IUF logo; clicking here returns you to the home page.
Uniting Food, Farm and Hotel Workers World-Wide

The Sugar Worker, October 2005. News from the Sugar Sector.

Posted to the IUF website 01-Nov-2005

Share this article.

Note to our Readers:
The IUF Sugar Workers' Network Web Site is available at http://www.iufdocuments.org/sugar/
Affiliated union can request a password to the site by sending an electronic message to Jorge Chull�n.

The Sugar Worker
Information and Analysis for Unions in the Sugar Sector
Volume VII, Number 10
October 2005


Philippines: CATLU President in Hacienda Luisita Assassinated

Ricardo Ramos, president of the Central Azucarera de Tarlac Labor Union (CATLU), was shot dead on 25 October, while celebrating a union victory as the company paid back wages owed to the workers following an 11-month strike.

According to police reports, Mr Ramos was with some of his co-workers in Barangay Mapalacsiao, Tarlac City, near his home, when a gunman approached him from behind and fired into his head. The gunman has not been identified. Local press reported that Mr Ramos is the third union leader killed this month, and some groups have pointed to the military as responsible for his killing.

On 21 October, the Department of Labor and Employment (DoLE) levied 8,000 bags of sugar as payment for wages owed to 373 workers in the Central Azucarera de Tarlac. The value of the sugar was 8.8 billion Filipino pesos (about USD 160,000) to cover 21 days of salary, the 13th month payment, and other bonuses for 2004. The DoLE decision resolved one of the issues in dispute between union and management. Management has also agreed to reinstate 33 of the 35 dismissed union officers, which was a second issue in the labour dispute. (Two of the officers, said local reports, resigned to avoid disrupting negotiations.) One remaining issue is a new collective bargaining agreement (CBA). Instead of the usual two-year CBA, management is asking for a two-year extension of the current CBA, ostensibly to allow the company to improve its financial position.

The CATLU organises factory workers in Hacienda Luisita, owned by the family of former President Coraz�n Aquino. Last year, the workers were attacked by military and police personnel while picketing the factory, resulting in the deaths of at least seven people, with dozens more injured. (For more information see The Sugar Worker, November 2004.)

Indonesia: Threats of Violence Against IUF and Sugar Federation

The IUF-affiliated FSPM TG, a federation of independent sugar unions in Indonesia, has been struggling against gross violations of trade union rights by private and public employers and local Manpower Office officials, who are acting in collusion with the Suharto-era yellow unions FSPPP-SPSI and SP BUN in the sugar sector.

FSPM TG officers and Hemasari Dharmabumi, the IUF representative in Indonesia, have now been publicly threatened with violence if they persist in organizing sugar workers and continuing to struggle for basic trade union rights. An anonymous threat entitled "Warning Note" was delivered to Hemasari on 31 August while she was attending an ILO seminar for plantation workers. The note warned the IUF not to organize in agriculture or sugar mill companies "which already have trade unions" and told Hemasari to "go home immediately".

On 27 September, an "All Indonesia Sugar Mills Unions Solidarity Forum," claiming to represent all sugar mills in the state-owned PTPN system as well as privately owned mills (including the Gunung Madu plantation and mill complex, Indonesia's largest, whose management in March fired newly-elected FSPM TG President Daud Sukamto), issued a "statement of position" attacking the IUF for, among other things, "provocative and dishonest" actions in "hijacking the cadres of other trade unions." The letter was signed by the SP BUN unions at PTPN IX, X, XI and XII, as well as the SP BUN union at the PTPN Marketing Office, the FSPP SPSI and others.

On 30 September, the SP-BUN PTPN IX issued a "Statement of Position" which accuses Hemasari and FSPM TG General Secretary Legimin of violating unspecified laws. The statement threatens "physical action" against Hemasari and Legimin if they do not stop their union work. The threatening statement was circulated throughout the PTPN sugar mills in East and Central Java.
The IUF General Secretariat has written the Indonesian Manpower Minister to condemn the threats as criminal acts and grave violations of fundamental trade union and democratic rights. We called the Manpower Minister to take the necessary measures against the authors of the threats and launch a full investigation. We insisted that the government immediately take all appropriate measures to ensure the safety and wellbeing of Legimin and Hemasari Dharmabumi, for which we hold the government of Indonesia responsible.

