Contribution by Ron Oswald, general secretary, IUF
First let me say what a pleasure it is to be in your congress and to visit Norrland in the northern part of Sweden for the first time.
I also want to go on record to thank Livs and all our Swedish affiliates for your wonderful support to our work and particularly our project activities which are so important to building union strength in so many countries in a world where unions are needed more than ever before to confront the barbarism of a global economy running riot.
I bring you greetings from our wider IUF membership of close to 10 million. I am also delighted to be here with Barbro Budin from our Geneva secretariat and with our Asia/Pacific regional secretary Ma Wei Pin whom many of you know and who is responsible for leading some outstanding work in often difficult circumstances in that huge and diverse region.
Your congress takes place in extraordinary times and I want to at least touch on that today.
I will therefore speak of three things. Each of them I will talk about briefly though each deserves much more in-depth examination than that I am capable of.
Since we are those who bring the world its food I want first to talk about our broken global food system. Secondly I want to touch on the global economic crisis we have found ourselves confronted with in recent months and finally about what we in the IUF are doing about one of the key engines driving some of the worst of globalisation. By that I refer to the major transnational companies that increasingly dominate our national and global economies.
But first let me turn to the state of the world’s food system. It is in simple terms broken and it is failing peoples by the millions with catastrophic consequences.
The food crisis has recently been linked to the rapid escalation in food prices reaching its height last year. Yet this is only one manifestation of a persistent, longer-term crisis in which the right to adequate food is denied to more than 900 million people. In 1996 the UN’s FAO stated, ”We consider it intolerable that more than 800 million people throughout the world do not have enough food to meet their basic nutritional needs.” And this was when the global prices of major agricultural commodities were collapsing, hitting their lowest levels in three decades.
Whether agricultural prices are hitting record highs or record lows, hundreds of millions of people continue to be denied the right to food.
And yet the value of annual global exports in agricultural products has steadily increased to over USD 700 billion before the hyperinflation of 2008.
If despite that more people than ever are hungry then where are the benefits of this expanding trade in agriculture promised us by the WTO, whose Doha Round the FAO urges be concluded as the main solution to global hunger? By 2007, the FAO estimated that 850 million people were chronically malnourished, though food production continued to outpace population growth. In 2008, the IMF spoke of an additional 100 million potential new victims of starvation.
A system which routinely condemns over 900 million people to hunger and malnutrition is self-evidently in permanent crisis. From the standpoint of international human rights law the system is more than a failure. It is a crime.
Last year we heard of a ”world food crisis”. 800 millions people hungry before was somehow not a crisis. What made it a crisis last year I would suggest was the near-simultaneous appearance of mass protests in some 30 countries which elevated this ongoing violation of human rights to a potential political crisis for governments.
The new element that drove those protests and riots in 2008 was hyperinflation in the price of staple foods. Prices of some of these essentials doubled and tripled in the space of a year, some of them in the space of months. On March 31 2008 the price of rice rose by 31% in a single day; on February 25 last year, that of wheat by 27%.
While dealing with this damaging rise in prices we should also be asking why millions also sank into hunger and poverty when agricultural commodity prices fell steadily, as they did through the 1990s. We should ask why, with shop prices continuing to rise during these years, did the profits of the transnational processors and traders increase, along with their buying and marketing power; while the wages of coffee, tea, and sugar workers stagnated or fell, sometimes drastically?
Where is the linkage between commodity prices, retail prices, wages and purchasing power the WTO assured us that the market through liberalized trade would achieve? Dependence on volatile global commodity prices has pushed entire populations to the brink of starvation.
Commodity price changes in themselves do not tell us the whole story since whether they rise or fall hundreds of millions go hungry. A key part of the explanation lies in the poor’s vulnerability and powerlessness faced with speculation and the massive extraction of value by corporations and speculators along the food chain.
Corporate profits for the traders and primary processors are at record levels. Cargill, the world’s leading trader, registered an 86% increase in profits from commodity trading in the first quarter of this year. 2007 profits for ADM, the second global trader, were up 67% per cent last year. Bunge, riding the wave of demand for oilseed for biodiesel, enjoyed a 77% increase in first quarter profits last year. Nestlé, the world’s largest food corporation, posted exceptional 2007 profits and launched a 25 billion dollar share buyback program – while telling its workers that higher input prices mean they should brace themselves for layoffs and wage cuts.
