MNC’s in the Philippines

Maria Theresa Lopez Paunlagui

KIEA-WSN-SENTRO
A corporation is created under the laws of a state as
a separate legal entity that has privileges and
liabilities that are distinct from its members… it is
recognized by law to have rights and responsibilities
like natural persons.

TNCs “…comprise companies and other entities

established in more than one country and so linked
that they may coordinate their operations in various
ways…” (OECD)

They only have one objective: to increase their

profits!
 The Economy: A Miracle?
• For years, the Philippines was known as the “sick
man of Asia.”

• But in the past few years, this seems to have

changed as the country’s economy zoomed to
7.2% in 2013.

• 3 of the top credit rating companies in the world

– Fitch, Standard and Poor’s and Moody’s – gave
the country investments grades in 2013.
 Economic Miracle?
• In 2013, the country registered $3.860 billion in foreign
direct investments (FDI), this is up by 20% compared to the
$3.215 billion in 2012 (from Bangko Sentral ng Pilipinas)

• According to the Central Bank, bulk of the capital

placements came from Mexico, Japan, the United States,
British Virgin Islands, and Singapore.

• These were placed into: manufacturing sector; water

supply; sewerage; waste management and remediation;
financial and insurance sector; real estate; and, mining and
quarrying industries.
 Economic Miracle?
• All these contributed to last year's full gross
domestic product (GDP) growth to 7.2
percent.

• The 2013 GDP growth is higher than the 6.8-

percent posted in 2012.

• Is this the start of an economic miracle?

 Economic Miracle?

Despite robust
economic
growth, the
Southeast
Asian nation's
FDI inflows are
small
compared with
regional peers
due to poor
infrastructure
and high power
costs.
 Who benefits?
• This growth in FDIs did not translate to
growth in employment.
• This begs the question… Do MNEs
generate jobs commensurate to all the
incentives that the Philippines provide
them?
• The answer is NO!
 The Problems with MNEs…
• MNEs constitute the core of the capitalist system
today.
• They are involved in all areas of human economic
activity – production, services and financial
speculation.
• They intervene not only in legal activities but also
in the illicit activities and those in between.
• They influence decision-making in all levels.
• They practice various tax avoidance measures.
 The Problems with MNEs…
• They control the media – and therefore
dictate what are behavior, ideas, aspirations
and habits should be.
• They undermine workers’ and trade union
rights.
• They can count on the coercive arm of the
state (courts, police and the military).
• Thus, MNEs can and will undermine
democracy!
 Case Study:
Korea Electric Power Corporation
better known as KEPCO, is the largest electric utility in
South Korea, responsible for the generation,
transmission and distribution of electricity and the
development of electric power projects including those
in nuclear power, wind power and coal.
responsible for 93% of Korea's electricity generation.
On the 2011 Fortune Global 500 ranking of the world's
largest companies, KEPCO was ranked 271
The South Korean government owns a 51% share of
KEPCO.
 Case Study: KEPCO
KEPCO expanded its operation to the Philippines
in 1995 to respond to the Philippine
government’s call to the development and
utilization of the country’s indigenous resources
and augment its power supply.

The company engages in the rehabilitation,

operation, maintenance, and management power
plants and is the subsidiary of KEPCO
International Hong Kong, Ltd.
 Case Study: KEPCO
Since its entry into the Philippine power industry,
Kepco Philippines Corporation now provides
approximately 12% of the total installed generation
capacity in the country.

ROMM of the 650MW Malaya Thermal Power Plant in

Pilila Rizal (1995)
BOT of 1200MW Ilijan Power Plant (1996)
ROMM of 185.8MW Naga Power Plant Complex (2006)
BOO of 200MW Circulating Fludized Bed Combustion
Power Plant in Cebu (2011)
 Case Study: KEPCO
Employee Situation
In the year 2000, started to hire employees for the
construction, commissioning, operations and
maintenance of the BOT plant in Ilijan Batangas City.

Compensation was not really bad, however,

compared to the other plant in Pilila Rizal – Malaya
Power Plant, which has Labor Union, the benefits are
way below.
 Case Study: KEPCO
Employee Situation
The employees attempt several times to form a
union, thus the management in every attempt will
try to talk to the employees for a wage hike or
additional benefit.
o Leaders were promoted to higher positions.
o Job Evaluation Team whose members comprised of the
employees themselves to evaluate the job of the R&F
positions in the company.
wage and other benefits were given annually and based on
the seniority of the employees.
 Case Study: KEPCO
Forming the Union
 to be heard and to respect workers’ rights and privileges.

 Trust was the essential feature of forming our UNION

Management upon hearing the formation of the Union

tried to dialog and harass the leaders and general
membership.

Schedule was shifted to a harder routine, some were

transferred to different work load, overtimes were
restricted, etc.

