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Session Four Outline: Finding out about TNCs

Aims

• to see what information exists on companies in our country
• to identify contacts and sources of company information
• to find out how to evaluate company information and what help is available
• to look at how information about TNCs can be exchanged across the world
• to consider ways of improving our rights to company information.

Summaries of session 4

• BUL1 (Plamen Dimitrov)
• EST1 (Tiia Kask)
• RSA1 (Martin Jansen)
• SWE1 (Ola Niclason)

Activities

The role and impact of TNCs
Brief reading and discussion on the impact of TNCs in the other countries in the project. Is the role of TNCs the same in all the countries? Do all countries offer similar things to TNCs? What is the opinion of the other study circles about global competition? The facilitator records the main points from the discussions.

Finding out about a local TNC operation

Study circle members have brought suggestions of local TNC activities that interest them. Select one from the suggestions. Then work together to find out about it.

• What do we want to know about this TNC?
  What are the questions you want to ask? Using flipchart paper, together draw up a list of questions to ask about the company, its local activities, and the TNC that it is part of. Remember to think about the three levels: local, national and international. If you wish, you can check your list against Finding out about the local activities of a TNC: some questions to ask to see if there are any questions you wish to add or change.
• Where can we find answers to our questions?

  Again using the flipchart, draw up a list of sources of information to answer your questions, taking each question in turn. Think about local sources of information, plus national and international. Think of people as well as organisations. Some course materials that might help you include:

• Rights to Company Information
• Getting Company Information
• Company Annual Reports and Financial Statements
• Who Shares Information on TNCs?
• Directory of Resource/Solidarity Organisations on TNCs Worldwide
• List of Useful Web Sites
• Researching our TNC Divide out the tasks for searching for information between members of the study circle.
• What information rights do we have?

  Hold a brief discussion on the rights that exist in your country to company information. The facilitator may need to do some research to aid the discussion. You can also use the course materials Rights to Company Information. What steps can be taken to improve your rights? The facilitator records the discussion.

Summary and evaluation of this session

The study circle evaluates the session, using the form provided.

Activities before Session 5:

• carry out your research tasks on a local TNC

Session 4: Notes for the Facilitator

You will need:

• Finding out about the local activities of a TNC: some questions to ask [one copy per member]
• Directory of Resource/Solidarity Organisations on TNCs Worldwide [one copy only]
• List of Useful Web Sites [one copy only]
• Session evaluation sheet
• Flipchart paper and pens

Points to bear in mind:

The aim of this session is primarily to develop the skills of the study circle members in being able to research a particular TNC. Through this they will come to know more about the structures of TNCs, what information does and does not exist about them, and who has information, whether locally, nationally or internationally. This should lead to a better understanding about the need to fight for better rights to information about TNCs.

The method of this session is to start with the questions and discussions raised by the circle members, and use the materials provided as a source of support so that they can check their ideas if needed.

There is a range of material available for support. Some will be useful to your study circle, some perhaps not. This is because company information varies between countries. Hopefully, prior to this session, you will have been able to assess the availability and rights to company information in your country. You can then guide the study circle with this information and the course materials which are most appropriate in your situation.

When selecting a local TNC operation to be researched, it may be necessary to guide the study circle members to agree on just one. There could be a conflict of interest. You may like to explain that the purpose of the exercise is to take one example as a case study, where the group members will collectively go as far as they can in finding out about it at home and abroad. If their attention is drawn across a number of different case studies, they are likely to gain less overall understanding and skills on finding out about corporations. By working together on one case study, their skills will be better for their own research in the future.

Keep the results of the discussions on what rights to company information exist in your country but do not put them on the Internet yet. They will be integrated with other discussions later.

