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TPP & Workers: Worth Watching? Double-Barreled, Cross-Border Complaints Filed Against Chedraui/El Super Under NAFTA agreement/OECD Guidelines

On November 12, 2015 the U.S. United Food & Commercial Workers (UFCW) Local 770 and the Mexican Frente Autentico del Trabajo (FAT) made coordinated filings against the Chedraui Commercial Group under both the NAFTA (North American Free Trade Agreement) side labor agreement and also OECD (Organization for Economic Cooperation and  Development) Guidelines.  Chedraui is Mexico’s third largest retail chain with some 35,000 employees in over 200 stores throughout the country, and Chedraui also has  an 83% ownership interest in California-based Bodega Latina Corporation which does business as the El Super grocery chain in 50 supermarkets employing over 5,000 employees in California, Arizona and Nevada.

The NAFTA complaint, filed with the U.S. Department of Labor (DOL) seeks an investigation into Chedraui’s practices in Mexico and alleged ineffective labor law enforcement by the Mexican government.  The DOL has 60 days to decide whether or not to accept the NAFTA complaint for review, which process ultimately could lead to fines and other penalties.

OECD Guidelines adopted in 2011 to promote “good corporate citizenship” by firms investing in other member countries require, as a matter of industrial relations, among other things, that corporations respect workers’ organizing rights and engage in good faith collective bargaining. Each OECD country maintains a National Contact Point (NCP) to receive complaints about labor abuses by foreign investors. The OECD complaint alleges that Chedraui has cultivated sham unions through so-called “protection contracts” that represent the interests of management, not workers, and which prevent the formation of independent unions.  The U.S. NCP, based in the Department of State, has three months to decide whether or not to act on the unions’ complaint and can offer a mediation process aimed at resolving the dispute within six months.

As “Common Dreams” staff writer Deirdre Fulton reported, former chair of the U.S. National Advisory Committee on the NAFTA  labor agreement, University of Maryland international labor law professor Marley Weiss, has remarked, “If the [Obama] administration fails to take strong action [in response to the “double barrel” complaints], critics [of TPP] will see it as a signal that the U.S. is falling short on linking trade, investment and labor rights.”