The Multinational Monitor



Challenging Martial Law in the Factories

An interview with Crispin Beltran

Crispin Beltran is chairperson of the Kilusang Mayo Uno (KMU) Labor Center, a progressive Philippine trade union confederation with approximately 800,000 members. Beltran has been the victim of repeated arbitrary arrest and short-term detention due to his union activities. Over the last decade, he has faced a broad array of criminal charges that Amnesty International found "may be intended primarily to silence or intimidate Crispin Beltran and to undermine the legal status of the KMU and affiliated unions."

Multinational Monitor: What is the profile of the Philippine trade union movement?

Crispin Beltran: The trade union movement in the Philippines is very weak, in the sense that only about 10-15 percent of the labor force, which is about 27 million people, is organized into trade unions. To exacerbate this weakness, the trade union movement is not united. It is factionalized, and engaged mainly in inter-union struggles.

The whole spectrum can be divided into three general categories. The biggest groups are the democratic and progressive trade union group, to which the KMU belongs, and a conservative bloc. The conservative bloc includes the Trade Union Congress of the Philippines (TLCP), some of the other unions that are identified with the social democratic orientation, the Christian Democratic bloc which belongs to the Union of Filipino Workers and also the very small rightist bloc of the UFW. Then there are the "middle of the roaders," mostly independent unions focused on bread and butter issues. The conservative ones cater with the policies of the government, and of course the multinational corporations through the International Monetary Fund and World Bank. Those who are in the progressive bloc struggle with the people on the sectoral and trade union interests of the workers as well as on multi-sectoral issues that are related to the national interest.

Although the progressive and nationalist bloc is more or less numerically dominant, we still are not able to make an imprint or an impact on the policies of government. As a result, the policy of the government in cahoots with the capitalists is repressive and very exploitative in nature.

Our labor laws today are still the labor laws of the martial law regime of President Marcos. During that time, the more or less liberal policies of the pre-martial period were amended to such an extent that liberal unionism was almost prohibited - or at least very restricted. But, after the lifting of martial law and the overthrow of Marcos, there was no substantial return of the workers' rights, especially to organize and engage in strikes. This continues under President Ramos. Specific provisions in the labor law, particularly article 264 (A-J), give the Department of Labor and the Office of the President jurisdiction over any and all labor disputes that involve "the national interest" - meaning almost all disputes can be taken over.

These provisions, which impair workers' rights to self-organization and collective bargaining violate International Labor Organization conventions 87 and 98.

Another provision of the labor law, Article 106, further directly and indirectly restricts membership in the trade union movement by way of massive contractualization of workers. Because only regular, rank-and-file workers are legally qualified to be members of the union, those that remain perpetually contractuals and agency workers are excluded from membership in the union.

Another problematic portion of the labor law involves the wage-fixing authority of the government. Wages of die workers are now left to the sole discretion of the employers and the so-called labor market. The government has relinquished its authority to protect the workers' income as mandated by the constitution Section 3 of Article 13 of the constitution mandates that the government must secure a living wage for workers. The minimum wage now is only 118 pesos [less than US$5] per day, whereas the estimate of the living wage per worker now is about 260 pesos [more than US$10] per day. So the minimum wage is less than one-half of the needs of the worker and his family to maintain a minimum standard of existence and welfare.

These major defects of the labor code (i.e. restrictions on membership, contractualization and wage fixing), contribute to the general weakening of the trade unions.

MM: What percentage of the workforce earns the living wage?

Beltran: Seventy or 80 percent of the population falls below the poverty line of 268 pesos. The Department of Labor estimates 72 percent and the University of the Philippines estimates 80 percent. I am living right on this line. Who earns 268 pesos per day in the Philippines? It is the white collar workers and those who are working with big multinational corporations.

MM: How frequently does the government intervene in labor disputes?

Beltran: It is very frequent. For instance, in two recent incidents - involving the Meralco Employees and Workers Association and the Philippines Airlines employee association - cases were assumed by the Department of Labor, even before the filing of the notice of strike. The issues in these two cases represent ordinary problems of the trade union movement in the Philippines. In the Meralco case, the union-busting activities of the employers resulted in the dismissal of something like 77 workers. Most were reinstated, but 25 very vocal and active union leaders are still out of their jobs. Under the code, it is an unfair labor practice to strike any time before waiting for a so-called cooling off period, but as I said, even before the notice of a strike was filed, the Depart ment of Labor assumed the case. The problems are further exacerbated by the contractualization of some 2,800 workers who were meter readers. These workers have been members of the collective bargaining unit for the last 35 years, but now their work is being contracted out. Therefore, they can no longer be members of the collective bargaining unit, which was engaged in the renewal of the existing collective bargaining agreement at the time that management imposed these new rules. So the union was in a bind, and, to apply the coup de grace, the Department of Labor took over the dispute.

