OECD complaint 2

The RIO TINTO Campaign site

Renewed Complaint concerning Rio Tinto

Lodged by the Australian Council of Trade Unions under the OECD Guidelines for Multinational Enterprises

Following the points of clarification issues by the OECD's Committee on Investment and Multinational Enterprises in December 1999 - which had the effect of invalidating the Australian Government's reasons for not dealing with the complaint - the ACTU renewed its complaint about the activities of Rio Tinto in January 2000. The renewed complaint also includes new material - since the time of the first complaint Rio Tinto has been found to have unlawfully victimised trade union representatives for undertaking legitimate union activity.

Here is the full text of the letter from the ACTU to Australia's National Contact Point under the OECD Guidelines.

24 January 2000

Ms Janine Murphy
Executive Member
Foreign Investment Review Board
C/- Treasury Building
CANBERRA ACT 2600

Fax: 02 6263 2940

Dear Ms Murphy,

Rio Tinto: breach of OECD Guidelines for Multinational Enterprises

I write regarding the complaint made by the ACTU in April 1998 regarding the conduct of Rio Tinto, and your response of 3 February 1999.

Following the findings of the OECD Committee on Investment and Multinational Enterprises (CIME) in this matter I request that you re-examine this complaint.

I also formally lodge a new matter that is the subject of complaint under the Guidelines.

You will be aware that, subsequent to receiving your letter of 3 February 1999, which declared the matter resolved, the ACTU raised the issue with the Trade Union Advisory Committee to the OECD. TUAC then formally raised the issue for clarification with CIME in a letter dated 17 June 1999 to the chairman of CIME.

CIME considered the matter in meetings in September (at which the ACTU was present and allowed to make a presentation) and in December. On 10 December 1999 it issued its final response to TUAC's request [OECD document no. DAFFE/IME(99)35/FINAL]. A copy is attached.

The CIME found that on two key points the reasoning of the Australian National Contact Point was incorrect in reaching its conclusions.

First, and most important, Rio Tinto's compliance with domestic legislation and with orders and awards of the Australian Industrial Relations Commission does not mean that it has complied with the Guidelines (point 7 of the CIME response). The Guidelines are supplementary standards of behaviour.

Secondly, in the letter for 3 February 1999 it was argued that the dual-listed structure of Rio Tinto meant that the domestic company was entirely responsible for its own affairs and that therefore it was “unnecessary and inappropriate” to liaise with the British National Contact Point regarding the case. CIME's response (at points 8 & 9) indicates that the specific structure of a company is not relevant; all that matters is that parts of the entity are linked in a manner that one is in a position to influence another. In the case of Rio Tinto, the ACTU finds it inconceivable that the London head office of the company is not in a position to influence the Australian company.

Your attention is also drawn to point 14 of CIME's response. Whilst CIME states that a National Contact Point is under no obligation to contact the NCP of another country in relation to the operations of a multinational enterprise, “it may be desirable for an NCP to inform its counterpart in the home country of an MNE when a particular case is brought to its attention”.

In the ACTU's view it would clearly be desirable that a major complaint brought in Australia against a major company that has its head office in the UK be brought to the attention of the British NCP.

I therefore request that you reconsider the original complaint of April 1998 on its merits, rather than with regard to the technicalities raised in your letter of 3 February 1999. CIME has clearly indicated that such technicalities should not be a consideration in your handling of the complaint on its merits. It is strongly requested that you examine the particular conduct alleged for its compliance with the Guidelines.

Further, a new component is added to the original complaint. Since the time of your letter of 3 February Rio Tinto has been found to be in breach of the Workplace Relations Act with respect to its treatment of union representatives conducting union business. In simple terms, it has been found guilty of victimising unionists. In CFMEU and Coal and Allied Operations Pty Ltd (Matter no. NG 778 of 1998) Justice Branson found, in a decision dated 5 November 1999 that: “The applicant has succeeded in establishing that the respondent has engaged in conduct in contravention of Part XA of the act in three instances.” The decision is available on the Federal Court's website: www.fedcourt.gov.au

Part XA of the Act contains provisions relating to to freedom of association.

Section 298K in Part XA of the Workplace Relations Act states that:

“An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:

(i) dismiss and employee;

(ii) injure an employee in his or her employment;

(iii) alter the position of an employee to the employee's prejudice; . . . . “

Section 298L defines prohibited reasons and includes:

“(m) in the case of an employee or an independent contractor – has absented himself or herself from work without leave if:

(i) the absence was for the purpose of carrying out duties or exercising rights as an officer of an industrial association; and

(ii) the employee applied for leave before absenting himself or herself and the leave was unreasonably refused or withheld; or . . . “

The company was found to have victimised union representatives at the Hunter Valley No.1 mine through unreasonably refusing leave for them to attend an Industrial Relations Commission hearing, and to attend a union district delegates' meeting, and then issuing an official warning (a disciplinary measure) to the employees for doing so.

The ACTU considers this conduct by Rio Tinto to be a breach of 7(1) of the Guidelines which requires MNEs to respect the right of their employees to be represented by trade unions. Victimisation of trade union representatives for carrying out union business cannot be construed as respecting employees' representation rights. The refusal of leave for legitimate union business is also a breach of subclause 7(2)(a) which requires the provision of facilities to representatives of the employees as may be necessary to assist in the development of effective collective agreements.

The breach by Rio Tinto of Australian law is also a breach of clauses 7(4) and (7). With respect to (4) the company has not observed standards of employment and industrial relations similar to that of comparable employers in the same country. The ACTU is unaware of any other Australian company which has been found by a Court to have victimised union representatives in this way.

With respect to section (7) the discrimination against the employees for carrying out legitimate union activity is clearly in breach of the anti-discrimination provisions of this subsection of the Guidelines.

The position is now that Rio Tinto has, apart from its breaches of the Guidelines, been found to have failed to comply with Australian law.

It is suggested that, in attempting to resolve the complaint, the NCP do more than simply seek the views of the parties and those of the Department of Employment, Workplace Relations and Small Business. An effort should be made to bring the parties together at senior officer level, to mediate the complaint, and to attempt to devise a solution that could see the complaint withdrawn or resolved. Given the seriousness of the complaint, and that it now involves breaches of Australian law by the company, it is strongly urged that the British National Contact Point be formally informed.

Your attention is drawn to the lengthy time frame in which you dealt with the original complaint. Given that no attempt was made at mediating the complaint the delay of nine months between the making of the complaint and your response does not seem justified.

The ACTU strongly requests that you accord the renewed complaint the priority it warrants. The complaint deals with one of the largest corporations operating in this country; it concerns major and continuing breaches of the OECD Guidelines for Multinational Enterprises; including a breach of Australian law.

I look forward to your prompt reply.

Yours sincerely,

Jennie George
President

cc. John Evans, Trade Union Advisory Committee to the OECD, Paris
Damien Roland, International Federation of Chemical, Energy Mine and General Workers Unions (ICEM), Brussels
Dwight Justice, International Confederation of Free Trade Unions (ICFTU), Brussels
Maggie Dwyer, British Trades Union Congress (TUC), London