The Multinational Monitor



Confronting Multinationals: Trinidad Workers on the line

An interview with David Abdulah

Nowhere does the conflict between multinationals and Third World people come into sharper focus than in the dealings these companies have with local laborers. And nowhere do the difficulties of Third World economies in developing their own resources appear so clearly than in those countries which possess-but do not greatly benefit from-vast energy reserves.

This month, Multinational Monitor discusses both these themes with David Abdulah, chief education and research officer for the Oilfields Workers' Trade Union of Trinidad and Tobago, that country's second largest union and the one most outspoken in its criticism of multinational corporations.

Trinidad and Tobago, a Caribbean nation of 1.2 million people, has hit the oil jackpot: in 1979, it earned U.S. $921 million from oil exports-30 times the amount received in 1970. The Trinidad and Tobago oil industry is partially government-owned, following nationalizations of BP and Shell plants in 1968 and 1974, respectively. AMOCO and Texaco remain fully foreign-owned, however, and continue to refine large quantities of crude. Texaco, for instance, owns a 360,000 barrel-per-day refinery in southern Trinidad.

But for all the wealth the country's oil has generated, the economy has not gotten off the ground. Trinidad and Tobago's agricultural sector is practically nonexistent, forcing the country to import virtually all its food. And the manufacturing sector is in disrepair, making the economy dependent on the world market-with all its fluctuations-for consumer goods.

The Oilfields Workers' Trade Union of Trinidad and Tobago, in existence since 1937, represents roughly 20,000 workers in the oil and petrochemical industries. It has been instrumental in drives to nationalize the oil industry.

This month's interview was conducted by the Monitor's Patricia Perkins, Jonathan Ratner and Matthew Rothschild when David Abdulah visited Washington on December 12, 1980.

MULTINATIONAL MONITOR: Your union has the reputation for being one of the more militant and activist unions in Trinidad. Is that correct?

DAVID ABDULAH: That's right.

MONITOR: What are the demands of the union with regards to multinationals? Where are the conflicts?

ABDULAH: Take Texaco, for example. This year we have a very big struggle with Texaco on the question of pensions, but the struggle isn't just on pensions. The cry is "Texaco must go."

They have been running down their plants and equipment, not repairing their refinery properly, causing all kinds of safety problems; hiring more and more contract labor; dragging out indefinitely simple industrial relations problems such as grievance procedures. There's 'a very long litany of woes against Texaco.

We believe that Texaco wants to pull out of certain Third World countries and locate more at home. They are cutting back the need for our refineries. If you at most of the large refineries in the Caribbean, you'll see they are not operating at full capacity.

So we are saying, before Texaco goes, let's take it over, so that we get

something that is at least worth taking over. When we say "Texaco must go," this is a very strong anti-company line. It's not a question of "let's sit and talk"; it's a question of "get out of the country." That call got very strong and widespread support in 1979-1980 amongst the workers and in the country. We expect the demand to open up again with tremendous ferocity when we negotiate with Texaco in January or February.

MONITOR: Is the "Texaco must go" sentiment unusual or typical of the attitudes of the rank-and-file of your union? Are other companies facing similar demands?

ABDULAH: At W.R. Grace's wholly owned fertilizer plant, Fedcam, the workers are on strike for a new three year agreement. I spoke to our union people a few days ago and they said really it is not so much a question of three year wages for W.R. Grace workers. It is more now a question of W.R. Grace must go. So there is a very strong anti-multinational sentiment developing.

MONITOR: What lies behind this attitude?

ABDULAH: A number of things. People are more aware of the fact that these multinationals are ripping off the country. There is a greater amount of consciousness that Trinidad and, Tobago should take control of their own resources. If we don't have control of our own resources, we are pawns in the boardrooms of New York and Chicago.

MONITOR: Could you give an example of how they are "ripping you off?

ABDULAH: For instance, the transfer pricing mechanisms. W.R. Grace sells fertilizer in the United States for two and one half times the cost it pays for the fertilizer from its own Trinidad subsidiary.

Texaco uses similar devices. Texaco-Trinidad, Inc., Textrin, buys oil from a marketing company of Texaco called Texport. Textrin buys the oil at a very high price and then sells the refined product to Texaco in the U.S. at a very low price. So Textrin shows a net loss on its books, when in actual fact they've made a profit. This is the way they operate.

