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14 March, 2001The following is the speech given by the IMF general secretary, Marcello Malentacchi, to the Steelworkers' conference on aluminium.
The Riviera Hotel,
Las Vegas,
6th March, 2001
Mr President, Colleagues, Brothers and Sisters,
I am very pleased to have the opportunity to be with you today, so soon after the appointment of your new International President, and to be able to personally bring you this message of solidarity and support, on behalf of the twenty-three million metalworkers who are, like you, affiliated to, and a part of, the IMF family.
The aluminium industry is one of the most important sectors of the IMF's basic metal industries, both in terms of the employment and thus trade union membership it provides, as well as the contribution your industry makes to global economic growth and thus prosperity.
Global aluminium consumption is increasing faster than that of any other metal, as new applications are being continually developed that exploit the advantages aluminium has to offer, in terms of its very low weight, tensile strength and resistance to corrosion.
Consequently the long-term prospects for employment in the aluminium industry are extremely good.
However, there are some significant problems or challenges, which need to be overcome in the short term.
Bauxite, the ore from which aluminium is obtained, is the world's third most plentiful element, and it can be found in every part of the world. However, with our current level of knowledge and technology, there are only a relatively small number of places where the ore is found in sufficient quantities to make it economically recoverable.
Just five countries, Guinea, Australia, Brazil, Jamaica, and India, contain over three-quarters of the world's bauxite deposits, and it does not make any sense to transfer bauxite half way around the world, when more than half of it ends up as waste.
Consequently, fuelled by the continual process of economic globalisation, investments will increasingly be made in these bauxite-rich countries, creating much needed jobs in the process, in order to establish the refineries needed to transform the ore into alumina, for shipment to the aluminium smelters.
The bulk of aluminium production is in the developed industrial countries, where the vast majority of the metal is used, either in a pure state or mixed with other metals to create alloys that increase its strength and ductility, enabling it to be used for a wide range of applications.
In contrast, alumina production is, at the present time, more or less equally divided between the regions where bauxite is obtained, and those countries where the aluminium smelters have already been established. However, as noted above, this situation is likely to change in the future as soon as comparatively low-cost and stable supplies of electricity can be guaranteed.
Probably the greatest problem facing the aluminium industry at the current time, is the relatively high costs of energy, given the extremely large volumes of electrical power that are needed to transform bauxite into alumina - around 5KiloWatt hours (KWh) per tonne, and in particular, from alumina to aluminium - between 12,000 to 14,000KWh per tonne.
As we have seen recently in the US north-west, when the price of electricity rises beyond a certain limit, it is just not economically viable to manufacture aluminium, as the cost of production far exceeds the price that can be obtained for the finished metal.
As you know, the situation recently arose in the USA, where companies which had contracts to obtain electricity from publicly-owned companies at, or close to the cost of production, could make much higher profits by closing down their plants, bringing an end, albeit temporarily, to production, and then re-selling the electricity they did not use.
Indeed, it has been suggested that one company could obtain as much as $500 million profit by the end of September, as a result of this process.
This underlines the vital need for the aluminium industry to have an adequate and stable supply of power at prices they can afford.
At the present time the global aluminium market is rather tight, with consumption levels in excess of production levels. Furthermore, this situation is likely to continue for the next few years, as global consumption levels are expected to increase faster than new capacity is added or brought back on stream.
However, the USA aluminium market is in a very different and much more difficult position. High electricity prices have forced many aluminium smelters to shut down and, in the light of the uncertainty, many aluminium consumers in the USA are withholding their purchases, which has resulted in a rapid build-up of stocks, further aggravating an already problematic situation.
Colleagues, similar to many other sectors, the aluminium industry is being affected by the process of economic globalisation and is undergoing a period of consolidation and restructuring, with a wave of mergers and take-overs resulting in a concentration of ownership that further intensifies competition.
This process inevitably results in restructuring, as the expanding companies seek to sell off those subsidiaries that are deemed to be non-core activities, or eliminate any bottlenecks in the production process, that prevent them from operating their plant at optimum levels of production, as they attempt to establish a balance between the various stages of the production process, from bauxite supply to alumina refinery, and then to aluminium smelting and, increasingly, to the down-stream higher value-added finished products.
New investments in refining, smelting, extrusion and further processing are being made in every continent, from Asia to Latin America and from Eastern and Central Europe to the Antipodes, reflecting the constant increase in global demand for aluminium, and this augers well for the future. Indeed, the future for the aluminium industry is as bright and as durable as the metal you produce.
However, the development of massive MNCs like Alcoa, for example, with subsidiaries in almost every part of the world, means that they become the pace setters for wages, working conditions, occupational health and safety and environmental provisions, for the industry as a whole.