And yet you can search in vain for the word corporation in the briefing papers for the 2008 FAO World Food Crisis Summit – this in a report entitled ”Facts, Perspectives, Impacts and Actions Required”.
One of the main issues and actors in the crisis of the world food system, global corporations, are simply not mentioned. The driving force behind liberalizing agricultural trade over the past decade – the enormous increase in the reach, power and market share of transnational corporations is entirely absent. There are only markets, market signals, and prices. With these ”facts” and this ”perspective”, how can we understand the real mechanisms at work, and meaningfully address the issues?
The forces generating hunger don’t simply happen – they are made to happen. If world cereal stocks are low, it is because governments were systematically pressured, lobbied, blackmailed and seduced into selling them off, thereby privatizing an essential mechanism for managing supply. The corporations now manage the planet’s food stocks.
With the major actors rendered invisible – and in particular, the corporations and the financial speculators who increasingly dictate how and what kind of food is planted, harvested, processed and marketed at what price, we’re left with an ”action plan” which tells the poor it will essentially be business as usual. What should have been an opportunity in Rome last year for governments to show their commitment to following through on their obligation to protect and enforce the right to food therefore concluded with humanitarian assistance and vague calls for more investment without specifying what kinds of investment and investment for whom and whose interests.
Today for example private equity and hedge funds – investors focused on short-term, high-yield gains – have been expanding beyond commodity futures markets and are pouring billions into acquiring farmland, inputs and infrastructure.
And yet the FAO sees speculation playing no significant role in pushing prices upwards whilst at the same time these investment fund locusts are betting hundreds of billions of dollars on higher prices, creating a bubble that drives prices upwards. It was speculation alone which drove up the price of rice futures by 31% in a few hours on March 31. Retail prices follow, and the consequences can be fatal. As Tom Giessel, a US wheat farmer said recently ”We’re commoditizing everything and losing sight that it’s food, that it’s something people need. We’re trading lives”.
Governments must have restored to them the policy tools they need to ensure food security through investment in local and national food systems. Clearly, we must halt the diversion of food from human consumption to fuel tanks. And food and agriculture must be defended from the incursions of financial markets through tough regulation not liberalization.
Closely linked to the ideology which stands at the heart of a broken food system that leaves millions starving is the crisis which we continue to face in the financial markets and in the real economy.
It is a crisis for sure. But like all crises it will eventually be resolved, one way or another. The question we need to be addressing therefore is not whether it will be resolved but rather how, by whom, and on whose terms?
And there are stark choices in those simple questions. Can we resolve it on a path which helps us combat and reverse poverty and inequality, or will the crisis be resolved in ways which push us deeper into unemployment, the destruction of decent work, environmental degradation and ultimately mass hunger?
This crisis is rooted in the years of de-regulation of our economies. Since the 1980’s government after government has dismantled regulations which were put in place to control the greed and excesses of the markets. That undoubtedly laid the ground for the crisis as a small group built obscene wealth and the gap between rich and poor grew everywhere.
But the current deep economic contraction is not merely a problem with some bad debt or greedy CEOs in finance, though there is plenty of both and we are right to outraged by that.
The vaunted leaders of AIG for example, one of the world largest financial players, played with investors’ money in criminal ways. At the end of last year they had lost money and in part destroyed people’s savings and pension funds to the tune of $61.7 billion. In the last three months of 2008 they were losing $27 million dollars every hour. $465,000.00 each minute. They were losing the annual median income of an American family in less than ten seconds! This is not casino capitalism – it is criminal capitalism.
And these kings of Wall Street and the City of London knew what they were doing. Their greed knew no limits and, rather than allowing them to retain staggering levels of wealth whilst so many people suffer, they should be now be treated like what they truly are – criminals – nothing more, nothing less, and they should be going to jail.
And those who are now being bailed out with public moneys, our money, are not failed financiers who simply made honest mistakes.
But memories are short, it is easily forgotten that, whilst the scale of what we have seen transcends the economic turmoil of recent decades, the past three decades or more have been marked by recurring crises and volatility punctuated by bursts of apparent growth which, we were told, were the real expression of a fundamentally sound economy which was delivering greater prosperity for all.
