Walmart in the Global South: Workplace Culture, Labor Politics, and Supply Chains 9781477315699

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Wa l m a rt i n t h e Globa l Sou t h

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WALMART

in the Global South Workplace Culture, Labor Politics, and Supply Chains

EDITED BY Carolina Bank Muñoz Bridget Kenny Antonio Stecher

U N I V E R S I T Y O F T E X A S P RES S

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Copyright © 2018 by the University of Texas Press All rights reserved Printed in the United States of America First edition, 2018 Requests for permission to reproduce material from this work should be sent to: Permissions University of Texas Press PO Box 7819 Austin, TX 78713-7819 utpress.utexas.edu/rp-form The paper used in this book meets the minimum requirements of ANSI/NISO Z39.48-1992 (R1997) (Permanence of Paper). L i br a ry of Congr e ss C ata l ogi ng -i n-P u bl ic at ion Data

Names: Bank Muñoz, Carolina, author. | Kenny, Bridget, author. | Stecher, Antonio, author. Title: Walmart in the Global South : workplace culture, labor politics, and supply chains / edited by Carolina Bank Muñoz, Bridget Kenny, Antonio Stecher. Description: First edition. | Austin : University of Texas Press, 2018. | Includes bibliographical references and index. Identifiers: LCCN 2017038792 ISBN 978-1-4773-1567-5 (cloth : alk. paper) ISBN 978-1-4773-1568-2 (pbk. : alk. paper) ISBN 978-1-4773-1569-9 (library e-book) ISBN 978-1-4773-1570-5 (non-library e-book) Subjects: LCSH: Wal-Mart (Firm) | Discount houses (Retail trade)—Social aspects—Developing countries. | Discount houses (Retail trade)—Economic aspects—Developing countries. | Discount houses (Retail trade)—United States. | Business enterprises, Foreign—Developing countries. | Labor and globalization—Developing countries. | Globalization. Classification: LCC HF5429.215.D44 B36 2018 | DDC 381/.149091724—dc23 LC record available at https://lccn.loc.gov/2017038792 doi:10.7560/315675

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For wor k e r s a rou n d t h e globe figh t i ng for just ic e at Wa l m a rt

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Con t e n ts

Acknowledgments ix I n t roduc t ion. Situating Walmart in a Global Context: Workplace Cultures, Labor Organizing, and Supply Chains 1 Carolina Bank Muñoz, Bridget Kenny, and Antonio Stecher C h a p t e r 1. Walmart in Brazil: From Global Diffusion to National Institutional Embeddedness 29

Katiuscia Moreno Galhera, Scott B. Martin, and João Paulo Cândia Veiga C h a p t e r 2. Walmart and Labor Conditions in South Africa: Local Retailing, Contract Labor, and Union Challenges 64 Bridget Kenny C h a p t e r 3. Walmart Workers in Chile: A Case of Union Democracy, Militancy, and Strategic Capacity 87 Carolina Bank Muñoz C h a p t e r 4. Rank-and-File Union Activism in Walmart Argentina

118

Paula Abal Medina C h a p t e r 5. Walmart Culture in the Information Technologies Industry in Mexico 150

Gabriela Victoria Alvarado C h a p t e r 6. Walmart’s Direct Farmer Program in South Africa: Developmental State Victory or Corporate Whitewash? 181 Stephen Greenberg C h a p t e r 7. Brokering Development: NGOs and Walmart in Nicaragua 199 Jennifer Wiegel C h a p t e r 8. Walmart’s Human Trafficking Problem: The Shrimp Supply Chain in Thailand 222

Nicholas Rudikoff

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contents

Fi na l R efl ec t ions

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Carolina Bank Muñoz, Bridget Kenny, and Antonio Stecher Contributors 252 Index 255

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Ack now l edgm e n ts

T h is projec t h a s be e n a long time coming. The prospects of doing an edited volume on Walmart in the Global South fi rst came up in a discussion between Carolina Bank Muñoz and Bridget Kenny during the Walmart tribunal process in South Africa in 2011. Soon after, Carolina mentioned the idea to Antonio Stecher, who received it enthusiastically. The three of us had our fi rst meeting in 2012 at the International Sociological Association meeting in Buenos Aires, Argentina. From the start, we had clear goals for the volume. First, we wanted to have a better understanding of Walmart’s global operations. Second, we wanted to include authors from the Global South, not only authors who write about the Global South. Finally, we wanted the book to be analytically interesting but useful to social movements and the activists who are fighting for the rights of workers on the ground every day. The project has been a labor of love, as it has been challenging for the three of us, in three different locations (the United States, Chile, and South Africa) to coordinate the volume from afar. We were fortunate that our call for papers was met with great enthusiasm from across the globe. We are especially thankful to our contributors for engaging in excellent work and scholarship and for their patience during this multiyear process. Our project benefited from a Professional Staff Congress–City University of New York (PSC-CUNY) grant, from a South African National Research Foundation Incentive Funding for Rated Researchers grant, and from Fondecyt Program grant 11130095 of the National Commission for Scientific and Technological Research (CONICYT) of the Chilean government. We are also grateful to Clara Tilve and Kora McNaughton, who provided initial translation for the chapters on Argentina and Mexico and the conclusion (“Final Reflections”). Maria Heyaca provided additional translation assistance and edited the Argentina chapter. Additionally, Rodrigo Guerra worked on the table and charts in the introduction. Kerry Webb, our editor at the University of Texas Press, was extremely enthusiastic from the outset and has provided invaluable support throughout the process. We are also grateful for the insightful and careful reviews from two anonymous reviewers. Finally, we would like to thank our three families, whose support and love during the completion of this book have been invaluable.

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Wa l m a rt i n t h e Globa l Sou t h

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I n t roduc t ion

situating walmart in a global context: workplace cultures, labor organizing, and supply chains carolina bank muñoz, bridget kenny, and antonio stecher Ov e r t h e pa st t h r e e dec a des, the profound and rapid transformation of the retail industry has been one of the most distinctive features of the capitalist restructuring characteristic of the current phase of global capitalism (Vallas 2011; Lichtenstein 2009). As has been documented, during the 1990s three interconnected processes transformed the retail industry (Wrigley and Lowe 2010): (1) increases in the concentration of retail capital and the consolidation of large corporations; (2) the development of information and communication technologies and new management systems that generated a logic of production and retailing based on the demand created by large companies in the retail industry; and (3) the introduction of new management systems such as lean retailing and just-in-time production. To these three processes we can add the new participation of these consolidated retail corporations in the global economy under the trade liberalization, deregulation, and privatization that marked the global turn to neoliberalism in the 1990s (Castells 1999; Harvey 1991; Lichtenstein 2009). Formed through increased foreign direct investment (FDI) in different geographical areas (Asia, Europe, Latin America, and Africa) and within national economies, these new transnational retail corporations, using a frame of shareholder value, increasingly sought improvements to their returns through new consumer markets, access to cheap labor, economies of scale, niche markets of production, and access to lower-cost goods sourced globally. As the world’s largest private employer and the largest retailer, Walmart is the corporation that best represents these industry changes, and it continues to dominate the press and academic debate over the global expansion of transnational retail corporations and working conditions in both their retail operations and across the supply chain. Much of the exten-

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sive literature documenting Walmart’s presence and practices has focused on its operations in the United States: its effects on labor markets, trade union politics, business practices, and the political ethos (Featherstone 2004; Dicker 2005; Bianco 2006; Fishman 2006; Brunn 2006; Lichtenstein 2006, 2009; Moreton 2009). Bethany Moreton (2009) tells the story of the fi rm’s emergence in small-town America: with its orientation toward agrarian populism, conservative Christianity, and a free market ideology, the fi rm grew by selling corporate capital through these values to rural markets. Its origins contributed to today’s noteworthy “Walmart culture,” which is marked by greetings, cheers, and an ideology of family rather than of employment relations (Burt and Sparks 2006; Dunnett and Arnold 2006). Scholars have detailed Walmart’s reliance in the United States on low-wage employment and effective state subsidy of its workforce through welfare (Dube and Jacobs 2004) and shown how the fi rm systematically underpays workers, operates through understaffing and intimidating supervision, and acts to prevent unionization (Featherstone 2004; Rosen 2006; Bair and Bernstein 2006; Seligman 2006). A growing body of literature has examined the effects of Walmart’s dominance within distribution systems and supply chains through category management, preferred supplier lists, integrated computer technology linking suppliers to the retailer, and expectations of on-demand delivery of quantity and standard dictated by the retailer, all of which enable Walmart to sell cheaply through its “everyday low prices” (Burt and Sparks 2006, 29–30; Bonacich and Wilson 2006; Bonacich and Hardie 2006; Fishman 2006; Lichtenstein 2009; Hong 2011). As Nelson Lichtenstein (2009) has argued, the “revolution” in retail and in business practice engendered by Walmart, which restructured global commodity chains as it sought cheaper and cheaper supply from producers around the world, induced other fi rms to follow suit. Much of the literature on Walmart in the United States and its role in supply management focuses on the effects of the fi rm’s vast power—on community landscapes, local small business, competitor retailers, labor conditions, wage levels and labor markets, unions, and suppliers and labor therein. An emergent line of inquiry explores how Walmart has operated outside of the United States after expanding globally since its fi rst store in Mexico in 1991. These studies have offered a look at the fi rm’s impact through analyses of both its successes and its failures in other economies (Christopherson 2007; Aoyama and Schwarz 2006; Brunn 2006; Tilly 2006, 2007). Moving beyond the borders of U.S. markets allowed researchers to engage with Walmart as a complex and contradictory phe-

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nomenon. Scholars focused on its divergences and convergences within national economies and within local retail sectors. Cases of its failures and exit were documented, for instance, in Germany, Japan, Indonesia, Hong Kong, India, and South Korea (Christopherson 2007; Aoyama and Schwarz 2006; Hugill 2006). Studies explored the “embeddedness” of retail capital in host economies (Coe and Wrigley 2007). Thus, Walmart’s success or failure in a local economy was explained through supplier relations, site access, labor regulation, and local consumer cultures. The terms of its participation and growth within these different places across the world were negotiated amid diverse actions by states, workers, and unions, which challenged a unilateral view of the dominance of the company that has come to not only symbolize corporate interests but to embody twenty-fi rst-century capital accumulation itself (Lichtenstein 2006). Fewer studies have explored these dynamics in developing economies. Chris Tilly’s (2006, 2007) work on Walmart in Mexico makes the important point that the corporation cannot be seen as a monolithic power, but must be understood for how it entered into the Mexican retail sector. Thus, Walmart benefited from entering Mexico early in the development of “modern” retailing practices, but by the same token it reached a limit within national markets and came to operate like most other large retailers there (Tilly 2006). Anita Chan (2011) uses creative methodologies to access experiences in Walmart stores in China and combines detailed studies of retail work with studies of the supply chain relations of the factories serving Walmart from China, which point to management culture, union institutional weight, and local economic pressure to engage with multinational suppliers. Comparative studies, too, have shown that Walmart operates differently from other transnational retail fi rms, such as Carrefour, suggesting, for instance with respect to labor conditions, that where the host economy best matches Walmart’s home economy environment the fi rm does better (Durand and Wrigley 2009). Studies from other countries have argued that Walmart has to be understood within the local sectors and the particular institutional terrains in these contexts. Thus, adequately understanding the global expansion of Walmart and its multiple impacts on working conditions, employment, and labor organization across the globe requires an analytical lens capable of addressing global movement, transnational company practices, and the complex local dynamics (institutional, cultural, and political) of the different countries that Walmart has entered. Far from a monolithic force conquering the world, Walmart uses a global strategy and tactics that are contested and contradictory. It must confront and adapt to the diverse sets of policies

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and practices present in different national contexts—that is, each country’s regulations, economy, history, union organization, preexisting labor culture, and civil society, all of which can be in tension with and transformed by the very entry of Walmart. This collection builds on this rich literature, both the earlier examination of Walmart in the United States and its supply chains and studies of its operations elsewhere. Although this volume follows the critical intervention of economic geographers who emphasize the extent and forms of interconnection of global retail capital within local economic and regulatory contexts, it does so not through strict comparison but by offering a view of multifaceted national dynamics, which when taken together argue for the impossibility of understanding Walmart only from the perspective of the fi rm. In helping us to understand some cases where gains have been made—improvements in wages, labor conditions, and the well-being of workers, increases in collective mobilization, greater state leverage over transnational corporations (TNCs), the mobilization of solidarity by civil society—the analyses presented here explain these gains and their limits. This volume assesses the similarities and differences in Walmart’s experiences in different national contexts, illuminating when and how state regulation and politics and labor unions and workers have redirected company practice and to what effect. Focusing on retail operations and supply chain relations in disparate contexts across the Global South, including Chile, Brazil, Argentina, Mexico, Nicaragua, Thailand, and South Africa, we examine how social and political regulation embed capital within the relations that defi ne corporate practice and collective action: the regulatory context, state politics, trade union organization, and local cultures converge as vectors with very different force across place. The cases address the success (or failure) of workers, from direct employees to outsourced workers to workers on farms and in the supply chain, in mobilizing across contexts in relation to Walmart’s strategies and practices. This volume engages with three dynamics to suggest this range of responses: Walmart culture, labor organizing, and supply chain practices. We show that the fi rst dynamic, “Walmart culture,” has affected workers in some countries and locations more than others, while in some contexts it has provoked collective organization. In the second dynamic, labor organizing, industrial relations regimes and labor laws have been partly responsible for Walmart’s responses as well, but as we show, changing temporalities of national political economies have also played a part in the union activism and culture of solidarity within each national context—including when and how neoliberalism was introduced and whether labor

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parties (or those allied to labor) have reformed labor regulation. Workers and unions across our case studies, except Mexico, have organized and mobilized around working conditions and wages.1 In all countries, the common ground is that labor law has forced Walmart to recognize unions, but there are instructive differences between them in industrial relations systems, forms of labor control, their broader national political and economic contexts, and the organizing repertoires of workers and unions. The chapters dealing with the third dynamic, food supply chains, help to develop the literature beyond its emphasis on Walmart’s power to assert contractual advantage over suppliers and producers while also showing the fi rm’s ready capacity to strategically adapt, thus entrenching corporate power in food systems. These chapters confi rm the conclusion that Walmart has the power to control suppliers, but they also add to our understanding of the multiple sets of relations that influence supply chain dynamics, including state development agendas and foreign (U.S.) aid agencies, local retail competition and practice, and global union and consumer campaigns. We offer detailed commentary on labor activism and organization and differences across the countries Walmart has entered. Our portraits of the convergences of various interests in ways particular to local histories, institutional contexts, and political terrains present the company, not as the single driver of change, but as one player in a set of relationships within local political economies and in the larger picture of growing global corporate hegemony. We see that multiple actors within local contexts contribute to explaining the effects of Walmart. The greatest contribution of this volume is to bring together in-depth empirical case studies of Walmart in many of the countries of the Global South in which it operates. The book adds to the broad understanding of the processes of economic globalization, especially given the importance of transnational retail corporations in the global economy. As such, the volume also contributes to a more profound understanding of local political economic processes, workplace cultures, worker organizations, worker identities, and workers’ subjectivities in different local contexts and national cultures. Finally, the book will serve as a useful resource for organizations that care about social justice and are engaged in worker struggles, including unions, worker centers, and other nonprofit entities. We hope that the book will open dialogue and understanding between the different actors across the world who are committed to restoring balance to today’s brutally asymmetrical capital-labor relations.

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In the following sections, we describe in more detail Walmart’s origins and expansion, its practices, and our case studies through the three core themes: Walmart culture, labor organizing, and supply chains.

walmart origins and expansion Walmart, as its famed narrative reminds us, was founded by Sam Walton in Bentonville, Arkansas, in 1962. Today Walmart has over 600 stores in the United States alone (Walmart Corporation, n.d.). What explains Walmart’s tremendous growth? Lichtenstein (2006, 14) argues that the company had its origins and began its stupendous growth at a particularly fortuitous place and time. Neither the New Deal nor the civil rights revolution had really come to northwest Arkansas when Walton began to assemble his small-town retailing empire. But the agricultural revolution of the early postwar era was in full swing, depopulating Arkansas farms, and putting tens of thousands of white women and men in search of their fi rst real paycheck.

While Walmart was expanding its enterprise and paying rock-bottom wages in the “right to work” South, urban retail workers in major chain stores like Macy’s (fi rst organized in 1937) and supermarket workers organized by the United Food and Commercial Workers (UFCW) union saw unprecedented gains in wages and working conditions due to unionization. Ultimately, it was the implementation of neoliberal economic policy in the United States by the 1980s that guaranteed Walmart’s growth. President Ronald Reagan’s transformation of the business environment “relieved labor-intensive employers of hundreds of billions of dollars in annual labor costs. . . . The failure of labor law reform in 1978 followed by the PATCO debacle in 1981, meant that unionism would not be much of a threat in discount retailing” (Lichtenstein 2006, 15). Furthermore, Reagan’s dismantling of strong antitrust legislation sealed the deal for Walmart (Lynn 2006). Walmart is often heralded as a great innovator, but its model is not so vastly different from that of previous innovators in the retail industry in the United States, such as Woolworth’s, Sears, and A&P. The striking difference is that these other retail giants were not able to grow and swallow competitors, in large part because of strong antimonopoly legislation. Time and time again they tried to consolidate and expand, but effective lawsuits kept their power in check (Lynn 2006). By contrast, a deregulated market allowed Walmart to expand. As Susan Christopherson (2007) argues, Walmart has achieved

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figure i.1. Walmart Sales (in Millions of U.S. Dollars), 1972–2015 Source: Based on data matching both Walmart Corporation (n.d.) and IGT (2008).

market dominance and autonomy by responding to a U.S. regulatory environment that enables market concentration. What we have seen, then, is that Walmart has benefited not only from neoliberal policy but also from significant state subsidies. According to a 2014 report issued by Americans for Tax Fairness, Walmart receives over $7.8 billion in tax breaks and taxpayer subsidies a year. This includes $6.2 billion in health care and food stamps subsidies (because Walmart’s wages are so low that many of its workers rely on public assistance and Medicaid), $1 billion in federal tax breaks, $70 million in economic development subsidies from state and local governments, and fi nally, $607 million in tax breaks to the Walton family (Americans for Tax Fairness 2014). In short, Walmart’s growth and “low prices” stem directly from billions of dollars in direct and indirect subsidies. At the same time as these neoliberal policies were being implemented in the United States a liberalized global economy was expanding. Woolworth’s, Ford, and GM “rose to prominence during the period of the protectionist world order with a heavy protected domestic economy,” notes Peter Hugill (2006, 6), who argues that “it is important to keep in mind that the economic world order in which Walmart has grown to prominence is one marked by the virtually complete return to global liberalism.” Furthermore, free trade agreements ensured the rise of a global market of cheap goods, particularly goods produced in China. Today Walmart has all but saturated the rural, suburban, and exurban markets in the United States. To continue to grow it needs to move into urban markets and new markets globally. Walmart’s very survival as a profitable company that trades well on the New York Stock Exchange hinges on an urban and global strategy, and its sales data (figure I.1) clearly show

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the impact of its global strategy on its sales. With this consideration in mind, Walmart continues to try to expand its global empire, but expansion has not been as easy as the company had hoped. Walmart’s expansion has been characterized as occurring in “waves,” beginning with North America, expanding to NAFTA-linked Canada and Mexico, moving wider through Latin America and Asia, then entering Europe, and, fi nally, attaining a foothold in Africa, China, and India. For another image of the growth in numbers of Walmart stores and Walmart employees, see the pie charts in figures I.2 and I.3. This book covers cases in Latin American, Asian, and African countries across the Global South. Included are a number of key retail sites, including in Mexico, Brazil, and Argentina, that represent early moves by Walmart in the 1990s. The fi rm entered Chile and South Africa later. The buyout of the South African company, which also traded in Africa, instantaneously gave Walmart a presence in twelve sub-Saharan African countries, unlike in the other cases. 2 In all of our retail cases, Walmart entered countries through acquisitions of existing companies. Our supply chain cases represent a fragment of Walmart’s extensive global supply chains but are illustrative of its intervention in fresh food production for local markets where it also operates retail stores (Nicaragua and South Africa) and its global sourcing of food (Thailand). As described earlier, we interrogate and understand Walmart’s expansion into different contexts in the Global South along three key analytical axes, taking into account both the literature on Walmart and the case studies gathered in this volume: Walmart culture, labor organizing, and supply chains.

walmart culture The core values of the Walmart corporate culture are expressed in its claims to the Walmart cheer, an open-door policy, excellence in service, smiling faces, and a characterization of associates as “family.” These features aim to solicit consent from workers in their retail operations. Walmart actively attempts to introduce new meanings, ideals, values, and representations of what work is, what it means to be a good (or bad) worker, and the relationship between the company, workers, and society. Because Walmart’s identity has been so closely interwoven with its workplace culture, it lends itself particularly well to an examination of how these cultures travel. As different empirical studies have demonstrated for Walmart’s penetration in Latin America (Abal Medina 2004; Hernández

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figure i.2. Walmart Employees across the Globe, 2015 Source: Walmart Corporation (n.d.). *Estimates **Includes Mexico, Central America, and South America ***United Kingdom, excluding Ireland

figure i.3. Walmart Stores across the Globe, 2015 Source: Walmart Corporation (n.d.). *Estimates **Includes Mexico, Central America, and South America ***United Kingdom, excluding Ireland

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Castro 2011) and on a global level (Moreton 2009; Chan 2011; Lichtenstein 2006; Kenny 2018), the store’s oversight of the workforce—who are primarily young, female, and low-qualified—attempts to propagate new managerial discourses in order to remodel worker subjectivity from the viewpoint of a series of principles and values. These include flexibility, mobility, individual responsibility, entrepreneurship, competitiveness, continuous innovation, excellence and quality, customer service, versatility, company loyalty, individualized guidance, full availability, internalization of corporate principles, and self-representation as part of a corporate family that promises protection, inclusion, and social mobility. In studying the impact of Walmart on workplace culture in the Global South, our case studies demonstrate how store managers use different mechanisms (selection criteria, orientation procedures, training opportunities, bonus and reward systems, surveillance and sanctions, corporate ceremonies, commitment programs) to install a particular culture and produce a specific type of labor subject (depoliticized, fragile, individualist, self-regulated) that functions for the interests of corporate accumulation and, on a broader scale, within the scheme of neoliberal governance (or governmentality). The case studies show that the inculcation of the company’s workplace culture has been a major factor to explain disciplinary regimes in some places, such as Mexico and, in the early phase, Brazil. Yet elsewhere—in Argentina, Chile, and, in the later phase, Brazil—Walmart’s culture has been a catalyst for protest. Thus, in Mexico professional IT workers resisted Walmart culture individually, while in Chile, Argentina, and Brazil retail workers responded to it with lawsuits and collective action. In fact, Walmart culture became a target that mobilized workers and unions for broader fights within the company. In South Africa, by contrast, Walmart has only minimally introduced its characteristic cultural practices, perhaps having learned lessons from its experiences in Latin America. Instead, South African workers are less aware that they work for an American transnational fi rm; Walmart’s cultural practices are therefore not read as impositions of foreign culture, but taken as minor issues within a context where labor conditions in the stores bother workers more. Studies of Walmart’s impact on labor cultures and identities cannot solely focus on describing the company discourses and practices that seek to reshape workplace culture and labor subjectivities, benefit production, and weaken union organization and action. They must venture to understand not only how workers (or some types of workers) in specific contexts identify with the values of the corporation, but also how they resignify

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and resist Walmart culture. As the cases in the book show, labor culture in Walmart stores is never the linear result of a fully successful operation of new managerial discourses, but rather a disputed symbolic field. Likewise, stores are also spaces of vast local symbolic production, drawing on everyday experiences and the process of work itself. The stores are where workers forge bonds of complicity, support, and resistance on a daily basis (Stecher 2012; Stecher and Godoy 2014; Kenny 2018). Two interesting issues emerge from this field that deserve further attention. The fi rst is related to the question of how workers can shift from an initial moment of full involvement, commitment, motivation, and identification with the company (especially at the beginning of job placement) to a position of the utmost suspicion, distrust, anger, and antagonism (Myers and Chan 2011). The second issue is the tension that characterizes retail TNC business and managerial models, which surfaces from the confl ict between a fi rm’s attempts to construct a corporate family culture where the employee is identified as a loyal “collaborator” while it simultaneously and intensively exploits cheap manual labor through low salaries, high turnovers, high-intensity work, flexible work hours, and large numbers of subcontracted workers (Tilly 2007). Such tension between a company’s symbolic integration, protection, and identification, on the one hand, and the material reality of work and employment conditions (highly precarious for workers), on the other, proves to be a key entry point into understanding workers’ experiences and the processes of identity production that characterize Walmart stores and large retail TNCs in the Global South. Walmart’s use of its company culture and the responses to it vary greatly across contexts. The chapters by Gabriela Alvarado (Mexico), Bridget Kenny (South Africa), Paula Abal Medina (Argentina), Katiuscia Moreno Galhera, Scott Martin, and João Paulo Cândia Veiga (Brazil), and Carolina Bank Muñoz (Chile) offer direction for problematizing and understanding the importance and complexities of the symbolic dimension of Walmart’s expansion in the Global South. Alvarado’s chapter on Mexico focuses on the reality and conditions of work and employment of Walmart’s IT workers. Based on the author’s own ethnographic work, the chapter outlines company strategies to construct and inculcate Walmart culture as well as the workers’ response: they grew skeptical of the values and ideals that management sought to promote. The chapter illustrates the tension between Walmart’s symbolic control over its employees—in this case, even its most qualified employees—and the harsh working conditions those employees endure. In light

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of these conditions, to workers most of the company’s promises and messages appear contradictory, meaningless, awkward, and even manipulative or deceptive about the difficulties they face at work. This dissonance undermines the consent that Walmart may be hoping to elicit. The chapter by Abal Medina on Argentina illustrates how a symbolic field becomes a key territory of dispute between company logic and the union organization of store employees. In this case, “associates” was naively translated by the fi rm into Spanish as “collaborators,” with negative connotations. The company attempted to render its discourse as legitimate, unquestionable, and singular, promoting the idea of the company as a large corporate family and the workplace as a happy and conflict-free environment. The action taken by the union delegates aimed at producing and circulating alternative discourses within the store that would reveal the antagonism between capital and work as well as the precarious work and employment conditions. These alternative discourses no longer spoke from the corporate “we,” but rather were constructed around the workers’ experiences of organization and struggle. In Chile, Bank Muñoz shows that the autonomous retail union won a legal case against the use of the term for “associates” translated as “collaborators,” thereby shoring up claims to the category “workers” instead. The union also won gains with a company apology for discriminating against workers by imposing aesthetic standards on them. In short, Walmart’s “culture” provoked union counterclaims that, in raising new possibilities for the construction of labor identities and forms of action among Walmart store employees, limited and questioned Walmart culture and the power of the company inside the stores. The same dynamic is reported by Katiuscia Moreno Galhera and her colleagues in their chapter on Brazil, where the Walmart workplace culture is perceived as a key element of the union struggle in the stores. In all cases, unions’ collective bargaining and legal demands against the company are related to their opposition to some aspects of Walmart corporate culture. In short, the chapters on Chile, Argentina, and Brazil help us understand the importance of the symbolic dimension in the analysis of the struggle, organization, and resistance undertaken by workers and social organizations as Walmart has expanded in the Global South. These processes always imply questioning the multinational’s discourses and producing alternative local meanings concerning workers, the company, and society that repoliticize the workspace and the public sphere and expose new possibilities of identification and collective action. By contrast, Kenny’s chapter on South Africa offers us a portrait of

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Walmart’s response to preexisting conditions in the country’s food retail industry. There Walmart workers are young, black, and female, with little or no labor experience outside retail, and many are engaged through temporary agencies. Unlike in Argentina and Mexico, Walmart has tentatively introduced its own symbolic discourses into some of its South African subsidiaries—for instance, through its open-door policy and morning cheers—but these practices are not a dominant feature of the stores studied. Instead, we see that, with workers primarily supplied through labor brokers, the workforce is fragmented along the dimension of permanent or contract status. This division on the shop floor, which has a long and meaningful history in South African retailing (Kenny 2017), ultimately reinforces management power in a context where, with the high media attention during its initial entry in 2011, the South African company has hesitated to adopt Walmart’s company culture, including branding, as a central strategy. Thus, whereas in Brazil, Chile, and Argentina unions organized against Walmart culture as an imposition of foreign or American practices, in South Africa most workers are focused on relations within their subsidiaries, as seen in South African companies. The various chapters of the book, especially the five just mentioned, highlight the importance of the symbolic or cultural dimension in analyzing and understanding the expansion of Walmart into different countries of the Global South. The installation of its corporate culture is a key element in the management and organization of the work inside the shops and in the effort to subject the workforce to the company’s interests. However, this attempt at acculturation can have different results in different places and is always mediated by the working conditions, the biographical trajectories of the workers, the presence of alternative discourses and meanings within the stores and the national context, and resistance by trade unions.

labor organizing Walmart has a reputation for being the most anti-union employer in the world. Certainly, part of its failure in Germany can be attributed to a fundamental lack of understanding of the union model in that country. However, we can also argue that the labor movement is in crisis the world over. For the past thirty years, we have witnessed a general decline in union density, even in labor strongholds such as South Africa and Brazil. The crisis of labor is explained in part by the concentration of capital and the redistribution of wealth to the top. The same processes of deregulation,

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privatization, and trade liberalization that have permitted retail consolidation and domination over suppliers have also been at least partly responsible for declining labor movements. As a result, countries are more unequal than ever before. Yet neoliberal globalization has also produced opportunities for labor and labor movements. Since transnational corporations rely heavily on the smooth transfer of goods across the supply chain, workers, particularly those in the ports and the logistics industry, potentially have the power of disruption (Bonacich and Wilson 2008; Bank Muñoz 2017). Walmart’s labor strategy is to keep unions and other worker organizations off the shop floor across the supply chain or, at the very least, to minimize the impact of unions on its business practices to the greatest degree possible. This volume highlights workers’ variable responses to that Walmart model. With the exception of Canada, a vast majority of Walmart’s non-U.S. retail operations are in fact unionized.3 These include stores across Latin America (nine countries), Africa (thirteen countries), Asia (two countries), and Europe (one country). How is it that the most anti-union corporation in the world has had to accept unions everywhere except the United States and Canada? The simplest answer is that labor laws matter. Several chapters in this volume, particularly those on Argentina, Brazil, Chile, and South Africa, examine how unions in these countries are challenging Walmart’s anti-union behavior. While unions are vastly different between these countries, and even within these countries, the one thing they all have in common is that state policies forced Walmart to accept unions, either as a condition of entry or because of existing labor laws. Brazil, Argentina, and Chile have all been the scene of anti-union behavior and poor labor practices, but in all three countries workers and their organizations have made tremendous strides in improving their working conditions in terms of both symbolic victories and economic gains. Yet each of these case studies is remarkably different in terms of institutional context, labor laws, and worker mobilizations. At one end of the continuum, Alvarado argues Mexican IT workers were individualized and exited employment; at the other end, Bank Muñoz shows Chilean warehouse and retail workers have made substantive gains against Walmart through grassroots organizing and democratic processes. In Argentina, Abal Medina shows workers’ engagement in a double confrontation with Walmart and the business union inside the Avellaneda retail store led to consciousness-raising and the building of a democratic union. As shown by Morena Galhera and her colleagues,

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workers in Brazil, particularly after reforms in the early to mid-2000s, made some bargaining gains by using the industrial relations system, which protects national sectoral bargaining. In South Africa, according to Kenny, the majority union has maintained its collective agreements with the company, but a myriad of branded subsidiaries has meant a diverse set of conditions and union presence. The union is concentrating on divisional bargaining to eliminate internal company variation, but has been more successful at implementing and monitoring conditions within subsidiaries where it had historical weight. At the same time, workers on the ground face the realities of labor market fragmentation and high unemployment, which have undermined bargaining and legal protections. Walmart in Brazil had no choice but to accept unions. Under Brazilian labor law, workers are automatically represented by national sectoral unions. For example, all workers pay a state union tax that funds unions and allows them to collectively bargain with employers on economic issues. Additionally, workers can choose to become a member of the union and potentially receive other, non-economic benefits. Regardless of whether they are members or not, workers are represented by the collective bargaining agreement. For its fi rst fi fteen years of operation in Brazil, Walmart was characterized by more or less anti-union practices and bad labor conditions—consistent, of course, with how it operated in the United States. Yet, Moreno Galhera and her colleagues fi nd that, since 2010, Walmart has been operating under a model they call “confl ictual cooperation.” For the past four years the Brazilian labor movement has been able to get Walmart to negotiate over “work rules, overtime, profitsharing, and union representation at the workplace level and union rights in collective bargaining agreements.” Negotiations have been tough, and sometimes inconsistent. Nonetheless, the fact that Walmart has been compelled to bargain is an enormous achievement. Of the countries that are the focus of the three labor organizing case studies, Brazil clearly has the strongest state regulations protecting unions from multinational corporations, such as Walmart. At the same time, it has the least sustained grassroots activism and the strongest corporatist labor-management relationship. Also, unions’ ability to use the labor regulation reforms implemented with the Workers’ Party (PT) electoral victories of 2002 is potentially threatened under the leadership of President Michel Temer. As it did in Brazil, Walmart attempted to introduce Walmart culture in Argentina immediately. Also as in Brazil, Walmart was forced to accept unions, because of Argentinian labor law. Since in Argentina workers are organized by sectors, the retail sector is part of the larger commer-

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16 walmart in the global south

cial workers’ union. However, as Abal Medina points out, commercial unions fit into a business union model that was reinforced through the decades of neoliberal reforms. Thus, member representation has been curtailed as commercial workers have experienced high levels of unemployment, low wages, and generalized precariousness. Even though workers are represented by a union, the union has played a minor role in the workplace. The case of Argentina is unique in that what has arisen in the absence of effective member representation is grassroots resistance to both what workers call the “sellout union” and Walmart corporate culture—a war on two fronts, so to speak. As Abal Medina shows, Walmart implemented labor control in a variety of ways. For instance, in its “Mystery Shopper” program workers were surveilled by managers from other stores, and its famous open-door policy placed a premium on individual interaction rather than collective negotiation. Activist workers rejected this framework, particularly the imposition of these strategies by an American corporation coming into Argentina. At the same time, they were frustrated that their union representatives were doing nothing to fight Walmart’s bad labor practices. In the end, activist workers and delegates were able to improve working conditions in branches. However, their most important victory was the transformation of their union. Word spread to other Walmart stores in Argentina, and similar transformations have occurred at some of its other locations. Unlike in Argentina and Brazil, labor unions in Chile are not allowed to organize by sector; instead, they organize at the level of plants and enterprises. Nonetheless, when Walmart entered Chile, it had to accept the preexisting unions at D&S, the company it acquired. Importantly, Bank Muñoz details, there has also been new organizing at Walmart, and while the company has engaged in anti-union practices, labor law has enabled the formation of these new unions because laws against closed-shop agreements enable autonomous unions to emerge alongside company unions in the same branch. At Walmart Chile, over 70 percent of stores are unionized, and over eighty different unions represent Walmart workers. Some of these unions are militant and democratic, some are corrupt company unions, and many are in between. The case study included in this book analyzes two labor federations whose members are in militant and democratic unions as well as the warehouse workers’ union, which is also a highly democratic union. As in Argentina, the worker-activists in the democratic and militant Walmart retail federations are fighting a war on two fronts: both Walmart’s anti-union practices, culture, and poor working conditions

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and, at the same time, the corrupt union at Walmart, which reportedly represents over 20,000 workers. As in Argentina and Brazil, despite antiunion tactics, workers are nonetheless making both economic and symbolic gains in their collective bargaining negotiations. Bank Muñoz argues that because of their different political histories, industries, levels of leverage, and workplace issues, the independent retail and warehouse unions each developed distinct strategies that combine direct action and democratic organizing. Each of these three chapters takes a unique perspective on Walmart’s role in the country they study in relationship to unions and the labor movement. They show that, in each country, Walmart entered by attempting a wholesale implementation of a U.S. model. In Brazil, Argentina, and Chile, however, Walmart has been forced to adapt to different sets of institutional cultures, laws, and movements. But as these case studies make clear, even as the company has adapted its model to the host countries’ climates, it has spent time testing the waters to see how much of its original model it can maintain. Indeed, we see that in all three locations Walmart continues to push the boundaries of the local labor laws. This makes strong worker movements more important than ever, particularly the democratic, militant, and grassroots movements emerging in Chile and Argentina. The South African case is somewhat different from Brazil, Argentina, and Chile. Here, the state ruled that Walmart had to continue its recognition agreement with the South African Commercial, Catering, and Allied Workers Union (SACCAWU) as a condition of approving the corporate merger. The union is the majority union in a national context of industry bargaining. Legally, the industrial relations regime provides for national company bargaining and the possibility for sectoral bargaining (if there is majority representation by employers and unions). In the retail sector, however, unions have never won the right to bargain sectorally; thus, unions bargain with retail companies. SACCAWU remains an affi liate of the Congress of South African Trade Unions (COSATU), a federation that is still in alliance with the ruling party, the African National Congress (ANC), and that traditionally engages in sectoral organizing (one industry, one union).4 SACCAWU has negotiated collective agreements by division of Massmart. The union has been pushing for centralized bargaining by division (there are four divisions, with multiple subsidiaries under each division) as a way to fight variation in conditions and representation in the different brands. But its focus on company bargaining has arguably undermined its ability to take up workers’ concerns on the ground, as Kenny argues in her chapter, particularly in the subsidiary studied, where labor

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18 walmart in the global south

brokers employ most of the workforce.5 Instead, store-level worker politics— conducted through union shop stewards, but often for nonmember employees of labor brokers—has been directed at slowing dismissals or contesting the most egregious examples of unpaid hours. These fascinating case studies give us detailed insight into how the regulatory environment, state politics, and worker mobilizations have shaped Walmart’s labor practices.

supply chains In the supply chain, Walmart’s goal is to reproduce its trademark concept, “everyday low prices.” Because of generally low profit margins in retail, Walmart, aiming to maximize efficiency and squeeze producers, uses its widespread global sourcing network to lower prices by increasing competition among suppliers and producers. In the supply chain, Walmart has been heralded as a great innovator, and retailers in general have gained significant power in supply chains over the past several decades (Gereffi and Korzeniewicz 1994; Lichtenstein 2009; Wrigley and Lowe 2007; Burch and Lawrence 2005; Reardon and Berdegué 2002). This shift has occurred through data management and logistics control, which has enabled tighter operations and ultra-efficient supply chains, as pioneered by Walmart (Fishman 2006; Lichtenstein 2009). In the context of trade liberalization and deregulation, the expansion of the global supply base of commodities has increased the competition among suppliers, to the benefit of corporate retailers. The concentration of retail has itself led to greater control over distribution channels (Coe and Wrigley 2007; Coe and Hess 2005). Retailers control not just what is being sold but decisionmaking over product design, cost, and quality. The convergence of consumption patterns globally has reinforced the mass production of standardized products that can be distributed globally. This book examines directly three cases of Walmart’s relations within supply chains. Two cases examine fresh produce sold within domestic markets, which lends itself to local procurement because of its perishability (Fold and Pritchard 2005), and the third focuses on shrimp farming as a globally sourced Walmart commodity. Where the primary concern is freshness and food safety, retailers intervene to manage the chain carefully. Small-scale farmers, however, may battle to meet product standards as well as volume and consistency of supply demands. What the cases from South Africa and Nicaragua suggest is that the risks are not simply borne by producers—these relations are actively constructed by

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Walmart within local regulatory and historical contexts. Importantly, this story includes both local distribution practices and the power dynamics between the retailer, producers, and state development agendas. In South Africa, the “Walmart effects” of logistics management had already been absorbed by the industry as standard practice prior to Walmart’s entry into the market. In both South Africa and Nicaragua, in different ways, Walmart makes strategic use of existing practices and development programs to support local farmers. The case of Walmart’s global sourcing of shrimp for mainly Northern consumers also shows us that a wide range of relations explain the labor conditions in the global shrimp food chain, including the role of the World Bank and regional development banks in promoting aquaculture to the Global South, voluntary codes of best practice and the industry institutions that promote them, migrant labor regimes in the subregion, and American consumption trends. We end the collection with this chapter on the success of transnational labor solidarity in contesting conditions of near-slavery and in taking legal action against the trafficking of labor to shrimp farms in Thailand. Stephen Greenberg examines how in South Africa, before entry, Walmart’s supply chain innovations had already helped to structure local practices, and how, after entry, Walmart’s supply chain integration affected its primary target—small-scale black farmers. Although contradictory, South African regulatory directives encourage important tensions. Walmart entered a national economy in which a policy terrain already backed market approaches to agriculture and food distribution, including both a liberalized regime for large-scale commercial farmers who export and, more paradoxically, developmentalist directives to assist “emerging” (black) farmers’ supply to local markets under post-apartheid imperatives of “black economic empowerment.” Thus, in a context where retailers already are highly formalized and attuned to Walmart-initiated practices and where the state has intervened to set agricultural policy in ways that prioritize access to supermarkets’ supply chains, it may not be possible to measure the full impact of Walmart’s entry initially in any obvious changes to the local food regime. The state was promoting a range of programs with retailers to assist smallholder farmers in entering their chains. Yet Walmart’s supplier development fund convinced the state to allow it to acquire Massmart in its competition tribunal process. Walmart’s South African program of support to suppliers, entitled Ezemvelo, is an extension of the company’s global Direct Farm Program. Walmart directly contracts with smallholder (black) farmers to bring them into the fresh produce supply chain as well as with some projects

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walmart in the global south

through the intervention of a U.S. multinational NGO fi rm called TechnoServe, which also operates in Nicaragua. First, the introduction of this program itself helped to ease tensions with the state when Walmart’s acquisition of a majority share in Massmart required state approval. Greenberg argues that the program’s benefits to smallholder farmers are unclear at this early stage, but he fi nds evidence that smallholder farmers are receiving lower prices for their produce than they would through other channels. Although contracts are not necessarily exclusive, they do bind farmers to supply quantities to Walmart that often preclude their ability to make other supplier arrangements. Finally, he suggests, there is also already some evidence that Massmart/Walmart is using its strength to sideline deals with local partners or assert conditions on deals with them. In addition, much of the skills training for these farmers is conducted by other private-sector multinational input companies (for example, fertilizer and seed companies) and links these development initiatives to a broader global corporate agenda of which Walmart is a driver. In general, the form of incorporation of smallholder farmers into Massmart/Walmart’s supply chain, by seeking to bring them into commercialized relations in line with state policy direction, has lowered these farmers’ negotiating power and, Greenberg argues, has only further entrenched the preexisting lowwage labor regime for farmworkers by making even more competitive demands on their employers, the farmers. Thus, Walmart’s program to support access to its fresh produce chain in South Africa could make it harder for farmworkers, already in a precarious position, to mobilize to improve their conditions. This case offers us preliminary insight into possible intersections between South African retail workers and farmworkers, both categories of low-wage, precarious labor. Similarly, Wiegel fi nds that local supply chain practices are critical to explaining how Walmart has fared in Nicaragua. Focusing less on adaptations and more on Walmart’s active impact in these relations to the local economy, she provides a very interesting counterpoint to the South African case. In Nicaragua, where agricultural production operates mainly through small farm units, a company like Walmart faces different supply challenges than it does in South Africa, where most local produce can be sourced from highly capital-intensive commercial farms that produce export-quality products. In Nicaragua, Wiegel fi nds, NGOs (including TechnoServe) funded by the U.S. Agency for International Development (USAID) offer an intermediate intervention to assist in training and supporting small farmers to facilitate their entry to supply Walmart’s fresh produce needs. In a local market in which small producers are more frag-

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mented than in South Africa, the NGOs agglomerate supply for Walmart and offer a range of subsidies to farmers and the retailer. In essence, Walmart has been able indirectly to mobilize local farmer organization in Nicaragua by relying on USAID-funded NGO support to coordinate its supply chain. Indeed, rather than “eliminating the middle man,” as it often claims, Walmart here instead has banked on the local organization of institutions to assist its procurement operations. Wiegel argues that NGOs absorb the costs of training, credit, and distribution, to the ultimate benefit of Walmart. At the same time the rapid supermarketization of the country is putting local farmers at a disadvantage as it becomes more important to get their produce onto Walmart shelves. Thus, as in South Africa, Nicaraguan state strategy to support rural development becomes ever more oriented toward accessing supermarket supply chains. Yet, also as in South Africa, while the benefits to small farmers remain unclear, there is evidence of deskilling among farmers themselves as they become more reliant on NGO interventions: the competition to meet Walmart’s supply requirements puts greater pressure on farms to lower labor costs, perhaps through increased use of family and informal labor, under more precarious conditions. The Thailand case, by contrast, illustrates how Walmart uses local suppliers to feed the global supply chain to the Global North. Rudikoff describes how the fi rm uses a joint venture of the largest shrimp producers in Thailand to obtain quality shrimp for the global market. Here there are no subsidies to the supplier and no intermediaries to monitor the system, except through voluntary codes of best practice. As a result, we clearly see a race to the bottom in order to ensure a supply of low-cost shrimp to Walmart and other transnational corporations as these subcontractors engage in modern-day slavery through labor trafficking from Cambodia and Myanmar to supply a compliant workforce to shrimp farms, all while Walmart assures its public that conditions are being monitored. In this case, the rapid expansion of demand—rising shrimp consumption in the United States—is linked to local conditions of production, relies on forced migrant labor, and is monitored through voluntary codes. World Bank (2008) development aid and loan programs from the 1990s encouraged the expansion of aquaculture in many countries of the Global South, and once again we can see how Walmart worked within these changing political economies to source its commodities. Through these three cases, we see Walmart flexibly using local institutions and working with local dynamics in ways that ultimately reinforce its own corporate practices. In neither South Africa nor Nicaragua

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walmart in the global south

do we have evidence of Walmart adjusting its profitable practices to offer a greater share to local partners. Furthermore, its emphasis on coordinating local producers to enter into commercial and financialized relations only deepens the low wages and poor conditions of the farmworkers employed by smallholder farmers. It appears that Walmart is adept at fi nding resources in local economies within regulatory and institutional settings, even as it acknowledges local development imperatives and meets local regulations set up by states to direct FDI. In the South African and Nicaraguan cases, the mechanisms that enabled its procurement of fresh produce fit into state development directives and may in fact have reinforced their orientation toward the commercialization of agriculture as a mechanism of support to smaller farmers. These mechanisms also increased corporate power in the food systems of these countries. In contrast to the cases of local production for domestic markets, the example from Thailand suggests that migrant workers experiencing particularly poor conditions, including bond-slavery and labor trafficking, were able to build a campaign to protest and ultimately force the suppliers to release and partly recompense them. They did so by leveraging global labor and consumer networks that crossed national as well as union sector divides and emphasized the poor working conditions underpinning Northern consumer choice. Furthermore, a class action suit still ongoing in California challenges the very labor control regime of these suppliers and within Walmart’s supply network. These three cases suggest that supply chain workers can put pressure on Walmart, but where local state development prerogatives focus on one set of priorities—in our cases, bringing producers into commercialized markets—and not on others, such as the labor conditions within those relations, local political economies may make it harder for farmworkers or food-processing workers to even consider such efforts. In the Global South, state development policy for agriculture and aquaculture becomes a critical site of investigation for understanding the effects of transnational retailers within local economies, particularly a retailer as powerful as Walmart. These studies also emphasize possible strategic intersections between retail and supply chain workers for future action, such as linking labor conditions within interconnected nodes of the chain while also putting pressure on state development directions within food systems.

final remarks Walmart in the Global South shows that the global fi rm does indeed embed itself within local economies and relations. Through work culture,

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labor organizing, and supply chain dynamics, Walmart has adapted to national contexts. Yet, as we see in these case studies, it has varied its strategies and tactics and learned lessons from its earlier investments to apply to its later acquisitions. The fi rm’s flexibility has reproduced in countries other than the United States its ability to dominate practice and extract profit—sometimes by ensuring its political palatability, as in South African supplier programs or Brazilian trade union recognition, and sometimes by selling its work culture to new audiences, as in Mexico and Argentina. Yet, as this book also shows, sometimes these processes of localization offer moments of potential rupture and challenge for labor and for states. While in Mexico individuals more passively resisted Walmart culture, workplace culture in Brazil, Argentina, and Chile fueled collective resistance when workers counterposed company discourse to their realities. It also offered a concrete point of leverage to build solidarity in favor of a union. Trade union legacies themselves have offered resources to workers, as well as spaces, within the context of Walmart’s practices, to reinvigorate unionism in some places. What becomes clear is that it is not enough to simply understand that Walmart adapts to the local institutional and regulatory context; much more important is understanding how and under what circumstances it adapts. Each of these case studies illustrates the nuance of Walmart’s approach and workers’ responses across the globe. Therefore, what this book affi rms is the importance of a global network of activists and academics to share information, learn from Walmart’s different models, and produce knowledge that will benefit organizations and workers across the globe who are trying to create a just, dignified, and collectively participatory workplace at Walmart. We end with five reflections about investigating the global expansion of Walmart and its impact on the conditions, experiences, and organization of workers in different sites in the Global South. Coming from the perspective of the importance of critical social science and social justice, we think it is important to highlight the following: 1. It is important to develop case studies on the entry of transnational corporations into national contexts that offer detailed analysis and use varied methodologies. As this book on Walmart makes clear, analysis of the company’s global economic trends and corporate strategies is not sufficient. Such analysis must be complemented with empirical studies on the specific modalities in which Walmart inserts itself as an economic actor, within specific contexts. We need to learn

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walmart in the global south

how it adapts, modifies institutional and regulatory frameworks, and shapes discourses and practices (economic, political, work, and labor) in the local environment. Given different work cultures, different conditions of employment, different daily experiences of workers, and different forms of the oppression and struggle with which they contend, case studies are crucial to adequately understanding the impact of a large transnational corporation such as Walmart on workers globally. Case studies reduce the risk of extrapolating the experiences from one context (for example, from the United States and other countries in the Global North) and simply applying them to other contexts (for example, countries in the Global South). Case studies, then, offer empirical evidence that is in tension with “commonsense” ideas around the homogeneity of economic globalization and show us the heterogeneous ways in which transnational companies impact the countries they enter, their economies, and workers. 2. Affirming the importance of case studies in analyzing the functioning of transnational corporations does not imply abandoning global analysis. Indeed, situating case studies in the larger context of global corporate strategy and capitalist logic is key to a more thorough analysis. As Saskia Sassen (2007) has discussed at length, the challenge is to elucidate, at both an analytical and an empirical level, how various scales (local, national, regional, global) are differentiated and articulated in the processes of production and social reproduction characteristic of global corporate strategy. The chapters in this book, and the book as a whole, illuminate the complex dialectic between the local and the global, making visible both the specificity of local processes and their intersection with global dynamics. 3. This book is not merely an aggregation of different case studies with one theme in common, but rather an invitation to compare, contrast, and fi nd similarities and differences in the distinct contexts of the Global South. These case studies give us the foundation to contribute to the production of theory. Although we did not intend for the book to be a theoretical project, and the varied methodologies in the case studies limit our ability to generalize, the collection nonetheless presents an opportunity to advance the conceptualization of the impact on the nature of work and on workers of the expansion of transnational corporations into the Global South. 4. As recognized, importantly, in this book, different types of workers directly or indirectly participate in the functioning and accumulation processes of large transnational corporations. Retail transnation-

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als tie together huge chains of production that connect different jobs and workers and are situated across the globe. Beyond the retail workers featured in the Chile, Argentina, Brazil, and South Africa chapters, the book also highlights the reality of subcontracted workers in retail stores (South Africa), warehouse workers (Chile), professional IT workers (Mexico), farmworkers (South Africa and Nicaragua), and workers in shrimp farming factories (Thailand). Labor and employment conditions, opportunities for organizing, and the daily experiences of workers are linked directly or indirectly to the organizational and economic dynamics of Walmart’s chain of production at the global level and in each country. Each chapter here allows us to observe how diverse workplace experiences at Walmart are conditioned by state institutions, regulatory frameworks, race, gender, and social class in the labor markets of these different countries. 5. Situated within a critical tradition in the social sciences that seeks to contribute to the democratization and emancipation of society, this book calls us to attenuate the brutal asymmetry that characterizes labor- capital relations under global and fl exible capitalism. As such, our book strives to make visible legitimized injustices, hidden contradictions, and inequalities that have become naturalized in the contemporary world of work and in doing so to open new opportunities for self-reflection and social action for workers and their organizations (Habermas 1990). This book should be read as both a collective effort to shed light on contemporary forms of the domination and rationalization of work on behalf of capital and a contribution to the understanding of how workers and their organizations are transforming their conditions. As different chapters illustrate, collective action, solidarity, and worker activism at the local and global levels are central to efforts to advance toward greater justice and democratization in our societies. notes 1. In Mexico, retail operations are unionized and the outsourced IT workers in the case presented here are not, although they have the legal right to be unionized. 2. By 2017, Walmart, through its South African–owned Massmart Holdings, traded in thirteen countries in Africa: Botswana, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, South Africa, Swaziland, Tanzania, Uganda, and Zambia. The Massmart profi le explains the dominance of southern African countries. 3. Workers in the province of Quebec organized a union in 2004, but Walmart closed the store a few months after unionization. 4. Over the past couple of years, major divisions have emerged within COSATU,

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with the National Union of Metalworkers of South Africa (NUMSA) being expelled in 2015. With a number of other unions, NUMSA launched another federation, the South African Federation of Trade Unions (SAFTU), in May 2017. These developments relate directly to tensions with the ruling ANC. SACCAWU was originally a member of the “Group of Nine”—the nine unions critical of COSATU—but as of this writing it remains within COSATU. 5. The national political battles within the South African labor movement must also be understood as adding to the union’s difficulties.

references Abal Medina, Paula. 2004. “Los Dispositivos de control como inhibidores de la identidad colectiva: Un Estudio de caso en grandes cadenas de supermercados.” In El Trabajo frente el espejo: Continuidades y rupturas en los procesos de construcción identitaria de los trabajadores, edited by Osvaldo R. Battistini. Buenos Aires: Prometeo Libros. Americans for Tax Fairness. 2014. “Walmart on Tax Day: How Taxpayers Subsidize America’s Biggest Employer and Richest Family.” Washington, DC: Americans for Tax Fairness (April). Available at: https://americansfortaxfairness.org/files /Walmart-on-Tax-Day-Americans-for-Tax-Fairness-11.pdf. Aoyama, Yuko, and Guido Schwarz. 2006. “The Myth of Wal-Martization: Retail Globalization and Local Competition in Japan and Germany.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 275–292. New York: Routledge. Bair, Jennifer, and Sam Bernstein. 2006. “Labor and the Wal-Mart Effect.” In WalMart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 99–114. New York: Routledge. Bank Muñoz, Carolina. 2017. Building Power from Below: Chilean Workers Take on Walmart. Ithaca, NY: ILR Press. Bianco, Anthony. 2006. Wal-Mart: The Bully of Bentonville: How the High Cost of Everyday Low Prices Is Hurting America. New York: Doubleday/Currency. Bonacich, Edna, and Khaleelah Hardie. 2006. “Walmart and the Logistics Revolution.” In Wal-Mart: The Face of Twenty-First-Century Capitalism, edited by Nelson Lichtenstein, 163–188. New York: New Press. Bonacich, Edna, and Jake B. Wilson. 2006. “Global Production and Distribution: WalMart’s Global Logistics Empire (with Special Reference to the China/Southern California Connection).” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 227–242. New York: Routledge. ———. 2008. Getting the Goods: Ports, Labor, and the Logistics Revolution. Ithaca, NY: Cornell University Press. Brunn, Stanley D., ed. 2006. Wal-Mart World: The World’s Biggest Corporation in the Global Economy. New York: Routledge. Burch, David, and Geoff Lawrence. 2005. “Supermarket Own Brands, Supply Chains, and the Transformation of the Agri-food System.” International Journal of Sociology of Agriculture and Food 13 (1): 1–18. Burt, Steve, and Leigh Sparks. 2006. “Wal-Mart’s World.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 27–46. New York: Routledge.

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Castells, Manuel. 1999. The Information Age: Economy, Society, and Culture, vol. 2, The Power of Identity. Oxford: Blackwell. Chan, Anita, ed. 2011. Walmart in China. Ithaca, NY: ILR Press. Christopherson, Susan. 2007. “Barriers to ‘U.S. Style’ Lean Retailing: The Case of Walmart’s Failure in Germany.” Journal of Economic Geography 7: 451–469. Coe, Neil M., and Martin Hess. 2005. “The Internationalization of Retailing: Implications for Supply Network Restructuring in East Asia and Eastern Europe.” Journal of Economic Geography 5: 449–473. Coe, Neil Martin, and Neil Wrigley. 2007. “Host Economy Impacts of Retail TNCs: The Research Agenda.” Journal of Economic Geography 7: 341–371. Dicker, John. 2005. The United States of Walmart. New York: Penguin Books. Dunnett, A. Jane, and Stephen J. Arnold. 2006. “Falling Prices, Happy Faces: Organizational Culture at Wal-Mart.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 79–90. New York: Routledge. Featherstone, Liza. 2004. Selling Women Short: The Landmark Battle for Workers’ Rights at Walmart. New York: Basic Books. Fishman, Charles. 2006. The Wal-Mart Effect: How the World’s Most Powerful Company Really Works—And How It’s Transformed the American Economy. New York: Penguin Books. Fold, Niels, and Bill Pritchard, eds. 2005. Cross-Continental Food Chains. London: Routledge. Gereffi , Gary, and Miguel Korzeniewicz, eds. 1994. Commodity Chains and Global Capitalism. Westport, CT: Praeger. Habermas, Jürgen. 1990. Conocimiento e interés. Madrid: Taurus. Harvey, David. 1991. The Condition of Postmodernity: An Enquiry into the Origins of Cultural Change. Oxford: Blackwell. Hernández Castro, Juan José. 2011. “Trabajo e identidad entre los trabajadores de Walmart.” In Trabajo no clásico: Organización y acción colectiva, vol. 1, edited by Enrique de la Garza Toledo, 227–288. Mexico D.F.: Universidad Autónoma Metropolitana-Iztapalapa, Plaza y Valdés. Hong, Xue. 2011. “Outsourcing in China: Walmart and Chinese Manufacturers.” In Walmart in China, edited by Anita Chan, 34–53. Ithaca, NY: ILR Press. Hugill, Peter J. 2006. “The Geostrategy of Global Business: Wal-Mart and Its Historical Forbears.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 3–14. New York: Routledge. Instituto de Gestión del Transporte (IGT). 2008. “Estudio comparativo entre Walmart y D&S.” Unpublished document. Santiago, Chile: IGT. Kenny, Bridget. 2017. Retail Worker Politics, Race, and Consumption in South Africa: Shelved in the Service Economy. Basingstoke, U.K.: Palgrave Macmillan. Lichtenstein, Nelson, ed. 2006. Wal-Mart: The Face of Twenty-First-Century Capitalism. New York: New Press. ———. 2009. The Retail Revolution: How Wal-Mart Created a Brave New World of Business. New York: Metropolitan Books. Lynn, Barry C. 2006. “Breaking the Chain: The Anti-Trust Case Against Walmart.” Harper’s, July. Moreton, Bethany. 2009. To Serve God and Wal-Mart: The Making of Christian Free Enterprise. Cambridge, MA: Harvard University Press.

