Appendix 10
TNCs and the Workers’
Struggles
in the Philippines
Dr. Edberto Villegas
A Short History of
Foreign Investment
in the Philippines
Global corporations or transnational
corporations (TNCs), mostly American, began gradually to dominate the
Philippines economy during the American colonial period (1900-1946). By
1929, American investments overseas stood at US$17 billion with US$80
million of these in the Philippines. In addition to being a trading post
in Asia, the Philippines was becoming for American capitalism an inviting
place for investors’ profits. During the American colonial period in the
Philippines, apart from its control of the copra and abaca industries,
U.S. capital began to finance the mining of gold and copper in the
mountains of Bontoc, Kahnga-Apayao Province, through the assistance of
the U.S.- established Bureau of Mines.
American soldiers found lucrative
economic opportunities
iii the
Philippines. The Benguet Corp. was established in 1903 by two American
soldiers and an American restaurateur. Incorporated as Benguet
Consolidated Mining Co., S .A., it started as a gold mining firm.
Some of the other leading TNCs set up
before the Second World War in the country were San Miguel Corp. (1813),
brewery: Findley Miller Lumber (1915), logging: Hawaiian
-
Philippine Co. (1920), sugar refining/sugar plantation; Caltex (1921),
oil-gasoline: Del Monte, Philippines (1926), canning of pineapple juice;
Phimco Industries (1927), light matches.1
After 1946, American TNCs proliferated
in the Philippines, not only because of the expansion of U.S. investment
worldwide at that time, but also due to the attraction of the parity
rights offered to American business. Parity rights gave special treatment
to American businessmen in terms of equal rights with Filipino citizens to
exploit the natural resources of the country. Though parity rights were
supposed to be officially terminated in 1974, the Marcos government at
that time, especially during the martial law era, substituted for it other
laws that. again extended formidable advantages to foreign investors.
These laws will be discussed later.
The introduction of the import
substitution program by the International Monetary Fund-World Bank (IMF-WB)
in developing countries in the l950s facilitated the entry of more
manufacturing TNCs into the Philippines, such as Procter and Gamble,
Roche, Bristol Laboratories, Wonder Inc., S. C. Johnson & Son, Upjohn,
Philaeor and Mariwasa Manufacturing. By t965, about half of the
Philippines’ total foreign investments of P4.226 billion (US$156.2 million
at the exchange rate of P27
=
US$1) were in manufacturing.2
During the martial law period, there
was a greater influx of foreign investment into the Philippines because of
the open door policy of Marcos. By 1978, of the 743 foreign wholly owned
corporations, which were incorporated abroad and which acquired licenses
to operate in the Philippines, 144 entered the country after the
declaration of martial law in 1972.
With the ratification of the
Philippine-Japan Treaty of Amity, Commerce and Navigation in 1974,
Japanese TNCs also started to invade the shores of the Philippine.3
The biggest Japanese investor in the country is Kawasaki Heavy Industries
Ltd. and Kawasaki Steel Corp. operating through its subsidiary, Philippine
Sinter Corp., which has set up a US$250 million ore sintering plant in
Cagayan de Oro in Mindanao. Second in line is Mitsui Co. with its plants
in Bataan and Cebu, producing electronic products, followed by UNIDEN
Philippines, a wholly owned Japanese corporation, manufacturing
communications equipment. In addition to Mitsui, there is also Japanese
equity participation in local corporations from the largest trading
companies in Japan
- Mitsubishi,
Marubeni, Toyo Menka, C. Itoh, Nichimen, Sumitomo, Ataka, Nisako Iwai and
Kanematsu.
During the late 1960s, in line with
export-oriented industrialization (EOI) pushed by the IMF-WB as an
economic policy for the Philippine government to replace the earlier
import substitution program, free trade zones were established in the
Philippines. The first export processing zone (EPZ) was set up in
Mariveles, Bataan Province, in 1968: and by 1987, five EPZs, exclusively
manufacturing for the export market, were operating in the country.
The transnational banks (TNBs) also
came in dioves during the martial law era putting up offshore units (OBUs)
in the Philippines. Among these are Floyd Bank International Ltd.
