Trade Unions Ask Norwegian Pension Funds to Divest of Grupo Mexico Shares

IMF, ICEM and four Norwegian trade unions ask Council on Ethics of the Government Pension Fund of Norway to divest its holdings in the Mexican mining conglomerate Grupo Mexico because of alleged labor and environmental violations.

NORWAY/MEXICO: The International Federation of Chemical, Energy, Mining and General Workers' Unions (ICEM) and the International Metalworkers Federation (IMF) sent a letter yesterday, March 15, requesting the divestment to The Council on Ethics, which is charged with overseeing responsible investments of the Government Pension Fund, the second largest pension fund in the world. Grupo Mexico is accused of labor rights violations, environmental destruction and shareholder fraud. The letter also requests divestment in Southern Copper, Grupo Mexico's wholly-owned subsidiary.

"We are supporting this action on behalf of trade unionists in Mexico to call attention to the extreme abuses of Grupo Mexico and to ask the Council on Ethics to drop Grupo Mexico as an investment in accordance with the Fund's very high standards and Norwegian law," said Fellesforbundet President Arve Bakke. "The wealth of future generations in Norway must not be invested in companies which systematically attack labor unions and damage the environment, as Grupo Mexico has done."

Manfred Warda, ICEM General Secretary, stated, "We have national mining unions in over 60 countries, and nowhere have we found more despicable behavior than that demonstrated by Grupo Mexico."

The overt attempt by Grupo Mexico to crush the National Union of Mine and Metal Workers of the Mexican Republic (SNTMMSRM or Los Mineros) and gross violations of workers' rights to freely associate and collectively bargain as defined by the International Labor Organization are core arguments for divestment set forth in the letter.

"The illegal practices of Grupo Mexico, unfortunately supported by a corrupt Mexican government, include seizing the union's assets, attempting to replace the legitimate union with one selected by the company, and launching a protracted campaign of repression against the union's leadership," said IMF General Secretary Jryki Raina,

In August 2007 the government and Grupo Mexico forced workers at eight mines to join a company-sponsored union using "elections" in which workers had to vote publicly in front of their employer. One union leader has been imprisoned without bond since December 2008. There are also credible allegations that Grupo Mexico is responsible for the violent deaths of two workers on two separate occasions.

Despite these attacks, Los Mineros continues to negotiate wage increases across the country that average twice the government-imposed wage cap, which unions believe is a major motivation for Grupo Mexico's attacks. It is especially noteworthy that Los Mineros maintains non-confrontational labor relations with most employers and has some 70 collective bargaining agreements with multinational employers such as Goldcorp, Bombardier and ArcelorMittal.

The company is accused of gross health and safety violations at the Pasta de Conchos mine, where 65 workers died in an explosion in 2006, and the copper mine at Cananea, where workers have been on strike since July 2007.

Studies of Grupo Mexico smelter operations in Mexico illuminate the company's shameful environmental record where abnormal levels of toxic minerals such as lead, zinc, copper, cadmium, mercury, and magnesium were found among the general populations, including high levels of arsenic and cadmium among children. In Peru, Grupo Mexico was forced to pay hundreds of millions of dollars to remediate its contamination of water and air. In Chile the company is accused of developing a mining project on indigenous land without consultation with local natives or assessing environmental damage.

According to sources cited by the trade unions submitting the letter, the cost to shareholders of Grupo Mexico's abysmal labor practices exceeds $3 billion (USD) on top of the hundreds of millions required to remediate the company's environmental destruction in Peru. Grupo Mexico was convicted by a U.S. court in 2009 of defrauding shareholders of a wholly-owned subsidiary. Another subsidiary has been linked to drug trafficking.

Covalence Ethical Quotation System, which tracks the ethical reputation of multinational companies, ranked Grupo Mexico 573rd out of 581 global companies in 2009.

The trade unions and labor federations submitting the request for disinvestment anticipate that the Council on Ethics will thoroughly investigate the information and make an expedient decision to divest.

Los Mineros is affiliated with both the ICEM and IMF. The Norwegian trade unions signing the letter are Fellesforbundet, Handel og Kontor i Norge, Industri Energi and Norsk Arbeidsmandsforbund.