Decent Jobs in the International
Sugar Sector
Jorge Chullén,
IUF Global Sugar
20 & 22March 2007 - Geneva
The Context
Recent developments in the international sugar
scenario have been (and will continue being)
dominated by:
• Process of EU sugar reforms and its influence in
the world sugar scenario (not only Europe)
• Tighter relationship between sugar and oil prices:
– Brazilian ethanol price : ‘natural floor’ price for sugar
– Oil prices: ‘natural ceiling’ price for sugar
Applied Research on Decent Jobs
(EU/ACP)
• Decent Job framework (ILO)
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Employment opportunities
Social protection
Social dialogue
Workers’ Rights
• Applied research  reality
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Guyana, Malawi: EU/ACP
Jamaica: OSH
Mozambique: outsourcing of cane cutting operations
Union work
EU Sugar Reforms
• Complex process
• Reform of the CAP since Agenda 2000
• Everything but Arms trade deal with LDCs
• From Sugar Protocol (Lome) to Economic Partnership
Agreements (EPAs)
• WTO ruling on illegally subsidised sugar exports
• Enlargement of EU 15  EU 27 (2004-06)
• An European process…
• Proposal to reduce production by 5-6 million tonnes of sugar
between 2006-2010, with the EU becoming a net importer
• Cut in support to domestic production
• Impact on the international trade segments
…with enormous implications for ACPs
(African, Caribbean & Pacific countries)
• Cut of 36 % in preferential sugar price: 2006-2010
• Loss of revenues, and possibly market access
• “Accompanying measures” offered to the ACPs –
financial aid
• “Sugar Action Plans” to be ‘nationally owned
• Support to improve competitiveness
• Diversification out of sugar
• Opportunity to decide what sort of sugar sector
(in the ACPs) should/could be built : a vision of the
future?
FOCUS ON THE ENGLISH-SPEAKING
CARIBBEAN
Focus on the Caribbean
• Caribbean: a micro-cosmos of a traditional sugar
industry and EU/ACP sugar trade relations
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Export-oriented sugar economies since the 1600s
Workers and employment
Ownership: state-owned and privately-run estates
Independent farmers
Relation with state and government agencies
Cultural, social, political in addition to economics
Size of the industry: possibility of a comprehensive cover
What sort of industry can be built? Question is clearer to
discuss/decide in the region than elsewhere
• Established working relationship between the region
and the IUF global sugar program
In the English-speaking Caribbean
everything is politics…so, the
document takes politics heads-on
Poor leadership and management in
the sector
• 30 years of preferential price by EU
» No “unpleasant “ market features: guaranteed volume, price, indefinite
period
» Where did the revenue go? Back to the industry?
» State-ownership of the sector
• Weak production structure, except Guyana (and
Belize?)
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St Kitts ended sugar for exports in 2005
Trinidad : last harvest in 2007?
Uncertainty over Jamaica’s sugar state-owned sector
Barbados: a reality or a mirage?
• Future: would this leadership move the industry
from a sugar-based to cane-based
industries…rediscovering cane after 300 years!
Some General Comments
• Extremely poor management and leadership of the
industry
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Growing debts
Government bail-outs
“Political interfering “ (also in Spanish-speaking countries)
• Outsourcing, casualisation
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Belize case: about 1/3 of labour force retrenched, rehiring
Trinidad: outsourcing of all operations of a state-owned company
• Pension plans
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US$2.50-4.00/month ex-gratia payment in Jamaica
Ex-gratia pension in Guyana plus NIS (up to US$ 100/month)
• OSH
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Eight deaths in Jamaica’s sugar sector in 2005 due to preventable deaths
Poor working conditions in factory and field, PPE
Three fired after factory explosion
published: Thursday | May 12, 2005
Claudine Housen, Staff Reporter WESTERN BUREAU:
TWO ENGINEERS, Hubert Boothe and Glendon Johnson, factory manager David Hamilton, of the Long Pond
Sugar Factory in Trelawny have been dismissed following an internal investigation into the tragic explosion
which claimed the life of a factory engineer last month.
In explaining the reasons for the men's dismissal, Livingstone Morrison, chief executive officer of the Sugar
Company of Jamaica (SCJ), said: "There are a number of standard operating procedures that have been
breached and responsibility for the breaches was located with the individuals directly and indirectly."
"The men were dismissed last Thursday," said Mr. Morrison who added that they were dismissed only after
being given the opportunity to defend their actions.
"The report on the investigations was done some weeks before and clarifications sought. Following (this)
hearings were conducted to give relevant persons an opportunity to respond," said Mr. Morrison.
