TUC and ICTU Visit to Brazil

Brazil Visit February 2005

TUC & ICTU delegation report

Between 22 and 25 February a trade union delegation from Britain and Ireland consisting of Brendan Mackin, President of the Irish Congress of Trade Unions and Sam Gurney, policy officer from the European Union and International Relations Department of the British Trades Union Congress visited Brazil with support from the FCO Global Opportunities Fund to meet colleagues from the three ICFTU affiliated national centres in Brazil; the CUT, CGT and FS and representatives of Brazilian Government (including a very informative lunch with Dr Mauricio Rands, Federal Deputy) and business organisations. Meetings focused on an exchange of information on proposed union and labour market reforms in Brazil (the origins of the Brazilian trade union system are very different from that in Britain and Ireland with roots in a corporatist approach involving a much greater level of state intervention in union structures, not least in regard to funding). A range of other issues of mutual concern were also discussed including; organising in multinational companies, trade policy and support for Brazilian migrant workers in Britain and Ireland.

The visit was extremely useful in re-establishing direct contact and has generated a range of possibilities for future work. A number of suggestions in this regard are made in the conclusion. The report does not include details of the information provided to the Brazilians but concentrates on the information they gave us.

Day One - 23.2.05 - Union National Centre Visits

CGT - Confederacao Geral Dos Trabalhadores

Those present from CGT included: Antonio Carlos dos Reis (Salim), President; Caninde Pegado - General Secretary; Lourenco Ferreira Do Prado, International Secretary and Maria Pinto, Director for Equal Opportunities. The CGT expressed great pleasure in renewing contacts with British and Irish Trade Union movements noting that relations had been close in the past but that contact had reduced during the 1980s. The view was expressed that with the pace of globalisation it was even more important for us to work together. They cited links with other ETUC unions as a result of the MERCOSUL - EU process and links with other Portuguese speaking countries via their own international body which links national centres in Brazil, Portugal, Angola, Mozambique, East Timor etc and which the CGT currently chairs. They also reported on their activities in MERCOSUL structures and the CGT role in helping to co-ordinate ‘Southern Cone’ federations particularly in light of FTAA negotiations.

The CGT is a cross industry federation, claiming 2.2 million members and the fastest growing union membership in Brazil across a range of sectors including: paper, textile, metal, telecoms, commercial services and local government. They were keen to stress their affiliates presence in a number of leading edge industries. On internal structures it was pointed out that they regarded themselves as fully democratic with all leaders elected and able to belong to any party as long as party is committed to workers’ interests. Current priorities included: skills development for workers, the impact of privatisation, anti-child labour measures and organising informal workers (who make up 2/3 of the economy). They mentioned initiatives such as the creation in Belo Horizonte of a specialist agency to help people enter the formal labour market. It was further reported that they play an active part in joint councils dealing with issues such as social welfare, pay and unemployment benefits and had provided training for 50,000 members in the recent past. New challenges they were facing included structural reforms coming from government, but also macro economic factors such as high interest rates (being kept artificially high to benefit financiers) and negative policies affecting manufacturing and production citing in particular high taxation on products made in Brazil.

CGT colleagues expressed their opposition to proposed labour market and union law reforms in their current format. On union reform they expressed support for the principle of change but felt that whilst the current government had consistently advocated autonomy for unions the proposals on the table would not lead to this as they enshrined a continuing link to the Ministry of Labour and would exacerbate the danger that multinationals would use the law to set up company unions. They felt that the government proposals favoured union pluralism over unity. The CGT stated that they favoured reforms that would lead to union funding based on real membership and would oppose the current legislation once it enters congress. On the linked issue of labour reform they are concerned that workers are being singled out and argued strongly that the key issue was ensuring that the law continued to provide minimum guarantees. They also emphasised that other areas were equally overdue for reform such as the taxation system, citing the 40% tax on manufactured products as a strong disincentive to home based production.

We set out the current position in Britain and Ireland and areas of common concern, such as rebuilding membership, relations with government and the need for tripartite working, the learning and skills agenda and organising migrant workers. The CGT expressed particular interest in support for training of union leaders in Brazil to deal with the new realities of globalisation. At the conclusion of the meeting it was agreed they would submit a proposal via the British embassy for consideration on training and consider how we could work together to organise Brazilian workers in Britain and Ireland.

