A Cautious Case for OECD Guidelines for workers rights

On 22nd January 2016, Pragatisheel Cement Shramik Sangh (PCSS), a union affiliated to the Chattisgarh Mukti Morcha, signed a landmark settlement with LafargeHolcim, the Swiss cement giant. PCSS represents contract workers across four plants in the state of Chattisgarh. Though the struggle initially began more than 25 years ago, a solution was only achieved through the use of an international mediation process based around the OECD guidelines for multinational companies.

PCSS was founded in 1989 with the aid of the legendary Shankar Guha Niyogi. Niyogi helped lead the movement for the contract workers at the cement plants for regularization, wages and better working conditions. Niyogi was assassinated a few years later but the fight continued. Back then, the plants were owned and run by Ambuja and ACC or their previous avatars. Ambuja and ACC use a ‘bogus’ contractor system to prevent workers from being regularized but finally in 2006, the Industrial Court passes an order in the favour of PCSS and ordered regularization and reinstatement of workers who were coerced into taking VRS. Holcim (which become LafargeHolcim after a 2015 merger) ‘inherited’ the struggle when they took over the units in 2006. For the next five years, the tactics employed by the management were violent and crude. PCSS fights both in the courts and on the factory floor. A timeline of the struggle is available here.

Finally, frustrated by the management’s refusal to hear them and negotiate, they approached the National Contact Point (NCP) in Switzerland in 2012. The NCP is a mediator or ombudsman created by the Organisation for Economic Co-operation and Development (OECD) to handle complaints about companies accused of violating their guidelines. PCSS wrote a letter of complaint to the Swiss NCP indicating their issues. They alleged that Holcim had violated the rights of workers to organise into a union, refused to enter into collective bargaining agreements, discriminated in the wages between contract and regular workers and abused the human rights of communities around the plants. Their full letter can be found here. Each of the previously mentioned points is a violation of the guidelines drafted by the OECD.

“After the matter went to the NCP, the company at the highest level was forced to recognise our union and enter into negotiations,” said PCSS lawyer Sudha Bharadwaj to swissinfo.ch. “Only after complaining to the NCP was Holcim ready to talk to us,” he said. “Before that they thought nothing of us.”

The NCP organized a meeting between the union and the international management of Holcim. Shalini Gera, activist and legal adviser of PCSS, worked to bring the problem to the attention of the Swiss media. Together with Swiss union UNIA and Swiss-based human rights organisation MultiWatch, solidarity organisation Solifonds, the BWI and ICEM (now merged into IndustriALL), PCSS increased awareness through various channels. While Holcim did not like this, they still came to the table because the NCP’s negotiations are informal and private. They would at least avoid getting more negative press. IndustriALL provided funds for PCSS to attend these negotiations in Switzerland.

But the NCP mediations do not guarantee any results and even after two meetings, there was no clear outcome. For 3 years after the initial complaint was made, numerous steps were taken by IndustriALL in Switzerland and PCSS in Chattisgarh. Harassment and jailing of union leaders were still regular. The NCP gave a final statement in mid-2014 but continued to monitor the situation every six months. Finally, after the merger of Holcim and Lafarge in 2015, and a change in their international management, a settlement was signed in 2016 that regularized hundreds of workers and fixed their wages based on experience and Cement Wage Board regulations.

This victory is a landmark event in the history of Indian labour disputes. It opens up avenues for more unions to take up issues using the OECD’s resolution mechanism. The full guidelines for multinational enterprises are available here and there are specific industry-level guidelines for Mineral, Extractive, Agricultural and Garment industries. These industry-level guidelines provide the framework for what kind of due diligence has to be done by multinational companies regarding their international supply chains. For example, in the garment sector, the due diligence guidelines discuss issues of child labour, sexual harassment and migrant workers rights.

There are 35 countries that are a part of the OECD. All of them plus 11 others have ratified the OECD guidelines. So these guidelines apply to Australia, Canada, England, United States, Japan and Korea, among others A full list of all the National Contact Points for complaints can be found here.

But the process is far from perfect. An article in the Guardian lists a number of instances where NCPs have sided with the companies and dismissed cases or have found that no violation of OECD guidelines took place. “The whole process has left us with big questions as to whether or not it’s even worth bothering with these complaints”, the writer says. So, taking into account the experiences of the villagers of Thervoy who tried unsuccessfully to take on Michelin, this dispute resolution mechanism can be considered a flawed but possible route to be considered in the future.

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