Management tried to give the members a hard time for

them to give up.
 Case Study: KEPCO
Forming the Union
 CE on March 10, 2010

 Harrasment experienced
o soldiers were at the admin bldg. of the Company.
o Some employees were locked and not allowed to vote.

 UNION fought for their rights

 won the election.

 DOLE order
o KIEA-WSN as the certified sole and exclusive bargaining agent of
the KEILCO R&F employees.
 Case Study: KEPCO
Forming the Union in Keilco
CBA followed which took about ten months to
complete.

management sometimes would forget the

rights of the employees.

Union to remind them of mutual respect.

 Case Study: KEPCO
The DISPUTE
Changing of personnel’s schedule of work
affecting take home pay

From the original 2-2 schedule of the Operation’s

group (12H-duty with 4H OT), schedule was changed
to 3-1 schedule without the regular OT.
The UNION decided to include the case within the
CBA. COMPANY requested a MOA to discuss the
matter after CBA. Still is binding because MOA is
included in the CBA.
After a year of discussion, the schedule of the
Operation Department was reverted to 2-2 scheme
 Case Study: KEPCO
The DISPUTE
 Implementation of activities / benefits such as Family day,
Sports fest

 Different pay scheme among the non-members and members of

the UNION.
 Events will be held during working hours, operations who are on
shifting schedule should be the ones to adjust during their days
off (no pay)
 Union requested Management to pay a rest day OT to those
who would be attending the activity during days off; meet half
way; (alternating sched)
 Every time needs to discuss since not binding yet. Plant
Management would not want to have it written.
 Union currently included this matter in the on-going CBA
 Case Study: KEPCO
The DISPUTE
Changes in policies such as promotions

Reserved personnel were hired without positions.

- no improvement in their Job grades which in
turn demoralize members.
Union requested Management that after a year of
training, if no position available, should at least be
promoted 1 JG higher. ( still under discussion)
Union included this in the current CBA nego.
 Case Study: KEPCO
ROLE OF THE UNION TO PREVENT DISPUTE
Different cultures between Koreans and Filipinos,
arguments sometimes arise
dialogs with the COMPANY via LMC and Grievance
Machinery
solid movement every time there would be disagreements

UNION has the ability to immobilize the operation of

the Plant,
the UNION makes the Management feel that the
COMPANY is also important to its members
Guarantee that UNION will work hand in hand with the
COMPANY for a more progressive KEILCO, so long as it
respects the rights of the workers.
 Situation in Other MNEs
• We are better off compared to
workers in other MNEs.

• Despite getting favorable ruling in

ILO, the workers of Dusit Hotel
(owned by Thailand’s Dusit Thani)
who were illegally sacked after
shaving their heads in protest over
a CBA deadlock, are still figthing to
be reinstated after almost 10
years.
• The workers of Toyota who were sacked as part of the company’s union
busting a few years back, who similarly got favorable ruling in ILO, have
yet to be reinstated or properly compensated.
 Situation in Other MNEs
• Global fast food
companies like
McDonald’s, KFC, Pizza
Hut, Shakey’s and other
MNEs massively
employes precarious
workers.
 Situation in Other MNEs
• In Coca-Cola, workers
had to fight the
company to prevent
the use of an
atrocious evaluation
system that could
lead to job insecurity.
 Situation in Other MNEs
• Many MNEs, specially
those located in export
processing zones, are
rampant violators of
trade union and
human rights,
including occupational
safety and health
standards.
• Hanjin is a classic
example. It is notorious
for workers’ deaths in
their shipyard.
 Situation in Other MNEs
• Glencore Xstrata, a
Swiss mining company,
is at war with the B’laan
communities in
Tampakan, Mindanao.
Dozens have been
massacred for opposing
a project that would
force 4,000 people from
their homes as 10,000
hectares of land will be
destroyed.
Prevention of Disputes in MNEs
Stop the wanton
implementation of
management
Management prerogatives that
violates the CBAs
should (in unionized
recognize establishments)

and respect Stop union busting

labor rights! and other union
avoidance
techniques (in
non-unionied
establishments)

MNEs in the Philippines/mtlpaunlagui082014

Resolving Disputes in MNEs

Grievance Other
LMC
Machinery remedies

MNEs in the Philippines/mtlpaunlagui082014

 Resolving Disputes in MNEs

Meta-legal Mass Shaming

Strike
Tactics actions campaigns

Legal and Mediation

Filing of Using OECD
and
quasi-legal Concilitaion
cases and ILO

MNEs in the Philippines/mtlpaunlagui082014

 Social
What should Dialogues

national
centers do to
prevent labor
dispute in Strike
MNEs? preparedness

MNEs in the Philippines/mtlpaunlagui082014

What Needs to Be Done?
Global solidarity

Impact Assessment of MNEs

Binding Rules for MNEs

Stop ISDS

Review IFAs