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CHILE: Copper Miners’ Strike May Set a Precedent for Labour Rights

Daniela Estrada

SANTIAGO, Jul 30 2007 (IPS) - The 35-day strike by roughly half the 28,000 subcontracted workers at Chile’s state National Copper Corporation (CODELCO) may set a precedent for labour rights in the country, experts say.

This Monday “the basis of an agreement,” which must be ratified by all the striking workers, was reportedly reached between the company and strike leaders. The conflict broke out on Jun. 25, and the Chilean Catholic Church’s bishops’ conference has acted as a mediator.

CODELCO is the world’s largest copper producer, extracting 1.78 million tons of refined copper in 2006, and is the main contributor to Chile’s state coffers. About 17,000 people are employed directly by CODELCO, while there are more than 28,000 contracted and subcontracted workers.

On Monday, contracted and subcontracted CODELCO workers blocked the road from the city of Calama, in the northern Antofagasta region, to the Chuquimata mine. Two people were injured and 18 subcontracted workers were arrested.

The Public Ministry (office of the public prosecutor) appointed a special prosecutor to investigate this and other acts of violence that have taken place in the context of the strike, at the request of the executive president of CODELCO, José Pablo Arellano, who on Friday Jul. 27 reported losses of about 40 million dollars due to damages and lost production.

The striking workers are demanding the same wages for the same work as employees working directly for CODELCO. According to articles in the press, subcontracted workers earn between 183,000 pesos (nearly 400 dollars) and 1.7 million pesos (over 3,000 dollars) per month, depending on their job description.

The core issue is labour discrimination within the company, permitted by loopholes in the law on subcontracting or outsourcing, which entered into force in January this year, Martín Pascual, an economist with the Chilean Labour Observatory (OLAB), of which the non-governmental Centre for National Alternative Development Studies (CENDA), Fundación Sol and Oxfam are members, told IPS.

“This law allows workers to be subcontracted within the company’s primary area of activity, which permits a situation to arise where direct company employees are earning three times as much as subcontracted workers doing the same job,” said Pascual.

“The CODELCO conflict is indicative of what could happen in every other economic activity. That’s why business owners are so concerned about it,” said Pascual, referring mainly to the future of collective bargaining, which at present is restricted to each individual company and is not allowed between companies or across productive sectors.

Since inter-company bargaining is not permitted by Chilean law, a number of analysts have pointed out that the negotiations between CODELCO and the subcontracted workers is not actually legal and could set a “bad precedent.”

Tension among business associations has grown because the government of President Michelle Bachelet has announced it will send a draft law to Congress to widen the scope of collective bargaining and increase unionisation.

In 2006, 8.6 percent of salaried workers had the benefit of collective bargaining, while the unionisation rate was 12.9 percent for men and 7.5 percent for women. In the mining sector, however, over 90 percent of employees were unionised.

“The mining companies are on the alert for the repercussions (of the CODELCO strike). In the rest of the marketplace, this conflict and others which have emerged recently are seen as organised pressure to reduce subcontracting and change the rules of collective bargaining,” said Rosanna Costa, of the non-governmental Freedom and Development Institute, linked to the rightwing opposition alliance.

The economist said in an opinion column published this Monday by the newspaper El Mercurio that “investment decisions (meaning how much to invest, particularly in labour) are becoming increasingly pessimistic because of expectations about future legal reforms, affecting collective bargaining, that have been announced.”

On Jul. 23 the state mining company reached an agreement with nearly half the subcontracted workers, but the rest, who belong to the Confederation of Copper Workers (CTC) led by Cristián Cuevas and linked to the Communist Party, were not satisfied with the deal.

The agreement offered an immediate bonus of 450,000 pesos (900 dollars) and changed the terms of the contracts with contracting firms so that subcontracted workers would get productivity bonuses, health insurance and other benefits.

But this opened up a further debating front, since it was not clear who would pay for the benefits, CODELCO or the contracting firms, which have been criticised for not participating in the conflict negotiations.

On Jul. 26, the worst disturbances since the beginning of the strike took place in the Andina and El Teniente divisions of CODELCO, two of the five divisions operated by the company.

Subcontracted strikers hurled rocks at buses transporting workers to El Teniente, who abandoned the attempt to get to the mine because it was too dangerous and demanded greater security. At Andina, masked protesters derailed a train carrying copper concentrate, which spilled half a tonne of its freight.

CODELCO’s El Salvador mine has been shut down throughout the strike, because of picketing by strikers.

President Bachelet deplored the violence and backed the management of CODELCO, although analysts say that the conflict has again shown up differences within the centre-left Coalition for Democracy which has been in government since 1990. According to press reports, different cabinet ministers have clashed over their support for opposite sides.

The escalating violence moved the Chilean Catholic Church to issue a statement on Jul. 18 which was sympathetic to the workers’ position.

The Episcopal Conference’s declaration, “Fundamental Challenges in Recent Labour Conflicts,” said that subcontracting or outsourcing has become a widely-used mechanism to drive labour costs down and boost the productivity of companies, to the detriment of working conditions and equal pay. Unfortunately, under this regime, working conditions are often neither decent nor just, the statement said.

Cardinal Francisco Javier Errázuriz, for his part, said on Jul. 25 that state companies “should set an example” on labour issues.

High international copper prices, driven mainly by the huge demand from China, have brought CODELCO enormous profits in recent years. In 2002 sales reached 3.5 billion dollars while in 2006 they were worth more than 17 billion dollars, contributing 8.3 billion dollars to Chile’s state coffers.

At present 40 percent of CODELCO’s copper is exported to Asia, 33 percent to Europe, 17 percent to North America and 10 percent to South America.