Multinational investors and union rights: Strikes and sackings continue
By Jano Charbel – Al Akhbar – 10/09/2012
Business executives representing nearly 50 US companies are in Egypt this week, the latest of a series of international trade delegations to visit the country. Foreign investors are a vital part of the current administration’s economic strategy — the hope is that they will provide the jobs and capital to lift the country from its economic malaise.
But labor activists Egypt Independent spoke to have drawn attention to multinational corporations’ patchy records on union rights. Cadbury, Schlumberger, Pirelli, Henkel-Persil and Suzuki, among others, are accused of union busting and punitive sackings.
These violations are not out of step with the general trend in the private sector here, but they raise questions about the commitment of corporations headquartered in countries with nominal trade union freedoms to preserve those freedoms in their international operations. They also raise questions about the government’s willingness to turn a blind eye to workers’ rights, when investment is at stake.
Cadbury
The confectionery giant Cadbury, a subsidiary of the Kraft Foods conglomerate, has been reaping in hundreds of millions of pounds worth of profits since its establishment in the country in 1992.
Located in 10th of Ramadan City and in Hanovil, Alexandria, Cadbury Egypt employs more than 1,500 people. Despite resistance from the administrative board, Cadbury workers managed to establish their independent trade union on 28 April.
Led by their union, these workers launched a two-day strike on 27 July during which they demanded the 15 percent wage increase decreed for the public sector by President Mohamed Morsy on 1 July.
On 8 August, five of nine trade union leaders in the company were dismissed by Cadbury Egypt on charges of instigating unrest within the company.
Mohamed Hassan, president of the union in Alexandria, says that last year, the union was able to generate profits for the company amounting to LE267 million.
“Nevertheless, the administrative board sacked us for demanding our rightfully earned pay raises.”
He argued that the company’s managing director, Gawad Abaza, “doesn’t want a workers union in the company or anybody else to hold him accountable for our exploitation and the violation of our most basic labor rights.”
Depending on experience and seniority in the company, workers at Cadbury Egypt earn between LE1,500 — LE6,000 per month (US$250 — $1,000), well above the national average. Hassan claims that “administrative board members earn a monthly average of LE15,000 ($2,500), while Abaza earns a large percentage of the profits each month.”
Hassan says Cadbury Egypt’s board dismissed them without first resorting to negotiations with the Manpower Ministry, in violation of labor laws.
“We ourselves engaged in negotiations with the Manpower Ministry’s bureau in Alexandria for 21 days,” Hassan says. “We strive to take our case to the labor courts.”
Hassan pointed out that similar union-busting actions have recently been undertaken by Cadbury in Tunisia.
Late last month, the five unionists dismissed by Cadbury Egypt received letters of support and solidarity from the Swiss-based International Union of Food Workers. Similarly, Kraft workers from various other countries also sent letters of support, demanding their reinstatement.
Schlumberger
Established in France and headquartered in Texas, Schlumberger is the world’s largest oil field services company and employs some 115,000 people in 85 countries.
Schlumberger Egypt directly employs about 1,000 well-paid workers and professionals in 10 different sites across the country. Schlumberger Egypt’s profits in 2011 amounted to an estimated $30 million. On average, an Egyptian engineer might earn LE9,000 per month ($1,500) working at the company, while a manual worker at an oil rig might earn LE5,000 ($833) per month.
However, this company apparently does not respect the right to organize. Against the administration’s will, employees there established their first union committee in May 2011.
The administrative board responded by punitively sacking four workers from the company between June and July 2011, including three unionists and one union organizer.
Mohamed Abdel Rahman, secretary general of the Schlumberger Egypt Workers Union, says the company’s France branch sought to compensate them for their dismissals.
“Yet we don’t want monetary compensation,” he says. “We demand our jobs back and we demand the right to organize within the company.”
Abdel Rahman, one of the unionists who were sacked, says Schlumberger officials from France and the US visited Egypt last week to investigate the dispute.
He also says the unionists filed a complaint to the Manpower Ministry last year.
“Ministry officials told us that we did not violate any laws and that we were in the right,” Abdel Rahman says, adding that he and the other unionists who were fired had lodged a legal appeal before the Labor Court in September last year. Their next court hearing has been adjourned to 12 September.