This makes it increasingly important for the trade unions which represent the interests of the workers in such companies, to develop the necessary structures to facilitate the international solidarity and cooperation that will become increasingly important in the years ahead.
Indeed, if the International Metalworkers' Federation, and other International Trade Secretariats did not already exist, to help overcome the barriers of language, xenophobia and different cultures, and attempts by employers to play off one group of workers against another, it would be essential for the trade union movement to create them.
Consequently, we owe a great debt of gratitude to those trade union leaders who met in Zurich over 100 years ago, and possessed the wisdom and foresight to establish the IMF, and we should ensure that we make full use of the opportunities it provides to build the same kind of solidarity at the international level, that is the key to effective trade union action at the national or any other level.
As many of you will be already aware, IMF affiliated unions have been discussing the problems arising from globalisation, and seeking suitable solutions at successive Central Committee and Congress meetings for over 10 years, through the formulation of a series of IMF Action Programmes.
At the Congress which will take place in Sydney, Australia later this year, we will be adopting the most recent version of our Action Programme.
The new Action Programme will focus on the universal need for recognition and respect of fundamental human ' and workers rights, which are an essential part of the sustainable economic policies that are necessary to achieve global growth.
And while world trade is a key aspect for global economic and social development, it must be fair as well as free.
Speculative financial transactions constitute the vast bulk of monetary transfers, and it is clear that the ability to rapidly transfer funds to almost any part of the world, has exacerbated, if not been a major factor, contributing to the several financial and economic crises we have all suffered from in recent years.
There is an urgent need for some form of regulation or control over such transactions, and the IMF has strongly supported the introduction of what is known as a Tobin Tax, on all speculative financial transfers.
Furthermore, in order to redress the imbalance of power between the MNCs and trade unions, we need to strengthen our organisational structures, in order to make them more effective in defending the interests of our members.
Where there is a lack of unity at the national level, we will seek to achieve this by establishing IMF Country Councils, and seek to further integrate them into the IMF structure by encouraging their participation in the IMF Regional Councils we have established. And in parallel to these developments, at the individual company level, through the establishment of IMF World Company Councils.
Indeed, one of the most important developments we have established within the IMF to help achieve our goals, is the creation of IMF World Company Councils amongst some of the major MNCs.
IMF World Company Councils provide a unique forum for workers within one multi-national company to come together and determine a common platform of demands, in order to ensure that the company recognises their employees right to fundamental human and trade union rights.
I should explain that these are not in any way similar to the European Works Councils, which have a legal status, but are largely talking shops, where management who have to meet the costs of these meetings, set the agendas and in many cases, choose to ignore their legal and moral responsibility to inform the workers of major decisions, such as the recent example provided by the sudden announcement by General Motors to close its Vauxhall plant in Luton in the U.K., where the workers found out they were to lose their jobs, when it was broadcast on the television news programmes.
In contrast, the agendas for IMF World Company Councils are drawn up by the IMF and the unions involved, although we frequently invite a representative from the management of the company to participate in these meetings, in order to address the meeting and respond to any questions or issues the delegates wish to raise.
IMF World Company Councils also provide an opportunity to establish networks of trade union activists, who can respond quickly to any attempt by management to exploit any group of workers, or pressurise those in one country or region to accept changes that might undermine the position of those in another country.
While we cannot expect to achieve the same level of wages in every country, where we have workers in Mozambique, for example, who were literally forced to accept a no-strike clause in their employment contracts, as a condition for gaining employment, and are receiving wages that are less than one quarter of those paid to South African workers doing exactly the same type of work, then it is clear that the management of the company involved, Billiton, are exploiting the difficult situation that exists in Mozambique, and these workers badly need all the help we can give them.
Another important aspect that we have developed in the IMF, as part of our ongoing struggle to ensure that the workers in MNCs, especially those in developing countries, are not exploited or used to undermine the wage levels and terms of employment in the older industrialised countries, is the preparation of a draft Corporate Code of Conduct.
The IMF's Corporate Code of Conduct sets out to establish that all workers in a single company are guaranteed the same basic trade union rights, sometimes referred to as "Core Labour Standards", as well as observing their environmental obligations and ensuring decent wages and working conditions for all the company's employees, including those who work for sub-contract companies, irrespective of where they live and work.
Colleagues, the USWA has a proud history of fighting for trade union and workers' rights and has, since its inception, played a major role in the wider international trade union movement.
With the retirement of George Becker and the appointment of Leo Gerard, we have witnessed the end of one chapter in the long and illustrious history of the USWA, and now marks the beginning of a new one.
It is clear that we in the trade union movement are facing some difficult times and, with the election of a Republican President in the USA, the situation is not going to get any easier, but I am confident, that as long as the workers in the metal industries continue to cooperate, and provide the support and solidarity that was shown by those who helped to form the IMF over 100 years ago, then we can and we will succeed.
