"Social Dumping" in Mexico Under NAFTA

by Janice Shields

 TIJUANA, MEXICO - ONE MONTH AFTER the U.S. Congress approved the North American Free Trade Agreement (NAFTA), Mexico held its first independent union election in 10 years. Unfortunately, neither NAFTA nor this vote ushered in a new era in Mexican labor relations or brought significant improvements to Mexican maquiladoras (foreign- owned factories). Intimidation, corruption and employer interference continue to mar union representation, and working conditions in border plants remain dismal, notwithstanding the much-touted promises of the labor side agreement to NAFTA.

Conditions along the U.S.-Mexican border a year after NAFTA confirm concerns of NAFTA critics, who warned that the lax NAFTA accord would encourage corporations to profit from so-called "social dumping." Multinationals pursuing this practice shift their production facilities from industrialized countries with relatively strict labor and environmental standards to countries such as Mexico, where standards are weak or rarely enforced.


Company unions

 "From the time the maquiladoras started to grow here [in Tijuana], unions were set up by the companies rather than the workers, with ęprotection contracts' signed before even a single worker was hired," says Mary Tong of the San Diego-based Support Committee for Maquiladora Workers. "Workers don't even know about [the union] unless and until they try to organize or have complaints on the job. Then, the union, which is paid to make sure that there is no labor unrest, tries to keep them from organizing. The so- called union representative is more often a greater threat to organizing than even the company. The company usually doesn't even have to bother dealing with labor problems because they're squelched by the union representative."

Workers at Plásticos Bajacal, a subsidiary of Phoenix-based Carlisle Plastics Inc., participated in the historic vote on whether to replace the official Regional Confederation of Mexican Workers (CROM) with independent union representation. Voting took place on the sidewalk in front of the plant on December 15, 1993. A CROM representative escorted workers, who make hangers, outside the factory gates, where they voted aloud. International observers say 30 CROM thugs with cellular phones filmed each worker's vote. The Conciliation and Arbitration Board, the government agency which oversees union elections, raised no objection to this process.

Representatives of the proposed independent union requested that the election be called off when they became concerned that supporters would face reprisals from the company and the CROM. Ultimately, the two unions negotiated a settlement in which the independent union got little more than an agreement that workers who had been fired for organizing activity would receive the severance pay legally owed to them.

Carlisle President Clifford Deupree recalls the vote differently. The vote occurred openly according to Mexican custom and the only filming he noticed was done by the media. Votes ran 10 to one against the union challengers, who capitulated, he says. "We are there as guests of the Mexican government. We follow their laws very rigorously. It is not my place to comment on comparative labor law in the United States as compared to other countries."

 Despite this setback, the mere fact that an election occurred is "a tribute to the great effort by organizers on both sides of the border," says Tong. The fact that independent union elections are so rare in Mexico illustrates "the failure of NAFTA proponents' promises for a new era of labor rights," she says.

Another group of maquiladora workers sought independent representation in January 1994. One hundred eighty-seven General Motors (GM) workers tried to register as an independent union at the labor board in Ciudad Juárez, Chihuahua, south of El Paso, Texas. After the labor board failed to respond to this request, workers wearing red bandanas popularized by the Zapatista rebels in Chiapas took over the board's offices on February 7. Workers from a Ford factory and two other GM plants joined the protest. One worker who participated in the masked takeover told Labor Notes he "wanted to avert the company's retaliation, while showing the boss there will be a second Chiapas in Chihuahua." But the board rejected the union registration on February 16 and GM fired 15 labor leaders in March. Workers slowed production and resubmitted their request to register an independent union; GM fired 60 more workers. "Employees at that plant chose to leave the employment of the company," says GM spokesperson Michael Hissan. "Under Mexican labor laws, they received a settlement, negotiated to their satisfaction."


Labor side agreement

 Activists in Mexico, with some assistance from U.S. and Canadian allies, are pursuing three avenues to help Mexican employees in foreign-owned factories. They are demanding genuine implementation of NAFTA's labor side agreement, filing cross-border lawsuits against foreign parent companies and taking direct action against employers.

