"Creating Shared Value" in Europe: Trampling on rights, fomenting conflict

«You have to see the world as it is, but try and change it anyway»

This phrase was bandied about by Peter Brabeck in 2006 and parroted by Nestlé management staff, including the Head of Zone Europe, Luis Cantarell, who used it to describe his vision of the Group’s development in Europe.

In December 2006, the Nestlé European Works Council addressed an open letter to Mr. Cantarell which began, “As Nestlé employees, we take you at your word. We too want change – and urgently at that”.

While Nestlé takes great pains to satisfy the financial community and “deliver shareholder value”, we, its workers, face uncertainty as results are published and our prospects for the immediate future take shape. The frequent reference to “benefits from efficiency programmes”, may excite a financial analyst, but for Nestlé workers and their unions, they mean job losses, downsizing, flexibility demands and outsourcing and they foretell of continuous restructuring and persistent attacks on wages, terms and conditions.

The fact is, Nestlé is achieving its exceptional results on the back of factory closures, job cuts, and successive cost-cutting programmes that have led to deteriorating working conditions.

In 2007 the situation had hardly changed. In May, the European Works Council issued a statement:

Unions across Europe are dealing with the consequences of the attack on existing agreements and on workers’ rights which Nestlé has launched at bargaining tables throughout the region. The catalogue of charges being levelled against Nestlé includes:

– Refusal to engage constructively in collective bargaining:
Intransigence, resorting to threats and intimidation, attempting to impose changes without negotiations, going no further than satisfying legal requirements to bargain collectively all suggest that Nestlé is wilfully ―
– Downgrading industrial relations.
– Erosion of workers’ purchasing power:
Throughout Europe, Nestlé has either imposed pay freezes or effectively achieved them by exacting concessions.

The deteriorating state of industrial relations and collective bargaining is widespread and symptomatic of a Europe-wide policy to undermine existing agreements and weaken workers rights.

Nestlé’s most egregious attack on workers rights began in late 2007 when the union at the Nestlé confectionery plant in Perm in Russia put forward its wage increase proposal in the context of collective bargaining and Nestlé Russia said “we don’t negotiate wages”. Management repeatedly confirmed that it was their position to negotiate working conditions, benefits and bonuses, but not wages, referring to this refusal as standard Nestlé policy.

Workers’ purchasing power had been drastically eroded through the rampant inflation of basic necessities in the Perm region, and it was widespread practice for workers at the Nestlé plant to sell blood in order to supplement their income. Nestlé “offered” a wage increase, but it didn’t come near to covering inflation much less represent a real increase, and it was “non-negotiable”.

When Nestlé’s violations of ILO Conventions and the OECD Guidelines were exposed, the company went so far as to offer its own interpretation of the Convention on collective bargaining rights, positing that since the Convention doesn’t explicitly mention “wages”, they are within their rights to exclude them from collective bargaining.

It took 6 months of determined struggle plus an international support campaign to get Nestlé Russia to finally negotiate wages in good faith.

The workers in Perm saw Nestlé as it is, but tried – and succeeded – to change it anyway!