CUT

Meeting with Joao Vaccari Neto, CUT International Secretary. Joao began by noting that they were pleased to re-establish contact with British and Irish trade unions and keen to strengthen links, which in the past had been good. He then set out an overview of the current economic and political situation in Brazil. CUT maintained close links with president Lula (whose own union background was in the CUT). The Workers Party election victory was a source of great pride but also great headaches with a large range of problems to be dealt with including: infrastructure, lack of formal sector jobs, low wages and agrarian reform. The government has initiated a process of change to make the Brazilian system more open to outside investment and penetration by multinationals. This has involved issues of both political and economic sovereignty and the CUT has maintained opposition to some aspects such as the current FTAA proposals. Progress had been made in a number of areas including wages and the acceptance of an agenda of citizenship rights focused on education, pensions, health care, transport, housing and basic utilities and livelihoods.

On the reform agenda the CUT view some as necessary and others less so. They expressed broad support for the macro economic work of the government but less for micro economic measures e.g. interest rates currently running at 17% creating huge profits for banks, but stifling investment. We discussed the historic background to union reform with current legislation dating back to 1937, based on fascist Italy and a corporatist approach. Limited independence was given to unions in 1988. The CUT favours the principle of full independence and autonomy and an elimination of the current system where unions are financed by the ‘Unicade’ or union tax which is levied on all salaries and often results in unions not having to pro-actively organise and recruit. The CUT have played an active part in the tripartite labour forum set up to discuss the reforms and whilst they feel the reform proposals are not perfect they view them as a good starting point, not least because they would formally recognise the role of national trade union structures, which despite the active role they play are currently in theory illegal. Whilst the working relationship between the national centres is good there are major differences in attitude to the reform process, which the CUT ascribe in part to some bodies being thoroughly institutionalised and scared about standing on their own feet.

On the issue of trade policy, there is currently a debate within CUT about how much of a priority should be given to work in this area. It was agreed that what was needed was a far fairer system of international trade. Brazil was especially under pressure from the US and its attempts to impose one-sided free trade agreements (Joao noted that the US has 87% of the Americas’ GDP) and continued dumping of produce on central and south American states. What was needed by Brazil and developing countries was market access, technology transfer, freer movement of people, progress with NAMA talks and most of all progress with Agricultural at the WTO.

The CUT expressed strong support for the new trade union international which will emerge from the merger of ICFTU and WCL and stated that they wished to see the broadest possible organisation with wide invitations to take part including a range of Indian national centres and possibly even China. They were also interested in possible linkage with WFTU. The essential point was that it must be democratic and genuinely representative of all regions not just Europe, US and Japan. CUT is especially concerned with unity within the Latin American Trade Union movement, relations now stronger due to contact during the MERCOSUL process. Negotiations around the FTAA had led to expanding links with the AFL-CIO and CLC reinforced by political changes which have seen increasing opposition to the economic polices of the US, IMF and World Bank.

We concluded by discussing efforts to organise migrant workers both in Brazil and in UK and Ireland. Freedom of movement was a major issue in the MERCOSUL negotiations and in Brazil there were now many hundreds of thousands of migrant workers (both documented and undocumented). In Sao Paulo there were many Bolivian workers and in Brazil as a whole around ½ million Paraguayans (the total population of Paraguay is only 5 million!) The CUT already helped with a centre for Brazilian migrant workers in Boston and were exploring links with JTUC-Rengo in Japan where there were 250,000 Brazilian workers. We agreed that we should explore links with the work TUC and ICTU are doing to support Brazilian workers and maintain contact in the run up to WTO ministerial.

Forca Sindical

Meeting with Joao Carlos Goncalves (Juruna), General Secretary and Rubens Romano, International Secretary. Both men shared the sentiment that in age of ever increasing globalisation practical links between our organisations were more important than ever. Multinationals offered some advances, but only those that helped to create jobs and abided by ILO standards could be welcomed. Joao set out the background to the creation of FS in 1991 from elements of the CGT, CUT and others, noting it was now second to the CUT in terms of size with membership, concentrated in the private sector, banking, manufacturing etc.