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Myers, Scott E., and Anita Chan. 2011. “Practicing Cheer: The Diary of a Low-Level Supervisor at a Walmart China Store.” In Walmart in China, edited by Anita Chan, 151–172. Ithaca, NY: ILR Press. Reardon, Thomas, and Julio A. Berdegué. 2002. “The Rapid Rise of Supermarkets in Latin America: Challenges and Opportunities for Development.” Development Policy Review 20 (4): 371–388. Rosen, Ellen Israel. 2006. “How to Squeeze More out of a Penny.” In Wal-Mart: The Face of Twenty-First-Century Capitalism, edited by Nelson Lichtenstein, 243–260. New York: New Press. Sassen, Saskia. 2007. A Sociology of Globalization. New York: W. W. Norton. Seligman, Brad. 2006. “Patriarchy at the Checkout Counter: The Dukes v. Wal-Mart Stores, Inc., Class-Action Suit.” In Wal-Mart: The Face of Twenty-First-Century Capitalism, edited by Nelson Lichtenstein, 231–242. New York: New Press. Stecher, Antonio. 2012. “Perfi les identitarios de trabajadores de grandes empresas del retail en Santiago de Chile: Aportes psicosociales a la comprensión de las identidades laborales.” Psykhe 21 (2): 9–20. Stecher, Antonio, and Lorena Godoy, eds. 2014. Transformaciones del trabajo, subjetividad, e identidades: Lecturas psicosociales desde Chile y América Latina. Santiago: Editoriales Ril. Tilly, Chris. 2006. “Wal-Mart in Mexico: The Limits of Growth.” In Wal-Mart: The Face of Twenty-First-Century Capitalism, edited by Nelson Lichtenstein, 189–212. New York: New Press. ———. 2007. “Walmart and Its Workers: Not the Same All over the World.” Connecticut Law Review 39: 1805–1823. Vallas, Steven Peter. 2011. Work: A Critique. New York: Polity Press. Walmart Corporation. N.d. “Our Story.” Available at: http://www.corporate.walmart .com (accessed May 21, 2014). World Bank. 2008. World Development Report, 2008: Agriculture for Development. Washington, DC: World Bank. Wrigley, Neil, and Michelle Lowe. 2007. “Introduction: Transnational Retail and the Global Economy.” Journal of Economic Geography 7: 337–340. ———. 2010. “The Globalization of Trade in Retail Services.” Report commissioned by the Organization for Economic Cooperation and Development (OECD) Trade Policy Linkages and Services Division for the OECD Experts Meeting on Distributive Services. Paris (November 17).

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Ch a p t e r 1

walmart in brazil: from global diffusion to national institutional embeddedness katiuscia moreno galhera, scott b. martin, and joão paulo cândia veiga I n 20 01 t h e Soci a l Obse rvatory I nst i t u t e (Instituto Observatório Social, or IOS), a research body affiliate of the Central Única dos Trabalhadores (CUT), the largest labor central in Brazil, released a study about Walmart’s compliance with International Labor Organization (ILO) core labor standards (CLS) during its initial years of operation in Brazil.1 Different sorts of violations were found in some subsidiaries of the giant company in cities located in the São Paulo metropolitan area. Unjustified layoffs, forced overtime, discrimination against women, and measures forbidding trade union leaders to access the floor of the stores were some of the main violations uncovered (IOS 2000). The directors of Walmart Brasil declared to the press that the research was biased because management had not been consulted. Yet prior to the fieldwork, the research team had spent weeks trying to gain access to Walmart management, without any success. During the period captured by that study, the late 1990s through 2000, Brazil thus seemed to be on the same track as the rest of Walmart’s expanding global operations, with its well-documented rapacious labor as well as business and government relations practices—a veritable global Leviathan in action. If we fast-forward ten to twelve years to the early 2010s, however, a different picture emerges in South America’s largest country. Walmart Brasil fi nds itself bargaining periodically with local trade unions and with all three major Brazilian national labor centrals—CUT as well as Union Force (Força Sindical) and the General Union of Workers (União Geral dos Trabalhadores, or UGT). Human resource representatives are invited to participate in congresses of the CUT-affi liated National Confederation of Commercial and Service Workers (Confederação Nacional dos Trabalhadores no Comércio e Serviços, or CONTRACS), and elected worker commissions and teams of workers sit down with Walmart man-

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agers to discuss all sorts of conditions and prospective improvements in the retail stores. 2 Topics such as work rules, overtime, profit-sharing, and union representation at the workplace level and union rights in collective bargaining agreements are all part of the negotiating agenda. Negotiations are tough, the fi rm continues to test the limits of labor law—as verified by the government fi nes it has faced—and the threat of confl ict is always present or latent, yet a pattern that might be characterized as “confl ictual cooperation” has begun to emerge in labor-management relations.3 What changed over the fi fteen years since the company fi rst entered Brazil, and in the decade-plus since the original research took place? How can we explain the change in company behavior and employment relations? More broadly, why does a company with a worldwide anti-union reputation have a working relationship with trade unions in Brazil, many of which have a tradition of militancy against multinationals? This chapter will address these questions by showing how the shifting Brazilian institutional environment in which the company has operated has not only constrained unilateral measures to avoid or undercut unions but also given both managers and unionists incentives to seek new types of bargaining relationships to deal with persistent confl ict. At the same time, we will place the fi ndings of our research within the context of the broader literature on Walmart’s labor relations practices outside its home country and region, as the multinational has expanded beyond its core North American focus of operations. This perspective highlights some of the distinctive features of Walmart’s labor relations in Brazil, but also some commonalities with those countries that have more union-friendly institutional environments.

methodology We focus on the activities of local unions and CONTRACS-CUT since 2003, when the National Walmart Union Committee was created. CONTRACS has created three national committees of union leaders representing workers for each of the three major national supermarket retailers—Walmart, Pão de Açúcar/Casino, and Carrefour. Today the three chains represent 60 percent of supermarket sales in the Brazilian economy. Pão de Açúcar/Casino and Carrefour are French-owned, while Walmart is the only American company present in the sector. Our evaluation of the bargaining process is based on analysis of internal documents and correspondence of CONTRACS-CUT from 2003 through 2015 as well as on

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interviews with union leaders and the company’s management. This research enables us to examine the evolving agenda of trade unions toward the three major retailers. We also draw on interviews with Walmart management conducted by IOS staffers as part of ILO-sponsored research on Walmart’s supply chain (IOS 2007). However, given Walmart’s hermetic posture regarding labor relations as a company with a closed capital (privately held) ownership structure in Brazil and the paucity of relevant public company documents and reports, to a large extent we are often left— as is true with research on Walmart in many countries—with no choice but to deduce the company’s evolving strategy from its behavior, its few public statements, and the perceptions of its union interlocutors.4

background Brazil’s labor relations framework needs to be understood against the backdrop of political regime evolution and a few important turning points. The state corporatist labor relations framework, established in the 1930s under the Estado Novo dictatorship of Getúlio Vargas, is known as the Consolidação das Leis do Trabalho (CLT), the basic principles of which persist but have been modified by subsequent political dynamics and institutional reforms. The CLT established state tutelage and domination of unions, which were organized into single, monopolistic entities that represented all workers within a given sector of the economy (for example, metalworking or commerce) by municipality (unicidade sindical) and which, in turn, were aggregated into official state-level sectoral federations and national confederations by branch (for example, confederations for industry and for commerce). Under this framework, the state regulated union elections, set strict limits on the right to strike, and funded unions through a compulsory tax withheld from workers’ paychecks (the “union tax,” or imposto sindical). At the same time, organized workers received health, social security, and other benefits that grew over time and were tied to union membership and formal-sector labor force status. Although the CLT union structures became politicized and workers and unions were the subject of controlled mobilization during the populist period of more democratic politics (1945–1965), their more repressive aspects were enforced with a vengeance by the post-1964 military regime, accompanied by legal interventions to topple many left-leaning union leaders and activists as well as more general state repression against political opposition. The return to civilian rule in 1985 brought more political space for unions, which had begun in the late 1970s to organize more autono-

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mously as part of the “new social unionism” (novo sindicalismo), whose most visible leader was Luis Inácio Lula da Silva. (Elected president in 2002, Lula would serve two terms, from 2003 to 2010.) The most important organizational expression of that bottom-up movement for a more combative, autonomous unionism was the Central Única dos Trabalhadores, founded in 1983; many CUT leaders had been members of the Workers Party (Partido dos Trabalhadores, or PT). The new constitution drafted in 1988—with substantial input from unions and other civil society organizations through a popular amendment process— legalized the right to strike, ended the Labor Ministry’s formal power to intervene in unions to oust leaders and its formal powers to recognize (or not) unions, including newly formed ones, reduced the workweek, and provided for maternity and paternity leave. Many of these provisions required subsequent implementing legislation, and some structures were left untouched: remaining in place were the formal principle of one-union-per-sector-permunicipality, the union tax as the funding base of unions, and a formal legal prohibition on independent national labor organizations outside of the confederation structure (such as CUT and its rivals such as the Força Sindical). The market-reforming presidency of Fernando Henrique Cardoso (1995–2002) brought efforts to reform labor market regulation along more flexible lines (for example, part-time and temporary contracts), efforts to weaken union rights (most of which were effectively resisted by unions and their political allies), and, from the 1980s onward, a newfound role in an expanded process of collective bargaining via the labor court system of mediation and arbitration that was much less subject to the tutelage of the state than ever before in Brazil’s history under the CLT. This brief overview brings us to the time frame of our research, which includes Lula’s presidency as well as the foreshortened presidency of his PT successor, Dilma Rousseff; in power from 2011, her term was cut short in 2016 by impeachment on charges of manipulating official budgets. In research conducted in the year 2000, IOS found that Walmart had violated principles of trade union freedom in the sense that leaders could not access stores to promote union campaigns or hold worker assemblies. There was evidence that the fi rm pressured employees not to pass on their dues (contribuições financeiras) to their unions.5 Moreover, the company had fi red union leaders and workers who had organized a temporary, unannounced work stoppage (paralisação relâmpago) in front of the entrance of a supercenter in the São Paulo suburb of Osasco in 1998 (IOS 2000). IOS research also documented that the company systematically disregarded various clauses in the annual municipal-level collective

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conventions that regulated working conditions for commercial workers.6 Of particular note was Walmart’s noncompliance with the terms regarding weekly paid time off (descanso semanal remunerado), which is a legal right in Brazil but whose terms proved to be one of the most controversial items on the negotiating agenda. Walmart’s record with respect to ILO Conventions 100 and 111—regarding equal opportunities and nondiscrimination based on gender, race, religion, political views, and background—was found to be deplorable. Employment in the management ranks of supercenters was unequal between men and women, as well as between whites and Afro-Brazilians (negros and pardos). Incidents of sexual harassment were also documented. Additionally, researchers found that paternalistic collective practices in stores instituted by management to “raise the spirit” and reinforce the company loyalty of work groups were common, despite being quite unusual among multinational fi rms in Brazil. These imported “group dynamics” practices violated the privacy of workers who were reluctant, for instance, to share with others what they did during their time off. In Germany, something similar happened around this time: Walmart workers used to hide in the bathroom, because they found the company’s ritual chanting embarrassing (Quinlan 2001). In short, Walmart’s arrival in Brazil in the middle of the 1990s seems to fit a pattern of labor experiences in other countries where the fi rm had set up shop as part of its global expansion. This effort to impose precarious work based on low wages, elimination or reduction of benefits, and very high turnover reflected closely the spirit of the anti-union, low-road policy developed in the United States. Indeed, Walmart seemed to be almost directly transplanting its home-country practices, the only nuance being that, with unions and collective bargaining an established fact in semicorporatist democratic Brazil, company efforts were directed at undermining the power and legitimacy of unions rather than their outright elimination. In the fi rst section, we discuss the theoretical approaches to understanding how the institutional environment can constrain and reshape the corporate strategy of a large multinational when it operates in countries with democratic regimes and robust labor relations arrangements, as well as the institutional changes—mainly legal—in the internal Brazilian design. In the second and third sections, we discuss the supermarket sector’s configuration in Brazil and the constraints and opportunities provided by Brazil’s institutional and regulatory framework. We then recount the difficult process of dialogue with and recognition of union leaders—particu-

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larly those affi liated with CONTRACS—on the part of Walmart’s management, specifically its human resources department, between 2004 and the fi rst half of 2014. This near-decade of fi rm-level bargaining reveals a great deal about the evolution of Walmart Brasil’s view of unions—from enemies to be destroyed to adversaries it sought to engage (and constrain) through a sophisticated process of negotiation.

diffusion and transplantation versus national and local institutional embeddedness: the global expansion of transnational corporations It is helpful to situate the discussion of Walmart’s shifting labor relations in Brazil within the context of debates on how multinational corporations approach issues such as human resource management/labor relations (HRM/LR) when they enter new countries in their global expansion strategies.7 A basic analytical continuum between pure “diffusion” of homecountry or established overseas company practices and pure “adaptation” to national and/or local realities in the new host country—with intermediate categories such as “hybridization”—has informed and been problematized in this literature. There is productive debate about the drivers of these initial strategic decisions and, more importantly, about the evolution of policies and practices over time as multinationals (TNCs, or transnational corporations) “sink roots” into new national soils. We draw from a current within that literature that emphasizes the profound impact on the choice, implementation, and often eventual modification of these strategies by different national institutional environments as well as by institutionally embedded social relations that may take on distinctive subnational, sectoral, and local characteristics (see, for instance, Hollingsworth, Schmitter, and Streeck 1994). We give a particular spin to institutional analysis, taking inspiration from the more fluid and contested vision of institutions in the broader recent literature on institutional change and continuity within comparative political economy—a particular variant of institutional analysis (Streeck and Thelen 2005; Mahoney and Thelen 2010). We also draw from work that fi nds that institutionalized patterns of employment relations may empirically vary a great deal within contemporary national political economies in an age of globalization and flexible production systems—including within the same sector by fi rm or worksite location—given such common factors as the weakness or decay of na-

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tional peak associations of labor and capital and the increasing salience of different subnational laws, customs, and norms (Jacobs and Kahn 2014; Locke 1992). As one of the authors has argued elsewhere in the context of a comparative study of employment relations in Brazil, “subnational actors and processes [have] . . . contingent and very particular forms of articulation with national actors and processes” (Martin 2001, 130). From this perspective, it is by no means inconsistent to fi nd that Walmart was constrained in some ways by the evolving institutional and regulatory environment for employment relations, even as, exercising an institutionally embedded agency, it reacted somewhat differently to the constraints and opportunities this environment afforded. We argue that Walmart’s initial strategy regarding labor issues reflected a fundamentally “diffusionist” or “voluntarist” outlook of trying to implant practices developed in its home region of North America. Over time, however, as it came up against resistance from institutionally enabled trade unions that were increasingly well positioned to resist unilateral policies and push for bilateral engagement, the fi rm came to reformulate its labor relations practices, leading to a more regularized and nationally aggregated, if still contentious, bargaining relationship for channeling confl ict. This occurred in a national institutional environment where the non- or anti-union postures put into practice by Walmart, which were widespread in its home country, proved untenable, both relationally and in a regulatory sense. Contributing to the untenability of such postures was Walmart’s use of what labor relations scholars of Anglo-American countries (Kochan 1980; Pyman, Holland, and Teicher 2004; Gall 2002) call “union substitution” strategies: non-union employers seeking to have direct, unmediated communications and channels with workers and employing other sophisticated human resource management techniques that seek to undermine unions’ influence and authority. For two reasons, we emphasize not static institutional constraints but rather, in the specific context of Brazil from the 1990s onward, a dynamic institutional environment embodying constraints and opportunities: (1)  the evolution of an aggregated version of trade union organization, and (2) the shifting labor relations framework. First, in the post-1988 environment, and especially after 2002, what we would term, following others, a “hybrid” corporatist-liberal version of trade union organization and labor relations was evolving in Brazil that enabled collective action of a more aggregated sort (independent of government interference), while promoting norms of bilateral engagement in general and over the terms of profit-sharing in particular. As Bolívar La-

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mounier (1992) and Amaury De Souza (1992) have each pointed out, the new constitution made unions more autonomous, ending the Labor Ministry’s formal power to intervene in unions as well as its function of recognizing and regulating unions (enquadramento sindical), and it strengthened the right to strike, particularly in the public sector and essential services. Yet the constitution and post-constitution framework under Brazil’s young democracy strengthened collective labor rights without providing for pure, “pluralist-style” freedom of association; the principle of one union per occupational category per territorial unit (unicidade sindical) was maintained, and during the 1992–1994 period Brazil came close to adopting the relevant ILO Convention 87 on freedom of association (but never did so); the system of fi nancing of unions through a compulsory tax (imposto sindical) levied on all workers, collected by the state, and passed on to unions was maintained; and many important powers of the system of labor courts (justiça do trabalho), which play a role in adjudicating individual or collective worker grievances against employers for legal violations as well as in mediating collective labor disputes, were kept largely intact. The net result, as the post-constitution, democratic-era labor relations framework took shape, was that state tutelage and control of unions were largely obliterated (the “sticks” in the Estado Novo corporatist system), while unions were able to maintain—and augment in a competitive political environment in which politicians courted worker and in some cases union support—important power resources that impeded organizational pulverization or fragmentation. It is worth mentioning the macroeconomic developments in the Brazilian economy after 2004 (during the second year of Lula’s fi rst term), which were reflected in the labor market and which deepened during the second term with the dismissal of the orthodox ministro da fazenda (minister of economy) Antonio Palocci. Economic growth, a minimum wage increase, public policies (such as the promotion of microcredit and support for Bolsa Família, an antipoverty program), and union practices led to a decrease in unemployment, improvement in the average quality of jobs, and the growth of purchasing power.8 Macroeconomic indicators played one of the most important roles in promoting advancements for labor unions, since labor regulation was sometimes flexibilized and sometimes strengthened (either in the public or private sector).9 As a consequence, this overall scenario of economic progress encompassed other issues such as increases of turnover rates and labor churning and the flexibilization of labor contracts and wages (Krein, Santos, and Nunes 2012). A second and related development in the post-constitution, democratic-

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era labor relations framework was that both TNCs and unions were maneuvering in their bilateral encounters as well as within the legislative process to reshape employment relations in general and the collective bargaining process in particular. This resulted in the gradual emergence and dynamic evolution of regularized negotiating practices—institutions with a legal anchor but also with considerable cross-sectoral, firm-level, and even work-site-level variation in practice, around workplace restructuring in general and with respect to two issues in particular that loom large in the supermarket sector.10 One issue is how to negotiate around so-called hours’ banks (bancos de horas), a system whereby employers can respond to shifting product demand by having workers work hours that exceed contractual norms for weekly work during peak periods and work an equivalent amount less during slack periods, while being paid a regular weekly wage throughout and in such a way that average weekly hours adhere to contractual norms and employment is stabilized (albeit with the loss of overtime opportunities). An interesting evolution regarding hours’ banks has occurred: originally an employer proposal in the early 1990s that was resisted by unions, the practice was negotiated jointly (in the auto sector) in the 1994–1996 period, when it was tied to a reduction in weekly working hours and variation within a tight band (Martin 2001), and it fi nally became a legally enshrined option under a law passed in January 1998, with an extended term for calculating hours added under a November 1998 executive decree (Cook 2007, 90; Cardoso and Gindin 2009, 40–41). Although the hours’ bank option required formal agreement with unions, many employers abused these contractual provisions in the late 1990s and early 2000s (for example, by not paying workers it fi red during downturns the accumulated pay to which they were entitled for having worked extra hours), thus clogging the labor courts with individual disputes. As Cardoso and Gindin (2009, 41) note, “When the economy started to grow strongly in 2004, some unions would refuse to sign ‘bank of hours’ agreements again, supported by the Labour Court, which would fi nally (in 2007) concede that the ‘bank of hours’ benefits only employers and require its regulation by collective agreement.” By the end of the decade, both CUT and Força Sindical were urging affi liated unions not to sign or renew hours’ bank accords. The second major issue is of even more direct relevance to Walmart and the other supermarket cases discussed in this chapter. Profit-sharing, or participação nos lucros e resultados (PLR), as it is known in Brazil, is more akin to the broader notion of “gainsharing” or “performance bo-

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nuses” familiar to those who follow U.S. labor relations. PLR was created as a legal benefit in the 1988 constitution, but despite being negotiated in practice by a few strong manufacturing unions in the 1990s, implementing regulations were not approved until 2000, in Law 10.101 (Brazil 2000), which gave it nationwide legal force and for the fi rst time required—without specifying the modalities—negotiations between management and unions on its terms. After this time, it became a significant focus of collective bargaining and labor confl ict, particularly at the fi rm level (Cardoso and Gindin 2009). As is often the case with legal labor norms or “rights” with vague principles of implementation, the challenge for unionists has been to make such negotiations real and meaningful and not allow employers to go through an empty show of meeting with union representatives and then imposing their own limited performance bonus schemes. Thus, this is a case not just of de jure and “hard” institutional constraints and formal institutional embeddedness, but also of soft legal constraints with considerable leeway and flexibility—for good or ill—for the creation of new de facto institutions at the company-specific level and with many cross-company variations as a result. Our perspective is thus related to the strong emphasis on the determinacy of national institutions understood in the formal-legal or more sociological sense of national laws, business traditions, corporate culture, and the like that informs some studies cited in this chapter. Yet our perspective also puts a distinctive emphasis on the indeterminacy and plasticity of institutional arrangements in the particular context of a Brazil that was simultaneously undergoing many transformations during the period.

walmart corporate strategy in brazil The 1990s witnessed a wave of retail internationalization. U.S. and European fi rms entered into new developing countries with potential for growth as well as into the markets of other developed countries outside their home countries and regions. The spread of retail foreign direct investment has led to recognition and much research on the implications of transnational retail chains within the global economy (Durand and Wrigley 2009). As a family-owned and privately held company that came from a strong regional base of operations in the U.S. South and that focused on smaller towns and cities, Walmart began its foreign crusade beyond North America relatively late and its expansion unfolded in “waves.” The fi rst wave swept through neighboring North American countries within the NAFTA context, beginning in Mexico in 1991 and Canada in 1994

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with the acquisition of Woolco (Colla and Dupuis 2002). The second wave came in Latin America and Asia (South Korea, Japan, China, and Indonesia). The third wave was captured by the words of a Walmart senior vice president: “To be big globally we have to be in Europe” (Financial Times, quoted in Quinlan 2001, 197). Peter Hugill (2006, 14) writes that “the company has had problems expanding into zoned, regulated, and unionized places elsewhere in America [outside the South] and internationally.” Yet, as he goes on to argue, emphasizing a theme that helps us situate Walmart’s relative commercial success in Brazil, it has not had to shut its operations in Brazil, unlike its experience in some other countries, and its more recent chameleon-like adaptation to doing business is in a way more attuned to Brazilian realities: “Where [Walmart] has been most successful abroad it is, with few exceptions, simply doing business as a local company” (emphasis added). In Brazil, Walmart was particularly attracted by the macroeconomic stabilization resulting from the Real plan of 1995, which brought inflation under control. After the interim presidency of Itamar Franco (1992– 1994), a brief interregnum during which the political and bargaining influence of progressive unions had been at a peak, the Brazilian state embraced market-oriented macroeconomic reforms (privatization of state enterprises, deepening trade liberalization, state spending rationalization, and so on) as well as a series of labor market and relations initiatives— some adopted by temporary executive decree, others in the form of proposed legislation—that sought to strengthen the hand of employers and weaken some rights of workers. These reforms were only partially passed or implemented, and their impacts were generally blunted, as compared to flexible labor market reforms in some other Latin American countries. As Maria Lorena Cook (2007, 59) notes, “Toward the end of the [1990s, the] labor movement .  .  . in Brazil .  .  . [was] able to stall—and even to reverse—some flexibility reforms, particularly those affecting unions . . . because of organized labor’s relative strength, its retention and use of political alliances, and the fact [the country’s] labor laws largely protected workers’ collective rights, thus enabling unions to conserve key resources in mobilizing to block the most harmful reforms.” Still, the fact that reforms were adopted in a series of one-off regulations and decrees—outlawing wage indexation clauses in collective bargaining contracts; speeding up the procedures and applications of labor court decisions; allowing part-time and temporary contracts; and allowing for “hours’ bank” flexible scheduling arrangements, temporary suspension of employment contracts, and the rescinding of Brazil’s ratification of ILO Convention 158,

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which outlawed “unjustified dismissals”—and the Cardoso government’s efforts to place limits on strikes and rewrite labor laws regarding collective rights surely sent signals to Walmart and its competitor Carrefour. Such employers were already inclined to take a hard line toward what had been growing union influence from the late 1980s to the mid-1990s. Thus, Walmart’s proclivity during this phase of its global expansion toward diffusion as a TNC with a distinctive corporate strategy and ethos was in some ways reinforced by, and dovetailed with, the political and regulatory conjuncture within which it expanded its operations in Brazil. In what was a timid strategy of testing the waters of the Brazilian market during its initial years of operation, Walmart maintained its homecountry tradition of opening stores in less densely populated areas of Brazil. In 1997 a few stores were opened in the suburbs of São Paulo state, and in 1998 the chain began to operate in the south of Brazil. At the beginning of the 2000s, the company opened stores in the southeastern states of Rio de Janeiro and Minas Gerais (Walmart 2017). Typical of the company’s international tendency during this period to mechanistically export home-country practices are stories such as this: When it arrived in Brazil, Walmart sold ski equipment and baseball shoes. At Christmas the next year, in an effort to attract customers, the U.S. fi rm had to set up tents all around the parking lots in its stores, such was the quantity of unsold items that the fi rm wanted to sell that did not fit in the stores. (Folha de S. Paulo 2004, authors’ translation)

In fact, one of the most influential business newspapers in Brazil reported in 2001 that, “after a misshapen start outside the U.S. market, the retail chain fi nally seems to be learning how to sell things in other countries” (Valor Econômico 2001). In Brazil, Walmart opened its fi rst distribution center in the São Paulo metropolitan area and its fi rst store, under the brand Everyday (Todo Dia), in the city of São Paulo (Walmart 2017). Here it followed the same geographic strategy of delaying its entry into major metropolitan centers that it had utilized in Mexico (Valor Econômico 2002). Since big retail’s path to growth (especially for latecomers) often involves acquisitions, Walmart began to make its competitors uncomfortable in 2003 when it bought out the BomPreço chain for R$676 million (about US$218.64 million). At the time, BomPreço was the largest retailer in northeast Brazil, rated third in the ranking of the Brazilian Supermarkets Association (Associação Brasileira de Supermercados, or ABRAS).

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Immediately afterwards, Walmart began expanding to the south and the southeast with the acquisition of 140 stores of the Sonae Group for R$1.7 billion (US$550 million). This acquisition, the largest buyout in the Brazilian economy in 2004, enabled Walmart to bring into its fold the BIG, Mercadorama, Nacional, and Maxxi brands. In 2005 and 2006, Walmart and Carrefour contended fiercely for second place in the Brazilian market (within an expanding economy), with the U.S. chain briefly taking over second place, based on recent acquisitions, in 2006. By 2007, Walmart was overtaken again by Carrefour, and as of late 2014, Walmart stood third in market share in the Brazilian market. In 2006, the company expanded to the Federal District (the city of Brasília), Goiás (in the center-west), and Espírito Santo (in the Southeast). In 2007, the fi rm ventured into e-commerce in Brazil (Valor Econômico 2007) and also launched its “Generics” program for the sale of low-cost drugs. In 2008, the company extended operations further into the centerwest region, opening its fi rst stores in Mato Grosso do Sul (Walmart 2017). The post-2008 economic crisis in the Global North did not hit Brazil hard, in part because of what one study (ILO 2011) praised as a countercyclical “income-led strategy” of stimulating the growth of wages—starting with the legal minimum wage, which grew by 72.3 percent in real terms between 2003 and 2014 (DIEESE 2014)—and increasing conditional cash transfers to the poor under the Bolsa Família antipoverty program as well as access to consumer credit (ILO 2011). This strategy, together with the presence from 2002 onward of Workers Party national governments linked closely to CUT, created an environment conducive to wage bargaining and real wage gains, an important contextual element that shaped—if by no means determined—the evolution of labor relations at Walmart. In 2009, ninety-one new stores were opened, and simultaneously the Feel Good (SentirBem) line of own-brand products was launched, just after the launch of another own-brand line of goods, Good Price (BomPreço) (Walmart 2014). In that same year, the parent company announced its intention to concentrate new global investments in the Brazilian and Chinese markets (Valor Econômico 2009). In other important developments, the company launched the “100 Women in Leadership” (“100 Mulheres na Liderança”) trainee program in Brazil in 2011, with the stated goal of “preparing women for positions as directors and general managers throughout Brazil” (Valor Econômico 2011). The next year, some U.S. legislators denounced the reported spread of what they saw as practices of bribery and corruption in Walmart Mexico—aimed at speeding up store siting and construction and maintaining

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the pattern of aggressive expansion of stores—to Brazil and China (Valor Econômico 2012). Between 2012 and 2014, Walmart spent US$439 million investigating fraud allegations overseas, including in Brazil, but as of December 2014, no outcomes had been divulged publicly (Vaz 2014). In six years, the number of stores under the Walmart brand almost doubled in Brazil, from 302 in 2006 to 547 in 2012. It is worth noting that the company maintained its status in Brazil as a privately held company, despite this growth, at a time when initial public offerings by expanding companies were becoming more frequent with the expanded Brazilian stock exchange.

institutional constraints and opportunities for walmart in brazil The retail and wholesale sector in Brazil has become increasingly concentrated, whether through the actions of the originally nationally owned Pão de Açúcar group (Companhia Brasileira de Distribuição) or because of the entrance of two foreign chains into the country, with Carrefour in 1975 and Walmart in 1995. Concentration occurred through both acquisitions and organic growth within each of the three major chains, as well as through diversification of the products and services sold. The “Club of Three”—a term that we use to refer to the major chains in terms of sales revenue for nearly a decade based on the rankings issued periodically by the Brazilian Supermarket Association—recorded gross sales of R$127.6 billion (approximately US$41.27 billion) in 2013 (Associação Brasileira de Supermercados 2014a, 2014b), with a combined market share of 55.4 percent among the 500 largest companies in the sector.11 Each supermarket chain followed a distinctive trajectory, but all three had a similar pattern of exponential growth—the Companhia Brasileira de Distribuição (which began as a small candy shop in the 1940s) is currently the largest company in the sector, with gross sales of R$64.5 billion (US$20.86 billion) in 2013 and almost 2,000 stores and shares traded on the New York and São Paulo exchanges. Moving early toward internationalization, Carrefour opened its fi rst store in the city of São Paulo in 1975, and though it had only 241 stores in 2013, its total gross sales were R$34 billion (US$11 billion) that year. Walmart Brasil stands in third place, with gross revenues of R$28.5 billion (US$9.22 billion) and 544 stores (Associação Brasileira de Supermercados 2014a; Grupo Pão de Açúcar 2014; Carrefour 2014; Tibola 2009; Walmart 2017). Table 1.1

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Table 1.1. Rankings of Gross Sales Revenues of Major Supermarket Retailers in Brazil, 2006–2013 Gross Revenues (in Billions of Reals) and Market Ranking Company

2006

2007

2008

2009

2010

2011

2012

2013

Companhia Brasileira de Distribuição (Pão de Açucar/Casino)

16.5 1st

18.8 2nd

20.9 1st

26.2 1st

36.1 1st

52.5 1st

57.2 1st

64.4 1st

Carrefour

12.9 3rd

19.3 1st

22.5 2nd

25.6 2nd

29.0 2nd

28.8 2nd

31.5 2nd

34.0 2nd

Walmart Brasil

12.9 2nd

15.0 3rd

17.0 3rd

19.7 3rd

22.3 3rd

23.5 3rd

25.9 3rd

28.5 3rd

Source: Associação Brasileira de Supermercados (ABRAS, Brazilian Supermarket Association), http://www.abras.com.br/ (accessed July 16, 2014).

shows the evolution of gross sales in the sector from 2006 to 2013, according to the ABRAS ranking. As is evident from the table, despite operating for twenty years in Brazil, Walmart has remained in only third place in the market since 2007. Room for further concentration of the supermarket sector has declined or disappeared, and the Club of Three TNCs now compete among themselves for market share in Brazil within an overall market that, at least until 2014, was growing substantially and had many regional players and a few other national players. The gap between the Club of Three and all other companies in the sector is illustrated by the 2013 ABRAS rankings: whereas Walmart had gross revenues of R$28.5 billion (US$9.22 billion), the next company on the list, Cencosud Brasil Comercial Ltda., had gross revenues of only R$9.8 billion (US$3.17 billion) (Associação Brasileira de Supermercados 2014a). There are several dimensions to the evolving national and local institutional arrangements within which Walmart operates, and they represent a complex mix of constraints as well as opportunities. One dimension is the nascent system of antitrust and competition policy organized around the Administrative Council of Economic Defense (Conselho Administrativo de Defesa Econômica, or CADE), which was set up in the mid-1990s as one part of market reforms to check abuses of market power. CADE reviews competitive behavior and takes the punitive actions against eco-

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nomic actors allowed under the terms of administrative law, based on violations specified in the Law for the Defense of Competition (Lei de Defesa da Concorrência) of 1994. For instance, in 2002, CADE found that the concentration of chains by the Dutch group Royal Ahold (which would later sell the G. Barbosa chain to Walmart) could harm the consumer and undermine competition in two cities, Salvador and Feira de Santana (Valor Econômico 2003). In 2005, CADE prohibited Walmart from acquiring the BomPreço and G. Barbosa store networks in Aracaju, the capital city of Sergipe state, because together they constituted 90 percent of local retail commerce (Valor Econômico 2005). Moreover, the combined effort of the large supermarket chains in 2002 to boycott credit card companies failed when countered by a CADE ruling based on the same law (Valor Econômico 2002). A second dimension of the institutional arrangements that enable and constrain Walmart’s strategy and behavior is related to the shifting labor relations framework. And a third, non-institutional factor that has shaped fi rm strategy and behavior is internal competition within the Club of Three, which has been particularly fierce. Pão de Açucar/Casino was already planning, by 2003, to build new stores in northeast Brazil in order to limit expansion in that region. Walmart moved to expand in the northeast after its failed effort to buy the G. Barbosa chain, which was strong in that region and was for sale. Following that same expansion strategy, the American giant had acquired the Sendas chain in the state of Rio de Janeiro (Valor Econômico 2003). Moreover, the Club of Three were the only chains to present proposals in 2006 to buy the Atacadão network of stores, which were acquired in the end by the Carrefour group (Valor Econômico 2006, 2007). The share of the supermarket sector in Brazil’s GDP has remained constant during the last decade at around 5.5 to 6.5 percent (Associação Brasileira de Supermercados 2014b). The retail sector in particular has been strong in terms of employment: according to the latest data from the Brazilian national statistics agency (Instituto Brasileiro de Geografia e Estatística 2014), retail employed 17.2 million people nationwide and wholesale employed 1.7 million. According to the same agency, one in five wage-earners in the country was employed in the commercial sector as a whole in 2012; 38 percent of that total had a workweek longer than the legal maximum of forty-four hours, and two out of three workers had earnings equal to or less than the equivalent of two minimum wages. In other words, commerce as a whole, besides concentrating income and wealth in a few hands, continued to offer precarious jobs (as measured by job secu-

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rity) and relatively low wages, even amid considerable drops in income inequality and income growth at the bottom of the income spectrum in Brazil since the mid-2000s. In 2011, Walmart launched, belatedly, the business strategy of “everyday low prices” (preço baixo todo dia, or PBTD) in Brazil with the stated aim of selling to the client products with prices that are lower and more stable than those of competitors, always achieving customer savings when the sale is completed. In order to sustain that strategy, the company also must operate with Everyday Low Prices (Custo Baixo Todo Dia), seeking better means of negotiating with suppliers and greater efficiency in processes in order to be able to offer lower prices and maintain the business’s sustainability. (Walmart 2013, authors’ translation)

The PBTD strategy, in principle, is the same as that adopted in the United States. Walmart’s mantra of “everyday low prices”—an effort to distinguish itself from the constant time-limited “sales” and “discounts” of its competitors—has roots in the “rural, patriarchal and Protestant culture that famously characterized Walmart from its earlier days as an insular Ozark retailer” (Lichtenstein 2009, 53). This cornerstone philosophy led to what Charles Fishman (2006) called the “Walmart effect”: the company’s ambivalent impacts on society as its “everyday low prices” for the consumer, falling at an impressive rate over time, combined with its profoundly anti-worker and anti-union policies of offering wages below market norms, relying on part-time workers with shifting work schedules attuned to management’s needs, and providing little or no health coverage or other benefits. Returning to the discussion of institutional constraints and opportunities, Walmart’s PBTD strategy as it has taken shape in Brazil has been less aggressive and, as we would argue, more culturally and institutionally embedded. The model of just-in-time logistics and sourcing perfected in the home country—based on the concepts of maintaining no buffers and minimizing inventory—leads to extreme labor flexibility within the company’s stores and tends to promote such flexibility throughout the supply chain. Arguably, this model is made possible in the United States by a set of legal and informal labor and business norms that give powerful union avoidance tools to non-union employers such as Walmart (in the country at large and especially in “right to work” states) and create a laissez-faire environment for interfi rm and buyer-supplier relations in which abuses of

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oligopolistic power by buyers are tolerated or encouraged. Moreover, the union substitution (or union avoidance) strategies practiced by large companies that have perennially avoided unionization of their workforces also have a strong history in the United States and have facilitated Walmart’s execution of its extreme version of this strategy (Kochan 1980). Under this sourcing and logistics system, and in the context of U.S. business law and labor relations norms, the legal fiction can be perpetuated that those who are hired by subcontractors or employment agencies and often work side by side with Walmart’s own employees (for example, in transporting goods from loading docks to in-store locations and in stocking shelves) are not dependent workers and can thus be governed by separate wage and other contractual and de facto labor norms despite the powerful ways in which the principal (Walmart) shapes these norms for its “agents” (its suppliers). In Brazil, however, there have been distinct institutional limits on Walmart’s tendencies, and these constraints grew in particular over the course of the 2000s. On the one hand, unions are pervasive in Brazil, and the presumption is that formal-sector employers, particularly large fi rms, must deal with them and do not have a non-union strategy as a legally or politically viable option. In Brazil, a single union has a monopoly of representation for purposes of collective bargaining within its occupational category (in this case broadly defined “commerce”) and the territorial jurisdiction of a municipality or set of contiguous municipalities, though it is up to workers to make their own individual decision on whether to actually join the union and pay dues. In practice, this means that “collective bargaining coverage” is much higher than “union density” (unionization rates, or density) in Brazil as a whole and for any given union, since bargaining agreements are binding for all workers in the fi rms making up the bargaining unit, whether or not they pay voluntary union dues—not to be confused with the obligatory, government-collected union tax—and are thus members. Thus, 14.78 percent of the workers across Walmart’s network of stores were members of unions from the CUT labor central alone (DIEESE 2013), yet in practice they negotiated on behalf of a significantly larger, albeit not clearly quantified, share of Walmart workers (that is, the total number of waged workers in the Walmart stores at which they had won union elections). Thus, for example, despite the fact that national union density stood at 20.9 percent of all wage and salaried (formal-sector, non-self-employed) workers in 2008, the collective bargaining coverage rate for about the same time (2007) stood at 60.0 percent (ILO 2011). Although obligatory membership in the monopolistic unions

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(the sindicato único or unicidade principle, as it is known) and the obligatory union tax have been obstacles to the country’s ratification of ILO Convention 87 regarding freedom of association, in some ways these obstacles actually facilitate union organization and activity and some degree of worker cohesion independently of the will of employers. In other words, in Brazil, even where managers adopt deliberate and aggressive anti-union practices, as occurs with Walmart in the United States, unions have greater freedom and room for maneuver. This freedom stems partly from legal protections and partly from the improved organizing and bargaining strategies of the more active unions to act on behalf of workers and to use their legal rights (such as the legal prohibition on fi ring union officials during their terms of office) to defend workers. Firms are thus obligated to recognize or acquiesce in the presence of the union and to bargain collectively, though at the same time they may and often do seek to limit the union’s voice at the workplace level and may try to stonewall negotiations and send disputes to the labor courts for resolution. On the other hand, over the course of the period since the early 2000s— in a context in which “the concepts of flexibility and deregulation of rights [were] on the wane in Brazil” after their mid- to late-1990s surge (De Andrade Baltar et al. 2010, 22)—the institutional context moved in favor of workers and unions in several senses. The enforcement activities of labor courts, a strengthened labor inspectorate, a unified tax collection and social security auditing apparatus, and the newly created office of public labor prosecutors (Ministério Público do Trabalho, or MPT) combined to put new pressures on fi rms trying to subvert the letter or spirit of labor laws in such areas as the (non)classification of de facto employees as de jure dependent workers and in relationships between principal fi rms and those to whom they outsource work. As Paulo Eduardo De Andrade Baltar and his colleagues (2010, 20–23) note: “Companies that outsource services have been held accountable when the contractor does not comply with labour laws. The recognition of accountability, or at least subsidiary accountability, [has] induced many companies to adopt preventive measures in order to avoid the accumulation of future labour liabilities.” A prime example from 2013 suffices to illustrate how the operation and activities of such legal bodies have helped enable and empower activist unions (and their regulatory allies) to pursue legal strategies to combat abuses of workers; it also suggests how such strategies can be complementary to union strategies focused on pressure and negotiations on wage issues, such as those described in detail later in this chapter. In October 2013, the Second Circuit of the Regional Labor Tribunal ruled against

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Walmart in the fi rm’s initially successful appeal of an earlier lower labor court ruling fi nding widespread violations of labor laws at company stores in the Federal District and three southeastern states—São Paulo, Paraná, and Rio Grande do Sul. The case had originally been brought by the MPT, an autonomous organization composed of career officials whose career incumbents frequently work closely with progressive unions (De Andrade Baltar et al. 2010; Coslovsky 2011, 2013). The ruling in this instance assessed a fi ne of R$22.3 million (about US$7.21 million) against the fi rm for “collective ethical damages” (danos morais coletivos), property damages (danos patrimoniais), and “discriminatory acts” against employees. The decision also required the fi rm to cease a number of documented violations of labor laws by: (1) recording hours worked faithfully, under penalty of a fi ne of R$5,000 (US$1,620) monthly per worker for each subsequent violation (in response to forced and unpaid overtime); (2)  eliminating the requirement that employees sing or dance “motivational hymns” (monthly fi ne of R$2,000 [US$650] per employee for violations); (3) allowing employees to leave their work stations to go to the bathroom (fi ne of R$1,000 [US$320] monthly per worker for violations); and (4) ending illicit subcontracting practices by which Walmart employees are supervised by outside fi rms or by which work functions reserved for the fi rm’s own employees by contract are performed by such external fi rms. The specific problem with this last practice had been a frequent blurring of functions and supervision between Walmart employees and the sales promotion agents employed by other fi rms who worked in the aisles of Walmart stores advertising specific brands’ products. While this ruling may seem familiar to U.S. observers familiar with the history of class action lawsuits against Walmart in its home country relating to issues such as gender discrimination, several features of this ruling in Brazil stand out: fi rst, the breadth of the issues covered by the ruling (issues must be more narrowly defi ned in U.S. class action suits); second, the fact that a public body initiated the legal proceedings through a specialized labor body; and third, the level of coordination between this public body and the unions in gathering information on the nature of the reported violations and thus bringing pressure on the fi rms. In the United States, a collection of individuals with similar claims is coordinated by specialized class-action lawyers in general-purpose courts and thus the extent of redress, the compensation, and the measures required to correct the practices backed by the force of further fi nes are much more limited. We argue that it is possible to distinguish two moments in Walmart’s late entry into the Brazilian market. The fi rst phase, well characterized by

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the research of the IOS (2000), showed signs of an aggressive management style with pervasive disrespect for worker rights and the principles of gender and racial equality. The fi rm’s second phase in Brazil began when it initiated a period of acquisitions and grew rapidly in a few years, particularly in the northeast, starting in 2004. It was this activity during the second phase that led unionists to perceive the necessity of at least minimally centralizing collective bargaining with the American company. The new management culture that began to surface in 2004 led the president of the Commercial Workers Union of the City of São Paulo to state in 2005: “There is no doubt that the treatment given to workers in Brazil is better than over there, in the U.S.” (Valor Econômico 2005). At the same time, he also attributed the low union membership rate in Walmart stores at that time to the company’s lack of openness to dialogue. That seemingly contradictory reality—greater openness to dealing with unions but with severe challenges still to be overcome in Brazil, such as the recent labor court case just discussed here—is explained in part by the fact that the Brazilian institutional environment incentivizes and even requires some level of bilateral negotiation with fi rms, including fi rms that are reluctant. As a result, fi rms may come to perceive the benefits of resolving or preventing confl ict and regularizing HRM/LR policies. As a CONTRACS leader put it: I wouldn’t say [Walmart is] less belligerent [in Brazil than in the U.S.]. I would say that here it’s not as easy to apply “Walmartization” because our laws impose some conditions and laws in the U.S. are innocuous. There they don’t have labor laws or a formalized collective bargaining contract to give more security to workers and the fi rm takes advantage of that situation. So, compared to the U.S., we are much better off because our laws help guarantee at least some minimal conditions so we [the unions] can take legal actions and punish Walmart, something that is very difficult to do in the United States.12

At the same time, such traditional collective bargaining is overwhelmingly about wage and compensation issues in Brazil (Cardoso and Gindin 2009), and it remains difficult to address work rules, work organization, and working conditions more broadly through collective or fi rm-level bargaining. Walmart takes advantage of its unilateral “freedoms” to organize the workplace in Brazil’s labor relations environment and benefits from the lack of statutory or obligatory forms of workplace-level worker organization and representation, as there is in other countries where it has

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expanded, such as Germany. Walmart also benefits from the differences between the commercial sector, which has no strong practice of worker representation, and some heavy manufacturing sectors and fi rms that have established “factory commissions” and “unified representation systems” that are recognized and acknowledged by employers and, though linked to unions, are chosen directly by workers at each fi rm and in each factory. Thus, the collective action of unions, federations, and national union confederations, along with the activities of international allies—in parallel to and often in complementary fashion to regulatory institutions— has had, to some degree, an important constraining effect on the “everyday low prices” model, or the Walmart effect. To call on employers to “sit down at the bargaining table” (chamar para a mesa de negociação), a phrase that is part of Brazilian union jargon, brings to light an important dimension of employment relations in Brazil.

expanding institutions of firm-level bargaining: the contracs The National Confederation of Commercial and Service Workers (CONTRACS) was formed in 1987, in the wake of the founding of the CUT labor central (in 1983). It was initially a national department within CUT, as were other sectoral bodies, with the mission of representing CUTaffi liated commercial workers nationwide and competing with CUT’s rival labor central Union Force, which had among its affi liates the strongest and largest commercial union, the São Paulo (city) commercial workers union. In 1993, the department became a confederation and also took on the role of representing service-sector workers (CONTRACS 2014). In 2011, CONTRACS was legally recognized by the Ministry of Labor and Employment (MTE) and began to benefit from the 2008 law recognizing independent national labor centrals by receiving the compulsory union taxes collected nationally from workers to fund unions.13 CUT unionists had accumulated experience since 2001 in dealing with TNCs in various sectors, having partnered with the Dutch labor central Federatie Nederlandse Vakbeweging (FNV) through the joint project “Taking on the Multinationals” (“Ação Frente às Multinacionais”), known as CUT-Multi. The project’s aim was to organize workers into company-specific national networks represented by fi rm-level national union committees, a newly created type of inter-union entity. In 2003, CUT asked CONTRACS to choose three priority TNCs in the commer-

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cial sector in which to undertake such network building. Based on Katiuscia Moreno Galhera’s interviews with union leaders in 2014, the criteria for the choice of fi rms were as follows: the size of the fi rm’s investment; the presence of CUT rank-and-fi le workers; the fi rm’s history; the degree of its expansion into Brazil; and the degree of the fi rm’s current and potential labor abuses. On this basis, the CONTRACS chose Walmart and Carrefour in the supermarket sector and C&A, the Dutch clothing retailer. The official objectives of the National Walmart Union Committee— also known as the Walmart union network—were to unite representatives from labor unions throughout Brazil, exchange information within Brazil and abroad, open a channel of dialogue with the company in Brazil, and promote cooperation and solidarity both domestically and internationally. To that end, the Walmart union network set out to promote respect for core labor rights (as defi ned by the International Labor Organization [ILO] and recognized by the Organization for Economic Cooperation and Development [OECD]); unity and solidarity among unions; support and cooperation in seeking national collective bargaining for Walmart workers in Brazil; the implementation of decisions adopted in its National Encounters (Encontros Nacionais) meetings; discussions regarding strengthening and maintaining the committee’s links with union leaders, the rank and fi le, and company officials in Brazil; the establishment of a network of contacts with unionists in other countries with an eye toward joint actions; development of means of self-support and fi nancing; the joint elaboration of a set of negotiating demands; and a restructuring of the framework and agenda of negotiations with the company. In this initial stage, only unions affi liated with CONTRACS-CUT were allowed to take part in the network (CONTRACS 2004). According to a union leader, the rationale was to allow CONTRACS to build the novel experience of a company-level workers’ network and ensure CUT unionists’ leadership role prior to inviting commercial worker union representatives from other labor centrals to participate in the network. During the fi rst phase, until the network could be strongly established and CONTRACS was organizationally able to assume its leadership role, local confl icts were resolved and collective bargaining contracts were negotiated at the local level by each trade and commerce workers’ union (sindicato dos empregados no comércio, or SEC). In the CONTRACS archives, for instance, we found many collective agreements regarding profit-sharing (PLR) between 2004 and 2006, signed by the human resources department of the fi rm and local unions.14 As noted earlier, Law

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10.101 had established the requirement that unions be included in negotiations to determine the amount of obligatory annual profit-sharing, whether in fi rm-level bargaining accords or through other types of bilateral arrangements. This legislation had occasioned the opening of many new negotiating venues across different occupational categories in the Brazilian labor force (Cardoso and Gindin 2009). Although these were local PLR agreements specific to each city’s stores, they exhibited many similarities given that the fi rm set the terms, such as the lack of mention of any specific targets (regarding profits, revenue, productivity, or other indicators) and the characteristics of the profit-/resultssharing tabulators. These clearly benefited management and white- collar personnel much more than blue-collar workers: the former’s PLR was at least the equivalent of one month’s salary, while ceilings ranging from 20 to 40 percent of their (already lower) normal monthly wages were imposed on PLR for the latter. As noted before, it should be remembered that in Brazil legal minimum wages were increased substantially from the early to mid-2000s under official national wage policies (a 72.3 percent rise in real terms from 2003 to 2014); still, wages paid at many Walmart stores remained barely above the legal minimums.15 Moreover, it is noteworthy that, since Walmart is a privately held company in Brazil, the various stakeholders do not have access to detailed company accounting records, which makes it difficult to verify the amounts on which profitsharing is supposed to be based. Though the fi rst steps toward the creation of the Walmart union network were taken in 2003, CONTRACS was unable to hold the fi rst meetings with the company to discuss a national profit-sharing framework until 2004. According to the minutes of those meetings, the company recognized the importance in principle of signing a national accord on profit-sharing, though the terms of the agreements for 2006 were set entirely by the fi rm. However, this national negotiation on a single PLR accord for all Brazilian Walmart workers did not take place. Meanwhile, CONTRACS began to consult the Inter-Union Department for Statistics and Economic Studies (Departamento Intersindical de Estatística e Estudos Econômicos, or DIEESE), a research institute, for its technical and data analysis capacity to help negotiate an improved agreement. As revealed in a CONTRACS internal document, a meeting of Walmart and Carrefour worker representatives and DIEESE officials sought agreement on a framework depicting the various forms and payment values of the existing PLR schemes, with an eye toward having a comparative reference point and elaborating a joint proposal to negotiate with Walmart. They debated the following basic items to be sought in PLR accords: the basis

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for remuneration; the amount to be distributed; the form of distribution; the point system for various indicators of economic performance; eligibility criteria; monitoring norms; access to information; rules and criteria for verifying the fulfi llment of targets; and the period of payment and length of the agreements. It was agreed that CONTRACS, together with the network coordinators and DIEESE, would formulate a draft PLR framework based on a series of tasks with specific deadlines (CONTRACS 2006a). Among the other priority agenda items in that time period were combating the company’s anti-union policy “impeding workers and unions from mobilizing for better working conditions”; ending the hours’ bank system of fi rm-defi ned flexible workweeks; preventing occupational illnesses; and working together with non-CUT unions representing Walmart workers to restrict working on Sundays and holidays, this last issue being a longstanding demand of CUT commercial unions (CONTRACS 2006b). At this point a dialogue with the fi rm was established. In fact, in its newspaper, the confederation announced to its rank and fi le “the recognition of the [Walmart workers] committee by Walmart, which attended the requested meetings and is analyzing the negotiating framework (pauta) proposed by the union,” as well as the “opening of a dialogue with the multinational, which is known for its intransigence and unwillingness to negotiate” (CONTRACS 2006c). The negotiating process was by no means smooth, but the pattern of “confl ictual cooperation” that we emphasize here gradually took shape in unionist-Walmart interactions during this time period. The timetable negotiated between the fi rm and the confederation was not adhered to, even though talks continued. A 2008 internal CONTRACS document notes a “pause in the process of negotiating PLR, since the company did not comply with what it had agreed to” (CONTRACS 2008a). The emails exchanged between the confederation and the fi rm demonstrate, moreover, that in the PLR accords of previous years the company at fi rst had attempted to lower the thresholds by excluding outsourced workers (terceirizados) and temporary workers and had also tried during 2008 to keep the same model of limited profit-sharing that unions had resisted in previous years. In 2008 the confederation tried to create more space for negotiation through a new research project by the IOS to reevaluate conditions in Walmart stores. Yet the company did not accept the key unionist demand that either a wage floor be established nationwide for all stores or all contracted workers be covered under PLR bonuses (CONTRACS 2008b). In 2010, CONTRACS, UGT, and the Federation of Workers of the State of São Paulo (Federação dos Empregados no Comércio do Estado de

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São Paulo, or FECESP) reached a broad collective agreement on PLR with Walmart. The accord established that 70 percent of results-sharing would be based on fi rm operations and performance and 30 percent would be based on worker performance, including that of administrative employees. This agreement set a ceiling on the amount to be shared equivalent to three times the national monthly minimum wage for managerial and supervisory personnel, one minimum wage for other full-time positions (with a minimum amount of R$650, or US$210), and one minimum wage for parttime workers (with a minimum of R$350, or US$113.20) (CONTRACS 2010). Besides the 2010 PLR accord, another important labor victory was a 2013 meeting between the company and some ideologically diverse union entities. Members of CONTRACS, Union Network International (UNI), UGT, and Union Force were all present at this meeting. According to the official minutes, several issues were discussed. On the right of workers to hold a dialogue with their union in the workplace, the fi rm replied that there was “no directive against unions or prohibiting the union’s entry into the workplace.” On the “multiplication of tasks” (desvio de função) and irregular time card management, the company said that it had sent an internal circular to its stores clarifying the company rules. Also discussed were the problems with legally registering collective contracts (homologação); delays in these registrations and retention of legal documents beyond specified time limits were violations of labor laws. The company responded by attributing these delays to optimization of logistical processes. The unionists and the company representatives also discussed differences in the wages being paid to workers with the same job title and the company’s disrespect for the physiological needs of workers; cashiers, for instance, had to wait a long time before they could go to the restroom. Another problem area discussed was irregular ergonomics in the workplace and related violations of statutory health and safety standards for work in the commercial sector. Equipment that presented risks to workers and/or clients and “moral harassment” (assédio moral) were also discussed; on these issues, the fi rm promised to get back to the unionists with a formal response. Finally, the meeting addressed excessive working hours; the company made promises that it would seek to address the problem (CONTRACS 2013).

conclusion In this chapter, we have problematized the evolution of Walmart’s posture toward unions and labor relations from the time of its entry into

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Brazil in the mid-1990s to the period of the mid-2000s through 2014, when it accepted a national union network as a recognized interlocutor and engaged in serious bargaining over contentious issues. We have contrasted this new departure with the reluctance of one of its two major rivals, Carrefour, to negotiate in good faith with a national union network set up by the same unions and interested in the same set of issues.16 Much of our attention has been focused on the issue of profit-sharing, in part because this has become an unlikely centerpiece of employment relations in Brazil in many respects since the mid-2000s, particularly at large fi rms with a national presence. It is important to understand that the system of municipal-level collective bargaining over annual wage increases— in this case affecting individual Walmart stores or multiple stores only when they are in the same municipality—is fragmented not only territorially but also, in some instances, by the presence of different contract renewal dates (“baseline dates,” or data base) as well as by Brazil’s union structure of multiple, competing labor centrals. In this context, progressive unions have seen in the vague but legally mandated requirement that the terms of annual results-sharing be somehow negotiated a potentially powerful venue in which they could achieve, sector by sector and firm by fi rm, some difficult-to-reach historical objectives—namely, building alliances at the national fi rm level and unifying and leveling upward dispersed worksite-level wage norms across operations and a large and socioeconomically diverse country. What is more, other nonwage issues of work rules and everyday workplace relations were also increasingly dealt with—if not always resolved—through new national bargaining channels. However, such union agency has not been equally manifest across sectors and fi rms—as is evident with the Walmart-Carrefour contrast. Instead, considerable heterogeneity of outcomes has been evident in Brazil. We must also keep in mind that hopes for a more uniformly prolabor state under the PT were somewhat disappointed owing to the failure to implement the negotiated labor relations reforms discussed in the tripartite National Labor Forum early in Lula’s fi rst term, as well as to the fact that for most of the PT’s years in power the labor ministry was in the hands of the PT’s more conservative coalition allies. There was no broad, uniform labor upsurge. The context we are describing as influential was enabling—it opened new possibilities that innovative unionists could seize upon—but it was by no means determinative. The tenor of Walmart’s formal employment relations changed in important ways during the period of our research, even as many of its problematic and sometimes illegal workplace practices continued. Its new patterns of cooperation were characterized by the use of pressure as well

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as persuasion and deliberation, or what is referred to in the literature as “confl ictual cooperation.” We have made the case that this shift in fi rm behavior and labor-management relations reflected an institutional environment that not only increasingly constrained the company’s unilateral behavior but also institutionally enabled unions to denounce Walmart abuses to labor authorities and organize Walmart workers more effectively for collective action and national-level bargaining. Clearly, Walmart perceived some benefits in working through national-level negotiations and not having to replicate local negotiations in a costly manner. We are influenced by recent perspectives on institutional change and continuity, which conceive of institutions not simply as external norms but rather as sets of norms and practices that are themselves subject to strategic actions that can modify those institutions, incrementally or gradually. As such, they may have a complex mix of constraining and enabling properties at any given moment in time. Post-corporatist or hybrid corporatist-pluralist union institutions in Brazil—with the continued principle of monopolistic representation and the union tax and the institutional bias toward having some kind of union representation in formal-sector fi rms and workplaces—made union avoidance or union substitution strategies such as those followed by the fi rm in the United States difficult if not impossible. If these institutions ensured that unions at least had a foothold in Walmart’s Brazilian operations, they also kept unions in principle as a mostly external presence to the actual workplace and fragmented collective bargaining by keeping it at the territorial level. Overcoming these institutional constraints and creating new national fi rm-level labor coordination institutions and then labor-capital bargaining institutions, including ones that would give them more leverage over store-level disputes and fi rm abuses, were important projects of CONTRACS and the CUT-affi liated commercial workers unions with Walmart members, which increasingly worked in partnership with commercial unions from rival labor centrals. In general, the rolling back of state corporatism’s repressive aspects since the 1988 constitution, while preserving some of its core principles of organization that preserve unity and fi nancial solidity, has created a less restrictive environment for unionists. Within this shifting and more permissive environment, labor centrals have created their own sectoral structures; unionists have at times joined with state officials and fi rms to try to revive struggling regions and economic sectors through novel negotiating “chambers”; and unionists have sought to engage multinational companies at a national level. In short, unionists have worked on expanding the institutional forms and agenda of negotiations with employers beyond traditional

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collective bargaining, with its narrow agenda, set timelines, and continued specter of labor court mediation. Moreover, the heightened activism of labor inspectors and labor prosecutors, though an important if blunt instrument for checking the worst employer abuses, does not in and of itself transform employment relations. At the same time, it is important to consider that Walmart also no doubt perceived and took advantage of certain possibilities conferred by the shifting institutional and regulatory environment. For example, the fi rm initially tried to keep negotiations over wages and profit-sharing fragmented as much as possible and sought to capture the corporate “high ground” on social responsibility issues such as environmental concerns or forced labor within its supply chain, even as it resisted improvements in work rules and labor standards within its stores. Much like Carrefour and other companies in the commercial and other sectors, Walmart took advantage for several years of the vagueness of PLR negotiating mandates to impose the terms of annual bonus schemes— obeying the letter but defying the spirit of the law. As future research examines the period of political and economic crisis in Brazil since 2015—marked by steep recession, a political crisis that has shaken the political system, and the impeachment of a sitting president— and looks forward, it will be important to be attentive to the durability of the nascent bilateral negotiating institutions of the period under study. How might unionists use them effectively to centralize overall collective bargaining and level general wage norms upward as well as combat the persistent workplace-level abuses evident over a range of issues of everyday in-store relations? Moreover, the primary challenges of labor relations have shifted from distributing the benefits of growth and expanding consumption to allocating the costs of downsizing and restructuring, not only at Walmart but in the supermarket and commercial sectors more generally and in Brazil as a whole. Yet it remains striking that such high-level negotiations on an annual bonus income encompassing all the company’s employees in the country and spanning the various labor centrals to which they were affi liated could become a reality. That outcome would have seemed esoteric just a decade earlier in the evolution of the fi rm’s labor relationships in Brazil. Thanks to Walmart unionists’ pressure and clever maneuvering within a shifting national institutional environment, the giant U.S. retailer moved a substantial distance away from its initial intransigence toward engagement with labor unions in Brazil, and unionists found ways to start chipping away at the company’s long-standing mistreatment of its workforce. It remains to be seen whether these were small cracks in the wall or deep fissures that bespeak deeper transformations.