Additional material available:

• How TNCs Hide Information
• An International 'Right to Know' Campaign?
• Words and their Meanings
• Useful Management Information for Union Negotiators

Activities before Session 5:

• help study circle participants to research their corporation through the Internet, if appropriate
• download materials for Session 5

Finding out about the local activities of a TNC Some questions to ask

ABOUT THE COMPANY

• Who owns this company? Is it a TNC? What is the TNC's name?
• Where is the TNC's headquarters? In which country?
• What does the TNC do or make, locally, in our country, and worldwide?
• Who owns or controls the TNC?
• What other companies does the TNC own or control?
• In which other countries does it operate?
• What is the TNC worth overall? How big were its sales (turnover) and its profits worldwide last year?
• What profits did it make in our country last year? What proportion of its worldwide wealth comes from our country?
• Who can help us find out about this TNC?

ISSUES FOR TRADE UNIONISTS

• Has the company created a lot of good jobs with decent terms and conditions?
• Is the company being restructured? What is the impact on the workers?
• Is there skills training and technology transfer?
• Does the company have a good health, safety and environmental record?
• What is the company's attitude towards our trade union?
• What is the TNC's overall restructuring strategy and how does this local company fit into it?
• What is the experience of workers in other plants in this TNC, in our country or abroad? What issues have they had to face in working terms and conditions, health and safety, training, etc.?
• Does our union have contact with other unions in this TNC, for example through an international union?

ISSUES FOR COMMUNITY ACTIVISTS/ENVIRONMENTALISTS

• Is this TNC an important employer in our area?
• How many local people does it employ?
• What is its impact on our community, the people and the environment?
• What is its relationship to our community? Does it sponsor local sports or other activities?
• How does the company respond to requests for discussions? Who does it talk to in our community?
• What is the record of this TNC towards communities and the environment in other parts of the world?

Rights to company information

Without information about companies, it is hard to make them accountable or to negotiate effectively. But getting the information we need is not easy because companies have many ways of avoiding giving it out. They argue that their information must be confidential, otherwise their competitors would know too much. They often go to great lengths to hide information from workers and the public.

What rights do we have to company information? In each country there are legal rights laid down by law and won in the courts. And there are rights won by trade unionists in collective bargaining. Here are various rights. Which of these rights apply in your country?

• Labour Relations Law

  In many countries, the laws governing the relationships between employers and workers include provisions about workers' rights to information about the company for whom they work.

• Company Law

  Countries have laws to make companies meet certain standards in the way they are run and report their activities to the public. The laws govern such issues as a company's Annual Report, Annual General Meeting, auditors and yearly accounts.

  'Public' companies, that is those in which members of the public can buy shares, are usually obliged by law to publish an Annual Report and Accounts.

  'Private' companies (which means that shares are not sold on the market) usually do not have to publish reports. They can be very secretive.

• Case Law

  In some countries the courts have ruled that management must give unions the necessary information so that they can bargain properly. Otherwise, the company has committed an unfair labour practice.

  Such a right exists in South Africa, for example. On 13 April 1993, in the case between the metalworkers' union NUMSA and Atlantis Diesel Engines (Pty.) Ltd. over the retrenchment of workers, the court ruled that the company must give information "without exclusion of relevant facts and details".

• Disclosure Clauses in Collective Bargaining Agreements

  Obtaining information from companies is also called 'disclosure'. Some trade unions include a disclosure clause in their collective bargaining agreement which gives the union rights to all the necessary and relevant information that they are going to need. There are difficulties in compiling a list to define what information the union negotiators will need. Nevertheless a disclosure clause can be a useful device.

• Union control over Provident and Pension Funds

  Unions also have rights to information through their control over provident and pension funds. When these pension/provident funds invest in other corporations, this can be used both as a source of information and of pressure to make the corporation more accountable.

Getting company information

Company Annual Reports and Accounts:
You can get a company's Annual Report by writing to its head office. Sometimes they are put onto microfiche film and held in libraries.

Financial Press:
Financial press and the 'business page' of newspapers contain a lot of information on companies.

