Workers in Venezuelan State Companies Demand Improved Pay & Conditions

Mérida, 25^th July 2014 (Venezuelanalysis.com) – Workers in state run steel and electricity companies are demanding improved wages and conditions, and have issued criticisms over the management of their respective industries.

Tensions have risen this week in the Sidor factory, located in the eastern Guayana region of Venezuela. Nationalised in 2008, Sidor is the fourth largest steel plant in Latin America.

For almost two years the workers at the plant, largely grouped under the pro-government Sutiss trade union, have been negotiating a new collective contract with state authorities. The current contract expired in 2010.

According to union negotiators only eleven clauses of the new contract remain to be agreed. However, they say that negotiations with the Venezuela Guayana Corporation (CVG), the entity which oversees the heavy state owned industries in the region, have dragged in recent months.

In this context some Sidor workers initiated fresh protests at the beginning of this week, with Venezuelan media reporting that the workers had temporarily closed down some main highways around the nearby city of Puerto Ordaz, causing problems for local residents.  

On Wednesday Diosdado Cabello, a leading figure of the governing United Socialist Party of Venezuela (PSUV) and president of the National Assembly (AN), travelled to Guayana, Bolivar state, to meet with local authorities and discuss the situation.

Cabello announced the formation of a commission to analyse problems in Sidor and other CVG industries, which would include Bolivar state governor Francisco Rangel (PSUV), CVG president Justo Norguera, and Minister for the Social Area, Hector Rodriguez. Cabello did not meet with the Sutiss union.

The AN president then launched accusations against factory’s trade union organisations. He described the Sutiss and other Sidor trade union currents as “mafias” that were responsible for the delay in signing a new contract and the poor productivity at the plant. He said that these groups maintained unreasonable demands and then threatened to carry out destabilising actions if these were not met.

“They [Sidor trade unionists] don’t want the company to be working; at the expense of thousands of workers that do want to work,” he said.

Cabello also accused union negotiators of demanding “impossible” concessions such as the payment of 800,000 BsF (US $127,000) per worker in order to sign the contact.

The comments angered both the Sutiss leadership and anti-government trade unionists. The following day an assembly was called in Sidor to reject the government’s stance in the dispute, where production line workers were addressed by Sutiss president Jose Luis Hernandez.

“Mr. Diosdado Cabello, you have disappointed us…together with the workers, we are in the right”, he said, while declaring that the union would continue pressuring for the signing of the new contract.

Hernandez argued that the 800,000 BsF demand cited by Cabello had been distorted in a bid to upset negotiations. The union leader also told press that the vast majority of Sidor workers were government supporters.

The Sutiss has further requested that the government invest $30 million to raise production at Sidor, and questions the whereabouts of previous state funds approved for investment.

Local parliamentary deputies for the PSUV backed Cabello’s stance today, arguing that Sidor workers couldn’t demand a collective contract beyond the means of the plant, which is subsidised by the state. The deputies also said that while they support the right to make labour demands, they asked workers not to close down streets as a negotiating tactic.

According to Juan Linares, a retired worker who was employed at Sidor for 28 years, production at the plant has fallen from 4.3 million tons of liquid steel in 2007 to 1.5 million last year, around 31% of potential maximum output.

Meanwhile, the formal workforce has increased from 5,700 to 14,000 workers in the same period, Linera wrote in an article for independent pro-government site Aporrea.org. Part of this increase has been an effort to eliminate sub-contracting of workers and include these as full Sidor employees.

Lack of investment, problems with maintenance and supply of raw materials, internal mafias and corruption, labour unrest and the 2010 electricity crisis are different factors that have been put forward to explain the fall in productivity at Sidor.

Electricity sector

Workers for state owned electricity company Corpoelec, which was nationalised in 2007, have also been struggling for improved pay and conditions.

A demand of the trade union representing electricity workers, Fetralec, has been the negotiation of a new collective contract, as the previous one expired over four years ago. Other problems, they claim, are the failure to ensure payment of contractual pay increases, certain bonuses, and medical insurance.

In a statement in late June, the Fetralec accused the Electricity Ministry and company management of “trying to unilaterally impose the administration of a collective contract, bonuses and the depreciation of the salary”.

Following a series of protests by Corpoelec workers in Caracas and other states, President Nicolas Maduro intervened in mid July and ordered a universal pay increase for the sector, benefitting around 40,000 workers. The lowest of twelve pay bands now receives 6,377, 1.5 times the minimum wage. Maduro has on several occasions argued for the need for new collective contracts to be negotiated between unions and public and private entities.

The Fetralec union has since expressed its satisfaction with the pay deal. However, it has pledged to continue pushing for the agreement of a new collective contract and improvements in other conditions.

The disputes take place at the same time as car assembly workers demand that the government intervene in their industry to prevent multinational companies from implementing layoffs and worsened conditions. The companies blame state currency exchange controls for the situation, saying that they cannot import sufficient parts for production and have to cut back.

The various labour demands are being made to the backdrop of several on-going economic problems which are affecting the South American OPEC nation, including an overvalued currency and pressures on currency controls, product shortages in several sectors of the economy, and annual inflation topping 60%.

The government is designing a set of major economic and state reforms for implementation later this year.