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notes 1. The authors wish to thank the editor of this book, as well as two anonymous reviewers, for very helpful feedback for our revisions. We also wish to acknowledge an anonymous informant from the  Commercial Workers Confederation (CONTRACS), as well as its member organizations; the National Committee of Workers of the WalMart Group; the X Global Labour University Conference (2015); and the Social Observatory Institute. All translations from the Portuguese in this chapter are by the authors, and all exchange rates are based on the official exchange rate between the real and U.S. dollars as of February 20, 2017 (see http://www4.bcb.gov.br/pec/conversao /conversao.asp). 2. Brazilian laws reflect a corporatist legal structure set up in the 1930s. The liberalization of union organizational practices that began in the 1970s was intensified by the many formal government oversight strictures enacted by the democratic 1988 constitution, and moves were made to legalize and then recognize inter-union organizations in the 1990s and 2000s. Thus, the pyramid of union organization in Brazil encompasses base-level unions (organized not by company but by occupational category within a territorially defi ned municipality, somewhat similar to a county in the United States), federations that aggregate unions within the same category (sector) by state, confederations that do the same at the national level, and three competing labor centrals that are inter-union, cross-sectoral organizations. The left-leaning CUT is the largest and most representative of the three centrals and has been linked to the Workers Party (Partido dos Trabalhadores, or PT) since its foundation, though it has had links to other left parties at various times. The center-right Union Force (Força Sindical) also has important national political linkages; its historical leaders are currently federal deputies. UGT, a more recently formed entity, is more difficult to situate ideologically; it is the labor central with the largest presence in the commercial sector. The newest labor central is New Workers Labor Central (Nova Central Sindical de Trabalhadores, or NCST), established in 2005. 3. The term “confl ictual cooperation” was coined by Wolfgang Streeck in his discussions of labor-management relations in Germany and the former West Germany (Streeck 1992). 4. That said, it should be noted that despite being a publicly traded company, Carrefour was equally unwilling to cooperate with research on its compliance with international labor standards and domestic labor laws (Binotto et al. 2006). 5. Such member dues are distinct from the “union tax” that, by law, is withheld from all workers’ paychecks and then passed on by the government to unions, a remnant of the CLT corporatist system. 6. In organized workplaces in Brazil, “collective conventions” (convenções coletivas, or collective bargaining agreements) set the terms of employment across the commercial sector in a given municipality, including base wages and aspects of working hours such as the “hours’ bank” system (bancos de horas) of adjustable weekly work averaged out to a fi xed and set weekly amount that smooths out wages even as weekly working hours fluctuate. 7. There is a vast literature on these debates, which emerged in the 1990s in the context of increased cognizance of distinct national varieties of capitalism and their implications for the overseas expansion of home-country multinationals reflecting as-

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pects of these varieties. A few examples, with an emphasis on the auto sector, will suffice: Berger and Dore 1996; Samuels 2014 [1990]; Kenney and Florida 1993; Deyo 1996; Kochan, Lansbury, and MacDuffie 1997. A more recent work (Durand and Wrigley 2009) explores and helpfully reviews these debates, in large part in the context of the global expansion of service companies. 8. The Bolsa Família is a monthly fi nancial benefit for families living in poverty or extreme poverty; see Federal Law 10.836, January 9, 2004. 9. Examples of flexibilized labor regulation include the New Law of Bankruptcy and Judicial Recovering (A nova Lei de Falências e de Recuperação Judicial), which protects fi nancial companies at the expense of workers’ rights; Constitutional Amendment (Emenda Constitucional) 41/2003, which substantially changed the retirement system for the public sector; the National Program for the First Job (Programa Nacional de Primeiro Emprego), which flexibilized dismissals for young workers; and the allowance of short-term contracts for rural workers (Krein, Santos, and Nunes 2012). Examples of strengthened labor regulation include the non-urgency, as defi ned by Lula, over the congressional law project, which would allow companies to give preference to private negotiated agreements in lieu of compliance with labor legislation; new regulation for internships; the inclusion of freelancers in the social security system; the extension of unemployment insurance for workers affected by the 2008 crisis; and the promotion of regulatory national institutions, such as the Labor Justice (Justiça do Trabalho), the System of Fiscalization (Sistema de Fiscalização), and the Public Ministry of Labor (Ministério Público do Trabalho) (Krein, Santos, and Nunes 2012). 10. Both issues are discussed in detail in an ILO study by Adalberto Cardoso and Julián Gindin (2009, 39–42). 11. All data are from Associação Brasileira de Supermercados. Combined market share is based on the authors’ calculations. 12. Interview with CONTRACS leader, July 12, 2014 (authors’ translation). 13. Law No. 11,648 of March 11, 2008, established that 60 percent of the union tax collected on all workers by the MTE—a legacy of the 1930s corporatist labor relations framework—would be passed on to local unions (sindicatos de base), 5 percent to the local unions’ confederations, and 10 percent to the national labor central to which the local unions belong, with 10 percent kept by the MTE. Historically, funds were passed on only to the monopolistic, officially sanctioned and created national confederation (of industry, of commerce, and so on) and its state-level federations, while independent labor centrals (centrais sindicais) were outlawed. In the late 1980s, the newly formed centrais created in the twilight of the military regime were “decriminalized” following the democratic transition and new democratic constitution. 14. In the CONTRACS archive on June 12, 2014, we accessed the fi rm-level bargaining agreements (print documents) dated 2004–2006 and signed between the SECs and Walmart from the following municipalities: Contagem (2004), Aracaju (2004), Salvador (2004 and 2005), Campina Grande (2004), João Pessoa (2004 and 2005), Osasco (2004), Teresina (2005), Espírito Santo (2005), São Paulo (Federação, 2006), Florianópolis (2006), and Bahia and Itabuna (2006). 15. For instance, the official minimum wage increased from R$260 (US$84.09 at mid-2014 exchange rates) per month in 2004 to R$350 (US$113.20) per month in 2006. The wage tabulator for Teresina, the capital of the northeastern state of Piauí, shows that wage levels for most occupations in the Teresina Walmart store were set at

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R$365 (US$118.05) for 2005, while the official minimum wage for the year 2005 was R$300 (US$97.03). 16. While exploration of the reasons for Carrefour’s more intransigent approach are beyond the scope of this chapter, elsewhere we are pursuing hypotheses about the impact of the company’s long-standing confl icts with unions in Brazil as well as in France and the ineffectiveness of the company’s global framework agreement as a tool to strengthen union interlocutors.

references Associação Brasileira de Supermercados. 2014a. “Ranking ABRAS/SuperHiper 2014 apresenta as 20 maiores supermercadistas do país.” São Paulo: Associação Brasileira de Supermercados. Available at: http://www.abras.com.br/clipping.php?area=20 &clipping=44032 (accessed July 15, 2015). ———. 2014b. “Uma década de expansão.” São Paulo: Associação Brasileira de Supermercados. Available at: http://www.abrasnet.com.br/economia-e-pesquisa/ranking -abras/os-numeros-do-setor (accessed February 20, 2017). Berger, Suzanne, and Ronald Dore. 1996. National Diversity and Global Capitalism. Ithaca, NY: Cornell University Press. Binotto, Paula Alexandra Serafi ni, Mariângela Rangel, Jacques Penido, Leonardo José Ostronoff, Ana Yara Paulino, and Clóvis Sherer. 2006. “O Trabalho nos supermercados.” Florianópolis: Sociedade Brasileira para o Progresso da Ciência. Brazil, Presidency of the Republic of. 2000. “Presidência da República—Casa Civil— Subchefia para Assuntos Jurídicos.” December 19. Available at: http://www .planalto.gov.br/ccivil_03/leis/l10101.htm (accessed February 20, 2017). ———. 2004. “Presidência da República—Casa Civil—Subchefia para Assuntos Jurídicos.” January 9. Available at: http://www.planalto.gov.br/ccivil_03/_ato2004 -2006/2004/lei/l10.836.htm (accessed February 20, 2017). Cardoso, Adalberto, and Julián Gindin. 2009. “Industrial Relations and Collective Bargaining: Argentina, Brazil, and Mexico Compared.” Working Paper 5. Geneva: International Labor Organization, Industrial and Employment Relations Department. Carrefour. 2014. “Trajetória Grupo Carrefour.” Available at: https://www.carrefour.com .br/institucional/grupo-carrefour/trajetoria?crfint=conteudo|grupo-carrefour|m -cntxt-100||trajetoria|2&cfrict=calhau. Colla, Enrico, and Marc Dupuis. 2002. “Research and Managerial Issues on Global Retail Competition: Carrefour/Wal-Mart.” International Journal of Retail and Distribution Management 30 (2): 103–111. Confederação Nacional dos Trabalhadores no Comércio e Serviços (CONTRACS). 2004. “Comitê Sindical Nacional dos Trabalhadores do Grupo Wal-Mart Brasil.” Internal document (print) obtained during authors’ fieldwork in São Paulo. ———. 2006a. “Relatório Wal-Mart-Carrefour-Reunião.” Internal document (print) obtained during authors’ fieldwork in São Paulo. ———. 2006b. “Seminario de Negociação Wal-Mart.” Internal document (print) obtained during authors’ fieldwork in São Paulo. ———. 2006c. “Jornal do Comité Sindical Nacional dos Trabalhadoes do Grupo WalMart—Lutando pela Globalização dos Direitos.” Bulletin 3. Internal (print) document obtained during authors’ fieldwork in São Paulo.

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———. 2008a. “Union Networks in Multinational Enterprises of CONTRACS-CUT.” Staff document (print). São Paulo. ———. 2008b. Email exchange between the director of Wal-Mart’s Human Resources and Labor Relations Department and the CONTRACS Department of International Relations (staff [print] document). São Paulo, March. ———. 2010. “Collective Bargaining Agreement—Profit and Results” (staff [print] document). São Paulo. ———. 2013. Minutes of the meeting of the UNI Walmart Brazil Network (staff [electronic] document). São Paulo. ———. 2014. “Histórico.” Available at: http://www.CONTRACS.org.br/conteudo/33 /historico (accessed July 21, 2014). Cook, Maria Lorena. 2007. The Politics of Labor Reform in Latin America: Between Flexibility and Rights. University Park: Pennsylvania State University Press. Coslovsky, Salo. 2011. “How Brazilian Prosecutors Enforce Labor and Environmental Laws: The Organizational Basis of Creative Problem-Solving.” Regulation and Governance 5 (1): 70–89. ———. 2013. “Flying under the Radar? The State and the Enforcement of Labor Laws in Brazil.” Oxford Development Studies 42: 190–216. De Andrade Baltar, Paulo Eduardo, et al. 2010. “Moving Toward Decent Work: Labour in the Lula Government (Reflections on Recent Brazilian Experience).” Working Paper 9. Global Labour University. Departamento Intersindical de Estatística e Estudos Econômicos (DIEESE). 2013. “Base CONTRACS X Distribuição das lojas da rede.” Internal document acquired during authors’ fieldwork. ———. 2014. “Balanço dos Pisos Salariais Negociados em 2013.” Estudos Pesqiosas (72, July). Available at: http://www.dieese.org.br/balancodospisos/2013/estPesq 72BalPisos2013.pdf (accessed January 12, 2015). De Souza, Amaury. 1992. “Sindicatos e greves: A visão do público.” In Ouvindo o Brasil: Uma análise da opinião pública brasileira hoje, edited by Bolívar Lamounier. São Paulo: Editora Sumaré. Deyo, Frederic, ed. 1996. Social Reconstructions of the World Automobile Industry: Competition, Power, and Industrial Flexibilty. New York: St. Martin’s Press. Durand, Cédric, and Neil Wrigley. 2009. “Institutional and Economic Determinants of Transnational Retailer Expansion and Performance: A Comparative Analysis of Wal-Mart and Carrefour.” Environment and Planning A 41: 1534–1555. Fishman, Charles. 2006. The Wal-Mart Effect: How the World’s Most Powerful Company Really Works—And How It’s Transformed the American Economy. New York: Penguin Books. Folha de S. Paulo. 2004. “Wal-Mart admite erros e faz planos no Brasil.” Folha de S. Paulo. Available at: http://www1.folha.uol.com.br/fsp/dinheiro/fi0606200424.htm (accessed February 20, 2017). Gall, Gregor. 2002. “Employer Opposition to Union Recognition in Britain.” Paper presented to the fi fty-fourth annual meeting of the Industrial Relations Research Association. Atlanta (January 4–6). Grupo Pão de Açúcar. 2014. “Relação com Investidores: Histórico e Perfi l Corporativo.” Available at: http://www.gpari.com.br/conteudo_pt.asp?idioma=0&conta=28 &tipo=31639 (accessed July 16, 2014). Hollingsworth, Joseph Rogers, Philippe Schmitter, and Wolfgang Streeck, eds. 1994.

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Governing Capitalist Economies: Performance and Control of Economic Sectors. Oxford: Oxford University Press. Hugill, Peter. 2006. “The Geostrategy of Global Business: Wal-Mart and Its Historical Forbears.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley Brunn, 3–14. New York: Routledge. Instituto Brasileiro de Geografi a e Estatística. 2014. “Tabela 8—Pessoal ocupado nasempresas comerciais em 31.12, segundo as divisões, grupos e classes de atividades— Brasil—2011.” Available at: ftp://ftp.ibge.gov.br/Comercio_e_Servicos/Pesquisa _Anual_de_Comercio/2011/parte1_tab8.pdf (accessed February 20, 2017). Instituto Observatório Social (IOS). 2000. Relatório geral da observação Wal-Mart Brasil Ltda. São Paulo: Relatório Geral. International Labor Organization (ILO). 2011. “Social Dialogue Indicators: International Statistical Inquiry.” Technical brief. Geneva: ILO. Jacobs, David, and Peggy Kahn, eds. 2014. Disunited States of America: Employment Relations Systems in Confl ict. Ithaca, NY: ILR Press. Kenney, Martin, and Richard Florida. 1993. Beyond Mass Production: The Japanese System and Its Transfer to the United States. Oxford: Oxford University Press. Kochan, Thomas A. 1980. Collective Bargaining and Industrial Relations. Homewood, IL: Irwin. Kochan, Thomas A., Russell D. Lansbury, and John P. MacDuffie, eds. 1997. After Lean Production: Evolving Employment Practices in the World Auto Industry. Ithaca, NY: Cornell University Press. Krein, Dari, Anselmo Luis Santos, and Bartira Tardelli Nunes. 2012. “Trabalho no Governo Lula: Avanços e contradições.” Discussion paper. Campinas: IE/UNICAMP. Lamounier, Bolívar. 1992. “O Modelo institucional dos anos 30 e a presente crise Brasileira.” Estudos Avançados 6 (14): 39–57. Lichtenstein, Nelson. 2009. The Retail Revolution: How Wal-Mart Created a Brave New World of Business. New York: Metropolitan Books. Locke, Richard. 1992. “The Demise of the National Unions in Italy: Lessons for Comparative Industrial Relations Theory.” Industrial and Labor Relations Review 45 (2): 229–249. Mahoney, James, and Kathleen Thelen. 2010. Explaining Institutional Change: Ambiguity, Agency, and Power. Cambridge: Cambridge University Press. Martin, Scott B. 2001. “Network Ties and Labor Flexibility in Brazil and Mexico: A Tale of Two Automobile Factories.” In The Politics of Labor in a Global Age: Continuity and Change in Late Industrializing and Post-Socialist Economies, edited by Christopher Candland and Rudra Sil, 95–131. Oxford: Oxford University Press. Pyman, Amanda, Peter Holland, and Julian Teicher. 2004. “Trade Union Strategies in a Sophisticated Human Resource Management Environment.” Working Paper Series 12/04. Melbourne, Australia: Monash University. Quinlan, Joseph P. 2001. Global Engagement: How American Companies Really Compete in the Global Economy. Chicago: Contemporary Books. Samuels, Barbara. 2014 [1990]. Managing Risk in Developing Countries: National Demands and Multinational Responses. Princeton, NH: Princeton University Press. Streeck, Wolfgang. 1992. “Training and the New Industrial Relations: A New Strategic Role for Unions?” In The Future of Labour Movements, edited by Marino Regini, 225–269. London: Sage.

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Streeck, Wolfgang, and Kathleen Thelen. 2005. Beyond Continuity: Institutional Change in Advanced Political Economies. Oxford: Oxford University Press. Tibola, Vinícius Peccin. 2009. “Taxa de mark-up no setor supermercadista brasileiro.” Undergraduate thesis. Porto Alegre: Universidade Federal do Rio Grande do Sul. Valor Econômico. 2001–2013. Available at: http://www.valor.com.br (accessed February 20, 2017). Vaz, Tatiana. 2014. “Walmart gasta US$439 milhões com investigacão de fraudes.” Exame.com, March 27. Available at: http://exame.abril.com.br/negocios/noticias /walmart-gasta-us-439-milhoes-com-investigacao-de-fraudes (accessed January 10, 2015). Walmart. 2013. “Relatório de Sustentabilidade.” Available at: http://www.walmart brasil.com.br/sustentabilidade/_pdf/relatorios/2013/book_Walmart_RA12_c (accessed July 18, 2014). ———. 2017. “Wal-Mart no Brasil.” Available at: https://www.walmartbrasil.com.br /sobre/walmart-no-brasil/ (accessed July 16, 2017).

I n t e rv i e ws Katiuscia Moreno Galhera, interview with CONTRACS leader in the Department of International Relations, July 3, 2015. Instituto Observatório Social (IOS), interview with Walmart Manager of Corporate Social Responsibility, August 24, 2007.

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Ch a p t e r 2

walmart and labor conditions in south africa: local retailing, contract labor, and union challenges bridget kenny

Wa l m a rt ’s acqu isi t ion of a South African–listed company with stores in eleven other African countries is one of its most recent moves into developing economies, and its fi rst effort to stake a presence in Africa. In late 2010, Walmart made an offer for majority share acquisition in Massmart Holdings, Ltd., listed on the Johannesburg Stock Exchange. In 2011 the deal underwent scrutiny by the South African Competition Commission and Competition Tribunal, and in 2012 the Competition Appeal Court approved the merger (Kenny 2014). This process was covered extensively in the South African media, and South African unions, together with UNI Global and the United Food and Commercial Workers (UFCW) union, used the acquisition in a campaign to argue for conditions to be put on the deal (and more rhetorically to block the deal), as well as to raise public awareness about the company. It was a successful campaign. Not only were South Africans introduced to Walmart’s antilabor history, but the collective submissions to the Tribunal by the unions and their global allies contributed to several conditions being placed on the merger, including the rehiring of formerly retrenched workers, confi rmation that the majority retail union’s collective agreement would be extended, and agreement to fund a supplier development program to support “emerging” (black) producers to enter its supply chain (see chapter 6). The process was drawn out, with the fi rst Tribunal ruling followed by an appeal by the trade unions as well as a request to set aside the Tribunal decision on the grounds of discovery by the three ministers leading the state’s case from the Departments of Economic Development (EDD), Trade and Industry (DTI), and Agriculture, Forestry, and Fisheries (DAFF). The unions and the ministers sought to strengthen the original ruling. From fairly early in the process, it was clear that the merger did not pose a problem of strict competitiveness—Walmart was buying an exist-

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ing company with market share already differentiated within local markets. However, South African competition law also provides a public interest clause. The three government ministers in particular were concerned about evaluating Walmart’s potential impact on local jobs because of its global networks. Thus, they actively engaged the merger application through their concern about protecting South African jobs in manufacturing and food production. The ruling of the Appeal Court ultimately strengthened the mechanisms by which the retrenched workers were to get their jobs back and increased the amount that the company had to provide to support the supplier development fund (see Kenny 2014; chapter 6). The South African Competition Tribunal process was hailed as an example of an engaged state intervening to set limits on global capital. Economic geographers have made the observation that retail TNCs specifically embed in the host economy (Coe and Wrigley 2007). Indeed, the well-publicized process by which Walmart took majority ownership of Massmart Holdings suggests one example by which the global fi rm complied with local regulation. In this chapter, I consider the claim about the interplay between global fi rm culture and local regulatory conditions with respect to labor conditions in stores. Specifically, this chapter examines wages, labor use, and conditions in Cambridge Food, one subsidiary of Massmart/Walmart in South Africa. It presents material from focus groups and a nonrepresentative survey conducted in 2013 of 109 workers from six Cambridge Food branches around Johannesburg.1 Although the transnational retail literature identifies labor relations as a facet of embeddedness, there has been less analysis of local labor practices in Walmartowned fi rms outside the United States in the context of national retail sectors (but see Christopherson 2007; Christopherson and Lillie 2005; Durand and Wrigley 2009; Tilly 2006, 2007). This chapter argues that prior South African retailing labor practices and standards segued easily with Walmart’s entry, even within the political context of high legitimacy of trade union representation and labor law protections. How we understand “embeddedness,” in turn, poses questions for how the labor movement approaches the struggle around Walmart in South Africa and Africa.

transnational retail firms: embedded labor relations? The global investment of retail capital, particularly led by food and general merchandisers, has been a trend since the 1990s (Wrigley 2000; Reardon and Berdegué 2002; Weatherspoon and Reardon 2003; Humphrey

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2007). By the 2000s, this investment had turned toward the Global South with a “deluge of retail FDI into the emerging markets” (Coe and Wrigley 2007, 342), and Walmart was a prime mover. In 1995, Walmart’s international sales were 4 percent of total sales, and by 2005 that share had increased to more than 20 percent (Durand and Wrigley 2009, 3). Walmart is the world’s leading international retailer at the moment. 2 Discussions around international retail expansion have begun to reach consensus on one point worth taking up more broadly: more than manufacturing TNCs, transnational retailers require that the fi rm embed within specific regulatory, cultural, and market relations, which changes both local contexts and the retailer itself (Wrigley, Coe, and Currah 2005; Coe and Wrigley 2007; Tilly 2007; Bianchi and Arnold 2004; Wrigley and Lowe 2007; Coe and Lee 2013). The retail TNC, then, is characterized as “necessarily embedded and essentially networked” within local market relations (Coe and Wrigley 2007, 346; Coe and Lee 2013, 331; see also Wrigley, Coe, and Currah 2005). In referencing land use planning, real estate markets, logistics operations, and consumption cultures, this phrasing marks the realities of the territorial embeddedness of retailers within locales, countries, and regions through coordination of stores and sourcing networks. One of the key fi ndings of this body of literature is that this multifaceted embeddedness is important to establish the “legitimacy” of a fi rm in a new market (Bianchi and Arnold 2004). 3 Research into the “failures” or divestments of retail TNCs reinforces this argument about the importance of localization. Firms do not succeed when they misread local contexts and assume that innovation in formats, products, merchandising, supply, or labor relations would be their comparative advantage. Thus, Yuko Aoyama (2007) argues, the difficulties of Walmart’s investment in Japan resulted from imposing home-country formats and expectations about factory direct production on local markets. Susan Christopherson (2006, 2007) explains that Walmart’s unsuccessful entry into Germany was related to the very different character of market governance there than in the United States—the power of German manufacturing, the system of occupational skills and training, the local regulatory context favoring existing fi rms—and ultimately to the disjuncture of Walmart’s fi rm culture, which circumvented consultation (see also Aoyama and Schwarz 2006). Indeed, from its earlier entries into Brazil and Argentina Walmart also learned the hard way about the importance of understanding the local market supply and producer and retailer practices (da Rocha and Dib 2002). By contrast, Neil Coe and Yong-Sook Lee (2013) argue that Tesco’s hallmark success in South Korea, unlike Carre-

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four’s and Walmart’s experiences there, had everything to do with its capacity to be “extremely agile” (Coe and Wrigley 2007, 363) in the local market by localizing formats, supply chain networks, knowledge transfer, product design, and retail services. Cédric Durand and Neil Wrigley (2009) usefully consolidate much of this literature into three key conceptual foci that explain the performance of the global retail fi rm within the host economy: the timing and mode of entry into the host economy, the ability to exercise and benefit from upstream market power, and the responsiveness to labor regimes. With respect to labor regimes, they compare Walmart and Carrefour on four measures: labor organization/union autonomy, labor regulation/enforcement, the scale of wage bargaining, and employment security. They fi nd that, unlike Carrefour, Walmart appeared to be more successful in international markets characterized by weaker union organization and regulatory enforcement, more individualized wage bargaining, and less job tenure security—conditions befitting its country of origin (Durand and Wrigley 2009, 1548–1549). “More precisely,” they write, “there may be a ‘ceiling labor-standards effect’ in which a transnational retailer fi nds it feasible to adapt its practices to suit countries where labor standards are lower than in its domestic market, but fi nds it difficult to adapt and compete in business environments with higher labor standards than in its domestic market” (Durand and Wrigley 2009, 1548). In short, because Walmart’s labor relations and conditions in the United States were of a lower standard than Carrefour’s in the French context, the U.S. retailer’s endurance in foreign markets corresponded to host-economy contexts with lower conditions and less protection. How are we to understand the embeddedness of labor in South Africa in relation to Walmart’s entry? I begin by using two cases to illustrate the model. Christopherson (2007) gives us a case where the power of labor in Germany was relatively consolidated: in terms of union presence, but also in terms of societal expectations and the support of institutional forms of participation, in terms of skill and training, and in terms of the position of labor, namely, the regulatory levers. This power clashed with Walmart’s presumption, based on its experience in the United States, that the workforce could be reoriented toward low wages and greater insecurity and explains Walmart’s disinvestment. By contrast, as Chris Tilly (2007) argues, Walmart consented to accommodating unions in Mexico, where the local regulatory and political contexts prescribed it, but also did better in this context because unions were not independent and offered little challenge. The South African case offers some complexities and challenges the ar-

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ticulation between “home and host.” In South Africa, trade unions are relatively autonomous and strong symbolically and politically—indeed, much was made of the “win” in the Tribunal case around Walmart’s entry in that the state was seen to be upholding the interests of labor—but they are structurally weak in an economy with an official unemployment rate of nearly 28 percent. Moreover, labor regulation is relatively supportive of employees, but enforcement is weak; wage bargaining in the sector occurs at the national company level, but conditions remain very basic at the store level; and though job security for permanent workers is protected, broader precaritization of labor has created an extensive context of labor market insecurity. These complexities not only point to how micro studies can fi ll out Durand and Wrigley’s useful broader categories, but also emphasize the ongoing mutual constitution of global and local. The South African case adds to others in this collection that complicate the fairly standard reading of Walmart’s capacity to import its anti-union and anti-worker practices, but it also suggests that Walmart “effects” are more productively read as an articulated process in which national retailer practices—themselves both global and globally attuned—combine with union politics to constitute the TNC.

walmart’s entry into south africa/ africa and massmart’s complexity Walmart entered South Africa through its majority share acquisition of Massmart Holdings, which looked fairly similar in operation to Walmart. Formed in 1990, Massmart focused on “high volume low-margin” distribution, operating through big-box retailing and wholesaling (Massmart + Walmart 2014). Massmart is a holding company that, in turn, owns many different subsidiaries, both retail and wholesale companies. Massmart is organized into four divisions under which its branded subsidiaries operate: Masscash, Massdiscounters, Masswarehouse, and Massbuild.4 None of the stores are branded as Walmart. The branded subsidiaries themselves were variously acquired by Massmart, some before Walmart’s ownership and some afterwards. In addition, at the time of acquisition, Massmart owned stores in eleven other African countries (later expanded to twelve), thereby giving Walmart a “footprint” across Africa. 5 Thus, Walmart’s ownership through Massmart in Africa represents a particularly complicated structure of multiple subsidiaries, with their own histories of acquisition, now grouped into divisions and operating in multiple countries. The divisions are important to our case because the majority union in the sector in South Africa, the South African Commercial, Catering,

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and Allied Workers Union (SACCAWU), has concluded recognition and collective bargaining agreements by division. Thus, four separate agreements cover Massmart subsidiaries in South Africa. Historically, each of the subsidiaries now under the four divisions had a quite different union presence, such that some—for instance, Makro and Game—were well organized by SACCAWU but others, particularly the newer and smaller wholesalers, had no prior union presence at all. On the one hand, company consolidation has brought workforces in some subsidiaries under union agreement, but in other better-off subsidiaries where the union has been stronger, additional downward pressure has been brought to bear on unionists working to maintain the standards in place. It is at this divisional level where the union has focused its attention and continues to fight to win parity of conditions.6 Thus, South African labor law provides for rights to organize with respect to the employer, but because of the complexity of the company structure, the union bargains by subdivision; it has active shop steward structures in some subsidiaries within those divisions but not in all. With respect to Massmart-owned stores in the other twelve African countries (the majority are Game and Builders Warehouse stores), the company bargains with the national retail or commerce union, where that union has won recognition. Crucially, according to unionists, Massmart conducts bargaining separately with each country-team and also by division, fi rmly rejecting even observer status for other country unions (such status, for example, would enable Zambian unionists to sit in on Namibian bargaining rounds, and so on) and for SACCAWU (even when bargaining mostly happens at its head office in South Africa).7 I return to the issue of Africa-wide union relations in the conclusion. In South Africa, then, while recognition agreements are in place with SACCAWU and collective bargaining takes place with the company, as protected by labor legislation and reaffi rmed as a condition of the stategranted merger approval, the highly complex and differentiated bargaining terrain makes the union’s job much more complicated. The effect is that on the ground, as this chapter details, there is a much more ambivalent sense of union gains than if we were to examine the company through national-level agreements (see chapter 1). Cambridge Food falls under the Masscash Division as one of nine subsidiaries; it has different conditions than subsidiaries in the other three divisions. Furthermore, as we see in this chapter, at the time of research the key dynamic at Cambridge Food that made conditions all the more different in these stores was the high degree of labor brokering, which effectively outsourced much of the workforce and thus excised it from any company collective agreement. I be-

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gin by briefly examining the retail sector into which Walmart entered and then detail the conditions within Cambridge Food.

south africa’s retail context Walmart entered an already highly formalized retail context (see Kenny 2018). South Africa’s mass grocery retail sector (another name for the formal sector of food retailing) is worth about US$29 billion, the largest in Africa in terms of value (BMI 2013). In 2003, the share of the food retailing market for formal stores in comparison to informal routes was 55 percent (Weatherspoon and Reardon 2003, 1). Since then, formal channels have increased to account for 62.3 percent of the food market by 2012 (meaning that 37.7 percent was in the informal sector made up of hawkers, spaza shops, and so on), higher than in many other developing countries (BMI 2013; see also Weatherspoon and Reardon 2003). Regardless of the exact figures, analysts agree that the food retail market has become increasingly formalized, with distribution happening through supermarkets. Furthermore, it is a growing market in terms of sales: in 2012, mass grocery retail sales were up by 10.4 percent, and this kind of growth rate was forecast to continue (BMI 2013). Four large South African corporations—Shoprite, Pick n Pay, Spar, and Woolworths—have accounted for over 90 percent of supermarket sales (Weatherspoon and Reardon 2003, 4). In 2012, Christo Weise, chairman of the board of Shoprite Holdings, wrote that “67% of the country’s adult population buy groceries from our stores. That is more than 23 million people.”8 Domestic retailers have also consolidated through mergers and acquisitions to expand to smaller towns and rural areas. In 2009, on the eve of Walmart’s approach, Massmart represented only 2 percent of the formal food retailing market but 22.4 percent of food wholesaling (RBB Economics 2011). In 2013, Massmart’s total food sales placed it third-highest in food retail and wholesale in South Africa. If the wholesale division is excluded, Massmart ranks as the fifth-largest of the fi rms (Macquarie First South Securities 2013, 46). Thus, it was into this retailing context of already existing fi rm dominance that Walmart entered. Format trends did not result from TNC investment but predated it, with domestic retailers being drivers. Massmart has been extending its food retailing operations (BMI 2013), and it is in this context that it has expanded Cambridge Food stores, which are mostly located in central business districts and working-class (formerly black) townships, particularly focusing on commuter transit routes. Massmart’s late entry into food retailing has been noted with caution:

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for instance, analysts suggest that it may hamper the company’s ability to obtain sites for expansion, noting that Shoprite, with its deeper presence in Africa, and Woolworths, with its specific market differentiation into higher-income categories, are important competitors (Macquarie First South Securities 2013, 46; BMI 2013). Thus, the South African market itself offers challenges and also explains trajectories. Dave Weatherspoon and Thomas Reardon (2003, 2) have noted a “rapid transformation of the African food retail sector” since the mid1990s toward increasing formalization, corporate consolidation, and the introduction of supply chain management technology and logistics. Thus, efficient procurement systems, “modern” supermarket formats, and corporate dominance of South African retail were already well under way (and expanding into Africa). Similarly, a labor regime already in practice in South Africa, led by sophisticated and globally savvy retailers, belies a clear differentiation between “home” and “host” economies. I turn now to exploring conditions in Cambridge Food stores.

low wages, precarious labor This section outlines basic labor conditions in six Johannesburg branches of Cambridge Food in 2013 through a nonrepresentative survey of 109 workers and focus groups with workers and shop stewards from the stores. The survey was conducted as a baseline study to support continued research in the stores. Therefore, while basic, the results allow us to confi rm a pattern of low-wage and precarious employment as the norm and, in the future, to track where and how changes occur. The research was conducted under the auspices of SACCAWU, which specifically identified Cambridge Food to research because it was a relatively new brand with low union membership, unlike several of the other subsidiaries.

T h e Wor k force a n d t h e E mploy e r In the branches surveyed, Cambridge Food relied on a workforce typical of retail workers in South Africa in many ways (Kenny 2007, 2018). Workers were young (the majority of the sample were thirty-five years of age or younger), female, and “black.” Typically for the region, the majority of workers spoke isiZulu as their home language, and nearly all workers interviewed were South African citizens. For nearly one-quarter of the workers interviewed, this was their fi rst job. Most of those who had worked before had worked in other jobs in the retail sector. The majority of workers had been employed in their branch for two years or less. The research shows, perhaps most importantly, that Cambridge Food

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Table 2.1. Who Employs You? Employer Cambridge Food Labor broker Supplier Total

Number

Percentage

16 81 12 109

14.7 74.3 11.0 100.0

Source: Cambridge Food worker survey, 2013.

used temporary employment agencies, commonly called “labor brokers,” to supply much of its workforce. Up to three-fourths of workers in the survey were employed by these agencies (see table 2.1). South African labor law categorizes employment by a temporary employment agency as a triangular relationship: employees of the agency have labor rights with respect to the employer, the agency, in the context of limited term contracts, and joint and several liability applies to the client fi rm for breaches of basic conditions legislation, collective agreements, and arbitration awards, although very few successful cases have been brought under this clause (Theron 2005; Benjamin 2014). From the early 2000s, South African companies, including retailers, have made generally greater use of labor brokering to manage staffi ng (Theron 2005; Kenny 2018). Nevertheless, labor brokering was used in these stores to a greater extent than it was in other major retailers in earlier periods (Kenny 2018). In focus group interviews at Cambridge Food, employees of the retailer at one branch explained that even though they had only about six Cambridge Food employees in their store, that was “actually considered as a lot because other stores have two to three permanent staff.”9 According to workers, this was the number of direct retail employees on average in each shop, which typically had 100 to 125 workers in total. Contract labor was used throughout the store, but in particular as cashiers, merchandisers, and packers and in the specialty food departments, like the bakeries and butcheries. Supervisors and administrators were just as likely to be direct employees of Cambridge Food as not. Thus, the vast majority of staff on the shop floor in these branches were supplied through labor brokers. The use of a large workforce supplied through contract labor defined the workplace dynamics in these stores. Contract workers faced greater precariousness and harsher discipline than direct employees of the retailer, including the constant threat of dismissal. In focus groups, they

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reported that they were easily dismissed and that there was high staff turnover: “Because the contract that we have, as I understand it, when Cambridge decided that they don’t want you anymore, then they can fi re you whether you have made a small mistake or not, but they don’t want you anymore.”10 Cashiers said of being contract workers: “We don’t have power. And they make sure that we don’t have any power.”11 This inequality was particularly noteworthy with respect to the issue of employment contracts. Although most workers had signed a contract of employment, most also reported not having a copy of it, despite this being a legislated basic condition of employment for everyone, including direct employees of the retailer (see table 2.2). Only employees of suppliers were more likely than not to have a copy of their contract (see table 2.3). In South African retailing, some suppliers use their own merchandisers in the stores to manage their stock. These workers are direct employees of Table 2.2. Do You Have a Copy of Your Employment Contract?

Yes No I don’t remember Total Missing Total

Number

Percentage

18 81 1 100 9 109

18 81 1 100

Source: Cambridge Food worker survey, 2013.

Table 2.3. Workers without a Copy of Their Employment Contract, by Employer

Employer Cambridge Food Labor broker Supplier Total

Number

Total Valid Number

Percentage

8 69 4 81

11 78 11 100

72.7 88.5 36 81

Source: Cambridge Food worker survey, 2013.

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the suppliers, the larger food companies. Often these workers have better working conditions than either the direct retail employees or the labor broker workers (see Kenny 2018). Among those not having a copy of their contract, contract workers raised the matter as a specific grievance because of the punitive way in which labor brokers prevented them obtaining copies. According to workers in several of the focus groups (across different branches), labor broker employees in particular were told to sign contracts without even being given an opportunity to read them: “They will never let you even see it. When you try and read it, they say, ‘Sign here and there,’ they don’t give you a chance to read it. . . . They will tell you to sign here or leave it.”12 Many contract workers also explained that they were instructed to leave the dates blank when signing: The guy from [the labor broker] comes and gives the guys papers to sign, and he just says, ‘Sign here,’ and they sign and they don’t have copies or they don’t read the contract or whatever. And whenever you comment about that so that they can rectify that thing, they just tell you it’s non-negotiable. . . . They show them that you signed here, and in the contract they don’t put the date and they just show you that you signed here. When they tell you to sign out, then you have signed your dismissal as well. . . . They write a date in that dismissal because already your signature is there before you are even dismissed.13

Workers claimed that, with the dates left blank, when the labor broker (or the retailer indirectly) decided that they wanted to dismiss a worker, instead of going through legislated procedure, the broker could simply fill in the end date, which would indicate the (supposedly pre-agreed) end of a short-term contract. The “signed” contract made it very difficult to contest the dismissal. Overall, we found a higher proportion of women—more than threefi fths of the total—employed in contract work. In both Cambridge Food and suppliers, men and women were employed evenly. This division of labor had the effect of making women, because they were more likely to be contract staff, bear the burden of poorer conditions of employment.

Wages a n d Con di t ions of E mploy m e n t The work was defi ned by low wages and few benefits, as is the case more broadly in food retailing (Kenny 2007, 2018). The majority of workers interviewed reported that they earned R3,000 (at the time less than $300) or less per month. The lowest salary reported was R1,300 (less than

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$130) per month, and the highest salary was R6,000 (less than $600) per month. These wages confi rm that retail workers remain among the lowest-paid workers in South Africa (Labour Research Service 2013). Wages did not vary significantly by age or gender, but they did by employer. Direct employees of the retailer earned higher wages than labor broker employees, with a basic majority of Cambridge Food staff earning above R3,500 (approximately $350) per month while nearly all labor broker employees earned at this threshold or below. Furthermore, just over 30 percent of the workers interviewed reported getting a pension or provident fund, and any other benefits were unlikely. Again, this benefit varied by employer: three-fourths of direct employees reported getting a pension, but fewer than one-fourth of labor broker employees did. The workforce received little training and had little opportunity for promotion or advancement within the company. Cashiers joked, “They just explained to us verbally that this is what this button does, and I know you will do it correctly because you ladies, you are too clever. That’s it. . . . And of course we are brilliant, you see. Without training.”14 A packer said that he “never got any training here, but I came with my own experience that I got at Pick n Pay [another retailer].”15 Workers also explained that they were often expected to show new staff how to do their work without any recognition or reward. In focus groups, direct retail employees complained that they were overlooked for promotion and that the criteria made no sense: Most senior people in the office are from Shoprite and Pick n Pay, which means that they just go to Pick n Pay or Shoprite . . . and they come this side, [and] you have to train [them] . . . and then the same person is going to earn more money and they are going to be on top of you, and when there are problems, then you have to come and solve the problem, but when the things are right, it’s like they block you.16

Most workers interviewed worked flexible hours, averaged over a month, and generally worked public holidays, Sundays, and extra hours without additional compensation. When we asked workers to report their actual shifts (actual hours and days worked) for the previous four weeks, the vast majority reported that their shifts varied weekly. Average weekly hours ranged from a minimum of sixteen hours to a maximum of seventy hours, with a mean of forty-eight hours. The standard weekly hours in the sector, and generally in South Africa, is forty-five hours, but sectoral legislation allows the averaging of hours over a month. Store trading hours expanded in the 1990s, and stores are now com-

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monly open on Saturdays all day, on Sundays and public holidays until the late afternoon, and increasingly into the evening hours of weekdays (see Kenny 2009). Nearly half of the workers reported that they worked before 7:00 a.m. or after 7:00 p.m. Most workers (68.8 percent) reported working on Sundays. Women were significantly more likely to work on Sundays than men, with nearly four-fi fths of women working on Sundays compared to just over half of men. Labor broker workers were significantly more likely to work on Sundays than either Cambridge Food staff or employees of suppliers; indeed, Sunday work was virtually a requirement of the labor broker’s contract. Most workers (over 70 percent) worked on public holidays. Again, there was a significant difference by employer: labor broker employees were more likely than Cambridge Food staff to work on public holidays. The majority of workers reported that they were asked to work longer hours than scheduled. Employees of labor brokers raised the issue of the extension of hours on demand as a problem for them. In the focus groups, workers explained that “they just tell us as we are about to leave that we must stay behind.”17 Furthermore, workers said, it was often unclear whether they were being paid for their extra hours; they were not told whether overtime rates would apply or whether the extra hours were even being recorded properly in their time dockets. For instance, cashiers explained that their schedules often varied each day: When they make the schedule, this week it says if you come in at 7:00 a.m., you will knock off at 1:00 p.m. If you come in at 11:00 . . . 12:00 p.m., you knock off at 7:00 p.m. But when it gets to you, it is no longer like that. You now come in from 7:00 a.m. until 4:00 p.m. This is how it always is. They can’t just have it straightforward and say, “This is the shift.” . . . So you don’t know exactly what it is. . . . There’s no order because you don’t know how much you earn at the end of the day. You don’t know the difference on what’s going on because the schedule is always like this. You don’t know if you are being cheated or not.18

Thus, workers explained, they could not track their own hours worked in a given month. In these cases, workers suspected that not all of the time they worked was even recorded. For instance, a cashier said, “He [her supervisor] signed seven [as knocking-off time] for all of us, while we still were cashing up. When you change it, writing the correct time, he calls you . . . that guy from [the labor broker] to come and sign the warning for that.”19 Thus, workers felt intimidated if they tried to query or correct their hours worked. Another contract worker explained:

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We have a problem with money, because you work full hours but when month end comes, and you have to get money for those hours you have worked for, then you fi nd out that your money does not correspond with your hours. Your salary is less, and when you complain, they will tell you excuses like you did not clock right or you did not sign correctly or there will be some excuse that they will give you. So basically they blame you for not doing things right, and that is why you did not get the salary that you were expecting, and when you ask them to fi x it, then they will tell you that “No, it is not possible because you are the one who makes mistakes.”20

Walmart has been linked to the underpayment of wages in other contexts (Chan 2011; Lichtenstein 2006; Rosen 2005). In the case of Cambridge Food, the use of contract labor reinforced such practices in different form. It was apparently easier for employers to obfuscate underpayment if workers also felt a greater threat of dismissal because they were contract staff. We turn now to union membership, which varied by employer.

U n ion M e mbe rship Twenty-eight percent of workers interviewed reported being members of a union (see table 2.4). This compares to company reported rates of union density in the Massmart Group as a whole in 2010 (on the eve of the merger) of 38 percent (LRS 2011). If we look closer at workers’ responses, however, we fi nd that several reported being members of the Food and Allied Workers Union (FAWU), corresponding to suppliers who were food companies, and one person reported “Scorpion,” a private insurance policy (see table 2.5). 21 Thus, closer to 20 percent could be said to be members of a retail sector union. This handful of workers were members of SACCAWU, the COSATU affi liate, but more were members of the Federal Council of Retail and Allied Workers (FEDCRAW), affi liated with the National Council of Trade Unions

Table 2.4. Are You a Member of a Union?

Yes No Total

Number

Percentage

31 78 109

28.4 71.6 100.0

Source: Cambridge Food worker survey, 2013.

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Table 2.5. If You Are a Member of a Union, Which Union? Union SACCAWU FAWU FEDCRAW Scorpion I don’t know Total

Number 8 7 14 1 1 31

Source: Cambridge Food worker survey, 2013.

Table 2.6. Union Membership by Employer

Employer Cambridge Food Labor broker Suppliers

Number (Percentage) of Members

Total

12 (75%) 15 (18.5%) 4 (33.3%)

16 81 12

Source: Cambridge Food worker survey, 2013.

(NACTU), another federation of unions. The few SACCAWU members were employees of Cambridge Food, and as noted earlier, SACCAWU has a divisional collective agreement covering direct employees. Disaggregated by employer, most of the direct employees of the retailer whom we interviewed were members of a union, while fewer than onefi fth of the labor broker employees were union members, as were onethird of suppliers’ employees (see table 2.6). Of union members, the mean length of time that they had been members was over five years. Most workers had not been members of another union in the past. SACCAWU shop stewards, who came from another company before it was purchased and rebranded as Cambridge Food, had longer tenures in the stores. 22 They struggled to keep an active branch going with what they described as the dramatic increase in the use of contract labor: Since Cambridge took over, there aren’t that many members because there are very few permanent workers now under Cambridge. Most of us [shop

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stewards] were permanent workers at [the previous company], but when Cambridge took over they incrementally brought in casual staff [i.e., contract labor] from [the labor broker]. So some stores have no permanent staff while others have few, for example, us at [my branch] we only have four. . . . We cannot mobilize any longer because there are [only] a few of us [permanent staff] in the company. 23

Indeed, some contract employees explained that they knew very little about unions. For instance, cashiers employed by one labor broker said, “We don’t really know the details of that place [the union], whether if you join it you are wrong, if you don’t you are wrong. We don’t know.”24 Instead of going to a union to protect themselves, these workers went to their supervisors to “advocate” on their behalf. 25 Shop stewards also felt that SACCAWU was limited in the extent to which the union could support them organizing contract workers. One explained what happened when a contract worker inquired about the union: So, she came to me to ask what the contract is about and what it means. Then I explained that by signing the contract she agreed to whatever it is that is written in the contract. We went to SACCAWU and asked them if they can’t adopt the contract workers and take this issue under their arm, and they said there is nothing they can do because the contract is signed, meaning it’s a mutual agreement. . . . I don’t remember what happened to that case, I think it just fi zzled out, but ultimately it seems like contract workers will always be contract workers.26

Although the direct retail employees were members of a recognized union, the use of contract labor undermined the ability of shop stewards to represent them, even when they wanted to, as in this shop steward’s example. It also made it more difficult for union members at the level of branches to mobilize, as they were only a small number.27 Thus, while divisional bargaining may have protected the retail employees against the more egregious conditions of their colleagues, the use of contract labor divided the workforce in ways ensuring that mobilizing at the shop-floor level would prove to be a deep challenge for the union and workers (in contrast to Chile and Argentina; see chapters 3 and 4).

conclusion There was little reward for or recognition of workers in these six branches of Massmart/Walmart. The work remained low-wage, low-skill, and

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dead-end. In return, workers were expected to work flexible shifts and long hours, often during unsocial hours in the context of poor public transport, questionable public safety, and the enduring legacy of apartheid geography that had people living far from their place of work. What this survey and the focus group interviews document in particular is the extensive use of labor brokering in the fi rm across shop-floor departments in 2013. Labor brokering has increased in South Africa more broadly with changes to labor legislation over the past ten to fifteen years as employers have sought to lower labor costs (Theron 2005; Benjamin 2014). Low unionization at Cambridge Food is also important in a sector historically dominated by a COSATU affiliate and characterized by higher union densities, and the use of contract labor had an impact here as well. Other Massmart subsidiaries have a deeper history of organization by SACCAWU, and hence higher membership, but as a relatively new fi rm, Cambridge Food highlights the union’s difficulties with new organizing, in particular organizing contract workers (see Kenny 2007). Returning to Durand and Wrigley’s (2009) insights, South African conditions suggest that Walmart will do well in the host economy, at least in terms of its labor regime, but this case also offers a more textured context for how Durand and Wrigley’s variables play out across space and time. Although South African unions are independent and labor regulation protects trade union rights with respect to the employer through company bargaining, enforcement is often difficult and relies on the industrial relations system on a presumption of strong unions. Furthermore, while wage bargaining happens regularly and at the national company level, employment security is low because of high unemployment, extreme inequality, and legacies of racial despotism. The case of Cambridge Food makes stark these contradictions. Furthermore, for over twenty years South African retailers have relied on low-wage, low-skilled, contingent labor working in a relatively formal retailing and distributive environment compared to other developing economies. Indeed, South African retailers have been very connected to global retail trends (Kenny 2018). The South African context conforms to Walmart requirements, but only if we understand that the context itself is already imbricated within global processes. In addition, regulation also carries differences of scale and internal scope. What this case suggests is the working out of contradictory factors between different subsidiaries and divisions within Massmart, between the different spatial scales of the national and branch levels, and between different labor market positions of workers within the fi rm.

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To make matters more complicated, these are dynamic processes. In South Africa, labor law reform pushed by the labor movement, including SACCAWU, within a national tripartite forum brought significant changes to the regulation of labor brokering in 2015. Amendments stipulate that unless otherwise clearly temporary, after three months all employees of temporary employment agencies are deemed to have become employees of the client fi rm. 28 With this significant change, labor broker employees, after three months of working in a retailer’s workplace, can now hold the client fi rm liable. In a court decision thereafter, the temporary employment service was deemed to remain the employer as well, but in a subsequent appeal court decision in July 2017, this was overturned, confi rming that after three months the client fi rm becomes the employer. These interpretations will surely play out in contradictory employer decisions. But in Cambridge Food, according to the union, the resolution appears to be that the fi rm is ending its contracts of service and reemploying workers directly, although SACCAWU anticipated that it would be rehiring fewer workers and expecting them to work part-time hours on flexible schedules and across departments. 29 Thus, even with a win for labor within the national regulatory context, Massmart appears to be adapting by fi nding other means of maintaining low-wage, flexible labor, following the longer history in the sector (Kenny 2018). The case of Cambridge Food highlights the complexity of Walmart’s engagement in South Africa. Although national labor legislation offers rights to organize, to strike, and to fair procedure, as well as to a range of basic conditions of employment, and though this subsidiary is covered by a divisional collective agreement, at the store level the actual conditions of workers tell a story of much greater variation with much more difficult worker and union contestation of daily conditions. It remains to be seen whether the relatively recent changes to South African labor law can be leveraged to bring contract or formerly contract workers into the union and to raise the standards of their jobs. They certainly offer possibilities for renewed branch-level organizing and mobilizing if the union and workers can make use of them. Finally, while this fragmentation of conditions across subsidiaries appears to be the pattern in South Africa, another development is worth noting. In most other African countries where Massmart operates, only a few actual stores are located in capital cities (most are Game stores), as many countries have only one or two stores (LRS 2014). A key strategy of SACCAWU, via the Global Union Federation UNI Global, has been to push forward with its Africa Massmart/Walmart Shop Steward Alliance,

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in which shop stewards and union officials from across Massmart’s African stores come together to discuss working conditions in these stores.30 The Alliance meetings serve as information-sharing gatherings, and this network supports bargaining processes within the different countries. UNI Global in particular emphasizes the goal of a global framework agreement with Massmart, and SACCAWU supports this campaign. Some analysts of retail TNCs suggest that global framework agreements can “provide a possibly more robust articulation for company-based laborrights enforcement” (Christopherson and Lillie 2005, 1924), but there are cautions to be noted. Although labor brokering may be affected by legal reform in South Africa, the example of Cambridge Food suggests that, in principle at least, any campaign for a framework agreement must consider these kinds of variations that leave workers out of core agreements. Thus, if as Coe and Lee (2013, 329) observe, retailers’ localization is a dynamic process, “shaped by the context of a developing host retail market,” then focusing on local market conditions and fighting around labor standards in South Africa may indeed have significant effects on the wider fi rm. Thus, the work of store-level union and worker mobilization also remains critical. In particular, linking debt-strapped consumers to lowwage jobs, connecting working-class customers to working-poor service workers, bridging retail workers and supply chain workers, and bringing retail employees and contract workers together suggest a set of opportunities emerging from the South African context and pushing campaigns not bounded by the global fi rm. The retail TNC literature emphasizes the importance of host-economy institutions in the “success” of the retail TNC. In taking seriously these directives, it will be important to keep in mind the power of labor in situ, which in turn may very well necessitate a more complex view of how Walmart articulates within specific labor regimes, already co-constituted through globally and locally imbricated relations. notes 1. In addition to the survey, interviews were conducted in each branch with focus groups and shop stewards from across the branches. Access was facilitated by the South African Commercial, Catering, and Allied Workers Union (SACCAWU). The project was funded by UNI Global. Project researchers included Bongani Xezwi, Ntsiki Mackay, Lesego Ndala, Matlhako Mahapa, Zakhele Dlamini, Tlaleng Letsheleha, and Zivai Sunungukayi Mukorombindo. I attended the Africa Massmart/Walmart Shop Steward Alliance meetings in Johannesburg on June 19, 2012, June 11–12, 2014, and October 24–25, 2016. I also attended the UNI Global Commerce Conference on March 19–20, 2017, in Dakar, Senegal. 2. South African retailers have followed the same expansionary impulse, of course,

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into Africa and other parts of the world—Shoprite most robustly—and all major corporate fi rms have increased the percentage of their turnover from business outside of South Africa over the past ten to fi fteen years (Macquarie First South Securities 2013; Weatherspoon and Reardon 2003; Miller 2008). 3. Neil Wrigley, Neil Coe, and Andrew Currah (2005, 440–441) defi ne embeddedness through the key dynamics of consumption processes, physical assets in markets, and local supply bases. 4. Under the Massdiscounters Division are the branded subsidiaries Game, a mass general dealer and food retailer, and DionWired, an electronics retailer. Under the Massbuild Division are the DIY and building material suppliers Builders Warehouse, Builders Trade Depot, Builders Express, and Builders Superstore. Under the Masswarehouse Division are the mass wholesalers Makro and The Fruitspot. Finally, under the Masscash Division are branded food retailers and buying associations, including the retailers Cambridge Food and Rhino Cash & Carry, and a cluster of wholesalers, including Trident, Powersave Liquorland, Saverite, Shield, Jumbo Cash and Carry, and CBW. See Massmart (n.d.). 5. Massmart Holdings trades in thirteen countries in Africa: Botswana, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, South Africa, Swaziland, Tanzania, Uganda, and Zambia. 6. Bridget Kenny, focus group interview with SACCAWU shop steward and union officials, Johannesburg, February 16, 2017; Africa Massmart/Walmart Shop Steward Alliance meetings, Johannesburg, June 11–12, 2014, and October 24–25, 2016. 7. Bridget Kenny, focus group interview with SACCAWU shop steward and union officials, Johannesburg, February 16, 2017; Africa Massmart/Walmart Shop Steward Alliance meetings, Johannesburg, June 19, 2012, June 11–12, 2014, and October 24– 25, 2016. In particular, I interviewed country teams of shop stewards and union officials from seven countries during the October 24–25, 2016, meeting. 8. See Shoprite 2012, 10. 9. Bongani Xezwi, focus group interview with shop stewards, Johannesburg, September 29, 2013. 10. Bongani Xezwi, focus group interview with contract workers, Johannesburg, August 20, 2013. 11. Bongani Xezwi, focus group interview with contract workers, Soweto, May 19, 2013. 12. Bongani Xezwi, focus group interview with contract workers, Johannesburg, August 20, 2013. 13. Bongani Xezwi, focus group interview with retail employees and contract workers, Soweto, May 13, 2013. 14. Bongani Xezwi, focus group interview with contract workers, Soweto, May 19, 2013. 15. Bongani Xezwi, focus group interview with contract workers, Johannesburg, August 20, 2013. 16. Bongani Xezwi, focus group interview with retail employees and contract workers, Soweto, May 13, 2013. 17. Bongani Xezwi, focus group interview with contract workers, Soweto, May 19, 2013. 18. Ibid.

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19. Bongani Xezwi, focus group interview with contract workers, Johannesburg, August 7, 2013. 20. Bongani Xezwi, focus group interview with contract workers, Johannesburg, August 20, 2013. 21. In South Africa in the 1970s, “independent” unions organizing black workers, who were excluded from the industrial relations system and the right to organize in recognized trade unions, reemerged. There were different traditions of organizing, but the formation of the Congress of South African Trade Unions (COSATU) in 1985 succeeded in instituting a principle of one industry–one union, following a principle of industrial unionism (see Baskin 1991). This federation remains the largest federation and is affi liated with the ruling ANC. Thus, food workers would be considered a different sector of workers than retail workers. Membership battles and debate over the principle of industrial unions have nevertheless surfaced, both within and outside of COSATU. Furthermore, since the period of research, there has been a split in COSATU, with the recent formation of the South African Federation of Trade Unions (SAFTU). 22. Bongani Xezwi, focus group interview with shop stewards, Johannesburg, September 29, 2013. 23. Ibid. 24. Bongani Xezwi, focus group interview with contract workers, Soweto, May 19, 2013. 25. Ibid. 26. Bongani Xezwi, focus group interview with shop stewards, Johannesburg, September 29, 2013. 27. See below for discussion of the labor law reforms after 2015 that alter this context. 28. The relevant sections are 198 A-D of the Labor Relations Act, as amended by the Labor Relations Amendment Act of 2014. 29. Bridget Kenny, focus group interview with SACCAWU shop steward and union officials, Johannesburg, February 16, 2017. 30. There have been annual meetings since 2012. I attended the 2012, 2014, and 2016 meetings, as noted earlier.

references Aoyama, Yuko. 2007. “Oligopoly and the Structural Paradox of Retail TNCs: An Assessment of Carrefour and Wal-Mart in Japan.” Journal of Economic Geography 7: 471–490. Aoyama, Yuko, and Guido Schwarz. 2006. “The Myth of Wal-Martization: Retail Globalization and Local Competition in Japan and Germany.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 275–292. New York: Routledge. Baskin, Jeremy. 1991. Striking Back: A History of COSATU. Johannesburg: Ravan Press. Benjamin, Paul. 2014. “The Persistence of Unfree Labour: The Rise of Temporary Employment Agencies in South Africa and Namibia.” In Temporary Work, Agencies, and Unfree Labour: Insecurity in the New World of Work, edited by Judy Fudge and Kendra Strauss, 118–142. London: Routledge.

