Wednesday, November 27, 2002

This work is dedicated ?to the memory of Fernando Lopez Lopez, a young worker who died on the job due to the company?s negligence, and to the memory of the infant son of a union member who died from a curable illness because his blacklisted father could not pay for medical care.?
*******

SUMMARY

After a four year battle, including a 10 month vigil on the steps of Guatemala?s Presidential Palace, members of the SITRADYMELSAAC electrical workers union are celebrating an unprecedented victory. Last week, after receiving a financial settlement from DYMEL, the construction subcontractor that had employed them, 71 workers and their families can finally start to rebuild their lives.

This small, grassroots union deserves a great deal of recognition for igniting an international campaign that even seemingly untouchable global corporate giants and their financers were unable to ignore.

But even as their victory is honored, the resolution of this long, painful struggle must not be taken at face value ? there is clear evidence that business as usual continues for US government financier OPIC, energy giant Teco Power Services (TPS) and long-time government construction contractor, JA Jones. These institutions and corporations would like us to believe that the SITRADYMEL controversy has ended, so that they may continue to operate with little accountability to labor, environmental and human rights.

This article, written by Sue Kuyper of Rights Action, celebrates the SITRADYMELSAAC victory but also provides an in-depth analysis of the larger context of corporate impunity within today?s global economy.

VIGIL ENDS IN VICTORY

On Tuesday, October 8, 2002, the longest vigil on the steps of Guatemala?s Presidential Palace finally ended. After 10 months of struggle away from their families, the SITRADYMELSAAC electrical workers union took down their banners, hauled away their weather beaten mattresses and headed home. Illegally fired in 1999, as a result of union organizing during the construction of the San Jose Power Plant, the workers have spent almost four years battling their former employer, DYMEL of El Salvador, as well as JA Jones Construction and TPS (the US based multinational constructor and project owner respectively), and the Overseas Private Investment Corporation (OPIC) (a U.S. government agency which funded the project).

Many were in tears as Willy Hernandez, General Secretary of the union, read a statement dedicating the strike to the memory of Fernando Lopez Lopez, a young worker who died on the job due to the company?s negligence, and to the memory of the infant son of a union member who died from a curable illness because his blacklisted father could not pay for medical care. Supporters set off fireworks as the strikers cried in each others arms, overcome with the emotion of finally reaching a victory after years of persistence, sacrifice and struggle.

The day before, on October 7, union members had traveled to the Labor and Family Court, in Retalhuleu, to collect checks averaging US$20,000 (156,000 quetzals). After a secret 3 month negotiation, the union agreed to a settlement equaling approximately 85% of their back pay since the date of their illegal firing.

Each member also signed court documents officially withdrawing all criminal charges against DYMEL and formally dissolving the union. The remaining conditions of the negotiation are confidential, as is total amount of the settlement. But, the financial award is estimated at over $1 million, and it is logical to assume that dissolving the union and ending the court cases were conditions imposed for receipt of payment.

Though unquestionably a deserved victory, it is only a partial triumph. The former union members face an uncertain future as a blacklist appears to remain in effect. TPS continues to operate a non-unionized power plant, and OPIC has apparently sanctioned neither TPS nor JA Jones. What?s more, OPIC has now demoted the only position within the organization that monitors labor rights compliance in the hundreds of projects it funds globally.

The SITRADYMELSAAC struggle demonstrates that OPIC continues to have no clear procedures for resolution of complaints made against corporations that it funds and insures for abuse of labor, environmental and human rights standards.

INTERNATIONAL ALLIANCES FIGHT GLOBAL ABUSES

As with the majority of labor conflicts in the context of today?s global economy, this union struggle took place in the context of a complex web of multinational actors. Although the settlement was formally negotiated with DYMEL, the US based owners ?TPS-- and financers ?OPIC?of the San Jose Power Station were very much on the hot seat thanks to the international campaign in support of the union.

Knowing that their struggle was not a ?national? issue, and that these multinationals were integral actors, SITRADYMELSAAC hung banners at their vigil naming all three as partially responsible for their situation and suffering. They began to tell the media and their supporters how OPIC, according to its own policies, supposedly could not finance projects that violated human rights, labor and environment laws and that this applied to all subcontractors. This turned out to be a key strategic move that led to their ultimate success.

