
Issue No 94		04 May 2001

LaborNET	Ask Neale	Tool of the Week

Interview

Global Action

Interview with Peter Lewis

The CFMEU has been a world leader in fighting the war on global corporations. John Maitland has been one of the generals.


	John Maitland

Can you briefly outline the experience your union has had working as a shareholder with the Rio Tinto company?

We had a very serious industrial dispute with Rio Tinto, which commenced almost immediately after the election of the Howard Government.

They obviously were intent on implementing the hard line approach of Reith and essentially commenced a process of attempting to get workers off collective agreements and onto individual contracts. Now, there was a reason for this because - I suppose it's a conspiracy theory - but it is borne out by the fact that the taskforce Peter Reith put together to produce the Workplace Relations Act had on it a senior industrial relations person from Rio Tinto, whose name was Michael Anguin.

So we had to respond to this very aggressive, very well resourced attack by Rio Tinto, and we laid out a fairly elaborate plan to deal with it, based on our history and tradition of militancy and our usual responses in times of challenge.

However that traditional method of dealing with major challenges wasn't working. It wasn't enough in itself to be able to bring Rio Tinto to the table. So we started considering other ways of dealing with the matter. One of the first things we decided to do to supplement the support we had going in the Hunter Valley and in Queensland, was to contact our International union body

One of the things that arose in the discussions was the possibility of actually undertaking a shareholder campaign, a proxy battle over workers' rights and corporate governance. Corporate governance first - that was the first issue - and workers' rights. The reason why we looked at corporate governance was that we believed the company's directors were making bad decisions about their human relations approach. We believed we could highlight that the structure of the Board in terms of its executive directors when compared to the non-executive directors, would show that there wasn't enough independence of thought in there. They were actually making too many decisions that were borne out of the views and attitudes of management of the company.

That was the first issue, and the second issue was the labour rights issue.

In terms of the mechanics, you actually started gathering shareholders from around the world and asking these questions in the forums that are provided for shareholders?

Having decided this was one area we could explore, we then looked at who had most experience in this area. We didn't have to search far. I have had a long term relationship with some of the senior people in the AFLCIO including the Secretary/Treasurer Richard Trumpka, who was formerly a Vice President with me of the International Miners' Federation. So I had some idea about the expertise that the AFLCIO had to engage in this and we were fortunate that the AFLCIO, through Richard, were very quick to offer assistance. First by way of providing a number of their people to come to Australia and to take us through a corporate campaigning, proxy campaigning seminar, which we did in February of 2000.

And from there you basically just ramped up the pressure over a period of time?

What we had to then look at, after having been given some very significant information on what we should do, we then had to look at the structure of the company, recently listed on the London Stock Exchange and the Sydney Stock Exchange. We had to look at how we would approach institutional investors in the United Kingdom and in Australia.

Now, as they were listed on the London Stock Exchange we immediately said, well, we have a good relationship with the British TUC, and we spoke to the British TUC to see whether or not they would be interested in being part of a global coalition of unions, to pursue this campaign. When they agreed, we nominated people who would essentially be the spearhead, responsible for putting in place the appropriate mechanisms to carry this through. We got the British TUC and the AFLCIO to nominate a person for the campaign. In Australia we had the ACTU nominate Linda Rubinstein, and of course Peter Colley from our National Research Department was the operative for us.

What did these individuals do?

They were responsible for putting the resolutions together. That might sound a pretty easy job, but it was a pretty difficult job because you had to pitch and word the resolution so that the major institutional shareholders would be interested. Putting the right sort of language into them was a fairly significant challenge because we are dealing with investments of billions of dollars, so people are very cautious when dealing with issues such as changing the balance of Boards of Directors. When you have a very large and relatively successful mining company, you find that a lot of investors are quite happy to see a greater number of executive directors, rather than independent directors. So we needed to make sure that the big institutional investors, who really do have regard for independence and do believe that there needs to be more independent directors than executive directors, would be supportive of the sort of things that we put up.

A second task was to actually look at how solicitation could take place. How could we get out and talk to the institutional directors. We had to find out what funds had shares and who were the major shareholders and then allocate resources so that people could go out and approach them. They then reported back on the success or failure rate in those discussions, and what was the feedback, what were people thinking about the proposal for us to have these resolutions on the agenda of the Annual General Meetings in London and in Australia for the Year 2000.

So these people you have been out there talking to aren't necessarily union super funds? They are the top end of town, and you have got people going in there saying, look, your company in the long term is going to be better if they treat their workers with some sort of respect?

In Australia we employed Susan Ryan, the former Federal Minister, to actually do our solicitation because Susan has a great deal of experience in the superannuation industry. We put this team together, and essentially their task was to flesh out all these issues. We had one window for us to actually lodge the resolutions so that the company would have to put them on the agenda. The reason they had to do it was that we complied with the company requirements for resolutions not from the directors, but privately sponsored resolutions.

In order to do this we had to get so many shareholders and a certain value of shares held by these shareholders. The union had to go out and buy quite a considerable amount of shares in Rio Tinto and also allocate those shares to staff. So we had all these CFMEU people with shares who were petitioning for these resolutions to go on the agenda.

It was fine getting them on the agenda, but when the agenda papers come out you generally have a series of recommendations by the directors, and in the case of our resolutions they unanimously recommended rejection of our resolutions.

And was that the end of it?

No, that wasn't the end of it. What we did of course was work very hard at it with Susan Ryan soliciting for us here and with professionals allocated to solicit in the United States and also in London.

