Tag Archives: carrefour

Indian States are Putting More Roadblocks in front of Walmart Expansion

New Orleans   Two reports yesterday from Dharmendra Kumar, director of the India FDI Watch Campaign affiliated with ACORN International, point out how far the superstore giants like Walmart, Carrefour, Tesco, and Metro really are from being able to freely enter markets throughout India.  This is largely a story that the global business press is missing as they tout the rise and fall of the stock market without trying to understand that there continues to be a huge struggle over these issues of foreign direct investment in multi-brand retail.

            First and foremost, when Prime Minister Singh announced that he was pushing forward the modification, he could only do so generally at the parliamentary level.  Specifically each of the twenty-eight India states, not to mention the seven territories, has the right to independently decide whether to allow this FDI expansion in their jurisdictions.  As of this date, only 11 of the 28 states have indicated a willingness to tolerate such expansion with 17 thus far militantly opposed.

            As Dharmendra reported yesterday, there continue to be more roadblocks. 

            Walmart had teamed up with India-based Bharti in recent years to operate a “cash-and-carry” business that sold only to other businesses and not the general public, something like Sam’s Clubs the United States.  The Government had indicated that a “group” business like Walmart-Bharti had certain restrictions, but in recent years the ambiguity of the “group” business definition had allowed them free rein.  No more. 

            To quote from Dharmendra’s report:

On 3rd June 2013, Govt. of India defined Group firms as two or more enterprises that directly or indirectly are in a position to exercise 26% or more voting rights in the other enterprise or appoint more than 50% members on board of directors in the other enterprise. Amidst widespread opposition to the Walmart’s backdoor entry of FDI in Multibrand retail (through Bharti-Walmart, the 50:50 joint venture between Walmart and Bharti for operating Cash-and-carry outlets in India), in April 2010 Govt. of India framed a policy that asked cash-and-carry businesses (Bharti-Walmart) to limit their sale to group firms at 25 per cent of their turnover. In absence of clear definition of what group firms meant Bharti-Walmart’s cash & carry business (20 Best Price Stores) continued to sale almost 85% of their products to Bharti Retail’s 200 Easy Day stores.

Now, Bharti-Walmart will either have to limit its sale to Easy Day to 25 per cent of its turnover or restructure its corporate structure.

 

There can’t be happiness in Bentonville over this new clarification.

 

Yesterday the Indian Department of Industrial Policy and Promotion (DIPP) was also meeting and was expected to also propose additional heartburn for the superstore outfits.   India FDI Watch expected the following actions:

It is likely that the DIPP

 

– Would ask global superstores to invest 50% of only the first tranche of investments (minimum $100 million) in back-end infrastructure.

– Would declare that the 51% foreign direct investment limit in multi brand retail is composite one, including FDI and foreign institutional investment (FII).

– Would allow superstores to create back-end infrastructure in states that do not allow any FDI in multi-brand retail

             Forcing the big boys to put their investments up front rather than only in the logistics and supply at the backend of a retail operation almost puts a bull’s-eye specifically on the usually smiley-face of Walmart.

            There’s a lot more fight to come in India over FDI’s expansion into retail.

Indian States and Walmart Expansion Audio Blog

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Exploiting Contract Workers

New Orleans Reading an surprisingly good article in the New York Times about the union fight in Indonesia against the great mega-retailer Carrefour to win rights for contract workers that they thought they had gained in a strike earlier this year, I was struck by how blind we all are to similar worker exploitation right in front of our eyes every day.  We are not blinded so much by ignorance as by ubiquitous corporate deceit and sleight of hand.  The worker smiling across the counter, hauling our garbage can, delivering our prescription, telling us about the traffic on the way from the airport, and in many other situations is not really working for the company whose name is on their uniform, but often an exploited contract worker in disguise.
Recently talking to Ken Paff, the long time organizer for Teamsters for a Democratic Union (TDU) about any new organizing being done by the Teamsters, he was incredulous when I told him that Waste Management and many other companies really only employed the drivers on those privatized municipal sanitation trucks, because the laborers on the back end of the trucks were almost always contracted, casual and temporary workers.  I knew because Local 100 has represented them with all of the garbage companies in New Orleans, Dallas, and elsewhere for years.  It’s part of the business model, pure and simple.  Offload the workman’s compensation liability on someone else because running in traffic behind a multi-ton truck is very dangerous work and besides who knows (cares?) what they might be paid for the work and the risk.  Just like the Indonesian worker was quoted  by Sara Schonhardt in the Times, “New employees who are young and ready to enter the work force will take whatever pay they can get…” and this sets the stage for exploitation obviously.
Taking a cab into the city from the Metro Airport in Detroit I saw an envelope between the cabbie’s seats that was marked UAW.  I asked him if he was represented by the autoworkers union.  He was on the organizing committee of a difficult drive to organize the company with the UAW’s help, but they kept being rebuffed as “contract” workers.  To same “in name only” beggars the question of the weaknesses of labor laws for this burgeoning sector of the domestic and global workforce.

Of course it goes without saying that this is part of why ACORN International’s India FDI Watch Campaign continues to insist that Carrefour, Walmart, Metro, Tesco, and other giant multi-brand retailers must agree to labor standards, job protections, and community benefits before entering India.  The notion of using contract workers in retail to escape national labor laws providing protections and benefits is well established.    For example in Mexico where Walmart is well established as Mexico’s largest private sector employer (just as they are in the USA and Canada), when you are watching the cashier ring up your bill and someone else bag your groceries, just like in Indonesia, you are talking to a contract worker with a smiley face on their shirt just like the rest of the Walmart “associates.”

Not all associates are created or treated equally it seems.  This is a critical issue that could easily be solved either by worker action or by closing the loopholes in the labor laws.  It would be wonderful if both workers and lawmakers could combine to fix this problem in many countries, though that seems like a Christmas kind of wish and too much to hope.

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