Workers constructing the San Jose Power Station, in Puerto Quetzal, Escuintla, began to secretly (for fear of repression) organize their union in 1998, in response to horrendous and illegal working conditions that resulted in the death of one worker and an accident in which a 14 year old worker lost his leg. In direct violation of Guatemalan labor laws, DYMEL responded with the mass firing of all union members. Fired workers quickly realized they had also been blacklisted by both national and international corporations and were refused work everywhere they applied.

After nearly 3 years in the courts, and a series of verdicts in their favor, the Guatemalan Supreme Court upheld all past verdicts and ruled that members of SITRADYMELSAAC should receive all their wages since their firing and be reinstated in their positions at the San Jose Power Station. Unfortunately, the day they returned to the plant to claim their jobs they were denied entry and law enforcement agencies refused to enforce the order. The company, DYMEL, claimed to have left the country although evidence suggests that they simply changed their name. TPS has assumed no responsibility for the abuses and suffering, though it continued to own and operate the plant, and reap profits from the plant.

As a last resort on November 28, 2001, SITRADYMELSAAC decided to take the bold step of starting a hunger strike on the steps of the presidential palace. The hunger strike ended when one of the members almost lost his life, but the union persisted, determined to maintain their vigil until they saw justice.

The vigil gave the needed profile to the case, and SITRADYMEL became the focus of international attention. A letter writing campaign targeting OPIC was launched on their behalf. Delegations of Canadian unionists visited them on steps and supported them internationally, and a Union representative toured the West Coast of the United States and Canada with Rights Action. The union began to receive letters of support from all over the world: US, Canada, Germany, Japan, France, Columbia, Spain, Italy and Australia. Finally in June, the negotiations began.

UNION BUSTING AND BLACKLISTING CONTINUES

There is no denying that SITRADYMELSAAC?s success merits recognition as a precedent-setting effort. At the same time, the transnational actors have, once again, escaped justice. In the August 2001 Supreme Court verdict, the courts ordered that all fired SITRADYMELSAAC workers be reinstated into their jobs. If this had happened, these workers would have had stable positions in a unionized plant. Instead, SITRADYMELSAAC representatives face an uncertain future as the blacklist is still in effect. As one union leader commented, ?Our faces have been all over the papers, they have seen us here on the steps for almost a year, there is no way any large company is going to give us work. We are known union organizers.? Furthermore, the San Jose Power Station still does not have unionized labor.

In essence, the management of the TPS plant succeeded in preventing unionization. And, considering that less than 2% of Guatemala?s labor force is unionized with violent repression against union organizers still regular practice, the stage is still set for trans-nationals to violate the dignity and rights of Guatemalan workers.

TPS FACES FURTHER CONTROVERSY

Teco Power Services is one of many energy giants who profited greatly from the recent global trends in energy privatization. In January 2001 as union members were fighting their case in Guatemalan courts, TPS was featured in the US, on Fox News, for their success as a corporation that has become one of the ten largest power companies in the United States and among the top 20 worldwide.

In 1998, the year construction of the plant began; TPS and two multinationals bought the energy distribution network from the Guatemalan government for $101 million. TPS earns profits from its 30% holding in this privatized energy consortium. But, as a September St. Petersburg Times article indicates, TPS stock values are plummeting as the energy sector comes into crisis. Yet on October 18, they reported a 22% jump in profits, partially due to increased production and profits in their Guatemala plants.

TPS continues to face controversy for its lack of safety standards. An October 3rd Tampa Tribune article describes one employee who was fired after 30 years working at one of TPS?s Power Plants in Florida for speaking about negligent environmental and safety standards to a government regulator. In a separate case, six other former employees are suing TPS for an organophosphate chemical leak in 1999 that the corporation knowingly did not address, that caused nerve damage and other health problems. The worker hopes to denounce ?a pattern of intimidation to keep workers from reporting safety and environmental problems at Teco's Big Bend station at Apollo Beach.?

