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The Sugar Worker, November 2004. News from the Sugar Sector.

Posted to the IUF website 01-Dec-2004

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The Sugar Worker
Information and Analysis for Unions in the Sugar Sector
Volume VI, Number 11
November 2004


Philippines: Deaths in Hacienda Luisita

On 26 November, local papers reported, management and two union organisations in Central Azucarera de Tarlac and Hacienda Luisita reached an agreement that might help resolving a labour dispute. The dispute, however, saw a violent dispersal of workers on strike which officially cost the lives of at least seven people. Some sources, including the human rights groups and a spokesperson for Tarlac City, put the number of deaths at 14, however. Dozens more were wounded. It is also said that 39 sacadas (seasonal cane cutters) from the Visayas and Mindanao - other islands in the Filipino archipelago - remained unaccounted for.

Workers in Hacienda Luisita went on strike on 6 November, when negotiations reached a deadlock. Workers are affiliated to two labour organisations, the Central Azucarera Tarlac Labor Union (CATLU), which represents 768 mill workers, and the United Luisita Workers' Union (ULWU), which represents about 5,000 farm workers. CATLU was demanding a wage increase of 100 pesos (USD 1.76) and 30,000 pesos on CBA signing bonus for each worker, while the company said that it could only give a 12 pesos wage increase and 12,000 pesos as a signing bonus. (USD 1.00 = PHP 56.58) ULWU, on the other hand, was demanding the reinstatement of 327 farm workers dismissed last October, among them their president, vice president, and eight other union officers. Workers retrenchment, according to management, is due to the falling sugar prices. The Hacienda Luisita Inc. runs the farm, the Central Azucarera Tarlac, the mill.

According to local papers, both CATLU and ULWU had filed a notice of strike with the Department of Labor and Employment (DOLE) citing illegal retrenchments, deadlock in the collective bargaining negotiations - alleging management's refusal to bargain - and the limited workdays given to workers. Farm workers had also complained about their daily wage of 9.50 Filipino pesos.

When negotiations reached a deadlock on 6 November, workers from the mill's boiling section, members of CATLU, walked off the job and, along with members of ULWU, picketed the mill gates. Already in the first day of protest, some clashes with the police were reported.

As early as 7 October, it appeared that negotiations had stalled. The Department of Labor and Employment (DOLE) ordered management of Hacienda Luisita Inc. (HLI) and the United Luisita Workers Union (ULWU) to maintain the status quo in the sugar estate, after ULWU had filed a strike notice before the National Conciliation and Mediation Board on 30 September protesting the retrenchment of the 327 workers, and accusing management of union busting. DOLE ordered the workers to return to work within 24 hours, and ordered management to readmit all workers on the same terms and conditions, in case that a strike had started after the order was issued. The DOLE also directed the National Labor Relations Commission to resolve the dispute between the HLI and ULWU within 30 days, and, at the same time, ordered the police to enforce its decision in case one or all parties refuse to comply, reported local papers on 23 October. DOLE had assumed jurisdiction on the dispute but also called the police, and the military, to intervene in an industrial dispute.

Mid afternoon of 16 November, ten days after the strike had started, the anti-riot police attacked the workers with teargas and water cannons, said reports. From the strikers' group, some responded with slingshots, rocks and Molotov bombs. The clash lasted for about 40 minutes, and gunshots were heard. The violent dispersal of the striking workers produced a fatal outcome: at least seven people dead, probably as many as 14.

According to the agreement reached on 26 November, the parties would put aside the issues of retrenchment and the deadlock on collective bargaining agreement (CBA) negotiations, which had led to the strike. The retrenchment of workers will be referred to the National Labor Relations Commission (NLRC) and the unions agreed to set up a joint committee to negotiate with management.

