LABOUR-SRI LANKA: Trade Union Pins TNCs To Negotiating Table

By Feizal Samath Reprint | | Print |

Feizal Samath

COLOMBO, Aug 11 1998 (IPS) - When a Sri Lankan trade union protested against retrenching at the local Coca Cola plant last year, it lost the battle despite an 80-day strike that paralysed production.

But a few weeks later, the management sat down and negotiated a collective agreement with the union, giving workers a 20 percent rise annually under a three-year deal.

“We may have lost the first battle, but the company, realising our strength, negotiated a better deal for workers because it didn’t want any more work stoppages that would disrupt production,” said Bala Tampoe, veteran trade unionist and general secretary of the Ceylon Mercantile Union (CMU).

The CMU, the island’s oldest and most powerful union, is at the forefront of attempts here by trade unions to deal with transnational corporations (TNCs) and other foreign investors who abhor unionised labour and flout workers’ rights with the covert sanction of governments desperate to woo them.

Political scientist Jayadeva Uyangoda of the University of Colombo, believes that traditional trade unions are faced with a series of challenges as economies open and governments court foreign capital in many developing countries.

He said many of the regimes were no longer “labour friendly”, they were “capital friendly”. Also under the new forms of industrialisation, most of the new labour is non- unionised with the result that the emerging labour force is fragmented, and even atomised as a social group.

Quoting from a 1996 study done by the International Union of Foodworkers (IUF), he says the free market model of globalisation has created “an unprecedented global competition leading to a downward spiral in wages and working conditions as workers on a global scale are forced to underbid each other to survive.”

According to Tampoe, who has been a member of the CMU for 50 years, and is Sri Lanka’s most strident voice in the union movement, trade unions have to go global to counter globalisation.

“Like transnationals, we must have cross border interaction and contacts with the international trade union movement. As a joint force, we are better equipped to face the challenges of the future,” he said.

In the late 1970s when Sri Lanka began dismantling state controls and opening up, foreign investors were enticed to invest in specially-created free trade zones and allowed to operate without hindrance from trade unions.

While investment zoomed in the zones, reports of gross abuse and exploitation of Sri Lanka’s mostly literate workforce spiralled, triggering criticism from all quarters. Complaints poured in, and trade unions took up the issue.

Lakshman De Mel, a retired trade secretary with the government, now working in the private sector, believes trade unions cannot afford to be confrontational. “If foreign capital is not allowed some peace and quiet, they would go elsewhere and that would create other problems,” he says.

According to De Mel, “If you want to create jobs, you need foreign capital. So what do we do? There has to be a happy compromise between inviting capital and ensuring labour rights.”

The CMU, which is probably the island’s only union which is not affiliated to a political party, understands the logic of the need for economic growth. But the majority of workers’ organisations are attached to political parties, and are used as platforms to promote the party interest.

As a result there was a great deal of competition between the trade unions, for members and very often, members moved from one union to another, when governments change. Job creation was a political consideration in the past when the state was the biggest employer.

But in recent years, the government has scaled down or sold off ailing state firms under the process of privatisation, and private enterprise has taken the lead in driving growth and become a far bigger employer than the government in Sri Lanka.

The process emasculated trade unions affiliated to political parties, and weakened their political clout to bargain on behalf of their members. Now workers’ groups like the CMU are more powerful and able to strike new agreements.

“Politically-motivated unions no longer have an influence and no more is there a massive shift in membership,” says G. Dissanayake, deputy secretary-general of the Employers Federation of Ceylon. “For the first time trade unions have to rely on

collective bargaining than rely on government or a coterie of political patrons. Productivity is playing an important role nowadays, unlike in the past.”

The CMU has been able to transform faster than any other trade union here, and has forced many TNCs like Singer, Nestle, British American Tobacco, Unilever, Brooke Bond-Lipton, Reckitt and Colman to the negotiating table.

The CMU which is affiliated to many international trade union groups, is clear that only a global union network can tackle TNCs in a climate of unrestricted industrial growth and private enterprise.