The Philippines Airlines is impressed with the very sensitive national matter of national transportation, so of course under the old law it was subject to the process of voluntary and compulsory arbitration. However, what is objectionable and contrary to the right of self-organization, as provided for in ILO Convention 87, is the fact that the right to strike was suppressed even before the intention to strike was expressed.

These are only two recent cases, but there are hundreds involving even, say, the garment industry, which can hardly be characterized as a national interest issue. These are all being covered by the assumption of jurisdiction by the Department of Labor, which means the prohibition of strikes. We call it martial law in the factories.

MM: What does it mean to have the Department of Labor intervene?

Beltran: There are two types of arbitration that are being applied, voluntary and compulsory. When issues involve interpretations of collective bargaining agreement provisions or charges of unfair labor practices within the purview of the existing collective bargaining agreement, the mode of settlement is voluntary arbitration, which means the parties involved select the judge or arbitrator, and the decision of that arbitrator is final. Compulsory arbitration takes place in all the other cases, like labor standards, violations of the right to organize, of the democratic rights of the workers that are not covered by any collective agreement. These cases are solved through compulsory arbitration, with decisions made by the National Labor Relations Commission of the Department of Labor. Their decisions are appealable to the Supreme Court.

MM: Are the contractual workers more prevalent in the private or public sector?

Beltran: In the private sector.

Of course, in the government sector, there is also a prevalence of contractual workers that are indirectly being paid by private contractors. However, these private contractors get their finances or capital from the government. So instead of the government directly paying the workers, wages are passed through private contractors. The further effect is to provide an incentive for graft and corruption in the government sector.

But contractualization is more prevalent in the private sector, and our research suggests that it is massive in nature. For instance, one of the biggest corporations in the Philippines, in fact the biggest, is a home-grown multinational corporation, the beer manufacturer San Miguel. San Miguel has about 24,000 regular workers, and about 18,000 of these regular workers are members of the KMU. Right now, the ratio between regular and contractual workers at the company is something like 35 regular to 65 contractual workers. The company has achieved this ratio through "spin-off" policies and through the forced retirement of regular workers and subsequent hiring of contractual workers in their place. This is leading to phenomenal change in the contacts and character of the employer-employee relations in San Miguel.

Now, as I said, the contractual workers are not qualified to be members of the unions under our laws. Secondly, their wage level is very much below the minimum wage, whereas the regular workers at San Miguel earn two to three times the minimum wage. Third, the contractual workers have no security of tenure of employment as mandated in the constitution. The government is mandated to afford tenurial security to employees, but this is absolutely absent for contractual employees. Their employment is for five to six months, and then renewed again for another six-month period, so that the worker could not acquire tenurial security. If this is true of the biggest corporation in the Philippines, how much more so must it be among the smaller ones?

I understand now that there is an association of the so-called secondary or contract employers called PALSCO, the Philippine Association of Labor Services Contractors. We understand also from our research that it is the employers themselves who are most of these contractors, so the employers or the capitalists make double profit. And, of course, it's a double exploitation of the workers.

MM: Hon, does the militarization of the country affect the trade union movement?

Beltran: This has been a problem for almost a quarter of a century now. During the whole period of Marcos's dictatorship, many workers have been repressed, harassed and exploited. Many of them were imprisoned and killed, many extrajudicially. I myself was one of the victims.

In 1982, the KMU for the first time was almost dismantled by Marcos. More than 100 of our top leadership went to jail, including our chairman then, Mr. Felixberta Olalia, and myself and others.

We thought that this would disappear from the scene when Cory Aquino took over. Rut we were all mistaken. It continued throughout the Aquino tenure except for a very brief period in 1986, from February to December. On January 22, 1987, the first salvo of repression under Cory Aquino was unleashed, and that was the massacre of the peasants in front of Malacanang [the president's palace]. Of the 19 that were immediately killed, 6 were KMU members, and the rest were peasants; about 150 were injured, some for life. Preceding that was the murder of the KMU chairman, Rolando Olalia, on November 13, 1986. There were several other murders and extrajudicial killings among KMU leadership. Among them were the brother of the vice chairman of the KMU, who was ambushed near Malacanang Palace, and Oscar Bentayan, KMU National Council member for Mindanao, who was murdered on October 10, 1989. Pickets were harassed and militarized, and many of us were incarcerated during this time. This was a direct result of the so-called low-intensity conflict policy, which was imported from the United States. Mr. Ramos, then secretary of defense and the implementor of the low-intensity conflict policy, called it a comprehensive-approach policy.