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Bianchi, Constanza C., and Stephen J. Arnold. 2004. “An Institutional Perspective on Retail Internationalization Success: Home Depot in Chile.” International Review of Retail, Distribution, and Consumer Research 14: 149–169. Business Monitor International (BMI). 2013. Food and Drink Report: South Africa Food and Drink Report. London: BMI. Chan, Anita, ed. 2011. Walmart in China. Ithaca, NY: ILR Press. Christopherson, Susan. 2006. “Challenges Facing Wal-Mart in the German Market.” In Wal-Mart World: The World’s Biggest Corporation in the Global Economy, edited by Stanley D. Brunn, 261–274. New York: Routledge. ———. 2007. “Barriers to ‘U.S. Style’ Lean Retailing: The Case of Wal-Mart’s Failure in Germany.” Journal of Economic Geography 7: 451–469. Christopherson, Susan, and Nathan Lillie. 2005. “Neither Global nor Standard: Corporate Strategies in the New Era of Labor Standards.” Environment and Planning A 37 (11): 1919–1938. Coe, Neil M., and Yong-Sook Lee. 2013. “‘We’ve Learnt How to Be Local’: The Deepening Territorial Embeddedness of Samsung–Tesco in South Korea.” Journal of Economic Geography 13: 327–356. Coe, Neil Martin, and Neil Wrigley. 2007. “Host Economy Impacts of Retail TNCs: The Research Agenda.” Journal of Economic Geography 7: 341–371. Da Rocha, Angela, and Luís Antônio da Rocha Dib. 2002. “The Entry of Wal-Mart in Brazil and the Competitive Responses of Multinational and Domestic Firms.” International Journal of Retail and Distribution Management 30 (1): 61–73. Durand, Cédric, and Neil Wrigley. 2009. “Institutional and Economic Determinants of Transnational Retailer Expansion and Performance: A Comparative Analysis of Wal-Mart and Carrefour.” Environment and Planning A 41: 1534–1555. Humphrey, John. 2007. “The Supermarket Revolution in Developing Countries: Tidal Wave or Tough Competitive Struggle?” Journal of Economic Geography 7: 433–450. Kenny, Bridget. 2007. “Claiming Workplace Citizenship: ‘Worker’ Legacies, Collective Identities, and Divided Loyalties of South African Contingent Retail Workers.” Qualitative Sociology 30: 481–500. ———. 2009. “Mothers, Extraordinary Labor, and Amacasual: Law and Politics of Nonstandard Employment in the South African Retail Sector.” Law and Policy 31 (3): 282–306. ———. 2014. “Citizen Wal-Mart? South African Food Retailing and Selling Development.” In New South African Review 4, edited by Gilbert M. Khadiagala, Prishani Naidoo, Devan Pillay, and Roger Southall, 56–74. Johannesburg: Wits University Press. ———. 2018. Retail Worker Politics, Race, and Consumption in South Africa: Shelved in the Service Economy. Basingstoke, U.K.: Palgrave Macmillan. Labor Research Service (LRS). 2011. “Massmart/Walmart Merger: Statement by Labor Research Service.” Unpublished document submitted to the Competition Commission, Labor Research Service, Cape Town.———. 2013. Bargaining Monitor 27 (March). Cape Town: Labour Research Service. ———. 2014. “Presentation on Massmart/Wal-Mart to the All-Africa Massmart/WalMart Worker Alliance meeting.” Johannesburg, June 12. Lichtenstein, Nelson, ed. 2006. Wal-Mart: The Face of Twenty-First-Century Capitalism. New York: New Press.

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Macquarie First South Securities. 2013. “South African Food Retailers” (report). Johannesburg: Macquarie First South Securities. Massmart. N.d. “Overview.” Available at: http://www.massmart.co.za/our-business /overview/ (accessed May 15, 2017). Massmart + Walmart. 2014. “Integrated Annual Report for 52 Weeks Ended 28 December 2014.” Available at: http://www.massmart.co.za/iar2014/our-business -model (accessed May 15, 2017). Miller, Darlene. 2008. “‘Retail Renaissance’ or Company Rhetoric? The Failed Partnership of a South African Corporation and Local Suppliers in Zambia.” Labour, Capital, and Society 41 (1): 34–55. RBB Economics. 2011. “The Merger of Walmart and Massmart: Economic Issues.” Submission to Competition Tribunal Case 73/LM/Nov10. Pretoria: Competition Tribunal. Rosen, Ellen I. 2005. “Life inside America’s Largest Dysfunctional Family: Working for Wal-Mart.” New Labor Forum 14 (1): 31–39. Shoprite Holdings Ltd. 2012. Integrated Report 2012. Available at: https://www .shopriteholdings.co.za/content/dam/MediaPortal/documents/shoprite-holdings /integrated-report/2012/Integrated_Report_2012.pdf (accessed July 24, 2017). Theron, Jan. 2005. “Employment Is Not What It Used to Be: The Nature and Impact of the Restructuring of Work in South Africa.” In Beyond the Apartheid Workplace: Studies in Transition, edited by Edward Webster and Karl Von Holdt, 293– 316. Pietermaritzburg: University of KwaZulu-Natal Press. Tilly, Chris. 2006. “Wal-Mart in Mexico: The Limits of Growth.” In Wal-Mart: The Face of Twenty-First-Century Capitalism, edited by Nelson Lichtenstein, 189–212. New York: New Press. ———. 2007. “Wal-Mart and Its Workers: Not the Same All over the World.” Connecticut Law Review 39: 1805–1823. Weatherspoon, Dave D., and Thomas Reardon. 2003. “The Rise of Supermarkets in Africa: Implications for Agri-food Systems and the Rural Poor.” Development Policy Review 21: 333–355. Wrigley, Neil. 2000. “The Globalization of Retail Capital: Themes for Economic Geography.” In The Oxford Handbook of Economic Geography, edited by Gordon L. Clark, Maryann P. Feldman, and Meric S. Gertler, 292–313. Oxford: Oxford University Press. Wrigley, Neil, Neil M. Coe, and Andrew Currah. 2005. “Globalizing Retail: Conceptualizing the Distribution-Based Transnational Corporation (TNC).” Progress in Human Geography 29 (4): 437–457. Wrigley, Neil, and Michelle Lowe. 2007. “Introduction: Transnational Retail and the Global Economy.” Journal of Economic Geography 7: 337–340.

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Ch a p t e r 3

walmart workers in chile: a case of union democracy, militancy, and strategic capacity carolina bank muñoz

Por conversaciones con la gerencia nos hemos dado cuenta que Walmart viene con una política completamente yanqui. Es la política de puertas abiertas para las negociaciones individuales, quieren llegar con el individualismo y nosotros la lucha la mantenemos colectivamente. In conversations with management we’ve realized that Walmart has a yanqui ideology. It’s the open-door policy for individual negotiations. They want to impose individualism, and for us struggle is collective. (author’s translation) cristian silva, walmart warehouse worker

Wa l m a rt, w h ich h a s be e n h e r a l ded as the world’s largest corporation, employing over 2.2 million workers (Walmart Corporation, n.d.), is the quintessential example of a “low-road” employer. Its trademark policy of “everyday low prices” has had negative consequences for workers in the United States, globally, and across the supply chain, and its anti-union practices, low wages, and bad working conditions are well known the world over (Lichtenstein 2006, 2009; Chan 2011). In the United States, Walmart workers have been challenging this retail giant for decades but have never been able to successfully unionize. In its global operations, Walmart operates somewhat differently. It has had to adapt to varying institutional contexts and accept unions in countries where workers have stronger freedom of association laws than exist in the United States. It is therefore not necessarily surprising that Walmart workers in Mexico, Brazil, Argentina, Chile, and South Africa are all unionized. Certainly, being unionized alone does not mean that workers have good benefits and working conditions. That depends on the kind of

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union that represents them. Mexico, for example, is known for both its deeply corrupt unions and its fierce, independent unions. It is unusual, however, to see in Chile, a country whose trade union movement was nearly obliterated during the seventeen-year military dictatorship, whose economy has essentially followed a neoliberal model, and whose young people were apolitical for decades, the rise of unprecedented social movements in the last ten years, including the student movement, indigenous rights movement, environmental movement, and independent workers’ movement. In this small Southern Cone country, workers are challenging Walmart and achieving significant victories. How do we explain workers’ striking success in Chile? Kathya Araujo and Danilo Martuccelli (2012) argue that Chilean society has essentially experienced two revolutions in the last three decades: the neoliberal revolution beginning in 1973 and the revolution calling for horizontality, justice, and equality beginning in the mid-2000s. It is the confluence of these two revolutions that helps explain Chilean society in its current form. Perhaps it has also created openings for the new forms of syndicalism that I discuss in this chapter. Not surprisingly, the story is complicated in a country where Walmart workers are represented by over eighty unions, in five different labor federations. Not all of these unions are democratic, militant unions. In fact, only a handful of unions and federations have been successful. Here I focus on the warehouse union, Logística, Transporte, y Servicios (LTS), and the retail unions belonging to two federations that are taking the lead on union democracy, militancy, and strategic capacity. These federations are the Federación de Sindicatos Autonómos Walmart Chile (Federation of Autonomous Unions) and the Federación Nacional de Trabajadores Líder (National Federation of Líder Workers). Altogether, these unions, both retail and warehouse, represent around 7,000 Walmart workers. The other three federations are outside of the scope of this study. Before articulating the argument, let me fi rst defi ne militancy, strategic capacity, and union democracy. By militancy, I am specifically speaking about strikes and other kinds of direct action tactics that are either frequently used or sustained over time. I use Marshall Ganz’s (2010, 8) concept of strategic capacity, which he defi nes as “the ability to devise good strategy.” According to Ganz, the three most important elements of strategic capacity are motivation, access to salient knowledge, and learning through deliberation. In short, “the greater an organization’s strategic capacity, the more informed, creative, and responsive its strategic choices can be and the better able it is to take advantage of moments of unique opportunity to reconfigure itself for effective action” (9). Union democ-

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racy is harder to defi ne. There is a rather large and contested literature on union democracy (Stepan-Norris and Zeitlin 1996; Stepan-Norris 1997; Moody 1997; Markowitz 1998; Parker and Gruelle 1999; Sharpe 2004; Weinbaum 2004). From my perspective, union democracy requires formal democratic processes (elections and committees), a high level of worker participation and engagement in the daily life of the union, and significant power in the union’s strategic decision-making and political process. In this chapter, I argue that the warehouse union and the two retail federations that I most closely studied are characterized by a unique combination of militancy, strategic capacity, and union democracy. However, these organizations have developed differently, largely as a result of variations in the characteristics of their industries, their political histories, and their leadership. These distinctions have led to different political opportunities, tactics, and outcomes. Through the research process, I have identified two types of union organizations. I argue that the warehouse union follows a model of strategic democracy, which leads to greater economic gains and few symbolic victories. The retail unions, by contrast, follow a model of fl exible militancy, which has led to significant symbolic victories, but fewer economic gains. These two different models are elaborated later in the chapter, but fi rst I turn to a recent history of Chile.

chilean neoliberalism During the seventeen-year dictatorship of Augusto Pinochet (1973–1989), Chile served as the testing ground for the neoliberal state. Immediately after the coup, as advised by Milton Friedman and the “Chicago Boys,” Pinochet cut taxes, liberalized trade, privatized health care, social security, and education, cut social spending, and deregulated the banking system (Klein 2007; Harvey 2007; Grandin 2006; Collins and Lear 1995; Stecher and Godoy 2014).1 In addition to the economic shock treatment, the Chilean Labor Code, once a model of democracy and union strength, was all but gutted. Prior to the 1973 coup, Chilean workers had a long history of labor struggle and resistance. Until the 1973 coup, workers had made unprecedented gains in wages, working conditions, and job stability, and by 1973 a full 35 percent of the Chilean workforce was unionized (Collins and Lear 1995). Pinochet and the military attacked workers and union leaders with special vigor, according to an International Labor Organization (ILO) report cited by Joseph Collins and John Lear (1995, 70): “In the aftermath of the coup, 2,200 union leaders were fi red, 110 were killed, and 230 were

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jailed.” Between 1973 and 1978, nearly all labor rights for both unionized and unorganized workers were suspended. The 1979 Labor Code followed the neoliberal model, creating a system that gave employers the utmost flexibility in organizing their workplaces as they saw fit. “The new Labor Code facilitated shifting workers from one position to another within a fi rm, and more importantly allowed employers to fi re workers at will, individually or en masse, for ‘business necessities’” (Collins and Lear 1995, 76). The new Labor Code also placed serious restrictions on organizing and eliminated the limited sectoral bargaining that had existed before the dictatorship, requiring employers to approve it.2 In addition, there were no closed-shop provisions (where all workers in a workplace are required to belong to a single union), so a single shop could have multiple unions, further undermining union strength in the name of worker “choice.” It was a beautifully crafted work of divide-and-conquer undermining cross-sector organizing and unions’ strategic capacity to bargain collectively. Even when workers were able to bargain collectively, they were restricted to the issue of wages. No other labor issues, such as health and safety or breaks, were subject to collective bargaining (Barrera and Valenzuela 1986). Finally, the new Labor Code changed the nature of strikes. Strikes had once been a significant source of worker power, but strikes under the new Labor Code were generally ineffective. Employers were now able to lock workers out, hire strikebreakers, and negotiate individually with striking workers (Collins and Lear 1995). In 2012, after twenty-three years of democratic rule, union density was only 15.3 percent (OECD 2015), at least in part because the Concertación governments have never significantly reformed the Labor Code.

methods In 2011, I moved to Chile on a Fulbright for seven months to understand the impact that Walmart was having there. Though my initial project was quite broad, when I arrived in Santiago I became increasingly interested in the relationship between Chilean unions and Walmart. Since there are no unions that represent Walmart workers in the United States, it was especially interesting to observe how workers at unionized Walmart stores and warehouses in Chile were faring. I made various strategic choices in designing the methodology for this project. I decided that I was not interested in interviewing Walmart management. Unlike my previous work (Bank Muñoz 2008), in which I spent

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significant time interviewing management, in this project I really wanted to focus on workers and their unions. I was fi rst able to gain access to Walmart unions in Chile through a contact in the United Food and Commercial Workers (UFCW) union in the United States. After I made the initial contact and had a better sense of the lay of the land, I made contacts with two retail federations and seven unions. I also felt strongly about interviewing suppliers for Walmart in Chile. This proved to be a very difficult task, since most suppliers were nervous or scared about revealing too much information about their relationship with Walmart. After making initial contact with two suppliers, I was able to use snowball sampling to gain access to eight additional suppliers. I conducted seven months of ethnographic fieldwork in Chile from December 2010 to July 2011. During the course of the seven months, I carried out in-depth interviews with a total of forty-six participants, ten Walmart suppliers, four union presidents, seven union leaders, two federation presidents, the head of the small business association, two union lawyers, and twenty Walmart workers. In addition, I was a participantobserver at weekly union meetings, union rallies, and quarterly union membership meetings. I also spent a significant amount of time going to different Walmart stores and warehouses and observing the workplace environment. I was able to obtain secondary data from unions, the Chilean Ministry of Labor, and Walmart’s website. In addition, I have a collection of Chilean and U.S. newspaper articles on Walmart in Chile. Followup research was conducted in November 2011, January 2013, and December 2014. As with all social science research, the data used in this project are not infallible. I did not interview a random sample of Walmart workers. I interviewed union activists and union leaders. I did not interview all eightytwo Walmart unions, in part because I did not have enough time, and in part because I was most interested in unions that were engaged in actual organizing. I found these through a process of elimination, starting with interviewing the president of the company union and fi nding out which unions he worked with, but also by interviewing various labor lawyers and other union leaders. I have attempted to correct for some of the limitations of the data through participant-observation. Participating on a daily and weekly basis with LTS and member unions of the two federations I discussed earlier gave me insights that I would not have been privy to by conducting only in-depth interviews. In all, I attended about twenty union meetings and two union assemblies.

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d&s and walmart The labor movement’s loss of political power, coupled with a shift in consumer culture and new access to credit, helped to give rise to big-box stores in Chile. D&S, Walmart’s predecessor, serves as an excellent example of how the retail industry in Chile was revolutionized (Calderón Hoffman 2006; Stecher 2012). D&S started as the family-operated supermarket Almac in 1957. It was the fi rst of its kind in Chile and in Latin America as a whole (D&S, n.d.). In 1984, the company introduced a new, more economical format called Ekono, and by 1987 it had opened an Híper Ekono store, a largescale, affordable supermarket. By the mid-1990s, D&S had grown into a small empire and had diversified its operations and added a construction company, Inmobilaria SAITEC. By 1995, D&S had opened its fi rst Híper Líder (the equivalent of a big-box store in the United States). The three final important milestones for D&S were the introduction of the credit card Presto in 1996, the creation of a centralized warehouse (LTS) in 1997, and the acquisition of the French fi rm Carrefour in 2003. As D&S became more and more successful, it continued to expand across the four formats. Prior to Walmart’s acquisition, the company had Híper Líder, Líder Express, Ekono, and Acuenta. Híper Líder is the closest to what a Super Walmart looks like in the United States. It combines both groceries and consumer goods. Although the store touts its low prices, it targets upper-middle-class families. Líder Express is similar to Kroger’s in the United States and is also oriented to middle- and upper-middle-class families. Acuenta, the discount warehouse, markets to working-class and lower-middle-class consumers. Finally, Ekono most closely resembles a large convenience store and its stores are located across Santiago. By the time Walmart acquired a controlling share of D&S, it had a 35 percent market share of the supermarket industry. Walmart and D&S share parallel histories. The Walmart model developed by Sam Walton in Arkansas draws on hyper-individualism and conservative moral values. D&S had long admired and tried to model itself on Walmart (D&S, n.d.). The Ibáñez family, owners of D&S, are known to be right-wing fundamentalists, and they benefited from the neoliberal policies that allowed them to expand their enterprise. Neoliberalism has been the key to the success of both the Ibáñez and Walton families. Without the dictatorship and shock treatment that Chile received in the 1980s, D&S would probably have not gained the market

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share it had when Walmart acquired it. Deregulation and shifts in consumer culture had allowed it to grow. Its market share captured the interest of Walmart, which has had stagnant U.S. sales but success in global expansion. D&S’s growth in Chile mirrors Walmart’s expansion of its empire in the United States, where it benefited from neoliberal policies that allowed it to expand in a right-to-work state, with essentially no labor protections, and where it has received millions of dollars in subsidies for creating low-wage jobs. D&S and Walmart were a natural fit.

walmart’s model in chile Although the parallels between D&S and Walmart are clear, over time Walmart has nonetheless slowly made significant changes to its business model in Chile. At fi rst Walmart changed nothing, but soon it began to reorganize management and supplier relations, change corporate culture, and negotiate new union contracts, before fi nally purchasing a strong majority share of D&S. It also officially changed the corporate name to Walmart Chile. Walmart has also taken a different approach to corporate expansion: D&S largely focused on the Híper markets, but Walmart has aggressively expanded the Ekono and Acuenta stores. In 2014, Walmart controlled over 40 percent of the retail grocery market and had 384 stores (Walmart Corporation, n.d.). These changes to the business model can be categorized in two ways: shifts in types of stores and changing corporate culture.

T h e Dist r ibu t ion of Stor es Although there has been growth in all four types of stores since Walmart’s acquisition, the clear strategy has been to develop and expand the smallformat stores more than the Híper and Líder Express formats. This approach is in stark contrast with D&S’s strategy of focusing on Híper Líder. In 2011 alone, Walmart opened forty-one stores and expanded its credit business to 1.6 million users (Walmart Corporation, n.d.). The main reason Walmart cites for the expansion of Ekono and Acuenta stores is that the formats “address segments where supermarket penetration is still low and there is room to grow” (Best 2011). In other words, it is expanding in poorer neighborhoods, where it is going to have a competitive edge. Expanding to working-class and lower-middle-class neighborhoods also makes sense in terms of the Presto credit card, because these income groups have only relatively recently attained access to consumer credit. Walmart is one of the leaders in predatory credit practices in Chile. The

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Presto credit card has a nearly 40 percent interest rate and no grace period. Examination of a credit card statement shows that when the cardholder uses the credit card, the account starts accruing interest from the day of purchase rather than the U.S. standard of thirty days after purchase (see also Líder Servicios Financieros, n.d.). This practice, of course, most penalizes poor and working-class consumers, who do not earn enough to pay off the balance of the credit card immediately. Furthermore, many of the poorer consumers are purchasing basic food necessities, such as milk, bread, and eggs, at Walmart because they do not have the money to pay for these items in cash at the small businesses in their communities. Thus, they pay a double tax: higher prices for these basic necessities at Walmart, and interest on top of that.

Ch a ngi ng Cor por at e Cult u r e In its second and third years of operation in Chile, Walmart made a number of significant changes. First, as mentioned, it changed its official name for tax identification purposes from D&S to Walmart Chile. Second, even though it did not change the names of the stores to Walmart, it began an advertising campaign that made it clear that Líder, Ekono, and Acuenta were all part of Walmart. The ads essentially told the consumer that Líder could offer rock-bottom prices because it was part of and supported by the world’s largest corporation. Finally, Walmart began more systematically implementing its corporate culture, especially in retail stores. Workers noted a dramatic shift in shop-floor practices toward the end of 2010 and the beginning of 2011. Store managers started handing out new employee handbooks with the Walmart logo. The company started more systematically calling workers colaboradores (like the U.S. “associates”), and it also began requiring that workers “look” a certain way. For example, women were asked to wear only light-colored nail polish.3 Walmart also began to implement its trademark chanting and instituted programs such as “Employee of the Month.” Most importantly, Walmart began trying to implement its “open-door” policy as a way to get employees to individually negotiate with managers instead of going through their union. These changes in corporate culture led to increasing worker grievances.

Wor k er Gr ieva nces Despite the fact that a majority of Walmart workers in Chile are unionized, it became immediately clear that Walmart practices are no better in Chile than in the United States. While workers I interviewed generally did not have a good relationship with D&S, they felt that Walmart is significantly worse. Amanda said, “With D&S, you knew very clearly who

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your boss was. With Walmart, they try to trick you.” Amanda made the insightful observation that whereas D&S was openly hostile to workers, Walmart is more deceptive. It engages in all kinds of workplace practices that push the boundaries of the law, without consistently breaking the law (though it does a fair amount of that also).4 Statistics on employee grievances obtained by the Chilean labor ministry reveal striking differences between D&S and Walmart. In 2007 and 2008, under D&S leadership, only 109 grievances were fi led. However, between 2009 and 2011, the number of grievances jumped to 262 under Walmart leadership. Four types of employee complaints, particularly in retail, were made: human rights abuses, anti-union practices, violations against fundamental rights, and bread-and-butter issues.

h um a n r igh ts a buses Prior to Walmart’s acquisition of D&S, D&S hired Sergio Diaz as director of the Assets Protection Department (otherwise known as Internal Security). Diaz was an ex-agent of the CNI (Central Nacional de Informaciones) and had already been convicted on three counts of torture committed during the dictatorship (La Nación 2007). During his time at D&S, he used the military handbook on interrogations to train his staff. Walmart kept him on. Under Walmart proper, workers have reported abuses by Sergio Diaz and his Internal Security office (Bank Muñoz 2017). a n t i-u n ion pr ac t ices Much as in the United States, Walmart in Chile is at the forefront of anti-union practices. It is slightly more challenging to engage in these practices in Chile, because the company cannot legally eliminate unions, but it certainly tries its best to push the boundaries of what is legal. Union Meetings Under Chilean labor law, union members have the right to hold meetings in their workplace (Dirección del Trabajo, n.d.). In January 2011, Walmart announced that it would no longer allow union members to hold meetings inside the stores during their lunch hour. According to Sandra, president of the autonomous federation for Walmart Chile workers, the company gave the justification that if it allowed unions to have meetings in the store, it would have to allow the same opportunity to all workplace organizations that workers belonged to, including, for example, the company soccer team.5 This was seen by workers and their unions as simply an excuse to not allow unions to run their daily affairs on the shop floor. The announcement that unions would no longer be able to have their

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meetings in the store dealt a particularly hard blow to the autonomous unions, which have very few resources. Their dues compensation is low because workers earn the minimum wage, and there is no automatic dues deduction, so dues have to be collected on an individual store level. It would be very costly for them to rent office space, so the autonomous unions rely on the physical space of the supermarket to hold meetings, draft grievances, and have the opportunity to stay in touch with workers.

Benefits in Exchange for Union Representation The second way in which Walmart has tried to defy the law is by offering benefits in exchange for union representation. In 2009, as the autonomous unions were just starting to organize themselves, Walmart attempted a number of legal tactics to obstruct them. Since the company was unsuccessful in these attempts, it shifted its strategy to a union-busting tactic that is well known in the United States. It started reaching out to groups of workers it did not want to get involved in the potential strike. This included the middle managers of departments within each store (who in Chile are eligible to be unionized) and other people in leadership positions. Walmart offered them a “benefits package,” which included higher wages, a productivity bonus, and two additional bonuses in exchange for their agreement not to bargain collectively through the union. No worker in a leadership position inside the retail stores would be interested in joining a union whose collective bargaining agreement would not cover them, so that very clearly undermined union organizing. The labor court sanctioned Walmart for engaging in practicas anti-sindicales (anti-union practices), which are a labor law violation (Court of Appeals San Miguel 2011; González Santibáñez 2012). f u n da m e n ta l r igh ts Many Walmart workers in Chile complain about the company’s violation of their derechos fundamentales, or fundamental rights. Chile’s labor code is strong on this right, which includes “the right to life and physical integrity, the right to private communications, the right to honor, conscience and religion, free speech, freedom to enter into employment contracts, and freedom from sexual harassment” (Rosado Marzán 2012). In addition, the fundamental rights clause of the labor code guarantees union freedom and choice and the right to collectively bargain, the right to nondiscrimination, and freedom from employer reprisals (Dirección del Trabajo, n.d., 1). In the following examples, the right to honor and nondiscrimination became particularly important. In 2010, after a cashier named Mauricio grew a beard, a customer ser-

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vice manager told him to shave it off because it made him look indigent and might turn away customers. The manager cited a new Walmart employee manual that dictated how Walmart employees should look. Employees were to appear well groomed. Women could wear nail polish, but only in pastel colors. Women with long hair had to wear their hair in a ponytail. Mauricio was shocked. “I couldn’t believe these words came out of the manager’s mouth. I have never had this kind of experience.”6 Lorena, a union leader, commented, “It reminded me of the dictatorship, when Pinochet decided women couldn’t wear pants.”7 Workers and union leaders were appalled by these new company policies. In the same week, this customer service manager told Sandra that she should get rid of her rat-tail (popular in the 1980s, a rat-tail was a shortcropped haircut, with a long, tail-like piece of hair growing from the nape of the neck), because it was offensive to customers. Sandra is gendernonconforming, and it was clear that the manager was objecting to her overall nonheteronormative appearance. Sandra said, “I understand that people who work with food, like in the bakery or butcher, need to be careful with their hair. That’s about hygiene, but I’m a cashier. It’s ridiculous. . . . This kind of thing never happened with D&S.”8 Both Mauricio and Sandra talked to their union representatives, and the local union launched a “Respect at Work” campaign. Union members were indignant that a transnational corporation was coming into their country and imposing its own cultural values about appearance. It turned out that other Walmart workers were also being harassed about their appearance. Laura, a Walmart worker in another city, complained that store managers “have been giving me a hard time about wearing all the same color. When I wear purple, I like to wear it head to toe.”9 Walmart’s attempt to “standardize” the way workers look is fascinating on many levels. In Chile, all Walmart workers wear uniforms. More often than not, workers see this as a benefit, since the company has to provide them with several uniforms free of charge and they do not have to spend their own meager wages on clothing for work. In fact, when Ekono-Walmart workers fi rst started organizing their stores, this was one of the most significant demands, because the company had not given them uniforms. At the same time, as we saw earlier, workers have a visceral reaction to attempts by the company to exercise control over their bodies. All three examples are consistent with the current literature on employer or corporate control over bodies at work (Wolkowitz 2006; McDowell 2009; Adkins 1995; Tyler and Hancock 2001; Masi de Casanova 2013). Phillip Tyler and Melissa Hancock (2001, 83) and Lisa Adkins

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(1995) particularly emphasize what the former describe as the “economic value of heterosexualized gender performance to the employer in attracting customers and providing them with the services they enjoy.” In short, one could argue that Walmart wants to produce the quintessential female and male workers because doing so would enhance its ability to attract customers to its stores and provide a unique customer service experience. By having a rat-tail and being openly queer, Sandra was breaking with compulsory heteronormativity and perhaps even making some customers feel uncomfortable. The Walmart manager understood that this was a risk for his local store and mandated that Sandra change her look. In the cases of Mauricio and Laura, the company, once again, wanted to produce a “standard” image. Both of these workers violated that standard and were disciplined for it.

br e a d-a n d-bu t t er issu es Finally, workers expressed significant concerns about low wages, subcontracting, and precarious jobs. Like Walmart workers in the United States, Chilean workers (in both retail and warehouse settings) also often complained that wages at Walmart were so low that they could barely make ends meet. Carmen observed, “I work and work and work, but no matter how much I work, I still don’t earn enough money to shop here [Walmart] without going into debt. How is this possible?”10 However, in contrast to the situation in the United States, where unionized supermarket workers at grocery stores such as Ralphs, Kroger, and Fairway Market earn considerably more money and have better benefits than Walmart workers, Chilean workers across the industry— with the exception of department store workers—earn very low wages, despite the fact that they are unionized. Walmart retail workers earn about US$370 per month and about 20 percent of this is deducted for health insurance and pension benefits. This is simply not enough to live on. A onebedroom apartment (360 square feet) in a lower-middle-class neighborhood costs about US$324 per month. Housing costs alone are more than the average Walmart monthly wage. This low wage forces Walmart workers to commute significant distances to work or to live with their parents if they are students. By contrast, Walmart warehouse workers earn between US$800 and US$1,000 per month. However, these higher wages are the result of recent increases. In 2006, warehouse workers earned only US$350 per month. Another chief complaint that workers had was the difficulty in getting enough hours. A permanent full-time position at Walmart in Chile requires a forty-five-hour week. However, many workers, perhaps even a majority of retail workers at Walmart Chile, are working part-time, which

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amounts to twenty to thirty hours per week. Not only are they earning less money, but they are missing out on some of the benefits that full-time permanent workers receive. Most of the part-time workers I interviewed wanted to be working full-time, but they were simply not given this opportunity. Furthermore, store managers often used hours and schedules as a way of rewarding their favorite employees and punishing those who were making “trouble.” Isabel said, “I was about to be promoted to a fulltime position, but then it fell through. So I started talking to the union. As soon as they [managers] saw me as a troublemaker, they changed my shift and reduced my hours.”11 Precarious work and subcontracting were pervasive problems among both retail and warehouse workers. Like the U.S. company, Walmart in Chile relies on precarious labor to boost its significant profits, which were US$88 million in 2012, according to its 2012 annual report. These profits may not sound excessive in comparison to the US$15 billion that Walmart made in the United States in 2012, but scale is important here. Chile is a country of 17 million people, while the United States is a country of nearly 320 million. Based on these examples, it’s fair to say that Walmart is not a kinder transnational corporation in Chile. Although it has had to modify its approach somewhat because of the institutional environment—such as by allowing stores to unionize—this has not kept its bad practices at bay. Yet Chilean workers have achieved unprecedented gains. For example, Warehouse workers won a 30 percent wage increase in 2011, followed by a 10 percent additional wage increase in 2014. Retail workers have achieved significant legal victories, such as forcing Walmart to stop calling employees colaboradores (associates) and revert to the term trabajadores (workers). Perhaps most importantly, Walmart has had to revise its employee manual and all labor contracts to use the term trabajadores instead of colaboradores. Retail workers also forced Walmart to give a public apology, published across Chile, for violating workers’ fundamental rights. Furthermore, the company had to recognize the Ekono union, the only union to organize under Walmart proper. Because Ekono stores had not been represented by unions before the acquisition, they had to organize directly under Walmart ownership. Given Walmart’s poor labor practices in both the retail and warehouse sectors, how do we explain the victories that Chilean workers have been able to achieve?

militancy and democracy at walmart chile Chile’s democratic transition happened over twenty years ago, yet the traditional labor movement has been largely ineffective in pushing for sig-

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nificant minimum wage increases and labor code reform. Tired of old methods, a new generation of Chilean workers has emerged, and the autonomous, militant, and democratic unions in Walmart Chile are part of this revival of the labor movement. Fernando Leiva (2012) convincingly argues that there is a strong extra-institutional track in the labor movement. While legal strikes in Chile have been on the decline, illegal strikes have risen significantly. For example, in 2002 only about 12,000 workers participated in legal strikes, while more than 300,000 participated in illegal strikes (Leiva 2013; Lopez 2007). Leiva’s (2013) illegal strike data show us that there is more going on in the Chilean labor movement than meets the eye. While national statistics show us a picture of union decline, Leiva’s data show us a picture of union revival. These data are consistent with my observations of the practices, strategies, and tactics of the autonomous Walmart unions. Furthermore, what is particularly interesting is that the warehouse and retail unions in this case study have developed differently, yet have had significant victories. Because their differences are partly explained by the history of how these unions were created, I turn next to this history.

T h e History of t h e LTS U n ion for Wa r e house Wor k e rs In 2006, when D&S still owned Líder and the warehouse LTS, a group of workers started meeting to talk about unionizing. They were tired of the low wages and the lack of dignity and respect on the job. In 2006, the average wage for an LTS warehouse worker was only US$350 per month. Workers had no voice, they could not complain, and they could not make suggestions. Since the workers did not know how wages and productivity bonuses were calculated, they were regularly cheated out of part of their salaries (LTS 2010). Workers were also forced to work ten- to twenty-hour shifts when products came in, and they were always nervous about getting fi red for complaining (LTS 2010). Cristian said, “We started the union slowly and covertly. At fi rst it was only twenty of us workers, then we kept talking to people and getting them to join us.”12 After several months of covert organizing, the group had enough signatures to declare themselves an official union on May 24, 2006. Although many of the workers did not have experience with unions, some did, and their experiences were generally not very positive. The executive committee of the newly founded union all committed to an agreement to build un sindicato de verdad (a real union). For these workers, a “real” union meant on-the-ground participation and leadership by the rank and fi le. As Rodrigo said:

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If you involve people, if you create a project with them, people feel motivated. When decisions are made collectively, the responsibility for those decisions belongs to the collective, and not only to the union leadership. This is what is different. A bad collective decision is a bad decision by all [workers], which is different from a bad decision made by the union leadership, which is only the decision of a few. (Villagra 2010, 7, author’s translation)

The union leadership and the rank and fi le were careful to create a union structure that would maximize participation and democratic decisionmaking. This was not an easy task. Some union members simply wanted the union to make all the decisions and fight all the battles, without having to commit themselves to these efforts. However, the union leadership understood that they would lose the battle in the long run without a grassroots movement behind them. Once again in the words of Rodrigo: I think that the union reflects all of the contradictions that we hold. We look for the collective, while many times people look for the individual. All people work for money and work for their families, so getting workers to think collectively is really hard, especially since we live in this individualistic system which is one hundred percent backed up by television, radio, and the media in general. It is a constant struggle for union leaders to say that the collective is what’s important, not the individual. (LTS 2010)

The union leadership and many of the rank-and-fi le members take pride in prioritizing the collective. As we saw earlier, it can sometimes be an uphill battle to convince workers that a collective process is in their best interest when the entire structure of society prioritizes the individual. However, serious one-on-one organizing, careful conversations, and trust-building slowly convinced workers that negotiating as a collective had greater potential to yield results than negotiating individually with the company. Given D&S’s hostility to the union, building a union that worked collectively was especially important because the leadership knew that they would have to go on strike to obtain their fi rst contract. Ultimately, workers voted unanimously to go on strike in November 2006. The fi rst contract negotiated by the union, the 2006 collective bargaining agreement, was mediocre—it included an end to the confl ict bonus, the transportation benefit, a no-interest loan for workers, and a bulletin board for posting union announcements. Nonetheless, the strike had a significant effect in building a movement. Although union leaders were not able to make all the gains they had hoped for in the fi rst contract, they

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did gain a tremendous amount of legitimacy and credibility. The company, on the other hand, lost credibility. The strike forever changed workers who had never participated in a labor action. Cristian said, “After the strike, workers held their heads high, they demanded respect, and displayed confidence I had never seen before.”13 Strikers had learned an invaluable lesson in what it means to fight the boss, and they became very engaged in the day-to-day activities of running the union. They were invested in their union and wanted to show other workers what it truly meant to have a democratic, bottom-up union. Even nonstrikers saw fi rsthand what it meant to take risks, go on strike, and win dignity.

l e a de rship poli t ics The political experience and diversity of LTS leaders is another reason why LTS has been able to follow a particular trajectory. Their range of experience has facilitated the union’s strategic capacity and fostered a dynamic process of decision-making. Some of the older workers have a history of either union participation or participation in movements against the dictatorship. Some of the founding members of the union are socialists, but many more are not. The current president, interestingly, does not have a labor background, but was raised in the evangelical church and sees his union activism as a calling. Jorge, a member of the executive committee, had to take care of his three siblings when his parents were forced underground in 1978, one of the most brutal years of the dictatorship. He was only twelve years old and had to rely on neighbors for food. Younger members of the union do not have political histories, but they receive significant political education in the union. For example, in order to join the union soccer team, they also have to attend the escuela sindical (union school) once a week. One of the most important characteristics that distinguishes the warehouse union from the independent retail unions is the warehouse union’s unwavering commitment to political education. The combination of democratic union-building and a certain brand of leadership politics has allowed LTS to operate from a position of strength vis-à-vis Walmart. Because the union had solid roots when Walmart bought D&S, it has been able to be proactive in its relationship with Walmart, frequently anticipating company moves and being on the front lines of strategic decision-making. The history of the independent retail unions is very different. T h e History of R eta il U n ions Of the 38,000 retail workers at Walmart Chile, only about 7,000 are represented by the autonomous unions. The others are either not union-

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ized or represented by the company union.14 Each union has its own history, and I cannot elaborate on each one. However, one thing that all of these independent unions have in common is their disdain for the leader of the company union and the deals he struck with Walmart. Many of the founders of the autonomous unions were previously active union members in the company union. Seeing fi rsthand the negotiations of the company union made them realize that they needed to break away from that union and form their own. To better understand the split between the company union and the autonomous union, let me explain how the company union came to exist. In 2007, the Sindicato Interempresa Líder (SIL) was formed, and it soon started negotiating with D&S (González Santibáñez 2011).15 The leader of the SIL had been a union leader at the French chain Carrefour, and when D&S bought some of the Carrefour locations, he struck a deal with D&S. The agreement was basically one of labor-management cooperation. As Juan explained it, “D&S was very anti-union, and in order to get my foot in the door, I told them that if they accepted me, I wouldn’t make trouble. Some people call me a sellout for this, but it’s thanks to me that we even have a union.”16 D&S did not fight the SIL, hedging its bets that this union would probably benefit them by keeping the troublemakers out. The SIL grew very quickly, and in 2008 it negotiated its fi rst agreement with D&S.17 Here it is important to point out that the agreement was not a contract, enforced by law, but more like a code of conduct. In Mexico, this kind of agreement is called a “protection contract.” It provides benefits for the employer in terms of labor peace, with few actual benefits for workers (González Santibáñez 2011). The agreement between the SIL and D&S set the bar very low on wages and set high expectations for workers. It also established the maximum for which any one store could negotiate. In essence, this agreement set a damaging precedent for the future of collective bargaining at D&S. As Cristian González Santibáñez (2011) wrote in a report that was used to testify against Walmart in the South African tribunals: The signing of the protection agreement guaranteed the company that there wouldn’t be any individual stores in the chain that enter contract negotiations that end in confl ict. It also established a schedule of contracts that given Chilean labor law, assured that workers would not be able to coordinate their individual contract negotiations. The old adage, “divide to rule” was applied rigorously. The aggregate effect of this process was to achieve labor control and manage the growing wave of confl icts that the company faced. This gave

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D&S the ability to negotiate its sale to Walmart as a company that was perceived as having labor peace.

In 2009, the Chilean courts ruled against D&S for having colluded with the SIL and engaged in anti-union practices. The SIL was also disciplined for constituting a union monopoly and preventing libertad sindical (freedom of choice of union) (Court of Appeals San Miguel 2009). In 2010, the SIL signed its second agreement, now with Walmart proper. This agreement essentially reproduced the same conditions as the fi rst agreement and was denounced as a protection contract by many of the autonomous unions that had split from the SIL in 2009. Given the cozy relationship between management and the SIL, workers began to join the various autonomous unions that started out small but have grown significantly in the recent past. Ironically, the Pinochet labor code that has been so detrimental to worker power in Chile as a whole, in this instance, has opened some space for these independent unions to form alongside the company union. This opportunity arises because there is no “closed-shop” provision in Chile, which means that multiple unions are able to compete against each other in the workplace. In the long run, this hurts the labor movement, because unions end up fighting each other instead of the boss, but at this juncture at Walmart Chile it has given the more progressive independent unions the ability to lure members away from the company union. These smaller unions have slowly but surely been building power by showing that strategy, militancy, and union democracy are relevant for challenging even the largest transnational corporation. They have also demonstrated that achieving union density, while important, is not the most significant aspect of labor organizing. Although these unions have the smallest numbers, they have achieved the greatest capacity to break with the protection agreement and win real wage and benefit increases across the board, even for the company union. Furthermore, these small independent unions have also been at the forefront of symbolic victories, particularly with regard to Walmart culture.

l e a de rship poli t ics Unlike the leaders of the warehouse unions, the leaders of the independent retail unions do not have the same kind of generational diversity and experience in politics. Most of these workers have had little or no experience with unions, as they tend to be women who have come out of domestic, agricultural, and other retail jobs. Some of these workers have had experiences in community-based social movements, and some were also active in anti-dictatorship organizing, but the vast majority are new to organizing in general. However,

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these leaders have a number of things in common. They believe that the mainstream Chilean labor movement has relied too much on electoral politics, especially on the Concertación, for labor gains. They believe that the workers’ movement must be independent from electoral politics and that it must be generated from the bottom up. Perhaps most importantly, they believe that the company union has a deleterious effect on building worker power at Walmart. Given this politics, these leaders believe that they must remain independent from the mainstream labor federation, the Central Unitaria del Trabajador (CUT), and politicians. Each of these unions has its own strengths and weaknesses. Some are better at developing leaders and base-building. Others have good formal democratic procedures but are struggling with their path forward. Still others have charismatic leaders who are able to move mountains. Nonetheless, they all have developed varying degrees of strategic capacity and union democracy. In contrast to LTS, the independent retail unions constitute seventeen different organizations with varying union cultures. The unions largely developed in response to a corrupt union, so these unions have had to consistently fight against the employer and also the corrupt union. Finally, these unions do not have the same industry leverage and political experience as LTS. All of these features and circumstances have forced these unions to take a position that is more reactive than proactive. They generally develop their strategy in response to what is directly happening on the shop floor. This is not to say that they do not engage in long-term planning—for example, in contract negotiations. However, their organizing is dictated more by their daily experience than is the case for the warehouse union.

strategic democracy and flexible militancy Because of their different political histories, industries, leverage, and workplace issues, the independent retail and warehouse unions developed distinct ways of being. They collaborate and share strategies, but each is unique in its organizational culture.

St r at egic De mocr ac y I argue that the warehouse union is most characterized by strategic democracy. LTS is in a unique position because it has a tremendous amount of leverage with Walmart. If the two central warehouses were to go on strike, Walmart in Chile would essentially be shut down because it would have no way of distributing goods to the different stores. This gives the

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workers an incredible amount of social power. The ability of the union to devise good strategy (and therefore have strategic capacity) is coupled with its commitment to political education and union democracy. For this union, the political development and engagement of its membership takes precedence over contract negotiations. It has eleven membership committees, including committees for women, health and safety, the newsletter, organizing, education, and the soccer team. The leadership is elected to three-year terms, with a midterm membership vote on their confidence in the leadership. If the membership is unhappy about the direction of the union or the leadership in the midterm, they can vote them out of office. Membership meetings, called asambleas, are held every three months and always have at least 80 percent attendance. Political education is woven into the fabric of the union. In addition to setting up structures in the union to facilitate dialogue, debate, and participation, the union has invested significant resources in leadership development for workers through the escuela sindical. Union members are required to participate in the union school’s ten-week program at least once. These leadership workshops cover issues such as labor legislation, labor and working-class history, workplace rights, the labor code, and mapping production (LTS 2010).18 As Rodrigo said, “Unions exist not only to improve salaries, but also to improve working conditions, education, health, etc.” The union leadership is conscious of the fact that 60 percent of the membership are consumer-oriented young people. They believe that participation in the escuela sindical will create greater levels of class- consciousness and union participation in general. As of 2013, over 400 workers had participated in the escuela, and it had yielded incredible results. One of the most important concepts that workers learn at the escuela sindical is Antonio Gramsci’s notion of controlling production. Inspired by the worker struggles in Turin, he believed that worker councils inside of factories have true revolutionary potential, because these democratic forms, among other things, give workers control over the productive process. Gramsci (1919, 159) argued that “the existence of the council gives workers the direct responsibility of production, it draws them to improving the work, instils a conscious and voluntary discipline, creates the psychology of the producer, of the creator of history.” The union leadership has taken the concept of controlling production very seriously, and in the escuela sindical they jointly create knowledge with union members about the productive process in the warehouse. Workers were often cheated by D&S because they did not understand how their productivity bonuses were calculated. As part of their training in the escuela sindical, workers

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learn how to map their workplace. This includes understanding the layout of the warehouse, who works in each section, strategic places for disruption inside the warehouse, the flow of goods to and from the warehouse, and worker output. The union now has members who collect all this information about the warehouse, including data stored in computers. This gives the union greater capacity to set the minimum ranges for the productivity bonuses and a better understanding of strategic points where they can disrupt production. As the philosopher Frances Bacon said, “knowledge is power.” In this case, knowledge of the internal workings of the warehouse is transformed into strategic leverage (power) in contract negotiations. By mapping production, workers have greater control over their own work lives, but also have the ability to limit the surplus value being extracted from their labor. Through its path of strategic democracy, LTS has been able to create a union of innovation, leverage, and diffused knowledge. The leaders of the union have created an organization with unparalleled transparency and one in which the members are fully aware and engaged at all levels of the organization. The concept of mapping production is particularly important, because it allows for both members and leaders to have equal expertise. As such, the vast majority of members who have been in the union at least five years are perfectly capable of serving in leadership capacities because they have vast knowledge and have been successfully developed. The union therefore does not have to concern itself with leadership turnover. Building a democratic union with strategic capacity, even before Walmart entered Chile, has allowed Walmart warehouse workers to be spared the company’s worst practices. In fact, the main issues that LTS has had with Walmart proper is subcontracting and the construction of a new nonunion warehouse. However, the union has been successful at keeping subcontracting to a minimum and helping the non-union warehouse to successfully organize. Walmart does not try too many tricks with LTS because the company understands that workers control production and are very efficient. They also know the history of the union and the strike of 2006. It is not in Walmart’s vested interest to provoke this union. Instead, the company’s approach has been to try to undermine it, however unsuccessfully.

Br e a d -a n d -Bu t t e r W i ns The case of LTS has been an example of unprecedented economic gains. While the union’s fi rst contract was quite weak, the subsequent contracts, including with Walmart proper, have been extraordinary. In 2008, LTS workers won a moderate wage increase but also a significant collective

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productivity bonus, a transportation bonus, extended vacation, the right to a union office on the shop floor, a union office in downtown Santiago, release time for the president of the union, and improved health benefits. In 2011 negotiations with Walmart, they won a landmark 30 percent wage increase, improved work and safety procedures, a better transportation bonus, and uniforms. Most recently, they won an additional 10 percent wage increase, a higher productivity bonus, and restrictions on subcontracting. These two contracts under Walmart have been so successful that Chilean Walmart warehouse workers are earning more on a monthly basis than non-union Walmart warehouse workers in the United States. This is particularly impressive given the significant difference between the countries in per capita gross domestic product (GDP). In the United States, per capita GDP in 2015 was nearly $36,000, while in Chile it was only $15,000. Industry leverage alone cannot explain these tremendous gains. In order for leverage to be useful, unions need to have the strategic capacity and member mobilization in place to create viable strike threats and/or control production. It is the combination of strategy and democracy that best explains the economic gains that LTS has made with a transnational giant such as Walmart.

Fl e x ibl e Mili ta nc y I argue that the independent retail unions are best characterized by what I call “flexible militancy.” Like the warehouse union, they also have strategic capacity and union democracy, but their political histories, leverage, and workplace issues have allowed the independent retail unions to construct a different kind of organizational culture. These unions understand that they do not have the same kind of industry leverage as the warehouse union. In addition, the demographics of their membership and their leadership politics are different. Finally, the independent retail unions are confronted by two enemies, Walmart and the company union. These conditions lead them to create and develop strategy in response to conditions on the shop floor, and this is why I call their approach “flexible militancy.” The predominant issues we see them organizing around have to do with anti-union practices and violations of fundamental rights. During contract negotiations, they have also organized around wages and benefits. These unions all have democratic structures that include committees, membership meetings, and some level of political education, but their incentive structures are different from the warehouse union’s. For example, because members are fi ned for not attending union meetings, these unions have high membership participation. The warehouse union, by contrast,

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does not fi ne members for non-attendance but rather has built a union culture in which members want to come to the membership meetings and understand the importance of their role in those meetings. Attending the meetings is also easier for warehouse workers because being concentrated in two workplaces rather than seventeen creates a stronger sense of collective identity. Although they vary in their democratic structures, the retail unions do have significant strategic capacity, particularly as it relates to tactics such as direct action, delegations to the boss, and utilization of legal resources. The unions’ industry leverage is not significant, but what little leverage they have they use in creative ways. For example, twice a year the Chilean labor ministry lists the top ten most anti-union fi rms. Employers on the list are fi ned and banned from government contracts for a period of two years. Walmart has been on the list consistently over the last five years. These unions publicize this fact in Walmart stores and turn customers away from the store during a two-week period. This creates bad press for Walmart, and the unions use the opportunity to educate and mobilize their own membership.

sy mbolic v ic tor ies The independent retail unions’ leverage in the industry and leadership politics have led them to prioritize daily working conditions on the shop floor. As a result, they have been able to successfully confront a number of important issues, such as violations of fundamental rights and anti-union practices. Union members, leaders, and lawyers meet on a regular basis to devise the legal strategy. Members are trained in labor law and participate in union leadership academies, leaders identify labor law violations in the retail stores, and the two part-time lawyers put the cases together. Earlier in this chapter, I discussed two workers who were disciplined with regard to how they looked. Sandra was disciplined and nearly fi red for having a rat-tail and Mauricio for having a beard. In addition to the “rights at work” campaign that the union initiated in the stores, the union also fi led a complaint with the Department of Labor. Walmart headquarters was completely taken aback by the angry workers. They settled out of court with the union, and the union asked the company to publicly apologize to the two workers and publish that apology in the company newsletter for two weeks. The apology read: We publicly apologize to Sandra and Mauricio, for having received treatment, from an ex-employee, that is not compatible with the dignity that every worker deserves and is not compatible with the values and culture

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of our company. Walmart has already taken the necessary steps to ensure that the same situation does not repeat itself. We ask that Sandra and Mauricio accept our public apology. Once again, we want to reiterate that what took place does not represent the ideas or actions of the company in terms of the fundamental rights of workers. It has never been the intention of the Supermercado Líder (Walmart) to damage the honor of one of our employees. (Walmart Chile 2011)

This apology was a significant victory for Walmart workers. The letter is particularly interesting because it shows the deep contradictions in the company. On the one hand, it states that the behavior by the manager was “not compatible with the values and culture of our company.” On the other hand, the manager who discriminated against Sandra and Mauricio was only enforcing what had been made clear to him in the Walmart culture handbook. Even apart from what was written in the handbook, the manager understood that a certain aesthetic attracted customers. By publicly apologizing and publishing the letter, Walmart had to clarify that it could not discriminate based on appearances. This victory is a great example of the significant agency that workers do have in their workplaces, especially when they are organized and represented by a militant union. Furthermore, this victory, particularly the public apology that thousands of workers saw, mobilized others to fight against Walmart culture and stand up for their rights. Subsequent lawsuits were fi led around issues of dress, grooming, and body appearance. Another significant legal victory involved the expansion of Walmart culture in Chile. Walmart culture has been extensively written about in the U.S. literature on the company (Lichtenstein 2006, 2009; Moreton 2010; Chan 2011). At the heart of the corporation’s “culture” is the policy of calling workers “associates.” In the U.S. context, the term “associate” is used to build a sense of ownership or participation in a family. Walmart associates are also shareholders. Of course, it is well established in the sociology of work that shifting the language from “worker” to “associate,” or “team member,” or any other name aside from “worker” or “employee” is an important managerial tactic for hegemonic control. The term “worker” can lead to a kind of class consciousness that employers (especially Walmart) are not interested in. For years this approach has had much success in the United States, but most recently the low pay and poor working conditions at Walmart, along with the formation of the Organization United for Respect at Walmart (OUR Walmart), has broken some of the power of Walmart culture.

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Walmart introduced the concept of Walmart culture for the fi rst time about a year after it entered Chile. The independent unions I was working with at the time were very dubious about this new culture that the company was about to introduce. One of the fi rst aspects of the culture that Walmart tried to introduce was to shift from the term “worker” to the term “collaborator” in all formal documents. Although D&S had called its employees colaboradores, the term was never used in any formal documents, employment contracts, or official company communication and was used only informally on the shop floor. Walmart sought to change this by formalizing the use of the term. This central feature of Walmart culture backfi red when Chilean workers rejected the formal codification of the term, especially coming from a transnational corporation. It might have gone better if Walmart had formally introduced a less loaded term. For example, Walmart in Mexico uses the term “asociado,” which much more closely resembles “associate” and is far less problematic. The independent unions in Chile were outraged by the formalization of the word “colaboradores,” and in 2010, working in a united fashion, they fi led a complaint with the Ministry of Labor, objecting to the term and arguing that the use of “colaboradores” was a violation of the labor code. Union leaders told me that they were ridiculed by the SIL union for “making such a big deal” out of the word. However, the independent unions very clearly understood the implications this had for Walmart culture. In January 2012, the ministry ruled that calling workers “colaboradores” was indeed a violation of the labor code. The Inspección Communal de Trabajo Santiago Norte stated: The term worker is a juridical concept, established explicitly in the law, article 3, section b, of the labor code. If the legislature had wanted to make the term worker equivalent to the term collaborator, it would have done so. As a result, the employer’s interpretation is not applicable. In addition, the term places the employer and the employee in a seemingly horizontal relationship, without acknowledging the power relations that govern work and that create subordination and dependence on the employer. Therefore the company must modify its manual to reflect the language in the labor code. . . . The employer must make these corrections and/or changes within 30 business days of receipt of this document, understanding that it will be subject to administrative sanction if it does not abide by this ruling within the time period established. In addition, the employer must publicize the changes as required by article 156 of the labor code.19 (author’s translation)

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This is one of the most significant symbolic victories that workers in Chile have had against Walmart. It attacks a principle that is critical to the way Walmart operates and creates a space for these unions to have a public dialogue with their members about the ways in which these terms are problematic. Colaborador continues to be used in stores, but does not have the same power. Furthermore, workers have been using the ruling to fight against the term on a store level. Ricardo stated, “Every time I hear a manager say ‘colaborador,’ I respond, ‘You mean trabajador’? That’s how we wear them down.”20 Many of the unions have spent time training their members to watch out for potential shop-floor grievances. This strategy has yielded many new grievances with the Ministry of Labor. One such grievance was fi led on behalf of cashiers in 2010. Cashiers usually have a slightly off balance (positive or negative) sheet at the end of the day. If this balance sheet is perfect or if they have more money in their register than required, they receive a bonus. However, if the balance is negative, they must pay for it out of their paycheck. What was most outrageous was that Walmart was also deducting money from future earnings and requiring cashiers to cover the cost of a customer’s check bouncing. The workers won this case in the courts: cashiers no longer have to pay out of their own pockets to cover negative balances in their registers. Of course, not all of these grievances have generated victories, and even when workers do win, Walmart does not necessarily stop its unfair labor practices. But the grievance strategy does provide the opportunity for solidarity and union-building. Further, it has also strengthened strategic capacity: by giving workers the opportunity to analyze an issue across the four store formats, it has given them more power to bargain collectively for changes across all stores. In addition to success with legal strategies, these unions have also had success with direct action. One prominent example is the strategy of reuniones en la calle, or street meetings. When Walmart changed the practice of unions being able to meet inside the stores, workers at these independent unions responded by organizing street meetings across Santiago. During lunch breaks, workers and union leaders would meet right in front of the store, put up banners, and set up a mic system. Union members would take their lunch break, go outside, and discuss union business out in public, pass out flyers to let consumers know what was happening, and speak out against Walmart abuses. An average of sixty to eighty workers attended these meetings. Their participation was courageous because management took written notes on who was participating and stood around the meeting in order to intimidate union members. In fact, Walmart at-

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tempted to fi re Sandra, which would have eliminated her protected status (fuero sindical), but in the end were unable to do so. Furthermore, after several weeks of street meetings across Santiago in which Walmart was publicly humiliated, the company reversed its new policy and allowed the unions to continue having their meetings inside the stores. Finally, retail workers, particularly workers at Ekono, have had some economic victories. After their 2011 strike, the Ekono union was recognized, but the contract subsequently negotiated was very weak. Historically, Ekono workers have been paid the lowest wages and have had the fewest benefits of all four different store formats. However, continued pressure, a strike threat, and good use of legal strategy won Ekono workers an unprecedented collective bargaining agreement in 2012, bringing them in line with the rest of the stores. The new contract includes a 3.5 percent wage increase; a US$60 per month attendance bonus; a US$100 per month attendance bonus for night restockers; a US$27 per month transportation allowance; US$50 bonuses for Chilean independence day and Christmas; two uniforms provided to each worker per year (one appropriate for summer months and one appropriate for winter months); a US$38 bonus for the birth of a child; a US$38 bonus for getting married and permission to not work on the wedding day; a US$400 death benefit for the spouse if a worker passes away; and sixteen hours of release time per month for union leaders to be able to conduct their union business.21 The other independent retail unions have also gained modest wage and benefit increases.

conclusion The case study of Chilean Walmart workers yields surprising results on a number of levels. First, it is surprising that in a country that has been touted as the exemplar of the neoliberal approach, militant and democratic unions in Walmart have emerged. Second, it is perhaps even more astonishing that workers are actually winning on multiple levels against the largest transnational company in the world. In this chapter, I have argued that workers in Chile have been successful in their organizing against Walmart because they have created militant, strategic, and democratic unions. However, the differences between the retail and warehouse sectors in the formation of these unions, industry leverage, leadership politics, and workplace issues have led to different outcomes. I have argued that the warehouse union can be characterized by its use of strategic democracy, while the independent retail unions engage in fl exible militancy. As a result, the warehouse union has had the most success in organizing

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around economic issues, while the retail unions have had the most success in organizing around workplace issues and Walmart culture. These are significant fi ndings because they illustrate the power of strong working-class organization and state policy in challenging the power of transnational corporations. Chilean Walmart workers refuse to be cowed by the largest transnational company in the world. Instead, they contest and challenge the Walmart culture and practices that the company is trying to impose on them.

notes 1. The “Chicago Boys” were a group of Chilean economists, mostly trained at the University of Chicago under Milton Freidman. Many of them returned to Chile, became affi liated with the Catholic University, and trained others in Friedman’s free market model. The original group of Chicago Boys received a free education, fi nanced by the Ford Foundation, under the U.S. government’s “Chile Project” (Klein 2007). 2. Prior to the dictatorship, the Chilean Labor Code largely specified plant- or storelevel unionization, but permitted sectoral bargaining in some instances (for example, in mining). This was fully eliminated after the dictatorship. 3. Carolina Bank Muñoz, interviews with Walmart Chile workers, Santiago, May 31, 2011. 4. Carolina Bank Muñoz, interview with Amanda, Santiago, April 17, 2011. 5. Carolina Bank Muñoz, interview with Sandra, president, Federación Autonoma Walmart Chile, Santiago, April 20, 2011. 6. Carolina Bank Muñoz, interview with Mauricio, Walmart Chile worker, Santiago, May 4, 2011. 7. Carolina Bank Muñoz, interview with Lorena, union leader, Santiago, May 16, 2011. 8. Carolina Bank Muñoz, interview with Sandra, Walmart Chile worker, Santiago, May 17, 2011. 9. Carolina Bank Muñoz, interview with Laura, Walmart Chile worker, Santiago, June 4, 2011. 10. Carolina Bank Muñoz, interview with Carmen, Walmart Chile worker, Santiago, June 17, 2011. 11. Carolina Bank Muñoz, interview with Isabel, Walmart Chile worker, Santiago, May 13, 2011. 12. Carolina Bank Muñoz, interview with Cristian, Walmart Chile worker, Santiago, March 31, 2011. 13. Ibid. 14. “Company unions” refers to unions that serve management rather than workers’ best interests. In Chile, while they claim to represent workers, their job is to ensure labor peace for management. In short, the company union secures its very modest union contracts without much of a struggle with management, in exchange for maintaining the status quo. 15. Carolina Bank Muñoz, interview with Cristian, LTS lawyer, Santiago, May 20, 2011.