Jamaica: Government Proposes Closing Two SCJ Mills

Addressing the country's Parliament on 25 October, Jamaican Prime Minister Patterson outlined a program to streamline the sugar sector in order to face the proposed cut to preferential prices in the European Union. The program would close two mills, Bernard Lodge and Monymusk under the Sugar Company of Jamaica (SCJ), aim at stabilise production at 200,000 tonnes of raw sugar, increase production of molasses for rum manufacturing, and produce up to seventy million litres of alcohol. The program also calls for joint ventures with private capital to achieve production goals, develop alternative crops in lands taken out of cane, and establish an import regime on refined sugar to protect the domestic market. The 200,000 tonnes of raw sugar would be earmarked to supply the European Union (126,000 tonnes), the U.S (12,000 tonnes), and the domestic market (62,000 tonnes).

The program assumes that the sector would be able to produce enough cane, close to 3 million tonnes per year but, as local sugar groups pointed out, it was not clear in Mr Patterson's address what groups would be growing the cane, what sources of financing would be available, and to what extent there is a solid and secure framework to guarantee long-term investments in cane fields. Prime Minister Patterson said that financing may come from the EU assistance program for the ACP sugar producing/exporting countries in 2006 (40 million euros for some 18 ACP countries), soft-term loans available in EU institutions and, perhaps reported the local press, from savings from the PetroCaribe arrangement with Venezuela.

Local sources said that the closing of the two mills would mean a loss of 4,000 jobs. In his address Mr Patterson gave no timetable for the closure of the mills but gave assurance that training programmes for workers would be available, as well as some government's initiatives in favour of the communities that would be affected. He also said that it is expected that workers would find employment in the tourism sector, and in the ethanol and rum production facilities to be established.

In first reactions to the proposal, the All-Island Jamaica Cane Farmers Association said that the government should transfer Long Pond and Bernard Lodge to the farmers, who would "show the prime minister and the government, what can be done with proper management at the factories." Management of the SCJ has been under criticism for some time, and local groups believe is one of the key factors in maintaining the poor conditions in the sector. Officials said the government would give some consideration to the request.

On 30 October, the local press reported that the Brazilian Aracatu Company made a USD 120 million offer for the whole of Sugar Company of Jamaica. Jamaican papers quoted Sunday Finance that said the Brazilian group would produce up to one million tonnes of cane for sugar and alcohol production. There was no confirmation by the company, which is based in the state of Paran�, and the Jamaican Sugar Industry Authority said it has not seen any formal proposal.

Sugar production in Jamaica has experienced a steady decline in the past 40 years: from over 500,000 tonnes in 1965 to slightly over 124,000 tonnes in 2005.

EU Consultant Team Proposes Closing Three Factories

Prime Minister Patterson's address came few days after an EU team of sugar consultants submitted a report on the cane and sugar sector in Jamaica, which called for the closure of three factories: Bernard Lodge, Long Pond and Monymusk.

The EU team said that most of the problems identified relate to cane: interruptions in the supply of cane, low quality of cane, and high content of extraneous matter in the cane delivered. They also mentioned time losses due to mechanical breakdowns in the factories. For the five factories under the state-owned and state-run Sugar Company of Jamaica (SCJ), the "pooled" production cost is about US 26 cents per pound of raw sugar, and only Frome operates at profit. The other four are: Bernard Lodge, Monymusk, Long Pond, and Duckenfield.

The EU team will visit Jamaica again in November to work with the sugar stakeholders on the process forward. Their report said the country should take advantage of the transition period proposed by the EU to streamline the industry. The reform package under discussion in the EU includes a 39 percent price cut in the period 2006/07-2009/2010, followed by a ten years when no changes would be introduced. The EU team also estimated that revenues on sugar exports would decline in 4.633 million euros in 2006/07, 16.501 million in 2007/08, 19.285 million in 2998/09 and 25.806 million euros in the 2009/10 and 2010/11 seasons. The accumulated revenue declines for the 2006/07 -2010/11 period was estimated at 92.031 million euros.

The EU team looked at the proposals for the sugar industry, e.g. a sugar refinery, an ethanol distillery, and co-generation of electricity to sell to the national grid, and concluded that "unfortunately, the basic conditions, (for) such downstream transformations� is hard to be met, given such an expensive raw material as Jamaican cane, and given the comparatively low market prices of refined sugar, fuel ethanol, and electric power." It added: "Great caution will have to be used when basing any strategy of adapting to the EU price cut for sugar on such questionable additions of value."