We were hopeful again that under the Ramos administration's so-called people's empowerment things could change a bit. But, with the amendment of the labor code, the holding in place of the assumption of jurisdiction and militarization in the factories, we see this policy as just a rehash of Marcos and Cory Aquino. Trade union repression as a primary product of continuing militarization remains very ominous.

Right now we have one case in Valenzuela, in Metro Manila, which the administration calls the hotbed of activism in the trade union movement and where there is a policy of infiltration, education, then militarization and liquidation of the trade union movement,

The MKIC Steel Corp. is one of a consortium of 7 companies in Valenzuela. There is a notorious CAFGU (Civilian Armed Forces Geographical Unit; the Philippine civilian defense force) element who was reared by the government in the Atlas Corp., the biggest corporate mine in Asia, on the Philippine island of Cebu. This man, named Jun Alamo, used to be a member of the ALU-TUCP, but in 1989 he was taken and trained by the military. He was indoctrinated by the military and he unleashed a sort of warfare in Cebu, supported by the military and the civilian government. As a result of his actions, 13 KMU members were killed at Atlas and about 60 were injured. Even the union office was strafed. Despite this, our local union at Atlas was finally certified by the Department of Labor, and Jun Alamo disappeared. Now he has again reared his ugly head in Valenzuela.

There are 135 workers in MKK. Forty-seven of them were trained in Camp Crame, the headquarters of the Philippine National Police, and Jun Alamo and another man who is known to be a member of the intelligence community are training these employees. While training, the employees are paid one hour overtime, and then an additional allowance of 100 pesos per day. After the training, they are organized as CAFGL units.

Seven of these workers are posted with weapons inside the factory. They monitor the activities of the workers, especially trade union activities. This is militarization inside a small company, and it is spreading very rapidly.

Last June 25, we had a rally in the Department of Labor, and we denounced this in-house method of liquidating unionism, first in Cebu and in Mindanao. Now they are applying an "improved" version of their activities in the Metro Manila area.

MM: You have been a very prominent critic of various aspects of the government's energy program. What are the KMU's main concerns in this area?

Beltran: The energy issue has been affecting Philippine labor and industry for quite a time now. It started in December 1990, when the price of oil was increased almost 100 percent. This affected very adversely the whole economy and the take-home pay of the workers. So we consistently fought against the increase of oil prices because of the so-called Gulf War hysteria and demanded a roll back of prices.

When the brownouts became prevalent, they further exacerbated the problems facing the economy and workers. For instance, during the first quarter of 1993, in Metro Manila alone, the Department of Labor concluded that 1.25 million workers, of a 3.5 million workforce, were significantly affected by brownouts.

Of these 1.25 million, 122,000 were totally laid off. This came on top of the already very, very bad unemployment condition before the daily power brownouts. So, it has become a very critical issue that affects the life of the workers. That's why we are in it.

We have very sharp criticisms of the energy policies of both the Aquino government and the Ramos government. One of our more enterprising members, a mechanic, was able to improvise a small machine that he placed in one of the small rivers in the mountains of Mindanao, and he was able to provide a small barrio with power. Why not use and develop machines like this, instead of investing in the huge, so-called fast track projects, very expensive projects that have been the source of suspicion of graft and corruption?

We also have complaints about unjustified, excessive, erroneous meter readings. Fortunately, Meralco, the sole franchise holder, has admitted that there have been some errors in reading meters. But we are not satisfied with this explanation.

I posed a question to Meralco officials: Your distribution system indicated that 100 kilowatt-hours were distributed. But while you have an input of 100 kilowatt-hours, you sent the consumer a bill worth 200 kilowatt-hours. Something is wrong in this system. I was not the only one who complained in the community, almost everyone did. In spite of the brownouts lasting for eight hours, or a third of a day, the kilowatt-hours consumed increased instead of decreased. And with the increase of the rate per kilowatt-hour, the bills are skyrocketing.

I used to pay 900 pesos, more or less, for our household electricity bill. But by January, February and March 1993, the bills shot up to 1,400 pesos each month. Before December 1992, brownouts were fewer and shorter in duration, but by January and February, we were having an average of eight-hour brownouts a day. Why in heaven's name did we consume more kilowatt-hours than in December when there were almost no brownouts?

So these are things that we push on, and much of our time and efforts are spent here, rather than doing our work. Of course it is part of our struggle. This is no longer a workers' struggle, it is a peoples' struggle. The interest is transcending the workers' jurisdiction. But we are happy in the sense that we contribute to helping the whole community.

MM: What is the KMU's position on multinational investment in the Philippine economy?