Stockbroker Reports:
Reports produced for stockbrokers provide useful information but they may be expensive.

Directories:

• 'Who Owns Whom', published by Dun and Bradstreet (or McGregors in South Africa). This has an index of company names, registration numbers, their subsidiaries and sub-subsidiaries, address, names of directors, and a financial summary. It also has some 'organograms' - structures of big conglomerates - showing how various companies interlock. This information is also available on CD-Rom.
• Moody's International is published in the USA and contains company profiles (ordered by country) including: company history, principal subsidiaries, associated companies (subsidiary on the same level), officers, directors. Moody's also covers sectors such as industry (Moody's Industrial) or banking and finance. Moody's International News Report provides weekly updates.
• Kompass and Kompass Worldwide provide information on companies, their products and services. In the section on products and services a search by industry can be undertaken, e.g. canned fruit. Information is provided about the number of employees, the categories of employees and the nature of the undertaking (manufacturer, distributor, wholesaler). The search by company provides address, directors, activities and number of employees.
• Graham and Trotman's Major Companies of Europe provides company profiles.
• The UN World Investment Directory provides information on a country by country basis.
• Scrip's Yearbook on pharmaceutical companies contains information about leading companies, markets, profits etc. as well as company and country profiles.
• Hoppenstedt's Konzerne in Schaubildern reveals inter-company relations through graphic illustrations of subsidiaries.

Corporate Information Databases:

There are private information companies which specialise in compiling and selling information about companies to other companies. As well as publishing directories, they put company information on computer databases. Three which originate in the USA are ABI Inform, Business Periodicals Index and Dialog. One coming from the UK is Profile: a database of UK companies.

These databases may be available in your local university or college library. They refer to articles published in hundreds of business magazines and newspapers. The focus is on what shareholders in the USA and UK are interested in.

Internet Web-sites:

More and more information on TNCs is available on the Internet. See the 'List of Useful Web-sites'.

Company annual reports and financial statements

Every year a 'public' company publishes an Annual Report. It is written by the company itself and so is not the full picture. However, it contains some useful information:

Chairman's Review: The Chairman of the Board of Directors summarises how the business has gone over the past year. His aim is to attract new investors and this influences the picture he gives. This is often not the same picture that management is giving to workers.

Directors' Report: what the company does, and some information on the parent/holding company and the shareholders. It shows which other companies have a stake in this company. You will also find the names of the company's directors.

The heading 'Directors Emoluments' tells you how much money was paid by the company to the directors in fees for all directors and in salaries for Executive Directors. Directors often get other benefits from which they can profit, such as the right to buy shares at special prices.

Company Accounts: Once a year, managers draw up the company's accounts and have them audited - a qualified accountant says that they are correct.

The 'Income Statement' and notes tell us about the past year:

• how much the company made from sales
• how much profit the company made
• how the profit was divided:
• tax paid to the Government
• dividends paid to the shareholders
• interest paid to the banks
• profits kept by the company to make it bigger.

  The 'Balance Sheet' and notes tell us how much the company currently owns and where the money came from:
  

• how much the company owns in fixed assets e.g. land, buildings, machinery, and in investments and cash
• where the company's capital comes from e.g. from bank loans and money invested by shareholders
• liabilities: how much the company owes to others
• how solvent it is: e.g. if it might go out of business soon.

Problems with company reports and accounts

• Difficult language: Also, accounting terms can vary from company to company.
• The information is too general: For example, we can find an overall figure for what the directors paid themselves in salaries and fees, but not how much individual directors got. We want to compare this with workers' wages!
• Hidden information: Annual Reports are written to attract investors. Companies are very clever at 'massaging' figures to tell a story which suits them.
• Identifying companies: Companies sometimes change their names. Also the trading name may be different from the company's registered name. So, if you are researching a company, especially over several years, use the company registration number as the main way of identifying it.
• Complicated financial relationships. Corporations own many subsidiaries and they interconnect financially. They buy and sell their goods and services to each other, lend each other money, and so on. The audited accounts for the whole corporation or for individual subsidiaries will not show this detail.
• TNC operations abroad: An annual report is about a company's operations in one country. It may say in which other countries it is involved, and list the names of other companies es abroad in the same corporation. But there is no detail on these overseas operations and how they interconnect with operations in this country, particularly financially.