(British), Chase Manhattan Bank (American), Banque Nationale de Paris
(French), Manufacturers Hanover Trust Co. (American), Bank of California
(American), Barclays Bank International Ltd. (American) and the Bank of
Tokyo (Japanese). Apart from these OBUs, foreign TNBs which have long been
operating in the Philippines are Citibank (American), Bank of America
(American), Hong Kong and Shanghai Banking Corp. (British) and Chartered
Bank of India, Australia and China (British). Morgan Guaranty Trust (a
U.S. TNB) is the second largest major stockholder (after the Ayala Group)
in the Bank of the Philippine Islands (BPI). Citibank and BPI are the
leading banks in the Philippines and are the depositories of most
foreign-affiliated companies (FFCs). At least 67 FFCs bank with BPI and 46
with Citibank.4
Summing up, the 1970s and the early
1980s saw the expanded growth of foreign investment in the Philippines,
though it exhibited a momentary decline from 1984 to 1985 as an aftermath
of the assassination of Benigno Aquino in 1983. With the coming of the
administration of Cory Aquino in 1986, foreign investment again increased
with Japanese capital making its presence more prominent in Philippine
business. In 1989, Japan overtook the United States in total investment
for that year (US$ 137 million vs. US$114 million
: and
in 1990, it surged even further ahead (US$266 million vs. US$52 million).5
A Short History of
the Workers’ Struggle
in the Philippines
The expanding operations of TNCs in
the Philippines have been accompanied by the cheapening of Philippine
labor. Throughout the American colonial period, the main thrust of the
workers’ struggle in the Philippines, primarily directed against the big
foreign corporations, was for economic amelioration, particularly an
increase in wages.
During the 1920s, the conditions of
Filipino workers deteriorated as an effect of the slump of Philippine
exports to the United States because of the cessation of the United
States’ intense war production that was spurred by the First World War and
which ended in 1918. Since the Philippines was primarily made use of by
the United States as a trade enclave, a decline of production in the
latter inevitably disturbed the former economy. Thousands of workers were
laid off, particularly in Manila, the trade hub of the archipelago. The
incomes of Filipino workers were further eroded by the capitalist’s Great
Depression of 1929, which led to a reduction of wages by many foreign
investors in the Philippines. With the blatant imposition of wage cuts
and piecework, the Great Tobacco Strike participated in by 11,500 tobacco
workers erupted in Manila in 1934, lasting for six weeks. However, this
strike, which was supported by the poor masses, peasants, seamen,
stevedores and other sectors, was violently suppressed with the shooting
of workers. One year after the Great Tobacco Strike, peasants in Luzon
staged the Sakdal uprising, which was likewise put down by military force
by the American colonial regime, resulting in hundreds of peasant
casualties.
As a response to the labor and peasant
unrest, Manuel Quezon, the elected president of the 1935 Commonwealth
government set up by the United States in the Philippines, launched in
1936 what he dubbed as the social justice program. There were two basic
labor reforms enacted: Commonwealth Act (CA) 103, creating a Court of
Industrial Relations (CIR) to fix minimum wages for industrial workers and
maximum rentals for tenants, and CA 213, allowing workers to collectively
bargain for wages, provided their unions were duly registered with the
Department of Labor.6
However, during the long period
(October 30, 1936, to June 1940) that the CIR had the power to improve the
lives of the working class, it never issued a single ruling fixing the
minimum wages and maximum rentals for tenants. Thus, strikes in labor
areas and collective protests in farms accelerated between 1930 to 1940.
Through their fervid struggles,
Filipino workers were able to win the eight-hour workday in 1939 with the
passage of CA 444, but the government excluded from this law the millions
of agricultural workers and industrial workers paid on a piecework basis.
After the Second World War, several
trade unions, sensing the strength of the toiling masses during the long
guerrilla war waged against the Japanese invaders, established the
Congress of Labor Organizations (CLO) in 1945. The conditions of the
workers after the war had considerably deteriorated. The Filipino workers,
aroused by their miserable plight, followed the CLO in numerous strikes
for higher wages, strict enforcement of the eight-hour working day and
other rights of workers. From July 1945 to June 1946, the CLO led 49
strikes participated in by 40,000 people, many ending in victory for the
workers.
When the CLO became nationally
influential, however, even among agricultural workers, like the
Philippine Workers’ Federation, the Quirino government with the advice of
the U.S. government banned the labor organization, accusing it of being a
communist front and arresting and killing its top leaders. The CLO’s
chairman, Amado Hernandez, was imprisoned for life and its general
secretary, Manuel Joven, murdered. Thus, the largest labor center at that
time ceased to exist.
In 1951, in an effort to appease the
continuing restiveness of the Filipino working class, a minimum wage law
was passed; and in 1953 through the so-called Industrial Peace Act (IPA),
a collective bargaining agreement between labor and management was
legalized. The elite-dominated Congress, however, fixed the minimum wage
well below the subsistence level for a Filipino family during that time.
IPA was also couched in such a way as to give so much leeway to the
capitalist class, especially the TNCs, for instance, in the provision
granting the right of the employer to enjoin a strike if “national
interest” is involved.
After the adoption of IPA, the number
of strikes all over the Philippines increased. From 1955 to 1957, strikes
declared averaged 61 annually. It was becoming clear that IPA was inutile
in eliminating the causes of industrial disputes.
When martial law was declared in 1972,
strikes were banned and labor leaders arrested with General Order No. 5;
but because of the international condemnation of this decree, Marcos
enacted Presidential Decree (PD) 442, otherwise known as the Philippines’
Labor Code of 1974, limiting the prohibition of strikes in what were
labeled “essential industries.” There was a rider, however, to this
provision, that is, if in the judgment of the minister of labor a strike
must be enjoined, then the ban could be applied to any sector of the
economy.