Now much of that apparent prosperity has evaporated overnight, and what we see is a systematic transformation in which finance has transformed and has come to dominate activities which it is supposed to serve.
The transformation away from investment in real, sustainable growth in manufacturing and services to a focus on purely financial profit (what the IUF originally termed ”financialization”) was not and is not inevitable. It was politically constructed, and it was built step by step through changes to laws, regulations, and the rules governing international trade, investment and finance. It was, is and ultimately will always be about who wields political power.
At every step in earlier crises and now this crisis there were alternatives, and there are particularly alternatives today, because the crisis is now so deep and so obvious that all the dogmas and marketing which told us ”there was no alternative” to brutal neo-liberal economics are now discredited and the path to political action that dominates rather than falls victim to economics can be wide open if we act.
So what needs to be done?
First we need to build what is sometimes called a ”new international financial architecture”. This doesn’t mean pumping new life into an old IMF and World Bank so they can save the day for the financial investors which roam the globe with the click of a mouse. No. It means placing control and accountability within the United Nations – an old demand which the IUF has always supported and that now finds support from former World Bank head economist Joseph Stiglitz.
A UN body that can stop speculators exploiting international differences in exchange rates and currency rates by stabilizing these rates and supporting them in ways which sustain growth, not speculation.
But because it is still nation states that can determine UN policy we’ll only get this through political action focused on governments at national level. And the starting point is to get our members and the public generally understanding what governments we need and what those governments need to do.
Of the more than USD 3.2 trillion dollars which circle the globe daily only 2% is actually linked to trade and investment. The rest is simply money in search of money. Closing the global casino means forcing this money into investment in productive employment, sustainable food production, and investment in technologies which can reverse global warming. It’s about politics, because the money moves into markets largely in response to political opportunity, not simply into markets as such. It’s about power. And internationally only the UN, supported by national governments, provides even a slim chance of political power being exercised in the direction of fairness and justice for all.
Today our political leadership looks sadly inept in its response. What should be a massive opportunity for leadership is I fear going to be squandered as politicians with too little imagination and possibly a deficit of courage fail to see the opportunity they have. Never in my lifetime has politics been presented with an opportunity like this. And not just an opportunity but almost a moral obligation to take power and control of a market system that has so clearly failed.
This should be our time. This is the time to say unequivocally that politics should provide vision and inspiration. That politics is there to determine the type of societies we need. That’s why we have democracy and why so many people over years and still today have sacrificed sometimes everything to have it.
That’s why people vote. Not to put a new group of people in charge of merely administering an economic system but to put people in charge who can transform society. An economic system can and must be no more than a tool to deliver that vision.
Will that happen? Will our political allies and political leadership seize the moment? Signs are not good. Signs are pointing more to their willingness to step in and fix things before handing the controls back to those who are not elected and who would again control an economic model that so obviously works only in the interests of a wealthy few.
Can that change? In my humble opinion only in one way. We must make it change and we must mobilize massively to do so. We must harness the enormous anger and outrage there is out there to demand our kind of change. And we must do it soon because if not others will harness that anger and we will then find ourselves in dangerous times. The frustrations and anger of our members are at risk at being turned inwards. Against those poorer than themselves rather than those far richer. Against those with even less access to rights, those on the periphery rather than against those who would deny us rights and those who would protect privilege. And down that path lies the barbarism of the far right – and make no mistake there are those on the right mobilizing to exploit the chaos and take us to a far more barbaric place.
The labour movement represents an answer to and a protection from barbarism. We always have and we always will though we are not guaranteed to succeed unless we mobilize. We did not succeed in the 1930’s in Europe and there is no comforting guarantee merely as a result of the existence of a single market in Europe that we will succeed now.
We must demand that today progressive politics takes its rightful place as the democratic expression of the kind of societies we need and that politics can and must work in the interests of all.
But we must also play our role in confronting the engines and drivers of the global market that our members increasingly face daily at work. I mean of course the major transnational companies that increasingly impact our members.
