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Decent Jobs in the International Sugar Sector Jorge Chullén, IUF Global Sugar 20 & 22March 2007 - Geneva.

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Presentation on theme: "Decent Jobs in the International Sugar Sector Jorge Chullén, IUF Global Sugar 20 & 22March 2007 - Geneva."— Presentation transcript:

1 Decent Jobs in the International Sugar Sector Jorge Chullén, IUF Global Sugar 20 & 22March Geneva

2 The Context Recent developments in the international sugar scenario have been (and will continue being) dominated by: Process of EU sugar reforms and its influence in the world sugar scenario (not only Europe) Tighter relationship between sugar and oil prices: – Brazilian ethanol price : ‘natural floor’ price for sugar – Oil prices: ‘natural ceiling’ price for sugar

3 Applied Research on Decent Jobs (EU/ACP) Decent Job framework (ILO) – Employment opportunities – Social protection – Social dialogue – Workers’ Rights Applied research  reality – Guyana, Malawi: EU/ACP – Jamaica: OSH – Mozambique: outsourcing of cane cutting operations – Union work

4 EU Sugar Reforms Complex process Reform of the CAP since Agenda 2000 Everything but Arms trade deal with LDCs From Sugar Protocol (Lome) to Economic Partnership Agreements (EPAs) WTO ruling on illegally subsidised sugar exports Enlargement of EU 15  EU 27 ( ) An European process… Proposal to reduce production by 5-6 million tonnes of sugar between , with the EU becoming a net importer Cut in support to domestic production Impact on the international trade segments

5 …with enormous implications for ACPs (African, Caribbean & Pacific countries) Cut of 36 % in preferential sugar price: Loss of revenues, and possibly market access “Accompanying measures” offered to the ACPs – financial aid “Sugar Action Plans” to be ‘nationally owned Support to improve competitiveness Diversification out of sugar Opportunity to decide what sort of sugar sector (in the ACPs) should/could be built : a vision of the future?

6 FOCUS ON THE ENGLISH-SPEAKING CARIBBEAN

7 Focus on the Caribbean Caribbean: a micro-cosmos of a traditional sugar industry and EU/ACP sugar trade relations – Export-oriented sugar economies since the 1600s – Workers and employment – Ownership: state-owned and privately-run estates – Independent farmers – Relation with state and government agencies – Cultural, social, political in addition to economics – Size of the industry: possibility of a comprehensive cover – What sort of industry can be built? Question is clearer to discuss/decide in the region than elsewhere Established working relationship between the region and the IUF global sugar program

8 In the English-speaking Caribbean everything is politics…so, the document takes politics heads-on

9 Poor leadership and management in the sector 30 years of preferential price by EU » No “unpleasant “ market features: guaranteed volume, price, indefinite period » Where did the revenue go? Back to the industry? » State-ownership of the sector Weak production structure, except Guyana (and Belize?) » St Kitts ended sugar for exports in 2005 » Trinidad : last harvest in 2007? » Uncertainty over Jamaica’s sugar state-owned sector » Barbados: a reality or a mirage? Future: would this leadership move the industry from a sugar-based to cane-based industries…rediscovering cane after 300 years!

10 Some General Comments Extremely poor management and leadership of the industry Growing debts Government bail-outs “Political interfering “ (also in Spanish-speaking countries) Outsourcing, casualisation Belize case: about 1/3 of labour force retrenched, rehiring Trinidad: outsourcing of all operations of a state-owned company Pension plans US$ /month ex-gratia payment in Jamaica Ex-gratia pension in Guyana plus NIS (up to US$ 100/month) OSH Eight deaths in Jamaica’s sugar sector in 2005 due to preventable deaths Poor working conditions in factory and field, PPE