Las Vegas,
6th March, 2001
Mr President, Colleagues, Brothers and Sisters,
I am very pleased to have the opportunity to be with you today, so soon after the appointment of your new International President, and to be able to personally bring you this message of solidarity and support, on behalf of the twenty-three million metalworkers who are, like you, affiliated to, and a part of, the IMF family.
The aluminium industry is one of the most important sectors of the IMF's basic metal industries, both in terms of the employment and thus trade union membership it provides, as well as the contribution your industry makes to global economic growth and thus prosperity.
Global aluminium consumption is increasing faster than that of any other metal, as new applications are being continually developed that exploit the advantages aluminium has to offer, in terms of its very low weight, tensile strength and resistance to corrosion.
Consequently the long-term prospects for employment in the aluminium industry are extremely good.
However, there are some significant problems or challenges, which need to be overcome in the short term.
Bauxite, the ore from which aluminium is obtained, is the world's third most plentiful element, and it can be found in every part of the world. However, with our current level of knowledge and technology, there are only a relatively small number of places where the ore is found in sufficient quantities to make it economically recoverable.
Just five countries, Guinea, Australia, Brazil, Jamaica, and India, contain over three-quarters of the world's bauxite deposits, and it does not make any sense to transfer bauxite half way around the world, when more than half of it ends up as waste.
Consequently, fuelled by the continual process of economic globalisation, investments will increasingly be made in these bauxite-rich countries, creating much needed jobs in the process, in order to establish the refineries needed to transform the ore into alumina, for shipment to the aluminium smelters.
The bulk of aluminium production is in the developed industrial countries, where the vast majority of the metal is used, either in a pure state or mixed with other metals to create alloys that increase its strength and ductility, enabling it to be used for a wide range of applications.
In contrast, alumina production is, at the present time, more or less equally divided between the regions where bauxite is obtained, and those countries where the aluminium smelters have already been established. However, as noted above, this situation is likely to change in the future as soon as comparatively low-cost and stable supplies of electricity can be guaranteed.
Probably the greatest problem facing the aluminium industry at the current time, is the relatively high costs of energy, given the extremely large volumes of electrical power that are needed to transform bauxite into alumina - around 5KiloWatt hours (KWh) per tonne, and in particular, from alumina to aluminium - between 12,000 to 14,000KWh per tonne.
As we have seen recently in the US north-west, when the price of electricity rises beyond a certain limit, it is just not economically viable to manufacture aluminium, as the cost of production far exceeds the price that can be obtained for the finished metal.
As you know, the situation recently arose in the USA, where companies which had contracts to obtain electricity from publicly-owned companies at, or close to the cost of production, could make much higher profits by closing down their plants, bringing an end, albeit temporarily, to production, and then re-selling the electricity they did not use.
Indeed, it has been suggested that one company could obtain as much as $500 million profit by the end of September, as a result of this process.
This underlines the vital need for the aluminium industry to have an adequate and stable supply of power at prices they can afford.
At the present time the global aluminium market is rather tight, with consumption levels in excess of production levels. Furthermore, this situation is likely to continue for the next few years, as global consumption levels are expected to increase faster than new capacity is added or brought back on stream.
However, the USA aluminium market is in a very different and much more difficult position. High electricity prices have forced many aluminium smelters to shut down and, in the light of the uncertainty, many aluminium consumers in the USA are withholding their purchases, which has resulted in a rapid build-up of stocks, further aggravating an already problematic situation.
Colleagues, similar to many other sectors, the aluminium industry is being affected by the process of economic globalisation and is undergoing a period of consolidation and restructuring, with a wave of mergers and take-overs resulting in a concentration of ownership that further intensifies competition.
This process inevitably results in restructuring, as the expanding companies seek to sell off those subsidiaries that are deemed to be non-core activities, or eliminate any bottlenecks in the production process, that prevent them from operating their plant at optimum levels of production, as they attempt to establish a balance between the various stages of the production process, from bauxite supply to alumina refinery, and then to aluminium smelting and, increasingly, to the down-stream higher value-added finished products.
New investments in refining, smelting, extrusion and further processing are being made in every continent, from Asia to Latin America and from Eastern and Central Europe to the Antipodes, reflecting the constant increase in global demand for aluminium, and this augers well for the future. Indeed, the future for the aluminium industry is as bright and as durable as the metal you produce.
However, the development of massive MNCs like Alcoa, for example, with subsidiaries in almost every part of the world, means that they become the pace setters for wages, working conditions, occupational health and safety and environmental provisions, for the industry as a whole.
This makes it increasingly important for the trade unions which represent the interests of the workers in such companies, to develop the necessary structures to facilitate the international solidarity and cooperation that will become increasingly important in the years ahead.
