June 15, 2009

Don’t cut workers’ pay, ILO warns Nigeria, others

By  Funmi Komolafe in Geneva and Victor Ahiuma-Young
GENEVA—The  Inter-national Labour Organisation (ILO), has warned  its 183 member-countries including Nigeria against pay cut for employees just as it advised them to reduce trade imbalance and be cautious with trade liberalisation.

It also suggested that minimum wage should not be allowed to fall in real value.

Also, governments should put in place social protection for employees and avoid job losses.

ILO noted that whereas stimulus packages had sustained banks, people in the informal sector have not been able to access the funds available.

Speaking on the current global financial crisis and its impact on jobs at a briefing in Geneva, yesterday, ILO’s Chief Employment Trends,  Economic and Labour Market Analysis Department, Mr. John Jefferson, said: “Enterprises tend to be cutting wages but this will be counter- productive.

“Neighbouring countries will be afffected  and this will not improve the situation, it will deteriorate.”

The ILO expert who also cautioned against devaluation said, “Minimum wage should not fall in real terms, instead, collective bargaining should be strengthened  to ensure that wages grow along with productivity.”

Also contributing, another expert, Mr.  Raymond Torrees said, “If you reduce income, they (employees) have less to spend in the market place.”

Though Jefferson said this was subject to the confirmation of the International Monetary Fund (IMF), he added that IMF officials who spoke at the ILO Global Jobs Pact promised that IMF may drop some of its conditionalities in favour of needed support for countries.

Quoting IMF, he noted that the current global financial crisis is the sixth since 1960 but that “this is the biggest.”

He said whereas it could take the world one to two years to recover from the current crisis, “job recovery  takes four to five years to recover.”

Jefferson said from the presentations of experts invited by ILO to discuss the financial crisis and its impact on jobs, there was a consensus that “governments need to provide employment and social protection with a focus on small and medium enterprise devlopment and skill development.”

It was also suggested that efforts should be made to assist employees who lose their jobs back to the labour market.

For instance, he said, “In Germany, about one million people have kept their jobs because government and social partners agreed on some subsidy. Subsidy can avoid and limit job losses.”

He said it was also agreed that “developing countires should put more emphasis on employment and social protection.”

Mr. Jefferson said, “IMF at the meeting said they have dropped conditionalities  tending more  for support”.

Although  the experts urged countries like Nigeria,  with one or two export items to look inwards and diversify , they cautioned against “ trade protectionism” which he said “ would be less effective.  We want to avoid wage deflation or competitive currency devaluation which are very tempting”.

ILO  expectations

Mr.John Jefferson told the journalists that  the ILO expects the financial market to be reformed “We welcome the reform of the financial system .  We need to come out of the crisis  with a Greener Economy”.

He said  member countries have been advised to reduce trade imbalance sazing “ we need to develop a fairer system”.

Mr.Jefferson said, “We are very much aware of the danger of the job crisis .  Not acting at all has a disproportionate   effect on the labour market”.

On Liberalisation, he said, “Liberalisation is important but we have to be careful about it”.

Labour resumes anti-deregulation protest

GENEVA—LABOUR and Civil Society Coalition (LASCO), would tomorrow, in Kano, Kano State, resume the national protest rallies against, among others, government planned full deregulation of the downstream sector of the petroleum sector and privatisation of public refineries, suspended  a month ago.

The protest rally which was suspended a month ago after taken place in Lagos and Delta states, is also designed to force government to review the national minimum wage and full implementation of the Justice Uwais Electoral Reform Committee’s report which LASCO said reflects the wishes of the Nigerian people.

This is coming even as  the Nigeria Labour Congress (NLC), has listed three alternatives to the planned deregulation of the sector, insisting that the nearly decade tangle of Labour and Government over the matter can only be resolved through tripartite consultation.

NLC’s alternatives were made known just as vice-president, Goodluck Jonathan prepares to address over 7,000 delegates from183 member countries of the International Labour Organisation including Nigeria on “ Managing the national jobs agenda in times of crisis”.

He will make his presentation on the same day that the Labour and the Civil Society Coalition Groups renew protest against the deregulation of the down stream sector, negotiation of national minimum wage and the implementation of Electoral Reform Committee Report.

Speaking exclusively to Vanguard in Geneva, Switzerland, on what Nigeria stands to benefit from the on-going 98th conference of the International Labour Conference, the general secretary ofthe NLC, Comrade John Odah said, “Our own alternative to the deregulation of the downstream and to the selling of the refineries is for our government to re-look at our joint venture agreement with a view to getting the oil majors to compulsorily have interest in refining petrol in Nigeria and therefore establishing refineries in Nigeria”.

He explained, where they do not agree, we would then work with government to approach other emerging investors in countries that have demonstrated ability like China, India and other emerging investors in other developing countries where we can agree that over a period of two to three years, we can agree that X number of investment can be done in terms of the establishment of refineries in the downstream sector . This we have to do as a nation*.

The NLC general secretary continued, “ With respect to existing refineries, part of the problem we’ve had is deliberate sabotage by vested interests and we are of the opinion that by the time you get people who are really interested in ensuring that we break this vicious cycle, then we would be able to have our refineries to come on steam in a way that they would satisfy at the very least the domestic market”.

Comrade John Odah pessimistic about government’s confidence in the ability of the private sector to tackle issues arising from the current global financial crisis said “ In our own case, we cannot have a situation where we hope that our own private sector which is weaker and lacks substance to do what the government has over the years failed to do. We need as a country therefore to come together and review why we’ve continued to have this problem and then collectively agree on solutions which everybody will now be committed to implementing”

He cited the United States of America where “there has been a whole lot of efforts at re-nationalisation of big time corporations. The latest example is that we had the United States government taking over 60% of General Motors and the United Auto workers have 17.8% of shares in this renewed effort at trying to get General Motors back on board. In effect, we can learn something from this”.

The NLC general secretary said of decade old stalemate over the deregulation of the downstream sector of the petroleum industry” For example, in our own situation, where government is now talking about deregulation. This is part of what we have quarreled about. Where the markets have shown remarkable lack of ability to deliver and this is part of the main reason for the current crisis”

Comrade Odah said he hopes our government will learn from this International Labour Conference to be able to tackle the problem in a holistic way in which all the social partners , Government, Labour and Employers will work together because it is not possible to just imagine that the government can address the crisis without carrying the social partners along”.

Tomorrow’s rally, according to the NLC’s Head of information, Comrade Owei Lakemfa, in a statement, said would at 8am from the NLC Kano State Secretariat, Katsina Road, by Bukavu Army Barracks.  The march which will move through Murtala Mohammed, IBB Way, Ibrahim Taiwo and State roads, will terminate at the Government House, Kano.

The statement advised the Federal Government not to resort to its normal negative tactics of trying to blackmail Labour, nor would it be profitable for it to use the police into a negative reaction against these peaceful protests and rallies.