Similarly to the Cadbury Egypt unionists who had been fired, those who had been fired from Schlumberger Egypt have received letters of solidarity from the International Federation of Chemical, Energy, Mine and General Workers Union and its affiliated unions in Canada and Norway.
The unions demanded that Schlumberger Egypt reinstate the four unionists and refrain from union busting.
Other multinationals
Headquartered in Dusseldorf, Germany, industrial giant Henkel-Persil — which produces detergents, cosmetic and beauty care products, and adhesive technologies — operates in 75 countries worldwide, with a labor force of some 47,000.
According to its website, Henkel employs 830 workers at its detergent production plants in Port Said. Media reports say Henkel Egypt generated profits of LE1.2 billion in 2011.
Workers at the company launched a strike on 28 August. Hundreds of workers demanded full-time contracts, increased wages, healthcare facilities and parity with Henkel workers in other countries, in terms of incomes, bonuses, profit sharing and paid holidays.
Like Henkel Egypt’s workers, Heinz Egypt’s 400 workers launched protests at their company in 6th of October City last month. Workers at this condiment company demanded an increase in their meager wages, full-time contracts for full-time work, periodic bonuses and profit-sharing payments, among other demands.
Suzuki Motor Corporation, managed by the Seoudi Group in Egypt, has also been involved in union busting. Workers at this company in 6th of October City established an independent union in June 2011, against the will of Seoudi Group.
According to a report issued by the Egyptian Center for Economic and Social Rights, five unionists and three other workers were dismissed from Suzuki Egypt between June and October 2011. These workers have not yet been reinstated.
The Italian global rubber and tires giant Pirelli dismissed five unionists from its company in Alexandria in July, after some 2,000 workers at the company went on strike the previous month. However, the Italian multinational company agreed to reinstate the five unionists and offered other concessions following intervention from the IndustriALL Global Union and Egypt’s General Trade Union of Chemical Workers.
The state of investment
Fatma Ramadan, executive board member of the Egyptian Federation of Independent Trade Unions, argues that “both corporations and the Egyptian state are responsible for increasing labor violations.”
Many workers at multinational companies, she continued, “earn only between LE600 to LE1,000 (about $100–166) per month, rarely more.”
Ramadan says about 130 laborers, primarily union organizers and strike leaders, have been punitively fired since the 25 January revolution for striking or organizing within their workplaces — private and public, domestically and internationally owned.
Tallal Shokr, a secretary of the Center for Trade Union and Workers’ Services and the Egyptian Democratic Labor Congress, puts the number at 155.
Trade union rights are generally better protected in public sector companies, Shokr says, and protected worst of all in the “free zones” designed to attract investment, where regulation is largely suspended. He thinks the petroleum sector is among the most aggressive in dealing with its workers.
“Under the pretext of attracting investment, foreign or domestic, all labor violations are legitimized,” Shokr says. “Investors know that the state won’t hold them accountable for violations of labor standards.”
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Qatar to invest $18bn in Egypt over next 5 years
Ahram Online – September 6, 2012
Qatar will inject $18 billion worth of investments into Egypt over the course of the coming five years, Hamad Bin Jassim, the oil-rich gulf state’s foreign minister, said at a press conference in Cairo on Thursday.
Of the pledged investment, some $8 billion will be allocated to electricity and natural gas projects in areas east of the Suez Canal, where Egypt has longstanding plans to build a massive industrial city. Another $10 billion will go to a planned tourist resort on Egypt’s north coast.
In yet another indication of new found warmth between the two nations, Egyptian President Mohamed Morsi met with Bin Jassim following the latter’s arrival to Cairo on Thursday.
In early August, Qatar pledged to deposit $2 billion in the Central Bank of Egypt (CBE) as a means of easing the country’s balance-of-payments deficit. The promise was made following a visit by the Emir of Qatar, Sheikh Hamad bin Khalifa Al-Thani, to Egypt, where he too met with Morsi.
Later in August, Qatar deposited the first tranche – worth some $500 million – in the CBE.
Egyptian Prime Minister Hisham Qandil, for his part, said at a Thursday press conference that Qatar would transfer the rest of the pledged $2 billion in three installments within the next two-month period.