In the aftermath of the Luisita killings, the House of Representatives heard that former President Corazon Aquino might have "abused" her power to prevent the implementation of the Comprehensive Agrarian Reform Law in Hacienda Luisita, owned by her family, the Cojuangcos, by issuing a special executive order which introduced a "stock-distribution option" (SOD). A big portion of Hacienda Luisita (about 4,900 of its 6,000 hectares) was classified as agricultural land and put under the Hacienda Luisita Inc. (HLI), a spin-off the Tarlac Development Corp. (TADECO). Then, in May 1989, the HLI adopted the SOD based on an agreement between TADECO, HLI and the farm workers. Under the agreement, some 5,000-farm workers were entitled to a third of the corporation's stock, in fact becoming shareholders. A Reuters report on the Hacienda Luisita killings said that farmers had always considered the SOD unfair and demanded full land reform.

According to the country's Sugar Regulatory Administration, the Central Azucarera Tarlac (CAT) produces about 75,000 tonnes of sugar per year, but Hacienda Luisita is reported to operate the biggest sugar refinery in Luzon. The CAT was incorporated in 1927, and became one of the first sugar producing companies to be listed in the Philippine Stock Exchange. It produces sugar, alcohol, molasses, and liquefied carbon dioxide.

In early November, The Philippine Star reported that San Miguel Corp. (SMC), the food and beverage conglomerate, was ready to spend some 5 billion Filipino pesos (USD 89.1 million) in acquiring a majority stake in Hacienda Luisita, which could house the raw materials San Miguel needs and also be a distribution centre. San Miguel said a couple of years ago it plans to broaden and diversify its revenue base and improve its distribution network. Analysts said that acquiring Hacienda Luisita would fit into SMC's strategy.

Hacienda Luisita is located in Tarlac City, some 120 km north of Manila in Central Luzon Valley. (With reports from IUF Asia/Pacific, The Philippines Star, Manila Times, Manila Bulletin, Today.)
The IUF general secretariat has sent a letter to President Gloria Macapagal-Arroyo condemning the killings at Hacienda Luisita. The letter is available in the IUF web site. The IUF Asia/Pacific region issued a statement available here.

Central Azucarera de Bais

Meanwhile, the union at the Central Azucarera de Bais (CAB) in Bais City, Negros Oriental, with over 360 members, received a mandate to strike from a 315-3 vote in early November, if collective bargaining negotiations and talks on the retrenchment of workers produce no results. The union said that employment for 36 workers in the refinery and 80 railroad workers was terminated, but the company hired new workers on a contractual basis. A strike seems quite probable, after a series of conciliation meetings, with the participation of the National Conciliation and Mediation Board, failed to produce an agreement.

The union had filed a strike notice before the Department of Labor and Employment (DOLE) in October, and then the company proceeded to dismiss the said workers on 25 October, including a union leader.
In a press interview, representatives of CAB Employees Union (CABEU) said the union had proposed wage increases of 40 Filipino pesos (US 70 cents) in the first year, 30 pesos (US 53 cents) in the second, and 20 pesos (US 36 cents) in the third year. Also, the union demanded a "living" bonus in addition to the 13th month-pay.

From their side, management said that they have offered workers a weekly productivity bonus, in addition to the 13th month, and proposed wage increases based on merit. Management also said that the retrenchment of the 36 refinery workers, including a union leader, is part of the automation program started in 2001, and that the 80 railroad workers are daily-paid workers, who have the possibility of being recalled. (Based on Inquirer News Service, Internet, 29 November 2004.)

United States: Job Losses in US Sugar

Between 300 and 350 jobs would be lost when US Sugar Corporation closes the Bryant mill (Pahokee, Florida) in early 2007. The mill, listed with an 18,000 tdc, was built in the early 1960s. The company announced the decision on 2 November, and added that over the next three years, and with a "substantial investment," it would enlarge and automate its Clewiston plant, which dates from the 1920s. Clewiston will expand its current 24,000 tdc to 38,000 tdc. Clewiston also has a refinery of 2,400 tonnes of daily melting capacity.

Trade sources said US Sugar presently employs 2,100 people, and top-level management said that the labour force would decline to between 1,500 and 1,600 when the Bryant mill closes. Severance packages for Bryant workers would be decided in the upcoming collective bargaining negotiations, although not all the employees who would lose their jobs are union members, said management. It was also reported that some jobs would be lost in Clewiston.