Beltran: The KMU is not against multinationals per se. We welcome multinational investment, provided that it does not compete aggressively and unfairly with local entrepreneurs and domestic capital. As it is now, the so-called spin-off policies of corporations, especially the big ones, is a one-way street, moving in the direction toward the control and domination of the multinationals. The local capitalists, especially in finance and banking, are reduced to being the junior partners of the multinationals.

This brings me to touch a little bit on the Medium Term Development Plan of President Ramos. It is just a package of propositions that are more or less within the framework of International Monetary Fund (IMF)/World Bank conditionalitics. We oppose this. We say that the Philippines, through the constitutional mandate, must develop an independent, modern, progressive economic development plan free from the conditionalities of the IMF and the World Bank. The Philippines has been subjected to IMF-World Bank dictations for a long time, even before the Marcos dictatorship and up to now. The KMU perceives these impositions as the main reasons for the economic debacle that we now have.

The domination of multinational corporations over the economy is the main problem as far as the KMU is concerned. During the last presidential election, one of the candidates said that the multinationals should only be the icing on the cake, not the cake itself. Local capital must be nurtured, and if the multinationals see that they could live with this condition, and the economy is already stable and growing, they could come in as a matter of course. But the present government has targeted foreign investment as the main mover of the economy.

MM: In which sectors do multinationals play the biggest role?

Beltran: The highly capitalized and mechanized industries, the basic industries, are in the hands of the multinationals. For instance, the car and motor vehicle industry is all in the hands of multinationals; all of the motor shops and repair shops are in the hands of Filipinos. Spare parts, including screws, are all imported. In the joint venture corporations, the Filipino capitalists are mostly just service contractors, or subsidiaries maybe, of multinationals. In garments, for instance, there are very big garment factories here, but they are all owned by multinational corporations, such as Novelty Philippines and several others. The Filipino capitalists are just contractors or just service accounts of these garment multinationals. The pharmaceuticals and medical industries are all in the hands of multinationals. And in the banking and finance market, the most Filipinos can get to be is junior partners of big multinational corporations in off-shore banking.

Although the United States still has the biggest investments in the Philippines, Japanese multinationals are bringing in more new investments than the Americans since the 1980s. American business is still entrenched in key and strategic industries. British investments are also quite influential in oil refinery and gas exploration and extraction.

Car assembly is now dominated by Japanese business, with some Korean and European ventures.

In the traditional sectors, like the mining industry, American nationals are predominant in big mining corporations like Atlas and Benguet Mines, although there are now significant Japanese inroads in the industry.

The commercial fishing industry is also dominated by Japan and Taiwan, and we are not even talking of poachers here. Even in agriculture, multinationals have already intruded, investing heavily in aquaculture. Agricultural inputs such as fertilizers and pesticides are dominated by multinationals from the United States and Europe.

MM: Among the foreign companies, who are the worst employers?

Beltran: There are differences in conditions, since American and Japanese multinationals are found mainly in large industries which are commonly capital-intensive and require higher technology, while Korean and Taiwanese investments are found mainly in labor-intensive and low-technology small- to medium-scale industries.

If you would compare these multinationals, at first glance the Americans and Japanese may pay more and give better benefits than the Korean and Taiwanese sweatshops. The former may be tolerant with trade unions, and the latter quite antagonistic. But if you analyze based on the ratio of profits and cost of labor, the Japanese and Americans would be more exploitative.

There is no way of comparing the sweatshops which cannot even afford to pay the minimum wage and minimal provisions for medical care. These sweatshops employ a majority of the industrial workers in this country.

When you compare the wages and benefits of the top 5 percent of the workers in Japanese and American companies with the majority of workers employed in the sweatshops, the average is one to nine. But if you compare a Nissan worker in the Philippines to one Nissan worker in Japan, the rate is one to 10; one worker in Japan earns what ten here do. So the ratio between the ordinary worker in the Philippines to the worker in Japan is one to 90; the salary and benefits of one worker in Japan can pay altogether 90 workers in the sweatshops. In our lectures in the Philippines at the multinationals, we get a chicken to give the workers a picture of how much salary they receive compared to a Japanese worker. An ordinary worker in the Philippines receives enough every day to buy three-fourths of the chicken. An ordinary worker in Japan receives enough to buy a whole range of 70 chickens.

Now if you try to analyze this, a Philippine worker's electric bill is as high as a Japanese worker's, and yet their comparative earnings are one to 90, so you can easily imagine how poor the Philippine worker is. His basic service costs of water, electricity, housing and food are almost as high as a Korean or Taiwanese worker, and yet those workers earn 10 times as much.

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