In the interim, Mr. Morrison said that the company has created a team of workers who will be conducting
frequent safety reviews.
"They have a right of appeal and it is a right that I have asked them to exercise if they see it necessary," he
said.
When asked when the internal reports would be made public, Mr. Morrison said that they would be released
" as soon as the time is appropriate".
He said the company's first priority was to its insurance providers.
The dismissal of the workers comes more than five weeks after the death of 23-year-old technician, Kajel
Insang, in an explosion on Thursday, March 31. (Bold added.)
“Nationally Owned Proposals”
EU/ACP ‘SUGAR ACTION PLANS’ TO
ADJUST TO NEW MARKET REALITIES
No Social Dialogue
• No clear channels of communication between
government agencies and sugar groups
– Tendency to create dependency on company’s
experts (over government bureaucrats and
technicians)
– Some unions simply not asked to be part of the
process/didn’t know about it
• Information-passing meetings – most of the time
• More important: predetermined parameters for
the plans.
– Strong bias in favour of “production-related” aspects
Future of the Sector (Caribbean)
• Lost opportunity to create a comprehensive proposal
for the sugar sector?
• Guyana: one of the ‘best sugar action plan’ but it is related to
recovery since 1992 and expansion plans proposed BEFORE the EU
sugar reforms
• What our contribution should be?
• OSH – key area of union work
• Social benefits: e.g. pension plans for agricultural workers
• Political participation: unions as part of civil society, representing
workers and communities
• Gender perspective: women in unions and contribution to
development (e.g. Caribbean sugar and bananas)
• Link to development: rural population, rural economies
• What is the unions’ proposal for the future of the sector?
Four lines of future work
1. EU/ACP Action Plans
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Critical review and ‘lateral thinking’
2. Occupational safety and health
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Drinking water
ILO C-184
3. Company/TNC work
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Illovo Sugar (Africa), UK and Caribbean
4. Cane, sugar, ethanol: food vs energy?
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Future configuration of the sugar sector?
1- CRITICAL REVIEW OF THE ACP
SUGAR ACTION PLANS
EU/ACP Sugar Action Plans
• What sort of jobs are being created? Lost?
• Regain sense of planning, vision, based on social
content
– Occupational safety and health
– Pension plans: impact on social protection, support to rural
population and economies
– Social dialogue: what ‘stakeholders’ want in their industry?
(Malawi example)
• Mid-term review by unions (2008)
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IUF sugar affiliation in ACPs (and EU)
EU sugar price (36%) cut implemented in 2006-2010
Active coordination union/regions/global IUF
Union participation in national/regional trade talks
Availability of drinking water for cane cutters
2- OCCUPATIONAL SAFETY AND
HEALTH
Analysis of (drinking) water
• Analysis of ‘on the stop’ samples from some
countries: e.g. Jamaica, Guyana, Mozambique,
Brazil, Malawi, Zambia.
• Discuss and analise results with local unions
• Training and capacity building
– Information on national specifications for potable
water
– Water requirements in given working conditions
• ILO Convention 184: Safety and Health in
Agriculture: ratification & focus on
organising/training (Caribbean since Aug. 2006)
Illovo Sugar
3- COMPANY/TNC WORK
Company/TNC work: Illovo Sugar
• Associated British Foods (ABF) – British Sugar
acquired 51% of Illovo (Aug. 2006)
• Largest sugar company in Africa: South Africa,
Malawi, Zambia, Swaziland, Tanzania,
Mozambique – some are among the world’s
lowest-cost sugar producers
• Concentration of decision-making power at
Illovo’s Headquarters in Durban
• Illovo’s position in LDCs commercial arm (London)
Illovo Sugar
• IUF affiliates in all African countries and in the UK
• Upwards harmonisation of terms and conditions of
work
– Mozambique: Maragra’s relative better conditions than in Xinavane
(Tongaat Hulett to become majority shareholder) BUT this is not the
case in other Illovo’s African operations
• Support unions in direct negotiations with local
management
– Occupational safety and health
– Revert outsourcing
• IUF inter-regional contacts: e.g. UK/Africa/Caribbean
• Tongaat-Hulett: another South African company taking
off… and expansion of Maputo’s port facilities (also for
sugar from Swaziland, Zimbabwe, South Africa)
Mozambique, an example
• Tongaat-Hulett in two sugar estates (Xinavane
and Mafambisse) before 2010
– 8,700 new jobs,
– Increase of 150,000 tonnes of sugar
• Growth in cane production
• Migrant workers: cane cutters (Xinavane)
• Terms and conditions: outsourcing,
casualisation
• OSH issues, social security
• Mozambique: first country to ship sugar to EU
under EBA
4- CANE: FOOD VS FUEL?