Company spokespersons said that the move is to prepare the company to compete in a more open market, making reference to the North American Free Trade Agreement (NAFTA), which, by January 2009, would open borders with Mexico, and the highly debated but not yet approved CAFTA, the free trade agreement with Central American countries. Lower sugar consumption in the country, was also cited as a reason to consolidate, automate and reduce costs.

US Sugar Corp. accounts for about 10 percent of the total US sugar production (estimated at about 7.5 million tones in the 2004/05 season), which is obtained from the cane grown in some 67,000 hectares of company-owned or leased land. US Sugar is also involved in orange juice production.

Sugar Trade: CAFTA Without the Dominican Republic?

The Bush Administration may drop the Dominican Republic from the free trade agreement with five Central American countries (CAFTA) because of a 25 percent tax on soft drinks sweetened with corn syrups (HFCS), which was recently passed by the Dominican Congress. The US Trade Representative Robert Zoellick said he has asked the US International Trade Commission to make an assessment of CAFTA without the DR, but also said he is hopeful that the DR would repeal the tax and get included in the deal. Immediately after the tax-package law, that includes the HFCS tax, was passed, the Dominican President sent an amendment to Congress to eliminate it. The US had warned the DR that the HFCS-tax was a protectionist move against CAFTA.

IUF International: Guyanese and British Sugar Unions Meet

A working meeting with the participation of GAWU and NAACIE, the two Guyanese sugar unions, and T&G and GMB, the two British sugar unions, took place on 22 November at the Transport & General Workers Union House in London, UK. It was the first time that all the sugar unions from the two countries met, reinforcing union contacts between the two industries which share long historical and economic links: the sugar exported from Guyana to the European Union is refined at the Tate & Lyle (T&L) refinery on the Thames.

The meeting reacquainted the unions and they shared their concerns about the proposed reforms to the EU sugar regime, learned about the Guyanese sugar situation, and agreed on future activities to support union work.

Attending the meeting were representatives of the national office of the T&G, a representative of the workers of British Sugar, and T&G research department. For the GMB, there were delegates from the Thames refinery, T&L's Food & Industrial Ingredients Europe (Amylum), which specialises in cereal starches and sweeteners, and from the research department. Also in attendance were the 1st vice-president of the IUF Agricultural Workers Trade Group and the global sugar coordinator.

It did not pass unnoticed to the unionists attending, that in addition to being a meeting of all sugar unions from countries whose sugar industries have centuries-old history, the meeting had key sugar and sweetener representatives from the two British unions which organise in the sugar sector: T&G in the beet sugar processing (British Sugar) and GMB in the cane sugar refining (Tate & Lyle). The meeting also allowed a discussion on the EU sugar regime among British unions.

Health and Safety

Honduras: Fifteen Died in Cane Fields Fire

On 29 November, fifteen people, including eleven children age 7 to 17, died when cane fields of the Azucarera Choluteca mill were being burned before their harvest. The victims lived in Santa Cruz, a sugar town in the Marcovia municipality, in southern Honduras.
According to police reports, the children and adults were hunting rabbits and other small animals that leave the fields when these are burned, but the fire spread from one burning field to a neighbouring one, trapping them. Employees did not realise the children were in the fields, until they heard their screams and family members tried to rescue them. (With reports from La Prensa and The State.)

Malawi: Aerial Spraying Stopped in Nchalo Sugar Estate

Aerial spraying of cane ripeners, reports the IUF coordinator for health & safety and the environment, has been a routine exercise in Nchalo sugar estate, one of the two sugar plantations in Malawi owned by Illovo Sugar.

During a "training of trainers" program organised by IUF, participants from Nchalo and Dwangwa reported aerial spraying of chemicals in their estates, suspecting harmful effects on the workers, the neighbouring communities and the environment. As part of their training, the sugar delegates were to find information on the type of chemicals used, the area under coverage, and possible effects on the community. In related activities, representatives of the Sugar Plantation and Agricultural Workers Union of Malawi (SPAWUM) in the health and safety committees in Illovo Sugar's operations, which include worker representatives, also raised the issue with management. Although management has not provided the union with information on the matter, the union reports that aerial spraying has since stopped in Nchalo, in part because of their continued efforts to obtain more information, as workers and the union exercise their basic right to know and to participate in health and safety programs.