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16. Carolina Bank Muñoz, interview with Juan, D&S worker, Santiago, April 1, 2011. 17. Carolina Bank Muñoz, interview with Cristian, LTS lawyer, Santiago, June 20, 2011. 18. Carolina Bank Muñoz, interview with Rodrigo, president of LTS, Santiago, April 22, 2011. 19. Article 156 establishes that employees must be notified of the changes within thirty business days and that both unions and employees should receive, free of charge, a copy of the new company manual. 20. Carolina Bank Muñoz, interview with Ricardo, Walmart Chile worker, Santiago, January 17, 2011. 21. The union was able to win contract language stipulating that illness or workplace accidents cannot be used to deny a worker the attendance bonus.

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Sindicato de Trabajadores Bodegas (LTS). 2010. Contando nuestra historia “llena de lucha y dignidad.” Santiago: Transnational Information Exchange. Stecher, Antonio. 2012. “Perfi les identitarios de trabajadores de grandes empresas del retail en Santiago de Chile: Aportes psicosociales a la comprensión de las identidades laborales.” Psykhe 21 (2): 9–20. Stecher, Antonio, and Lorena Godoy. 2014. Transformaciones del trabajo, sujetividad, e identidades: Lecturas psicosociales desde Chile y América Latina. Santiago: RIL Editores. Stepan-Norris, Judith. 1997. “The Making of Union Democracy.” Social Forces 72 (2): 475–510. Stepan-Norris, Judith, and Maurice Zeitlin. 1996. “Insurgency, Radicalism, and Democracy in America’s Industrial Unions.” Social Forces 75 (1): 1–32. Tyler, Phillip, and Melissa Hancock. 2001. Work, Postmodernism, and Organization: A Critical Introduction. London: Sage Publications. Villagra, Rodrigo. 2010. “Prólogo.” In Contando Nuestra Historia “Llena de Lucha y Dignidad,” 1–2. Santiago: Transnational Information Exchange. Walmart Corporation. N.d. “Worldwide Stores.” Available at: http://www.corporate .walmart.com (accessed May 21, 2014). Walmart Chile. 2011. “Letter of apology,” Diario Líder. Weinbaum, Eve S. 2004. To Move a Mountain: Fighting the Global Economy in Appalachia. New York: New Press. Wolkowitz, Carol. 2006. Bodies at Work. London: Sage Publications.

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Ch a p t e r 4

rank-and-file union activism in walmart argentina paula abal medina

The Argentine proletariat, as it is today, has modeled itself on the struggles over the last thirty years. In 1945–1946 the old proletariat merged with the new schools of workers coming from the inland, all of whom transmitted their experience to the next generations, who absorbed and enriched it: delegates, internal commissions, industry unions, a unified workers central, massive union affiliation, and union political intervention. During those thirty years, an indestructible social fabric was formed. . . . That fabric extends through the countless communicating vessels of social class, neighborhoods, and the city. The main objective of the military dictatorship has been to destroy it, to annihilate it. The most violent repression has been against union organizations—thousands of delegates have been assassinated, thousands have been imprisoned. adolfo gilly (1978, 60–61)

Gilly (1978) ou t l i n es the main features of the kind of unionism that became central to Argentine life with the eruption of Peronism. To understand the unique brand of populism that Argentina experienced, it is useful to read Perry Anderson’s (2011, 6) comparison of Peronism with Varguism in Brazil: Vargas’s rhetoric was paternalist and sentimental, Perón’s rousing and aggressive, and their relationship to the masses was quite distinct. Vargas built his power on an incorporation of newly urbanised workers into the political system, as passive beneficiaries of his care, with a protective labour law and a gelded unionisation from above. Perón galvanised them as active combatants against oligarchic power, with a mobilisation of proletarian energies in a trade-union militancy that outlived him. The one ap-

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pealed to lachrymose images of “the people,” while the other called up the anger of los descamisados—the local sans culottes, but without shirts rather than breeches.

The features listed by Gilly in the epigraph to this chapter did not coexist harmoniously but rather tended more to generate unresolvable contradictions that unleashed profound confrontations (James 1990). Marked by such fields of tension, the preponderance of Argentine unions is undeniable, which explains why the labor movement became an intentional target of the military dictatorship (1976–1982). Needless to say, labor after the end of the dictatorship underwent various transformations. During the 1990s, when neoliberal reforms were adopted by the Menem administration (1989–1999), three disputed union models became sharper: business unionism, strongly supported by the commercial workers unions; social movement unionism; and public-sector unionism (state workers), represented by the Central de Trabajadores de la Argentina (National Argentine Workers Union, CTA), which was founded in 1992 and built a new form of unionism, and by the Movimiento de Trabajadores Argentinos (Movement of Argentine Workers, MTA), which, vindicating a Peronist tradition and the old form of unionism, resisted Menem’s neoliberal politics. This chapter evaluates a case inscribed in this complex and fraught union landscape in which a Peronist union tradition, the memory of strong trade union strength on the shop floor, and the changes to the labor movement and work crystalized by neoliberalism all coexist. As such, we are trying to understand the process of trade union organization and the struggles of workers at a Walmart store in Avellaneda in the province of Buenos Aires. This case study is of great sociological interest because it brings together a number of unique characteristics: a multinational company known for its harsh anti-union politics enters a country with a strong labor movement tradition, setting up stores whose workers are represented by a business union that favors capital accumulation for the employer over the representation of workers.1 Nonetheless, the post-neoliberal cycle that has recently taken place in various Latin American countries (Sader 2008) has reversed many of the policies that supported the precaritization of work and high unemployment. At the same time that we see the latency of a powerful national union movement, something happens that would have been inconceivable just a few years before when the neoliberal order was deeply entrenched: a strike at Walmart Avellaneda with high levels of worker

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participation creates the conditions for the election of a group of union delegates who engage in a “double confrontation”—against the conservative tendencies of business unionism (the union that represents them), and against the precarious practices being implemented by Walmart. On a national level, the commercial employees’ union is the largest in the country, encompassing nearly one-fi fth of the total number of registered workers in the country’s private sector. My colleagues and I analyzed the characteristics of the commercial employees’ union, which we regard as a business union (Abal Medina 2011). Business unions, which have fundamentally adapted to neoliberal politics, have forfeited the representation of workers—mainly in terms of working conditions—in order to strengthen the provision of services, from health benefits to club memberships and other recreational activities. The union’s accumulation of resources has thus become a central objective, so much so that it impedes the organization’s original role of defending workers. This union model relies on dialogue and cooperation with management, stigmatization of those who voice objections, and a trickle-down ideology echoed in the discourse of the delegates who process daily services. A quote from Armando Cavalieri, the model’s main proponent, illustrates his understanding of the relationship between labor and management: Let’s be honest about several issues, we shouldn’t hide them; there is no need to propel foolish progressivism, rather realist progressivism. And we must keep in mind what Lula says when he visits, don’t be afraid of multinational corporations, look, they are people who invest. And in this case, supermarkets in my sector are people who invested. They didn’t come to just fool around, they came to leave something, because building stores, hiring people, that’s a good thing! They are not paid 2,000 pesos but 700, 750, and they all have jobs. This is the labor market we have. . . . That’s why I say we must privilege investment and maintain positive dialogue and strong legal protection. (Cavalieri 2003)

Argentine scholarship has characterized the union model for commercial employees as a kind of service unionism consolidated during the neoliberal reforms by providing services for affiliate contributors. This effectively ended real union representation for those commercial workers suffering from mass unemployment, high levels of precarious work, low wages, and the endless infringement of rights. At the end of 2000, when this research project was initiated, the Walmart Avellaneda store was the only store in the country, and one of

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only a few Walmart stores in the world, that had union representation. As such, it had already confronted Walmart’s harsh anti-unionism. However, because the store delegates had been elected by a business union, they were derogatorily called delegados saca turno (sellout delegates) by a nucleus of rank-and-fi le activist delegates. Years later, after changes to the political opportunity structure, these delegates would confront the business union delegates, and it is their story as grassroots organizers that we are about to tell. Walmart entered Argentina in 1995. By that time, the country’s growth and market share was already quite advanced. Walmart’s expansion in Argentina, compared to its presence in other countries in the region, was small. In 2010, for example, the corporation operated 1,472 stores in Mexico, 436 in Brazil, 254 in Chile, and 164 in Guatemala. In Argentina, the corporation operated 11 stores in 2005 and only 44 by 2010. 2 Still, it tripled its sales volume in only three years, making it the fastest-growing company in the supermarket sector.3 The empirical corpus referenced in the following sections corresponds mainly to the second stage of a larger investigation of labor-management relationships in large companies that employ high numbers of young workers. In the case of Walmart Argentina, during the fi rst research stage (2000–2005) we set out to defi ne the business control apparatus, and in the second stage (2007–2015) to explore the politicization of workers, their organizing tactics, and practices of resistance. We decided to focus more specifically on the Avellaneda store owing to its exceptional circumstance of having union delegates in the store—making it the only Walmart store in the country to have trade union representation. This was impressive even though these delegates had adapted to business unionism and were fully enacting the roles expected of them under that model. Walmart was forced to accept the commercial workers’ union in Avellaneda, and its capitulation permitted the emergence of a new trade union organization that challenged the business model. A “domino effect” ensued as the new and inspired union delegates pushed union organization and elections across all Walmart stores in Argentina. The body of our research—for which we took a predominantly qualitative approach—comprises records from direct observations in the store and at worker protests; extensive interviews with workers, union delegates, activists, and key informants; analysis of manuals and other company publications; and analysis of documents written by delegates and activists who work for the company. The experience of politicization that we analyze here offers a unique

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opportunity to highlight a common way in which today’s workplace regimes are configured. We examine the case from up close, focusing on the practices of resistance and organization, daily frictions, jargon, motives, the implications of the outcomes, and the dissidence that becomes possible. Later we analyze the enormous asymmetry of the forces enclosing experiences of resistance in just this one intersection: one of the world’s largest transnational corporations operating in a peripheral territory (Argentina), the precarious nature of work as a quality that taints the heterogeneous set of labor relations in the current capitalist configuration, and the consolidation of the already mentioned service union.

the exile of otherness: walmart’s anti-union policy As shown in my previous work on Walmart Argentina in which I focused on the company’s capital-labor relations, Walmart Argentina’s power is characterized by the “exile of otherness” (Abal Medina 2007). This conception is an attempt at constructing subjectivation that represents the world as neither splintered nor the site of asymmetrical power relations. Exile of otherness means understanding the world as a field stripped of power (Rolnik 2002). In this sense, the maximum efficiency of the power dispositive is materialized with subjectivities that are blind to the forces of alterity, subjectivities capable of establishing a uniform social space devoid of confl icts and asymmetries. Examples of this are the promotion of a culture of a smiling and permanent disposition to service in order to satisfy the client and the circulation of mainly discursive practices that stimulate pride in belonging, such as the ritualistic singing of hymns and dancing with pom-poms to recreate a deceptive sense of abstract unified belonging that veils the multiple mechanisms of differentiation inscribed in the body of the employee. For example, the word “associate” is used to refer to employees, the idea being that every “associate” is part of Walmart’s “big family.” Furthermore, one of the most salient practices along this strategic dimension is Walmart Argentina’s fiercely anti-union policy, which is clearly expressed in a controversial confidential manual distributed among managers and executives: “The commitment to remain union free also has a price. Unless each member of management is willing to spend the necessary time, effort, energy, and money, it will not be accomplished. The time involved is a day-in/day-out (365 days per year) application of the union free standards and the obligations and responsibilities imposed

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upon the management team.” The repressive practices that deter unionism include preventing the employment of “individuals who are more susceptible to unions” and the observance of a typology of employees suspected of harboring pro-union views that allows for the immediate eradication of “confl ictive elements.” These practices are reinforced by the “Mystery Shopper” program, a concealed, invisible form of control in which someone performing as a client evaluates a worker’s performance. The company also uses its open-door policy to proactively prevent unionism: superiors receive and listen to employees’ concerns, suggestions, and complaints in an attempt to neutralize confl icts. Walmart’s power is most effective in the absence of unions, and that is why maintaining union-free stores is its fundamental objective around the world. Even the business unionism at Walmart Avellaneda that sought to fortify its labor practices was unmanageable for the corporation, whose strength lies in the nonexistence of unions. As Sartre would say, a union is the abstract skeleton of a united working class, and as such a permanent invitation to unite. Recomposition would occur a few years later with low unemployment and the prominence of the collective bargaining negotiation under Kirchnerism. The fi rst Walmart to open in Argentina immediately became an exception to the company’s anti-union policy. Inaugurated in 1995 in the populous Avellaneda municipality of the Buenos Aires province, the store, which employed around 500 workers on the sales floor, opened a union local inside the company’s tightly controlled space. There a small group of delegates welcomed managers who were visiting from other countries where Walmart was present because they wanted to verify the union “with their own eyes.” Union leaders euphorically spoke of these foreign visitors as evidence to counter what we asked in interviews: why was it that after the company had been in Argentina more than ten years no other Walmart store had union delegates?4 On the other hand, workers systematically confused the union with the company’s open-door policy. A stock clerk’s testimony from another Walmart store, gathered in mid-2002, illustrates this issue: [Do you have union delegates?] No, but we do have Human Resources, which is similar. [Why is it similar?] Because . . . I mean, it’s run by Walmart, but its role is the same because there’s an open-door policy. If you have any concerns, you go there and talk about them, everything gets resolved. The people who work there are paid by the company and not the union, but it is basically the same thing.

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The presence of union delegates contradicted the company’s constant re-creation of a world without labor-management ruptures. First, it is striking that given Walmart’s anti-union stance, workers had organized a union at all. Second, it is impressive that workers took it upon themselves to challenge business unionism. It is no coincidence that a dispute over the genuine representation of workers emerged precisely in the Avellaneda store, which then was the only one with union delegates. The transnational company’s method of control was incapable of removing the “impurity” smoothly, so when workers and delegates managed to stand their ground in collective resistance, an extraordinary field opened that allowed unionism to spread to even more stores, limiting the company’s long immunity from worker organization.

preparations As for the typical striker, for him it is about something larger and different from his immediate interest: more than poverty, more than misery, what determines him is rage, the need to assert himself as a man in the eyes of those who treat him like a thing. Let us say unionism is a way of being human. Objectively, unionism is political. jean-paul sartre (2004, 110)

Activists, candidates for delegate, and store workers maintain a vivid memory of the fi rst strike at the Walmart Avellaneda on Sunday, February 4, 2007. “The hive began to tremble from below,” and “people were at their wits’ end,” workers told us. The motivation for the strike went back to a 1978 decree issued by a virulent military dictatorship that consecrated the unlimited power of business over the schedules and lives of workers: “Proprietors or managers of all types of establishments, with or without personnel, shall have the freedom to set the days and hours for activities, the opening, closing, and duration of the working day; be it allowed to carry out business on Sundays and holidays without restraints of the minimum working day or obligations to compensate by closing on a business day.”5 The decree remained valid from 1978 until January 2007. During those years, large supermarket chains would open on Sundays, paying their employees regular business day wages. Some pieces of legislation were passed to shorten the working day, but companies would present habeas corpus petitions that would prevent their implementation. With rising unemployment, collective bargaining intensified, and being paid for working on Sundays or having the day off became a central demand of workers. This is the context that frames the confl ict between labor and management and

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figure 4.1. First Strike at Walmart Avellaneda, Outside the Store, February 4, 2007 Source: Author photo.

between the activist union and the business union in the Walmart Avellaneda. It is in this context that workers emerged who would claim the need to intervene in the life of the union, whose position they considered too soft and in line with the company’s interest. In addition, the workers’ agitation increased after they learned that the company’s security manager, a military retiree, was the nephew of General Ibérico Saint-Jean, who had occupied the de facto presidency for a few days toward the end of the military dictatorship. The repeal of the decree nearly thirty years later entailed negotiations between businesses, unions, and governments (provincial and federal) that were carried out in the midst of constant threats to lay off significant numbers of employees if the state regulations were applied and if even a murmur of protest was heard from the commercial employees’ unions.6 Finally, in March 2007, after several meetings held at the Ministry of Labor, an agreement was signed that required companies to pay adequate wages. The conditions of a possible strike—unprecedented up until that point—were multiple and complex. One very significant factor was the heavy and persistent drop in unemployment, which had been used as a powerful disciplining force in the workplace and which came about with

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figure 4.2. First Strike at Walmart Avellaneda, Inside the Store, February 4, 2007 Source: Author photo.

the new political cycle inaugurated by the government of Néstor Kirchner in 2003. Also, as multiple testimonies emanating from the labor context in 2007 reveal, the included-excluded model of disciplining workers (Abal Medina 2009) was losing ground. This model, used in times of record unemployment, pitted precariously employed workers against unemployed workers by blaming (and thus silencing) the former for benefiting from “privileges” that prevented the latter from fi nding work. The Walmart Avellaneda workers sensed an opportunity in this sequence of events. Still, the brief story of the activists involved in the strike is fraught with discriminatory layoffs, forced reinstatements, extortion, attempted co-optation, stigmatization, and other abuses arising from deteriorating working conditions. The confl ict around Sunday pay and preparations for the strike mobilized workers in the store and raised the level of class consciousness among them. With union elections taking place a few months later, they soon had an opportunity to elect activist leaders. The preparation phase leading up to the election of union delegates upended the candidates’ daily lives. Following their shifts, they would meet every night at “a colleague’s house . . . which became something like our basic unit.”7 There, they would exchange news, study laws, and search the Internet for information on the company. One of the candidates changed his shift to begin at dawn in or-

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der to sneak in materials that he would leave in dressing rooms and lockers. To avoid being spotted, he had studied the store’s security cameras. The memory of these sessions was euphoric, and workers did not so much tell these narratives as relive them: “I was actually happy, but it was like a game. I never imagined the responsibility I was going to eventually take on,” one worker recalled. The five or six workers who would meet during these months described themselves as “those who challenge the bosses,” “the intelligent guy who knows a lot and uses the Internet,” “the silent but fi rm guy, because you can’t make him budge a millimeter,” and “the charismatic guy who gets along well with workers and speaks to everyone.” They felt invincible, although their sense of omnipotence was soon tempered by realism: “I never realized how powerful Walmart was. I don’t know, I’d say . . . in fact, they have all the money and I have to make an effort to save twenty-five cents for a photocopy,” said Blacki, whose nickname mocked the company’s strategy of presenting workers as a “big family” by requiring them to include a nickname on their ID badge. He told me how he resisted this strategy, effectively challenging the company’s modes of objectifying worker subjectivity by exposing its cynical way of creating a feeling of big family: “I chose ‘Blacki,’ which is how they view us, but in diminutive and in English, just like they prefer. They didn’t like it at all, but they had to deal with it because it upheld the rules.” The workers in that group, who were in their thirties, came from working-class families, had been working at Walmart for over a decade, and, in most cases, had children. None of them had previous activist experience, a party affi liation, or even a clearly defi ned ideology. In the beginning, they borrowed the language used by protesting Walmart employees in other countries: “Gustavo downloaded flyers saying ‘Walmart exploits’ and then we added to that: ‘Walmart exploits at Avellaneda.’” They were not familiar with the local activist jargon but gradually began to acquire it: “At the fi rst assembly, I said, ‘Hello, comrades.’ No . . . actually I still hadn’t gotten used to the word ‘comrade,’ and so I suggested we address each other by name.” They often claimed not to “know anything about history,” which sometimes seemed like an apology and other times like rebellious insistence that the discussion remain focused on the present day, which many saw as a time too urgent for distractions: “This is not the seventies, this is 2007. Perón can kiss my ass.” Over time, after years of saying, “Yes, yes, however you like,” to any company representative, they abandoned obedience and began to practice uninhibited transgression—like the activist worker who enjoyed walking around the store wearing camouflage pants and a red T-shirt with Che

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Guevara’s image, looking “like a guerrilla fighter, because I know they can’t stand it.” The delegate who had once been silent told me: Everyone was in the lounge, everyone: bosses, managers, the director, and all the employees, and then I arrived in the morning, all excited, you know—I was on fi re [laughs]: “How are you, comrades? Everything all right?” And then I tell them: “Listen up, on so and so Sunday we strike. We’re going to show these sons of bitches who’s in charge. Who’s in charge? The working class!”

Discussing the collective history of rebellious movements and differentiating them from revolution, Albert Camus stressed that revolts create values.8 This idea pervaded the Avellaneda store during the organizing stage. In fact, no pre-established values were brought to the strike. We conclude, together with Camus, that revolts always create values, and yet, in this particular case, we would argue that the truth of this idea is even more intense and encompassing. Against the company’s innumerable practices aimed at exiling otherness and diluting hierarchies, the language of antagonism (“they,” “these sons of bitches”) emerges with unusual strength in the narratives, which describe, name, and unveil the hierarchies within the store (“the bosses,” “the supervisors,” “the director”). All of a sudden, Walmart’s symbolic scaffolding, re-created in the declamation recited by team leaders and repeated in associate welcome magazines—“if we see ourselves as part of a large family, our success has no limit”—proved to be as fragile as a house of cards. An internal committee operating right in the middle of the multinational inspired feelings of empowerment and transgression and a sense of great achievement. The experience of organizing a campaign to replace sellout delegates with a contentious internal union committee unfolded with the force of the unexpected and the extraordinary. Spaces (home, store, union) and relationships (family, activism, work, colleagues, friends) became intertwined in new combinations showing that the most vulnerable of the vulnerable could say no and change things. As elections drew closer, the atmosphere remained upbeat and the drive toward unionization gained momentum. But then activists’ hopes for the near future bumped up against reality: before they could formalize their candidacies as the store’s union delegates and thus ensure their immunity against layoffs, the company announced that five workers would be fi red (Ministerio de Justicia 1988).

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This triggered a series of informal lobbying efforts, and fi nally the regional business union, pressed by worker demands and solidarity protests, negotiated with the company for the laid-off workers to be reinstated— for the fi rst time in Walmart’s history. However, one of the conditions negotiated was that the union would prohibit three of the reinstated workers from running as candidates in the election set to begin in a few days. This prohibition severely affected the rank-and-file activist nucleus forged in the heat of the fi rst strike on February 4, 2007. Its most active exponents were now somewhat censured, although having just avoided the loss of their jobs, they remained optimistic: “At least the union defended our jobs.” Even though this restriction limited their mobilizing efforts and consciousness-raising, when the elections took place with other candidates, two delegate positions were won. The rank-and-fi le activist nucleus subsequently teamed up with the winners and continued to organize in the store. In what follows we share an analysis of how union organizing took place on a daily basis.

daily union practices “I’m a delegate and now what? No one teaches you how to be a delegate, where to start, what to do. I have no idea.” These were the words of one of the delegates the day after the election. By then, with barely five months’ preparation, they had read and studied various laws, organized several instore protests and one assembly, pursued numerous complaints after the layoffs, and written up dozens of flyers, among many other activities. Shortly after the elections and following several discussions, they decided to clarify their role as delegates to the workers. In the statement they issued, titled “Changes in Habits,” they emphasized that “we do not distribute medicine,” that “we are not chefs,” and that “our role aims to improve working conditions based on honorable and legal guidelines.”9 The statement included a list of diverse complaints and demands (analyzed later in this section). In dramatically refusing to claim responsibility for these functions, this statement generated a commotion in the union, fi rst among delegates and then among workers.10 One worker said: A real racket went up when they did that, because it’s also worthy of consideration for me to want to eat well and in peace after I get off work, you know? And at fi rst we thought, “And what got into these guys?” Like they think they’re big shots and everything.

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One delegate remembered that it stirred things up a lot. People got mad. . . . Later, we made it real clear that we were not going to lie or cheat for the workers. You didn’t show for work? You don’t have just cause? Face the corresponding penalty. And that way, people will respect you more.

As I have discussed in previous articles (for example, Abal Medina 2007), there exists a certain widespread misunderstanding around union practices: it is commonly assumed that delegates operate through cronyism; this assumption reduces union relations to soliciting favors. From interviews conducted with delegates of other companies, we detected a strong ambivalence in regard to this issue, since requesting favors implies both the loyalty of the benefited worker and the risk of discrediting the union. The Avellaneda rank-and-fi le activist delegates clearly and explicitly differentiated and distanced themselves from that type of unionism. Indeed, most of their practices were founded on discussion and exchange: “It is necessary to generate controversy” and to “discuss, discuss, and discuss,” they stressed. They constantly held intense exchanges, worked to reach common positions, and reflected on how to carry out agreed steps. Making controversial, grandiloquent, or ironic statements seems to have been a way to foment debate. The delegates’ intention was to have their views seep into the workers’ daily conversations and encourage workers to become close to them. Delegates also expanded the politicization of what were, until then, unchanging and indisputable conditions: speaking in English, performing cheers, practicing favoritism in awarding prizes, failing to fulfi ll conventional rights (the punctuality bonus), and questioning the sellout delegate.11 Hence, the discussion began questioning what unionism could do: “As delegates, what are we there to do and not do?” Delegates’ politicization questioned the established order: They use a lot of words in English because it’s a North American company . . . and that’s okay, but they are here in Argentina. . . . They confuse us when speaking in English, and that affects the equality of opportunities because not all of us understand English on the same level.

These questions, which we fi rst learned about from the flyers and materials drawn up by delegates, were frequently reflected in interview comments made by employees at the store. Easily identifiable by their high-

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flown style, these comments were in synch with other documents drafted by delegates, as well as with their oral testimonies and those of workers: Rather than open doors, here there are revolving doors.12 Walmart sometimes seems like a serial violator of worker rights. What they hand out are the losses. We want to be part of the earnings.

There were many other such comments that could be linked to specific problems, such as the frequent mention of “tendinitis” among cashiers, allusions to the regular practice of co-opting part-time employees (with contracts of thirty-two to thirty-six hours per week) into working full-time schedules (forty-eight hours) without modifying their contracts, and remarks about the arbitrariness of awarding prizes. From the perspective of the Avellaneda rank-and-fi le activist delegates, the role of a delegate was not to be an administrative consultant or a sellout, not to scam people, and, most importantly, not to betray workers.13 These prohibitions marked the emergence of a type of delegate in double confrontation, with both the company and the prevailing unionism. Their rejection of existing union practices began to defi ne a new way of being a delegate, as shown in the following statements: For us, delegates are like lawyers. A lawyer always defends you, whether you are right or not. A delegate does the same. He has to always defend you. We are going to make a T-shirt for all delegates to wear in the store that says: “My job is to defend your job.”

In this way, union practices acquired their own specificity, which treated the worker as a collective subject (Carter 1995; Martínez Lucio and Stewart 1997). Our interpretation from analyzing several sources was that “Will always defend you, whether you are right or not” means that the rank-and-fi le activist delegates defended the shared condition of workers, of the collective. In other words, their defense originated in their own membership in the collective of workers.

the demands and repertoires of action Dozens of charts and daily agendas help us quickly identify the main problems at Walmart Argentina that have been subject to complaints, petitions, demands, and protests:

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1. Problems linked to payments, such as bonuses for perfect attendance and punctuality, regulation of the prize system, equity in earnings, and no overtime pay on Sundays. 2. Problems linked to working conditions, including the company’s frequent use of additional hours and corresponding modification of thirty-two- to thirty-six-hour-per-week contracts to forty-eight-hour contracts; control over safety and health conditions; multiple cases of tendinitis among cashiers; malfunctioning or inadequate technology, such as devices and tools that can obstruct work or produce risks; resistance to the use of the term “associate”; psychological violence and abuse of workers; linguistic contamination owing to management use of over 150 English terms; and workers’ rejection of business policies such as cheering and dancing. 3. And fi nally, actions aimed at defending the collective organization of workers, such as exposure of the open-door policy’s inconsistency, union discrimination, failure to comply with labor standards for subcontracted stock clerks, an internal security organization managed by ex-military officers who served during the dictatorship, and complaints of a delegate working in complicity with the company.14

And this list is incomplete: we discovered an incredible number of grievances, corresponding reports, pamphlets, and letters. When the rank-and-fi le activist delegates did not manage to achieve their demands, they resorted to direct action in interesting ways. For example, when the company did not respond to the complaint that it would not modify contracts of thirty-six hours per week to forty-eight hours, delegates argued that thirty-six-hour contracts were not reasonable, since the company frequently added extra hours, inappropriately prolonging the working day. Disregard of the complaint led the delegates to protest for an entire day on the busiest corner outside the Avellaneda store. Clothed in Walmart uniforms, they distributed flyers to pedestrians and drivers that said: “Everyday low wages, always,” altering the company’s slogan of “Everyday low prices, always.”15 One of the rank-and-fi le activist delegates played an instrumental role based on his ability to write well and his documentation of the actions and demands carried out during the times of double confrontation.16 These grievances were fi led in writing with supporting documents and sent to several union compliance offices, where each demand and request was reviewed. Hence, there is extensive supporting documentation of this delegate’s union participation. This documentation allowed the grievances to be continued and assessed on almost a

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daily basis, and the permanent dialogue with workers that ensued created an opportunity for the collective of workers to do evaluations. The demands, complaints, and claims constitute forms of resistance around the time-wage relation, subjectivity issues, and the forms of collective existence within the company.17 In the fi rst case, we can group together the demands for forty-eight-hour contracts, payment for perfect attendance and punctuality, and profit-sharing as attempts to dismember the time-wage gap while denouncing other conditions, such as the illegitimate use of the concept “associate.” In the case of objectified work transforming work as subjectivity, workers questioned the attempts to instill a business culture that confused the relationship between individual workers and the company and to impose a body language of unconditional commitment. Other practices that were questioned included intimidation and psychological violence and the use of English in the stores. Rejecting Walmart’s emblematic smiley face was another example of resistance to objectification: the company’s smiley face would be inverted to appear as a frowning face to convey the workers’ true feelings. “The smile belongs to the company, we workers are sad,” they would say. If the smiley face is based on the connection between associates and the company, then the images created by the delegates turned this logic on its head by using the company’s own symbol to alter its meaning. This not only worked to regain their alterity but also generated new motives for happiness, real profit-sharing being among the most important. The delegates pursued resistance on the level of collective existence by pushing for new ways of building sociability among workers—questioning the sellout delegate being one example. Just as important were the complaints of discrimination against unionists; the questioning of the use of the term “associate” and its replacement with the expression “comrade,” which was an attempt to not only change a term but redefi ne it; the politicization of the collective through stirring up controversy, breaking down abstract information into more understandable ideas, and infi ltrating union bulletin boards; the incorporation of words such as “they,” “the managers,” “the bosses,” and “the company” into discourse, thus differentiating them from the workers; and the complex task of representing workers as a collective by connecting demands and organizing meetings between diverse groups of workers, such as temporary employees, subcontracted workers, part-timers, and even many “non-pay-scale” employees.18 Among the materials we gathered are delegates’ weekly reports to the store’s managers, with copies to the union, over a period of dozens of weeks in which they reiterated the demands, based on extensive de-

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scriptions of the various problems. The delegates would keep workers informed through multiple channels: messages posted to bulletin boards in the lounge, flyers left in the dressing rooms, email, and a blog where they uploaded all the information. When the issues covered a specific problem, the delegates would send text messages or call for assemblies or systematic informal meetings, as illustrated in the following passage: We go and speak informally to each one, ask them how they’re doing and what’s going on. If the delegates talk all the time with everyone, people begin to lose the fear of “approaching a delegate, that they might see me talking to a delegate . . .” and with Omar we take turns: today you speak to one sector, tomorrow I’ll go to another one . . .

Likewise, the delegates sent out letters and emails to Walmart authorities, both in Argentina and the United States, in which they interpreted the ethical policies and principles of the company with maximum literalness. On this issue, Peter Fleming and Andre Spicer (2007) discuss the resistance of “believing too much”—for example, when delegates exaggerated the company discourse so as to reveal the company’s true cynicism and undermine its legitimacy. They did so primarily by challenging the slogan “we are all associates,” the open-door policy, and the company’s promotion of itself as a “large family.” We can observe a kind of deep consubstantiation with the company in assertions such as: “The company’s ethical principles were not taken with the founder, Sam Walton, to his grave. We know that the company protects and wants to ensure dignified and honorable conditions for all its associates.”19 These accusations led to many problems for management, several sanctions, and, according to the delegates, one managerial layoff at the Walmart Avellaneda. Likewise, the news throughout the store tended to deeply disrupt the symbolic economy of the company’s power. Reiterating this exaggerated praise of belief and attitudes led to questioning the veracity behind the company’s ethical principles and business culture. Having worn out the establishment and strained relations between Walmart Avellaneda and the regional union, the delegates reached out to new interlocutors, such as the work and education committees of the National Chamber of Deputies, provincial and municipal branches of the Ministry of Labor, the National Institute Against Discrimination, Xenophobia, and Racism (INADI), and the Superintendent’s Office of Labor Risks, as well as media, political, and union organizations, national and international NGOs, human rights organizations, and researchers and university professors.

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In all these cases, the delegates also tended to exaggerate its external support in order to defend themselves against both the regional business union and the company’s authorities. This experience was a useful and essential lesson in how to avoid the business union’s censure inside the store. The delegates also aimed to engage the new interlocutors and scare the traditional ones (the business union and the company) in a way that said, “Careful, we have other options.” The delegates had to protect themselves as the company threatened layoffs; struggles with the business union worsened; and the organization within the store risked ruin, a possibility that began to color daily practices. With their sense of omnipotence diminished, the delegates were reminded of the fragility of their rich yet intense union organizing within the company. They began recognizing the asymmetry of the forces generated by a union organization in the workplace and of their own position—caught in a double confrontation with both the company and the higher levels of the union. The intensifying struggles within the store tended to increase employee participation. When the company began resorting more often to layoffs as a way to control the internal situation, the delegates’ dependence on external support deepened, leading to an overpoliticization of their slogans, body language, and aesthetic that stalled the progress of union organization in the store.

layoffs in tragic perpetuity In mid-2007, a new round of layoffs took place. Among those affected was Gustavo, who had previously been laid off and reinstated on the condition of being censored. At that time, a chain of emails was organized to gather signatures with the aim of placing an ad in local newspapers to denounce Walmart’s ideological persecution and anti-union behavior. Gustavo, fi nding himself once again without a job, collaborated with the delegates and the rest of the activists in this effort. They sought out the support of intellectuals, union organizations, internal committees, grassroots territorial organizations, and human rights organizations. As they did so, disturbing information came to light: the delegates learned that, just like other supermarket chains, Walmart was employing ex-military officers in important managerial positions. After numerous inquiries, the delegates discovered the name of the exmilitary officer employed as director-general of Walmart security. For victims of the dictatorship, Alfredo Oscar Saint-Jean had a last name that was unforgettable. The retired military officer’s uncle, Ibérico Saint-Jean,

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had been the de facto governor of the province of Buenos Aires during the dictatorship and the author of the 1978 decree mentioned earlier, which remained valid until 2007. 20 At the height of the dictatorship, Ibérico Saint-Jean publicly declared, “First we will kill all the subversives, then we will kill their collaborators, later their sympathizers, afterward those who remain indifferent, and fi nally, we will kill the cowards.” Alfredo Oscar Saint-Jean was an active-duty military officer during the dictatorship, stationed in Tandil, Azul, and Tucumán—regions where extremely brutal repression took place. 21 He was also the son of Alfredo Saint-Jean, one of the de facto presidents during the dictatorship. By then, the delegates would parade through the Avellaneda store with Hebe de Bonafi ni, a member of Madres de Plaza de Mayo (Mothers of Plaza de Mayo), so that everybody could see that they had the support of that human rights organization. A full-page ad with signatures was published in the national daily newspaper Página12. 22 Later, the same newspaper ran front-page stories about the company’s abuses (see figures 4.3

figure 4.3. “American Beauty” Walmart Source: Author’s screenshot of front page, Página12, 2007.

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figure 4.4. “Walmart

under the Magnifying Glass” Source: Author’s screenshot of front page, Página12, 2007.

and 4.4). Following the complaints, the Commission for Labor Legislation of the National Chamber of Deputies arranged to meet with the delegates, several of the laid-off employees, and company authorities. 23

the micropolitics of intimidation and resistance In describing how Walmart threatened, laid off, extorted, and co-opted, all to its own benefit, we have used strong words because these are extreme practices, born of an economy of excessive power. We have also referred to disproportionate transgressions and delegates’ rebellious daily actions, which, despite the company’s sporadic use of excessive power, achieved their goal: appropriating the simple power of making history. This confrontational space was tangible and the events that took place there were narrated over and over again by delegates and workers: the layoffs, the strike, the assemblies, the grandiloquent declarations, and the

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company manipulations to discredit and raise suspicion about the activist delegates and supporters. Management used other tactics as well, such as certain intonations, averted gazes, a casual presentation and questions, and insistent interjections such as, “I don’t understand you, but I’ll listen, tell me,” accompanied by a smiling, receptive, and utterly confused facial expression. Fighting the company pushed the delegates toward exhaustion and kept them constantly on guard. In several interviews, workers described the rank-and-fi le activist delegates as “overly haughty.” This phrase somewhat captures the delegates’ dilemma: they needed to present a proud demeanor at all times but in doing so risked invoking the stigmatized cliché of an activist and thus alienating the workers. In a long group interview with delegates, the transcriber, and a couple of rank-and-fi le activist delegates, several noteworthy issues came up. They recalled the period of several days (possibly at the end of the month) when they did not have enough money for public transportation. One interviewee said: Do you remember? That day we were late for the union meeting because we didn’t have any money and we had to walk. I don’t know how far, but it sure was hot! . . . And yeah . . . we must have walked fi fty or sixty blocks, and afterward we went back to the store because we wanted to tell everyone how the meeting went.

Union participation risked not only being laid off but also not being hired anywhere else for having a history of activism. Workers participated in union organizing nonetheless, despite facing permanent economic hardships that obstructed their access to needed resources such as photocopiers to make copies of notices for posting on bulletin boards or money to pay for bus tickets. Clearly, the union could have covered these costs, but its willingness to do so was subject to the fluctuating and confl ictual terms of its relationship with the delegates. Excerpts from several interviews with activist delegates echo these fundamental struggles: They begin to pay attention to you if you get involved. And we’re talking about at the level of the president of Walmart and other upper-level management. They pay attention to how you dress, how you speak, basically your mannerisms. They notice if you’re educated or not, based on how you speak, how you dress. . . . And they are going to use everything that they can against you. . . . And sometimes they even manage to impress

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you and you get nervous, and then you’re screwed, you can’t say anything else. Because they usually stand like this, with their hand here, you know? And the typical conversation they start is something like, “Tell me, what’s going on? What’s bothering you?” Those are the typical questions. And then they look you over even down to your shoes. And then they want to steer the conversation to where they want it to go and you end up talking about the soccer game that afternoon, or that one time that I don’t know how it came up, but that he was bilingual and that his grandparents who were fi nancially well off and were Scottish and, yeah, you always end up looking like a bug next to them. And then they show no interest in your complaints. You’re talking, and they have a computer next to them, and you’re talking, and they’re looking at the computer screen. You know what I mean? They always underestimate you. And on top of that, they always try to talk to you when you’re alone.

Faced with these demoralizing tactics, the delegates meticulously rehearsed a fi n de siècle politics of resistance and self-defense, as illustrated in the following representative response to Walmart authorities: “This is a group of delegates. No one talks alone. If you don’t mind, I’m going to go get the guys and then we’ll come up and sit down.” One interviewee noted that “they use a lot of psychology on us, so we respond with a lot of psychology too.” Another tactic was using alternative presentation credentials; when Walmart authorities would say something like, “So, my name is [their name], I studied at so and so university, etc.,” then, in the words of one delegate, “it’s our turn: ‘I am [their name], I’m a Walmart delegate, and so I’m a terrific troublemaker.’” One delegate told of a time when a situation escaped his control: I got up shouting, “You know what? I’m sick of how you underestimate us and offer no response to anything, and everything we ask for is always being evaluated. So this group of delegates is leaving right now, and you know what else? Don’t ever look at my shoes again.”

As he spoke, this delegate seemed to relive the anger he felt at that moment. “Tears ran down my cheeks,” he said, from the helplessness he felt

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for “not being able to give my colleagues any answers.” As a delegate, it was no easy task to demand changes in working conditions at the multinational corporation while also being responsible for putting unionism into daily practice amid its neoliberal denigration. Charged with this task, the delegates incorporated a special way of walking around the store (on corporal movement, body language, and dress, see Burawoy 1989). We have verified that the company used a powerful scare tactic that does not permit a worker even a hint of subjectivity without being marked as a target, as something to be extinguished. Thus, for the delegate who looked down at his own shoes when he became aware that the team leader was looking at his shoes while listing his university degrees and ancestors, to then look up and speak as a worker representative, required the strength to deny his own insignificance to the team leader (“you’re nothing but a bug”), which up until then had marked their relationship and determined his entire labor history. It is not easy to conclude this section. Despite our attempt to perform microphysical analysis throughout our investigation, we had not imagined the harshness of the tactics the company would use to wear down the delegates. We originally wanted to include a case of a Walmart store with delegates who worked there; later, after the composition of the internal commission was modified, we wanted to show the politicization of the workplace in the context of a confrontation between union grassroots organizers and its upper echelons. Finally, we sought to explore the new demands in contemporary workplaces characterized by precariousness (especially in the world’s largest transnational corporation), as well as the conditions for possible change, the repertoires of action, and the apparatus of union activism. However, an area of fundamental support between the union and the company also existed in this territory twice detached (as worker and as union), and insofar as its dynamic maintained confrontation, the result was usually “serial action,” in the Sartrean sense—that is, atomized direct action. What remains clear is that the union’s use of confrontation in contemporary corporate everyday activities is a practice of literally staging the body, of focusing on the face-to-face interactions not only in workers’ obligations and indifference but also in their participation and confidence. But furthermore, it is the personal up against systematic harassment by the company, whose exhaustive operation spans all the markers of class. Following Gilly (2006), the point of conjuncture that burns, that hurts— the point where “people are nobodies”—is precisely the location where what the union is supposed to do in the workplace is inscribed.

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re-legados: rank-and-file newsletters “Re-legados” is the name of a series of newsletters that the rank-andfi le activist delegates published and distributed throughout the store during the fi rst couple of months they began organizing. 24 Though the delegates announced that the idea behind the title was to hand down a “great legacy,” the word re-legado also connotes the failure of the “marginalized” and a confi nement within limits that involves not only physical limits (the store) but also functional limits. The sellout delegates, who perpetually harassed the new group of activist delegates, are a perfect example of these limitations. The regional union’s secretary-general, Antonio Orlando Machado, whom we met at the strike on February 4, declared in a newspaper interview: Díaz and Falcón are publicly offending the union. They have distributed flyers within the store but from absolute anonymity. Faced with any attempt to destabilize this union, our organic groups and statutes can provoke the separation of the delegates, who continue to reject any sort of relationship with the CTA. 25 . . . Anyone who makes attempts against union unity, in accordance with the statutes, is usually disassociated. If I corroborate it, I will expel them as affi liates.

The interviewing journalist asked: “What do you mean specifically when you say they make attempts against union unity?” The secretary-general explained: This union calls on its members to march in a protest and they don’t show up. When we call for a protest at Vital, they don’t show. We organize an event to fi x up an office we have in Crucecita, and they say they were not elected to cut grass and paint. Later, they come and ask to use a union hall twice a month for a barbecue with colleagues and then badmouth the union. I may look foolish, but I’m no fool. So it’s really very clear—they still deny it, but as soon as I have the proof, I will propose an assembly of delegates and solicit their expulsion. 26

This transcription forms part of an extensive interview in which Machado reiterated the threats of expulsion and emphasized the hierarchy of the organic groups. It would be redundant to use this space to insist on the vertical dynamic present in the decision-making, the disciplinary rhetoric in speak-

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ing of the delegates, the cronyism revealed in the secretary-general’s declarations (“they come and ask to use a union hall . . . and then badmouth the union”), and the references to the “absence of obedience to union leaders” and the “negative representation” of its chief officers, who, it should be noted, are by defi nition all workers of the establishment who perform functions as a delegate (“they don’t show up to cut the grass or to the protest at Vital or to the march”). “This group of delegates does not ask permission,” the activist delegates declared time and again in their interviews and pamphlets. “The only people who give us orders are our comrades.” This confl ict with the union, their struggle for autonomy and defense of their representation in the workplace, was not a mere discursive dispute, for two reasons. First, the secretary-general’s declarations were clearly threats to expel them. And second, being forced to engage in serial action, the delegates in double confrontation faced many more difficulties as they strove to gain improved working conditions. Likewise, the delegates’ actions were conditioned every time they had to acquire the union’s permission or request fi nancing for printing material. The threat of expulsion, however, was an especially effective mechanism used by the union to ensure the activist delegates’ confi nement. The company also often persecuted the activist delegates for their activities by paying them lower wages. It did this by dismissing the hours of work that the delegate was away from the store taking care of union responsibilities. 27 To remedy the situation, delegates had to present the company with “union permissions” issued by the regional business union. The union’s denial of these permissions became another way of conditioning the delegates and boxing them into subordinate positions within the structural pyramid. These interactions strained the already scarce personal fi nancial resources of the delegates and their families. One of the delegates wrote a heartfelt message to colleagues at the store and in activist circles: This pains me so much since I represent the only income for my family, made up of my wife and three children. And I am not only forced to tolerate Walmart’s discrimination, but they are also now taking money out of my pockets. The worst part about all this is that if my wage is frozen, my whole family will be at risk, since my wage feeds my kids, puts them through school, and dresses them. No one has the right to threaten my kids, and least of all Walmart. Many times I have cried because of such persecution, but the tears I shed will never force me to abandon the struggle that I have decided to continue. 28

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This delegate did not run again in the 2010 election, despite being recognized by an ample majority of workers as a central figure in the store’s union organizing. His disinclination to run again was based on years of repeatedly being paid a lower wage than the official wage for his job, and the union did nothing to defend his situation. Nearly defeated, he told us with great emotion: I will no longer be a delegate. My family needs minimal stability, and I just can’t do it anymore. But I know for a fact I will never again sit at home with nothing to do, staring at the ceiling. I will be in the streets, in the protests, helping the comrade delegates of the store. In solidarity!

He added, now more bright-eyed: “It’s a one-way street. You get a taste of activism and you never go back.”

final words The rank-and-fi le union organizing by delegates and activists in double confrontation with Walmart and the business union at the Avellaneda store, as well as the active participation of an important number of store employees in strikes and assemblies, undeniably improved working conditions at the store. The organizers achieved several important results: (1)  the company’s agreement to make many workers’ limited contracts into forty-eight-hour contracts, thus eliminating the precariousness of their jobs and ending the company’s frequent abuse of their previous contracts by making use of additional hours; (2) as an immediate consequence of the complaints fi led by the Avellaneda store delegates to the media and the National Chamber of Deputies, the initiation of delegate elections at another store in the Buenos Aires province, the Walmart Constituyentes store, where there had been no worker representation for twelve years; (3) guaranteed overtime pay for Sunday shifts, an achievement in which the Walmart Avellaneda strike played an especially important role; (4) the guarantee of labor stability for many temporary employees; (5) the elimination of obligatory cheers and singing on the sales floor (practices that persist in internal meetings but in which participation is now more voluntary, according to workers); and (6) enforcement of the company’s obligation to pay perfect attendance bonuses. We could say that the main triumph of the store’s worker collective, despite difficulties, was the recovery of rank-and-fi le unionism as a tool to organize their struggles and transform their working conditions. Like-

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wise, the actions carried out by the delegates and activists at the Avellaneda store spread to other stores and, to some extent, managed to reveal (and denounce) the larger chain of obstacles to unionism in transnational corporations. In the past few years, the Argentinian state has not remained neutral in this confl ict, though we cannot unambiguously establish how it means to intervene. Categorizing the arguments, it is important to keep in mind that, from 2003 to 2008, the country experienced a persistent and substantial reduction in unemployment. This trend was accompanied by revocation of the laws and regulations that maintained precarious working conditions as well as by renewed interest in recovering the role of unions and collective bargaining. These transformations have had decisive consequences for individual workers, who, brushing off the subjectivity of potential unemployment, were inspired to articulate resistance and repoliticize their relationship with the workplace. On this ground fi rst shaken by state action, labor confl icts arose and multiplied. And in contrast to the previous decade (the 1990s), several of the demands and complaints made by the Avellaneda store’s delegates and workers have been positively recognized. As mentioned, the state organisms that intervened include INADI, the Commission for Labor Legislation of the National Chamber of Deputies, and the provincial and municipal branches of the Ministry of Labor. However, many of Walmart’s irregularities—for instance, and most obviously, the arbitrary and widespread use of temporary employment agencies to contract regular workers—could be addressed if the state enforced the statutory controls over working conditions. Governments of countries like Argentina limit their sovereignty when they forgo regulations and allow convolutedly illegal practices because of their reliance on foreign investment for national development. The folly of this approach becomes tangible when we measure the suffering caused by large companies’ multiple violations of individual and collective worker rights. Finally, the union model is a direct cause of the current weaknesses of union delegates. Democratic, participatory, and open debate on statutory and legislative reforms remains a pending issue in Argentina. To conclude, and going back to the elements of Argentine unionism detailed at the beginning of this chapter, what we have called the model of the commercial employees’ union functioned decisively as an obstacle in the organizing experience of the rank-and-fi le activist delegates in the Walmart Avellaneda store. The commercial employees’ union model led directly to the delegates’ “double confrontation” dilemma: fi nding that, upon questioning and confronting Walmart’s actions, they also had to confront the union.

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The intra-union confl ict illustrated in this case study has been replicated in many other confrontations between rank-and-fi le delegates and the higher echelons of a union; over and over again, tiny groups of organizers are confronted by the same pyramidal union structures. These structures effectively confi ne delegates’ confrontation efforts to vertical confrontations, with the aim of preventing communication and relationships between isolated union ranks—for example, between different internal commissions. Without unions’ recognition and legitimation of institutional alliances between grassroots organizations within their structures (in other words, allowing the union form to be contested and modified), it is difficult to progress in politicizing the workplace and sustaining and multiplying the involvement of rank-and-fi le activist delegates. Without such guarantees, we can defi ne delegates’ organizing efforts as confined politicization, an experience whose potential has inevitable limits. Martín (Blacki) Falcón and Gustavo Córdoba, two participants in the struggles narrated in this case study, now work and organize in the National Argentine Workers Union (CTA). In March 2014, they shared with me their assessment of the organizing at the Walmart Avellaneda store: “Individual defeats, collective victories.” They had lived through the intense and dramatic times of organizing in double confrontation and experienced in the flesh Walmart’s multiple and merciless policies of repression. I asked them to explain their assessment. “Beyond our participation, today Walmart understands that in Argentina unionism is strong and that as workers we have rights.” notes 1. “Business union” refers to unions, similar to those in the United States, that are in favor of labor-management negotiations and that technically represent workers but are not activist unions. A business union is not a company union as in Mexico. 2. Twenty-five of these forty-four stores were under the Walmart brand, fourteen were ChangoMás stores, and five were ChangoMás Express stores. 3. From $1.16 billion in 2006, the company’s sales volume grew consistently to reach $3.65 billion in 2009. During this period, Walmart leapt from seventy-fi fth to forty-fourth in the ranking of the top one thousand retail companies in Argentina. Figures retrieved from Revista Mercado 1095 (June 2009). 4. These union leaders were members of the Commercial Employees’ Union (SEC) and/or the Argentine Federation of Commercial and Service Employees (FAECYS). 5. Decree 9168/78, Province of Buenos Aires. 6. For example, Miguel Premoli, director of human resources for Walmart Argentina, declared, “If the ordinance is eventually made valid, we would have to lay off 120 people from the hypermarket [one of the Walmart stores]. The margins are very small and the fi rst adjustment variable is personnel.” Daily La Nación, April 1, 1998.

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7. A Peronist local party office. 8. “While even the collective history of a movement of rebellion is always that of a fruitless struggle with facts, of an obscure protest which involves neither methods nor reasons, a revolution is an attempt to shape actions to ideas, to fit the world into a theoretic frame” (quoted in Aronson 2004, 167). 9. “First of all, we want to clarify that you can count on us in the most diffi cult of situations, but we hope you understand that we do not distribute medicine because it is not legal for us to do so, because we all have charity benefi ts for that, and prescribed medicine is discounted on the basis of charity or affi liation. But we cannot distribute the medicine. As we understand it, this cause is not why you voted for us. We all remember the unscrupulous use of the allotment of drugs, prostheses, crutches. . . . Second of all, we apologize to those who frequent the lounge during breaks and fi nd nothing to eat or drink. Many believe this is our responsibility, but it must be clarified: we are not chefs. The lounge lunch service is the Deli’s responsibility, and the responsible entity for that area must carry out the necessary measures in order to provide highquality service, as if the Mystery Shopper or Guillermo Comes [the store director] were to buy food there.” 10. The statement was posted on all the lounge’s bulletin boards, and the delegates made flyers and energetically distributed them among workers. 11. “Why do we use more than 150 words in English every day? Linguistic contamination, unequal opportunities. Why do we have to cheer? It is not part of our culture and it’s embarrassing. Do we force people from the United States to drink mate when they come here?” 12. In other words, if a worker uses the open-door policy, he or she risks being fi red. The open-door policy is thus a trap. 13. The issue of betraying workers came up when a former delegate was accused of informing on workers in complicity with the company. 14. One emblematic case, discussed later in the chapter, is that of Alfredo Oscar Saint Jean, who was employed as the director-general of security for Walmart Argentina. 15. When this demand was granted, the contract negotiation of one female worker was left pending. When the company refused to grant her a forty-eight-hour contract, the delegates walked around the store wearing company Christmas T-shirts on which they wrote in marker, “This unit of delegates supports [name of the worker].” A similar action was sparked by a dispute over Sunday overtime payment. Shortly after, the company decided to sponsor the San Lorenzo de Almagro soccer team and place the Walmart logo on their jerseys. The delegates covered bulletin boards with flyers and distributed copies of the newspaper article about the company’s sponsorship among workers, accompanied by the following statement: “What nerve! These insensible exploiters didn’t want to pay us in full to work Sundays and now they spend more than three million dollars a year to publicize their brand on that stupid shirt.” 16. This delegate, a poet from the Chaco province, was described as “the intelligent one who . . . goes crazy with Internet.” He was fi red, later censured as a candidate for delegate, and then fi red once again several months later. He continued to organize with store employees from outside Walmart. 17. For more profound analysis of these three dimensions as fields of affectation that defi ne the singularity of the relationship between capital and work, see Abal Medina 2014.