 To date, the labor side agreement has been worthless. The agreement established National Administrative Offices in the United States, Canada and Mexico to hear labor violation complaints. Workers from one NAFTA country can submit evidence to the NAO office of another NAFTA country to demonstrate that their country's labor laws are not being enforced. If the NAO finds merit in the case, officials from the country where the hearing was held meet with their counterparts in the country that violated its own labor laws to try to resolve the dispute.

The NAO held its first hearing in September 1994 in Washington, D.C. The U.S. Teamsters and United Electrical Workers unions charged General Electric and Honeywell with systematic violations of Mexican health, safety and union organizing laws. The U.S. unions acted in solidarity with the Mexican metal workers union STIMAHCS, an affiliate of the Authentic Labor Front, Mexico's independent labor federation. The unions accused both companies of illegally firing about 150 Mexican workers who attended off-duty meetings with union organizers. Testifying before the NAO, four Mexican labor lawyers said U.S. companies breach Mexican labor laws with impunity because Mexican officials are anxious to please U.S. corporations. Electronic media were banned from recording the proceedings and witnesses were limited to 15 minutes of testimony each. On October 12, the NAO issued a report that concluded that it was "not in a position to make a finding that the Government of Mexico failed to enforce the relevant labor laws." No action was taken against either company.

The NAO released a report on its second case, involving a Sony Corporation subsidiary located in Nuevo Laredo, in early April 1995. The Sony complaint was filed by the International Labor Rights Education and Research Fund, the National Association of Democratic Lawyers, the Coalition for Justice in the Maquiladoras and the American Friends Service Committee. This complaint alleges that Sony workers were denied their right to organize and associate in four ways: Workers who organized were fired; a union election was procedurally flawed in ways similar to the Plásticos Bajacal vote; workers who protested the flawed election in front of the plant were beaten up by police; and a petition to register an independent union was improperly rejected.

The NAO report concludes that, "it appears plausible that the workers' discharges occurred for the causes alleged, namely for participation in union organizing activities." In the Sony case, the NAO took its toughest position to date - which is not saying much. The report calls for "ministerial consultations." U.S. Labor Secretary Robert Reich has written to Mexican Labor Minister Santiago Oñate to request a telephone conversation about the matter. "It is my hope that we can agree on how to proceed on these matters as soon as you have had an opportunity to review the report," Reich wrote Oñate. "I believe it is important that we continue to discuss the labor rights and industrial relations we have mutually agreed are of critical importance."

 A statement from Arturo Alcalde of the National Association of Democratic Lawyers in Mexico City said, "This decision calls attention to the basic problems faced by Mexican workers, namely that government authorities hold the labor law in contempt and that official unions do not respect the democratic rights of their rank and file members."

 Sexual harassment is another common grievance among maquiladora workers, most of whom are women. In the first case of its kind, Mexican employees sued U.S.-based National O-Ring in a U.S. court on December 15, 1994, alleging violations of Mexican labor and other laws and demanding at least $2.25 million as well as punitive damages. More than 100 workers who had been employed at Exportadora de Mano de Obra in Tijuana filed the charges against the U.S. company, which they allege is Exportadora's parent, National O-Ring, and National O-Ring President John Shahid. "If NAFTA opened the border to trade, the border should also be opened in terms of liability," says the workers' attorney, Fred J. Kumetz.

 The suit alleges that the company refused to pay back wages, and accrued vacation and severance pay to over 190 workers who were terminated when the U.S. parent shut down the plant in November 1994. Exportadora's workers had earned the equivalent of 50 to 75 cents per hour (at the exchange rate in place prior to the peso devaluation) and worked 48 hours per week. The complaint also accuses National O- Ring's president of sexual harassment.

In May 1994, Shahid allegedly offered to give a Mexican office employee a night course in English, reportedly touching the employee repeatedly on the back in an offensive manner. In September 1994, women employees were required to participate against their will in a bikini contest at the company picnic. Without their permission, Shahid videotaped them, training the camera below their waists. After the women complained about the incident, National O-Ring stopped sending work orders to the Exportadora plant. In December, Shahid told the San Diego Union-Tribune that the video incident never occurred and that his company does not own Exportadora.

