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Uniting Food, Farm and Hotel Workers World-Wide

Nestlé: Global Profits but No Global Rights for Workers

Posted to the IUF website 11-Jun-2003

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On April 28, management of Nestlé's instant coffee plant in Ilopango, El Salvador locked the factory gates for good. A notice told workers to collect their compensation at the Ministry of Labour. Production was being transferred out of the country to meet the demands of global restructuring.

In fairness to Nestlé, the move was not unanticipated. Three weeks earlier - on April 8 - the workers had been informed that the plant was slated for closure. This generous notice contrasts favourably with, for example, the notorious closing of the Três Corações factory in Brazil, where workers were told on a Friday that the plant was closing the following Monday. And Nestlé has generously offered two months salary, in addition to the compensation required by Salvadoran law. This is small consolation for the workers thrown out of their jobs, however, and their union, the IUF-affiliated SETNESSA, has not unreasonably pointed out that the majority of the workers are too young to retire but too old to find new employment. It is demanding that Nestlé employees continue to receive their salaries and benefits through the expiration of the collective agreement later this year. The union's demand is certainly worthy of discussion and is one that would not cause any significant financial difficulty for the company given the numbers of workers involved and wage levels in El Salvador. Negotiation, however, is an exercise the company prefers to avoid where it is not compelled to do so. Nestlé management refused to meet with the union and ordered it off the factory premises. Then the gates were shut.

Nestlé corporate management in Vevey, Switzerland, reserves the right to make crucial decisions affecting the lives of its global workforce, but refuses to assume responsibility for global industrial relations. Profits come first. Where national law and practice allow companies to close down overnight, overnight closures are on offer. Where weak legislation sanctions union busting, Nestlé is not averse to busting unions. Where legislation in the European Union instructs the company to provide "information and consultation" through a European Works Council, workers will be informed and even consulted on the destruction of their jobs (and thousands of jobs have been lost in Europe, with more on the way). But consultation, in the absence of negotiation, remains an empty exercise.

Nestlé is in fact correct when it states that their industrial relations practices are implemented in accordance with national legislation. But national legislation is too often inadequate in an age of global mergers, acquisitions, production and distribution. Corporate arrogance is corporate arrogance, even when enshrined in law.

As a global corporation, Nestlé is free to invest and disinvest, to rationalize and shift production to meet "benchmarks" and the demands of shareholders - and to refuse negotiations with unions at any and all levels where it is not required to negotiate. Unions are condemned to a series of local struggles with local managers as they confront the consequences of global restructuring. The struggle inevitably takes place on highly unequal terrain.

For workers around the world, global benchmarking is global slash and burn, leaving in its wake shattered lives and broken communities. To effectively resist and move forward, we need international recognition of our collective rights and representation. We need to "benchmark" our gains, to establish a minimum floor on which to build and consolidate. Unions need a global bargaining table, based on global rights and global standards. In the case of Nestlé, that means establishing a framework for recognition and negotiation with the IUF, which represents the vast majority of the company's unionized workers.