The IUF has been involved in "training the trainers" on health and safety and the environment for some time, with a recent program on pesticides finalizing in March 2004. The program had the participation of some fifteen delegates from three IUF affiliates in Malawi, which organise in the tobacco, sugar and tea sectors. At present, the trainers conduct grassroots education activities to raise the awareness of workers and local management on the hazards and risks that pesticides poise to people and the environment. (Based on a report from Amuko Omara, IUF Coordinator for Health & Safety and the Environment, prompted by an article on aerial spraying of malathion in cane areas of Trinidad, which appeared in Sugar Worker, October 2004.)

Company News

South Africa: Strong Rand Hit Illovo's Profits

Illovo Sugar has reported a 32 percent fall in profits for the six months ending 30 September because of the strong South African rand and dry weather conditions in South Africa. The South African rand has appreciated by 11 percent against the US dollar in 2004, with gains larger than in 2002 and 2003.

Illovo Sugar also operates in Malawi, Zambia, Swaziland, Tanzania, and Mozambique, where weather conditions for cane growing were favourable, and operations are expected to surpass previous year's levels. Illovo Sugar estimates to produce 1.8 million tonnes of sugar in the current season ending in March 2005, down from the 2.2 million tonnes of last year, in part because of adverse weather conditions in South Africa, and the sale of the Gledhow mill, refinery and estate (in South Africa) and Monitor Sugar (United States) in 2004. These sales are part of a strategic re-alignment of Illovo's assets.

In mid October, Illovo's managing director said that the company is ready to invest 500 million South African rands (USD 86.5 million) in expanding production in its existing operations and acquiring further facilities in the African countries in which it already operates. Some African countries have more possibilities to improve sugar production in comparison to South Africa said the managing director, citing the example of Zambia, where agricultural yields average 120 tonnes of cane per hectare per year, with sucrose content as high as 15 percent. In contrast, the Gledhow estate in KwaZulu-Natal, which Illovo sold to a black empowerment group, produces 50 tonnes per hectare per year, with sucrose content of 12.5 percent. Commentators said that yields in other African countries where Illovo operates, are similar to Zambia's.

Brazil: COSAN Group Strengthens its Position

The COSAN Group, reckoned as the world's largest sugar and alcohol company, has raised USD 200 million through bonds issued in the United States and Europe, in an operation coordinated by Morgan Stanley and Credit Suisse First Boston. Most of capital raised would go into restructuring debts, which in large part are short-term obligations.

COSAN reports annual revenues of USD 700 million, which it plans to increase to USD 1 billion in the next two years. COSAN owns 12 mills, a stand-alone refinery and two refineries attached to mills. Three of the mills are a joint investment with Tereos, the result of a merger of the French groups B�ghin-Say and Union SDA. COSAN has a capacity to process over 28 million tonnes of cane, and produces 2.3 million tonnes of sugar and 1 billion litres of alcohol. (If all the cane were allocated to sugar production, local sources said, Cosan would produce some 3.6 million tonnes of sugar, which would make it the world's second largest sugar producer, after the German S�dzucker.) COSAN has also invested with Crystalsev and Nova America in port facilities in Santos.

Danish SiD to Support Sugar Worker

The Danish union SiD has agreed to support to the publication of the Sugar Worker/Trabajador Azucarero in 2005, a main tool to create a common understanding of sugar issues and solidarity among IUF sugar unions, and as a follow-up of the global sugar conference, which recommended its use in collecting and disseminating information. It was also at the conference that the SiD delegate underlined the "use and usefulness" of the publication. Many thanks.

The IUF welcomes the support from SiD, especially as the Sugar Worker would anchor the redevelopment of the sugar section in the IUF web site. The IUF Sugar Workers' Network Website (a working title) would be launched in January 2005.

As our readers may have noticed, several have sent us comments and information to supplement published articles, some sent corrections - meaning they actually read it -, others offered to, or were cajoled into, contributing on a quasi-regular basis. The new sugar web site and the Sugar Worker/Trabajador Azucarero will provide us with further opportunities to improve and expand the participation of the affiliated unions in the IUF global sugar work.