Pointing indirectly to the social configuration of the industry, the report made a worrying comment: "While a first glance at the financial statements and notes of the five government mills, controlled by the Sugar Company of Jamaica (SCJ), indicates that they are well presented and informative, they turn out to be unaudited, and should be read with that in mind. In fact, the last audited accounts� were from 1997/98."

European Union: Poland Joins the Opposition to Sugar Reforms

Eleven of the 25 country members of the European Union are demanding a sugar reform package with less drastic price cuts, longer transition periods, and increased compensation to farmers. The countries are Spain, Italy, Ireland, Greece, Portugal, Finland, Hungary, Latvia, Lithuania, and Slovenia, with Poland recently joining their ranks.

Italy's Prime Minister Silvio Berlusconi said that his government is "absolutely" opposed to the reforms as proposed, as there would some 71,000 jobs lost. The Italian Minister of Agriculture wanted talks with his French counterpart, saying that Italy might not support the EU position at the WTO meeting in Hong Kong, if there is no "opening" in the sugar front. The Irish government is also very actively lobbying against the reforms, while Hungarian officials said that they lobby for a 25 percent reduction in prices, instead of the proposed 39 percent, and a compensation for farmers between 80 to 100 percent instead of the proposed 60 percent. The opposition group could block the reform process.

The European Commission wants the reforms to be approved at a Council meeting in November, before the WTO ministerial meeting in December in Hong Kong. Press reports, however, said that the reform package might be discussed only in January 2006.

Africa, Caribbean and Pacific: Kisumu Sugar Declaration and Action Plan

Ministers of the Africa, Caribbean and Pacific (ACP) countries signatories of the EU/ACP Sugar Protocol and ministers of the Least Developed Countries (LDC) supplying sugar to the EU under the Everything But Arms (EBA) trade initiative met on 22-26 September in Kisumu, Kenya to discuss strategies to adjust to the proposed reforms in the EU sugar regime.

In their Kisumu Declaration, the ACP-LDC ministers regretted the lack of progress in the joint work with the EU on sustainable development, stating that their sugar concerns have been until now completely ignored by the EU. They recognised the need for their industries to be more competitive and consider trade to be a vehicle to achieve the Millennium Development Goals (MDGs). They reaffirmed that the reforms as proposed would destroy their sugar industries, with devastating consequences for their countries. They also stated that the proposed 40 million euros as assistance for the ACP sugar exporters in 2006 is inadequate, and took note of the UK government's suggestion that assistance would amount to 100 million euros in 2006, and 500 million euros annually thereafter. The Kisumu Declaration summarised some key decisions, among them: an urgent request for the EU to support St Kitts' transition-out-of-sugar program, as the country has been "compelled to cease production for export, since the EU Commission's proposed reduction in the sugar price," the restructuring of the ACP/LDC sugar industries at their own pace, and the appointment of a consultant to review the intra-ACP cooperation in research and development. They also considered desirable to have an agreement after the WTO ministerial meeting in Hong Kong, and that their countries would engage in an "intensive and effective participation" both prior and after the Hong Kong WTO meeting.

The meeting in Kisumu also drafted an action plan on "Promoting the Sustainable Development of the ACP Sugar Sector." Among the most important decisions are:

The eight MDGs, are: Eradicate extreme poverty and hunger; Achieve universal primary education; Promote gender equality and empower women; Reduce child mortality; Improve maternal health; Combat HIV/AIDS, malaria and other diseases; Ensure environmental sustainability; and Develop a global partnership for development.

Brazil: Pernambuco Sugar Workers End Strike

On 29 October, workers in some 20 sugar factories and 100 alcohol distilleries in the state of Pernambuco in northeast Brazil, ended an 8-day strike in support to their wage demands. The president of FETAPE, the rural workers federation of Pernambuco, said that an agreement with Sinda��car, the employers association in the alcohol and sugar industries, gave the workers an 8.2 percent wage increase. Some 100,000 sugar workers launched their strike with a demand for a 20 reais per month increase, and that the minimum wage be fixed at 25 percent above the national minimum wage. The minimum wage was at 305 Brazilian reais per month.

