Thursday, September 01, 2016

A story of co-operative failure

A strike by miners associated with the Federation of Mining Cooperative in Bolivia, known as Fencomin, began when the government introduced what is known as Law 149 that the miners reject. The roadblocks and protests resulted in Bolivia’s Vice Minister of the Interior, Rodolfo Illanes was beaten with rocks and sticks and left dead on the roadside. Historically the mining cooperatives have been allies of President Evo Morales so why did they turned against the government and murder the official responsible for negotiating with them?

Morales tried to explain that “Unfortunately, the true Bolivian cooperative mining companies have been deceived by some leaders and, for some cooperatives who in the end aren't cooperatives but private businesses.”

The Bolivian mining cooperatives have become businesses whose owners hire labour.  Roughly 95% of the cooperative miners are workers, and 5% are owners.  It is common for the employed workers to be “temporary”. They have no social security, no job security and no health or retirement benefits. Vice Minister of Coordination with Social Movements, Alfredo Rada, pointed out the cooperative workers are exploited by the owners, who have created a hierarchy inside the organizations for their private benefit. Rada added, “We respect true cooperativism, where all are equal, but these companies have been converted into semi-formal capitalist businesses.”

Kathryn Ledeburis the Director of Andean Information Network in Cochabamba, Bolivia in an interview with The Real News Network thinks “that its seems to be apparent that there are private mining interests that are offering contracts or that have a vested interest in engaging cooperative miners and an opposition to greater state control over mining. This would be greater state income in terms of taxes, greater environmental controls, and less abilities to make alliances or to hire these cooperative miners. Some of these cooperatives are small independent artisanal miners. And some of them are actually quite big quite profitable companies. So we’re looking at a sector here that’s quite diverse and represents multiple interests. Some genuine and others based on high profit margins.” She goes on to confirm that at the root of the problem is the global commodities downturn in the prices such as in zinc, and tin, silver, gold that has reduced the income of the miners and the miners want a larger share of the mining revenues. The pie is smaller for the cooperative miners’ returns. The pie is smaller for the state’s taxes.

The cooperative owners sought to deny employed workers the right to unionize nor wanted their workers represented by unions. Which is very different from how some media outlets like the Voice Of America put it. 

They also wished to see a relaxation of environmental regulations for the mining cooperatives to cut costs. They also asked for subsidies on electricity.

 But a key demand was to revoke the law disallowing national or transnational businesses from partnering in cooperatives. The cooperatives want the right to form partnerships with multi-nationals. The Guardian writes “They want to be able to associate with private companies, which promise to put more cash in their pockets, but are currently prohibited from doing so.”

A researcher reminds us that as early as the late 1950s USAID was recommending that the Bolivian state encourage the proliferation of mining cooperatives in order to relieve widespread discontent among laid-off workers. A similar but more dramatic event occurred in the mid-1980s, when falling international mineral prices, pressure from the World Bank, and general economic disarray prompted the state to privatize virtually all of COMIBOL’s (CorporaciĆ³n Minera de Bolivia, the state-owned mining company )  mining concessions and “relocalize,” or lay off, some 20,000 miners. Many of these miners joined or formed cooperatives. Responding in part to rising commodity prices, many rural residents with no previous mining experience started joining cooperatives. The incentives for such action spring not just from the international market prices, however. Since coming to power in 2005, Evo Morales passed a significant number of political reforms that benefit the cooperatives. In 2009, cooperatives were recognized as equal players in the mining sector alongside private companies and COMIBOL; the first Minister of Mining and Metallurgy under Morales was an ex-cooperativista who blocked attempts to nationalize privately-owned mines if it seemed that it would restrict cooperative access; and, perhaps most importantly, no attempt has been made to pass laws that would require cooperatives to pay state taxes, respect national labor and environmental standards, or in any other way conform to the expectations made of private mining companies.

Miners may well all be  part of the same cooperative, but they do not work cooperatively per se. Although structures and practices vary wildly across cooperatives, internal social differentiation is very common: the cooperative’s mining concession area is divided among the socios, or official cooperative members, each of whom might hire a group of workers, or peones, to mine the region to which he has rights (it is almost always a “he,” except in cases where a widow inherits her husband’s cooperative membership). Peones do not receive the benefits of cooperative membership, which include some life insurance and the ability to participate in decision-making processes, and they are most often paid only a very small percentage of the value of the minerals that they extract. Most of the workers with whom I spoke were men in their early 20s who were working as peones for socios. Armed with bags of coca leaves, bottles of 98% alcohol, and several sticks of dynamite, they take tremendous risks on a daily basis to scrape together a living. A cooperativista with a lucky corner of the mine had an opportunity to generate a surprisingly good income, and increasing numbers of campesinos and indigenous communities are willing to risk poor health and water pollution in the hopes of benefiting. But today, with commodity prices well down the outlook are for fewer prospects for co-operatives to make a living — and thus more anger, discontent and unrest.

An article in Dissident Voice reaches the same conclusion as the World Socialist Movement
 “…like many cooperatives in the US that arose out of the 1960s, they have turned into small businesses. Regardless of their initial intentions, cooperatives existing in a surrounding capitalist environment must compete in business practices or go under.” (our emphasis)

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