 The Exportada workers first filed complaints with the Justice Department of the State of Baja California in Mexico. Citations were issued but the U.S. owner refused to appear, arguing that the Mexican plant was a legally separate company for which National O-Ring was not liable. Formal records filed with the government are in a "borrowed name" - the name of a Mexican who is listed as the owner even though all operations and profits are controlled by the foreign company. The U.S. case is pending.

Glimmers of hope

 At the local plant level, workers have begun to form committees to function as independent unions that can counter the company unions. "Committees have been established at 19 different maquiladoras in Tijuana," according to Aurora Pelayo, a community activist in the worker colonia of Vista Alamar. "It is hoped that the committees will one day be able to join to form one union for all of the workers."

In their struggle, maquiladora workers have been assisted by cross-border organizations such as the Support Committee for Maquiladora Workers. The all-volunteer Support Committee is run entirely through donations. It seeks to promote and support independent labor organizing in Mexico. To date, the Committee has publicized strikes in Mexican factories and organized tours of the industrial zones and colonias so international labor leaders, politicians and journalists can witness the adverse impact of foreign exploitation along the border. The committee also has sponsored health and safety workshops to train maquiladora workers as leaders in their communities, to organize for better conditions.

 "I did not hold out hopes for NAFTA bringing any type of positive benefits to workers," says Tong. However, "the debate over NAFTA did draw together a lot of unionists and others in the United States, Canada and Mexico who never really considered the situation of workers in the maquiladoras before," the organizer says. "They now are realizing that they really need to work hand-in-hand with Mexican workers. That's the only positive I've seen."


Border Health Hazards

TIJUANA, MEXICO - JUST 13 YEARS AGO, the river valley below the mesa in Tijuana, Mexico was an ecological preserve where residents of Chilpancingo, a neighborhood between the mesa and the river, could drink untreated well water. Then came a steady increase in the number of maquiladoras (foreign-owned factories) on the mesa. The companies released toxic chemicals into three drainage ditches that passed through the neighborhoods to the river, and now concentrations of lead, copper, zinc, cadmium, arsenic and chromium all exceed legal limits. A water treatment plant built in 1990 is overloaded.

Maurilio Sanchez Pachuca, president of the Citizens' Pro-restoration Committee of Padre Canyon and Community Services, who has conducted a health survey of the area, says "40 percent of Chilpancingo's population is sick and has learning disabilities." Sanchez built a medical clinic beside his house, but has no more money for furnishings or a doctor, so the building sits empty.

Since the North American Free Trade Agreement (NAFTA) went into effect, the city of Tijuana has begun to artificially extend the mesa so that more polluting plants will tower above the workers' communities; the Mexican government also is building a taxpayer-financed highway to connect two maquiladora areas for the convenience of the foreign managers.

U.S. and Mexican residents 370 miles to the east also suffer the ill effects of maquiladora-caused pollution. Foreign companies have built approximately 80 plants in Nogales, Sonora, across the border from Nogales, Arizona. Both the Nogales Wash, which flows from Mexico to the United States, and the area groundwater are contaminated with industrial chemicals. The remote cities' particulate pollution levels exceed U.S. federal health standards, partially due to heavy smoke from the Sonora dump, where industrial products are burned. A recent University of Arizona survey of Nogales, Arizona residents found higher than average rates of multiple myeloma, a rare bone marrow cancer, and lupas, a disease in which the immune system attacks the body.


Maquiladora health and safety

Health and safety conditions inside the maquiladoras are as dangerous as those in the surrounding communities. Aurora Pelaya, a community activist in a Tijuana neighborhood, charges that the problems have long been covered up because "companies have made under-the-table payments to environmental and health and safety investigators for years."