In 2011, Qatar had said it would provide Egypt with a $10 billion grant, with which to support Egypt’s post-revolution economy, but only ended up disbursing $500 million later in the year.
Qatar’s name has begun to resonate among Egyptian business circles, with Qatar’s National Bank recently offering to buy a controlling stake in National Societe Generale Bank, one of Egypt’s largest private lenders.
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Egypt declares 70 army generals retired: Report
Press TV – September 4, 2012
A report says the Egyptian government has announced the retirement of 70 army generals, weeks after President Mohamed Morsi replaced Field Marshal Hussein Tantawi as defense minister with Major General Abdel Fattah al-Sisi.
The new defense minister made the announcement, adding that six members of the Supreme Council of the Armed Forces (SCAF) have also been dismissed, according to a report by the Egyptian daily al-Shorouk.
The six SCAF members will however remain in the armed forces, the paper said.
On August 12, Morsi dismissed Tantawi from his post, canceling a constitutional declaration issued by the military that restricted presidential powers.
Tantawi was Egypt’s defense minister for nearly two decades under former dictator Hosni Mubarak. He headed Egypt’s SCAF, which took power in February 2011 after Egyptians launched a revolution against Mubarak’s regime in January, which eventually brought an end to the dictatorship.
Morsi also ordered the retirement of the military chief of staff, Sami Anan, replacing him with Sedqi Sobhi Sayyid Ahmed.
On August 22, Egyptian lawyer Assem Kandil filed the first legal complaint against several officials in the African state including Tantawi.
“I did so because I accuse them all of killing protesters during the series of bloody protests in Egypt following last year’s uprising along with wasting public money in the state’s spending on the parliamentary election,” the lawyer said.
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$200 million loan from China due to arrive in National Bank of Egypt
Al-Masry Al-Youm 03/09/2012
The National Bank of Egypt said that the US$200 million loan recently granted by the China Development Bank will arrive in the country within days.
The interest rate due on the loan is up to 3.75 percent above Libor rates, which is the central lending price of British banks for a pay period of eight years, including a three-year grace period.
Sharif Elwi, vice-president of the National Bank, said that the loan marks the beginning of Egyptian cooperation with Asian markets in light of worsening economic conditions in Europe.
China has allocated $20 billion to finance projects in Africa, and the National Bank began loan talks with the China Development Bank five months ago, Elwi explained. He denied that the government had pressured the National Bank to broker the deal due to Egypt’s declining international credit rating.
National Bank leaders plan to visit Singapore, Hong Kong, China and Malaysia this October to present investment opportunities in Egypt to potential backers there.
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Iran, Venezuela and Egypt, a possible peace troika to address the Syria situation
MercoPress | August 30, 2012
Venezuelan Foreign Minister Nicolas Maduro has welcomed Iran’s proposal for the formation of a troika committee on Syria consisting of Iran, Egypt, and Venezuela
Minister Maduro welcomed the proposal to keep “major powers from interfering in Syria’s internal affairs” Minister Maduro welcomed the proposal to keep “major powers from interfering in Syria’s internal affairs”
Maduro made the remarks in an interview with reporters from the Iranian media upon his arrival in Tehran on Wednesday to attend the XVI Summit of the Non-Aligned Movement (NAM), which opened in Tehran on Sunday and closes on Friday.
“Playing a role by regional countries in (resolving) the crisis reduces the interference of external powers in Syria,” the Venezuelan foreign minister stated, according to the Persian service of the Mehr News Agency.
“Before everything else, we call on the major powers to stop interfering in Syria’s internal affairs and allow the Syrian people to live in calm, peace, and independence.
“(Iran’s) proposal is a very good proposal (according to which) the major powers and foreign powers will stop interfering in the Syrian crisis with the involvement of the conflicting sides and regional countries to resolve the problem.
“The country of Venezuela welcomes the proposal because it will (help) the people of the country of Syria to achieve peace and true calm.”
Commenting on the NAM summit in Tehran, Maduro stated, “The summit is being held in a country whose people are diligent and are seeking progress and peace. One hundred and twenty countries have gathered together in Iran to step toward world peace.”