The IUF has an ambitious plan to build our union strength inside those companies. To build union membership and then organize it to start to be a far stronger counterpart to those companies global managements. We have won victories in some the biggest food and beverage companies in Russia, in Korea, in Germany, in Indonesia, in Pakistan, in the USA, in South Africa and elsewhere.
And we have recognized one simple fact. If we are to challenge these global companies we need of course to have union members everywhere in the company. We cannot leave parts of them non-union because that will come to haunt us all – you all understand ”social dumping” because you are threatened by it so often!
But it is not enough to simply have every workplace of a global company unionized. That is already an ambitious plan and one we are trying to achieve in many of the companies we face. Union membership alone is not enough. It is not power. Only union members organized together represent real power. So now we are not just seeking to unionize those companies everywhere they operate. We are setting out on a path to organize those unionized members into a counterweight to global corporate power.
For example in Coca-Cola we have already secured international recognition from that company. This means a team of IUF affiliates from all corners of the world meets with the most senior corporate management twice a year in Atlanta to go through our agenda of violations of rights and employment practices throughout the Coca-Cola system. This is a first for any US Corporation. It has brought real results. In the past three years Union members have grown and union recognition has been secured from the company in Pakistan, in India, in Russia, in Guatemala, in Colombia, in South Africa to name some examples. Real victories built on our strength, our history and our engagement with Coca-Cola’s top brass. But this is not enough. We have to consolidate this victory by building a global union organization within the Coca-Cola system and this we have now begun to do with the creation last year of the Global Coca-Cola Workers Alliance which your union is a member of. Wherever Coca-Cola looks they will one day soon see IUF affiliates – and not just isolated IUF affiliates but unions joined together in a common purpose within the Alliance. If we succeed we will sustainably improve the balance of power between us and Coca-Cola.
There are other examples. Too many to go into today. Let me end though with one. Unliver, the global food and personal products giant has for decades said they would never, categorically never, speak to the IUF or recognise us in any way. In Pakistan they run their operations with scandalous forms of labour. In Khanewal Pakistan they employ 22 permanent worker in a factory with close to 700 workers. 22 permanent workers and the rest on 9 month contracts from shady temporary employment agencies. Something close to slavery. In Unilever’s Rahim Yar Khan factory in Pakistan temporary workers tried to unionize and 292 of them were dismissed in October 2007. But they refused to go quietly away into the night. They fought back and we fought back with them. Our CasualT campaign has now forced Unilever to back down. We and Unilever are now in UK government mediation under the OECD MNE Guidelines, an instrument that seeks to curb the worse excesses of corporate behaviour by OECD-based TNCs. They are backing down in Pakistan and will now offer hundreds of permanent jobs to those workers – and the right to be in a union that goes with those jobs. Built on those brave workers’ fights and the IUF’s support we WILL have unionized workplaces in Unilever Pakistan. And Unilever is now asking the IUF to develop a global relationship which would allow us to resolve issues across an international bargaining table rather than face this kind of IUF campaign again. If we can win this fight in the coming weeks it will represent one of our greatest victories in bringing a major global corporate giant to its knees. Watch this space!
There are potentially many other examples of our organizing ourselves in global companies. I hope later this year that Danish Crown – not the largest but a major international player nonetheless – will be amongst them. I am convinced we will succeed there as we are doing in an increasing number of other cases.
But we will only do so with your help. I know I can count on that and your presidency of the IUF since 2007 has only made me more than ever certain of that fact.
Comrades I could today have talked today about other things. About the struggles we need to wage in Europe to defend standards. About our growing fight back to defend decent permanent jobs against the onslaught of casualisation, outsourcing and contract labour and to embrace and organize those workers so they can work in dignity and with respect. About the dangers of irresponsible and unregulated food supply chain activity that has seen children dying from tainted milk in Asia and has at least some links to new strains of human disease like swine flu, about the thousands of forced and child labourers that still are so prevalent in many of our sectors’ supply chains, about millions of domestic workers in virtual slavery, about the dangers of unregulated genetically modified organisms introduced in the food and agricultural chains, about the unknown and untested dangers of nanotechnology growing in our industries. But time and my not wanting to abuse your wonderful patience any more than I have does not permit me today.
What I can do though is to wish you a wonderful congress and guarantee you our support and solidarity as we move forward together. Thank you.