The Labor Code of 1974 replaced the
IPA and was meant to make business opportunities more favorable to TNCs
and for the export market. It was geared to the export-oriented
industrialization (EOI) program of the government promoted by the IMF-WB.
Consequently, the code’s manpower development and employment policy was
devised to cheapen Philippine labor for TNCs through such methods as the
apprentice programs, which legalized the payment of wages below the
minimum or allowed no wage at all (Articles 61 and 72). Through the
assistance of the World Bank, the code also provided for the expansion of
vocational schools for Filipino youth to increase the reserve labor supply
for TNCs.
Because of the totalitarian policy
against the right of workers to strike and organize, there was a
temporary cessation of strike activities from 1973 to December 1975. By
1975, labor regrouped its forces, and the first wave of strikes hit Metro
Manila when workers from La Tondea, a distillery, staged a walkout. This
was followed by a series of strikes in 30 factories involving 40,000
workers. In June 1976, another 15,000 workers followed suit. In the wake
of the political activity during the election campaign for the Batasang
Pambansa in 1978, strikes again swept over at least 12 firms in Metro
Manila, joined by 16,000 workers and shutting down a number of the
region’s hotel, garments, transport, motor and electrical industries.7
After the lifting of martial law,
Marcos introduced new labor laws to make it doubly difficult for workers
to strike. These were PD 130, which required a two-thirds vote of union
members instead of the former simple majority before a strike permit is
granted, and PD 227, which controls picketing and allows the free passage
of vehicles in a company where a strike is being held. In spite of PD5 130
and 227, however, strikes escalated to a new height during the
post-martial law period. The Marcos government reacted with ferocity
against the workers, particularly against the members of the Kilusang Mayo
Uno (KMU), the radical, nationalist workers’ trade center founded in 1980.
After the general strike in 1982 that swept the Bataan Export Processing
Zone (BEPZ), involving 20,000 workers and led by the KMU, its chairman,
Felixberto Olalia, became sick in prison and died.
Strikes were beginning to have a class
character as exemplified in the general strikes at the BEPZ. Political
demands were being forwarded by striking workers, apart from economic
demands, like an increase in wages. This was a manifestation of the
growing awareness of the working class that their poverty cannot only be
blamed on the conditions of their workplaces but more so on the whole
socioeconomic policies of the government. For example, in one of the
manifestos issued by the KMU and the PKMP (the Coalition of Workers
Against Poverty), the conditionality of wage restraint imposed by the IMF
for a loan to the Philippines was singled out as a major cause of the
starvation pay of the Filipino working class. Aside from the KMU and the
PKMP, various workers’ alliances at the territorial and line industry
levels were formed.
The increasing politicization of the
working class could be mainly attributed to better organizational and
education efforts conducted in their ranks by labor federations. For
instance, the KMU has a three-day course for its members entitled Genuine
Trade Unionism which covers the following topics: conditions and problems
of the Filipino working class; trade unionism; the movement for
liberation of the workers and the nation; and the history of the Filipino
working class.8
The working class, specifically the
KMU, was an active participant in the downfall of Marcos in 1986. Hoping
for a revision of the Labor Code of 1974 by the Aquino government, the
Filipino workers were greatly disappointed when not a single major change
of the code was enacted with the provisions on the control of the right to
strike retained.
The Aquino government, initially
proclaiming itself to be pro- worker, turned out to be a tool of big
capital after all. The progressive labor secretary, Augusto Sanchez, who
was appointed to the Aquino cabinet and who was supported by the KMU,
found himself later eased out from the government through the pressure of
the TNCs. The Aquino government’s trade secretary gladly announced to a
conference of American and Filipino businessmen that the sacking of
Sanchez would be favorable to American investment.9
Aquino, a weak president, eventually
became the spokesperson for the interests of the TNCs and their local
partners. The country began to enter a new period of economic crisis with
inflation and the debt service rising, further impoverishing the lower
masses. The onerous IMF-WB conditionalities before new loans could be
granted devalued the peso further and considerably diminished public
expenditures for social services, such as education and health. The death
squads of the Aquino military have operated with impunity, assassinating
union and mass leaders
-
notably Rolando Olalia, the KMU
chairman who replaced his father, Felixberto, and Lean Alejandro, a
leading official of the People’s Party (Parlido rig Bayan), the
nationalist political party that was formed in 1986.
In spite of the systematic suppression
of the worker’s movement, general strikes continued to erupt in 1987, 1990
and 1991. Though scores were arrested and killed among their ranks, this
has now intimidated the working class to fight for their rights against
the exploitation of capital and for true independence (a political demand)
for the Philippines.
