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UNI and its worldwide network of unions are to step up their campaign to force private equity and hedge funds to respect labour rights and accept principles of corporate social responsibility.

Unions are also looking at ways to ensure that companies bought up by Sovereign Wealth Funds - the fast growing investments of cash rich countries - are protected by similar rules.

“There is a complete absence of transparency in the operations of private equity and we have a problem with their role as an employer,” UNI General Secretary Philip Jennings told the UNI World Executive on its second day in Delhi, India. “We are in a new round of ruthless and sometimes barbarous capitalism.”

Executive members from around the world reported on the growing global impact of PE and called for tighter regulations and greater dialogue.

“Unions were not properly prepared but now people are getting angry - and private equity groups are their own worst enemy when it comes to their brand image,” said Michel Muller of France.

“Private equity has a position of enormous power,” said Margret Monig-Raane of Germany. “We have got to press governments for minimum standards.”



UNI global union has produced an 11-point programme to rehabilitate private equity funds and make them better - and more visible - corporate citizens.

The points include acceptance of the interests of all stakeholders, respect for the International Labour Organisation’s core labour standards, negotiations with unions over take-overs and respect for existing collective agreements.

Danish unions are pressing for laws to make private equity invest 20% of their own cash in buyouts to reduce the amount of borrowed money that often ends up on the balance sheet of the companies taken over.

At the moment funds may only be using their own money to fund 2% of a buyout, said Bo Larsen of Denmark but Danish unions are having some success in put obstacles in the way of Private Equity funds coming into Denmark.

“UNI needs too say something about what sort of controls there should be on Private Equity and what sort of say people should have in a takeover,” said Bo.



Governments were accused of hypocrisy for insisting on free markets and competition to trade unions but suddenly preparing to intervene in the markets to keep out some Sovereign Fund Investments.

“We have never been against competition,” said Wolfgang Katzian of Austria. “We have always wanted a framework of rules so that competition is not played out on the backs of the workers.”

One of the biggest government owned funds is the Norwegian Sovereign Fund, which has always operated with transparency and could become a model for other fast growing funds.



UNI and other global unions recently met top private equity groups in the United States and have had similar discussions in the United Kingdom and plan PE initiatives next year in France and Spain. Japanese unions have set up a task force to monitor PE following a seminar earlier this year.

Susana de Rueda said UNI has a growing number of global agreements with companies and similar agreements are needed with investment funds to ensure that they respect the rules wherever they operate.

Bones Skulu of South Africa called for seminars in Africa to help unions there prepare for attacks by private equity.

“Private equity affects all of us,” said Trevor Johnson of Trinidad and Tobago. “Our money and the money of our members are being used to invest in PE.”

The issue of workers’ capital - workers’ money tied up in the pension funds that have helped bankroll private equity buyouts - is likely to be a further topic for the UNI World Executive.

UNI-Asia Pacific President Joe Hansen reported on the difficult negotiations his union had with the new management at private equity bought store chain Myer. In the end the unions were able to defend existing benefits.



Approaching one third of all mergers and acquisitions last year involved private equity, reported Philip Jennings. “We have the growth of a new financial structure that can buy any publicly quoted company any time, any place, anywhere.”

“We have been successful in driving private equity off the back pages of the financial press on to the front pages - and UNI has become Public Enemy Number One of private equity.”

He told delegates that the average pay for the top fund managers in the United States is $657m a year. Ten minutes work gives them $35,000 - greater than the average yearly wage of a US worker, which currently stands at $29,500.

“And these are the people who are arguing against labour rights and minimum wages.”

In a wider attack on the financialisation of the globalising world Philip said, “at the end of the day when the process of globalisation goes wrong it has direct consequences for working people.”

Rob MacGregor of UK condemned the regulators for failing to learn from previous crises to prevent the run on the Northern Rock Bank - the first run on a bank in the UK for a century. “It has led to a perverse situation with the UK which prides itself as one of the top financial centres in the world turned into a global laughing stock.”

The bank faced melt down because of an over-reliance on cheap global debt to finance housing loans that dried up suddenly because of the subprime crisis in the United States. “ The role of the trade union now is to ensure that this debacle never happens again.”