Meanwhile, JA Jones, the Plant?s constructor, whose supervisors were some of the most abusive at the site, continues to enjoy its close relationship with the United States government, announcing recent contracts to build US Embassies in Africa as well as owning and operating US military bases world wide. ?From building Liberty Ships in World War II, to constructing and managing U.S. military bases around the world, to creating and refurbishing many of the landmarks that make Washington one of the most distinctive capital cities in the world, J.A. Jones is proud to build upon its historical partnership with the U.S. Government,? said John Bond III, president of J.A. Jones Construction Co. (www.jajones.com)

In spite international outcry and Guatemalan court rulings, neither TPS nor JA Jones have suffered any consequences as a result of their violations of internationally recognized labor rights. According to its own web site, ?OPIC systematically monitors investor compliance with U.S. economic, environmental, worker rights, and corrupt practices through questionnaires, investor reporting and site visits. Noncompliance may constitute a default under OPIC loan agreements.?

When SITRADYMELSAAC asked OPIC if a formal sanction process was taking place against TPS, during a March 2001 meeting, OPIC representatives responded that they could neither confirm nor deny such a process. And although it is warranted based on OPIC?s own mandates, when contacted this week and asked if the corporations had been sanctioned or continue to be eligible for financing, an OPIC spokesperson representative had no comment.

CORPORATE WELFARE AND IMPUNITY

OPIC?s top clients are a rogues gallery of transnational corporations implicated in corruption and abuse of environmental, human rights and labor standards world wide. One of OPIC?s top clients was the now infamous Enron. OPIC funded Enron to build the Dabhol power plant in India which currently sits empty after the Indian government refused to purchase the over-priced energy it was supposed to generate. As a result, Enron is currently asking for payment on its $200 million political risk insurance policy from OPIC.

OPIC also funded Unocal?s operations in East Kalimantan, Indonesia, where local communities have battled human rights and environment violations for over 30 years, including last week?s announcement of an off-shore oil spill which began over a month ago. In spite of this, OPIC recently approved a $350 million loan to expand this project.

OPIC, an export credit agency (ECA), uses US tax dollars to provide loans and political-risk insurance to US multinational corporation projects abroad. Most industrialized nations have at least one ECA. OPIC is the essence of corporate welfare, providing billions of dollars in corporate subsidies to giants such as Enron and Unocal. According to the ECA-Watch web page, ?ECAs finance greenhouse gas-emitting power plants, large scale dams, mining projects, road development in pristine tropical forests, oil pipelines, chemical and industrial facilities, forestry and plantation schemes?.?, projects which have well-known environmentally and socially-damaging impacts and are reaping profits from free trade agreements and the privatization of public services. ECAs are also the largest public contributors to the developing-country debt crisis. ?Nearly half of the developing-country debt to official creditors is owed directly to ECAs.? (ECA-Watch, www.eca-watch.org)

OPIC, as well as other ECAs, face challenges to their practices throughout the globe for a lack of transparency, weak project screening practices as well as little to no project monitoring of environmental, labor and human rights violations. And, once complaints of violations are brought by affected communities and workers, a clear complaint resolution procedure is virtually non-existent. This has definitely been the case with OPIC?s response to the series of controversies within the San Jose Power Station.

Since 1974, OPIC has been under statutory mandate to monitor labor issues in financed projects. This is not just organizational policy; it is required of them by federal law. Surprisingly, there is only one position, the Environmental, Human Rights and Labor Policy Analyst, specifically charged with responsibility for labor rights screening and monitoring projects, who must also facilitate resolutions of conflicts when necessary. A virtually impossible task considering that OPIC has hundreds of projects throughout the world.

But, instead of strengthening their already weak labor monitoring practices, it seems OPIC has decided to lessen their commitment. According to a letter written by Lawyers' Committee for Human Rights and other Washington based organizations; OPIC has recently decided to demote this position to an entry level position.

In general, OPIC is currently under scrutiny for its systematic lack of monitoring as well as watered-down sanctioning policies and practices, and it faces an up-hill battle in its re-authorization process before the US congress scheduled to take place sometime in the next year.

In the end, the unrelenting struggle of SITRADYMELSAAC should be taken as a positive example, but one that also needs further action especially considering that neither TPS nor JA Jones have ever publicly commented on the case and seem to continue to enjoy large government contracts in spite of evidence that they operate without regard to international law.

As OPIC faces upcoming congressional hearings, it should not be allowed to continue to use public funds to support projects worldwide with such damaging social and environmental impacts. As SITRADYMELSAAC union members recognize, ?We are but one example of the exploitation, abuse and poverty created by globalization. We hope to have opened a path to justice that others may follow.?

