Wednesday, 20 January 2010

Vale-INCO: Some in Canada Say Strike Shows Risk of Foreign Control

Published: January 13, 2010

SUDBURY, Ontario — Last July, the 3,300 unionized workers who normally work deep below this city in the vast nickel mines owned by Vale Inco did something unusual: they went on strike even though they had already been laid off temporarily.

Even by the standards of a mining city with a long and often bitter history of labor strife, the nearly six-month walkout by the Canadian arm of the United Steelworkers of America is exceptional, and not just because of its length. To many in Canada, particularly those in the labor movement, the strike has become a symbol of the pitfalls of allowing large corporations to fall under foreign control.

Even before Vale, an iron ore miner based in Brazil that was once state-controlled, completed its acquisition of Inco in 2006, there was a widespread debate in Canada about the “hollowing out” of the country’s corporate sector. Inco had tried to create a Canadian mining giant by offering to buy Falconbridge, a rival that also has extensive operations in Sudbury. But the unsuccessful effort touched off a series of maneuvers that resulted in Inco, one of Canada’s most prominent corporations, being owned by a Brazilian company few Canadians knew and many distrusted.

For Inco’s unions and their supporters, the unusually protracted strike is confirmation of those suspicions.

“This is all about trying to change the community to fall in line with the communities around the world where they do business,” said John Fera, a third-generation Inco worker who is president of Local 6500 of the steelworkers union. “As much as we always fought with Inco, people were always proud to work in the mining industry. That pride just doesn’t seem to be there now.”

Many predictions made by critics during the debate surrounding the takeover of Inco and other prominent Canadian resource companies like Alcan, the large aluminum producer based in Montreal, have not come to pass in Sudbury, which literally grew around Inco’s nickel operations during the 19th century.

John Rodriguez, the mayor and a strong supporter of the strike, acknowledged that Vale had not reduced charitable donations. The company pressed ahead with significant investments in Sudbury’s mines and smelters planned by Inco. And it even won favor with many locals by planting grass on some of the black slag heaps that make vast sections of the otherwise attractive city resemble the surface of a barren planet.

But Jean-Charles Cachon, a management professor at Laurentian University in Sudbury, said that he had observed one significant change since Vale took control of Inco — a reluctance to share information about its books.

After a particularly bitter series of strikes, Inco took a new approach beginning in 1985. Professor Cachon and Mr. Fera said that the company began sharing internal accounts with the union, a move that averted at least one strike. Similarly, Inco opened its books to suppliers. Not long after Vale’s acquisition, however, Professor Cachon said that “they reverted back to what I would call the old-fashioned Inco way. That is: ‘We don’t tell anyone anything.’ ”

Mr. Fera said that the union not only lost its dialogue with the company, it also noticed an increase in disciplinary actions against its members. The two factors, Mr. Fera said, combined to create a tense environment when negotiations began in the spring of 2009. Early last year, Vale Inco announced that it would extend a previously scheduled one-month shutdown of its Canadian nickel operations for two more months, a move that left up to 5,000 employees on temporary layoff beginning in May.

The company cited growing nickel inventories and low nickel prices. After peaking at about $20 a pound in 2007, a year after Vale paid $19.4 billion for Inco in a heavily leveraged deal, nickel had fallen to about $7 a pound. It is trading for about $8 a pound now.

On Wednesday, the union filed a formal complaint against Vale Inco accusing the company of bargaining in bad faith. It asks the Ontario Labor Relations Board to order contract talks restarted under a mediator and to require that the company present new proposals on key issues. It also requests that Vale Inco be required to reimburse the strikers for lost wages.

“The bargaining-in-bad-faith claim is baseless,” Cory McPhee, a Vale Inco spokesman based in Toronto, wrote in an e-mail message. He added that the company had approached the steelworkers “on numerous occasions asking them to sit down with us and explore a path forward. They’ve rejected the idea at every turn.”

Two demands from Vale Inco are, in the union’s view, responsible for the ultimate collapse of the talks. Like some other employers in Canada, the company wants to change its pension plan from one offering guaranteed benefits — the dominant model for many large Canadian plans — to a defined-contribution plan with variable benefits.

Arguably more provocative is Vale Inco’s proposal to modify a profit-sharing plan linked to the price of nickel. Before the current recession, when high demand for stainless steel brought high nickel prices, miners at Inco earned 20 Canadian dollars an hour through the nickel bonus. When nickel prices were low, however, the bonus payments have amounted to as little as 500 Canadian dollars a year. If the miners were working now, the bonus payment would be about 6 Canadian dollars an hour.

Vale Inco wants to raise the minimum nickel price that initiates the bonus — an idea the union accepts, although the two sides disagree on the amount — and set a limit on the maximum payment, which the steelworkers reject.

Mr. McPhee, a longtime Inco employee himself, dismissed union suggestions that the strike was a clash between Brazilian and Canadian business cultures. Instead, he criticized the union for holding what he considered an unrealistic view of Vale Inco’s situation.

“We did not want to be in a strike, but the business has fundamentally changed,” Mr. McPhee said. “We’re in a 100-year-old-plus operation here. It brings challenges in terms of investment in the business.”

Out at the picket line near the Vale Inco Copper Cliff smelter — its 1,234-foot smokestack is something of a national landmark — most of the strikers viewed the situation as a power play by the their new Brazilian owners.