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18. It is interesting to note that in some cases the “defended” were workers whom the delegates did not strictly represent. For example, when an external stock clerk was discovered during an inspection to have been working for fourteen hours straight, a complaint was fi led with the company and the case was publicized. The delegates stressed that “the external stock clerk did not inform the delegates or any other union representatives. This situation came to our attention through several colleagues. Any sort of company retaliation towards the stock clerk will be interpreted as inspired by this complaint and the delegates will defend the stock clerk to the fullest.” The complaint ended by announcing that new inspections would be made in order to corroborate the company’s strict compliance with the maximum legal working day and its respect for time off. 19. Another interview comment illustrate this point: “I don’t know, they say things like, ‘This son of a bitch is doing me over because he’s a delegate, but he’s asking of me something that the company wants to be a requirement regardless.’ And then you throw around names of people that violate the ‘open-door’ policy and that is what’s killing them.” 20. The decree consecrated the unlimited power of businesses over the schedules and lives of workers by enabling them to cancel breaks, holidays, and limited working days, among other provisions. 21. It is important to emphasize that, to our knowledge, Alfredo Oscar Saint Jean (the son) does not face any open judicial procedures or sentences for his activity as a military officer during the dictatorship. After graduating from the Military Academy in 1975, he served as a lieutenant in several locations: Tucumán, Bahía Blanca, and, after 1979, Tandil and Azul. The latter two regions form part of subzone 12, which was run by his father, who fi rst served as a minister under President Leopoldo Galtieri and later became de facto president of the country. Subzone 12 is known for the intense repression it endured following the military coup, as well as the network of clandestine centers that operated there. Thirty-three charges were brought against Saint-Jean’s father (who has since passed away) for his participation in crimes against humanity in subzone 12. 22. The ad highlighted the support of numerous human rights organizations, branches of the National Argentine Workers Union (CTA), intellectuals, and grassroots organizations spanning issues of labor, neighborhoods, and culture. It was not signed by the Sindicato de Empleados de Comercio de Lanus y Avellaneda (SECLA), whose secretary-general, Orlando Machado, declared, “I can choose to share information about Saint-Jean’s son being employed by Walmart Security, but it is not a union issue.” 23. Héctor Recalde (the deputy who led the commission) and Claudio Lozano (a CTA member) played important roles, opening a crucial debate that outlined many of the core issues then in dispute among union representatives. 24. Translator’s note: The word relegado translates in English as “marginalized.” Within the context of the case under study, relegado designates Walmart’s attempts to undermine and discipline the unruly rank-and-fi le activist delegates by confi ning them both physically and functionally. When re is split from legados (as in Re- legados), however, the whole meaning is altered. Legado translates in English as legacy. In this case, legado designates the activist wisdom and political experience passed down by the rank-and-fi le activist delegates. In the local parlance, re has the effect of amplifying legado. With relegado converted into re-legado, the meaning of the magazine’s ti-

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tle shifts from “The Marginalized” to “Great Legacy,” a shift in meaning that is lost in English translation. 25. This comment was in response to the interviewing journalist’s observation, “But in the CGT [General Confederation of Labor] there are political differences but that doesn’t seem like a logical reason to divide.” 26. Published July 28, 2008, by the news agency ANSud.com. 27. Other times, Walmart’s lowered wages were due to “simple confusion,” according to complaints, over the delegates’ justification for the hours they spent outside the store. The company’s many episodes of “confusion” maintained uncertainty and compelled the delegates to repeatedly report the difference in their hours; hence, the company’s “confusion” conditioned the delegates’ output. 28. Excerpt from a statement entitled “The Pain of Being a Delegate.”

references Abal Medina, Paula. 2007. “El Destierro de la alteridad: El Caso Walmart Argentina.” Revista Mexicana de Sociología 69 (4, October/December): 683–727. ———. 2009. “Dispositivos, resistencias, modos de politización: Un Estudio sobre la relación capital-trabajo en grandes empresas.” PhD dissertation, Universidad Nacional de General Sarmiento, Instituto de Desarrollo Económico y Social, Buenos Aires. ———. 2011. “La Correa despolitizadora del sindicalismo empresarial.” El Grupo de Estudios en Cultura, Economía, y Política (CECYP), 15 (20): 65–92. ———. 2014. Ser sólo un número más: Trabajadores jóvenes, grandes empresas, y activismos sindicales en la Argentina actual. Buenos Aires: Editorial Biblos. Anderson, Perry. 2011. “Lula’s Brazil.” London Review of Books 33 (7): 3–12. Aronson, Ronald. 2004. Camus y Sartre: La Historia de una amistad y la disputa que le puso fi n. Valencia: Publicacions de la Universitat de València–Editorial Universidad de Granada. Burawoy, Michael. 1989. El Consentimiento en la producción. Madrid: Ministerio de Trabajo y Seguridad Social. Carter, Bob. 1995. “A Growing Divide: Marxist Class Analysis and the Labour Process.” Capital and Class 55: 33–72. Cavalieri, Armando. 2003. “Desde el Llano.” Todo Noticias (cable program), October 20. Fleming, Peter, and Andre Spicer. 2007. Contesting the Corporation: Struggle, Power, and Resistance in Organizations. Cambridge: Cambridge University Press. Gilly, Adolfo. 1978. “Los Consejos de fábrica: Argentina, Bolivia, Italia.” Revista Marxista Latinoamericana 2 (5). ———. 2006. Historia a Contrapelo: Una constelación. México: Editorial Era. James, Daniel. 1990. Resistencia e integración: El Peronismo y la clase trabajadora Argentina (1946–1976). Buenos Aires: Sudamericana. Martínez Lucio, Miguel, and Paul Stewart. 1997. “The Paradox of Contemporary Labour Process Theory: The Rediscovery of Labour and the Disappearance of Collectivism.” Capital and Class 62: 49–77. Ministerio de Justicia. 1988. “Title XII: De la tutela de la libertad sindical” (“On Union Protection”). Informacion Legislativa, Ley de Asociaciones Sindicales 23.551. Com-

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plete text available at: http://www.infoleg.gov.ar/infolegInternet/anexos/20000 -24999/20993/texact.htm. Rolnik, Suely. 2005. “El Ocaso de la víctima: La Creación se libra del rufián y se reencuentra con la resistencia.” Zehar (Gipuzkoa) 51. Available at: www.criterios.es /pdf/zeharrolnikocaso.pdf (accessed February 5, 2017). Sader, Emir. 2008. “Refundar el estado: Posneoliberalismo en América Latina.” Buenos Aires: Instituto de Formación de la CTA (September). Available at: http:// biblioteca.clacso.edu.ar/clacso/coediciones/20100824012031/sader.pdf (accessed February 5, 2017). Sartre, Jean-Paul. 2004. Problemas del Marxismo. Buenos Aires: Página12–Losada.

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Ch a p t e r 5

walmart culture in the information technologies industry in mexico gabriela victoria alvarado

T h e globa l i z at ion of t h e econom y, with its tendency toward the flexibilization of the labor market, provides the background within which to contextualize Walmart.1 This includes the doctrine of the new wave of management, which adopted the perspective of lean production in work organization, and the creation of a management industry full of publications, consultants, and experts in labor relations advocating the implementation of management systems around the globe (Reygadas 2002). Such new models of flexibilization are implemented through the organizational or corporate culture and, according to scholars who advocate for the new work systems, emphasize a cultural type of control in which active and voluntary participation is sought, as opposed to a coercive and bureaucratic control (Reygadas 2002). In the case of Mexico, we observe that the neoliberal state policies of the 1980s initially impacted collective bargaining agreements. However, from the 1990s to the present, different political regimes have imposed a focus on productive modernization with a tendency to eliminate state enterprises while increasing the flexibilization of workplace relations, following the demands imposed on Mexico by the International Monetary Fund and the World Bank through their structural adjustment programs.2 In this chapter, the central research question focuses on the globalization of the Walmart culture, specifically: How is Walmart culture implemented in Mexico, considering the socio-labor and local cultural reality of information technology (IT) workers? What types of interpellation do these workers manifest? To answer this question, I fi rst describe the arrival of Walmart in Mexico in the 1990s, including its organizational structure and the hierarchical positioning and work roles of the IT worker. Subsequently, I present fi ndings on the social and labor reality, working conditions, and control of IT professionals in Walmart Mexico. I also illus-

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trate the various management strategies used to establish Walmart culture in Mexico and evaluate the interpellation, redefi nition, negotiation, and appropriation of cultural symbolic forms by IT workers. I also highlight the inconsistencies of the so-called Walmart corporate culture as applied mechanically by administrators, managers, and “coaches” in the Global South, particularly in a country like Mexico. The result is empty talk in the face of the IT worker’s socio-labor reality. This research combines various methods, including fieldwork as a participant-observer, which allowed me to produce a fi rsthand interpretation (Geertz 1991) and deal with the “distance” and “objectivity” conditions inherent to it.3 Data collection took place between the years 2000 and 2006 through a variety of sources, such as emails, messages, and communiqués circulating inside the company’s network and annual and quarterly reports of the subsidiary in Mexico and the U.S. headquarters in Bentonville, Arkansas. I also evaluated internally distributed documents, such as the magazine Walmart Today, various newsletters, and an external collection of newspaper reports. Finally, I participated in company events, like ceremonies, celebrations, and cultural induction courses. All of these qualitative data were entered into a logbook from February 2004 to June 2006. By having the opportunity to participate voluntarily as an employee in various committees, such as committees for the working environment, for organizational development, and for emotional vision, I was able to gather extensive information, which was systematized, coded, and analyzed. My participant-observation as a local researcher, with the opportunity to keep a record of data and information and to conduct interviews over five years, facilitated a thorough analysis and a dense triangulated description with quantitative data. This corpus of ethnographic, quantitative, and qualitative information forms the basis of the analysis that I present here.4 This is of course not the fi rst project to systematically analyze the condition of Walmart workers in Mexico, but it is the fi rst to detail the lives of IT workers. As such, this project has been informed by a corpus of literature on Walmart Mexico. Some have studied the company from an economic and administrative sciences perspective (Bribiesca Silva 2005; Alvarado García 2006). Others have considered it as a model of management and business innovation based on organizational changes, without taking flexibility in labor relations into consideration (Vázquez Huérfano 2011). Studies in organizational behavior have focused on the notion of social responsibility (Moguel Liévano and Camacho 2012). These studies rely almost solely on information about the company that is public and

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on interviews with senior officials, which limits their objectivity as well as their analysis. On the other hand, some have carried out research in-store, such as Romo González (1996), who has argued that the explanation for the store clerk feeling of being in an “environment of deliberate joy” despite the salaries “not being too high” is due to the corporate culture of the company, which understates the complexity of the phenomenon. 5

work culture: reflection and interdisciplinary discussion In recent years, there has been academic interest in Mexico and Latin America on the issue of work culture. One example is the work of a group of social researchers coordinated by Rocío Guadarrama Olivera (1998), which, relying on different theories of culture and work and on qualitative methods, looks beyond those defending the government’s “new work culture” and observes Mexico’s productive reality with more equanimity. For his part, Enrique de la Garza’s (2000) edited volume on work culture aims to understand the state of the discipline considering the most important theories and results of empirical research in the region and systematizing fi fteen years of empirical research and theoretical discussions in Latin America. In this project, I approach culture from a historical-semiotic perspective, since Walmart culture cannot be assessed adequately without recourse to the historicity and socioeconomic structure within which it is immersed. Accordingly, constant increase in the productivity of labor has been one of capitalism’s defi ning characteristics since the fi fteenth century. This overarching trend fi nds its cultural ideological justification in the birth of the entrepreneurial spirit that followed the fusion of the bourgeois adventurism and speculative commercial spirit of the aristocracy (Von Martin 1962). At a later stage of capitalist development, a series of ideas placed the Protestant ethic at the center of a “civilized” scheme, as illustrated by Benjamin Franklin’s advice to a young merchant in “Tips for a Young Trader” (Weber 1993, 44): Franklin’s transubstantiation of Christianity renders the demands of capitalist productivity through the framework of individual self-discipline and the exigency therein to sacrifice the “now” of use of value on the altar of “tomorrow’s” commercial valorization. In more recent times, we can observe a global redefi nition of labor relations through the labor culture of lean production. Here, rationalization strategies are deployed with a high degree of internal flexibilization through human resource departments. The central aspect of this

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culture is the continuous improvement of both the production process and the workers, with the objective of promoting open competition between different areas, activities, and posts, as well as the mercantile relationship between individuals, clients, and providers, devoid of collective protection (Wannöffel 1998). I also consider workplace culture from the analytical intersection between the symbolic and the productive, defi ning workplace culture as generating, updating, and transforming symbolic forms of work activity. Additionally, I incorporate the concept of the symbolic efficiency of work, which I defi ne as the cultural effects of work activity and the meanings that emerge from work and are transferred to other aspects of a worker’s life, and the work efficiency of culture, that is, the cultural influences that affect the work process; at stake in the latter are the different ways of seeing, valuing, and feeling that have been learned inside and outside the workplace and that influence work performance (Reygadas 2002, 20). Furthermore, the cultural reproduction of subaltern groups and their subordination are considered possible by the hegemonic class. In other words, there is a specific way in which a social group organizes and uses their time and space that is different from the capacity of hegemonic groups to incorporate, enforce, and monitor such times and places, nationally and globally (Aguado and Portal 1992). Finally, following Thompson (1998), I address cultural analysis as the study of symbolic forms—the actions, objects, and significant expressions of various kinds in relation to the historically specific and socially structured contexts and processes in which, and through which, such forms occur and are transmitted and received.

walmart arrives in mexico Walmart established itself in Mexico in 1991 as a subsidiary of the multinational, having ventured into the Mexican market by partnering with CIFRA, an important chain of Mexican supermarkets. By late 2012, the number of employees totaled 248,246, a growth of 11.47 percent compared to 2010 (figure 5.1), and there were 2,989 stores in operation, a 23.75 percent increase compared to 2010. Of those stores, 2,347 were in Mexico and 642 in Central America—78.52 and 21.48 percent of the total, respectively (Walmart de México y Centroamérica 2012).6 By late 2013, the company reported 2,199 units in Mexico and 662 in Central America, for a consolidated total of 2,861 units. Taking into account restaurants and banks, the total is 3,221 units, which brought in a profit of Mex$420,892 million.

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figure 5.1. Number of Walmart Mexico and Central America Employees, 2000–2013 Source: Annual reports, Walmart de México y Centroamérica.

Table 5.1. Walmart Mexico and Central America Sales (in Millions of Mexican Pesos), 2012 and 2013

Sales Total Mexicoa Central Americab Consolidated

2013

2012

Percentage Growth

363,666 56,911 420,577

352,123 55,724 407,847

3.3 2.1 3.1

Source: Walmart de México y Centroamérica 2013 (December). Sales totals from the restaurant segment are not included. b Includes the effect of exchange rate fluctuations. a

The number of employees decreased from 248,246 in 2012 to 241,536 in 2013. It can be deduced that the increase in the number of stores and the decrease in the number of employees meant that employees have absorbed a greater workload (speedup). On the other hand, there are staff working in areas of the company who are not formally Walmart employees, such as student interns and the external and outsourcing suppliers (Victoria Alvarado 2009). In addition, the company’s annual data underestimate the number of workers it employs, as it does not include outsourced workers under contract (who work under precarious conditions regardless of their specialization). The Mexico store obtained higher sales growth (3.3 per-

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cent) in 2013 over the previous year compared to Central America (2.1 percent), for a consolidated total growth of 3.1 percent, as shown in table 5.1.

the it sector at walmart mexico The job classifications at Walmart Mexico can be categorized into procurement, operations, distribution centers, and services. This chapter focuses on the service division, which includes IT workers. The information technologies area consists of a vice president who reports to the executive vice president of administration and fi nance and who oversees seven subdivisions (among them, Merchandise, Accounting, Infrastructure, and Distribution and Imports), which are coordinated by 31 managers. There are approximately 201 line workers (programmers, analysts, assistant managers, project leaders, supervisors, and operators). Within the IT area, there are three categories of formal employment: low (operators, programmers, programmer analysts), medium (analysts, senior analysts, senior programmers), and high (assistant managers, project leaders, system specialists). IT workers carry out their activities in two large data computing centers (Azcapotzalco and Toreo). Usually, they interact with the retail stores through the store’s system manager or, in the case of restaurants, the accountant, manager, or assistant manager. IT workers’ tasks include: (1) the administration and maintenance of the catalog of the existing systems; (2) the administration of the data communications network and the phone voice network, including the servicing of network problems; (3)  support for the company’s internal suppliers and users; (4) support for the business units (stores) and distribution centers in Mexico, Argentina, and Brazil and diagnostics of equipment and system failures; and (5) oversight over contract fulfi llments by service providers. Unlike Walmart retail and distribution employees who work at physical locations, IT workers are uniquely situated in an environment of virtual reality. Information science depicts virtual reality as an information interphase that generates synthetic environments in real time as a representation of reality. Since the information revolution, virtual reality has been deployed in multiple dimensions. In our case, it is articulated through the triangle corporation–information network–physical world. It is in this virtual space that the labor process of the IT employee unfolds, and there that they monitor and correct any problems with the functioning of Walmart’s information network.

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working conditions: control of time and workspace and contractual arrangements Although we may theoretically distinguish between labor conditions and corporate culture, in the labor reality of IT workers the two are intimately related and shape specific labor relations, including work shifts, overtime, the extension of the workspace into the home, different contractual schemes (from outsourcing to the absence of collective bargaining), evaluations to promote salary hikes, norms instituted by the company that replace internal labor regulations, technology-supported surveillance, limited professional expectations, and different forms of symbolic labor violence in the workplace. These labor conditions are imposed in greater or lesser ways by hegemonic power relations. Culture is no longer presented as something that operates outside of power but is rather part and parcel with it. Culture in this context designates the capacity to impose meaning, values, and modes of illegitimate behavior through pedagogy or symbolic violence. As noted by Pierre Bourdieu and Jean-Claude Passeron (1995, 46), the pedagogical action that mediates social relations between groups or classes in a social formation is the basis of an arbitrary power that imposes an arbitrary culture. The cultural reproduction of IT workers as a subaltern group, and their subordination to Walmart Mexico, is made possible through the use, organization, and control of the labor space-time. In other words, as this social group organizes and uses its time and space in specific and everyday ways, it faces the capacity of the hegemonic group to incorporate, impose, and control such time and space. As such, class struggle in this context materializes in a battle over “gaining spaces” and “controlling time” (Aguado and Portal 1992, 68). This dynamic is exemplified in changes made to the workday in the IT area. In the fi rst stage (1991–2000), despite the hours being from 8:00 a.m. to 5:00 p.m., it was common and “considered favorable” by the bosses for IT workers to stay until 8:00 p.m. Subsequently, managers dropped this expectation but took advantage of the roles fulfilled by IT workers to fi nd other ways to extend the workday. For example, IT workers operate equipment and systems that function 24 hours a day, 365 days a year, requiring that they cover night shifts and “rest day shifts”; these hours are not paid as overtime because the work carried out during these shifts is considered part of the employee’s tasks. These shifts are carried out both at the workplace and at home. The workspace is extended through

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technological resources such as cell phones, radios, and laptops. Additionally, certain shift rotations are damaging to workers’ health. For example, some workers are scheduled for a night shift followed by a morning shift, or an afternoon shift followed by a night shift. Workers call this “the leap of death” because they do not have the opportunity to rest and recover between shifts. Often the health ramifications of these shift rotations are colitis, impaired sleep, and stress. In terms of wages, IT workers are more privileged than other Walmart workers. Like other workers, they receive the fi nancial benefits prescribed under federal labor law, although their access to “profit-sharing” has become contentious because Walmart argues that these fi nancial benefits are affected by “factors of a legal nature”; instead, IT workers are compensated with a “results bonus,” which is not always granted. For example, Walmart paid no results bonuses in 2008 because, according to the company, results were not achieved, even though US$11 billion of profit were generated for shareholders of Walmart Stores, Inc. IT workers’ wages are also affected by the requirement that they participate in training during nonwork hours or during breaks, despite the specific statement in Walmart’s own regulations and ethics statement that workers should be paid for training. Furthermore, there is no systematic way for workers to move up in the company through promotions based on additional training, nor does the company disclose job positions or salaries. These decisions are made unilaterally.

T h e Full R a nge of R ecrui t m e n t: From Ou tsou rci ng to t h e Non e x ist e nce of U n ions Since 2001, there have been approximately 250 employees in the IT area (including line employees and supervisors).7 The constancy of this number stands in contrast with the marked increase in the number of stores that need to be serviced. There is a simple explanation for this apparent paradox: subcontracted or outsourced staff are hired to service systems and equipment in the new stores (numerical flexibility). As noted earlier, one of the tasks of employees in the IT subdepartments is administering and coordinating the various suppliers (subcontracted staff). These nonpermanent subcontractors perform highly qualified specialist services in the development of various projects, especially managing software and fi lling permanent or fi xed jobs in which they carry out preventive and corrective maintenance of the various systems and central computers on the WAN (wide area network) and on computers and systems in the LAN (local area network) of each of the stores, offices, and distribution centers.

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Outsourcing in the IT area at Walmart Mexico is an important form of hiring that the transnational uses to lower its labor costs. We can observe that of the seven IT subdepartments, five depend heavily on subcontracted labor, which accounts for 50 percent of Merchandise employees, 62.5 percent of Accounting employees, and 53.3 percent of Distribution and Imports employees.8 Not enough data are available to characterize the Central Support, but it is the subdepartment with the most outsourcing support compared to all the other subdepartments, as it is responsible for providing corrective and preventive support for all equipment and systems and maintaining all the units at the stores, offices, and distribution centers. Another form of hiring the company uses to control employees is apparent in its relationship to the union, which is in line with Mexican labor flexibility. There are various forms of unionism in Mexico, ranging from company unions, or corporate unionism, to independent democratic unions. At Walmart Mexico’s operations, the most common type of union among retail store employees is the company union, which derives its power primarily from the Collective Contracts for the Protection of Enterprises (CCPEs).9 These contracts, which are negotiated between the union and the company without workers even knowing about their existence, codify the subjugation of store employees.10 With the support of the government, companies and company unions provide the pretense of having a union and collective bargaining, even if that occurs behind employees’ backs without their knowledge and with complicity between the company and an intermediary. Because the Walmart Mexico CCPE is registered and recognized by the labor authorities, it has acquired a ghostly judicial presence for the employees. There is no IT union; instead, employment contracts are directly negotiated between the IT worker and the employer. Walmart’s position on unions has been clear since the days of Sam Walton.11 However, the “benefits” of Mexican labor law have enabled the company to adapt its position to the present context. In other words, while Walmart must allow the presence of unions in its stores in Mexico, it can avoid negotiating with democratically elected unions by signing on with company unions. Given this scenario, it is evident how defenseless the IT worker is at Walmart Mexico. The situation of subcontracted IT workers is very similar, although their rights and benefits are more restricted. Like the regular IT workers, they are also not represented by a union; indeed, they consider themselves lucky to at least have a source of work. In lieu of a real trade union, there is a “Hotline” subdepartment, governed by Walmart’s policies, which stipulate that:

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the Hotline is an area created to strengthen a suitable working environment and to comply with our Open Door policies and Code of Ethics. It aims to provide associates at all levels the opportunity to express their concerns through a different channel and independently from their bosses, through a group of partners who are interested in listening and seeking a solution to such concerns. (Walmart de México 2002a)

They add that Hotline representatives will make contact by visiting the units, making phone calls, and sending emails. This subdepartment is in the Vice Presidency of Human Resources, which is responsible for outlining the policies and regulations of the transnational in Mexico.12 In the absence of internal working regulations that are registered with legal entities such as the Ministry of Labor and whose content is known to employees, these policies and regulations are responsible for establishing working conditions in the company. In 2003, sixty-one policies were classified. The Hotline subdepartment’s main nonwritten function is to justify why unions are unnecessary. In short, in order to maintain a system of maximum efficiency at a lower cost, Walmart must implement not only its corporate culture but also a series of procedures, regulations, policies, and codes of ethics that control, discipline, and punish IT workers. To this I turn next.

walmart culture and the it worker’s perspective To analyze Walmart culture, it is necessary to take a semiotic historical approach in which the cultural practices are manifested through symbolic forms. technology expands under globalization, and so does the scope of economic activity as production models are disseminated and business systems interact globally. According to its business strategy, Walmart is imposing marketing techniques, installing equipment, and establishing distribution logistics at the same time that it is implementing Walmart culture.13 The company has placed particular emphasis on establishing Walmart culture in its operations in Mexico, but this has been difficult, since worker turnover at the company is 44.2 percent (Walmart de México 2004). At the retail store level, management must familiarize nearly 50 percent of its workforce with Walmart culture every three months.14 The turnover rate of the IT staff—mainly attributable to staff layoffs, which are euphemistically called “talent renewal”—is about 12 percent per year. These layoffs often involve dismissing older employees with more rights and replacing them with young professionals at much lower wages and benefits.

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After the formal purchase of CIFRA, Walmart’s predecessor in Mexico, the change in culture was realized through induction courses for employees in which euphemisms were deployed to explain the implications of globalization and provide a (partial) historical vision that hewed to the values of the Protestant ethic in presenting Mexican workers’ way of working in a negative light and exalting U.S. workers’ way of working. And in the same spirit of capitalism informing Benjamin Franklin’s “Tips for a Young Trader” (Weber 1993, 44), an important influence on work behavior and the economy since the eighteenth century, Sam Walton launched his “Ten Rules to Build a Successful Business,” “Five Commitments for Success,” and “Golden and Platinum” rules in the twentieth century. These rules may have been somewhat effective in Walmart’s expansion in the United States. However, when “exported” to Mexico and presented to IT workers there, they called the efficiency of the model into question. Specifically, they challenged the efficiency of this corporate culture by pointing to another cultural efficiency, the one that IT workers bring with them from outside the workplace. For example, one of the thematic modules in the induction courses on Walmart culture related to the concept of “leader.”15 It is interesting to observe the differences between employees’ interpretation of leadership and management’s interpretation. The following quotes are illustrative of this dynamic. An employee said: More than leaders, I see bosses. This is something that should be worked on, because a leader is one who encourages and motivates his or her people to do things, for the simple fact that there should be coherence between what is done and what is said. In other words, that they lead by example, because that is how they will show others they are convinced of Walmart culture. I know it is not an easy change.16

A manager said: We focus mainly on achieving results, setting objectives, and cost control. We continue to make caring for our people secondary. The online associates are people who do their job well, but I think sometimes we do not pay enough attention to them, because often we feel overwhelmed by the projects we have to deliver and we neglect the human aspect.17

The different ways in which Walmart implements models of leadership at the formal and informal levels are clearly illustrated in these comments.

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Leadership is an important mechanism of control for Walmart, as good leaders should effectively blur the relations of power in the company. However, in this case we see that IT workers have not necessarily been coopted by this strategy. The IT worker quoted here clearly sees the difference between workers and their bosses. Other leadership figures are also used in the indoctrination of workers—for example, sponsors who are responsible for training new employees and mentors in charge of supporting employees in difficult work. There is also the “adviser to improve,” who tracks employees who have not performed well. Finally, there are informal leaders in IT, such as employees who volunteer for various committees.18 Walmart applies the principles underlying Walmart culture through a number of programs, including “Quality of Life” and “100 in Culture.”19 The “Quality of Life” program consists of a small booklet containing a series of agreements with companies for discounts on products and services such as pharmacies, opticians, hotels, and so on. This program also coordinates the open training for employees, although this is not significant for IT workers’ professional development, since they have a higher level of education. The “100 in Culture” program tried to reinforce knowledge of Walmart culture by communicating to employees specific behaviors and habits to adopt. The program emailed one message to IT workers each week for sixteen weeks. Workers would then have to respond via email and confi rm whether they had practiced the behavior or not. Some examples of the behaviors communicated in the messages were: “evaluating the work of other areas, because each one makes an important contribution to the company,” “being well informed on what is happening in my area to better serve my internal customers,” “identifying my areas of opportunity and trying to improve them,” “smil[ing] and greet[ing] colleagues, customers and suppliers (3-meter rule),” and “treating my colleagues equally, regardless of rank or role.” There was relatively low participation in this program. In fact, only 35.65 percent of employees on average responded to the email. 20 One IT worker said: The truth is, I did see the invitations to participate, but there was always either a massive fault in the EFT [electronic banking], and the managers of the stores got quite nervous, or there were problems with Telmex links or . . . as nearly always, there was a lot of work . . . and also, I feel like they see us as little children with no judgment. We already know our responsibilities. 21

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Although it is true that workers were often overwhelmed by their work duties, this quote reflects something that came across in interviews time and time again—the feeling of being infantilized by the company. Not responding to the email was an easy and inconsequential way of engaging in passive resistance, whether intentional or not. Another way the Walmart culture was implemented was through training and cultural induction courses. In 2005, a site was established on the internal network about Walmart culture, outlining the principles, philosophy, and origin of the company. Some modules were installed as practical guides for each basic principle of the culture, structured especially to be implemented by store managers. For the IT area, Walmart suggested that the modules be implemented in the ten-minute daily meetings, but because some of these were not always held, some sections sometimes implemented the modules in their weekly meetings. Since 2006, a small segment is dedicated at the IT area’s monthly meetings to discussing these aspects of culture. The self-learning site on the network is called CAMINA, and it contains a virtual library with 550 abstracts of books on leadership, marketing, management, business strategies, and human resources, as well as business biographies, based on information from the Business Book Review and other such sources. The virtual library also provides access to 178 abstracts in Spanish of books (with titles such as Executive Coaching, Short Course for Managers, Smart Decisions about Money, Personal Magnetism, and The New Era of Marketing), monthly summaries of articles from fi fteen global journals on management and business, and the section development plan, which sets out work skills development for employees with the support of their immediate supervisors over a period of six months to a year. The proficiencies supported by the plan are personal (leadership, communication, decision-making, time management, service motivation) and technical, and the plan covers 133 operational routines for stores and staff offices. The plan offers online courses specific to the IT area, called Netg, which have been very difficult to implement owing to the workload and also because the pedagogical conditions for learning are nonexistent: IT workers are expected to do them in “little bits of free time” during the workday. Within the corporate culture, the theoretical and methodological tools of cultural studies—such as myths, informal communication channels, rituals, and symbols—are incorporated into the work environment. Walmart culture tries to induce behaviors through various business rituals. Among

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these are the initiatory rituals (when an employee starts working at the company); the work rituals; rituals of recognition (employee of the month, seniority); rituals of exclusion (feedback for improvement that managers can use to modify an employee’s behavior, even going so far as to terminate the contract); and integration rituals (the birthday cake, doing the cheer). The cheer is performed in the IT area only at public events or in some meetings; the cheer does not occur daily, as is customary in stores. Regarding this practice, an employee stated: Well, I see that people initially rejected [Walmart] culture, but there is an optimistic 25 percent, and we think that it would be good. . . . But another large percentage continues to reject the concepts and even “mock the cheer.”22

“What I don’t like,” said another employee, “are things like birthdays and ‘acting like a duck.’ I disagree with public demonstrations like the squiggly, 23 things like the cheer, where it is known that those who do it feel ridiculed and everyone else knows.”24 What we can observe is that these rituals that worked in the United States during the days of Sam Walton are not working in the IT division in Mexico, where approximately 80 percent the of workers have an undergraduate education. Instead of creating integration, identification, and enthusiasm, these practices generate embarrassment and are uncomfortable. This is precisely because principles, values, practices, and beliefs cannot be implemented mechanically and uniformly in each of the local cultures within which Walmart establishes itself. 25 Just as there are work ceremonies and corporate festivals to celebrate the economic achievements at Walmart Mexico, corporate culture is also expressed in the form of various reports: the company’s general reports, the annual and quarterly reports, and the monthly area reports. All of these briefi ngs, besides providing information and data about the expansion, sales, and charities through the Walmart Foundation, deal with the subject of how reporting is done. They are inspired by, and often mechanically copied, from Walmart’s U.S. operations. One important reporting tool is the annual work environment survey, through which we can see how an employee expresses himself or herself and the contradictions surrounding the principles instilled by the Walmart culture, such as individualism. The following quote from an IT worker is illustrative:

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The work atmosphere is generally not good, because, for example, when there is a problem and two or more areas are involved, it is a situation of everyone against everyone, and nobody accepts the responsibility they each have. There is a lack of comradeship and teamwork spirit even within the same area. There is a lot of individualism. 26

In 2005, Walmart culture was evaluated as part of the work environment survey carried out by the IT Vice President’s office. Fifty percent of the respondents in IT said that they did not experience a culture. Nor did it seem to them that people were practicing the basic Walmart principles of integrity, respect for the individual, service, and the pursuit of excellence. One IT worker said: Sometimes I wonder where the principles of the organization are. They speak of respect for the individual, but sometimes we forget a bit and we fall into the same inconsistency caused by work pressure—so then we say one thing but do another, and trust is lost. In business we talk about participation, but we remain autocrats, and about teamwork, but individualism continues to be promoted and rewarded. 27

Through the symbolic forms described here, the company produces meanings and puts them into circulation through different avenues of message transmission and via various means of communication and internal dissemination, such as the different portals on the company network, internal communications, posters on computer screens, messages conveyed through emotional or neuro-linguistic programming (NLP) techniques, and workshops in “emotional vision” and making a “slogan” for the Vice Presidency of IT. Among the main means of communication are the bimonthly publication, Walmart Today, and informative monthly newsletters. All of the formal means of communication mentioned here disseminate the corporate culture of the company and its operational and labor policies in a controlled and partial, top-down vertical manner. When someone sends out a message publicly that is not consistent with the interests of the company, situations like the following, as related by an employee, have ensued: When several managers came to IT, the top management, accountants— they came from the Accounting Department—and at the meeting they held to analyze the WEI [Work Environment Index], a colleague who worked in the area of Production made a comment on overtime not being paid.

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figure 5.2. Responses of Walmart IT Workers to the Question: “How Have People Responded to Walmart Culture?” Source: Walmart Mexico, “Evaluation of the Walmart Culture,” questionnaire distributed in 2004 by the Vice President of Systems.

So they let him speak, then the meeting was adjourned, and an hour later they called him to go collect his check, as he was fi red. So when they have those famous meetings to fi nd out if we’re happy, I rather keep quiet. 28

In short, IT workers have a clear understanding that the open-door policy and the work experience survey, rather than being tools to resolve labor confl ict, are tools through which labor is disciplined and punished. Walmart benefits not only because it achieves submission, but also because, in the face of public scrutiny, it can argue that it conducted a survey whose results showed that workers were pleased with their work environment. In 2004, the vice president of IT gave out an open-ended questionnaire entitled “Evaluation of the Walmart Culture” to the area’s 241 employees. 29 I systematized the information received and analyzed it to confi rm some elements that account for the way in which IT employees challenge, renegotiate, and appropriate the various symbolic forms that constitute the Walmart culture. Forty-seven percent of IT workers participated in the survey. The questions were coded to obtain a general pattern of responses. Responses to the following questions are presented in figures 5.2 and 5.3:

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figure 5.3. Responses of Walmart IT Workers to the Question: “What Do You Like

the Least about the Walmart Culture?” Source: Author’s interview question, 2004.

How have people responded to Walmart culture? And what do you like the least about the Walmart culture? Regarding the fi rst question, I observed four types of respondents: (1) those whose acceptance of Walmart culture is very positive; (2) those whose acceptance of Walmart culture is positive; (3) those who perceive Walmart culture as a process and who are confl icted about accepting it; and (4) those who perceive shortcomings in the implementation of Walmart culture and fi nd it difficult to accept. As we can see in figure 5.2, one-third of respondents (34  percent) believed that “people” had a “very good” or “good” stance toward the acceptance of the Walmart culture, and two-thirds (62 percent) believed that it had been “irregular and difficult to accept.” I detected five types of responses to the second question (What do you like the least about the Walmart culture?): (1) those who liked every thing and disliked nothing about Walmart culture; (2) those who disliked that the Walmart culture was not adhered to and who criticized how the leaders (bosses) acted; (3) those who disliked doing cheers; (4) those who did not like the economic and labor policy aspects of Walmart culture; and (5)  those who did not consider the Walmart culture appropriate for a country like Mexico (see figure 5.3). These varied opinions were grouped as follows: One-third (31.25 percent) replied that there was no consistency between what was said and what was done—in other words, the company did not “live,” or apply, its own culture. These respondents saw the corporate cultural approach as just all talk, as empty rhetoric. Another group of respondents (24 percent) did not like certain practices like “do-

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ing the cheer,” were critical of the company’s economic and labor policies, and felt that the Walmart culture was not appropriate for Mexican employees. Among the miscellaneous responses (9.82 percent) were the following: the Walmart culture had “no planning, which affects family life”; the Walmart culture “focuses more on stores than offices”; and in the Walmart culture, employees are “called ‘associates’ when it means something different to what they are.” And fi nally, one respondent expressed a dislike for “preferences, influences, and suck-ups.” In fieldwork, I asked some employees who did not answer the questionnaire (53 percent) why they had not participated. Some replied that they were overworked and the questionnaire would take too much time, and others responded that it did not make sense to answer it, that the “evaluation” was just all talk. The academic training of IT workers is mostly at the professional level in information technologies, and generally their social background is middle-class; most are children of professionals, smallbusiness owners, or employees of small businesses. Therefore, it is especially difficult for them to take Walmart culture seriously, especially practices like “the cheer.” And yet there are some cultural principles that have permeated even the ranks of IT workers. By and large, IT workers have bought into the principle of individual competitiveness, focused as they are on professional and economic success. As a result, IT workers experience constant stress, which affects their health. Their lifestyle and aspirations are rooted in urban life, and their tastes and leisure activities reflect relatively high levels of consumerism and engagement in the computer entertainment offered by multimedia platforms. Their self-defi nitions and participation in the economic and political realities of their environment on all levels—local, national, and global—are generally conservative, as is consistent with the social background of most technology specialists and the limited perspectives that situate them between apathy and ambiguity.

Eva luat ion as a n I nst rum e n t of Wor k Con t rol Walmart has several effective ways to subjugate, monitor, and sanction workers, and one is “feedback for improvement” (Walmart de México 2002), a procedure that supports management in correcting and modifying the behavior of employees to make them more productive. There are five levels of feedback: (1) verbal feedback; (2) fi rst written feedback; (3) second written feedback; (4) day of decision-making and fi nal written notice; and (5) termination. In the IT area, this type of feedback is generally applied up to the second level, since employees are generally not dis-

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missed individually but rather in collective staff layoffs (what the company euphemistically terms “talent renewal”), which occur more or less annually. Another form of control is the employee assessment. As Michel Foucault (2005, 189) points out: The evaluation, the exam, combines the techniques of a supervising hierarchy and those of normalizing sanction. It is a normalizing watchful eye, a surveillance that enables qualifying, classifying and punishing. It establishes over individuals a visibility through which they are differentiated and sanctioned.

Walmart uses a variety of different assessments; the most common is the annual performance evaluation, in which the employee is subjected to a rating with parameters outlined by the principles and values of the Walmart culture. In a scheduled appointment, usually lasting about two hours, the employee interacts face to face with his or her immediate superior. These sessions are characterized by hostile questioning of the employee, as the demand for absolute quality and greater productivity increases is insatiable. Employees generally leave their performance evaluation feeling unsatisfied and frustrated that their work and efforts have not been recognized.

Wa l m a rt’s I T Pa nop t icon a n d Mobbi ng (Wor k pl ace V iol e nce) The company’s so-called “Statement of Ethics” details the behaviors expected of Walmart employees. The primary responsibility of the “associate” is to “obey the law at all times! If you see that another associate is breaking the law, or if any associate asks you to break it, or you think they may break it, report it immediately” (Walmart de México 2005). In other words, the transnational’s corporate ethical statement to employees is: Obey, monitor, and report. As I explained earlier, IT resources are available at Walmart Mexico’s website that employees can use to self-learn in their “spare time.” The website also contains a vast catalog of cultural induction courses, embodying Walmart values and principles, that employees are to use as guides to behavior. These online resources are amplified through magazines, books, and videos on “success” and competitiveness among employees. This experience-making machine, intended to modify behavior and channel or reeducate the behavior of individuals, constitutes a post-

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modern Walmart “Labor Panopticon,” updated with technology (Foucault 2005, 207). In the transnational’s apparatus of service production, surveillance becomes a key economic operator, to the extent that it constitutes an internal mechanism within the corporate organizational model and a mechanism for exerting discipline. To effectively monitor employees, Walmart deploys a highly sophisticated and precise virtual watchful eye, supported by technology. Thus, the workspace is surrounded by a system of video cameras that would be the envy of even the Bentham Panopticon. 30 To enter his or her workplace, the employee must use personal electronic identification tags that grant different levels of access, especially for the data centers. The virtual technological gaze is extended to the employee’s use of the company network, also navigated with different passwords, in the form of a weekly report sent to the immediate superior about the employee’s external and internal emails. Not only has the watchful eye become ubiquitous, but so has the ear. In the Help Desk area, one of the monthly employee assessments is the “Nice” program, which records the telephone interaction between the user and the analyst and then analyzes it according to specific parameters. That area also requires that employees use personal dialing access keys, which control activities like going to the toilet, going outside to smoke, or attending a meeting. In other words, IT workers must log their time away from the computer using these access keys. Moreover, the controlling virtual eye branches out into the employee’s home life and space, through cell phones and personal laptops, when he or she works a shift from home. So workers are constantly monitored, even when they are not officially on the clock. As we have seen throughout this research, “the new organizational models incorporate, implicitly and secretly, the seeds of new forms of violence at work” (Montaño Hirose 2007, 68). These include a corporate or organizational culture as a way of legitimizing a set of principles and values, such as honesty, the pursuit of excellence, teamwork, and involvement. According to Heinz Leyman, organizations seem to have become the stage where human violence is permitted—where one can “justify the unjustifiable” in the name of the economic progress of companies, without taking into consideration the quality of working life of the working class (quoted in Del Pino 2007, 107). These working conditions can be explained in terms of psychological harassment at work (PHW), or “mobbing.”31 PHW is assisted by the application of corporate policies that justify imposing higher workloads, de-

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manding higher productivity, and encouraging competitiveness and individualism, as observed in the global neoliberal cultural context. Thus, this context provides the stage for the emergence of PHW, generated by practices that promote toxic relations between the sectors of the company (Peña Saint Martin and Sanchez 2007, 36). At Walmart, these corporate practices aim to instill an extreme individualism—not teamwork, as the company proclaims in its principles.

Limi t ed E x pec tat ions of Professiona l Dev elopm e n t i n t h e V irt ua l E r a The work of the IT worker at Walmart is inscribed in a new division of labor based on an information technology paradigm with three key dimensions. First, the IT network and its software platforms are planned and designed according to the strategic decisions of the Bentonville headquarters and in coordination with specialists from the other large transnational technology companies that sell them their equipment, such as IBM, Cisco, and HP. Second, IT workers browse the web for work asymmetrically—that is, with limited connectivity and access. In other words, this asymmetry is embedded in the relationships in the network: those who are online but do not have decision-making power, such as the IT worker at Walmart Mexico; the employees on the web, represented by systems engineers in Bentonville, who are making decisions; and those who are offline altogether, such as retail store clerks and employees in other business units, who are given non-interactive one-way instructions (Castells 2004). The third dimension of the information technology paradigm is the decision-making process. It is understood that IT workers are responsible only for executing orders. They are restricted in how they carry out decisions: limited to set procedures, especially in the daily work, they give store users support only for operational problems. In solving specific problems, they apply a prescribed request escalation, ranging from referring the problem to a senior systems specialist, to asking a supplier, such as IBM, to provide certain services, to contacting the Bentonville specialists. All of this problem-solving is done online with the business unit concerned, in the shortest possible time and under the constraint of being tasked to involve the equipment and systems that affect the company’s sales as minimally as possible. The professional development of IT workers in Mexico occurs in the global maelstrom that is the IT revolution, which has transformed the labor process by introducing new social forms and techniques to the divi-

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sion of labor. This environment creates a trend toward a greater qualification or intellectualization of work. One of the most important things IT workers expect from the company is certified training in the design and administration of different systems, platforms, and computers, not only to provide better results for the company but also to enhance their own professional opportunities outside the company or enable them to climb the company ladder to a senior specialist position in Bentonville.32 Because they are highly unlikely to receive such training, however, their aspirations for professional opportunities are cut short. The company provides the minimum technical upgrades that ensure only the operation of the equipment, the ability to execute limited systems management tasks, and the systematization of local stores in Mexico. Meanwhile, any potential extra training time is taken up with the many cultural induction courses that IT workers are expected to take, not to mention the heavy workloads.33 The information age has its limitations in the countries of the Global South, and especially for Walmart Mexico IT workers, whose work is constrained by the fact that only tasks and the local requirements of store units are automated. These are managed in a restricted manner and based on the transnational’s catalog of policies and procedures in systems and IT resources, the software platforms, and the operation and maintenance of the various equipment and communication links that constitute the network. In their daily work, IT workers at Walmart Mexico, acting as internal users of the company, interact occupationally with other Walmart employees nationwide—including employees of other nationalities (Brazilian, Argentine, North American)—and with outsourced employees. Therefore, the workplace becomes an intercultural space where different national and local work cultures are present in an ensemble of diverse and complex relations. These interactions among employees are embedded in power relations as well, so the workplace is a space not simply for a mixture of cultures, but also for the processes of negotiation and conflict (Reygadas 2002, 138) that play out among systems analysts, programmers, operators, project leaders, specialists, supervisors, managers, senior officials and service providers. All these players are hierarchically positioned, with access to different power resources that affect IT workers’ experience of inequality, difference, and disconnectedness on several flanks (García Canclini 2004). Workers rarely interact face to face in the workplace, and problems encountered in the network-company are solved by means of different

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IT resources, such as cell phones, conference calls, radiofrequency messages, and online interaction through the network between those managing Walmart’s systems and equipment. That is, the labor dynamics play out in a dimension of virtual interaction. At the same time, IT employees, as work agents thereof, enable the infrastructure that constructs interactions in a real virtuality. Both the material and the symbolic existence of company employees is thus captured completely, fully immersed in a scenario of virtual images as the appearances on the screen that are communicating the experience become the experience. This culture of virtuality is generating a symbolic work efficiency, and rich feedback is provided through these new learning environments, making the various work processes more effective. Although the meanings that emerge from these workspaces are intermingled with workers’ beliefs and practices from their own lives, these too are traversed by Walmart’s corporate culture, and the company’s attempt to impose its values, principles, and behaviors is legitimized through pedagogical means or symbolic violence.

conclusion In an analysis of Walmart’s corporate culture, one can identify diverse types of relations, including those dealing with the technical labor capacity, power, and communications and those related to symbolic interactions, signs, norms, values, beliefs, practices, and behaviors. Although, given the complex interrelations in Walmart’s corporate culture, it is not possible to identify each individual influence, some of its constitutive dimensions can be underscored: 1. Control over the time and space of labor: The company’s control is exerted over the workday and workers’ time, and it governs training during break time, the roles played by the different work shifts, and the expansion of the workspace to the home. 2. The labor rights framework: This framework relies on outsourcing and, when possible, the absence of labor unions; replaces the labor codes established under federal labor law with its own “catalog of corporate policies”; and, similarly, substitutes the services of its Hotline subdepartment for the functions typically carried out by unions on the shop floor. 3. Organizational control: The company uses norms, politics, and ethical codes to discipline and sanction workers.

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4. Symbolic violence: By stoking workers’ fear of not complying with the expectations of excellence and fear of losing their jobs, maintaining stressful workloads, and keeping work schedules irregular, the company negatively affects workers’ psychological, emotional, and physical health. 5. Neoliberal structural and economic dimensions of labor: The company’s labor practices are those inscribed in the neoliberal system, such as labor market flexibilization, with the direct participation of the state. This system has a direct impact on the company’s managerial doctrine of the organization of work (quality control, inventory control, teamwork, polyvalent job positions). 6. Symbolic-cultural dimensions of labor: Worker identification with the company is promoted by means of rituals, belief inducements, and emotional techniques intended to persuade workers to internalize and legitimize the corporation’s quest for ever greater profits and lower labor costs.

As Walmart crossed over the U.S. border into Mexico, it sought to reproduce its domination in economic and employment spheres by hegemonizing the cultural field with its application of “Walmart culture” and bringing various resources to bear on its implementation of its core principles, including: the use of various leadership figures (sponsors, mentors), the implementation of cultural programs (“Quality of Life,” “100 in Culture”), training and cultural induction courses, the online site for self-learning CAMINA, and the use of various business rituals (integration, recognition, exclusion, initiatory events) to induce desired behaviors in workers. The forms of economic organization do not develop in a social vacuum; they are rooted in cultures and institutions. In other words, it was necessary to analyze the Walmart culture in order to see it through the lens of a semiotic historical approach, which sees cultural practices manifested through symbolic forms. These symbolic forms are generated and transmitted in order to be imposed. Although these forms were successful in the company’s initial expansion across the United States, their export to Mexico in the spirit of Walmart transnationalism through senior management executives cast doubt on their cultural effectiveness, from the perspective of IT workers. For these workers, Walmart’s corporate culture is challenged by another cultural context—the one they bring with them from their lives outside the workplace. Thus, the messages and values transmitted by Walmart in a variety of ways in the workplace—email, the “pipeline,” the network, maga-

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zines and newsletters, chalkboards, and closed-circuit television—are confronted on a daily basis by IT workers. We see this in how the company uses, organizes, and controls workers’ time and space in the workspace but also socially and symbolically—for example, scheduling twelvehour workdays, extending IT workers’ working hours (available 24 hours a day, 365 days a year) to care for network equipment and systems, expecting training to take place during workers’ time off, and extending the workplace, through shifts, to the home (during physiological rest time). The IT worker is positioned in this age of information as a specialist whose interactions are rarely carried out face to face. As they solve the various problems that arise in the company-network by means of different resources, the work dynamic for IT specialists is situated in a dimension of virtual interactions. These virtual labor processes have generated greater symbolic efficiency by creating new forms of learning and allowing IT workers to show greater analytical capacities that allow them to diagnose and solve the problems that users encounter in the corporation’s systems. For example, they can interact in virtual environments, administer a variety of software platforms, and operate equipment that supports the network. Nonetheless, for countries in the Global South such as Mexico, conforming to this new division of labor at Walmart deskills IT workers by placing them on the lower rungs of the labor hierarchy, where they have minimal ability to participate in design, planning, and decision-making, all of which are primarily carried out by headquarters in Bentonville. For the organizational unit to work effectively with maximum efficiency and the lowest labor costs, it is necessary to implement the transnational corporate model by imposing not just a corporate culture but also various procedures, regulations, policies, and codes of ethics that control, discipline, and punish the IT employee. In the transnational’s apparatus of service production, surveillance becomes a key economic operator to the extent that it constitutes an internal mechanism within the corporate organizational model and a mechanism for disciplining workers. These new organizational models implicitly and secretly incorporate the seeds of new forms of symbolic and physical violence at work. I have also shown here how the multinational manages a range of recruitment modalities, from outsourcing to personal contracts with no union representation, as in the IT area, to contracts through corporate unions with CCPE in the case of store-level employees. IT workers’ behaviors are marked by individualism and competitiveness, values that are fostered by the Walmart culture and that fi nd justifi-

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cation in the ethics of omission—“I don’t see, I don’t hear, I don’t speak, I do absolutely nothing.” In other words, the important aims of acting within these values are saving one’s job, retaining the boss’s affection, getting a promotion, pursuing success, and surviving in the labor market. The principle of solidarity is gone, owing to the absence of a trade union. In the neoliberal context of increasingly severe economic crises, IT workers quite reasonably fear losing their jobs, not being “excellent” enough if they do not shoulder the excessive workload, and being completely unprotected as they deal with this organizational cannibal. This is why a majority of IT workers have no choice but to adopt an attitude of simulation, of feigning, which becomes a form of resistance. But there have been small outbreaks as some employees, beginning to see that their own experience working in this transnational has become widespread, realize all the levels of exploitation of employees at Walmart’s stores and assembly plants in countries like China and elsewhere in Central America. The struggle that civil society organizations have undertaken against the indiscriminate establishment of stores in Mexico—because of their harmful effects on local communities—is one area for future research, since this struggle could be linked with the resistance of some Walmart employees, which remains underground. So far, employees’ isolated attempts to become organized have immediately been suppressed (Conde García 2009). Furthermore, besides the collective action of civil society organizations around the establishment of stores, other national and international organizations are beginning to come together to challenge the labor policies of Walmart in Mexico. Of special note was the 2012 New York Times exposé of Walmart’s illicit operations during the construction of at least two stores in Mexico. As a result, some of the civil society organizations banded together in April 2013 to create “the network of social organizations against the abuse and impunity of Walmart” (Milenio 2013). This network is fighting for the rights of Walmart workers to establish independent unions that bargain collectively and pressuring labor courts to eliminate the so-called protection contracts used by Walmart Mexico. This pressure could create a space in Mexican civil society to fight for labor rights, citizens, humanity, and more. notes 1. I am grateful to my big family for their loving patience, and to Dr. Sergio G. Sánchez D. for his academic orientations. 2. When Walmart arrived in Mexico in the 1990s, it benefited from the economic

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and labor policies that had been extended to all large enterprises by both mainstream political parties, the Institutional Revolutionary Party (PRI) and the National Action Party (PAN). 3. My participant-observation was made possible by my work in the IT department of the transnational in Mexico for fi fteen years. Through participant-observation, I’ve been able to conduct in-depth ethnographic research and access events, people, situations, and lived experiences as a natural “native” (Schwartz and Jacobs 1995) engaging in interpretations of the fi rst order (Geertz 1987, 28). This has allowed me to closely experience the phenomena under study, becoming one with it in the sense of understanding the feelings and intentions of the research subjects. 4. It is worthy of mention that, even when the academic credentials of IT professionals signify big differences between them and the precarious store employees, the multinational’s forms of cultural control and exploitation of their labor are very similar. That being said, even though the subjects of research are IT workers, where relevant and possible their differences from the store employees will be pointed out. 5. Further examples of this complex literature are: PROSEDEC (2008), on the violations of workers’ labor human rights; Hernández (2008), on corporate labor abuse; Conde (2009) and Bouzas (2007), on business protection contracts; and, fi nally, Álvarez and Tilly (2006) on foreign participation in convenience stores. 6. In 2010, Walmart Mexico became Walmart Mexico and Central America, absorbing the stores in Honduras, Guatemala, El Salvador, Costa Rica, and Nicaragua. 7. According to data recorded in staff listings from 2001 to 2009. 8. According to data extracted from the questionnaire used by the organizational development area in 2006 in response to the question: “How many employees report to you?” 9. Research conducted by Alfonso Bouzas on the more than one hundred CCPEs detected for the Walmart Supercenter in the Federal District is eye-opening. These CCPEs, although signed with different corporate unions, follow the same model “format” and adhere to a single set of internal rules that is applicable to all establishments (Bouzas 2007, 135). 10. The main objectives of the CCPEs are twofold: avoiding the possibility of the company itself setting up and registering a real union representing the employees, and ensuring advantageous conditions for the employer in labor relations in order to increase its profits by reducing the employees’ wages, benefits, and rights (Xelhuantzi 2007, 99). 11. To Sam Walton, unions represented a threat because if they entered his stores, costs would increase (Slater 2004, 54). Therefore, he never allowed anyone at a Walmart store to become part of a union and proclaimed that he preferred to close the place down rather than accept a union. 12. “To develop Human Resources policies in Mexico aligned with the corporate policies of Walmart Stores in the United States, except legal or tax guidelines that are not applicable. . . . The Associates [employees] of Walmart must fully respect human resources policies. A breach of these carries penalties that may result in the termination of a contract” (Walmart de México 2001). 13. As Don Soderquist, vice chairman of Walmart US, said, “Culture has become an essential skill that has contributed greatly to the success of the company and it was unthinkable to build Walmart stores in international markets without exporting those

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in charge of greeting at the store entrance, those who do the cheer, the quotes and photographs of Sam Walton, the focus on customers and low prices always, as well as all the elements that were part of that culture” (Slater 2004, 184). 14. In 2008, there were a total of 170,014 employees at Walmart Mexico, of whom only 0.15 percent (250 employees) were IT workers. 15. In a May 2004 questionnaire about the Walmart culture, the Vice Presidency of Systems asked: What do you expect from your leaders? Fifteen percent answered “communication,” 32 percent said “respect and motivation,” and 53 percent said they wanted them to “fulfi ll their role as a leader.” These results were drawn from systematizing the questionnaires. 16. Interview with IT area line employee, March 20, 2004. 17. Interview with IT area manager, March 25, 2004. 18. As a member of various committees in 2005, I noticed that a large percentage of them (80 percent) are made up of managers and assistant directors, who are seen to have an institutional involvement. That is, attending committee meetings is one of their duties. The line employees and assistant managers among the remaining 20 percent seemed to have rather careerist or instrumental intentions. 19. The company’s three main principles are: 1. Respect for the individual: Walmart seeks a respectful environment for its associates, one in which the dignity of each person is valued, everyone always expects the best from others, and differences between individuals are accepted. This principle is based on each Walmart associate contributing to making a difference. 2. Client services: To serve its customers and offer quality merchandise, product variety, and low prices every day is the essence of Walmart business. Sam Walton reportedly used to say, “The two most important words I have written are those I put on the fi rst Walmart sign: Satisfaction Guaranteed.” 3. Pursuing excellence: Walmart employees are expected to distinguish themselves by maintaining high standards of operation, a desire to be the best, and a spirit of competition, to overcome their fear of failure, and to be willing to take risks. From these three principles a whole body of concepts are derived for each of them. Along with other rules such as “the Sunset,” “the 3 meters,” “productivity circles,” and the “code of ethics,” these concepts make up Walmart’s “business philosophy.” 20. I obtained this result when I was monitoring the program, based on the reports mailed to us each week by the Vice Presidency of Systems on the internal network. 21. Interview with Systems Help Desk area employee, October 10, 2005. 22. Interview with IT assistant manager, March 29, 2004. 23. There is a star between the words “Wal” and “Mart,” and when the cheer is shouted out letter by letter and employees reach the star, they do the squiggly and shake their hips. Robert Slater (2004, 73) thinks it is funny that “more than a million people are willing to shake their rears in public on their employer’s command.” 24. Interview with point-of-sale employee, March 28, 2004. 25. Stephen Robbins (1997, 44) comments that when Walmart purchased the Woolco stores in Canada, they found that Canadian executives considered it extravagant to have to proselytize for certain values and visions, since expressions of enthusi-

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asm embarrassed people. Employees in Calgary refused to sing the national anthem of Canada at the morning session and were reluctant to join the company cheer. 26. Interview with IT Help Desk area supervisor, March 25, 2004. 27. Interview with assistant manager in IT area, March 26, 2004. 28. Interview with production employee, February 25, 2004. 29. These questionnaires were emailed to each employee. The employees allowed me to consult them because I was part of the Grass Roots Commission (Work Environment). 30. Bentham’s Panopticon is the architectural figure with a peripheral construction, with cells and a tower in the center with a guard in it. In each cell, you can place a madman, a patient, a convict, a school child, or an employee (Foucault 2005). 31. The word “mobbing” is used to refer to bullying at work. 32. IT workers have expressed themselves in this regard in grassroots surveys in 2001 and 2002, as well as in the questionnaire conducted by the Organizational Development area in 2006. 33. As for cultural induction courses, 55.5 percent are for line employees and 78 percent are for managers; compared to the technical systems and equipment courses, there are 37 percent for line employees and 14 percent for managers. Walmart offers no certification courses in its systems and equipment; such certification would give IT workers competitive opportunities as professionals outside the company (according to the systematization I carried out on data from the Organizational Development area questionnaire mentioned earlier).

references Aguado, José Carlos, and María Ana Portal. 1992. Identidad, ideología, y ritual. México: Universidad Autónoma Metropolitana. Alvarado García, Rodrigo. 2006. “México-Walmart: Una Relación de éxito y mutuo beneficio.” Bachelor’s thesis, Relaciones Internacionales, Universidad de las Américas. Bourdieu, Pierre, and Jean-Claude Passeron. 1995. La Reproducción: Elementos para una teoría del sistema de enseñanza. Mexico City: Editorial Fontamara. Bouzas, Alfonso, Luis Reyes. 2007. “Walmart.” In Contratación colectiva de protección en México: Informe a la Organización Regional Interamericana de Trabajadores (ORIT), edited by Alfonso Bouzas, 127–147. México: UNAM-IIE. Bribiesca Silva, Claudia. 2005. “Walmart un impacto en la economía, de 1991–2004.” Bachelor’s thesis, Facultad de Economía Universidad Nacional Autónoma de México. Castells, Manuel. 2004. La Era de la información: La Sociedad red, vol. 1. México: Siglo XXI. Conde García, Esteban. 2009. “El Estado de indefensión de los trabajadores del grupo Walmart de México en el D.F. ante los contratos de protección colectiva.” Bachelor’s thesis, FES Acatlán–Universidad Nacional Autónoma de México. De la Garza, Enrique. 2000. “La Flexibilidad del trabajo en América Latina.” In Tratado Latinoamericano de sociología del trabajo, edited by Enrique de la Garza, 148–178. México: El Colegio de México-FLACSO-UAM-FCE. Del Pino, Rebeca, and Moisés del Pino. 2007. “Hacia la ética de la omisión o el desen-

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mascaramiento de la falsa moral en las organizaciones: Mobbing y escenarios conspiracionales.” In Cuando el trabajo nos castiga: Debates sobre el mobbing en México, edited by Florencia Peña Saint Martin, Patricia Ravelo Blancas, and Sergio G. Guadalupe Sánchez, 99–116. México: Ediciones Eón. Foucault, Michel. 2005. Vigilar y castigar. México: Siglo XXI Editores. García Canclini, Néstor. 2004. Diferentes, desiguales, y desconectados: Mapas de la interculturalidad. Barcelona: Editorial Gedisa. Geertz, Clifford. 1991. La Interpretación de las culturas. Barcelona: Editorial Gedisa. González, Romo Z. 1996. “Los Ritos y rituales en la cultura corporativa de Walmart Super Center.” PhD dissertation, Universidad Autónoma de Barcelona. Guadarrama Olivera, Rocío. 1998. “Introducción.” In Cultura y trabajo en México: Estereotipos, prácticas, y representaciones, coordinated by Rocío Guadarrama Olivera, edited by Juan Pablos, 9–24. México: UAMI, Fundación F. Ebert. Milenio. 2013. “Se unen ONG’s contra impunidad en caso Walmart.” Milenio, April 24, 2013, 24. Moguel Liévano, Manuel, and Julio Camacho. 2012. La Responsabilidad social de las empresas: El Caso de las organizaciones extranjeras del sector comercio en el Estado de Chiapas. Chiapas: PROMEP/UNACH. Montaño Hirose, Luis. 2007. “Nuevos modelos organizacionales y violencia en el trabajo.” In Cuando el trabajo nos castiga: Debates sobre el mobbing en México, edited by Florencia Peña Saint Martin, Patricia Ravelo Blancas, and Sergio G. Guadalupe Sánchez, 65–80. México: Ediciones Eón. Peña Saint Martin, Florencia, and Sergio G. Guadalupe Sánchez. 2007. “El Mobbing: Contribuciones del concepto al estudio del trabajo y su organización.” In Cuando el trabajo nos castiga: Debates sobre el mobbing en México, edited by Florencia Peña Saint Martin, Patricia Ravelo Blancas, and Sergio G. Guadalupe Sánchez, 23– 40. México: Ediciones Eón. Reygadas, Luis. 2002. Ensamblando culturas: Diversidad y confl icto en la globalización de la industria. Barcelona: Gedisa. Robbins, Stephen. 1997. Comportamiento organizacional. México: Prentice-Hall Hispanoamericana. Schwartz, Howard, and Jerry Jacobs. 1995. Sociología cualitativa: Método para la reconstrucción de la realidad. México: Editorial Trillas. Slater, Robert. 2004. La Cultura Walmart: La Historia de una nueva generación de líderes que convirtió el legado de Sam Walton en la compañía #1 del mundo. México: Edit. Aguilar. Thompson, John B. 1998. Ideología y cultura moderna. México: UAM-Xochimilco. Vázquez Huérfano, Ana. 2011. “Propuesta de un modelo de gestión de la innovación en empresas comerciales, caso Walmart.” Master’s thesis, Instituto Politécnico Nacional, Centro de Investigaciones Económicas, Administrativas, y Sociales. Victoria Alvarado, Gabriela. 2009. “El Trabajador de sistemas telemáticos y la nueva cultura laboral en Walmart México.” Bachelor’s thesis in social anthropology, Escuela Nacional de Antropología e Historia. Von Martin, Alfred. 1962. Sociología del Renacimiento. México: FCE. Walmart de México. 2001. “Human Resources Regulations,” in Corporate Policies. Key POLRH00.