Egyptian Minister Asks for Direct Flights between Tehran, Cairo
Fars News Agency | August 27, 2012
TEHRAN – Egypt’s Civil Aviation Minister Samir Embaby called for the start of direct flights between Tehran and Cairo due to the two nations’ enthusiasm for making reciprocal visits.
“The measure is necessary due to the eagerness of many Egyptian and Iranian people to make reciprocal visits,” Embaby was quoted by the Egyptian weekly, al-Youm al-Sabe’.
He also underlined that starting direct flights between the two countries would play a vital role for trade and economic ties between Iran and Egypt, and said the economic studies carried out in Iran indicate that 60% of Iranians like to visit different Egyptian cities, partly for religious tourism.
In relevant remarks in June, new Egyptian President Mohammad Mursi also underlined his enthusiasm for the further expansion of ties with Iran, and said relations between Tehran and Cairo will create a strategic balance in the region.
“The issue will create a strategic balance in the region,” Mursi told FNA in June, hours before the final results of the presidential election was announced.
Also in July, Iranian President Mahmoud Ahmadinejad and Mursi, in their first telephone conversation, conferred on the two Muslim countries’ ties and the Non-Aligned Movement (NAM) now underway in Tehran.
President Ahmadinejad said Tehran welcomes close interactions with the Egyptian government and nation, and attaches no limitations to the expansion of ties and cooperation with Cairo.
Ahmadinejad expressed Iran’s preparedness to transfer capabilities, achievements and experiences in various scientific, technological, industrial and economic fields to the Egyptian people.
Mursi is due to travel to Iran on August 30 to attend the NAM summit.
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UK changes position on IMF loan for Morsi’s Egypt
British officials refrain from giving full backing to Egypt’s $4.8 billion loan request, having previously supported such funding under military rule
By Amer Sultan | Ahram Online | August 25, 2012
London – The United Kingdom has refrained from backing Egypt’s request of a $4.8 billion loan from the International Monetary Fund (IMF).
“We prefer to wait and see the results of the negotiations between Egypt and the IMF,” a UK Foreign Office spokesperson told Ahram Online.
During her recent visit to Cairo, the IMF’s managing director, Christine Lagarde, received a formal request from Egypt for a $4.8 billion loan.
“The UK thinks that this is a good opportunity for dialogue between the two parties,” the spokesperson added.
Asked whether the UK would back the Egyptian request if the IMF board decides in its favour, the spokesperson replied: “We do not have anything to say for the time being.”
The UK’s caution seems to mark a significant change in its attitude towards Egypt’s calls for international assistance to overcome its economic difficulties.
The UK provides 5 per cent of the IMF budget, making it the fourth biggest contributor, with equivalent voting power. It follows the US (18 per cent), Germany (6 per cent) and Japan (6 per cent).
Early this year, the UK government was enthusiastic about an IMF offer of a $3.2 billion loan at a 1.5 per cent interest during Egypt’s period of direct military rule.
A high level UK diplomat then told Ahram Online that the offer was “an amazingly good deal” with “virtually no conditionality.”
UK support at the time followed a meeting of British representatives with the Supreme Council for Armed Force (SCAF), which until July 2012 had veto power on all political decisions.
The diplomat explained that his government felt the deal the IMF put to Egypt was very favourable.
Speaking this week, the Foreign Office spokesperson insisted there was no change in the UK positions on the IMF loan after President Morsi took the reins of power from SCAF.
During her visit to Egypt last Wednesday, Lagarde met Morsi and his prime minister Hesham Kandil, and praised the Egyptian vision for reform.
“We are impressed by the strategy that President Morsi and Prime Minister Kandil have proposed during our meetings today,” she said at a joint press conference with Kandil.
An IMF technical team is due to arrive in Cairo in early September to begin work on arrangements for the mooted loan.
“We prefer foreign borrowing at this stage given the low interest rate of the IMF loan compared to much higher rates when borrowing domestically,” said Kandil, on the matter.
He added that borrowing domestically would crowd out the private sector and the IMF loan would help ease liquidity problems.
The IMF said in a statement it had maintained close dialogue on economic policy with Egyptian authorities since the start of the transition period in February 2011. It said it has also provided considerable technical assistance upon request from the government.
Related articles
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