At present, the working class in the
Philippines can he arrayed according to what we can call the progressive,
the conservative and the independent unions. The progressive unions,
according to my definitions, are those who are critical of the current
socio- economic structure of the Philippines, particularly of the
dominance of TNCs and the IMF-WB in the economy, while the conservative
bloc accepts the present system and supports the Aquino administration.
The independents arc composed of congeries of unions with different
perceptions of Philippine society and are swayed either to the progressive
or conservative camps.
Of the 12% unionized members of the 12
million wage workers in the Philippines, the progressives claim 43% or
2.1 million workers. These include the KMU (branded by the government as a
communist front), a labor center which is an umbrella group for the
following unions: the National Association of Trade Unions (NATU), Trade
Unions of the Philippines and Allied Services (TUPAS), LAND (a federation
for Filipino seamen), BUSINA (an alliance of jeepney drivers), COURAGE (an
alliance of government workers). ACT (Alliance of Concerned Teachers), the
Alliance of Hospital Workers and several other unions. The conservative
group, which claims 34% or 1.2 million of the total Filipino workers, has
under it the Trade Union Congress of the Philippines (TIJCP), a labor
center organized by Marcos; the Federation of Free Workers (FFW);
Pagkakaisa ng Demokratikong Manggagawang Pilipino (Unity of Filipino
Workers); National Congress of Farmer Organizations (claiming 200,000
membership); and Lakas ng Manggagawa Labor Center (Workers’ Strength Labor
Center). The independents have around 24% of the total workforce of the
Philippines.10
The progressives and conservatives
have united regarding demands for wage increases, though the amounts of
the asked-for wage hikes vary between them. This is because the Filipino
workers receive a miserable daily wage (US$2.79),11 lower than
those of other workers in Asia, except China. The conservatives, however,
have always balked when a general strike on wage increases is about to be
launched. Not one of their leaders has been arrested by the Marcos or
Aquino governments.
Current Government
Policies
Related to Foreign
Investments
Amid the continuous repression of the
workers’ struggle (there were a total of 58 cases of trade union
repression during the first five months of 1990 alone),12 the
Aquino government has, on the other hand, extended greater privileges to
TNCs in the Philippines. It just recently (1990) passed the Foreign
Investment Act (RA 7042) allowing the entry of foreign investors into
sectors in industry in which they were formerly limited only to 40%
ownership. With the law, foreign investments can have 100% equity
ownership in practically all areas of Philippine business. Under the
Marcos administration, 100% foreign ownership was barred from the
so-called non-pioneer industry areas, which refers to economic sectors
where sufficient local capital has already been invested. Although the
new Aquino law has a provision (called the Foreign Investment Negative
List) which spells out three lists of exclusion (Lists A, B and C) from
100% foreign ownership, this provision has a rider. To cite: “Amendments
to Lists B and C: (List B refers to investments related to weapons and
armaments, morals and public health, and List C refers to the non-pioneer
areas.) After promulgation and publication of the first Regular Foreign
Investment Negative List at the end of the transitory period, amendments
shall not be made more often than once every two years.” List A of the
Negative List refers to areas of activities reserved to Philippine
nationals by mandate of the Constitution and specific laws.13
In addition to the new foreign
investment law as discussed in the foregoing, all the other laws favorable
to foreign investment adopted during the Marcos regime were retained.
These are the Investment Incentives Act (RA 5186), the Export Incentive
Act (RA 6135) and PD 218. RA 5186 allows full repatriation of profits and
dividends and generous tax exemptions while .p RA 6135 offers attractive
incentives, e.g., the control of strikes, cheap labor and rentals on land
and other infrastructure provided by the government in the free trade
zones. A particular provision in PD 218 exempts TNCs’ headquarters from
submitting financial statements to the Securities and Exchange Commission
(SEC) of the Philippines.14
As was the case during the Marcos
period, there are certain types of foreign firms given priority by the
Aquino government to borrow from local banks. Based on a descending
percentage of a debt to equity ratio, among these firms are: Group A with
a 60:40 ratio, which includes (a) firms registered under the Investment
Incentives Act and Export Incentive Act, (b) firms registered with the
Export Processing Zone Authority, (c) Central Bank certified
export-oriented firms and (d) firms entitled to incentives under other
laws or PDs; Group B with a 55:45 ratio, which includes firms engaged in
other manufacturing activities; and Group C, 50:50 ratio-firms engaged in
non-manufacturing activities.15 The preference of the
government for foreign firms in its policy for local lending has adversely
prejudiced medium- and small-scale Filipino businesses without foreign
equity.
In 1988, added to provisions in the
Philippine Labor Code which provide undue advantages to the capitalist
class, particularly the TNCs, was the so-called Herrera Law (after its
author Sen. Ernesto Herrera, former general secretary of TUCP). The
Herrera Law abolished the setting of a national minimum wage and instead
allowed different regions (12) of the Philippines to decide on their
specific daily wages for workers in their territories. This law extended
the period of a collective bargaining agreement or CBA from three to five
years, which is favorable to management since workers will have to wait
for a longer period of time before they can negotiate for a new CBA.