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———. 2002a. Hotline Policy. Key POLRHA35. Walmart de México. 2002. “Normatividad recursos humanos,” in Asesoría para mejorar. Key POLRH30. ———. 2004. “Recursos humanos,” in Programa de transmisión de la cultura Walmart. ———. 2005. Declaración de ética. Key POLRH56. Walmart de México y Centroamérica. 2012. Informe anual 2012. Available at: http:// walmart.2012.33aws.com/capitulo.php?s=39&lang=es (accessed August 4, 2013). ———. 2013. Reporte de ventas 2013. Available at: http://www.walmex.mx/assets /fi les/Ventas%20Diciembre%202013.pdf (accessed January 22, 2014). Wannöffel, Manfred. 1998. “Interrogantes sobre la cultura laboral de la competitividad internacional.” In Cultura y trabajo en México: Estereotipos, prácticas, y representaciones, coordinated by Rocío Guadarrama Olivera, edited by Juan Pablos, 112–137. México: UAMI, Fundación F. Ebert. Weber, Max. 1993. La Ética Protestante y el espíritu del capitalismo. Barcelona: Edit. 62. Xelhuantzi López, María. 2007. “Qué es un contrato de protección?” In Contratación colectiva de protección en México: Informe a la Organización Regional Interamericana de Trabajadores (ORIT), edited by Alfonso Bouzas, 98–120. México: UNAM-IIE.

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Ch a p t e r 6

walmart’s direct farmer program in south africa: developmental state victory or corporate whitewash? stephen greenberg

T h is ch a p t e r e x a m i n es Massmart/Walmart’s use of the Supplier Development Fund to support small-scale commercial farmers in entering its fresh produce supply chain in South Africa. I argue that ultimately the fund has supported fewer farmers than expected. The fund is built on a model that focuses on integrating farmers into commercial relationships that prioritize fi nance. This model has limited farmers’ negotiating power in the face of strong corporate control of the supply chain. Massmart’s intervention has focused on a relative elite among black farmers. Even so, in the context of commercial competition from large-scale producers, participating farmers are compelled to reproduce the low-wage, ultraexploitative labor regime inherited from apartheid. Farmers may be better off receiving support to produce less regulated products for local markets rather than being thrust inappropriately—and with increased household exposure to fi nancial risk—into the commercial space. Ultimately, Massmart’s development programs and others like it have come at the expense of meaningful and appropriate support to a wider periphery of producers. In 2011, one of the conditions of Walmart’s acquisition of Massmart in South Africa was the establishment of a R242 million (around US$24 million at the time) supplier development fund (SDF) to be used over five years to assist in developing South African black, women, and local suppliers and manufacturers (Massmart/Walmart, n.d.). Some government departments—specifically the Departments of Economic Development (DED) and Agriculture, Forestry, and Fisheries (DAFF)—initially opposed the deal, out of concern for local manufacturers and distributors (RBB Economics 2011; Kenny 2013). This opposition was placated after Walmart agreed to the SDF, which was built on a preexisting smaller plan (R42 million) to pilot Walmart’s global Direct Farmer Program in South Africa.

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The SDF was aligned with government plans for public-private partnerships (PPPs) to include black farmers in commercial supply chains. The negotiation of the SDF was viewed by some at the time as a victory for an active developmental state in placing progressive conditions on foreign direct investment (FDI). However, evidence suggests that the fund was used primarily to give a positive spin to Walmart’s entry into South Africa. Walmart has been in control of the fund, framing the intervention in commercial terms, structuring participating enterprises as private companies, and making its own decisions about where to invest the fund’s resources. Moreover, although it has produced two annual reports, Walmart essentially monitors the fund itself with only an advisory board. The SDF started operating in 2012 and supports supplier development in manufacturing and agriculture. At the end of February 2015, the SDF had disbursed R71.2 million to or on behalf of 24 manufacturing and 139 smallholder farming enterprises (Massmart 2015, 2). Just under half of total disbursements were in agriculture, but more recently there has been a shift to manufacturing (Massmart 2015, 12). The South African food system is driven by large-scale standardized production for industrial markets, based on economies of scale. Smallholder producers fi nd it difficult to compete in such markets, especially if they are not able to identify and take advantage of commercial niche markets on their own. There are issues of profitability in agriculture that make self-sustaining commercial operations for small-scale producers difficult. The fund makes grants for equipment, materials, and factory improvements; offers guarantees on loans from commercial lenders; and offers technical assistance and support services, including agricultural extension services, merchandise safety and quality compliance, in-store promotional and merchandising assistance, and fi nancial and business training (Massmart 2015, 2). The emphasis in this chapter is on the agriculture program, known as Ezemvelo, with a closer look at the TechnoServe Limpopo project, the largest individual project in the program. A core of large-scale commercial producers and a wide periphery of small producers who mostly do not produce enough for their own household subsistence characterizes South Africa’s “dualistic” agrarian structure. There is a small middle layer of what have at times been called “emerging” black farmers—commercial farmers of various scales who supply to formal markets. Walmart is targeting this layer in its program. Corporate food retailers play an important role in fresh produce supply chains in South Africa. The retailers set and govern private standards.

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Fresh produce is an entry point for food retailers in the battle for domestic market share, in a context of intense competition driven by economies of scale (high volume throughput at low margins). This compels retailers to continuously look for ways to increase margins, including supply chain “efficiencies” (cutting costs) and transfers of risk to suppliers. Post-apartheid government policy to support black farmers has been fragmented and ineffective to date. In recent times, policy has honed in on the integration of black producers into commercial value chains, in a framework of black economic empowerment (BEE). Retailers and other commercial buyers have adapted a small strand of their supply chain activities to a political context in which government encourages privatesector participation and public-private partnerships, by using contract farming or offtake agreements, often with value chain fi nancing. Corporate social responsibility projects are packaged to meet political requirements such as BEE.

overview of agrarian structure and labor in south africa At the end of formal apartheid in 1994, South Africa had a dualistic agricultural structure, with a core of large-scale white commercial farmers generating more than 90 percent of domestically produced and marketed agricultural products (Liebenberg 2013), using ultra-cheap black labor. A large periphery of up to 2.5 million land- and resource-poor small and micro-scale farming households surrounds the core, geographically restricted to the “homeland” areas reserved under apartheid for permanent black settlement. Almost all of these households are net food importers (buying more food than they sell); an estimated 167,000 small-scale commercial households farm for either a main income or an extra source of income (Aliber and Mdoda 2014, 1).1 These latter households have become the focus of government and private-sector strategies to build black farming. Massmart’s focus is on small and medium-size commercial producers, defi ned by Massmart as having an annual turnover of R1.5 million to R50 million (Massmart 2015, 7). Only 7 percent of all producers (including large-scale commercial farmers) have a turnover above R5 million (Kirsten 2011), and thus the targeted farmers are actually in the top echelon of all producers. Work on farm labor in South Africa has focused on large-scale commercial farms with no published work on labor in the broad periphery of agricultural production. In this periphery, the focus is on livelihood op-

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portunities in farming, which are treated as “jobs” (National Planning Commission 2011). Given the large number of producers in the periphery, farming as a productive economic activity is an important area for support. However, researchers have not yet entered the “hidden abode of production” for those in the periphery who employ labor, whether occasionally or continuously. It is known that labor on small-scale farms is mostly household and casual labor, with gendered divisions of labor within households in terms of agricultural production. Women generally produce vegetables and other crops for home use, while men tend to control crops for sale, though this is not a hard and fast division. Women often make production decisions on the crops under their care, may control some cash crops, and may manage the land for some crops as individuals or as part of households. Family labor is widely used where it is available, and there is widespread temporary and casual employment, drawn from local areas, especially for weeding and harvesting (Gollin 2014). Labor regulation on farms must also be placed in the broader context of extremely high levels of unemployment and limited or nonexistent worker organization, both of which reduce workers’ power to claim paper rights. There is no effective state regulation of working conditions in this arena of production. Although there is a sectoral determination for agricultural labor, small producers are exempted from complying, and in practice terms and conditions are negotiated between household members, or between employer and laborer, on an individual basis. Terms and conditions of employment depend on the context of family and gender power relations and on relations between landowners and producers and those seeking employment. Remuneration may be made in cash, but often takes the form of a share of the crop, tenure (agreement to stay on the land), and/or food. On commercial farms (both black- and white-owned), as the scale (enterprise size) increases and the producer is more integrated into “tight” value chains with contracts (Cousins 2014), adherence to labor regulation usually increases and there is greater use of cash wages over other forms of remuneration. Regulations may be local or global labor standards for suppliers, using the statutory regulatory framework as a baseline (for example, the Wine Industry Ethical Trade Initiative in the Western Cape or other fair trade initiatives). However, even in these cases, independent verification and monitoring of supplier compliance is sparse.

retailers and fresh produce supply chains Food retailers in South Africa, as elsewhere, play an active role in organizing the supply chain for fresh produce and other agricultural products, in

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particular by setting product standards and coordinating production and distribution to meet these standards. Although the state maintains a minimum food safety regime, retailers tend to use this as a base and then add additional quality and other standards, based on their own market analysis as well as globally negotiated baselines, such as the Hazard Analysis Critical Control Point (HACCP), GlobalGAP, or British Retail Consortium (BRC) codes. Retailers closely manage supply chain relationships to ensure that requirements are met. In South Africa, there has been a strong shift away from sourcing fresh produce from bulk municipal markets to direct sourcing from farms in order to increase control of the production and supply process. Fresh produce procurement from the national fresh produce markets had dropped from 63 percent in 1993 to less than 10 percent in some instances in 2007 (National Agricultural Marketing Council 2007; Bienabe and Vermeulen 2007). Massmart was historically a wholesaler, but it has more recently diversified into retail, and Walmart’s entry has sped up this process. The introduction of fresh produce into its stores is one of the wedges Walmart is using to expand its food retail market share in South Africa. According to the SDF’s operations head, Sherry-Lee Singh, “There is a R22 billion [US$2.2 billion at that time] total market for fresh produce. We are aiming for 10 percent of the market to show that at least we are a player.”2 Alongside the standards management process, retailers are also in a competition with one another to increase very thin margins, which may be as low as 2 to 3 percent. At the base, the large retailers operate on economies of scale, with high-volume throughput of low-margin products. Reducing costs is a key competitive imperative, and the supply chain is one area where Walmart has excelled in cutting or transferring costs and risks to suppliers in the chain (Fishman 2006). According to Grant Pattison, Massmart’s CEO at the time of the acquisition, Walmart “will introduce its supply chain efficiencies into South Africa” by cutting out middlemen and contracting directly with farmers—in other words, by taking over sourcing and distribution functions in the chain. He said that this would include getting farmers to pack fresh produce on their farms into Walmartor Massmart-specific containers (private-label store branding) through the creation of Massmart’s own cold chain from the farm to stores and that the costs of cold storage facilities might be shared between Massmart and producers (Visser 2011). For the retailer, this eliminates the cost of repackaging from on-farm into branded retail packaging. Ramesh Subbiah, who worked for Walmart’s Direct Farm Program in India, said: “We found that the market was in need of fresh foods at a fair price. In the Indian fresh produce markets, there are many interme-

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diaries in the supply chain between the customers and farmers and it is these intermediaries in the fresh produce markets who set the prices, not the farmers” (Massmart 2011, 1). “Removing the middleman” is a common refrain, and Walmart’s supply chain efficiency argument is a perfect example of this. However, the reality is often more complex. For example, intermediaries can play an important role in providing credit and other ad hoc support to both producers and consumers that allow supply chains to continue functioning even in the absence of formal commercial involvement (Isaacs 2013). This is similar to what we see in Nicaragua (chapter 7).

adapting to the political context The largest share of fresh produce to retailers still comes from the mostly white-owned, large-scale commercial core. Government is satisfied to let this proceed, but it also wants to bring black farmers into commercial production. Economic transformation was the hope in the Reconstruction and Development Program (African National Congress 1994), at the height of popular involvement in policy and program formulation, even if the proposed methods may not always have been the most appropriate. However, post-apartheid government efforts at supporting smallscale black farmers have been fragmented and ineffective in transforming the economic structure in the face of growing corporate power. Earlier programs of land reform focused on the transfer of land without really considering the economics or integrating new producers with agricultural support. From the outset, land reform and black farmer support policies vacillated between market-based approaches (private-sector structuring and delivery) and various more direct state interventions, some of them punitive in orientation (for example, the current proposals on compulsory land expropriations for redistribution) (Hall 2009; Republic of South Africa 2015). Black economic empowerment policies, through which the state establishes guidelines for the inclusion of black citizens in structures of formal economic ownership and control, is one enduring effort to influence investment. The extension of the BEE model into agriculture through AgriBEE (Department of Trade and Industry 2008) looked primarily at black equity ownership and skills development in commercial agro-food value chains. Agricultural development policies and plans have converged on a model of integration of a layer of commercial black farmers into corporate value chains, with a strategic orientation to mentorship, coman-

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agement, share equity arrangements, and contract farming (DRDLR 2013). A training levy was instituted on businesses over a certain size to fund Sector Education and Training Authorities (SETAs) to support human resource development, incorporating BEE. The content of the training is guided and led by corporations based on their economic interests, although the performance of the SETAs has been poor and riddled with corruption. In the context of the expansion of BEE requirements into agriculture, commercial commodity associations, processors, and retailers started development programs to integrate black farmers into commercial supply chains. These have generally taken the form of a contract farming, or “value chain fi nancing,” model: the buyer provides inputs, fi nance, and technical expertise, offers a guaranteed market, and recoups costs after the sale (National Agricultural Marketing Council 2009). Such a model may work for some farmers who have the capacity to diversify beyond a single product or market as well as the technical and management skills to operate commercially. Skills can certainly be developed in such arrangements, although the skills identified for development are generally selected based on corporate interests and needs. One of the challenges with the value chain fi nancing model is that supplier/producers may become locked into a production model where they have limited negotiating power. There is an element of transformative intent in government efforts, in the sense that greater black involvement in owning and managing economic assets is an advance over the apartheid era, when blacks’ economic agency was undermined and prevented. But the lack of a diversified approach for diverse needs has resulted in an orientation toward a thin commercial layer and a small number of private businesses at the expense of meaningful support to the wide periphery of producers. The underlying continuity in the economic structure has led efforts to be directed toward (subordinate) inclusion in corporate-controlled value chains rather than toward transforming the social relations of production, including a transition away from a low-wage economy. Indeed, commercial black farmers are integrated on terms of direct competition with large-scale producers with no concessions. Chains are buyer-driven, with retailers and processors determining standards based on their own requirements. Commercial black farmers are compelled to follow the same low-wage labor regime as the large-scale commercial farming sector. They are pushed to externalize costs or transfer risks to themselves and their workforces in the form of precarious work and low or no wages. An alternative commercial approach to head-to-head competition with

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the large producers (which by no means all farmers can select) involves identification of premium “niche” markets where small-scale commercial producers have a competitive advantage over large-scale producers— for example, labor-intensive activities or fresh produce with short supply chains. This is where Massmart has situated its agricultural support. At the launch of the fund, Massmart set itself a target to source at least 70  percent of its fresh produce requirements directly from farms, with 30 percent of this to come from small-scale black farmers (who would thus supply around 21 percent of total fresh produce) (Massmart 2014). The most important criteria for commercial supply chain participation are quality/standards, consistency of supply, and volume. Given the context of intense competition, low margins, and historical marginalization of these black smallholder producers, there are real challenges for them to meet entry standards. Lack of material resources, lack of access to capital or the excessive risk of borrowing, and historical marginalization from markets, all narrow the path to entry into commercial chains. Effective access to markets is a key issue for new black farmers trying to get into commercial production. The markets do exist, but the challenge is in integrating production, infrastructure, and markets.3

the ezemvelo direct farmer program Ezemvelo was introduced as the South African pilot of Walmart’s Direct Farming Program, which is part of Walmart’s overall business strategy. Globally, Walmart has sought to expand the food market across distribution types; in South Africa it was aiming to double its food sales over five years (Hathaway 2013). The Direct Farm Program aimed to reach a target of US$1 billion of produce sales sourced from 1 million small and medium-scale farmers by the end of 2015. The vast majority of these producers are in China, which had a claimed 757,149 participating farmers in 2010 (Walmart 2012). The program uses a direct sourcing model: the retailer contracts directly with farmers instead of going through agents or intermediaries. With the trend in food safety being to “know your supplier” (Prevor 2007), the direct sourcing model has benefits in the form of traceability and quality control, as well as reductions in supply chain costs, especially in transport (see figure 6.1).4 Ezemvelo aimed to support small-scale direct farm activities for five years, with Massmart offering “route to market, off take agreements and training programmes” (Massmart 2012, 1). The original goal was to integrate 1,500 small to medium-size farmers in South Africa into Walmart-

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figure 6.1. Organizational Structure of Massmart/Walmart Relationships Source: Author’s construction.

Massmart supply chains as self-sustained commercial operators by 2016. At the end of 2014, however, there were just 139 participating farmers, 45 percent of whom were women. Ezemvelo had eight projects in four provinces, with Limpopo the largest (table 6.1). 5 TechnoServe in Limpopo was the largest single project, with fi fty-eight participating farmers. Ezemvelo was working with one cattle production project and six vegetable production projects at the end of 2014, as well as with a pack house in Limpopo partly owned by supplying farmers. The program had facilitated R13 million (about $1.4 million US) in farm product sales from 2012 to 2014, with 62 percent going to Massmart and the rest to other buyers (Massmart 2015, 8). The projects experienced an array of challenges to commercial self-sustainability. There was a 15 percent drop in the number of participants from 2013 to 2014 due to site discontinuation and fluctuations in cooperative membership (Massmart 2015, 47). According to the SDF operations lead, Sherry-Lee Singh, in 2014 the target number was under revision since it had proved more difficult to get farmers to the “market-ready” stage than initially envisaged.6 At the end of 2015, Massmart indicated a shift in orientation from agriculture to manufacturing: Massmart corporate affairs executive Brian Leroni said, “We have come to a point where we may have to invest less proportionately in agriculture and work with our more successful guys” (Magubane 2015). The target number of participants was adapted to include the numbers trained rather than only the number consistently supplying Massmart with produce.7 This very clearly indicates the difficulties of establishing commercial small-scale black farmers in the market, even when the supply

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Table 6.1. Ezemvelo Projects at the End of 2014

Name

Location (Province)

Korema Farm

Gauteng

African Ambition

Employees/ Members

Product

Issues

15

Vegetables

Volume, technical

Eastern Cape

15

Vegetables

Packing and distribution, plant disease

Inqolobane Yobumbano Co-op

KwaZulu-Natal (KZN)

28

Vegetables

Electricity, irrigation, drought

Mnothophansi Co-op

KZN

11

Vegetables

Markets, transport, packing and distribution, electricity

Lebapanke Trading and Products

Limpopo

9

Vegetables

Transport, weather

TechnoServe SA

Limpopo

58

Vegetables

Food safety standards, agronomic

Themba Enterprise Developmenta

Eastern Cape

Cattle

Capital

Vexogenix Packhouse

Limpopo

Vegetables

Sufficient supply volume

Source: Massmart 2015. a At the inception phase at the time of reporting.

7 23

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chain is controlled as Massmart does. Massmart says that seven hundred farmers had gone through training by the end of 2014 (Massmart 2015, 47). Training focused on crop production and food safety, and the crop production course included an introduction and five specific vegetable production manuals (Massmart 2014, 19). Massmart’s collaboration with large private-sector input companies (for example, Bayer in agrochemicals and Hygrotech in seed) to provide training offers a concrete example of skills training being linked to a particular model of high-external input agricultural development, led by transnational corporate agendas, which is necessary to meet private entry standards.

T ech noSe rv e i n Limpopo TechnoServe (a U.S. multinational nongovernment organization with operating entities in many countries, including South Africa) supports the oldest and largest single project in Ezemvelo, with fifty-eight participating vegetable farmers in Limpopo province. TechnoServe operates as an independent project manager, receiving fees from Massmart for its contribution, and it works with many of the largest agro-food corporations on commercial farmer development and integration across Africa and globally. It provides technical and management support to farmers in credit facilitation and distribution, business, agronomics, supply chains, and markets. Producers are supported to meet entry standards, and technical and business training is provided. TechnoServe provides a structured relationship that supports individual farmers in their commercial supply relationship with Massmart. Participants are also supported in forming themselves into private, registered commercial business entities in one form or another (company, co-op). Ezemvelo targeted smaller farmers, although the focus was on farmers who already had access to natural resources and “experience in producing for-sale-to-market produce” (Mashala 2013, 43). According to Mandla Nkomo of TechnoServe, farmers are selected using a “livelihoods fi lter” based on secure access to land and availability of physical assets (especially irrigation); they must also be active, resident farmers who have already produced for the market, and they must be able to contribute some money of their own. Nkomo acknowledged that these criteria “will exclude many people. The program is not for everyone. Subsistence farmers won’t all fit in.  .  .  . There is not enough money in the program to bring in infrastructure, so farmers must already have the physical assets.”8 Massmart does not specifically exclude farmers from distributing into other markets: “There are no exclusivity [agreements] or restrictions at-

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tached. . . . As long as suppliers fulfi l their commitments to us, they are welcome to supply anyone else” (Mncane Mthunzi, quoted in Mashala 2013, 42). One form of support is access to “recoverable grant” funding for inputs. Eighteen farmers were granted access to revolving credit at 0 percent interest in April 2012. All farmers supplied produce to Massmart, with a 91 percent recovery of the loan in 2012 (Sangweni 2015). This is a value chain fi nancing model in which the buyer provides production fi nance and recovers the costs on sale. Farmers may carry the risk of crop failure in such circumstances. Where crops failed in the program, the fund did “subsidize” (but not write off) repayment (Massmart 2015, 47). In addition to the credit, TechnoServe provided on-farm technical support and facilitated training by a commercial farmer mentor (Sangweni 2015). TechnoServe has also worked with the SDF to build and transfer a commercial pack house operation in Limpopo to selected farmers who also supply the pack house. The pack house trades as a nonprofit company called Vexogenix, with farmer and management shareholdings, and Massmart sits on the board of directors (Massmart 2015, 58). In 2013, seventeen farm sites with eighty-one participating farmers supplied the pack house, with produce valued at over R850,000 (Massmart 2014, 38). Self-sustained commercial production has proven difficult, and vegetable cooperatives have struggled to become “retail-ready.” Massmart gave several reasons, including: farmers lacked the required infrastructure (drip irrigation, fencing, piped water, basic on-farm sorting facilities); farmers were producing only a single commercial crop, which could not sustain them throughout the year; volumes were too low; development takes time and results cannot be seen early in the process; and farmers ended up carrying production risk without insurance cover (Massmart 2015, 48). These issues are similar to those highlighted in many studies that have looked at the obstacles to commercial small-scale farmer development in South Africa and on the continent (see, for example, Van der Heijden and Vink 2013; du Toit et al. 2015). Drawing lessons from commercial smallholder avocado production in Limpopo with a similar farmer profi le, Lusito Khumalo (2013) highlights the challenges of oversupply at harvest time, when everyone wants to sell; high production costs, especially pesticide spraying; wastage in handling; lower-than-projected labor productivity (relating to knowledge and skills); too few trees; and long distances to farms. Only one of the ten participating avocado farmers produced a reasonable margin, with turnover below the cost of production for most farmers. Khumalo concludes that the farm units were too small and thus

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economically unviable, indicating the pressure to achieve economies of scale. Nkomo at TechnoServe said that many of these projects may work while money is available to support production expenses and to absorb losses. But once funding is withdrawn after five years, he acknowledged, it is uncertain how many producers will be able to stand on their own.9 Perhaps these farmers would be better off producing less regulated products for local markets rather than being thrust inappropriately—and with increased household exposure to fi nancial risk—into the commercial space. And perhaps TechnoServe could consider other production goals and measures of success beyond commercial self-sustainability. These would require alternative forms of support that concentrate less on commercial readiness and more on other factors such as soil health and fertility, water management, crop diversity, and local market support. There are also questions about the extent to which the producers who manage to break even have really benefited. In similar projects elsewhere in the country, farmers have indicated that they feel locked into a single market without the possibility of selling to other markets. Farmers have also said that they received lower prices for their produce than originally agreed.10 For TechnoServe’s work, Nkomo explained, prices are based on the open market using the First National Bank pricing mechanism.11 This would not be transparent to most small-scale farmers. Davison Chikazunga (2013) has found that small-scale fresh produce farmers, also from Limpopo, who retained access to “traditional” market channels (street vendors and small traders) had higher incomes over the course of a year than those who were locked exclusively into formal commercial channels (supermarkets and agro-processors). While the short-term challenges of establishing self-sustaining commercial producers is the primary focus of Massmart’s program at present, there are longer-term threats. Charles Fishman (2006) argues that initially access to Walmart’s supply chain offers great opportunities to suppliers to increase volume with demand stability. But later on, reliance on Walmart as the largest customer develops, and a slow squeeze ensues as Walmart annually imposes more stringent conditions. Eventually this leads to highvolume, low-cost production for the suppliers too, which translates into inferior quality. Fishman indicates that continual cost reductions in the production and distribution process is a major source of profit for Walmart. It is too early to see these processes at work in Ezemvelo, since most fresh produce suppliers are not fully established as self-sustained commercial entities yet. But elsewhere in South Africa, where intermediate suppliers have already experienced the harder edge of Walmart’s approach, there

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are voices of warning. In KwaZulu-Natal, discussions with Massmart to secure an off-take agreement with an independently run pack house and processing facility revealed tensions in the relationship. A consultant involved in the process said: I’m not in love with Massmart. In fact, I view them with huge suspicion . . . Massmart fell in love with our model because they thought we were weaklings who they could quite easily sidestep and access our communities directly. . . . In those meetings, I made it quite clear that was not going to be the case. [The pack house] is a commercial entity, and [it] competes directly with their direct farmer model. They then looked around the country . . . they went to all these different places and they eventually came back and said they do want to interact. They said, “We know your model is not what suits us, but we realize that we can’t work without it.” Then we started getting some things, well, how do we do our costings? Is it cost plus fi fteen, cost plus this, cost plus that? And I could see they started feeling uneasy. They wanted to draw us in and then override us. . . . If they can’t go direct to the farmers, they will want to put us in the corner and say, “That’s fi ne. These are your operating expenses. We’ll give you 5 percent on top of that.” Which is not the model we want either, because then we know we’ll be squeezed by them, and we didn’t want to be in that position where we are price-takers from Massmart.12

the impact of massmart’s direct farmer program and conclusions The Supplier Development Fund was viewed by some as a victory for the activist state in imposing progressive conditions on multinational foreign direct investment in a developing economy. However, the evidence suggests otherwise. The activities of the SDF and Ezemvelo should be seen in the context of the government’s orientation toward forming publicprivate partnerships and integrating commercial black farmers into formal value chains. Their head-to-head economic competition with largescale commercial producers compels participating small-scale farmers to adopt the cost baseline of these large-scale competitors. The result is selfexploitation, imposition of fi nancial risk through enforced borrowing to be part of the program, and the continuation of an ultra-cheap labor regime using household and other labor without regulation of conditions or remuneration. These jobs are not necessarily worthless, especially in the context of very high unemployment, but the point is that the structure of

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production that Walmart relies on to procure its fresh produce necessitates these conditions. Even in this environment, where the farm workforce and producers subsidize the cost of production through reducing their share of the output, small-scale producers still cannot make ends meet. Massmart’s quiet move away from Ezemvelo, as it has seen that it will not work in commercial terms, suggests it was a poor model from the outset. A focus on commercial farmer integration does not respond to the broader priorities and transformation imperatives confronting the South African agricultural sector, which should emphasize instead diverse and appropriate support— including support to the large periphery of micro-scale producers—and the development of production for local markets. Walmart is in complete control of the process: the multinational frames the intervention in commercial terms, decides where to invest the resources, monitors itself, and imposes standards without concession. Ultimately, it appears that the SDF was used primarily to give a positive spin to Walmart’s entry into South Africa in the face of resistance (however weak). Walmart benefited from a flurry of positive press, especially in 2012 and 2013, as a result of its Direct Farmer Program. For instance, Minister of Agriculture Tina Joemat-Pettersson put up (token) resistance to Walmart’s acquisition of Massmart and was initially skeptical toward the deal, saying in 2011, “We are so apprehensive about the Walmart/ Massmart intervention because if you bring cheap food into the country it is going to underscore and put our local farmers under so much pressure. . . . Give us Walmart/Massmart and you will see what it is going to do to agriculture in this country. . . . Once they have the monopoly after four, five years all their prices will shoot up” (quoted in City Press 2011). But following a Walmart-sponsored tour to Costa Rica in 2012, JoematPettersson changed her tune. In August 2012, she said: “The court case was necessary, but now let’s just say the prenuptial [agreement] has been worked out” (quoted in Business Day 2012). Later that year, she said: “DAFF is pursuing a strategy of linking small producers to sell their produce directly to the major retailers such as Walmart, Pick n Pay, Spar and other retailers. We are proud to be part of a partnership with Walmart/ Massmart. Their programme offers the most comprehensive kind of assistance to smallholder farmers to my knowledge by a corporate company” (Joemat-Pettersson 2012). In this way, Walmart has successfully met the seemingly progressive conditions required for FDI in South Africa by integrating them into its existing strategic plans. It has used the SDF as a marketing tool and chan-

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neled farmer support in its own interests. A by-product of these practices is the entrenchment of South Africa’s low-wage labor regime in agriculture. notes 1. “Smallholder” and “small-scale” are used by different authors interchangeably or with their own defi nitions. I prefer to use “smallholder” to refer to land size and “small-scale” to refer to enterprise size (the value of production), following Cousins (2014). I have adapted the use of these terms by different authors to be consistent with this defi nition. 2. Interview with Sherry-Lee Singh, supplier development operations lead, Supplier Development Fund, Johannesburg, March 10, 2014. 3. Interview with Mandla Nkomo, operations director, TechnoServe (South Africa), Johannesburg, March 3, 2014. 4. Interview with Singh, March 10, 2014. 5. The same report shows that the number of “employees/members” of the eight projects comes to 166. 6. Interview with Singh, March 10, 2014. 7. Ibid. 8. Interview with Nkomo, March 3, 2014. 9. Ibid. 10. Personal communication with Adetola Okunlola, researcher, Institute for Poverty, Land, and Agrarian Studies (PLAAS), University of the Western Cape, January 28, 2014. 11. Interview with Nkomo, March 3, 2014. 12. Interview with an anonymous business development consultant, Pietermaritzburg, August 2013.

references African National Congress (ANC). 1994. Reconstruction and Development Programme: A Policy Framework. Johannesburg: Umanyano Publications. Aliber, Michael, and Lelethu Mdoda. 2014. “The Direct and Indirect Economic Contribution of Small-Scale Black Agriculture in South Africa.” Paper presented at the 2014 annual conference of the Agricultural Economics Association of South Africa, Mpekweni, Eastern Cape (September 29–October 1). Bienabe, Estelle, and Hester Vermeulen. 2007. “New Trends in Supermarket Procurement Systems in South Africa: The Case of Local Procurement Schemes from SmallScale Farmers by Rural-Based Retail Chain Stores.” Paper presented at  the Adding Value to the Agro-Food Supply Chain in the Future Euromediterranean Space” conference, 103rd European Association of Agricultural Economists seminar. Barcelona (April 23–25). Business Day. 2012. “Massmart and Government—Match Made in Heaven.” Business Day, August 3. Chikazunga, Davison. 2013. “Determinants of Smallholder Farmers’ Participation in Modern Food Markets: The Case of Tomato Supply Chains in Limpopo.” In Smallholders and Agro-Food Value Chains in South Africa: Emerging Practices, Emerg-

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ing Challenges, edited by Stephen Greenberg, 15–22. Bellville: Institute for Poverty, Land, and Agrarian Studies. City Press. 2011. “Walmart Impact on Agriculture Dissected.” City Press, October 16. Available at: http://www.fi n24.com/Companies/Retail/Walmart-impact-on -agrculture-dissected -20111016. Cousins, Ben. 2014. “What Is a ‘Smallholder Farmer’ in South Africa Today?” Paper for a workshop on “Opportunities, Constraints, and Innovative Approaches in Small-Scale Agriculture in South Africa,” C3 Initiative on Strategies to Overcome Poverty and Inequality, Goedgedacht, Western Cape (August 6–8). Department of Rural Development and Land Reform (DRDLR). 2013. “Policy for the Recapitalisation and Development Programme of the Department of Rural Development and Land Reform.” Pretoria: DRDLR. Department of Trade and Industry (DTI). 2008. “AgriBEE Sector Charter on Black Economic Empowerment.” Government Gazette, no. 30886. Pretoria: Republic of South Africa. Du Toit, Andries, Ben Cousins, Adetola Okunlola, Mnqobi Ngubane, and Davison Chikazunga. 2015. “Challenging the Stereotypes: Small-Scale Black Farmers and Non-Governmental Support Programmes in South Africa: A National Scan.” Bellville: Institute for Poverty, Land, and Agrarian Studies. Fishman, Charles. 2006. The Wal-Mart Effect: How the World’s Most Powerful Company Really Works—And How It’s Transformed the American Economy. New York: Penguin Books. Gollin, Douglas. 2014. “Smallholder Agriculture in Africa: An Overview and Implications for Policy.” Working paper. London: International Institute for Environment and Development. Hall, Ruth, ed. 2009. Another Countryside? Policy Options for Land and Agrarian Reform in South Africa. Bellville: Institute for Poverty, Land, and Agrarian Studies. Hathaway, Lucy. 2013. “Walmart-Massmart Commercialises the Local Supply Chain: A Step in the Right Direction?” Polity, March 7. Available at: http://www.polity .org.za/article/walmart-massmart-commercialises-the-local-supply-chain-a-step-in -the-right-direction-2013-03-07. Isaacs, Moenieba. 2013. “Small-Scale Fisheries Governance and Understanding the Snoek (Thyrsites Atun) Supply Chain in the Ocean View Fishing Community, Western Cape, South Africa.” Ecology and Society 18: article 17. Joemat-Pettersson, Tina. 2012. “Address by the Minister of Agriculture, Forestry, and Fisheries, on the Occasion of the First African Farmers Association of South Africa Annual General Meeting, Pretoria, 22/10/2012.” Polity, October 22. Available at: http://www.polity.org.za/article/sa-tina-joemat-pettersen-address-by-the-minister -of-agriculture-forestry-minister-of-agriculture-forestry-and-fisheries-on-the -occasion-of-the-fi rst-african-farmers-association-of-south-africa-annual-general -meeting-22102012-2012-10-22. Kenny, Bridget. 2013. “Citizen Wal-Mart? South African Food Retailing and Selling Development.” In New South African Review 4: A Fragile Democracy—20 Years On, edited by Devan Pillay, Gilbert Khadiagala, Prishani Naidoo, and Roger Southall, 56–73. Johannesburg: Wits University Press. Khumalo, Lusito. 2013. “Big Business for Small Farmers: The Case of Venda Avocado Growers.” In Smallholders and Agro-Food Value Chains in South Africa: Emerg-

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ing Practices, Emerging Challenges, edited by Stephen Greenberg, 29–37. Bellville: Institute for Poverty, Land, and Agrarian Studies. Kirsten, Johann. 2011. “Most SA Farmers Are Small-Scale.” Farmers’ Weekly, September 23, 38. Liebenberg, Frikkie. 2013. “South African Agricultural Production, Productivity, and Research Performance in the 20th Century.” PhD dissertation, University of Pretoria. Magubane, Khulekani. 2015. “Massmart Moves to Shift Investment Focus to Small Manufacturers.” FastMoving, June 12. Available at: http://www.bizcommunity .com/Article/196/399/129737.html. Mashala, Peter. 2013 “Supporting New Farming Entrepreneurs.” Farmers’ Weekly, May 31, 48. Massmart. 2011. “Walmart’s Direct Farm Programme Coming to South Africa.” Massmart Group update. Johannesburg: Massmart (December). ———. 2014. “Supplier Development Fund Annual Report 2013.” Johannesburg: Massmart. ———. 2015. “Supplier Development Fund Annual Report 2014.” Johannesburg: Massmart. Massmart/Walmart. N.d. “Massmart Supplier Development Fund.” Available at: http:// www.massmart.co.za/iar2013/summary-relating-to-the-supplier-development -fund/. National Agricultural Marketing Council (NAMC). 2007. “Section 7 Investigation: National Fresh Produce Markets.” Pretoria: NAMC. ———. 2009. “Workshop Report: Expert Consultation on Contract Farming in Africa, Johannesburg, May 4–7, 2009.” Pretoria: NAMC. National Planning Commission (NPC). 2011. “National Development Plan: Vision for 2030.” Pretoria: Office of the President. Prevor, Jim. 2007. “Walmart Continues to Change Its Buying Practices.” Jim Prevor’s Perishable Pundit, March 1. Available at: http://www.perishablepundit.com/index .php?date=03/01/07&pundit=1. RBB Economics. 2011. “The Merger of Walmart and Massmart: Economic Issues.” Submission to Competition Tribunal Case 73/LM/Nov10. Pretoria: Competition Tribunal. Republic of South Africa (RSA). 2015. Expropriation Bill, B04 of 2015. Pretoria: Government Printers. Sangweni, Sithembiso. 2015. “Fairytale Success of Small Businesses in Massmart Fund.” GetBiz, February 12. Available at: http://www.getbiz.co.za/index.php/biz -news/retail/89-fairytale-success-of-small-businesses-in-massmart-fund. Van der Heijden, Tracy, and Nick Vink. 2013. “Good for Whom? Supermarkets and Small Farmers in South Africa—A Critical Review of Current Approaches to Increasing Access to Modern Markets.” Agrekon 52: 1–17. Visser, Jaco. 2011. “Massmart Wants to Transform Fresh Produce Supply Chain.” Farmers’ Weekly, October 21. Walmart. 2012. “Aid for Trade Facilitation Case Study: Walmart’s Direct Farm Program.” Available at: www.oecd.org/aidfortrade/48368733.pdf (accessed January 29, 2014).

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Ch a p t e r 7

brokering development: ngos and walmart in nicaragua jennifer wiegel

T r a nsnat iona l su pe r m a r k et ch a i ns have spread rapidly across the developing world over the past two decades as chains expand into new countries and rapidly increase their store numbers and market share there. Although supermarkets have existed in developing countries since before the 1970s, they were primarily domestic chains serving higher-income neighborhoods in major urban centers. Since 1990, however, supermarkets have rapidly expanded their store numbers, diversified their formats to serve low- and middle-income neighborhoods, and expanded beyond capital cities into smaller cities and towns. In doing so, supermarkets have expanded their share of food retailing, from 10 to 20 percent on average in 1990 to 50 to 60 percent in some regions by 2000 (Reardon and Berdegué 2002). Much of this growth has been transnational supermarkets spreading into new countries, with Latin America leading the way and Asia, then Africa and Eastern Europe, following behind. In higher-income countries like Argentina and Chile, supermarkets control over 60 percent of food retail, while in lower-income countries in Africa they control less than 10 percent (on “waves of supermarketization,” see Timmer 2008; see also Gutman 2002; Weatherspoon and Reardon 2003; Boselie, Henson, and Weatherspoon 2003). As a phenomenon, this “supermarket revolution in developing countries” has attracted attention within many disciplines, as well as within policy circles, in just the past few years (World Development 2009; Farnworth, Jiggins, and Thomas 2008; McCullough, Pingali, and Stamoulis 2008b; World Bank 2008; Burch and Lawrence 2007; Wrigley and Lowe 2007; Swinnen 2007; Vorley, Fearne, and Ray 2007b; Barrientos and Dolan 2006; Ruben, Slingerland, and Nijhoff 2006). Thomas Reardon, along with numerous colleagues, has been identified with the “supermarket revolution in developing countries thesis”; heavily focused on fresh fruits and vegetables, this thesis makes several basic arguments:

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1. Supermarkets will continue to expand their market share within developing countries at growth rates similar to those seen in the past two decades. 2. As supermarkets grow they will implement changes in their procurement systems toward greater vertical coordination. This will include a shift from spot purchases in wholesale markets to using specialized procurement agents, increased sourcing from within a network of preferred suppliers, centralization of procurement through the use of distribution centers (as opposed to procurement by store), and the implementation of private grades and standards. 3. The requirements of these “modernized” procurement systems create challenges for small farmers, who risk exclusion from the lucrative domestic urban markets that supermarkets are capturing (Neven and Reardon 2004; Boselie, Henson, and Weatherspoon 2003; Reardon and Berdegué 2002; Humphrey 2007; Timmer 2008; Reardon, Timmer, and Berdegué 2008; Coe and Wrigley 2007). This stream emphasizes uniformity in how supermarkets grow and organize procurement across fi rms, countries, and regions, with important variations explained by different “waves of supermarketization” (Timmer 2008; Reardon, Henson, and Berdegué 2007).

Because an important strategy for rural poverty reduction has been linking farmers to domestic urban markets to diversify and increase their incomes, this body of literature on supermarkets in developing countries has generated concern in development policy circles. The supermarket revolution thesis proposes, on the one hand, that supermarkets will increasingly capture urban retail markets, beginning with higher- and middleincome consumers—the more lucrative segment of these markets—and, on the other, that they will not source from small farmers, who will be increasingly hard put to meet supermarket demands. The upshot is that small farmers will gradually lose access to domestic urban markets. In the near future, if small farmers do not sell to domestic supermarkets, they will either be relegated to shrinking traditional markets or, worse, not be able to sell at all (Van der Meer 2006; McCullough, Pingali, and Stamoulis 2008a; Meijer et al. 2008; Vorley, Fearne, and Ray 2007a). This concern has created an opening for debate around the role that government and development agencies might play in countering this supermarket bias against small farmers, and it has been suggested that nongovernmental organizations (NGOs) in particular can—and should—help small farmers access supermarket supply chains by helping them make the “onetime ini-

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tial investments” needed to meet supermarket requirements (McCullough, Pingali, and Stamoulis 2008a; Weatherspoon and Reardon 2003; Boselie, Henson, and Weatherspoon 2003; Balsevich, Berdegué, and Reardon 2006; Reardon and Berdegué 2002). Economic geographers, on the other hand, argue that retailing as an activity is highly territorially embedded in a particular place. Establishing a network of stores requires embeddedness in local property laws and land-use planning. Attracting customers requires embeddedness in local cultures of consumption. And because supermarkets source the vast majority of their products domestically, embeddedness in local supply chains and production networks is also required. Hence, the success of a transnational food retailer in a new country depends on its ability to adapt to the local context—or to “strategically localize” its operations in the host economy (Dawson 2007; Coe and Wrigley 2007; Coe and Lee 2006). Economic geographers propose that supermarkets enter new markets by intentionally implementing place-specific strategies for the purpose, among other things, of establishing local supply networks and accessing resources for growth. Citing the failures of retailers in entering and establishing themselves in new host economies, they stress the variable success of the strategies used across fi rms and national contexts in localizing supply and suggest that the organization of procurement, and thus its effects locally, are more varied than the supermarket revolution stream portrays and predicts (Coe and Lee 2006; Humphrey 2007). In a similar vein, John Humphrey (2007), drawing on fresh fruits and vegetables, argues that whether and to what extent retailers vertically coordinate their supply chains depends on varied local conditions. In particular, he proposes that the need to vertically coordinate is less imperative in lower-income countries, like Nicaragua, where competitive strategies must be based on price, not quality, differentiation. He also argues, citing cases where supermarkets source in wholesale markets, that the need for supermarkets to vertically coordinate varies depending on existing market structures, particularly the ability of wholesalers to offer supermarkets what they need at a lower cost than a vertically integrated procurement system would offer. He also argues that the exclusion of small farmers depends on the alternatives. For example, in countries like China that are dominated by small farmers, supermarkets may have no choice. Humphrey’s argument is that the particularities of place pose challenges to, change the incentives for, and affect the outcomes of supermarket procurement practices. More specifically, he argues that, for fresh foods, the extent of supermarket growth, how supermarkets organize procurement,

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and the effects on small farmers are more varied than the supermarket revolution hypothesis predicts, especially for lower-income countries, where fresh vegetable production is dominated by small farmers. In response, Thomas Reardon, Spencer Henson, and Julio Berdegué (2007) argue that supermarkets tend to implement particular kinds of procurement practices as part of their entry and growth strategy in new countries, and that in doing so they take local conditions, such as those mentioned by Humphrey, not as exogenous conditions to which they must adapt, but as endogenous conditions to be transformed. They propose that an important driver of the most recent growth of supermarkets in developing countries is the implementation of “proactive fast-tracking strategies” by transnational supermarkets. Procurement modernization and the establishment of local supply are identified as key enabling conditions for supermarket entry and growth in developing countries. As transnational supermarkets see local conditions as “things they could alter for their own gain,” they proactively work to create the local enabling conditions necessary for growth. These authors shift the focus from Humphrey’s discussion of the extent to which fi rms modernize procurement to how they modernize procurement, across diverse national contexts, and emphasize supermarkets’ strategies to overcome challenges rather than their adaptations to those challenges. Reardon and his colleagues highlight, as have others (see McKay 2006), the way in which corporate localization strategies take advantage of place, not just to adapt corporate practice to local conditions, but to alter local conditions to fit corporate practice. Localization strategies of supermarkets, then, are not simply adaptations to the local, but strategies to alter the local to facilitate corporate growth. In this chapter, I explore the localization strategy of Walmart for fresh fruits and vegetables (FFV) supply in a lower-income country where fresh vegetables are produced on very small units—in a sense, Humphrey’s hardest case—yet where the modernization of procurement, in line with the supermarket revolution in developing countries thesis, has been documented (Berdegué et al. 2005).1 In doing so, I extend our understanding of supermarket localization strategies in developing countries in two ways. First, I show that supermarkets do not simply adapt to existing market systems; they actively work to establish the corporate procurement practices needed for growth. Second, I show how partnering with NGOs as supply chain actors proved to be a valuable localization strategy for overcoming the challenges of domestic procurement and supermarket growth in Nicaragua. Others have also highlighted the role of NGOs in linking farmers to markets, but they have tended to overlook the role of NGOs in

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supermarket supply chain localization. This strategy for localizing supply takes advantage of a specific feature of place, namely, the presence of the U.S. Agency for International Development (USAID) and USAID-funded NGOs that are implementing market-oriented agricultural development programs and are willing to orient them toward a supermarket buyer so as to facilitate entry and growth in a new market through local supply chain development and procurement modernization. This arrangement is not particular to Nicaragua, FFVs, or USAID as a bilateral donor. I conducted research on domestic supply chains for tomatoes in Nicaragua during 2008 and 2009. The data come from interviews with sixty farmers and forty-eight other supply chain actors, including farmers’ organizations, NGOs, supermarket buyers and procurement personnel, dedicated and nondedicated wholesalers, and intermediaries. 2 I also collected data on prices and production, including costs. These primary data are supplemented by secondary data from a supermarket value chain analysis conducted in 2003, a value chain analysis, case study, and household survey of tomato farmers conducted in 2004 (Balsevich et al. 2004; Balsevich, Berdegué, and Reardon 2006; Jano et al. 2004), my own value chain analysis and interviews with supermarket FFV suppliers in 2005 (Wiegel 2006), and data from a household survey of supermarket suppliers conducted in 2008 (Michelson et al. 2012). This chapter proceeds as follows. I first describe Walmart’s domestic supply chain for tomatoes in Nicaragua and the role of NGOs in that supply chain. In the following section, I examine how Walmart benefits from these partnerships, suggesting that they form an important part of Walmart’s domestic localization and growth strategy in Nicaragua. In the fi nal section, I present my conclusions, highlighting the implications for development practice.

the entry and growth of walmart and tomato sourcing in nicaragua There have been supermarkets in Nicaragua since the 1960s in the form of domestic chains with few stores, mostly located in the capital, catering to upper-income consumers. Since the mid-1990s, however, supermarkets have grown rapidly in number of stores, geographical distribution, and food market share. Between 1997 and 2002—just five years—the supermarket share of the food market doubled from 10 percent in 1997 to 19 percent by 2002 (Berdegué et al. 2005). The bulk of this growth came from two chains. While a national chain tripled the number of its stores

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Table 7.1. The Expansion of Walmart in Nicaragua, 2002 to 2009 2002 (Ahold)a

2007 (Walmart)

2009 (Walmart)

Number of stores

19

40

55

Geographical coverage

The capital and 6 other towns

The capital and 21 other towns

The capital and more than 25 other towns

Source: Author’s calculation from Balsevich, Berdegué, and Reardon 2006; Leiva 2004; Walmart de México y Centroamérica 2012; and interviews. a The figures are for Ahold from 2003 to 2005 and for Walmart since 2006.

in the decade from 1997 to 2007, the transnational chain that is now Walmart expanded from three to forty stores by 2007 (and to fi fty-four by 2009), spreading to most neighborhoods in the capital and most towns across the country (table 7.1) over the same period. Walmart entered Nicaragua and Central America in 2005 by acquiring Ahold’s share in the Central American Retail Holding Company (CARHCO), a regional joint venture with a presence in five Central American countries. Corporación Supermercados Unidos (CSU), a Costa Rican supermarket chain, moved into Nicaragua during the mid-1990s with three stores. The growth of the chain accelerated after 2001 with the entry of transnational capital in the form of the CARHCO joint venture— between the CSU, a Guatemalan chain (La Fragua), and Ahold—and again after 2005 when Walmart, one of the largest retailers worldwide, bought out Ahold, then became the majority shareholder in 2006, forming Walmart Centroamérica. In 2010, operations were merged to form Walmart de Mexico y Centroamérica (Walmart de México y Centroamérica 2012). In 2009, the chain had two store formats, one directed to middle- to upper-income consumers (five stores), and one directed to lower- to middle-income consumers (fifty stores). In both kinds of stores, consumers could fi nd a selection of fresh fruits and vegetables, staple and packaged foods, and other consumer goods under one roof. Despite large numbers of stores and rapid growth, available data show that Walmart in 2006 accounted for only around 8 percent of tomato sales (Balsevich, Berdegué, and Reardon 2006; FAO 2009). Walmart purchased tomatoes through its procurement arm, Hortifruti, in coordination with a USAID-funded NGO, an arrangement inherited from Ahold. In 2003, under the auspices of the USAID-funded Partnerships for Food Industry Development project of Michigan State University, USAID in Ni-

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caragua signed an agreement with CARHCO, by which the supermarket chain agreed to purchase 150,000 pounds of produce from farmer beneficiaries of USAID projects funded under Public Law 480, the Agricultural Trade Development and Assistance Act (also known as Food for Peace), and USAID agreed to provide farmers with financial and technical support to produce products demanded by the supermarket chain through the NGOs they funded (Harris et al. 2007; USAID 2009). This agreement was renewed in 2006 with Walmart. The NGOs involved were USAID NGOs and largely faith-based, including, for tomatoes, TechnoServe, Save the Children, Adventist Development Relief Agency (ADRA), and Winrock International, and, for other vegetable crops, Project Concern International and Catholic Relief Services. See the timeline in table 7.2 for more detail. In this supply relationship, the NGO agglomerates supply across several farmers’ organizations, which consolidate product from their members. Farmers and farmers’ organizations receive technical assistance and fi nancing from the NGO that initially brokered the supply relationship with Walmart under an agreement between its funder (USAID) and the retailer. The NGO continues to broker the supply relationship, coordi-

Table 7.2. Timeline of Walmart’s Entry into and Tomato Sourcing in Nicaragua, 1994–2007 1994

CSU of Costa Rica acquires three stores in Nicaragua; tomatoes are sourced in wholesale markets

2001

CSU becomes part of CARHCO, regional chain under leadership of Ahold; tomatoes are sourced in wholesale markets

2003

Agreement is signed between CARHCO and USAID; CARHCO initiates sourcing from small farmers through Winrock International

2004

Fifty percent of tomatoes are sourced from small farmers through Winrock International; sourcing through ADRA, TechnoServe, and Save the Children is initiated

2005

Walmart buys out Ahold

2006

Walmart becomes majority shareholder in Walmart Centroamérica; agreement is signed between Walmart and USAID

2007

Eighty to 90 percent of tomatoes are sourced through ADRA

Source: Author’s compilation from Balsevich, Berdegué, and Reardon 2006; Leiva 2004; Walmart de México y Centroamérica 2012; and interviews.

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figure 7.1. Supermarket Supply Chain: Walmart, Suppliers, and NGOs Source: Author’s construction.

nating products, volumes, price, and quality standards with Walmart and distributing them across the farmers’ organizations (see figure 7.1). Walmart drives the chain, orienting other actors toward its demands. In the supermarket supply chain, NGOs and farmers’ organizations mediate between producers and retailers, with wholesalers notably absent. In this supply chain, NGOs and farmers’ organizations take on important supply chain functions that wholesalers fill in municipal market supply chains. The credit and technical assistance provided to farmers by the NGOs are oriented toward a specific buyer, Walmart. Beyond supporting farmers, NGOs play an important role in coordinating the supply relationship across farmers and between farmers and Walmart, as well as in monitoring suppliers for compliance with supermarkets’ standards and quotas. Finally, actors along the Walmart supply chain, including the NGOs themselves, view NGOs as key actors in the supply chain. In our interviews with Walmart personnel, NGOs, and farmers, all actors made reference to NGOs when talking about their marketing or supply relationships. A supermarket procurement officer said, “Almost all of our tomatoes, 80 to 90 percent, we get from the NGO people.” An NGO official said, “We are currently supplying 100 percent of their [Walmart’s] tomatoes. They say they couldn’t ask us for more.” A farmer said, “The [supply] relationship is with the NGO,” and another said, “The NGO is who has the market [relationship with the supermarket].” These examples are representative of how NGOs are viewed in the supply chain.3

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In policy-oriented literature on supermarket growth in developing countries, NGOs are seen as playing a key role in shaping participation in supply chains by providing small farmers with the initial investment needed to produce for supermarkets and the organizational structure to agglomerate supply and help establish initial contact, thus reducing the transaction costs for retailers associated with sourcing from so many small producers (Balsevich, Berdegué, and Reardon 2006; Balsevich et al. 2007; Balsevich et al. 2004; Weatherspoon and Reardon 2003; Meijer et al. 2008; McCullough, Pingali, and Stamoulis 2008a). In this view, NGOs appear in the chain as temporary actors that support farmers, changing their initial assets and thereby affecting patterns of inclusion of suppliers in the chain, but they are not viewed as supply chain actors in their own right (McCullough, Pingali, and Stamoulis 2008a). Although this view accurately describes the NGOs working with farmers who supply municipal markets in Nicaragua, it does not fit the NGOs working with farmers who supply supermarkets. Farmers producing for municipal markets often receive technical assistance and support from NGOs to produce and market tomatoes, though the NGOs are not involved in marketing the product. By contrast, NGOs act as brokers in supermarket supply chains, negotiating the market relationship between supermarkets and farmers—a role that goes far beyond helping farmers make initial, onetime investments. Supermarkets, for their part, have followed NGOs from community to community, sticking with the broker, not the producer. Showing a defi nite preference for this sourcing strategy, they have procured increasing proportions of their tomatoes in this way over time.

partnering with ngos as a supermarket localization strategy Walmart has effectively localized the supply of tomatoes in Nicaragua through partnerships with NGOs. The company has increasingly sourced tomatoes (and other products) through supply chains in which NGOs take on supplier functions, even though they never own the product. This arrangement benefits Walmart in several important ways. First, the NGOs take on supply chain functions, thus reducing the fi nancial costs for Walmart of sourcing more directly from farmers and allowing the fi rm to capture lower farm-gate prices (the wholesaler’s margin) without the associated costs. Second, the NGOs subsidize production, and Walmart is then able to capture these subsidies in the purchase price they pay farm-

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208 walmart in the global south

ers for tomatoes that are a quality product at a commodity price. Third, NGOs help Walmart ensure a reliable supply by generating supplier loyalty and monitoring and disciplining farmers. Finally, NGOs bring capital into the supply chain in the form of production credit that is transferred to Walmart through delayed payments to farmers. Delayed payments to suppliers are an important source of capital globally for supermarket growth. By sourcing through NGOs, Walmart can access, in a variety of ways, the subsidies NGOs manage and channel to them for chain growth.

C a p t u r i ng t h e W hol esa l e r’s M a rgi n w i t hou t t h e W hol esa l e r’s Costs Farm-gate prices for tomatoes in Nicaragua are substantially lower than prices in wholesale markets. Price data for three months in 2007–2008 show that farm-gate prices paid by Walmart were 36 percent lower than wholesale prices ($0.16 versus $0.25 per pound), indicating that supermarkets obtained a significant price savings when purchasing tomatoes from farmers versus from wholesalers.4 Yet the difference between farm-gate prices and wholesale prices reflects not only the profit margins of wholesalers but also the costs associated with sourcing in the field. The transaction costs for sourcing tomatoes from farmers in Nicaragua are particularly high. The production sector is composed of many very small farmers, most of whom produce seasonally. Tomato production is dispersed across the country, in regions distinct from the major consumption zones, and the geographical dispersion of production varies seasonally. The costs of coordinating volumes, prices, deliveries, transport, and payments are high, as many farmers do not have cell phones or vehicles and many rural areas still do not have cell-phone reception or year-round road access. Transport is expensive owing to high gas prices, poor road infrastructure (fewer than 10 percent of Nicaragua’s roads are paved), and the distance between production and consumption zones. Many farmers do not have bank accounts or formal accounting systems, so payments must also be coordinated, often in cash and on paper. In municipal market supply chains, wholesalers take on a variety of functions, all of which imply costs. They invest in transport, spending time and money traveling to production zones to coordinate across farmers in different regions and different seasons as they agglomerate supply throughout the year, negotiating prices, volumes, quality standards, and deliveries. Wholesalers provide or coordinate the transport of the product to the wholesale market. They grade the tomatoes and do quality control.