One widespread problem is maquiladora employers' effort to keep Mexican workers out of the federal health care system. Mexican workers are supposed to receive free federal health care for job-related illnesses. But plants try to avoid written reports of job-related accidents or health problems by hiring their own private doctors who treat workers inside the factories.

"This is not new, but there's been a tremendous switch-over in the past year [since the North American Free Trade Agreement (NAFTA) went into effect] to maquiladoras having private doctors either on a part-time or on an on-call basis," reports Mary Tong, an activist with the San Diego-based Support Committee for Maquiladora Workers. "Any time there's an accident on the job or workers get sick with a job-related illness, they go to the doctor hired by the maquiladora rather than the government clinic, so it won't go on the record, won't drive the insurance rate up and won't be traceable to their plant as an on-the-job injury or health problem," she adds.

To encourage company doctors to recognize that they have obligations to their worker patients, not just to their maquiladora employers, the Support Committee for Maquiladora Workers, in conjunction with Mexican doctors, is urging the company doctors to focus their attention not only on patients' symptoms, but on the causes of their illnesses and on prevention.

Women maquiladora workers, who make up the majority of the overall maquiladora workforce, face special health and safety problems tied to pregnancy. Many women interviewed for a job are asked if they are pregnant. Some plants even require workers to take pregnancy tests every three months. "If the managers find out a worker is pregnant, they do forced speed-ups with no breaks, assign the worker to lifting heavy weights or working on heavy machinery that she doesn't know how to operate or physically can't operate and do other outrageous things to force her to quit so they won't have to pay maternity leave," says Tong. "In one case, managers of the Japanese-owned maquiladora, Tocabi, found out a worker was pregnant and put her in a soldering room with no ventilation to try and force her to quit by the fact that she wouldn't be able to stand the fumes. She was determined to keep working as long as she could because she really needed the money. It's a really sad situation, because the baby was born with anencephalies (without a brain) and she feels like she's responsible because she didn't quit," relates Tong.

According to Maurilio Sanchez Pachuca, "there have been a number of instances in the last year of babies born with anencephalies." "The companies claim that the workers' health problems are caused by deficiencies in the people," Jose Bravo of the Environmental Health Coalition in San Diego says. "Management argues that mothers have a folic acid deficiency, which causes anencephalic births. However, the women's diet consists mainly of corn and beans, which are high in folic acid."

 The babies that maquiladora workers do not bear are also controversial. The San Diego, California chapter of Planned Parenthood has established a relationship with the Border Projects Foundation in Tijuana. The foundation has trained local canvassers to provide contraceptives in workers' communities and within the maquiladoras themselves. The foundation has set up six clinics in the neighborhoods, trained doctors employed by factory clinics and established a center to perform sterilization surgeries. Planned Parenthood and the foundation would like to establish 50 maquiladora clinics in the next year, a Planned Parenthood fund- rasing pamphlet says. "If workers go to state-run clinics for family planning services, they receive bad comments in their personnel files and lose hours of work and pay," says Silvia Baron of Planned Parenthood in San Diego. "Providing these services at the factory allows workers to go to the clinic there during the lunch hour."

Mary Tong worries that employers will pressure workers to use these services. "In my experience with the maquiladora owners, if somebody's told by a clinic at their workplace, ęWe recommend you get a sterilization operation,' that really is fairly coercive."


Disorder on the border

 In November 1993, the United States and Mexico signed the Border Environmental Cooperation Agreement, which formally established the Border Environmental Cooperation Commission (BECC). The BECC oversees the North American Development Bank, which is supposed to provide financing for environmental infrastructure projects along the border and in other areas environmentally imperiled by the economic integration of the United States and Mexico. Unfortunately, "the BECC's rules of procedure were negotiated between the United States and Mexican governments behind closed doors without input from either the public or the BECC directors," according to Geof Land of the Arizona-based Border Ecology Project. When the BECC directors met for the first time on October 12, 1994 in Ciudad Juárez, Chihuahua, their first formal action was to approve rules that significantly limit public participation in the BECC's decision making process. The measure passed by an 8-to-1 margin. Only the U.S. public representative to the BECC opposed the rules. "The rules raise serious doubts concerning the promises of unprecedented ębottom up' public participation and transparency made by President Clinton," says Land. To date, no BECC environmental cleanup projects are even close to being started.