The Present Dominance
of TNCs
in the Philippine
Economy
A 1987 survey made by IBON Databank,
the leading private research institute in the Philippines, which conducts
regular studies on TNCs and TNBs in the Philippines, shows that there are
811 foreign and foreign-affiliated companies (FFCs) in the Philippines.16
TNCs, in addition to direct equity participation, have entered into
the following forms of arrangements with domestic corporations:
loan/credit arrangements, licensing agreements, management contracts,
technical assistance contracts, marketing contracts, recipient of foreign
raw materials and subcontracting agreements.
Of the 811 firms, 747 have links with
TNCs and TNBs in the form of licensing agreements, management contracts,
technical and service contracts, subcontracting arrangements and other
kinds of links. TNCs dominate six sectors of the Philippine economy:
agriculture, mining, manufacturing, public utilities (electricity, gas and
water), transportation, communications and finance. In the manufacturing
sector, TNCs have a monopoly in the production of food, garments,
household appliances and intermediate industry goods. Purefoods
monopolizes meat processing; Kraft Foods controls the manufacture of
cheese and butter; and Golden Donuts (franchise holder of Dunkin’ Donuts)
and California Manufacturing Co. monopolize the manufacture of bakery
products.
Toyota and Mitsubishi dominate the
assembly of motor vehicles, and Texas Instruments and Mitsui monopolize
the manufacture of electronic products for export. In the mining
industry, the leading FFCs with links with TNCs are PASAR copper smelting
plant in Leyte, Atlas Consolidated Mines in Cebu, Philex Mining Corp. in
Benguet and Kawasaki ore smelting plant in Mindanao. Caltex and Shell with
the Philippine National Oil Co. (PNOC), a government corporation that
always supports the appeal by Caltex and Shell for an increase of oil
prices, of which there have been 21 such oil price hikes since 1971, enjoy
power over the oil sector.
Thirty-four TNCs out of 42 firms in
the manufacture of drugs and medicine control the industry. Among these
are Johnson and Johnson Philippines Inc., Wyeth-Suaco Laboratories Inc.,
Mead Johnson Philippines, Abbott Laboratories Philippines, Warner-
Chilcott Laboratories and Squibb.
The garments industry is also under
foreign domination. Filsyn has a monopoly of fiber and filament mills
manufacturing; Litton Mills and Allied Thread Co. control the spinning
mills; and Gelmart Industries maintains dominance over the embroidery
portion of this industrial sector.
The TNCs and TNBs in the Philippines
have been amassing high profits in spite of the on-going economic crisis
in the Philippines generally brought about by the debt burden of the
country, which presently stands at US$29 billion. A 1987 survey of U.S.
TNCs by the American Chamber of Commerce revealed that the total average
earning of U.S. TNCs during the last five years reached P1.55 billion
(US$57.4 million) and profit repatriated abroad was P973 million (US$36
million). This means that, for every peso earned by U.S. TNCs in the
Philippines, 84 cents was sent hack to the United States.17
The operations of TNCs have brought
about the maldevelopment of the Philippine economy. Trade enclaves, like
urban centers with modern ports and free trade zones
-
favorite Sites for TNCs
- exist side by side with
depressed rural areas. TNCs and TNBs invest where profits are highest and
resources are abundant and cheap rather than for the economic development
of the host country. They pass off this kind of economic choice as the
best development policy for the Philippines through the recommendations of
the IMIF-WB to the Aquino administration. It is to be noted that the IMF
borrows heavily from the TNBs and that the TNCs are leading depositors in
the World Bank. The name of the game that the IMF-WB promotes in
developing countries is competitiveness in the international market, which
is presented as the basis for efficiency and industrialization. And
competitiveness, according to the IMF, requires the least government
intervention so that business can do whatever it deems most lucrative.
Thus, wages in the Philippines are controlled, based on the letter of
intent to the IMF, since it is argued by the government that a rise in
wages will adversely affect the cost of production of private business and
cause inflation. The government ignores the fact that labor in the
Philippines constitutes only 5% of the cost of production, compared with
the cost of capital, which eats up the greatest portion of the
expenditures of private business. At present, the Aquino government has
kept the minimum daily wage for industrial workers at P89 (US$3.29). This
is to be contrasted with the minimum daily cost of living of P172.91
(US$6.40) for a Filipino family of five to be on the poverty level.
