MAC: Mines and Communities


Published by MAC on 2007-05-15


Codelco Strike Slated For June 8

By Nathan Crooks (

(28 May 2007) The president of Chile's Central Workers Union (CUT), Arturo Martínez, announced this weekend the formation of a new labor confederation uniting all the subcontracted workers at the state-owned Codelco copper mining company. The new 'Confederation of Subcontracted Codelco Workers' will bring together more than 80,000 workers from both public and private firms that perform work for the copper giant's many divisions.

Labor experts, meanwhile, worried that the CUT was exceeding its authority in helping create the confederation and predicted that the labor group would be challenged in court. According to Martínez, the new confederation will seek to enhance "inter-company collective bargaining" in an environment that had previously been hostile to worker negotiations because of the vast number of different businesses involved.

"A much stronger form of union activity is coming," predicted Martínez. "And it's happening because the companies don't understand the kind of issues that they have to cede to the workers." Martínez, however, said that no national level union of subcontracted workers was in the works. "Various federations already exist," he said. "We'd like to unite them all, but it's still a bit premature."

Just as the new confederation was created, subcontracted Codelco workers announced their intention to begin an indefinite strike on June 8 because of what union leaders said was "lack of progress" in ongoing worker demands. Union leaders charge that Chile's state-run copper company deliberately uses subcontracted labor to hinder collective bargaining and divert responsibly for pay concerns and working conditions to third parties.

Labor restlessness in Chile has been growing in recent months.

Twenty labor leaders from four different unions blocked 3,000 workers from entering Codelco's Chuquicamata mine in early April (ST, April 2). The Chuquicamata mine is one of the world's largest open pit copper mines and the flagship of Codelco Norte's operations. A new three-year contract between management and labor was negotiated late last year with workers winning generous bonus payments and sizable pay hikes.

Workers in Chile's forestry sector recently secured record salary increases in negotiations that concluded early this month, but only after one worker was killed. As workers' demands increase, Chile's mining and forestry sectors continue to be hugely profitable, according to Chile's Securities and Exchange Regulator (SVS), which recently released country-wide January-March earnings figures (ST, May 2).

Codelco led all Chilean companies with reported earnings of US$1.4 billion – a historic high. The windfall profits are linked to the continuing high price of copper, which averaged US$2.69 per pound during the three-month period, US$0.45 more than in 2006 (ST, May 2). Copper production costs at most companies are between US$0.50 and US$0.70 per pound.

Union membership in Chile, meanwhile, remains low. A report released in early May by Chile's International Workers Organization (OIT) said union coverage was improving in Chile, although it still remained remarkably low. In 2006, only 8.6 percent of Chile's workers were members of a union and only 11 percent of the workforce was covered by collective bargaining. The statistics were only a small improvement from 1999, when 7.8 percent of Chile's workforce belonged to a union.

As future labor unrest looms, some experts are worried that the country's economy could sufferer as a result. Chile's economy grew by 4.4 percent in 2006, down from 2005's 6.3 percent growth, according to the Economic Commission for Latin America and the Caribbean (CEPAL). CEPAL attributed the decline in mining production to wage talks and an accident at the Chuquicamata mine as partly responsible for the nation's relatively low 2006 growth (ST Dec. 22, 2006). The use of cheap "scab" labor by Chile's major mining and forestry companies has remained one of the most controversial issues in Chile.

A subcontracted worker of Cellulose Arauco (Celco) was killed by police in a violent strike turned protest in early May. Police shot the worker three times after he attacked police vehicles with a tractor he was driving. He was one of 5,000 subcontracted workers of Bosques Arauco, a subdivision of pulp-processor Celulosa Arauco (Celco), who were striking after demands for more freedom to organize and a monthly raise of US$38 were rejected. Most forestry workers in Chile typically have base salaries of under US$100 a month, but can make up to US$400 a month with production-based bonuses (ST, May 7). After the worker's death, Church officials intervened and helped secure a significant pay hike for Celco's unionized labor force and the forestry protests ended.

This was the first death in 30 years in a labor dispute. Chilean President Michelle Bachelet condemned the shooting and urged a settlement based on "democracy, liberty, and respect." "No labor conflict can or should justify violence or death," she said. "Both sides must use mechanisms based on the law" (ST, May 9)

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