UNI unites opposition to Walmart in India
During a two day strategy meeting in Delhi stakeholders, including UNI affiliates SACCAWU from South Africa and UFCW from North America, discussed the on-going debate on foreign direct investment (FDI) in multi-brand retail in India and the danger presented if Walmart were given unfettered access to the Indian market without proper conditions and safeguards.
The debate was informed by a new report launched by UNI at the meeting, ‘Walmart’s Global Track Record and the Implications for Foreign Direct Investment (FDI) in Multi-Brand Retail in India’.
UNI is urging the Indian government to use its decision to put foreign direct investment (FDI) in multi-brand retail on hold to have a close look at the threat Walmart represents to India’s economy, as a key part of its on-going consultation process.
- UNI report exposes myth that Walmart would be good for India
- India’s government must recognise that Walmart has a case to answer
- Time for India to get tough because Walmart does not play by the rules
- India is the final frontier with a lot at stake – wrong to open up the floodgates
- Decision on whether to allow FDI in multi- brand retail and under what conditions crucial to future of India’s economy where 99% is informal
- South African government took a stand India should do likewise
- Read full report online here.
Christy Hoffman, the Deputy General Secretary of UNI Global Union said, “We have presented compelling evidence to the Indian government that should it decide to proceed with FDI in multi-brand retail it must first examine Walmart’s appalling track record and act accordingly by introducing much tougher conditions than are on the table at present. India needs to make sure that its workers do not suffer the same negative effects as other Walmart workers around the world. They must have the right to be unionised, have decent working conditions and wages, including the right to collective bargaining. India has the opportunity to set the bar higher and it must take it.”
Hoffman said that the criticism of Walmart did not apply to all foreign retailers who propose to enter the Indian market but explained that Walmart was a negative influence on others, “Walmart dictate standards in price and quantity on their vendors. By its sheer size, Walmart dictates the standards for the industry.”
The suspended decision on FDI stipulates the incoming multinationals led by Walmart would have to source only 30% of its supplies from smaller Indian enterprises. It’s not enough and it’s not enforceable. It matters because Walmart is the number one retailer in the world and controls a large part of the global supply chain. India’s economy will be transformed and not for the better if the Walmart model is applied.
The report key findings:
- Without adequate safeguards in place, FDI in multi-brand retail will lead to widespread displacement and poor treatment of Indian workers in retail, logistics, agriculture and manufacturing.
- FDI without strong conditions in place could lead to massive disruption of the Indian economy and society.
- Walmart says it will eliminate unnecessary costs, but instead the company will transfer the burden of these costs onto supplier companies, manufacturers, retail workers, farmers, and society at large.
- The report examines the track record of Walmart, the largest retailer in the world, with global revenue of $421 billion USD in 2010 3.5 times the revenue of the next-largest competitor.
The report reflects the experiences of UNI affiliates and in particular the United Food and Commercial Workers Union (UFCW) from North America which took part in today’s stakeholder meeting. Ian Campbell, Assistant Research Director at the UFCW said “What we have seen in towns across the US is that small businesses have gone under because of Walmart’s entry into the market. India’s small businesses, including kiranas, will likewise not be able to survive Walmart’s cut-throat and unfair competition without proper enforceable protection. These profits will be taken out of India’s economy and go to Walmart.”
UNI’s South African affiliate, the South African Commercial Catering and Allied Workers Union (SACCAWU) took part in the meeting and brought a message from the unions who have been fighting the Walmart/Massmart merger there. SACCAWU and other leading South African unions have shown that it’s possible to win concessions from Walmart by standing up to them and this was the message for India. The South African unions backed by UNI joined with three Government departments to challenge the merger. By standing up to Walmart they won conditions to protect workers in the supply chain and small businesses. Although the Competition Appeal Court has agreed to allow the merger it has ruled that Walmart must reinstate a group of workers who had lost their jobs because of the merger and that Walmart, SACCAWU and the Government must work together on a study to safeguard the livelihoods of small businesses in the wake of Walmart’s arrival. Mduduzi Mbongwe from SACCAWU said, “India and South Africa have a lot to share on the Walmart invasion. We have to think globally when considering Walmart because the company is changing the game everywhere, from South Africa to India and Latin America to China. A global threat needs a global solution.”
| The case for Walmart to answer: Walmart is the world’s largest retailer with sales over $400 billion USD and more than 8,000 stores in 28 countries. In India, Walmart currently operates 14 cash & carry stores through a joint venture with Bharti Retail. Walmart also supplies back-end assistance to Bharti Retail’s 150+ supermarkets and compact hypermarkets in 9 states.
· In a number of countries, the presence of a Walmart store has had a devastating impact on small businesses in the surrounding areas…with a substantial negative impact on employment growth and survival of single unit and smaller chain stores. · Supply chain intermediaries, like wholesalers and other middlemen, are also negatively impacted by Walmart. The company’s global reach allows it to source goods directly thereby circumvent existing wholesalers and distributors. · During the recent Competition Tribunal hearings in South Africa regarding Walmart’s acquisition of Massmart, the company cited its ability to eliminate middle men as an important way to cut costs. If applied in India this will result in thousands of job losses. · In the long term, Walmart pushes prices paid to farmers and manufacturers down rather than raising them, and producers unable to accept such concessions simply go out of business. · Given the Walmart supply chain model, the potential effects of FDI in retail include an increase in imports, price pressure on Indian producers, particularly SMEs, and a lowering of pay and workers conditions for manufacturing workers and farmers. |
UNI’s call for action:
- Should FDI in multi-brand retail go ahead UNI asks that the government to take steps to guarantee that retail workers will have an opportunity to be represented by a union and that a National Wage Board is established.
- UNI urges that the government to maintain and strengthen the current conditions under consideration, including the limitation on the pace and scale of the access to the Indian market, local sourcing and by the addition of an enforcement mechanism in place of self-monitoring.
- UNI advocates a rigorous regulatory framework that builds in legally enforceable protections to protect and assist those workers and other groups who stand to be harmed by the policy change.
UFCW is a union with 1.3 million members in the United States and Canada, including 900,000 in the retail sector. www.ufcw.org
SACCAWU is an affiliate of COSATU which has more than 2 million members in South Africa.