Editorial

An Unproductive Legacy

This week, the Mauritius Sugar Producers Association (MSPA), representing the interests of the corporate sugar sector, finally agreed to concede a 20% rise in the pay of artisans and labourers employed by the sugar industry (SI), after a long drawn-out process of negotiation with the trade unions. Matters had started tensing up when the MSPA announced that it was unwilling to go beyond the 16% increase it had conceded earlier on to the Plantation Workers Union (PWU) without regard to certain other non-pecuniary working conditions asked for. Having listened to all the parties, the Commission for Conciliation and Mediation (CCM), a negotiating mechanism chaired by Prof V Torul, had recommended a 20% pay rise against demands of up to 35% increase by the other parties involved in this collective bargaining process. Thus, the MSPA has, after showing a lot of resistance and without regard to certain basic conditions of employment of workers, finally agreed to the figure recommended by the CCM as salary compensation for the artisans and labourers working in the sector. The increase of 20% will be staggered over four annual tranches, starting with an initial increase of 11% in January 2010 and ending up by the last of three triennial increases of 3% each ending in early 2013.

This could mean that the workers will be prevented from engaging in the matter of wage negotiations well up to 2013. Moreover, it is crystal clear that the purchasing power of a three per cent increase in 2011, 2012 and 2013 will be eroded down by accumulating inflation and currency depreciation in the interval between now and the future dates when the compensation will become payable. The sugar industry will in parallel continue to have recourse to a sustained policy of reducing its labour force, which has fallen from 32,000 in 2000 to 11,300 in 2008, to avoid even the agreed watered-down compensation in the coming years. It is well known that the sugar industry has increasingly been having recourse to casual labour, which is a device to avoid having to meet otherwise legally binding commitments where permanent employees are concerned. It is a raw deal but this is all the unions were able to get to, not even compensating for the loss of workers’ purchasing power since the last revision of their pay granted by the Permanent Arbitration Tribunal in 2000.

Once the MSPA decided to accord no more than a 16% increase (which it had conceded to the PWU earlier) after the CCM had made its views known, tensions increased. A general strike in the sugar industry to take effect from mid-June was already under preparation. Certain unions involved in the discussions cast doubt on the figures presented by the sugar industry to the effect that, in view of dwindling incomes due to lower sugar export prices from the EU, it could not afford any further increase in the wages of workers. The Prime Minister urged the MSPA to review its position and agree to the 20% increase recommended by the CCM. This must have conveyed to the MSPA the urgency with which it was called upon to finalise the matter. The MMM opposition also took a stand in favour of a 20% increase. The MSPA therefore found itself isolated. This is the context in which it conceded the staggered pay rise of 20% over 4 years.

The role and importance of the sugar industry in the economy has shrunk considerably. It contributes less than 3% of annual GDP. It employs barely 2% of the country’s labour force. The large sugar industry shareholders have diversified their investments into non-sugar activities over the years, such as manufacturing, tourism and other services. It is these sectors that have become the main engines of economic growth. As an example, during the past 4 years to 2009, the tourism sector accounted for nearly 11% of the economy (i.e., more than 3 times the sugar industry); construction: 6.5%; non-sugar food production: 6.5%; electricity, gas and water: 2%; financial intermediation (i.e., insurance, banks, etc.,): 10.8%; real estate (IRS, renting, etc): 11.2%; transport and communications: 11.5%; textiles: 5.9%. It is those other sectors rather than the sugar industry that have been paying the bulk of the dividends and generating most of the employment in the economy. Yet, every time, the sugar industry is in the limelight, it attracts adverse comments from the public.

The reason for this lies in history. Labour struggles began on and intensified historically in the sugarcane fields. The uneven distribution of economic power of those days when wealth and incomes tended to be heavily concentrated in sugar and other agriculture between the haves and the have-nots, has left a scar. Attitudes have not changed sufficiently to warrant a coming together of those severed feelings of impoverishment and apartness. While enterprises have to look for profit, they also have to keep at the back of their mind a sense of fairness which may impact on their general image in the population. For example, barring the little redress of the situation that was achieved by way of 2000 arpents conceded under pressure by the sugar industry for public use in exchange for the massive grant of nearly all EU compensation under the Multi-Annual Adaptation Strategy (MAAS) to it, the bulk of the benefits of the EU grants have flowed into the hands of the large corporate sugar industry. Had the imbalance in the sharing out not been noticed, even the 2000 arpents would not have materialised.

It is also quite clear that whenever the sugar industry has diversified into other more profitable activities (e.g. energy), away from the dwindling sugar activity, it has chosen to leave its usual stakeholders (small planters, workers) on the sidelines, acting solely through the prism of proprietary rights. It has not invited them to share into those highly riskless activities, having insured its own future incomes by means of cast-iron IPP contracts. The same proprietary considerations became dominant in the development of IRS projects which became the new poles of high profit activities in the economy, especially in the heydays of the international economic boom. When you leave your erstwhile stakeholders in the lurch while you make it alone to hunt down areas where the huge profits lay, a deep feeling of social injustice is carried forward, reminiscent of what workers and their families had to endure in the days before the original rumblings in the sugarcane fields began.

One has a feeling that Mauritius still has to use the backbone of its relative good land supply to protect itself against any future dearth of basic food. The key to this lies in the orderly and well managed utilisation of our land resources before it is too late. Without cooperation from the large owners, this kind of maximum food self-sufficiency has increasingly become a receding target. One has doubts whether those who are endowed with the key land resource are inclined to pull everybody together in a common effort in this direction in the national interest, given that they also have control over finance and capital for undertaking a paradigm shift in the life of the nation. This doubt arises because of the confrontational attitude the sugar industry has posted each time an opportunity has arisen to share out more equitably the advances the nation has been making in diverse additional fields of economic activity, including those based on the large sugar estates which have been the nucleus of economic diversification. Living on with this kind of constraint no doubt adds to the economic insecurity of the country. Someone has to make a first move for all the ice that has accumulated over the years to thaw. It is possible to make a better share-out without impoverishing those who are rich. In fact, the latter will become richer and those who are less rich will be the better-off. It is a question of whether there is a willingness to depart from an unproductive legacy from the past.

M.K.

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