Nestlé, NestLies and ILO Convention 98
From October 12-15, the ILO's Bureau for Workers' Activities organized a symposium around the theme "Celebration of the 60th anniversary of Convention No. 98. The right to organize and collective bargaining in the twenty-first century." ILO Convention 98 (Right to Organise and Collective Bargaining), adopted in 1949, is one of the ILO's Core Conventions, i.e. fundamental treaties which are regarded as binding on all ILO member states whether they have been specifically ratified or not by governments. The Convention establishes in international law the rights of workers to organize trade unions and to bargain collectively with employers through these unions. Indonesia ratified Convention 98 in 1957.
For over two-and-a-half years the SBNIP, the IUF's affiliate at the Nescafé factory in Panjang, Indonesia, has been attempting to negotiate a new collective bargaining agreement which would include wages, and would include the wage scale in the agreement. Nestlé has rejected this demand, claiming that wages are a commercial secret and telling the union that it is Nestlé policy to exclude wages from collective bargaining.
The IUF has repeatedly pointed out that many Nestlé unions do in fact regularly negotiate wages. Moreover, a year-long campaign in 2007-2008 in Russia around precisely this issue ended in a union victory: a CBA which included, for the first time, wages and the wage scale. The Nestlé union in Malaysia has in fact travelled to Panjang with their collective bargaining agreement, which includes wages. So Nestlé's claims about global policy and wages are a lie - the same lie that was first told to the Russian union. Global Nestlié policy is to refuse to negotiate wages wherever circumstances allow them to get away with it.
Nestlé's imaginative interpretation of the scope of collective bargaining prompted the IUF - as it had successfully done in the case of Nestlé Russia - to make a new submission against Nestlé for violation of the OECD Guidelines for Multinational Enterprises with the Swiss National Contact Point (the State Secretariat for Economic Affairs), responsible for the implementation of the Guidelines. The submission has been found to be relevant under the Guidelines (refusal to engage in constructive negotiations and to provide information necessary for collective bargaining) and the IUF is co-operating closely with the NCP as it investigates the case.
Nestlé now claims that it too is cooperating with the NCP, and that it is willing to negotiate wages - provided a company union created in a luxury Sheraton hotel two years ago at Nestlé's expense is brought into the "process". In the meantime, with the OECD submission being handled by the Swiss government and both parties presumably seeking a solution, Nestlé filed suit against the SBNIP in the local industrial court. The court issued an ultimatum instructing the SBNIP to sign the company's unilateral contract offer. This contract does not include wages.
The IUF accompanied SBNIP President Eko Sumaryono to the ILO symposium to discuss the implications of the world's largest food company's rejection of collective bargaining in light of the 60th anniversary celebration.
Eko needed no new arguments - the ILO background paper for the meeting makes it quite clear that wages are central to the collective bargaining process:
Wages especially are central to collective bargaining and as such justify regular negotiations to bring remuneration into line with the cost of living and with the economic situation.
The ILO background paper also clearly states that when employers unilaterally make use of compulsory arbitration by the state - such as Nestlé's use of the court system to avoid collective bargaining with the Panjang union - this too violates Convention 98. Nestlé's multiple violations of the collective bargaining rights of the Nescafé workers and their union are clear.
Nestlé, however, is responding to protest letters from our affiliates and to queries from the media by saying that the Swiss NCP has confirmed that the company has not violated any of the OECD Guidelines. NestLie number 2. When the process works as it should, the NCP receives a submission, evaluates its merits, and then, if it accepts the submission, attempts to bring the two parties together to reach a negotiated solution. The process is specifically designed to avoid rendering judgement on whether the OECD Guidelines have been specifically breached or not, because it is a non-judicial procedure. In the event that a company refuses to take part in negotiations to resolve a conflict, the NCP may consider whether to initiate a formal investigation. The Nestlé Panjang case has not advanced to that stage, because Nestlé (good corporate citizen) claims to be participating in the process (while promoting a company union and attempting to marginalize and eliminate the SBNIP).
Nestlé is spreading misinformation about the situation in Panjang and the actions to date of the Swiss government officials dealing with the IUF's OECD submission.
Lies and more lies. NestLies….