MONITOR: How do the corporations view your union?

ABDULAH: It varies. Tesoro Petroleum, for instance, has had a very good relationship with the union. They are very cooperative; they don't hassle us.

We get a lot out of them because if you subtract Trinidad from Tesoro you leave Tesoro with virtually nothing; therefore it is very crucial that they maintain Trinidad as their place of operations. They can't afford to have any unrest, because if they do, that would be the end of Tesoro.

By contrast, W.R. Grace is very antiunion. They will send little slips of paper to workers saying, "Aren't you glad you don't have a union?" And a lot of our branch presidents in Fedcam-Grace's wholly owned fertilizer plant, have been dismissed, victimized, harassed, or bought out. As a result, our union leadership has come under strain and stress.

MONITOR: What are you hoping for in the strike against Fedcam?

ABDULAH: The immediate goal is for a new three year wage agreement. The strike is very important. We have to try to win it and give the workers at Fedcam some kind of strength. Fedcam workers going on strike two weeks before Christmas is highly unusual, because workers won't have the money to do traditional Christmas activities.

What happens in the negotiations with Grace and Texaco will set the pace for all other negotiations. Right now, 80% of our membership will be affected by the outcome. If things escalate, and the companies do not settle, the possibility is that other workers at other companies will join in solidarity with us. It could have the makings of a general strike situation.

MONITOR: Your union has been active in the South Africa oil embargo, hasn't it?

ABDULAH: Yes, we have played a very key role in that. Our members have on several occasions refused to deal with boats that we know are going to South Africa. We have raised a lot of protest to the government about Texaco using Trinidad oil facilities to bunker ships either on their way to South Africa or their way from South Africa. In response to our pressure, the Trinidad government formed a Commission of Inquiry on Texaco recently, and we gave our evidence about the ways and means in which Texaco uses Trinidad for shipping oil to South Africa.

MONITOR: Specifically how was Texaco using Trinidad in these oil shipments?

ABDULAH: It is very difficult to pin down, you know. Texaco might clear a ship for say, Land's End England, even though there's no port there for oil tankers. Then when the ship gets out in mid-ocean, they can-just send it to South Africa. Still, there are two ways that we suspect Texaco uses Trinidad.

One is for actually loading products on a boat for South Africa. We caught them with that about twice. They said the. boarding documents were made out incorrectly. But most of the time Texaco uses Trinidad as a place for bunkering ships going to South Africa. A ship coming from the United States can't make it all the way to South Africa without making a stop for bunker fuel. We don't want to bunker ships for anything like that.

MONITOR: Have there been any attempts to impose penalties against companies that make use of Trinidadian oil or port facilities for their shipments to South Africa?

ABDULAH: Well, the government has an official position, which they took back in the 1960s, which says there is not trade between South Africa and Trinidad and Tobago. So therefore if Trinidad oil is loaded on board for South Africa, then the government of Trinidad could stop that shipment.

However there is nothing that prevents a ship from getting supplies like bunker fuel en route to South Africa. Apparently there is some kind of international maritime agreement whereby the old rule is that any ship that calls in any port is supposed to be serviced, unless it's a time of war or something like that. We have said that this is unacceptable, and we have been trying to push for change in the regulations, so far without any success.

MONITOR: The Trinidad press has recently carried articles about corporate corruption. How prevalent are such practices?

ABDULAH: Illegal payments have become quite a problem. A few months ago McDonnell Douglas published a report and they said they made payments of $500,000 or something like that to three or four people in Trinidad, whom they would not name. And as I left Trinidad a week ago, an illegal payments scandal involving Tesoro was breaking, and the chairman of the board of Tesoro in Trinidad, Bernard Primas, had just resigned.

MONITOR: What does this kind of corruption indicate about the �government of Trinidad?

ABDULAH: Well, the point is, there is a hell of a lot of corruption in that government, right; the government does not operate without corruption; it's actually built into the ruling system. You see, Trinidad is expanding some of its services and its industries very rapidly. There are huge iron and steel products underway involving 26 multinationals; there is a big fertilizer project involving a dozen or so multinationals; the government is building a methanol plant, expanding its oil refineries, and building more roads.