With regard to the reform process, FS had welcomed the establishment of the labour forum and had tried to secure three main objectives 1) recognition of unions at workplace level, 2) formal legal status for national federations, and 3) establishment of federal and national collective bargaining structures according to industry. In addition they were looking for progress on mechanisms for dispute settlement with the introduction of a mediation system before strike action starts (in contrast to current system of a labour judge deciding on cases) and a better system of individual dispute settlement - under the current system workers who are unfairly treated have to wait until they are fired and then go to a labour judge (if you try to take a case while employed you end up being sacked anyway). Cases also take years to settle. A reformed system along the lines advocated by FS would enable a union to take legal action against an employer on behalf of a worker or group of workers whilst increased collective bargaining would reduce the number of individual cases which need to be taken. We discussed the current situation in UK and Ireland in regard to employment tribunals, ACAS etc. FS appeared broadly supportive of the process by which reform was being discussed and in answer to questions explained that the terms of reference for the labour forum had been set by the forum members themselves.

On other issues we touched on the trade union role in worker education which FS put high priority on and were particularly keen to explore areas for future work especially on the impact of globalisation on workers in both developed and developing countries and more joint working on organising multinationals such as Carrefour which they pointed out has a good code of conduct in France, but not in its Latin American operations. We agreed that we needed to look in more detail at common work on training and education, on organising employees of multinationals and support for migrant workers.

Day 2 Brasilia

Confederacao Nacional da Industria

We met with Simone Saisse, CNI coordinator of union relations and Lucia Rondon the CNI representative on the labour forum. The meeting began with an overview of the current state of the Brazilian economy, noting it was benefiting both from the general world upturn, but also the policies of the Lula government in pursuing stable micro-economic polices which have led to increased confidence and investment. Whilst the prospects for 2005 were not so good they did not believe there would be a major down turn and predicted growth at 4-5%. CNI remained concerned that government was not tackling some structural economic issues and were clearly unhappy that union reform was being advanced before labour market reform citing 2003 World Bank data which they believed showed that Brazilian productivity was suffering from the present labour system. They also cited other structural problems including the tax regime and lack of investment in infrastructure.

They reviewed the history of previous attempts to reform citing failure of President Cardosa and expressed the hope that President Lula might do better due to his close links with the union movement. They reiterated the fact that change was needed as some 60% of workers were now in the ‘informal’ sector and noted that many businesses had adopted ‘informal ways’ of working.’ They noted that informal sector employment had increased by 16% in recent years whilst formal sector employment had risen by just 1.6%. In terms of desired reform they emphasised the need for reforms to the tax system and progress on legal status for both business and union national organisations. In regard to progress they pointed out that whilst employers acted as part of a single body unions were still divided with CUT and FS taking part and the CGT and some other smaller groups remaining outside. They remain firmly opposed to unions having an active presence and/or negotiating at a workplace level citing the fact that the majority of enterprises were small to medium and that workplace presence would be too disruptive. The CNI stated that they were not opposed to unionisation in principle, but it must be voluntary and not imposed.

Cabinet office

We met with Sandra Rodrigues Cabral, special adviser to the Casa Civil (cabinet office) and formally a CUT organiser and Denise Maria Ayres De Abreu, head of the cabinet legal office. Sandra stressed that they were particularly interested in the relations between governments and unions and negotiating structures in other countries. We gave an overview of the situation in UK and Ireland.

It was considered that Brazilian constitutional democracy had been greatly strengthened in recent years and union reform was part of this process as without a strong union movement true democracy was not safe. There would also be differences between workers and capital and this conflict should not be denied however there was an urgent need to codify the system in which such disputes took place hence the need to look at new forms of arbitration and mediation and to review the legal status of union/business structures and their funding. The fundamental objective of union reform was to strengthen the movement in Brazil, and whilst it was considered that for the time being government would continue to play a role the ideal was for it eventually to pull back.