World Sugar Consumption to 2020
(thousands of tonnes)
2006
2010
2015
2020
Europe
31,422
31,502
31,593
31,701
Africa
13,984
15,505
17,407
19,309
N & C America
19,299
20,563
21,874
23,186
South America
17,542
18,874
20,481
22,088
Asia
62,183
69,549
77,897
86,244
1,555
1,696
1,859
2,023
145,985
157,688
Oceania
TOTAL
171,112 184,551
Cane, sugar and food
• Where the next 40 million tonnes of sugar would
come from?
– Brazil, India, Thailand, African countries, EU survivors of reform?
– What working & living conditions are prevalent in those countries?
– What is the state of workers’ rights?
• Competition from fuel sector - impact on other
economic sectors (e.g. food processing/beverages)?
– Rising sugar prices? Volatility of sugar prices?
– Traditional subordinated position of agriculture vis-à-vis food
processing/beverages sector changing: another outlet for produce
• Number and quality of jobs to be created (sugar
production)
– Guyana rate: 16 t/worker per year (current)
– France: 500 t/w per year (current)
– Impact of technological developments (field and factory) on job creation
Brazil to 2012/13
• Cane: from 420 million to 680 million tonnes in
2012/13: increase of 260 million tonnes
• Probably 2.6 million hectares @ 100 tm of cane/h
• Sugar production from 30 million to about 38.6
million tonnes (@ present rate of cane use)
• Brazil’s share of world exports to 50 percent
(from about 40 percent)
Figures subject to change without notice!
Cane, sugar, corn, ethanol
• Presidents Bush & Lula meeting (March 9)
• Brazil: world’s largest cane ethanol producer
– Growing domestic market: flex-fuel cars @ 120,000 new units per
month
– Export of about 20 percent
• US: world’s largest corn ethanol producer
– Subsidised corn
• US and Brazil: about 70% of global supplies
• Lula’s discourse endorses corporate claims on beneficial
impact of current model of development of cane/ethanol
President Lula to President Bush
(9 March 2007)
“President Bush, we have more than tripled the
yields of sugarcane plantations, which are the
main source of ethanol. And we have
demonstrated that it is possible to increase the
production of biofuels without harming the
production of food, and also reducing
deforestation of the Amazon region.”
(Bold and italics added.)
http://www.whitehouse.gov/news/releases/2007/03/20070309-4.html
This (way to produce) ethanol feels like
a new colonisation tool,
with a Brazilian flavour,
in a new brave world of food vs fuel
Cane, sugar and agro-gasoline
(ethanol)
Global demand of gasoline: 1,200 billion litres
in 2006
• Global sugar cane production: 1.3 billion tonnes  110
billion litres of alcohol (best Brazilian technology)
• Global maize production: 700 million tonnes  280
billion litres
• Global wheat production: 630 million tonnes  240
billion litres of alcohol
• Three main crops: 34 percent of global demand of
gasoline (due to ethanol lower energy content)
Agriculture and agro-diesel
• Global rapeseed production in 2005: 47
million tonnes  18.8 million tonnes of agrodiesel
• Global soybean production in 2005: 43 million
tonnes of agro-diesel
• Two crops: only 42 percent of US diesel
demand
THERE IS A NEW GUEST AT THE
TABLE, ONE WITH AN ENORMOUS
APPETITE… AND READY TO KICK THE
TABLE IF NEEDED
Would the ethanol boom benefit the
cane workers? - IUF’s sugar work
Emphasis on the IUF inter-regional work, and also a
global perspective
– South Africa
• Illovo Sugar & ABF (British Sugar)
• Tongaat Hulett: the next target?
– Brazil
• French Dreyfus: second largest sugar & ethanol group in the
country
• Infinity Bio-Energy (Bermuda): wants to be among the 10
largest groups
• French Béghin-Say, partner to Cosan
IUF Global Sugar
• Close follow-up of national and regional
developments that have an international
relevance (best practices)
– OSH
– Pension plans
• Critique of sugar development plans from
Decent Job perspective
– EU/ACP “sugar action plans”
– Model (s) of producing agro-fuels
IUF Global Sugar – Forum
• Sharing experiences and information
• To elaborate policies based on Decent Job framework (best
practices)
• To support on-going campaign to challenge corporate (and
governmental) models and version of reality
• Mid- term review of EU/ACP process (2008? four years
after Frankfurt)
• Solidarity
• Negotiations
• Union contacts and exchanges across regions
• IUF AWTG global work on agro-fuels: palm oil and cane