MONITOR: Because of all this expansion, there is a lot more opportunity for corruption, is that what you are saying?

ABDULAH: Yes, because every contract that gets sold, somebody has to get some money.

MONITOR: What kinds of formal terms does the government normally use in bargaining for foreign investments? Does the government maintain control of the resources and the marketing?

ABDULAH: No, not really. It varies from situation to situation.

MONITOR: Could you give us an example?

ABDULAH: Take the fertilizer industry. There are three fertilizer companies in Trinidad. There's Fedcam, which is wholly owned by W.R. Grace. Then there's Trindiam, a joint venture Grace set up with the government. Trindiad is 51 percent owned by the government and 49 percent owned by Grace. All Trindiam's marketing is done by Grace.

So Trinidad will make a profit based only on 51 percent of its sale of ammonia to Grace. However, Grace receives all the profits from the actual market sales of Trindiam's fertilizer. This is the way in which multinational corporations take control. The third fertilizer plant is a joint venture between AMOCO and the government. Here too, all the marketing of the product is to be handled by AMOCO. And the government is going to have to take on all the problems with labor and running the plant.

MONITOR: Does the government have any other options in terms of marketing? .

ABDULAH: There are options, but the , government doesn't want to pursue ' them.

MONITOR: Why not?

ABDULAH: Essentially because of two things. It has a certain class position; they are not really out to buck the multinationals. They find it easier to cooperate with the multinationals and ` to get a piece of the cake through : corruption. And secondly, they are ; frightened people. You know, these top civil servants and politicians don't feel ` confident that they could run the thing. Over the years, colonialism has created a psyche of inferiority in certain kinds of people.

MONITOR: Are they frightened also for non-psychological reasons? For instance, if the government started taking on the marketing role of the multinationals, then the companies might not take too kindly to Trinidad and then cut back on investment?.

ABDULAH: And start squeezing. the government? Sure. There are real problems; it is not an easy thing. You have to take your courage in your hands.

MONITOR: One of the striking things about Trinidad is that it's an oil producing LDC, but at the same time, being an oil producing country doesn't seem to have helped out the vast majority of people in Trinidad. There still seems to be a lot of structural underdevelopment. Could you explain why that is? There's billions of dollars of foreign exchange generated by the oil industry, yet it doesn't seem to have "trickled down. "

ABDULAH: Essentially, the reason for that is the type of development that is being pursued. In economics, you talk about development really being created when you have an internal dynamic in the economy. That is, you have linkages between one sector and another sector; one sector creates demand for another sector and vice-versa. When you have that kind of internal relationship, then when one thing is moving, it forces the other thing to move.

Now, Third World countries historically have never had an internal dynamic. We have always been externally propelled, so that when somebody else says "grow sugar," we grow sugar; when somebody says "grow bananas," we grow bananas. That's what has happened in Trinidad. Sure we have oil, but there is no attempt to link the needs of the people with the output of the industry.

MONITOR: Could you give a specific example of how this export orientation fails to benefit most people in Trinidad?

ABDULAH: We are one of the oldest oil industries in the world. Our first oil drill was back in the 1860s; the first oil production started in the 1870s, which was before 98 percent of the world's oil producers began. Yet, we do not have any indigenous oil technology. We cannot design our own oil structures, drilling, platforms, things like that. We can't produce designs for refineries. We don't even in fact do our own seismic work; we still have to contract that out and send the results to Houston. This is after 130 years of oil activity.

A second thing. The oil industry was always geared to suit other people's interests. For many years we were the largest oil producer in the British empire. Trinidad literally supplied the British war effort during World War 1. After World War II, when Britain declined as an imperial power, the United States became preeminent. The Americans decided they needed Trinidad as a refining base mainly to be able to send up products to the east coast of the U.S. The Americans would bring in the oil from the Middle East, refine it in Trinidad, and market it in the United States.

Now the kinds of products they made were suited to the needs mainly of U.S. east-coasters-principally the need for residual fuel oil, which is only really good for heating purposes and for generating electricity. Now we don't need residual fuel oil in Trinidad because we don I have heating problems.

MONITOR: How do you relate the needs of the people to the oil production capacities of the country?