TNCs only absorb, at most, 5%
of the total Philippine labor force of 25 million people or 1.25 million
workers. The great majority of the Philippine labor force are in
agriculture and working in firms with less than 20 workers. With the
introduction of labor- saving machinery in the assembly plants, more and
more Filipino workers have been laid off by TNCs. A case in point is the
construction of a big Japanese fishing port financed by a US$25 million
Asian Development Bank loan in Navotas, Rizal Province. The modern
facilities and equipment
-
for example, conveyor belts
- now in
operation in the port have displaced 6,000 Filipino fish haulers from
their jobs. Ice vendors doing small business in the port, the biggest in
Southeast Asia, were also eased out by the big ice plants in the
industrial zone.18
At present, there are 3,062,000
Filipinos unemployed or 8.6% of the total labor force. If one includes the
underemployed, impoverished Filipino workers and their families, it would
be higher. This state of affairs is borne out by a World Bank poverty
study in the Philippines in 1986 which points out that over the last two
decades the number of absolutely poor in the Philippines has been
increasing.19 This in the backdrop for the increasing amount of
foreign investment in the Philippines, which in 1990 stood at US$865
million.20
The waste emitted from the factory
stacks of TNCs operating in Metro Manila, particularly in the EDSA (Epifanio
de los Santos Avenue) area, have polluted the air of the city. It has been
observed that the air in Metro Manila is one of the most polluted in the
world.21
In the countryside, a notable case of
polluting the environment by a TNC is that of Kawasaki sintering plant in
Cagayan de Oro, Mindanao. It must be noted that this same plant was forced
to close down by the Japanese government in Chiba, Japan, when residents
protested against it polluting the surrounding area. Kawasaki activities
in Cagayan de Oro have caused serious cases of asthma. Residents of Ormoc,
Leyte, the location of the PASAR copper smelting plant, a Japanese TNC
subsidiary, have also complained of the pollution of the surrounding sea,
which has affected the livelihood of local fishermen.
The Del Monte banana plantation in
Davao, for its part, applied insecticides from the air to its banana
trees, which has caused bronchitis to its workers who are not provided
with masks while the spraying is going on.22 TNCs in
agribusiness in the Philippines use high-grade fertilizers which Filipino
farmers complain about as eroding in a short period of time the fertility
of the soil. To the TNCs, such fertilizers are the most effective way to
squeeze profits from the soil
iii the quickest possible time;
but for the Filipinos, the death of their soil means a more dreary life
for their posterity.
Conclusion
TNCs and TNBs have extracted more
concessions from the Aquino government over the last few years. Through
the IMF’s recommendations, prices of basic commodities, like meat,
chicken, milk, drugs (the highest in Asia), household appliances, etc.,
have been uncontrolled, causing an inflation rate of 18% in 1991. In spite
of a decrease in the price of crude oil in the international market,
Caitex and Shell have managed to pressure the government to increase the
prices of local oil, higher than oil prices in the United States. This has
resulted in the further spiraling of prices for prime commodities,
impoverishing thousands more Filipinos.
Strikes have continued to increase due
to the growing miseries of the working class. During only the first
quarter of 1990, there was a 5.6% rise in strikes, a 119.5%
increase from the previous year. The general strikes have become more
popular, the most successful in November 1990, paralyzing all the
factories in Metro Manila and involving 588 unions composed of 322,655
workers.23
The pitiable plight of the Filipino
workers is a potent condition for the effective development of class
consciousness among them. Worker-leaders should take the opportunity to
raise this consciousness to a higher analytical level which can be capable
of understanding the oppressive and irrational socio-economic structure of
Philippine society dominated by the TNCs and TNBs. With a scientific
assessment of the deformities of the Philippine economic system, which
militates against the welfare of the majority of Filipinos, the Filipino
working class, being in the forefront of social production, can serve as
the vanguard for the just restructuring of their society.
Endnotes
1. Directory of TNCs in the
Philippines (Manila: IBON Databank Philippines Inc., 1988) p. 22.
2. Ibid., p. 23.
3. Renato Constantino refers to the
influx of Japanese TNCs into the Philippines as the “second invasion” of
the country by Japan in his article “The Second Invasion,” 1988.
4. Ibid., p. 27.
5. Data from the Philippine Board of
Investments.
6. Edberto M.
Villegas, The Political Economy of Philippine Labor Laws, p. 32.
7. Nassa News, a monthly
publication of the National Secretariat for Social Action, Justice and
Peace, Vol. X, No. 4, May 1978, p. 18.
8. Panimulang Aralin sa Tunay na
Unionismo (Ecumenical Institute for Labor Education and Research [EILER],
1982).
9. Newswatch, Channel 9, Dec.
4, 1986, 6:30 a.m.
10. Data from EILER.
11. This amount was derived by
averaging the daily wages of Filipino industrial workers (P89),
agricultural plantation workers (P79) and agricultural non-plantation
workers (P58.50) and dividing by P27 which is the current
exchange rate for a US$1.
12. Data from the Commission on Trade
Unions and Human Rights.
13. From “An Act to Promote Foreign
Investments,” which prescribes the procedures for registering enterprises
doing business in the Philippines and other purposes.
14. Securities and Exchange Commission
(SEC) records.
15.
Guidelines on
Domestic Borrowings by Foreign Firms,
Circular No. 572, Series of 1977, Inter-Agency Committee on Domestic
Borrowings, Central Bank, Annex “I”.
