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#10 - JRL 7016
Moscow Times
January 14, 2003
Trade Unions at Crossroads
By Boris Kagarlitsky

Presenting the figures for 2002, statisticians will no doubt tell us that production has risen, wages have increased, and that after three years of growth the standard of living has returned to pre-1998 crisis levels. However, what the statistical reports will not show is the sharp increase in the number of labor disputes over the past few months.

A strike by air traffic controllers hit the news because it threatened to bring air travel to a halt across the country. But a small and successful strike at the ZiL truck factory in Moscow passed virtually unnoticed. And while the country was celebrating the New Year and Orthodox Christmas, an unprecedented dispute broke out in Norilsk between the management of Norilsk Nickel and the company's trade union.

Common to all these disputes have been demands for better compensation packages. Yet not so long ago, even many months of wage arrears did not raise much protest. Economic growth seems to have affected social psychology and created favorable conditions for the rise of the labor movement.

Norilsk Nickel, of course, is not a typical Russian company but one of the global leaders in its sector -- producing not only nickel, but also platinum and other precious metals. Workers' wages are impressive by Russian standards at about $700 per month, although compared to what their counterparts get in Canada and the United States it's a piffling sum, especially given that Norilsk Nickel sells on the same markets and for the same prices as its Western competitors do. It is also worth bearing in mind that the cost of living is higher in Norilsk than in Moscow, living conditions are harsher and the environment is more polluted.

For the past few years, an agreement has been in place between Norilsk's management and the union -- a member of the All-Russian Confederation of Labor -- stipulating that wages be indexed to the tune of 20 percent per annum, roughly in line with inflation. Lately, however, the company has not been sticking to the agreement, and to make things worse, prices have been shooting up on everything from communal services and child care to municipal transport. The union demanded that the agreement be honored, while management accused workers of wanting to "eat the company."

The piquancy of the situation is that all this is happening at a time when Norilsk Nickel is expanding. The corporation is purchasing a factory in the United States. It financed the recent election campaign of former CEO Alexander Khloponin, who went on to win the Krasnoyarsk gubernatorial contest. The Norilsk mayoral election is now approaching, and the company has to ensure that its man wins. Furthermore, in the best tradition of big business, Norilsk Nickel "contributes to" a number of politicians across the political spectrum.

And all this doesn't come cheap. From the management's point of view, corporate solidarity dictates that workers should finance their masters' ambitious plans out of their own pockets.

However, the union did not back down, and management has declared war. Workers are being handed prepared forms denouncing their membership in the union. The reason for quitting has already been written in for them: "I do not wish to participate in collective action and strikes that undermine the company I work for." All they have to do is sign on the dotted line.

As often happens in such situations, the measures have backfired. On Dec. 28, a meeting of union representatives voted overwhelmingly to undertake collective action, and now one of the country's largest companies is on the brink of a strike. Neither side wants production to grind to a halt, but negotiations have dragged on and the problems are not being resolved. The 20 percent indexation issue has become a matter of principle and, moreover, the Norilsk union's very existence is now at stake. Perhaps the future of the labor movement in this country is at stake.

If the Norilsk union is smashed, it will send out a strong signal to other companies. Until now, unions have not posed much of a problem to anyone -- by and large they have been feeble and ineffective. However, if they start to defend workers' rights -- as in the case of the air traffic controllers and in Norilsk -- they will, no doubt, experience the more brutal aspects of Russian business practices in full. If the Norilsk union is victorious, workers in other companies will surely start to assert their rights as well.

Boris Kagarlitsky is director of the Institute of Globalization Studies.

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