ABDULAH: Some of us are advocating that Trinidad go downstream and begin to produce petrochemicals and then get into secondary manufacturing such as producing synthetic textiles, based on oil, producing pharmaceuticals, and producing plastics products for everyday use.

In addition, each time you set up a labor intensive industry like textiles, you create thousands of jobs, whereas if you set up an iron or steel or fertilizer plant you're only going to create a couple hundred jobs.

MONITOR: How about agriculture? Does Trinidad have the resources to become self-sufficient in agriculture?

ABDULAH: We import about U.S.$250 million of food products each year. The government hasn't really encouraged agriculture. What we are saying is that we could produce far more food back at home. If we produced more agriculture products, that would then create a need for a canning industry, which is labor intensive by the way. Instead of spending $250 million on food imports, well be able to spend some of that at home. Well save on foreign exchange, and we will also have a control over the prices of this basic necessity. We won't be as affected by international market fluctuations. It really involves restructuring the economy.

MONITOR: But how do you go about restructuring the economy?

ABDULAH: It requires a change in system. Our economic system from the time of slavery has been part of the international capitalist system.

To restructure the economy one has to break with the system of international capital development. That's not to say that we would become isolated; you still must have relations with multinational companies and other countries.

But the point is we must control our own destiny and therefore we have to attempt to break the multinationals' control and establish our own kind of development. Now this is not easy. It sounds nice, but it is not easy because it is their interest against our interest. And their interest means billions of dollars of profits every year and no company or country is going to allow that to fall out of their hands.

MONITOR: Do you see these changes occurring with the present government or will you need a change of government?

ABDULAH: We are going to have to have a change of government. The present government has historically invited multinationally to come down to Trinidad. For instance, when Grace came to Trinidad, Grace wrote the contract. They wrote a letter---I saw a copy of it-saying, "Here is the contract; Is the government interested? If so, could you please sign the contract and send it back?" The government wrote back and said, "Well, yes, we are sorry for the delay; we are interested in the contract." This is the way the government has traditionally operated. Even though they have changed some from the 1950s and 60s, they still encourage multinationals to come down.

MONITOR: Even with a new government more committed to creating what you call an internal dynamic, wouldn't Trinidad still be at the mercy of multinationals, similar to the position Jamaica has been in?

ABDULAH: Yes and no. You see, I think that Jamaica pussyfooted; I think that Manley pussyfooted a lot. He wanted to break the influence of multinationals, and yet he tried to play the game at the same time. You cannot do both. You either do one thing or the other. You cannot begin to squeeze the multinationals and not begin to line up all the alternatives beforehand.

One of course also has to get people to try to understand social transformations that are, required and the problems that are going on at the same time that you have to solve short term needs.

MONITOR: But what do you say to a person of Jamaica, seeing the economy in as bad shape as it is; unemployment as high as it is; the companies and the international finance institutions like the IMF either turning the screws or sitting on their hands; what do you say when that person tells you: "Well look at how terrible everything is now. Seaga holds out the hop( of things being better. I don't like his politics all that much, but maybe I'll have a job. " How do you respond to someone like that?

ABDULAH: That is really the problem, you know, because that's why Seaga won. I'm not against the ordinary Jamaican worker or unemployed youth or farmer who was catching his tail, as we say in Trinidad, and supported Seaga hoping that he would get some more food to eat. I can't really blame a guy like that. I think that would be very unfair.

However, I feel the reason for that situation goes back to some of the mistakes Manley made early on, back in 1976. He had a couple of alternatives at that time.

MONITOR: What alternatives does Trinidad have at this time?

ABDULAH: For a long time there was a monopoly of technology and certain types of industry. Now several countries and several companies have the same kind of technology. The world is a little more open. Now we have to be very firm and strong when dealing with other countries and companies, saying "these are the conditions and the terms under which we want to receive this technology." It is not an easy game to play, but there are other people with whom we could begin to deal.

MONITOR: How long will it take to bring about the kinds of changes in the economy that you hope for?

ABDULAH: At our union's annual conference this year, we said that by the end of the decade of the 80s, "Those who labor must hold the reins." This is the way we put it. We are dealing with a very difficult situation. We have to just patiently carry out educational work amongst the people, showing them why the country's the way it is, how we could change, begin to organize and mobilize people, and create strong political and social institutions among the people.

Table of Contents