16. In the IBON study. TNCs and FFCs
are used interchangeably. Directory of TNCs in the Philippines
(Manila: IBON Databank Philippines Inc., 1986) p.4, 10.
17. IBON TNC Directory, p.27.
18. Japan’s Economic Aid o the
Philippines from a People’s Experience (Case Study of Navotas Fishport
Project) (Manila: IBON Databank Philippines Inc.).
19. Far Eastern Economic Review,
Aug. 18, 1987.
20. Philippine Board of Investments.
21. A Russian diplomat who has been to
many parts of the world made this observation to me.
22.
The author visited this
plantation in August 1988 and talked with the workers.
23. Report by EILER.
Case Study:
The Long Struggle of
the Nestle Workers
in the Philippines
One of the well-known struggles of
Filipino workers against a TNC is that of the union UFE (Union of Filipro
Employees) against the management of Nestle, Philippines. UFE is an
affiliate of the Drug, Food and Allied Workers’ Federation (DFA), which is
a member of the labor center Kilusang Mayo Uno (KMU) or the May First
Movement.
Nestle, Philippines
-
a Swiss multinational
- dominates the milk industry
in the Philippines. It has its central office in Makati, Metro Manila, and
suboffices in Cebu and Davao, premier cities in the southern Philippines.
Its factories are located in Alabang and Cabuyao (both in south Luzon) and
in Cagayan de Oro in Mmdanao. Nestle was twelfth among the top 1,000
corporations in the Philippines
iii
1989 with net sales of P7.5 billion
(US$278 million) and a net profit of P491 million (US$18.2 million).
In 1982, when there was still no one
union representing the Nestle workers, UFE-DFA/KMU launched a sympathy
strike on the grounds of non-payment of a Christmas bonus and other unfair
labor practices. A few days earlier workers under the union NPAFW
(Nutritional Products Association of Food Workers) at the Alabang and
Cabuyao factories also went on strike due to a deadlock in collective
bargaining negotiations. The 75-day strike of the two unions, the UFE and
NPAFW, successfully ended on March 19, 1982, making their members realize
the value of coordinated mass action. The two unions merged under the UFE
in 1984 after a certification election. Thus, UFE was recognized legally
as the sole and exclusive bargaining agent of the Alabang and Cabuyao
workers.
After more than two months at the
bargaining table, UFE and Nestle entered into a collective bargaining
agreement (CBA), which went into effect on July 1, 1984, covering the
workers at the Alabang and Cabuyao factories. The CBA contained wage
increases and new fringe benefits considered to be one of the best
agreements in the industry at that time. Nestle later agreed to extend the
same benefits granted to the Alabang and Cabuyao workers to its employees
in Makati, Cebu, Davao and Cagayan de Oro. The expiry dates of all
existing CBAs in the different worksites of Nestle were synchronized to
end on June 30, 1987.
But after some time, Nestle started to
violate provisions of the CBA won by the workers’ struggle. Benefits were
withheld and gradually withdrawn by the milk company. A big number of
casual workers were hired to perform the functions of regular workers at
Nestle’s Alabang and Cabuyao plants. Harsh and rigid implementation of
company rules were enforced and the agreed-upon one-month productivity
bonus (profit-sharing) was not granted. Union leaders were also being
harassed. UFE was thus led to declare a strike again on Jan. 22, 1986, on
the grounds of numerous unfair labor practices, union busting, non-paymer1t
of legally mandated holiday pay and productivity bonus.
The strike which lasted for almost two
months was the contribution of Nestle workers in ousting the Marcos
dictatorship. The period from 1982 to 1986 was a fervid campaign against
the Marcos regime with striking workers participating in the movement. UFE
was one of the numerous unions actively involved in the campaign.
The UFE strike ended in March 15,
1986, through the mediation of the new minister of labor, the pro-worker
Augusto Sanchez, to reinstate the striking workers. Sanchez was later to
be sacked by the newly installed Aquino government because of the pressure
of the TNCs in the Philippines.
In 1987, all the unions at Nestle,
including all sales personnel in the Luzon provinces, those at the Cebu
and Davao sales offices as well as at the factory at Cagayan de Oro, were
consolidated under the banner of UFE-DFA/KMU. This move was in order to
achieve a strong position at the bargaining table vis-a-vis Nestle’s
management. Nestle workers also intensified their campaign on labors
rights and tackled national issues in symposia and rallies.
When the next CBA negotiations came
around, Nestle management was steadfast on its “first and final offer,”
which the workers saw to be unreasonable and unjust. With this stance by
management, UFE was thus forced to declare a deadlock in collective
bargaining negotiations after more than three months at the bargaining
table. On Sept. 11, 1987, UFE declared a strike. It was at this point that
Nestle revealed its real character by dismissing almost all of the
officers of UFE, numbering 70, barely four days after the strike.
