition Tribunal to approve the merger of global retail giant Walmart with local retailer Massmart is not a free pass for the world’s largest company.

The Tribunal should and could have gone much further in laying down merger conditions, said the coalition formed by UNI Global Union, the South Africa Commercial, Catering and Allied Workers Union (SACCAWU) and the United Food and Commercial Workers International Union (UFCW) of North America to contest the merger.

“When you are dealing with a heavyweight, you need more than flyweight conditions,” said UNI General Secretary Philip Jennings. “”Even though we did win concessions that the companies never would have made on their own. This is no free pass for Walmart. This is not the time for a Walmart lap of honour.”

SACCAWU, which represents thousands of workers at Massmart, has also expressed its strong disappointment with the decision.

“We reiterate our position to strongly challenge this decision,”” said SACCAWU General Secretary Bones Skulu.””We are opposed to the acquisition of Massmart by Walmart without compelling and tangible conditions.”

In its decision, the Tribunal said the retailer must give preference as positions become available to re-hiring 503 workers who lost their jobs in Massmart last year; cannot cut staff for two years; it must honour existing labour agreements with SACCAWU for the next three years; and after the merger, it will set up a fund of 100 million rand ($US 14 million, or about 0.003% of annual global sales) for a three-year program to develop local suppliers, with trade unions sitting on the committee.

“With the economic scale of Walmart’s global business, the Tribunal should have been more ambitious in its decision. One hundred million rand is pocket money for this company,” Jennings said.

UNI believes that the decision from the Tribunal should be a wake-up call to Walmart that it needs to actively engage with unions in South Africa and around the world.

“It’s time for Bentonville to globally engage with UNI and our unions,” Jennings said. “With its new corporate buyout shop in London to invade and conquer new markets, governments and people are on alert that Walmart could be on its way to their country. Walmart should learn its lesson from South Africa. The more the Tribunal heard from Walmart, the more apprehensive they became about the merger. In the end the company had no choice but change its position.”

“In North America we have witnessed first-hand Walmart’s approach to labour relations”, said Michael Bride, UFCW’s Deputy Organizing Director for Global Strategies.  “We believe that this process in South Africa has effectively demonstrated to Walmart that it cannot hide from its labour record anywhere in the world, and for this reason we would echo UNI’s call that the company should sit down and negotiate a global settlement with unions from across its business.”

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.