Reform of funding and the certification process was vital. The current funding system was unworkable and led to fragmentation and the creation of shell unions. Under the present system all employees contributed 1 days salary per month to a central fund with 20% going to ministry of labour, 65% to regional confederations and 15% to local unions. This would be replaced eventually by a more voluntary system in which members would pay subs more directly with none going to the ministry and a certain percentage to legally recognised national centres together with the establishment of boards for collective bargaining in different industries and areas. The current situation has led to the existence on paper of between 16,000 and 18,000 individual unions, as once one was established you automatically received funding without having to demonstrate in any meaningful way a functioning workplace presence or membership. Under proposals under discussion unions would have to demonstrate a base level of members in a workplace and show that they were actually representing them.

It was stressed that union reform (along with reform of the university sector) was seen as a vital political priority. The government had created the labour forum as a tripartite body to make sure the debate was open and engaged all those concerned. They acknowledged there was opposition to some of the process from some unions and business, but believed that the current proposals had enough support to pass and would be a basis for further reform to bring Brazil into line with ILO freedom of association conventions and to improve the system of mediation of collective and individual disputes.

Ministry of Labour

The final meeting of the visit was with Osvaldo Bargas - Secretary for Labour Relations (and formally head of international at the CUT). He gave a detailed and open analysis of the historical background to the current situation in Brazil to reinforce his central message that there was urgent need for sweeping reform. He also noted that President Lula had promised action on this issue throughout the election campaign. Labour market reform was totally connected to union reform, but had to be sequenced in the correct way as it was impossible to move towards genuine collective bargaining and other labour market changes without properly constituted trade union organisations. The state had a role to play in achieving this and some reform would have to be pushed from the top, but it had to be remembered that this was in a Brazilian context where the state currently imposes authoritarian decisions, allocates funds and despite changes since 1988 in many areas still controls union rule books and by-laws. The funding situation had helped to create a ‘mafia of unionism.’ Osvaldo gave the example of his own experience in the auto industry where in the workshop where he had worked there were on paper 34 unions but in reality only one that did anything. Many workers were not represented in any way and some 2 million individual cases reached court each year.

The government wished to ratify ILO Convention 87 on freedom of association but would be unable to do so during this period of reforms due to need to compromise with some unions who were unwilling to give up sole representation rights in order keep them on board with the process. They will be allowed to keep some monopoly rights providing that certain criteria are met including 1) a mass meeting of members/non-members in a workplace to decide whether to allow representation by more than one union, 2) reform of union by-laws to reinforce internal democracy, and 3) unions must be able to demonstrate 20% membership to claim to represent. Osvaldo appeared confident that the legislation would be passed. The government would insist on the right to workplace representation and workplace presence for unions, something which business was still bitterly opposed to. Criteria for national centres would be established and they would be given legal status to match the political and practical functions they were already fulfilling.

Conclusion

Throughout the two day visit we received invaluable support from the British embassy and staff and all the meetings attended were useful and informative, such a programme would not have been possible without assistance from GOF and other embassy staff. Thanks to their preparations we were able to engage in meaningful discussions and learnt a great deal about the current Brazilian situation with a strong focus on how to take these links forward. Possible areas for future work include:

· assistance with training for union leaders in light of the proposed union and labour market reforms and the ongoing impact of globalisation on Brazil. The CGT have made a concrete proposal, but we would prefer an approach which involved all three federations;

· more information about the industrial mediation and employment tribunal system in the Britain and Ireland (this could be more of a government to government issue than a union one although there is no reason why work this area could not be tripartite);

· much greater co-ordination of work to organise Brazilian migrant workers in Britain and Ireland. All three federations expressed interest in becoming involved in the TUC’s. Portuguese workers project. We need to exchange information on numbers of workers and levels of organisation;

· more discussions around trade policy especially through existing ICFTU structures such as the Trade and Labour Standards working group. This is already happening as the CUT were represented at a recent TILS meeting in Geneva;

· with the proposed union reforms and increased penetration of the Brazilian economy by multinational enterprises there will be a greater need for Brazilian unions to engage in organising and recruitment work similar to that carried out in the UK and here we have a large amount of experience that could be shared, and we would benefit from knowing more about Brazilian experience.

GOF help with training and information exchange would be extremely useful. Beyond Brazil this type of visit would be of great use to us with other emerging economies most notably India and South Africa. Whilst we see colleagues from these countries at various international meetings the Brazil visit reinforced the point that taking the time to visit and talk to developing country national centres in their own countries is greatly appreciated and shows the genuine importance we place on such contact.