Days of Unrest in Codelco’s Mines

Editor’s note: The following is a special report written by E&MJ’s South American correspondent, Oscar Martinez, editor of Mining Media’s Equipo Minero magazine.

A mobilization of workers such as had not been seen for many years recently occurred in Chile, when approximately 28,000 contractor and subcontractor workers from various divisions of copper producer Codelco, including El Salvador, Andina, El Teniente, Ventanas and Radomiro Romic, struck on June 25. Demonstrators placed rocks and barricades to block access roads leading to the mines. However, the most serious incidents took place at El Teniente, where a group of strikers entered the mine facilities, knocked over a minibus and a pickup truck, and burned eight buses used to transport personnel.

Contractor workers employed by Codelco are involved in a wide range of services, including transport and catering, equipment maintenance and mine earthmoving and infrastructure projects.

According to company estimates, the strike resulted in a $40-million loss, plus costs resulting from damage caused by strikers to Codelco facilities and decreased production at Radomiro Tomic as a result of the temporary occupation of the plant by the strikers.

Striking contractor employees at Codelco’s copper mines perform a number of important
functions ranging from meal catering to equipment maintenance. (Photo: Codelco)

The strikers expressed specific demands, including better health and education benefits for workers and their families, implementation of the “equal work, equal salary” concept and payment of bonuses similar to those given to Codelco employees.

However, the bottom line “effective” application of the so called Law of Subcontracting, which makes temporary agencies and contracting companies liable for any legal obligations arising from employment. The strikers want stable jobs and permanent contracts, and an end to fixed term contracts or fee-based work contracts. In addition, they are demanding to be considered in housing plans similar to those offered by Codelco to their regular employees that would allow contractor and subcontractor workers to eventually gain ownership of the houses they are currently renting.

According to union leaders, the situation is serious. They claim that most contract workers live in an atmosphere of fear and debt because of uncertain working conditions, substandard benefits and fixed-term contracts.

Codelco has invited the contractors and their employees to discuss their grievances with the company. With regard to salaries and wage adjustments, Codelco claims that it gives priority, in terms of contractual relationships, to companies that pay higher wages to their employees—and that this is an important factor that is considered by the company when any contract is let out for bid.

Codelco has proposed the implementation of maximum timeframes for adjustment of salaries and assurance that the guaranteed salary will not drop below a certain percentage from the total salary. Codelco has also proposed the agreement of measures between the contractor companies and their employees to encourage unionization.

Another corporate goal set by Codelco is to establish a mutually satisfactory level of training for contract workers, in terms of training time per employee per year, that can be met and measured in a timely manner. Worker meals will also receive attention from Codelco, which will incorporate a special clause in its request for bids to service providers. This clause is intended to ensure an appropriate quality level for meals served to contract and subcontract workers.

Codelco said it also is willing to discuss with its contractors possible implementation of performance bonuses for their employees. According to the company, many of its contractors already have some type of target-incentive systems in effect that have achieved satisfactory results for both parties.

The topic of wages is a touchy issue, since Codelco is not directly involved in how and how much contractor employees are paid. However, the company said it rewards contractors with larger percentages of workers holding permanent contracts.

According to Codelco, as of May 2007, 27% of its contracts had been awarded through public bidding, 60% through private bidding, and the remaining 13% through direct allotment.

Codelco reported on July 23 that it had reached an agreement with just under half of its subcontracting workers who have been on strike for the last 29 days. The deal, agreed by two out of three sets of representatives from the Confederation of Copper Workers, covers about 13,000 of the 28,000 workers on strike.

However, reported that production at Codelco’s El Salvador copper mine in northern Chile was mostly halted as of July 23. Many Codelco union employees at the mine, the company’s smallest, haven’t gone to work because of safety concerns, according to a Codelco spokesperson.