Multinational Monitor

APR 2001
VOL 22 No. 4


NAFTA's Investor Rights: A Corporate Dream, A Citizen Nightmare
by Mary Bottari

The Chapter 11 Dossier: Corporations Exercise Their Investor "Rights"
by Michelle Swenarchuk

Serving Up the Commons: A Guest Essay
by Tony Clarke

NAFTA for the Americas: Q&A on the FTAA (Free Trade Agreement of the Americas)
by Monitor Staff


Chile's Democratic Challenge
an interview with
Sara Larrain


Behind the Lines

Fast Track to Hell

The Front
Unilever's Dumping Fever - The Torture Trade

The Lawrence Summers Memorial Award

Book Review
Trust Us, We're Experts!

Names In the News


Behind the Lines

Officemate's Inmates

Videotape of a Chinese prison camp has led to the conviction of a Chinese company in the United States for using forced prison labor.

Allied International Manufacturing (Aimco), makers of metal clips used to bind documents, pled guilty in March to related federal charges filed in a Trenton, New Jersey U.S. District Court. The company will pay a $50,000 fine as well as $500,000 to U.S. customs to settle potential civil claims. Aimco's owner also pled guilty to a single count of tax evasion.

U.S. customs agents collected evidence of Aimco payments to prison officials in Nanjing, where more than 60 women assembled the clips out of parts made at a nearby factory until their fingers were bloody. The women were not paid for their work attaching the silver metal handles to the clips' black base. The clips were imported by Officemate International, which holds a one-third U.S. market share for the spring clips. Between 1995 and 1997, 134 million of the clips were imported into the United States.

Although China signed an agreement with the United States in 1992 to make it easier for U.S. officials to inspect Chinese prisons suspected of making goods for export, Chinese officials did not cooperate with the investigation, which began when Peter Levy, the owner of Gem Office Products (an Aimco competitor), used a video camera to document unassembled clip parts going in and assembled clips coming out of the Nanjing prison.

Although Officemate has denied knowing that Aimco used prison labor, and posts a code of conduct denouncing such practices on its web site, customs officials say the guilty plea and fine contradict this claim.

Murder in the Coal Fields

A year after Alabama-based Drummond Corporation closed most of its U.S. coal mines and began operating new mines in Colombia, two leaders of the local mine workers' union were assassinated.

On March 12, Balmore Locarno and Jaime Orcasitas, president and vice president of the mine workers' union at Drummond's El Cerrejon mine in Columbia, were hauled off a company-chartered bus while on their way to work and shot execution-style. The assassinations were carried out in front of the unionists' colleagues by gunmen thought to be affiliated with the right-wing paramilitary group, Autodefensas Unidas de Colombia (AUC).

The mine's 1,200 workers immediately halted production in protest. While the parent company says it is not conducting its own investigation, Drummond Ltd. of Colombia called upon "the competent organizations and institutions to initiate the pertinent investigations."

The Confederation of Colombian Workers and the country's largest national union group, CUT, have both called for an increase in international monitoring of Colombia.

"Unless and until the authorities make a real effort to investigate these crimes, and bring them to an end, the suspicion must remain that the gunmen are not acting alone," says Fred Higgs, the general secretary of the International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM).

"When Drummond chose to switch many of its operations to Colombia, it did so knowing that country's hostile political climate and egregious human rights violations," United Mine Workers of America Vice President Jerry Jones says.

Gary Drummond, Drummond's CEO, told company stockholders in October that "the risk in the United States of what a plaintiff trial lawyer can do to damage our company under our legal system Š is much greater than the risk of guerrillas in Colombia."

Colombia has been the most hostile environment for unionists in recent years. One hundred and twenty nine Colombian trade unionists were murdered in 2000 alone.

CEO Excess

Salaries and other benefits for top U.S. corporate officers climbed another 16 percent last year, according to a New York-based consulting firm.

Pearl Meyers and Partners surveyed 50 large U.S. industrial and service companies, where the average executive compensation rose to $10.9 million in 2000 compared to $9.4 million in 1999.

The increase is part of a long-term trend. In Executive Excess, a study released in 2000, researchers for United for a Fair Economy and the Institute for Policy Studies found that CEO pay increased 535 percent in the 1990s, compared to a 32 percent increase in average worker pay (not adjusted for inflation). Had the U.S. minimum wage gone up at the same rate as CEO pay in the last decade, it would be $24.31 today.

Last year's stock market slowdown had little effect on the trend. Executives at Wall Street investment banks and brokerage firms took in large pay increases. For instance, David Komansky, CEO of Merrill Lynch, socked away $32.5 million in 2000 (up 18 percent from 1999), while 2,000 Merrill Lynch employees lost their jobs due to corporate cost-cutting.

The downturn in high tech stocks did not seem to deflate stock option packages taken by top executives either. Some company boards have changed stock option prices to allow executives to purchase at lower prices when stock prices drop, a move that has rarely been exercised in favor of workers or other stockholders.

Whether the high-flying salaries and stock options can continue amidst a steadily declining market is unclear.

- Charlie Cray


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