Four days into the strike, FETAPE denounced that the military police were harassing striking workers, confiscating their tools, the sound equipment used by workers in their pickets, and even water and chairs. As well, on 25 October, the military police seized a bus in which workers were visiting the Alian�a and Nazar� da Mata farms, in order to monitor working conditions.

In neighbouring Paraiba, a second round of wage negotiations reached an agreement for a 9 percent wage increase for sugar workers in the state, bringing their minimum wage up from 286 to 310 reais per month, retroactive to 15 October. The agreement was negotiated between the employer organisations ASPLAN (association of cane planters of Paraiba), FAEPA (federation of agriculture and cattle raising) and Sindalcool (alcohol producers) with the FETAG-Paraiba, the rural workers federation in the state.

Genetically Modified Cane
Brazil: GMO Sugar Cane "Generation 2005"
A recent report posted on the ProCana web site said that the cane varieties to be used by 2015, the "Generation 2005" which is started to being researched now, will be resistant to droughts, able to grow in poor soils, and developed for mechanical harvesting. In comparison with current varieties, many of them will be genetically engineered.

A spokesperson for the Centro de Pesquisa Tecnol�gica do Agroneg�cio de Cana do Instituto Agron�mico (IAC) said there is no doubt that transgenic cane would be part of the cane growing culture because of the need to have varieties resistant to plagues and with higher sucrose content. The IAC coordinates a team developing new cane varieties. In fact, the IAC has just launched four new varieties in Sert�ozinho (Sao Paulo), which it started investigating in 1993-1994. The new varieties are especially prepared to grow in poor soils - which, according to the centre, are characteristic to the areas in Sao Paulo which are replacing pasture with cane -, and grow erect, which facilitates harvest mechanization.

An association of cane planters, Orplana, supports the development of genetically engineered cane that, in their opinion, reduces the use of chemical products, lessens the impact on the environment, and reduces costs. The genetically modified cane, said Orplana, is practical and perfectly possible to be used by the farmers.

Researchers said that the advantage of a GM cane compared to GM soy is the fact that the sugar and alcohol produced do not have traces of the genetic modification because they are "pure molecules," in contrast to soy whose grain is really a "protein soup."

Company News
India: New Projects in Uttar Pradesh
The sugar sector in Uttar Pradesh, reports a German trade source, is witnessing an investment boom with over USD 914 million likely to be realised in the next two seasons, which would mean an additional 125,000 tonnes of daily processing capacity in the state. It is estimated that at a 10 percent recovery rate in a 150-160 day harvest season, this additional capacity may lead to a rise in annual production in the range of 2.0-2.2 million tonnes of sugar. Uttar Pradesh currently produces about 5 million tonnes.

Leading the process is Bajaj Hindusthan, with a new factory at Kinnouni (Meerut) that started operations this season, and three more factories in Bilai (Bijnor), Thanabhawan and Budhana (both in Muzaffarnagar) to come on line next year. The company also plans three more mills in 2006/07 in Saharanpur, Pilibhit and Lakhimpur Kheri districts.

The Mawana Sugars, subsidiary of Siddharath Shiram, announced investments for 5.35 billion Indian rupees in an expansion plan that includes a greenfield project in Meerut, setting up a new factory (also in Meerut), and expanding capacity in two existing factories in Mawana and Titawi.

Balrampur Chini Mills plans to set up a greenfield integrated sugar complex at Datauli and expand production capacity of its complex at Akbarpur. The company is also expanding four other mills: Balampur, Bahnam, Tulsipur and Haidergarh. Meanwhile, DCM Shriram Consolidated plans to invest 5 billion Indian rupees in two new mills (both at Hardoi) and in the expansion of its facilities in Lakhimpur Kheri and Hardoi. The K.K. Birla Group announced completing the investment of 7 billion Indian rupees in two new mills (Gorakhpur and Lakhimpur Kheri) and the expansion of the Sitapur unit, run by the Oudh Sugar Mills. Another 4 billion rupees are likely to be invested by the Triveni Engineering & Industries in a greenfield mill in Bulandshahr and the expansion of the Muzaffarnagar unit. Finally, the Simbhaoli Sugar Mills is considering investing 3 billion rupees in a new factory in Ghaziabad. (Exchange rate of INR 100=USD 2.2844.) (Based on Zuckerindustrie, September 2005.)