Ironically, U.S. and state laws may do as much to protect the Mexican environment as the BECC. Though there is great concern that much of the waste generated by U.S. companies operating in Mexico is unaccounted for, at least one U.S. company has been fined for violating laws in the United States that require hazardous waste generated by U.S.- owned plants in Mexico to be returned to the United States for disposal.

Alco Pacífico Inc. agreed to a felony judgment of $2.5 million in December 1993 for transporting toxic lead slag across the border and abandoning the waste outside Tijuana. The company's president was sentenced to 16 months in prison. RSR Industries of Dallas and Quemetco of Los Angeles paid $2.5 million in fines for supplying lead slag to Alco Pacífico.

 The money from the fines and settlement was given to the Mexican Secretary of Social Development and Solidarity to help eliminate the lead at the abandoned site and to establish a lead-testing program for children on both sides of the border. "The Mexican government has made little effort to clean up the site and now has asked me to direct the operation," says Los Angeles District Attorney David Eng.

 Probably the most hopeful signs for workplace improvement lie with the tentative efforts of the Mexican workers themselves, and with solidarity efforts by U.S. activists.

For example, workers demanded and won ventilation systems at two maquiladoras after they attended a health and safety workshop provided by the Support Committee.

"The workers came up with very innovative strategies to get the company to deal with workplace safety issues," says Mary Tong. For example, the workers at two companies, Sanyo and KSC Electronics, handed out booklets titled, "Does Your Job Make You Sick?," which describe different job-related health problems and what to do about them. The workers underlined the passages specifically related to their plants and then distributed them to all employees. They then anonymously put copies on their managers' desks. "Because the booklet had been passed around to all of the workers, the managers could not just fire one or two," Tong says.

"They were not even sure where the booklet came from to be able to retaliate against anyone," she adds. Some of the workers then told the managers that if they did not have enough money to put in a ventilation system, the workers would appeal to the foreign owners. "The ventilation system was installed right away," Tong says.

 Like the labor and community organizers, environmental and health and safety activists can cite few gains from NAFTA for border residents. They too point only to raised consciousness as a NAFTA benefit. Land says, "NAFTA heightened concerns about border conditions, provided a forum for groups concerned with international discussions, strengthened border networks, and generated increased funding for grassroots organizations."

 - J.S.


Flight of the Border "Swallows"

TO AVOID PAYING SEVERANCE OR BONUS PAY and to rid themselves of specific workers, maquiladora plants often simply close down completely or reopen under a different name.

Smith Corona, for example, has had labor problems since it moved a typewriter plant from Cortland, New York to Tijuana, Mexico in 1992, putting 800 U.S. employees out of work. Tijuana Smith Corona workers planned a strike for October 1994. But "Smith Corona suddenly disappeared from the social security records as if it had shut down," says Mary Tong of the Support Committee for Maquiladora Workers. "There are no more of its workers on the record, so one can only presume that they must have changed their name on the papers and in the social security records. They're still manufacturing the same products."

"If this is allowed to go through unchallenged, companies won't even have to shut down," Mary Tong says. "They can just change their names on paper and make like they shut down. They'll get rid of the workers they consider [to be] the trouble makers and reopen under a different name." Smith Corona declines to comment.

 During 1994, at least 16 companies became golondrinas, the Spanish word for "swallows," used to refer to plants whose foreign owners "fly away," abandoning workers without paying owed wages or the severance pay required by Mexican law. At the time of a closure, the company union will often declare a strike and tell the workers to take over the plant and guard the equipment. Under Mexican law, workers are given a legal claim to the plant and the union will extract as much as it can from the golondrina.. If the company does not pay the workers, the equipment can be sold and the workers recompensed. About 70 percent of the proceeds typically go to pay company debts and the union, however, while the workers get whatever is leftover.

- J.S.