11 Three fired after factory explosion published: Thursday | May 12, 2005 Claudine Housen, Staff Reporter WESTERN BUREAU: TWO ENGINEERS, Hubert Boothe and Glendon Johnson, factory manager David Hamilton, of the Long Pond Sugar Factory in Trelawny have been dismissed following an internal investigation into the tragic explosion which claimed the life of a factory engineer last month. In explaining the reasons for the men's dismissal, Livingstone Morrison, chief executive officer of the Sugar Company of Jamaica (SCJ), said: "There are a number of standard operating procedures that have been breached and responsibility for the breaches was located with the individuals directly and indirectly." "The men were dismissed last Thursday," said Mr. Morrison who added that they were dismissed only after being given the opportunity to defend their actions. "The report on the investigations was done some weeks before and clarifications sought. Following (this) hearings were conducted to give relevant persons an opportunity to respond," said Mr. Morrison. In the interim, Mr. Morrison said that the company has created a team of workers who will be conducting frequent safety reviews. "They have a right of appeal and it is a right that I have asked them to exercise if they see it necessary," he said. When asked when the internal reports would be made public, Mr. Morrison said that they would be released " as soon as the time is appropriate". He said the company's first priority was to its insurance providers. The dismissal of the workers comes more than five weeks after the death of 23-year-old technician, Kajel Insang, in an explosion on Thursday, March 31. (Bold added.)

12 EU/ACP ‘SUGAR ACTION PLANS’ TO ADJUST TO NEW MARKET REALITIES “Nationally Owned Proposals”

13 No Social Dialogue No clear channels of communication between government agencies and sugar groups – Tendency to create dependency on company’s experts (over government bureaucrats and technicians) – Some unions simply not asked to be part of the process/didn’t know about it Information-passing meetings – most of the time More important: predetermined parameters for the plans. – Strong bias in favour of “production-related” aspects

14 Future of the Sector (Caribbean) Lost opportunity to create a comprehensive proposal for the sugar sector? Guyana: one of the ‘best sugar action plan’ but it is related to recovery since 1992 and expansion plans proposed BEFORE the EU sugar reforms What our contribution should be? OSH – key area of union work Social benefits: e.g. pension plans for agricultural workers Political participation: unions as part of civil society, representing workers and communities Gender perspective: women in unions and contribution to development (e.g. Caribbean sugar and bananas) Link to development: rural population, rural economies What is the unions’ proposal for the future of the sector?

15 Four lines of future work 1.EU/ACP Action Plans Critical review and ‘lateral thinking’ 2.Occupational safety and health Drinking water ILO C Company/TNC work Illovo Sugar (Africa), UK and Caribbean 4.Cane, sugar, ethanol: food vs energy? Future configuration of the sugar sector?

16 1- CRITICAL REVIEW OF THE ACP SUGAR ACTION PLANS

17 EU/ACP Sugar Action Plans What sort of jobs are being created? Lost? Regain sense of planning, vision, based on social content – Occupational safety and health – Pension plans: impact on social protection, support to rural population and economies – Social dialogue: what ‘stakeholders’ want in their industry? (Malawi example) Mid-term review by unions (2008) – IUF sugar affiliation in ACPs (and EU) – EU sugar price (36%) cut implemented in – Active coordination union/regions/global IUF – Union participation in national/regional trade talks

18 2- OCCUPATIONAL SAFETY AND HEALTH Availability of drinking water for cane cutters

19 Analysis of (drinking) water Analysis of ‘on the stop’ samples from some countries: e.g. Jamaica, Guyana, Mozambique, Brazil, Malawi, Zambia. Discuss and analise results with local unions Training and capacity building – Information on national specifications for potable water – Water requirements in given working conditions ILO Convention 184: Safety and Health in Agriculture: ratification & focus on organising/training (Caribbean since Aug. 2006)

20 3- COMPANY/TNC WORK Illovo Sugar

21 Company/TNC work: Illovo Sugar Associated British Foods (ABF) – British Sugar acquired 51% of Illovo (Aug. 2006) Largest sugar company in Africa: South Africa, Malawi, Zambia, Swaziland, Tanzania, Mozambique – some are among the world’s lowest-cost sugar producers Concentration of decision-making power at Illovo’s Headquarters in Durban Illovo’s position in LDCs commercial arm (London)

22 Illovo Sugar IUF affiliates in all African countries and in the UK Upwards harmonisation of terms and conditions of work – Mozambique: Maragra’s relative better conditions than in Xinavane (Tongaat Hulett to become majority shareholder) BUT this is not the case in other Illovo’s African operations Support unions in direct negotiations with local management – Occupational safety and health – Revert outsourcing IUF inter-regional contacts: e.g. UK/Africa/Caribbean Tongaat-Hulett: another South African company taking off… and expansion of Maputo’s port facilities (also for sugar from Swaziland, Zimbabwe, South Africa)

23 Mozambique, an example Tongaat-Hulett in two sugar estates (Xinavane and Mafambisse) before 2010 – 8,700 new jobs, – Increase of 150,000 tonnes of sugar Growth in cane production Migrant workers: cane cutters (Xinavane) Terms and conditions: outsourcing, casualisation OSH issues, social security Mozambique: first country to ship sugar to EU under EBA

24 4- CANE: FOOD VS FUEL?