Theb outcome? We got 20 per cent of the shareholders to vote for our resolutions, even though they knew that the directors were against the resolution on corporate governance. But not only was that a significant feat, we were able to convince another eight per cent not to vote in favour of the company's recommendation, even though they didn't vote for ours. So we had 8 per cent of the shareholders actually abstain from voting on those two resolutions. So that was 20 per cent of the corporate governance one and we got 17.5 per cent on the labour rights, with similar abstention of around eight per cent. That was a huge vote in favour of our resolutions and that has led now to the company having more non-executive directors than executive. They actually moved to try and quell the concern about the structure of the Board and they have done that by introducing more independent directors.

However, we still don't believe it is independent enough. A couple of directors are not executive directors, but were formerly employees of the company. We believe that they are not truly independent. There is still a bit of work to be done there, and I'm not sure that we are going to revisit it, but at this stage there has been changes.

So how much money did you actually spend on the campaign and how do you judge whether that was money well spent?

Put it this way: In terms of the money that we spent on the campaign it was a lot less than we were paying in strike pay and assistance to our members who were on picket lines, and the legal costs that we were incurring by going through the Industrial Relations Commission, the Federal Court and the High Court.

So, you have actually found a new way of doing your industrial action?

Well, I wouldn't say it is a new way. What we have done is add another weapon to our armoury. We have got an arsenal of weapons and one is the traditional bans and limitations, strike action. Another is picket lines. Another is political agitation - you know, getting people to raise things in Parliament. You've got those, and we have just added this one, which is essentially corporate campaigning or shareholder campaigning. It is not something you would use on every campaign. Similarly, going on strike is something you would use in every campaign.

Was it worth it? Well, when we commenced this action we had no collective agreements with Rio Tinto and no prospect of getting collective agreements with Rio Tinto. That's union collective agreements, I mean. And now we have union collective agreements at every operation.

And at the shareholders' meetings that took place last year, and after the first meeting in London where they saw such a large vote coming in, the company actually started to talk about reconciling their differences with their employees and the union.

Mining has always been a very global industry. What do your members think about the current globalisation debate?

We have been exposed to international competition in Australia since the late seventies. The minerals boom of the seventies involved coal and iron ore for steel production in Japan, so mine workers, particularly in the coal mining industry have been very much aware of the arguments about their competitiveness, the need to be in the lower quartile of cost and be effective, productive and profitable.

This is something that we have been debating for a long period of time. It is not new to us, but neither could I say, is the argument about the share - the share of wealth being generated by global activities, because we have been arguing for a long time that the Australian resources industry has been ripped off by the Japanese. That we weren't getting our fair share from the international trade. We argued that there were cartels of buyers who were depressing prices and that the coal companies were being taken advantage of.

In this day and age, in the year 2000 and 2001, Rio Tinto and BHP and the others are now saying that the restructuring of the coal industry - the consolidation of the coal industry - will help them break the cartel monopoly that the buyers have had in the past.

They would never concede that during the eighties and nineties when we argued for a strengthening of export controls. But now, when there are no export controls and when they themselves are driving hard for a consolidation in the industry, they are acknowledging that there has been a cartel there all the way along.

We are very enthused by the challenge to the current form of globalisation because it is something we have been arguing about for a long time. That is one of the reasons the CFMEU is so supportive of the coalitions of groups that are getting out there and protesting, in the case of the mining industry we have been working with coalitions for a considerable period of time, dealing with these issues.

   Visit the CFMEU

  View entire issue - print all of the articles!

  Issue 94 contents

Interview: Global Action
The CFMEU has been a world leader in fighting the war on global corporations. John Maitland has been one of the generals.

Unions: Sisters United
In her May Day address, Bus Union state president Pat Ryan looks at the role women have played in the labour movement.

Politics: M1 and the Trade Unions
Phil Davey was one of the forces behind S11 but chose to sit out M1. He looks at this week's action.

History: Il Duce Roberto?
His modern-day fan club might not like it, but Rowan Cahill argues wartime PM Robert Menzies sailed close to the winds of Fascism.

International: Cuban Call for Global Labour Rights
An international meeting of union representatives in Cuba has vowed to start a campaign to defend workers rights from the effects of globalisation.

Economics: The G-Word
ACTU President Sharan Burrow asks if there's a better way forward for global trade.

Media: Birth Of A Nation
East Timor's young journalists are struggling with language barriers and technical difficulties most Australian media professionals wouldn't be able to comprehend. But they're keen and eager to learn.

Review: The Tremulous Hopes of the Fifties
Behind the the good times mythology of the 1950s was a desperate quest for the ordinary.

Satire: Teen Angst Poems a �Danger�
The Teen Angst Gun Massacre Affair has broadened, with staff at the NSW Department of Education revealing that �gangs of conspirators� have been found operating out of high school poetry competitions.

» Workers Seek Security on Back of Living Wage

» Temple Workers Return to India Victorious

» Unions Get Down to Workers Comp Talks

» Firefighters Hand Hoses To Politicians

» Unions Back Corruption Fight

» 'Workers Bank' Protest Rally Backs Cleaners

» Smoking Decision Sparks Call for Pub Bans

» Boycott Trade, Travel with Burma

» Qantas Takeover No Impulse Buy

» Sick Chicks Win Privacy Rights

» Arnotts Workers Seek More than Crumbs

» Jageth Backs Jakarta Hotel Workers

» Equity Members Send a Dear John Letter

» New Theatre Under Threat

» A Toast to May Day

» Activist Notebook