It is time for us to follow their example and let OPIC know that the public is paying attention and will not let the resolution of one labor conflict mean that business can go on as usual. Below is a sample letters for OPIC that demand their response.

OPIC WEB PAGE

For more information on OPIC, go to www.opic.gov. Click on ?Opic and the Environment? to request Environmental Impact Studies on projects under consideration for OPIC financing.

Peter Watson, President
Overseas Private Investment Corporation
1100 New York Avenue, NW
Washington, D.C. 20527
FAX: 202-408-5133
E: pwatson@opic.gov

Dear President Watson:

I am writing to express admiration for the long and valiant struggle of the Guatemalan workers of SITRADYMELSAAC electrical workers union who were fired in 1999 for union organizing in OPIC-financed San Jose Power Station, owned and operated by Teco Power Services and constructed by JA Jones. OPIC has no doubt received emails and letters expression concern and demanding OPIC take action.

On October 8, 2002, SITRADYMELSAAC ended their strike in victory after finally receiving the majority of their back pay from TPS subcontractor DYMEL that was order due to them in an August 2001 supreme court ruling. Yet, to date, OPIC has issued no public statement regarding any concrete action OPIC has taken to sanction Teco Power Services or its subcontractors, including JA Jones construction.

This case points to OPIC?s lack of capacity to monitor properly and respond to labor law violations in its projects. It is therefore alarming to know that OPIC has decided to demote the Environmental, Human Rights and Labor Policy Analyst in a move that will only weaken already questionable practices.

I believe the public has a right to get answers to the following questions about OPIC?s policies and procedures and would appreciate a response:

1. Has OPIC taken any formal action against the parent company and loan recipient, Teco Power Services as well as the plant constructor, JA Jones ? Have these companies been sanctioned?
2. Is OPIC currently funding any TPS and/or JA Jones projects? Are these companies, or any companies that contract with either corporation, still eligible for OPIC financing?
3. What procedures or policies does OPIC have to sanction corporations that violate labor rights, human rights or environmental laws? Has OPIC ever officially sanctioned a corporation for those reasons?
4. What complaint resolution process exists for parties who have suffered consequences as a result of the above-mentioned violations?
5. Is it true that OPIC has demoted the Environmental, Human Rights and Labor Policy Analyst position within OPIC? If so, how does OPIC explain this decision in light of OPIC?s current lack of capacity to comply with its federal mandates regarding labor issues?

I thank you for your time and attention to these matters. I plan to continue to monitor OPIC?s practices throughout the globe.

Sincerely,

cc:

PLEASE EMAIL CONGRESS MEMBERS YOUR LETTER:

The Hon. Paul Sarbanes, Chairman, Senate Foreign Relations Committee, Subcommittee on International Economic Policy, Exports and Trade Promotion, e: senator@sarbanes.senate.gov.

The Hon. Patrick Leahy, Chairman, Senate Appropriations Committee, Subcommittee on Foreign Operations, e: senator_leahy@leahy.senate.gov.

The Hon. James Kolbe, Chairman, House Appropriations Committee, Subcommittee on Foreign Operations, Export Financing and Related Agencies, e: jimkolbe@hr.house.gov.

PLEASE MAKE SURE TO FAX THE FOLLOWING OPIC BOARD MEMBER:

Alan P. Larson, US Department of State, Fax: 202-647-9763
D. Cameron Findlay, U.S. Department of Labor, Fax: 202-693-6143

===

TAX CHARITABLE CONTRIBUTIONS to Rights Action

To provide humanitarian and financial assistance to our partner grassroots organizations in southern Mexico & Central America that are working for human rights and community-controlled development, make check payable to ?Rights Action?, and mail to our Washington DC or Toronto offices.

CANADA:
Rights Action
509 St. Clair Ave W., Box 73527
Toronto ON, M6C-1C0

UNITED STATES:
Rights Action
1830 Connecticut Av, NW
Washington DC, 20009

Donate On line in the USA (anonymously if you want). Go to our website [www.rightsaction.org] and click on the ?donate now? icon, and follow the instructions.

info@rightsaction.org / www.rightsaction.org

posted 8:31 AM