25 World Sugar Consumption to 2020 (thousands of tonnes) Europe 31,42231,50231,59331,701 Africa 13,98415,50517,40719,309 N & C America19,29920,56321,87423,186 South America17,54218,87420,48122,088 Asia 62,18369,54977,89786,244 Oceania 1,5551,6961,8592,023 TOTAL 145,985157,688171,112184,551

26 Cane, sugar and food Where the next 40 million tonnes of sugar would come from? – Brazil, India, Thailand, African countries, EU survivors of reform? – What working & living conditions are prevalent in those countries? – What is the state of workers’ rights? Competition from fuel sector - impact on other economic sectors (e.g. food processing/beverages)? – Rising sugar prices? Volatility of sugar prices? – Traditional subordinated position of agriculture vis-à-vis food processing/beverages sector changing: another outlet for produce Number and quality of jobs to be created (sugar production) – Guyana rate: 16 t/worker per year (current) – France: 500 t/w per year (current) – Impact of technological developments (field and factory) on job creation

27 Brazil to 2012/13 Cane: from 420 million to 680 million tonnes in 2012/13: increase of 260 million tonnes Probably 2.6 million 100 tm of cane/h Sugar production from 30 million to about 38.6 million tonnes present rate of cane use) Brazil’s share of world exports to 50 percent (from about 40 percent) Figures subject to change without notice!

28 Cane, sugar, corn, ethanol Presidents Bush & Lula meeting (March 9) Brazil: world’s largest cane ethanol producer – Growing domestic market: flex-fuel 120,000 new units per month – Export of about 20 percent US: world’s largest corn ethanol producer – Subsidised corn US and Brazil: about 70% of global supplies Lula’s discourse endorses corporate claims on beneficial impact of current model of development of cane/ethanol

29 President Lula to President Bush (9 March 2007) “President Bush, we have more than tripled the yields of sugarcane plantations, which are the main source of ethanol. And we have demonstrated that it is possible to increase the production of biofuels without harming the production of food, and also reducing deforestation of the Amazon region.” (Bold and italics added.)

30 This (way to produce) ethanol feels like a new colonisation tool, with a Brazilian flavour, in a new brave world of food vs fuel

31 Cane, sugar and agro-gasoline (ethanol) Global demand of gasoline: 1,200 billion litres in 2006 Global sugar cane production: 1.3 billion tonnes  110 billion litres of alcohol (best Brazilian technology) Global maize production: 700 million tonnes  280 billion litres Global wheat production: 630 million tonnes  240 billion litres of alcohol Three main crops: 34 percent of global demand of gasoline (due to ethanol lower energy content)

32 Agriculture and agro-diesel Global rapeseed production in 2005: 47 million tonnes  18.8 million tonnes of agro- diesel Global soybean production in 2005: 43 million tonnes of agro-diesel Two crops: only 42 percent of US diesel demand

33 THERE IS A NEW GUEST AT THE TABLE, ONE WITH AN ENORMOUS APPETITE… AND READY TO KICK THE TABLE IF NEEDED

34 Would the ethanol boom benefit the cane workers? - IUF’s sugar work Emphasis on the IUF inter-regional work, and also a global perspective – South Africa Illovo Sugar & ABF (British Sugar) Tongaat Hulett: the next target? – Brazil French Dreyfus: second largest sugar & ethanol group in the country Infinity Bio-Energy (Bermuda): wants to be among the 10 largest groups French Béghin-Say, partner to Cosan

35 IUF Global Sugar Close follow-up of national and regional developments that have an international relevance (best practices) – OSH – Pension plans Critique of sugar development plans from Decent Job perspective – EU/ACP “sugar action plans” – Model (s) of producing agro-fuels

36 IUF Global Sugar – Forum Sharing experiences and information To elaborate policies based on Decent Job framework (best practices) To support on-going campaign to challenge corporate (and governmental) models and version of reality Mid- term review of EU/ACP process (2008? four years after Frankfurt) Solidarity Negotiations Union contacts and exchanges across regions IUF AWTG global work on agro-fuels: palm oil and cane


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