“The other owner, you knew where they were coming from,” said Chris Schroer, a millwright. “These ones just want to show us that they’re the boss.”

The union, however, is not without an international dimension itself. To start with, Mr. Fera’s local is part of an international union based in Washington. Its president, Leo W. Gerard, is a former Inco employee and member of the local Mr. Fera now heads. And throughout the strike, the steelworkers have been working with unions in Brazil and Europe to organize anti-Vale protests and to press other companies not to buy copper concentrate from Sudbury.

While the union’s continental membership has allowed it to endure a long strike financially, Vale’s global nature has also given it a similar advantage. In the past, a shutdown in Sudbury as well as the smaller Vale Inco mine in Labrador in the province of Newfoundland, where 150 to 170 workers also remain on strike, would have virtually eliminated the majority of the old Inco’s revenue. At Vale Inco, by contrast, nickel is only 15 percent of the business.

Professor Cachon views the strike as being more of a clash between mining cultures than one pitting Brazilian values against those of Canadians.

Vale’s iron ore business is based around open-pit mines staffed with large numbers of relatively low-skilled workers. In deep rock mines like Sudbury’s, most low-skilled labor has been replaced by sophisticated machinery. The miners, while well paid, are mainly technicians with several years of training and apprenticeship behind them.

“These people are already trying to find employment elsewhere and won’t be interested in coming back unless they have very good working conditions,” Professor Cachon said. “You just can’t replace people like that.”

Tuesday, 5 January 2010

Port Colborne lawsuit - What does it all mean?

Source: The Tribune
By Mark Tayti
Jan 3, 2010

PORT COLBORNE — Sitting in a Welland courtroom with her name attached to a high-stakes class action civil suit against nickel giant Vale Inco is not something Ellen Smith ever thought she might be doing.

Roll the clock back a decade or so and Smith lived a relatively normal life on the east side of Port Colborne. She had lived in her Rodney St. house for a couple of years and was raising a couple kids with her husband.

That was before news broke in the community about elevated nickel levels in the soil. Her own property was tested at 16,000 parts per million and 91 Rodney St. became one of 25 properties under Ministry of Environment orders against Vale Inco slated for remediation.

Then came the Community Based Risk Assessment (CBRA), an in-depth study that has been going on since near the turn of the last decade.

Smith got interested once she found out there were elevated levels of what have come to be known as "chemicals of concern" in her neighbourhood.

"I didn't know what it all meant," she said.

Ten years later, Smith still worries about what it all means. Her two children were raised in the home red-flagged by the ministry.

Sitting in on literally hundreds of CBRA meetings have done little to ease Smith's concerns. She said the scientific community is at odds on what the long-term health affects might be.

"Is there going to be human health problems? Nobody knows. The whole idea of not knowing has kept me involved."

Smith said there is still a lot of interest in the class action lawsuit that got underway in Welland in the fall and is scheduled to reconvene on Jan. 11, 2010.

"People stop me on the street and ask me how it's going," she said. "I am constantly getting phone calls from neighbours and people who have lived in the neighbourhood. People are interested."

The class action case deals specifically with real estate values and what impact chemical contamination may have had on those values since the news broke.

What the class action suit does not take into account is the very real stress the whole situation has had on families in the Rodney St. neighbourhood.

When the class action was certified, it was initially Wilf Pearson who was named as plaintiff.

A decision was made to remove his name and replace it with Smith's because of Pearson's ongoing health issues.

Regardless of the outcome, one thing Smith is never getting back is the time she invested tracking the process, attending meetings and researching on the Internet in order to answer that nagging question.

"There was a cost to the quality of life with my family," she admits. "There is always that worry in the back of your head as to the long-term affects of elevated levels of nickel in the soil."

She said a decision was made to separate the health issues from the real estate issues in the ongoing court case. She had hoped the CBRA would answer the questions concerning chemical exposure.

The more time that passes, the more she doubts it.

"I don't think the CBRA will accomplish anything — other than compile data," she said. "I am never going to get that question answered."

Smith said Vale Inco has spent millions to do the study. She believes the money would have been better spent by sitting down with property owners and coming to some out-of-court settlement.

"The scientific community is at odds with itself," she said. "A lot of the process has become political."

She said the class action suit represents anyone with property within the city's borders, who has owned the property as of September 2000.

For her part, she has spent several days in Toronto in the discovery process and has spent about four days on the stand during the trial giving evidence and being cross exzamined.

"Talk about stress," she said when asked about the trial. "Physically and mentally, it takes a lot out of you."

She said the CBRA and the lawsuit have dragged on for so long that many people have forgotten about it or they think it's over. Attendance at CBRA community meetings and open houses held to vet reports has dropped off and only a handful of Rodney St. neighbours remain actively engaged.

There have been times during the court case when Smith has been one of a sparse few in the gallery to witness the two legal teams argue the fate of the community.

"Whatever the outcome, it affects virtually every (property owner) in Port Colborne," Smith said. "I think there are just over 6,000 households. There is a lot of weight on my shoulders but I am not alone. I have a fantastic team of lawyers."

She is hoping a decision on the case will be handed down by the summer of 2010.

Despite all that Smith has encountered along the way, she has no regrets, other than the time lost with family.

Smith also plans on seeing things through to their conclusion.

"It's been 10 years of learning," she said. "I never had a interest in anything like this until it happened to me."