Indeed, if the International Metalworkers' Federation, and other International Trade Secretariats did not already exist, to help overcome the barriers of language, xenophobia and different cultures, and attempts by employers to play off one group of workers against another, it would be essential for the trade union movement to create them.
Consequently, we owe a great debt of gratitude to those trade union leaders who met in Zurich over 100 years ago, and possessed the wisdom and foresight to establish the IMF, and we should ensure that we make full use of the opportunities it provides to build the same kind of solidarity at the international level, that is the key to effective trade union action at the national or any other level.
As many of you will be already aware, IMF affiliated unions have been discussing the problems arising from globalisation, and seeking suitable solutions at successive Central Committee and Congress meetings for over 10 years, through the formulation of a series of IMF Action Programmes.
At the Congress which will take place in Sydney, Australia later this year, we will be adopting the most recent version of our Action Programme.
The new Action Programme will focus on the universal need for recognition and respect of fundamental human ' and workers rights, which are an essential part of the sustainable economic policies that are necessary to achieve global growth.
And while world trade is a key aspect for global economic and social development, it must be fair as well as free.
Speculative financial transactions constitute the vast bulk of monetary transfers, and it is clear that the ability to rapidly transfer funds to almost any part of the world, has exacerbated, if not been a major factor, contributing to the several financial and economic crises we have all suffered from in recent years.
There is an urgent need for some form of regulation or control over such transactions, and the IMF has strongly supported the introduction of what is known as a Tobin Tax, on all speculative financial transfers.
Furthermore, in order to redress the imbalance of power between the MNCs and trade unions, we need to strengthen our organisational structures, in order to make them more effective in defending the interests of our members.
Where there is a lack of unity at the national level, we will seek to achieve this by establishing IMF Country Councils, and seek to further integrate them into the IMF structure by encouraging their participation in the IMF Regional Councils we have established. And in parallel to these developments, at the individual company level, through the establishment of IMF World Company Councils.
Indeed, one of the most important developments we have established within the IMF to help achieve our goals, is the creation of IMF World Company Councils amongst some of the major MNCs.
IMF World Company Councils provide a unique forum for workers within one multi-national company to come together and determine a common platform of demands, in order to ensure that the company recognises their employees right to fundamental human and trade union rights.
I should explain that these are not in any way similar to the European Works Councils, which have a legal status, but are largely talking shops, where management who have to meet the costs of these meetings, set the agendas and in many cases, choose to ignore their legal and moral responsibility to inform the workers of major decisions, such as the recent example provided by the sudden announcement by General Motors to close its Vauxhall plant in Luton in the U.K., where the workers found out they were to lose their jobs, when it was broadcast on the television news programmes.
In contrast, the agendas for IMF World Company Councils are drawn up by the IMF and the unions involved, although we frequently invite a representative from the management of the company to participate in these meetings, in order to address the meeting and respond to any questions or issues the delegates wish to raise.
IMF World Company Councils also provide an opportunity to establish networks of trade union activists, who can respond quickly to any attempt by management to exploit any group of workers, or pressurise those in one country or region to accept changes that might undermine the position of those in another country.
While we cannot expect to achieve the same level of wages in every country, where we have workers in Mozambique, for example, who were literally forced to accept a no-strike clause in their employment contracts, as a condition for gaining employment, and are receiving wages that are less than one quarter of those paid to South African workers doing exactly the same type of work, then it is clear that the management of the company involved, Billiton, are exploiting the difficult situation that exists in Mozambique, and these workers badly need all the help we can give them.
Another important aspect that we have developed in the IMF, as part of our ongoing struggle to ensure that the workers in MNCs, especially those in developing countries, are not exploited or used to undermine the wage levels and terms of employment in the older industrialised countries, is the preparation of a draft Corporate Code of Conduct.
The IMF's Corporate Code of Conduct sets out to establish that all workers in a single company are guaranteed the same basic trade union rights, sometimes referred to as "Core Labour Standards", as well as observing their environmental obligations and ensuring decent wages and working conditions for all the company's employees, including those who work for sub-contract companies, irrespective of where they live and work.
Colleagues, the USWA has a proud history of fighting for trade union and workers' rights and has, since its inception, played a major role in the wider international trade union movement.
With the retirement of George Becker and the appointment of Leo Gerard, we have witnessed the end of one chapter in the long and illustrious history of the USWA, and now marks the beginning of a new one.
It is clear that we in the trade union movement are facing some difficult times and, with the election of a Republican President in the USA, the situation is not going to get any easier, but I am confident, that as long as the workers in the metal industries continue to cooperate, and provide the support and solidarity that was shown by those who helped to form the IMF over 100 years ago, then we can and we will succeed.