At the same time, Nestle, using its
vast capital, went on a propaganda blitz in the mass media, branding the
UFE strike as communist-inspired and meant to subvert the economy of the
new Aquino government. On Oct. 20, 1987, President Corazon Aquino declared
a “total war policy” against labor in a speech before representatives
from TNCs at the Manila Hotel. She authorized the police and military to
immediately dismantle illegal barricades set up by workers in front of
strike-bound establishments.
Just a few days later, the picket
lines established by UFE at Nestle’s factories at Alabang, Cabuyao and
Cagayan de Oro were dispersed by heavily armed military personnel,
resulting in injuries to several strikers. Some workers were detained
without charges. In one of the dispersals at Cabuyao, a Nestle’s truck,
forcing its way through the picket lines, killed three innocent
bystanders. However, it was striking workers who were charged with murder
by Nestle. The strike-bound Nestle factories were virtually transformed
into military camps. The incumbent secretary of labor, Franklin Drilon,
who replaced Sanchez, did not remedy such flagrant violations of workers’
rights. It must be noted that Drilon was formerly the vice president of
the Employers Confederation of the Philippines.
In another show of influence over the
judiciary process in the Philippines, Nestle was able to secure a decision
from the labor arbiter of the National Labor Regional Commission (NLRC)
that the previous 1986 strike was illegal, and thus, the leaders of this
strike would be considered dismissed. This is a clear example of an
ex-post facto law, which is prohibited by the Philippine Constitution.
The continued use of violence and the
inducement of Nestle to the striking workers to go back to work since
their leaders had already been fired caused confusion and demoralization
among the workers’ ranks. Their fighting spirit began to falter,
especially since they had been out of work for three months already.
Because of the aforementioned factors,
the U7FE leadership declared on Dec. 16, 1987, a temporary cessation of
the strike, even if the issues which caused the strike were not yet
settled. In a spirit of reconciliation, the union leadership called for
the resumption of negotiation talks, softening its former position.
Sensing victory, Nestle turned down all of these reconciliatory moves of
the union leadership. It instituted instead a martial law type of
situation by violating existing labor laws, especially at its factories.
It also put up its own “trade union arm,” drawn from expelled UFE members
and other pro- management employees. This is a clear circumvention of the
one- union representation of workers in a Philippine establishment.
Another example of Nestle making a mockery of Philippine law is its
refusal to abide by a Supreme Court decision to release union dues
(amounting to around P3 million or US$111,000 which Nestle has illegally
withheld).
Although UFE has been temporarily set
back by the offensives of Nestle’s management with its allies in the
government, its members are once more starting to consolidate their ranks.
They have had a rich history of concerted mass struggles from strikes and
noise barrages to mass leaves. UFE has even contributed a martyr to the
cause of the working class struggle in the person of Meliton Roxas,
chairman of UFE Cabuyao Division, who was killed by an unknown assassin in
front of the Nestle Cabuyao factory on Jan. 20, 1989. All suspicions point
to the alliance of Nestle and the Philippine military in the death of
Roxas.
The struggle of UFE provides us with
the important lessons described below.
i.
Union leadership must
continue to work indefatigably among rank-and-file workers, raising their
morale, particularly the shop stewards who are in direct day-to-day
contact with factory hands. Every arbitrary action of management must be
immediately answered by a concerted workers’ action. A major reason why
there was a slackening of workers’ enthusiasm in the 1987 strike was that
the rank-and-file workers thought that the UFE leadership was losing its
steam to fight back as it was unable to react immediately to the series of
Nestle’s violations of workers’ rights during and after the strike.
ii.
Union members must be taught that it
is idealistic to simply trust legal solutions for their demands. They must
be made to realize that it is through mass action, like strikes and walk-
outs, through which they can acquire their demands most effectively.
iii.
There is an urgent need
to strengthen their alliance with other local workers’ organizations, not
necessarily confined to their own industry. This is vital because the
capitalist class has strong connections with the government. In 1990,
Nestle, desiring to firm up government support, threatened to withdraw its
additional P1.5 billion investment (US$55 million) if the Aquino regime
did not guarantee industrial peace within its company.
iv.
UFE must establish an alliance with
workers in other countries who have also been victimized by Nestle Inc. It
is known that Nestle is employing similar union-busting tactics as those
it is adopting in the Philippines in such countries as Japan, Thailand,
France and Latin America where Nestle has subsidiaries.
It is in conferences like this where
the working class in the Philippines can contribute to the attainment of
the objectives of the international working class movement. And these
objectives are to free the world from the exploitation of people by
people, the exploitation of capital over labor and for the producers to
finally share the surpluses that they create for societies.
References
1. “Analysis on the Present Struggle
of the Nestle Workers in the Philippines,” a report of the Union of
Filipro Employees (UFE).
2. Ugat, special issue (Drug,
Food and Allied Workers Federation, July 1991).
