Nestlé Russia violates trade union rights in sale of Barnaul chocolate factory

On 18 December 2010 Nestlé Russia announced the sale of its Altai confectionary plant, located in Barnaul in Central Russia. The workforce – who are part of the sale – were informed the previous day. Seven hundred workers are scheduled to be handed over to a new employer during the second quarter of 2011 without any guarantees and no prospect of any negotiation with them or their union.

The Altai plant became part of Nestlé Russia in 1998. For more than 12 years its workers have been contributing to the company’s prosperity. And now they have been sold off – the plant, the brands and the employees are being handed over to an offshore financial construction called Corminus Enterprises Limited, headed by a former Nestlé Russia executive. The future fate of the plant and the workers is of little concern to Nestlé, with one exception: Altai’s most profitable product, Ruzanna chocolates, will remain in the company’s brand portfolio.

One month ago, the Nestlé Russia Union Council, which comprises 6 local unions, wrote to the company demanding negotiations over the future consequences for the Barnaul workers, including guarantees of continued employment and decent working conditions under the new owners. The response received on 1 February referred to legal and regulatory obligations to respect commercial secrecy and confidentiality prior to the sale, but included no reference to the request to open negotiations.

Nestlé states in its corporate social responsibility communications that its relationship with trade unions is built on the principles of “openness and mutual respect”. If this were so, the company would have respected the right to information and found a way to ensure fair treatment of the workforce through negotiations with their trade union. Social, employment and trade union guarantees should have been part of the Altai plant sales agreement.

This situation recalls the developments around the sale of the Yarichiv biscuits plant near Lvov, Ukraine, in 2008. The business was sold to International Logistics Systems – a company which belongs to former Nestlé managers. This time as well, Nestlé kept the most profitable brands. Under continuous pressure from the union, Nestlé and ILS finally guaranteed employment and union rights for Yarychiv workers, but later, the companies broke their promises. ILS never recognized the union and fired or replaced (with sub-contracted workers) 25% of its workforce including union committee members.