Ask the 'Experts'?

Many people can learn how to find basic company information. But it is a skill to unpack a corporation with all its interlocking subsidiaries, associate companies, and hidden information. Sometimes corporations 'swamp' you with information to make analysis difficult.. There may be labour service organisations or academics in your region who can help you sort out the information you need.

Who shares information on TNCs?

Trade unions organising in a TNC often know a lot about the corporation that employs them. National unions, experienced shopstewards and worker activists at the sharp end of negotiations can get a deep knowledge of a corporation's strategies and practices. Does your union have links with other trade unions in the same TNC? Each union usually holds only part of the picture. By sharing they can build the pieces into a whole picture, and also share their strategies for obtaining information rights.

International Trade Secretariats (ITSs) are international trade union bodies. The ITSs group trade unions in particular sectors or industries such as metalworkers, food workers, or public sector workers. Some bring together trade unions in particular TNCs to share information and build common campaigns to fight the corporation's strategy. In the course materials there are examples from the PSI (the organisation for public sector workers), the ICEM (the organisation for chemical, energy and mine workers), the IUF (the organisation for food, catering and plantation workers), for example.

Groups and campaigns in different parts of the world can also provide very useful information on TNCs. An example is given in the article Rapid Response.

Mostly each organisation or group has its own speciality or focus:

• some groups cover corporations in just one country or region. In some countries there are groups skilled at researching the company information which is available in their own country or in databases, etc
• some groups deal with 'corporate crimes' against communities and the environment, particularly in developing countries; some of these do not deal with workers' issues, however.
• some groups deal with specific corporations, e.g. the Rio Tinto Zinc mining multinational, or specific sectors e.g. the tobacco industry.

All these organisations are a good starting point for information and solidarity, if you know where to find them. Even though most are under-resourced and over-stretched, many are willing to exchange information internationally. Using computer communications can be a rapid and effective way of sending information over long distances. Many of these organisations are listed in the Directory of Resource/Solidarity Organisations on TNCs Worldwide.

Rapid Response

Multinationals Resource Center is a project based in Washington, USA. It responds to requests for information from all over the world. It covers corporations, industries, and products. It even shares ideas for building effective strategies. It can put groups in touch with each other who are fighting the same multinational. It is linked to the magazine 'Multinational Monitor'.

In South Africa ILRIG responds to requests for information from trade unions, environmentalists and community organisations. ILRIG stands for the International Labour Resource and Information Group, based in Cape Town. It provides information on foreign corporations to South African organisations, and on South African corporations to groups and unions overseas.

In 1995, South African community groups, environmentalists and trade unions were concerned by the proposal to construct a steel mill and other industries at Saldanha Bay on the west coast. There was a desperate shortage of jobs in the area. But the project threatened the environment of an internationally protected wetlands site, Langebaan Lagoon.

Local citizens and activists needed information about the corporations who were making very forceful proposals to the Government. The metalworkers' union NUMSA in the Western Cape requested ILRIG to research one of the dominant companies in the consortium, Bechtel Corporation from the USA.

Using electronic mail, ILRIG contacted Multinationals Resource Center in the USA. Within 36 hours they had sent back by electronic mail to ILRIG up-to-date information about Bechtel, its corporate structure, its activities in countries from Iran to Indonesia, its poor environmental record as main construction company for nuclear power stations and waste dumps in the USA, union struggles in the USA over racial discrimination in Bechtel, its political relationships to Republicans in power, and much more.

The information was used by NUMSA to assess its response to the proposed development.

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