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They provide many farmers and retailers with credit and assume the costs of fi nancial services, like accounting and payments. They cultivate relationships with farmers, to generate supplier loyalty and ensure supply, and also monitor suppliers, disciplining them when needed. Taken together, these functions represent important investments by wholesalers in vehicles, warehouses, equipment, communication, and personnel. If we look at the supply chain leading to Walmart, we see that it is NGOs—or the farmers’ organizations they subsidize—that take on these functions. NGOs are often responsible for communicating supermarket demand, quality standards, and weekly prices to farmers, allowing Walmart to communicate solely with one entity with ready phone access. NGOs provide production credit and administrative support. Farmers’ organizations receive and distribute orders and payments, grade and standardize the product, and handle transport. For example, while Walmart’s tomatoes over the course of 2007 came from around sixty farmers in four different municipalities, in directly interacting with only one NGO and two farmers’ organizations, the supermarket effectively had just three suppliers. Partnering with NGOs has helped Walmart access lower farm-gate prices without the associated costs. This reduces the initial and ongoing investments that Walmart would otherwise have to make—and that wholesalers do make—to access farm-gate prices. When we compare supply chains, we often think about the differential distribution of costs and profits among actors. In this case, we see that wholesalers have been eliminated from the Walmart supply chain, with NGOs absorbing their costs and Walmart (and maybe farmers and farmers’ organizations) reaping the profits.

“Qua li t y” Tom atoes at Com modi t y Pr ices The tomatoes produced by the farmers supplying Walmart through NGOs are different from the average tomato produced for the wholesale market, yet their price is practically the same. The seed varieties grown for supermarkets are distinct from those produced by the majority of farmers growing for wholesale markets. Walmart tomatoes come from seedlings produced in trays in greenhouses, located in a special substrate, and purchased from a specific nursery, while farmers producing for wholesale markets produce their own seedlings, mostly in the ground and open air. Farmers who produce tomatoes for Walmart use a greater quantity and diversity of more crop-specific inputs than farmers producing for municipal markets. Walmart tomatoes are more extensively pruned and trellised,

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and the harvesting and grading process is more complex, requiring more labor (Wiegel 2013). All of these practices add production costs. We would expect increases in production costs—especially when associated with an increased use of more specialized inputs, improved varieties, or more careful cultivation—to contribute to the quality of the final product. We learned from interviews with farmers, NGOs staff, and Walmart procurement officers that all agree that the quality of the tomato produced for Walmart is higher than the quality of the tomatoes generally available in the wholesale markets or sold in municipal markets. Walmart tomatoes have a more uniform size and appearance, and their consistent color and lack of imperfections make them more attractive to consumers. They purport to be less toxic, as only pesticides approved by the U.S. Environmental Protection Agency (EPA) are used on them, and being fi rmer, they are more resistant to damage from handling—an important benefit for supermarkets. We would also expect that higher production costs and a higher-quality product would be compensated by a higher sale price, yet this is not evident. The prices paid by Walmart over three months in 2007–2008 were almost the same as the prices paid by wholesalers; for example, Walmart paid US$0.16 per pound while the wholesalers paid US$0.15 per pound. Hope Michelson and her colleagues (2012) have found that the prices paid by Walmart for three vegetables, including tomatoes, were 34 to 54 percent lower than prices paid in traditional markets from April 2005 to May 2008. In sourcing through NGOs, Walmart is able to purchase higherquality, more expensive tomatoes at the same (or lower) price as any other tomato. So why do farmers produce a more expensive, higher-quality tomato if there is apparently no price incentive for doing so? One answer is that farmers do not assume all of these costs, because they are subsidized. All of the NGOs in question provide farmers, in a variety of ways, with important production subsidies. Investments in infrastructure, such as irrigation equipment and greenhouses, take the form of either outright grants or partial grants combined with long-term, subsidized (no- or low-interest) credit. Both NGO staff and farmers themselves confi rmed that production costs are covered by subsidized credit, with the fi rst season’s costs provided fully or partially as a grant. These subsidies allow farmers to profitably sell their quality tomatoes at a basic commodity price. Walmart then captures the subsidies by buying specifically from these farmers, thus obtaining quality tomatoes at commodity prices. This practice is consistent with what Peter Little and Michael Watts (1994) have documented:

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that buyers for agribusiness fi rms may source from specific farmers if they can thus access public subsidies targeting these farmers. There are also nonprice incentives for farmers to produce a higher-quality tomato and sell it to supermarkets; these incentives are discussed in the next section.

Ge n e r at i ng a n d M a i n ta i n i ng Suppl i e r Loya lt y One competitive strategy of supermarkets is to offer consumers a consistent supply of a given set of basic products. For Walmart in Nicaragua, tomatoes are an important basic product and a sales catalyst in stores. Tomato sales drive the sales of several other products: if consumers buy tomatoes, they are also likely to buy a number of other products. If tomatoes are not attractive or attractively priced, consumers are likely to buy tomatoes, as well as the other products, elsewhere.5 So tomatoes are an extremely important item for Walmart in Nicaragua. In Nicaragua, however, maintaining a constant supply of tomatoes of a consistent quality can be extremely challenging. First, supply is variable throughout the year, as climate affects the areas planted, the yields, and the quality. For most farmers, planting tomatoes is a seasonal endeavor based on rain patterns, relative production costs, and their expectations for when prices will be high. No one wants to end up with excess tomatoes when the supply is abundant and prices fall. Second, when tomatoes are scarce, there is fierce competition from buyers for a given producer’s harvest, and producers will sell to the highest bidder unless there are strong reasons to do otherwise. There are several possible solutions to the problem of ensuring a constant supply of tomatoes. Contracts could be one solution: farmers would have a guaranteed buyer in times of oversupply, and the supermarket would have a constant supply of tomatoes, even when competition is fierce. Yet, in Nicaragua, Walmart has not used legal contracts with suppliers—maybe because they are difficult to enforce, but also possibly because they limit the flexibility Walmart values in its supply relations. Another solution for ensuring a reliable source of tomatoes could be a price incentive: Walmart could always offer its suppliers a higher price than the competition. But with price continuing to be a critical competitive factor in food retail in Nicaragua, such a price incentive is not an ideal—or maybe even feasible—solution. And the data show that Walmart does not in fact consistently pay higher prices. In 2007, however, the transnational supermarket did negotiate a price band agreement with its suppliers, establishing a minimum and a maximum price for farmers. Interviews with farmers indicate that they do value the minimum price agreement, but re-

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sent the price ceiling. Moreover, side-selling does occur when other buyers offer a higher price, as confi rmed in interviews with Walmart procurement officers and NGO staff as well as farmers (see also Balsevich et al. 2004). Another common strategy used to generate supplier loyalty is interlinked transactions, which are particularly common in contract farming schemes. Buyers establish multistranded relationships with suppliers—for example, providing farmers with credit or other services they value over sale price gives farmers an incentive to remain on good terms with the buyer, even when prices are better elsewhere. The fear of losing these other services keeps them loyal. This strategy requires that supermarkets invest in providing these services, however, and so competes directly with other investments in growth. Walmart in Nicaragua acts as little more than a buyer for farmers who supply them. Yet sales transactions between farmers and Walmart are not entirely free. They are part of a multistranded relationship between farmers and NGOs. Sales to Walmart are interlinked with credit, specialized inputs, and the technical, fi nancial, and organizational assistance that NGOs provide to farmers. These services give farmers an incentive to cooperate with the NGO by making good on their sales commitments to Walmart. Farmers express a sense of gratitude and moral commitment to the NGO for the support they have received and continue to receive. They see the NGO as having made an agreement with Walmart that they feel obliged to fulfi ll. If they fail Walmart, they feel they are failing the NGO. This is reinforced by the fact that when Walmart has a problem with the farmers, it contacts the NGO, whose staff talk with the farmers to resolve the issue. The reverse also occurs when farmers have a problem. This relationship was described by Walmart procurement officers and marketing personnel from three NGOs and is cited in the supermarket supply chain study on tomatoes in Nicaragua conducted by Pilar Jano and her colleagues (2004). In this case, then, NGOs generate loyalty from farmers through the multiple services they provide, including marketing. NGOs transfer this loyalty to supermarkets when they negotiate supply agreements that require farmer compliance. Generating loyalty is not enough if there is no way to monitor or enforce it. Monitoring compliance requires close contact with farmers to know who is side-selling or not complying with quality standards. Both kinds of monitoring require investments that NGOs make for supermarkets in this supply chain. The ability to monitor farmers comes from NGOs’ close work with farmers in their communities, which enables NGOs to fi nd out

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who is side-selling and who is not. All of the NGOs in question monitor farmers as part of overall project monitoring, registering information on production, yields, and sales; they also use this information to monitor compliance with Walmart sales agreements. One NGO and one of the farmers’ organizations actively police side-selling as credit repayment is charged from a farmer’s sales to the supermarket. And supermarket buyers indicated that when there are problems with compliance, they rely on the NGOs to uncover the cause and apply disciplinary measures. Farmers’ organizations could in theory play this role, but according to supermarket procurement officers, they have proven unable or unwilling to do so. Meanwhile, NGOs are highly effective at it (Jano et al. 2004).6

Br i ngi ng C a pi ta l i n to t h e Ch a i n Supermarkets entering new countries, such as in Nicaragua, are in a phase of rapid expansion. In this phase, they are capital-scarce and need cash to grow as they open new stores. Supermarket growth is often funded in two ways. The fi rst is delaying payments to suppliers and thereby effectively obtaining free credit—by paying suppliers for their goods well after they have sold those goods to consumers, supermarkets are able to use this cash for growth. The second way is to push supply chain functions and costs down the chain to suppliers, thus freeing up capital that the supermarkets can use to fund growth (Boselie, Henson, and Weatherspoon 2003; Codron et al. 2004; Neven and Reardon 2004; Reardon et al. 2009). Producers that are capital-constrained, like small tomato farmers in Nicaragua, are unable to provide credit to supermarkets through delayed payments or to assume additional supply chain costs, so supermarkets must devise alternative strategies. One strategy is to source from wholesalers, which are better positioned to accept delayed payments and to take on additional supply chain functions. Another strategy for accessing capital for growth is to bring capital into the chain by incorporating new actors, which supermarkets can then access from inside the chain to fund growth. Claudio Gonzalez-Vega and his colleagues (2006) document how Walmart pursues this strategy in several Central American countries by helping its suppliers obtain credit through microfi nance organizations. They argue that this brings new capital into the chain in the form of credit to producers, allowing them to take on additional supply chain costs and accept delayed payments. In this way, supermarkets are able to capture these resources from within the chain to fund supermarket growth. In a similar way, when supermarkets source through NGOs, the resources that NGOs manage are brought into the supermarket supply chain.

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Table 7.3. Number of Days after Delivery before Suppliers Received Payment from Walmart, 2007 and 2008

Year

NGO Farmers

Non-NGO Farmers

2008 2007

22 22

8 10

Source: Michelson 2008.

When NGOs provide farmers with credit or help them access credit, they make it possible for farmers to accept delayed payments from Walmart. In 2007 and 2008, farmers who sold to Walmart through NGOs received payment on average twenty-two days after delivery, in contrast to the four to six days it took for the supermarket to sell the tomatoes, even if we include extra days for bank transfers and paperwork. Farmers who sold to Walmart directly on an occasional basis received their payments in less than half the time (see table 7.3). This indicates that Walmart does not always delay payments, but that it prefers to do so when it can. When supermarkets source through NGOs, they hold on to a supplier’s money more than twice as long, suggesting that this arrangement does indeed provide supermarkets with supplier credit to fund growth. When NGOs make investments in collection centers and equipment for grading, processing, and standardizing tomatoes, and when they subsidize farmers’ organizations to handle collection, processing, delivery, and fi nancial services for supplying Walmart, as discussed earlier, they are assuming important supply chain costs for Walmart, freeing up resources for supermarket growth. When NGOs provide farmers with resources or assume supply chain costs, they increase the total amount of resources available to the supply chain. When Walmart sources from NGO-supported farmers, it is able to capture these resources directly through delayed payments and indirectly through the freeing up of other resources for chain growth. Walmart sources from farmers through NGOs when there are resources to be captured. When an NGO withdraws these resources from a community or group of suppliers, Walmart’s incentive to source there disappears, explaining the withdrawal of supermarkets after an NGO leaves. When tomatoes are not available through an NGO, Walmart sources from wholesalers. This suggests that the cost (or risk) of sourcing directly from farmers without an NGO present is still prohibitive.

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conclusion Supermarkets are growing rapidly in a wide variety of developing countries. The recent takeoff in supermarket growth in developing countries has been explained, at least partly, by corporate strategies used by supermarkets to successfully localize their operations, particularly supply. Two important objectives of these strategies have been local supply chain development and procurement system modernization, identified as key enabling conditions for supermarket growth. Yet the conditions found in many poor developing countries pose significant challenges for transnational retailers in achieving these objectives (see Humphrey 2007 for a discussion). This chapter has documented how Walmart overcame the challenges of local supply chain development in a poor developing country, Nicaragua, using long-term partnerships with NGOs as a key strategy for localizing supply. First Ahold and then Walmart have actively worked with NGOs in Nicaragua to develop and coordinate domestic supply chains for tomatoes. These partnerships have helped Walmart to increasingly manage the supply chain to its advantage, improving the quality of the product, stabilizing supply, and accessing resources for growth, all while reducing its procurement costs. Far from merely playing a background role providing support services to farmers, NGOs in Nicaragua have provided important support services to supermarkets and acted as brokers between farmers and buyers in supermarket supply chains, enabling Walmart to implement procurement practices it was unable to implement with other market actors (Wiegel 2013). Walmart has also used its relationship with NGOs and sourcing from small farmers to build a reputation for corporate social responsibility to gain legitimacy and support from both the public and private sectors—also very important for its growth (Elder and Dauvergne 2015). Walmart ostensibly sources from small farmers, yet supply agreements are largely negotiated between Walmart, USAID, and specific NGOs. In this sense, these NGOs can be seen as helping Walmart to achieve a competitive edge vis-à-vis other domestic retailers, contributing to the diffusion of supermarkets in Nicaragua. I argue here that Walmart sources through NGOs because of the important economic and strategic benefits of doing so, yet an alternative explanation could be that it does so either in response to pressures from donors and NGOs to source from their beneficiaries or out of a sense of corporate social responsibility. This would also explain why tomato farmers’ entry into the Walmart supply chain appears to be conditional on NGO presence. To reduce rural poverty and support agricultural de-

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velopment, there has been an increase in Nicaragua in “value chain” or “market-oriented” projects and “business linkages programs,” which often seek out a “modern” buyer, such as a supermarket, as the target market for farmers’ goods. The fact that these projects tend to offer significant subsidies to both producers and retailers (Reardon, Henson, and Berdegué 2007) makes this alternative explanation consistent with the one for which we argue here—that Walmart captures important subsidies by partnering with NGOs to source tomatoes. The presence of such projects is a necessary but not sufficient condition for supermarkets to source through NGOs. Walmart must also choose to source in this way, and it does so with its economic interests in mind. Whether NGOs are seeking out supermarkets or supermarkets are following NGOs, evidence from this case suggests that these NGO projects facilitate or subsidize the growth of supermarkets in developing countries by feeding project funds into their supply chain. Walmart has been particularly adept at capturing these benefits in the case at hand, though the leading domestic chain, La Colonia, has been quick to follow suit. The rise of value chain approaches focused on modern markets has also privileged transnational supermarket chains like Walmart, as development funds have been oriented toward their needs and modes of operation. With a tendency to view supermarket chains as the inevitable future and the ideal buyer for the present, these projects have channeled resources into supermarkets’ supply chains, fueling their growth and speeding up the process of supermarketization. Although I have focused on the strategy of supermarkets vis-à-vis farmers, understanding the implications of supermarkets’ procurement practices for farmers, their labor, and rural employment reveals the relevance of this chapter to development practice. First, supermarkets seek to standardize production and procurement practices across suppliers, making suppliers exchangeable and driving competition among them. This standardization deskills farmers; moreover, decreasing value on their skills and knowledge and increasing value on their ability and willingness to comply generate a docile workforce. Supermarkets also use procurement practices to differentiate themselves, not only vis-à-vis consumers but also vis-à-vis suppliers, making it difficult for suppliers to sell to different buyers or switch buyers, reducing competition between buyers for a farmer’s product, and trapping farmers in a single supply chain. As supermarkets transfer the costs of harvest, grading, and quality control to farmers or farmers’ organizations, they move these jobs to family labor or the informal rural economy instead of Walmart distribution centers. Similar to its strategy toward its employees, Walmart’s strategy here

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with its suppliers of FFVs effectively works to weaken the position of suppliers while strengthening its own. Traditional market channels for FFV in Nicaragua are still vibrant, and suppliers easily move in and out of Walmart supply chains (Elder and Dauvergne 2015), but the control that Walmart can wield is a direct function of its market power, which is growing fast. In 2015, Walmart was the largest retailer in Nicaragua. With this level of concentration of retail power and the increasing levels of penetration by supermarkets in urban areas across the country, farmers will have fewer alternatives. Possibilities for contestation will be limited by the discourse of corporate social responsibility and the legitimacy obtained from national and international development actors. In this context, and in light of the negative impacts of rapid supermarket growth on small farmers and the rural poor, important development goals for development projects and public policy should be strengthening farmer agency, slowing supermarket growth, limiting the concentration of market power, and strengthening alternative market opportunities for small farmers. For the case at hand, available data on the benefits to farmers of participation in this chain, as compared to other domestic supply chains, are inconclusive (Jano et al. 2004; Balsevich, Berdegué, and Reardon 2006; Wiegel 2006; Michelson et al. 2012; Wiegel 2013; Elder and Dauvergne 2015) and inseparable from the effects of intense NGO subsidies and support, which go hand in hand with participation in this supply chain. This begs the question as to whether developing supply chains for supermarkets and funding their growth is the best use of development (and in this case taxpayer) funds targeted toward reducing rural poverty, or whether this is really a manifestation of funds targeted at aiding the growth of corporations abroad. This case lends more credibility to the latter possibility.

notes 1. In Nicaragua, the second-poorest country in Latin America for most of the last decade, the average field size is 0.95 hectares for FFV and 0.82 hectares for tomatoes (range 0.07–7.7) (INEC 2001). 2. Dedicated wholesalers are dedicated to specific kinds of retailers—in this case, supermarkets—while nondedicated wholesalers sell to diverse kinds of retailers, particularly retailers who operate stalls in municipal markets or own grocery stores. 3. By contrast, in interviews with actors along municipal market supply chains, none mentioned NGOs as playing a role in supply relationships, though they were present in supply communities. 4. According to the cooperatives’ fi nancial records, $0.16 per pound was the price received by farmers from Walmart. According to the Ministerio Agropequario

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(MAG-FOR) price data collected in wholesale markets, $0.25 per pound was the sale price in major wholesale markets. 5. Interview with Walmart procurement personnel, Nicaragua, 2009. 6. Interviews with Walmart and NGO personnel, Nicaragua, 2007 and 2008.

references Balsevich, Fernando, Julio A. Berdegué, Louis Flores, Pilar Jano, Thomas A. Reardon, and Paul Schultz. 2007. “Central America.” In Regoverning Markets: A Place for Small-Scale Producers in Modern Agri-Food Chains?, edited by Bill Vorley, Andrew Fearne, and Derek Ray , 21–40. Aldershot, U.K.: Gower Publishing Co. Balsevich, Fernando, Julio Berdegué, and Thomas Reardon. 2006. “Supermarkets, New-Generation Wholesalers, Tomato Farmers, and NGOs in Nicaragua.” Agricultural Economics Staff Paper 2006-03. East Lansing: Michigan State University. Balsevich, Fernando, Thomas Reardon, Julio A. Berdegué, Ricardo. Hernández, and Pilar Jano. 2004. “Acceso de pequeños productores de tomate a los supermercados en Nicaragua.” Report to USAID, Department For International Development, and the Common Fund for Commodities, under the project Rural and Agricultural Incomes with a Sustainable Environment (RAISE/Sanitary and Phytosanitary (SPS), Regoverning Markets, and Partnerships for Food Industry Development (PFID). Barrientos, Stephanie, and Catherine Dolan. 2006. Ethical Sourcing in the Global Food System. London: Earthscan. Berdegué, Julio A., Fernando Balsevich, Luis Flores, and Thomas Reardon. 2005. “Central American Supermarkets’ Private Standards of Quality and Safety in Procurement of Fresh Fruits and Vegetables.” Food Policy 30: 254–269. Boselie, David, Spencer Henson, and Dave D. Weatherspoon. 2003. “Supermarket Procurement Practices in Developing Countries: Redefi ning the Roles of the Public and Private Sectors.” American Journal of Agricultural Economics 85: 1155–1161. Burch, David, and Geoffrey Lawrence, eds. 2007. Supermarkets and Agri-Food Supply Chains: Transformations in the Production and Consumption of Foods. Cheltenham, U.K.: Edward Elgar Publishing. Codron, Jean-Marie, Zouhair Bouhsina, Fatiha Fort, Emilie Coudel, and Aurélie Puech. 2004. “Supermarkets in Low-Income Mediterranean Countries: Impacts on Horticulture Systems.” Development Policy Review 22: 587–602. Coe, Neil M., and Yong-Sook Lee. 2006. “The Strategic Localization of Transnational Retailers: The Case of Samsung-Tesco in South Korea.” Economic Geography 82 (1): 61–88. Coe, Neil Martin, and Neil Wrigley. 2007. “Host Economy Impacts of Transnational Retail: The Research Agenda.” Journal of Economic Geography 7: 341–371. Dawson, John A. 2007. “Scoping and Conceptualising Retailer Internationalisation.” Journal of Economic Geography 7: 373–397. Elder, Sara D., and Peter Dauvergne 2015. “Farming for Walmart: The Politics of Corporate Control and Responsibility in the Global South.” Journal of Peasant Studies 42: 1029–1046. Farnworth, Cathy Rozel, Janice Jiggins, and Emyr Vaughan Thomas. 2008. Creating Food Futures: Trade, Ethics, and the Environment. Aldershot, U.K.: Gower Publishing Co.

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Food and Agriculture Organization of the United Nations (FAO). 2005. “FAOSTAT” (data for Nicaragua). Available at: http://faostat.fao.org/default.aspx. Gonzalez-Vega, Claudio, Geoffrey Chalmers, Rodolfo Quirós, and Jorge RodriguezMega. 2006. “Hortifruti in Central America: A Case Study about the Influence of Supermarkets on the Development and Evolution of Creditworthiness among Small and Medium Agricultural Producers.” AMAP Report–MicroREPORT 57, prepared for U.S. Agency for International Development (USAID). Columbus: Ohio State University-Rural Finance Program (April). Gutman, Graciela E. 2002. “Impact of the Rapid Rise of Supermarkets on Dairy Products Systems in Argentina.” Development Policy Review 20: 409–427. Harris, Timm, Stev Lynn, Eric Lespin, Antonia Lespin, Mike Ramirez, Chale Espinosa, Alberto Araica, Antonio Rocha, and Francisco Buitrago. 2007. USAID/Nicaragua Title II Development Assistance Programs 2002–2008 FINAL EVALUATION. Washington, DC: USAID. Available at: http://pdf.usaid.gov/pdf_docs /PDACO867.pdf (accessed February 25, 2010). Humphrey, John. 2007. “The Supermarket Revolution in Developing Countries: Tidal Wave or Tough Competitive Struggle?” Journal of Economic Geography 7: 433–450. Jano, Pilar, Fernando Balsevich, Mark Lundy, and Thomas Reardon. 2004. “Case Study of the Cooperative of Production and Marketing (COOPROCOM RL), Nicaragua.” Report. Santiago, Chile: Centro Latinamericano para el Desarrollo Rural (RIMISP, Latin American Center for Rural Development, September). Leiva, E. F. 2004. “Nicaragua Retail Food Sector 2004.” Global Agricultural Information Network Report NU4001. Washington, DC: U.S. Department of Agriculture. Little, Peter D., and Michael Watts, eds. 1994. Living under Contract: Contract Farming and Agrarian Transformation in Sub-Saharan Africa. Madison: University of Wisconsin Press. McCullough, Ellen B., Prabhu L. Pingali, and Kostas G. Stamoulis. 2008a. “Small Farms and the Transformation of Food Systems: An Overview.” In The Transformation of Agri-Food Systems: Globalization, Supply Chains, and Smallholder Farmers, edited by Ellen B. McCullough, Prabhu L. Pingali, and Kostas G. Stamoulis, 3–46. Food and Agriculture Organization of the United Nations (FAO). London: Earthscan. ———, eds. 2008b. The Transformation of Agri-Food Systems: Globalization, Supply Chains, and Smallholder Farmers. Food and Agriculture Organization of the United Nations (FAO). London: Earthscan. McKay, Steven C. 2006. Satanic Mills or Silicon Islands? The Politics of High-Tech Production in the Philippines. Ithaca, NY: Cornell University Press. Meijer, Madelon, Iván Rodriguez, Mark Lundy, and Jon Hellin. 2008. “Super markets and Small Farmers: The Case of Fresh Vegetables in Honduras.” In The Transformation of Agri-Food Systems: Globalization, Supply Chains, and Smallholder Farmers, edited by Ellen B. McCullough, Prabhu L. Pingali, and Kostas G. Stamoulis, 333–354. Food and Agriculture Organization of the United Nations (FAO). London: Earthscan. Michelson, Hope, Thomas Reardon, and Francisco Perez. 2012. “Small Farmers and Big Retail: Trade-offs of Supplying Supermarkets in Nicaragua.” World Development 40 (2): 342–354. Neven, David, and Thomas Reardon. 2004. “The Rise of Kenyan Supermarkets and

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the Evolution of their Horticulture Product Systems.” Development Policy Review 22 (6): 669–699. Reardon, Thomas, Christopher B. Barrett, Julio A. Berdegué, and Johan F. M. Swinnen. 2009. “Agri-Food Industry Transformation and Small Farmers in Developing Countries.” World Development 37 (11): 1717–1727. Reardon, Thomas, and Julio A. Berdegué. 2002. “The Rapid Rise of Supermarkets in Latin America: Challenges and Opportunities for Development.” Development Policy Review 20 (4): 371–388. Reardon, Thomas, Spencer Henson, and Julio Berdegué. 2007. “‘Proactive FastTracking’ Diffusion of Supermarkets in Developing Countries: Implications for Market Institutions and Trade.” Journal of Economic Geography 7 (4): 399–431. Reardon, Thomas, C. Peter Timmer, and Julio Berdegué. 2008. “The Rapid Rise of Supermarkets in Developing Countries: Induced Organizational, Institutional, and Technological Change in Agri-Food Systems.” In The Transformation of Agri-Food Systems: Globalization, Supply Chains, and Smallholder Farmers, edited by Ellen B. McCullough, Prabhu L. Pingali, and Kostas G. Stamoulis, 47–66. Food and Agriculture Organization of the United Nations (FAO). London: Earthscan. Ruben, Ruerd, Maja Slingerland, and Hans Nijhoff, eds. 2006. The Agro-Food Chains and Networks for Development. Dordrecht, The Netherlands: Springer. Swinnen, Johan F. M., ed. 2007. Global Supply Chains, Standards, and the Poor: How the Globalization of Food Systems and Standards Affects Rural Development and Poverty. Wallingford, U.K.: CABI. Timmer, C. Peter. 2008. “Food Policy in the Era of Supermarkets: What’s Different?” In The Transformation of Agri-Food Systems: Globalization, Supply Chains, and Smallholder Farmers, edited by Ellen B. McCullough, Prabhu L. Pingali, and Kostas G. Stamoulis, 67–86. Food and Agriculture Organization of the United Nations (FAO). London: Earthscan. U.S. Agency for International Development (USAID). 2009. “USAID and Walmart Sign Agreement.” Van der Meer, Kees. 2006. “Exclusion of Small-Scale Farmers from Coordinated Supply Chains.” In The Agro-Food Chains and Networks for Development, edited by Ruerd Ruben, Maja Slingerland, and Hans Nijhoff, 209–219. Dordrecht, The Netherlands: Springer. Vorley, Bill, Andrew Fearne, and Derek Ray. 2007a. “Restructuring of Agri-Food Systems and Prospects for Small Producers.” In Regoverning Markets: A Place for Small-Scale Producers in Modern Agri-Food Chains?, edited by Bill Vorley, Andrew Fearne, and Derek Ray, 193–211. Aldershot, U.K.: Gower Publishing Co. ———, eds. 2007b. Regoverning Markets: A Place for Small-Scale Producers in Modern Agri-Food Chains? Aldershot, U.K.: Gower Publishing Co. Walmart de México y Centroamérica. 2012. “Historia: Línea de Tiempo.” Available at: http://www.walmartmexico.com.mx/linea_de_tiempo.html (accessed October 20, 2012). Weatherspoon, Dave D., and Thomas Reardon. 2003. “The Rise of Supermarkets in Africa: Implications for Agri-Food Systems and the Rural Poor.” Development Policy Review 21: 333–355. Wiegel, Jennifer. 2006. “Unlikely Bedfellows? Small Farmers and Supermarkets in Nicaragua.” Master’s thesis, University of Wisconsin–Madison.

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———. 2013. “A New Breed of Tomato Farmer? The Effect of Transnational Supermarket Standards on Domestic Cultures of Production and Trade.” International Journal of Sociology of Agriculture and Food 20 (2): 237–254. World Bank. 2008. “World Development Report: Agriculture for Development.” Washington, DC: World Bank. World Development. 2009. “Special Issue on Agri-Food Industry Transformation and Small Farmers in Developing Countries.” World Development 37 (11). Wrigley, Neil, and Michelle Lowe. 2007. “Introduction: Transnational Retail and the Global Economy.” Journal of Economic Geography 7: 337–340.

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Ch a p t e r 8

walmart’s human trafficking problem: the shrimp supply chain in thailand nicholas rudikoff

A s Edna Bonacich a n d ot h e rs have pointed out, the rise of giant retailers like Walmart led to a transition from a “push manufactures had control” to a “pull economy” where retailers set the agenda. Walmart’s rise also coincided with the increasing globalization of manufacturing. Given this transition, many in the labor and human rights community began looking at the importance of supply chains when analyzing global production and the business practices of large multinational retailers, both to better understand the exploitation and brutality of the global economy and as a way to organize a transnational resistance. Walmart is the world’s largest retailer, but sourcing and logistics— every thing that happens away from the store floor—are at the heart of its business. When a customer purchases something at his or her local supercenter, hundreds of workers around the world have already been a part of that production process: from those who made or extracted the raw materials to the production and fi nal assembly, to the transport, logistics, and warehouse workers who got the product to the store shelf. In 2010, the U.S. labor federation Change To Win (CTW) launched Warehouse Workers United, a campaign to organize in the giant logistics hub that had grown in California’s Inland Empire. As Juan De Lara (2013) has pointed out, the Inland Empire, a huge area comprising San Bernardino and Riverside Counties, was the perfect place to build a logistics hub to service the ports of Los Angeles and Long Beach, the largest ports in the United States: it had abundant and cheap real estate to build distribution centers, and it had a huge supply of immigrant and native-born labor to exploit. The workers in those warehouses worked not for Walmart or the other retailers but for third-party logistics companies, which turned to temporary staffi ng agencies to hire warehouse workers for close to minimum wage.

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The precaritization and extreme exploitation that U.S. warehouse workers endure bear a striking resemblance to the working conditions of other workers in global supply chains around the world, which include exploitation of migrant workers, poverty wages and wage theft, unsafe conditions, and employer fragmentation and subcontracting that make organizing next to impossible. We believed that warehouse workers in the United States could make common cause with other retail, logistics, and production workers around the world in Walmart’s supply chain and support each other’s struggles. We began talking to unions and NGOs in major Walmart supplier countries and initiating research projects to map Walmart suppliers. During this time, we received an urgent call from the Community Legal and Education Center (CLEC), a Cambodian labor and migrant rights organization based in Phnom Penh, reporting that hundreds of Cambodian and Burmese workers were trapped at the Phatthana Seafood Company factory in Songkhla, in the south of Thailand. The workers were being held in a state of virtual slavery and debt bondage. They had paid recruiters exorbitant fees to come to work in Thailand, and now they were not earning enough to pay off their debts or feed themselves properly, let alone buy a ticket home. Worse still, the factory had taken their documents—they were quite literally trapped. We connected CLEC to Migrant Workers Rights Network (MWRN), a local NGO that works with mostly Burmese shrimp workers in Samut Sakhon, the center of Thailand’s shrimp industry, and to Andy Hall, a leading local human rights campaigner. CLEC and local organizers made their way to Songkhla and began talking to the workers about what to do. On April 8, 2012, the workers went on strike (Boyle and Sokchea 2012). Thailand is one of the largest exporters of shrimp in the world (Ramsden 2016). As an economic powerhouse, it is also one of the largest hosts of migrant labor in the Association of Southeast Asian Nations (ASEAN) region. Labor and human rights problems in Thailand have been widely reported (Siebel 2014), and the country is regularly criticized for its record. In 2014, Thailand was downgraded to the lowest possible ranking in the U.S. State Department’s Trafficking in Persons Report (U.S Department of State 2014). The Thai Labor Relations Act of 1975 creates incentives in two ways for employers to hire and exploit migrant labor. First, because workers’ legal status is tied to their employer, they cannot seek other jobs in search of higher wages, nor can they protest or raise objections to unsafe working conditions, since loss of employment would mean loss of legal status and possible deportation. Second, the Labor Relations

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Act prohibits migrant workers from forming unions unless the unions are certified by a Thai national. It is estimated that as much as 90 percent of the workforce in Thailand’s seafood processing industry comes from Thailand’s neighboring countries, primarily Myanmar and Cambodia (Environmental Justice Foundation 2013). The proximate cause of the strike was the reinstatement of a performance bonus that had been cut, but that was only the latest indignity. Workers’ passports were being held by management, the free housing they were promised in their contracts had been a lie, and the living quarters were fi lthy (Sifton 2012). Conditions had gotten so bad at Phatthana that people were not earning enough to eat and were foraging for seafood that washed up on the beach. They could not begin to save money to pay off recruitment and travel fees or send money home to their families. The conditions fit the international defi nitions of human trafficking laid out by the United Nations in “The Protocol to Prevent, Suppress, and Punish Trafficking in Persons, Especially Women and Children,” supplementing the United Nations “Convention against Transnational Organized Crime”: “Trafficking in persons” shall mean [(a)] the recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation. Exploitation shall include, at a minimum, the exploitation of the prostitution of others or other forms of sexual exploitation, forced labour or services, slavery or practices similar to slavery, servitude or the removal of organs; (b) The consent of a victim of trafficking in persons to the intended exploitation set forth in subparagraph (a) of this article shall be irrelevant where any of the means set forth in subparagraph (a) have been used; . . . (art. 3). 3 The three key elements that must be present for a situation of trafficking in persons (adults) to exist are therefore: (i) action (recruitment, . . .); (ii) means (threat, . . .); and (iii) purpose (exploitation). (United Nations High Commissioner for Human Rights 2014)

When the workers struck, they were taking on not just some local operator but Rubicon Resources, an alliance of top Thai producers that markets “responsibly produced” shrimp in the United States from its base in Culver City, California, and is a leading supplier to Walmart. Walmart chose to highlight its relationship with Rubicon in a Wall Street Journal

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story celebrating its sustainability (Hudson and Watcharasakwet 2007). It was in this way that a group of migrant workers caused a disruption in the supply chain of the world’s largest retailer and exposed, once again, the terrible costs of Walmart’s low prices. The workers also exposed the failings of the programs that Walmart and other multinational corporations put in place to try to convince the public that they operated “responsibly.” As a Walmart supplier, the Phatthana factory should have been regularly inspected by Walmart’s auditors and covered by Walmart’s “Standards for Suppliers.” Furthermore, the factory was certified under a scheme, created and run by the industry, called the Best Aquaculture Practices (BAP) program, which supposedly mitigates the environmental impacts of farm-raised seafood and forces suppliers to adhere to labor and human rights standards (Global Aquaculture Alliance, “Best Aquaculture Practices Certification”). Despite the fact that workers reported regular visits from inspectors and auditors, neither program was the slightest bit helpful to the workers at Phatthana. It took action and solidarity from unions and NGOs around the world for the workers to win an end to their awful conditions. Five years on, workers are still suffering from their experience in the Walmart supply chain. The debts that workers incurred have led to loss of land and continued hardship, not to mention the trauma of the journey and the fight to return home. Some Phatthana workers are fighting back, fi ling a class action lawsuit against seafood producers and as of yet unnamed companies in a California court in 2016 (Keo Ratha et al. v. Phatthana Seafood Co. Ltd. et al. 2016). Walmart says that it does everything it can to police its supply chains and ensure that they are free from the most extreme kinds of labor abuse, but clearly in seafood processing, and in other supply chains, corporate solutions fail to address the problems and are a poor substitute for worker power and true supply chain transparency and accountability—longtime demands of the anti-sweatshop movement and global unions. Walmart’s dominant market position allows it to control supply chains in a way that few other fi rms on earth can do. In fact, this purchasing power and the lower prices it supposedly delivers to consumers are central to arguments made by Walmart’s defenders. Leading neoliberal commentators such as Thomas Friedman of the New York Times and Jason Furman, former chair of the Council of Economic Advisers, have argued that Walmart is able to leverage its buying power in order to force efficiencies on the market that deliver lower-cost goods to consumers, thereby helping working families (Furman 2005). Although it may be true that

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Walmart’s aggressive sourcing policies sometimes result in lower prices, there is no doubt a sinister side to Walmart’s role in the market. The veteran Walmart watcher Stacy Mitchell (2011, 2) has warned that Walmart has become “the most powerful force in our food system, more dominant than Monsanto, Kraft, or Tyson,” and Barry Lynn (2006) of the New America Foundation has labeled Walmart a monopsonist, arguing that “the problem is that Walmart, like other monopsonists, does not participate in the market so much as use its power to micromanage the market, carefully coordinating the actions of thousands of fi rms from a position above the market.” Of course, by dominating supply chains and fi rms, Walmart is also dominating workers and communities. Somehow Walmart wants us to believe that there is no contradiction between sustainable sourcing and the low prices won by Walmart’s unparalleled negotiating power. The reality is made clear in the numerous examples of Walmart supply chain scandals that have become public: the famous Kathy Lee Gifford child labor case (Strom 1996), the routine overwork and repression of a young female workforce in China documented by Anita Chan (Chan and Unger 2011), and the horrific tragedies at Rana Plaza and Tazreen in Bangladesh. Not to mention the ones we have never heard about. At this point, the public and the media seem to understand that Walmart’s aggressive pricing has terrible costs for the workers who produce Walmart goods. Walmart has done all it can to address these problems without impacting costs—which is to say, they have done almost nothing at all. Like its peers, Walmart has built elaborate programs to address the public’s concern that low prices create sweatshops and human suffering. The company has its own “Standards for Suppliers” as well as auditing programs. It also participates in numerous voluntary, industry-run certification schemes like the BAP program. Global trade unions and labor rights activists have been talking about accountability in global supply chains for some time. It is clear that as supply chains consolidate under the direction of fewer and fewer multinational corporations, those concerned with building worker power in a global setting will need to fi nd ways to build power globally and across sectors. “Sustainability” and “responsible sourcing” (corporate-speak for self-regulation) needs to be replaced by supply chain accountability and transparency led by unions and civil society. Until new standards can be won, workers who produce or move goods for Walmart and other multinational corporations will continue to suffer under the dictates of managers on the other side of the world. In the following pages, I describe the transformation of shrimp from a

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luxury food to a ubiquitous industrial protein. It was the global aquaculture industry in league with global fi nancial institutions that engineered aquaculture as a development strategy for the Global South, and that strategy has incurred some terrible costs. I look at some of the leading externalities of the industry in terms of the environment, food quality, and labor rights. Then I consider the industry’s self-regulatory response and its failings. Finally, I examine the Phatthana case as an example of how workers in the shrimp industry are treated and how they fought back.

our favorite seafood and its costs In the United States, shrimp was generally considered a luxury item to be enjoyed on special occasions. Today farm-raised shrimp, largely from Southeast Asia, are affordable and ubiquitous in restaurants and kitchens across North America and Europe. Wild shrimp, the pricey kind, need to be caught in the sea, a relatively time-consuming and expensive process. By contrast, farm-raised shrimp are the product of an advanced industrial production process: shrimp are raised in coastal ponds, fed fishmeal, and harvested and processed in giant facilities by hand. The process is extremely labor-intensive. In 2015, the United States imported most of its shrimp from India, Indonesia, Ecuador, Thailand, and Vietnam—all countries with abundant coastlines along which to locate shrimp farms and with low wages and poor labor standards that keep costs down in the labor-intensive deshelling and cleaning processes (NOAA Fisheries Office of Science and Technology, n.d.). Shrimp is the most popular seafood in the United States, and Americans consume more than four pounds per person per year—nearly twice as much as the amount of salmon they consume (Undercurrent News 2015). Shrimp is now so cheap that a consumer can get a pound at Walmart for less than $7. But has the cost of shrimp gone down, or have these costs simply been shifted to workers and ecologies in the Global South? Whatever its proponents claim, industrial aquaculture has significant and welldocumented negative externalities, for workers and farmers as well as for the fragile coastal ecologies needed to grow shrimp. In addition, troubling questions have been raised about the quality and safety of farm-raised shrimp, not to mention the taste. The transformation of shrimp from local delicacy to America’s numberone seafood-based industrial protein was made possible by a mix of technological advancement and a development strategy sold by international fi nance institutions to Global South nations in the 1990s. According to research by Public Citizen (2005), the push to introduce aquaculture was

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led by the World Bank and the International Bank for Reconstruction and Development (IBRD), along with regional development banks such as the Asian Development Bank (ADB), the Inter-American Development Bank (IADB), and the African Development Bank (AFDB). The banks used billions of dollars as loans or direct aid to promote aquaculture, modernize ports, and build post-harvest processing facilities. Public Citizen (2005, 1) argued that in less than two decades the modernization created “a shift in the pattern of global seafood trade characterized by a dramatic increase in high-value marine protein products from the South to the North.” The environmental costs of shrimp farming have been well documented by numerous organizations, including Greenpeace, Food and Water Watch, Public Citizen, and the Mangrove Action Project, as well as by academics such as Stefano Longo, Rebecca Clausen, and Brett Clark (2015) and Jason Konefal (2012). The destruction of coastal mangrove forests has been a leading problem of industrial aquaculture. Shrimp ponds must be built where mangroves grow, and there has been widespread destruction of this important coastal ecosystem to satisfy consumers in the Global North. Mangroves grow in salty coastal areas and are indispensable for a healthy coastline. They are home to fish, serve as buffers against storm surges, and absorb carbon dioxide (Doyle 2012). Kennedy Warne, cofounder of New Zealand Geographic, estimates that up to 70 percent of mangroves have been destroyed in the last forty years (Greenaway 2012). Public Citizen (2005, 1) concluded that “millions [of people] have been severely affected. This has taken place either through the direct appropriation of land for shrimp farm development, or by the degradation of the environment.” Food and Water Watch (2013) found that shrimp waste, chemicals, and antibiotics used in the farming process contaminate the land and coastline around the ponds, and that diseases can spread into nearby coastal waters. In Thailand, these conditions have led to a major loss of farmland due to salinization and discharge of by-products from shrimp ponds (Im-Erb and Anecksamphant 2002). Once land has been used for shrimp farming, it is no longer suitable for other farming. Its proponents often argue that aquaculture is an important way to protect wild fish stocks, but environmentalists disagree. As Warne points out, shrimp are carnivores, and their most common food is fishmeal. This fishmeal comes from wild-caught fish—and it takes three pounds of wildcaught fish to produce one pound of shrimp. Warne concludes that, “far from taking pressure off the world’s diminishing fish stocks, shrimp farming adds to the problem” (Greenaway 2012, 1). The food quality and safety of farm-raised shrimp has also been called

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into question. The downward push on costs imposed by apex fi rms like Walmart puts tremendous pressure on the farmers, often small family operators who sell to large seafood suppliers. Some resort to using a troubling cocktail of antibiotics and hormones to drive shrimp growth and reduce the risk of disease in overcrowded ponds. Numerous groups, including Greenpeace and Consumer Reports, have raised concerns about the use of antibiotics in farm-raised shrimp. In a recent study, Consumer Reports (2015, 1) found “bacteria on more than half the raw samples we tested and illegal antibiotic residues on 11 samples.” The U.S. Food and Drug Administration is responsible for testing imported seafood, but because of budget issues the FDA is only able to test a little more than 2 percent of all seafood imports. Thus, if shrimp farmers are using banned antibiotics or bacteria is present on imported seafood, there is little chance that the FDA will catch it (Philpott 2012). In addition to environmental concerns, it has been well established that labor rights in the industry are generally horrendous. The fishermen who work the boats that troll for forage fish, which goes into making the shrimp feed, face some of the most extreme forms of exploitation and violence on earth, including slavery, debt bondage, and murder. Ian Urbina (2015) and Robin McDowell, Margie Mason, and Marta Mendoza (2015) have uncovered the harrowing stories of the migrant workers recruited under false pretenses and forced to work for years on shoddy fishing boats. Conditions at the processing plants are not much better. The AFL-CIO’s international NGO, the Solidarity Center, published a report in 2008, entitled “The True Cost of Shrimp,” that exposed some of the labor rights violations at processing plants in Thailand and Bangladesh. The Solidarity Center concluded: As the industry has become integrated into a massive global shrimp supply chain, low wages, long hours, and unhealthy, hazardous work form the unfortunate foundation of working shrimp processing. Migrant workers, women, and children are among the most vulnerable and powerless and continue to be exploited as part of a downward push on costs and a rapid withering of decent, formal employment. (Connell 2008, 31)

The Solidarity Center report also pointed to the similarities between the development of the shrimp industry and the development of apparel, footwear, and toy manufacturing, pointing specifically to a global supply chain where easy access to public infrastructure, cheap labor and lax regulations in developing countries meets consumer demand

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in developed countries. Price pressure from retailers and import suppliers plus demand for speedier “just-in-time production,” facilitates the development of sweatshop conditions, price rate payments, subcontracting and abusive, dangerous work. (Connell 2008, 31)

In Thailand, the industry relies on a migrant workforce that is legally vulnerable and unable to unionize. Each shrimp needs to be peeled by hand, and this incredibly labor-intensive process creates tremendous incentives for companies to take advantage of migrant workers. Resistance to the unregulated growth of aquaculture in the 1990s culminated in a 1996 civil society meeting in Choluteca, Honduras. At that meeting, twenty-one NGOs, including Greenpeace International and the Natural Resources Defense Council (NRDC) as well as many local groups, signed on to the Choluteca Declaration (Accion Ecologica et al. 1996). The declaration demanded a global moratorium on the expansion of any shrimp farming that did not meet environmental and human rights standards. Walmart and the other multinational corporations that sit atop the seafood supply chain have created a system in which cheap shrimp in the Global North cannot be delivered without labor and human rights violations and environmental degradation in the Global South. Elsewhere, this has been called the “Walmart effect,” and in the seafood industry that seems appropriate—no other company in the world buys and sells more farm-raised shrimp than Walmart (Hudson and Watcharasakwet 2007).

nothing to see here: the industry response Not surprisingly, the industry reacted to the Choluteca Declaration by establishing its own industry association: the Global Aquaculture Alliance (GAA) and Best Aquaculture Practices (BAP), its own self-regulatory scheme (Global Aquaculture Alliance, “Best Aquaculture Practices Certification”). The GAA membership includes representation from different sectors in the industry. Members include restaurant groups like Darden (which owns Olive Garden and Capital Grille), retailers like Walmart, giant producers like CP Foods, feed producers like Cargill and Monsanto, and service providers like Preferred Freezer Services, one of the largest cold storage companies in the United States (Global Aquaculture Alliance, “Leadership”). Walmart executives routinely serve in GAA leadership positions. For example, Robert Fields, a Sam’s Club senior director for fresh meat, seafood, and gourmet deli, currently serves on the GAA board of directors (Global Aquaculture Alliance, “Leadership”). The GAA’s purported mission is to “promote responsible aquacul-

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ture practices through education, advocacy and demonstration” (Global Aquaculture Alliance, “About GAA,” 1). The organization has a lot to say about reducing negative impacts on the environment and workers and promoting a sustainable product that will be able to feed a growing world population. In 2013, the global aquaculture industry produced 97.2 million tons of seafood with an estimated value of US$157 billion (Food and Agriculture Organization of the United Nations 2013). The primary mechanism that the GAA has used to strengthen the credibility of farm-raised seafood is its BAP certification scheme. According to the GAA, “BAP certification defi nes the most important elements of responsible aquaculture and provides quantitative guidelines by which to evaluate adherence to those practices for processing plants, farms, hatcheries and feed mills. The number of BAP-certified facilities worldwide grows daily” (Global Aquaculture Alliance, “BAP Certification”). BAP takes its place among a bevy of other such corporate-dominated “social/ eco” responsibility certification schemes that are part of what has been called the “Corporate Social Responsibility (CSR) complex,” created in response to the anti-sweatshop movement. What all these initiatives have in common is that they are voluntary and run by corporations with little to no transparency or input from and accountability to workers or civil society. Scott Nova, executive director of the Worker Rights Consortium (WRC), has done battle with the CSR complex for years and is one of its fiercest critics. His assessment is clear: “Codes of conduct enforced through monitoring by corporate-funded auditors, is a proven failure, based on its fi fteen year track record in the apparel sector” (Nova 2012, 3). Nova adds: All of this activity has led to very little in the way of genuine improvements in wages and working conditions for the tens of millions of apparel workers in global apparel supply chains. Wages are lower in real terms in many countries than they were when this work started more than a decade ago . . . forced and excessive overtime (is) still rampant; managers and supervisors continue to use psychological pressure and humiliation as a primary strategy for maximizing production speed; attention to worker health and safety is still grossly insufficient; and any attempt by workers to exercise their right to act collectively to challenge these abuses is still met with swift and brutal repression.

Similar conclusions are echoed in the academic literature by scholars such as Jill Esbenshade (2004) and Niklas Egels-Zandén and Jeroen Merk (2014).

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Labor and human rights are given only cursory mention in the BAP standards. A report from the global accounting fi rm Accenture (2012, 43), prepared for the antislavery NGO Humanity United, stated that BAP includes standards on health and safety, but they largely fail to address other key labor issues. In the absence of specific standards, these certifications call for national standards and laws to be met, rather than international standards. National labor standards in the developing world, however, often fall short of international standards. Although the need for greater regulation than national standards was the impetus for market-based certification in the fi rst place, these certification schemes were generally designed to ensure product quality, not fair labor practices.

On the environmental side, BAP standards are considered similarly unhelpful. According to the Mangrove Action Project (MAP), BAP will “lead to further rapid global mangrove forest loss, endangering coastal communities by removing the protective greenbelts that can greatly lessen the impacts from future tsunamis and hurricanes.” The organization concludes that it has found BAP to be “inadequate in ensuring ecological sustainability and social equity” (MAP 2006, 1).

from bentonville to songkhla The horrendous conditions at the Phatthana plant cast serious doubts on the efficacy of self-regulatory schemes like Walmart’s standards for suppliers and the BAP standards. Phatthana was not an informal workshop or subcontracted supplier. It was a large fi rm, part of the larger PTN Group, a leading supplier of Thai seafood and a member of Rubicon Resources—the joint venture of the largest shrimp producers in Thailand (Pakfood Public Co. Ltd. v. United States 2011). In 2012, Rubicon appeared to be Walmart’s leading supplier of farmraised shrimp. At least Walmart promoted the alliance as such: a Sam’s Club sustainability website said that “Sam’s Club buys its Member’s Mark [Sam’s Club private-label brand] shrimp from Rubicon Resources, who takes responsibility for the product from the pond to the plate.”1 The website added that “100 percent of Member’s Mark shrimp are being grown in farms in Thailand that meet or exceed the stringent standards of responsible farming, sustainability and fair employee conditions established by the Global Aquaculture Alliance,” and that the “Sam’s Club seafood

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buyer typically visits the ponds and packaging facilities in Thailand and India twice each year to conduct a fi rsthand inspection.” Sam’s Club seafood buyer Dan Kallesen went on to say: “We are always looking at quality, sanitation and production standards, and we want to make sure that we solidify our partnership with the folks actually handling the shrimp. It is important to let our partners in Asia know that we are committed to their business doing well, and it’s great to have the opportunity to say ‘thank you’ in person.” Because the Phatthana workers fought back, fi rst by striking and most recently with a federal class action lawsuit in California, what would have been their invisible fight is now visible to all. Further, this incident speaks to the fundamental bankruptcy at the heart of the CSR project. How any auditor could have seen the working and living conditions of these workers and rated them as acceptable boggles the mind. These workers did not need an in-person “thank-you” from one of Walmart’s auditors— what they needed could not be provided by any fi rm in the seafood supply chain. The workers’ lawsuit was fi led alleging violations of the Trafficking Victims Protection Reauthorization Act of 2005 and the Alien Tort Statute (ATS). Plaintiffs charged the defendants with profiting from human trafficking and seeking to be made whole from their trip to Thailand in addition to damages for pain, suffering, and mental anguish (Keo Ratha et al. v. Phatthana Seafood Co. Ltd. et al. 2016). The complaint provides a stark look into the lives of Phatthana workers and the real-life impacts of purchasing decisions made in Bentonville, Arkansas, on the most vulnerable workers. The lead plaintiff, Keo Ratha, was working in Pursat, Cambodia, when he was recruited by CDM Trading Manpower Company (CDM) to work in Thailand. Most of the plaintiffs were from very small villages and worked in sustenance farming. A visit to one plaintiff’s home took almost two hours from the nearest paved road, which was itself hours from any major settlement. The promise of well-paid work in Thailand was attractive because it offered workers the chance to improve their lives—buying a little more land or sending a child to school would not be possible without taking a job outside of Cambodia (Keo Ratha et al. v. Phatthana Seafood Co. Ltd. et al. 2016). The recruitment agents offered workers jobs in the seafood industry paying between US$250 and US$300 per month, with a possibility of more with overtime. They were also offered housing. None of the workers had much money, so in order to pay the $350 in recruitment fees, they all

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had to sell possessions or take out loans. Mr. Ratha sold his motorcycle for the passport fee and went into debt, which he agreed to pay off with future earnings. Other workers, like Sem Kosal and his wife Sophea Bun, were told that they would work eight hours a day and be provided free housing. The agent even showed them an illustrated brochure containing pictures of the promised accommodations. Mr. Kosal took out a loan, at 3 percent interest per month, to fi nance the costs and put up his house and his parents’ land as collateral (Keo Ratha et al. v. Phatthana Seafood Co. Ltd. et al. 2016). Mr. Ratha and other workers from Cambodia traveled to the factory by bus accompanied by CDM agents, who took their passports upon arrival at the factory and turned them over to factory management. Yem Ban and Nol Nakry were not so lucky. The couple were driven to the border in a pickup truck packed with twenty-six workers. According to the complaint, workers were “packed in like sardines” and forced to sit and sleep on one another. The agents placed plates and dishes on top of the tarp that covered the workers and kept a close eye on them through the rearview mirror. If agents saw movement from the workers in the back of the truck, they would stop the vehicle, get out, and hit the workers with a tire iron. At some point, the workers were moved to another truck and taken across the border into Thailand. They stayed outside, exposed to the elements, on a farm near the border for eight days, during which time some workers asked to return home. They were told that they could not leave and were beaten by the agents as punishment (Keo Ratha et al. v. Phatthana Seafood Co. Ltd. et al. 2016). Once the workers arrived at Phatthana, they quickly learned that they had been deceived. Mr. Ratha started work the next day and found out that he would not earn the promised US$250 per month but instead just over half the promised sum: US$135 per month. With salary deductions for rent and payments on his debt, Mr. Ratha often did not have enough money to eat and was hungry most of the time. The accommodations that the company required Mr. Ratha to purchase were “overcrowded and unsanitary”; he had no bed and was forced to sleep on a concrete floor that flooded whenever it rained (Keo Ratha et al. v. Phatthana Seafood Co. Ltd. et al. 2016). Sem Kosal and his wife Sophea Bun were promised US$300 per month and free housing; they earned far less and were charged for accommodations that looked nothing like the pictures they had been shown. The room to which they were assigned was bare, with no mattresses, and was crawling with insects. Mr. Kosal and his wife made so little at Phatthana af-

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ter deductions and loan repayment that they were not able to send money home to support their children. When their children got sick, they were not able to help, and they could not afford to send one of their children, who was deaf, to school. Like other workers at Phatthana, they made so little that they were unable to afford food and often went hungry (Keo Ratha et al. v. Phatthana Seafood Co. Ltd. et al. 2016). Mr. Ban and his wife would look for unharvested food in the fields or fish that would wash up on the beach. Eventually, desperate and hungry, they turned themselves into the Thai police with the hope of getting home. They were put in a prisoner transport truck, photographed, and fi ngerprinted and deported. Before crossing back into Cambodia, they were forced to pay one last bribe to Thai border police. They returned home after a year of work heavily in debt (Keo Ratha et al. v. Phatthana Seafood Co. Ltd. et al. 2016). Mr. Ratha also returned to Cambodia still in debt. He was unable to repay the money he borrowed to fi nance recruitment and passport fees, so his family lost the use of the land he had put up as collateral. As a result, the family now faces a situation far worse than when he left for Thailand: unable to grow sufficient food, they have resorted to “watering down portions” and often go hungry, according to the complaint. They have had to borrow money to pay for food and are going further into debt. Mr. Ratha’s sister was forced to drop out of school at the equivalent of eighth grade in order to support the family (Keo Ratha et al. v. Phatthana Seafood Co. Ltd. et al. 2016). That there could be a case of human trafficking this egregious at a producer as prominent as Phatthana casts doubt on industry claims that mistreatment is rare and limited to small informal factories known as “peeling sheds.” The powerful Thai Frozen Foods Association (TFFA) has spent a lot of time deflecting accusations of human rights abuses. The industry has argued that most abuse happens in the sheds and not in major factories (never mind the fact that the peeling sheds often work for the large factories). One auditor with whom I met, under conditions of anonymity, said that things were so bad in factories employing migrant labor that she no longer was willing to audit them. Given the events at Phatthana in the spring of 2012, it is difficult to read Walmart’s claims of sustainability and judicious supply chain monitoring as anything more than public relations nonsense. If Walmart’s seafood buyer was really keeping a close watch on the “folks actually handling the shrimp,” surely he would have noticed the squalor of their living conditions, the fact that many wanted to leave but were unable to do so

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because their passports were being held (in violation of domestic and international law, not to mention Walmart’s [n.d.] own “Standards for Suppliers”), and the fact that workers were suffering from malnutrition. The lesson here is clear: workers in the global supply chains of giant retailers cannot rely on voluntary codes or auditing to ensure decent working conditions. Instead, what is needed is a willingness to strike and transnational solidarity and coordination along supply chains. At Phatthana, that is what happened: on April 8, 2012, some 800 workers at the Phatthana factory in Songkhla went on strike. The workforce was split between Cambodian and Burmese migrant workers. Coordination was difficult, and the groups reportedly did not get along. Nevertheless, the workers managed to strike and expose their situation. Two days later, as they protested at the factory gates, shots were fi red by Thai police. Luckily, no one was injured (Worrell 2012). About two weeks prior to the strike, Cambodian workers at Phatthana reached out to the labor and human rights group Community Legal and Education Center, who reached out to us. We worked with CLEC to confi rm that the Phatthana factory was indeed a Walmart supplier, using shipping records and, interestingly enough, BAP’s own traceability system. CLEC dispatched organizers to Songkhla, who connected with a local Burmese organization, the Migrant Workers Rights Network. These groups, along with Human Rights Watch in Thailand, fought to keep the situation under control, coordinate media, and ensure that no harm came to the workers. The workers also received support from Sawit Kaewvarn, secretary-general of the State Enterprises Workers’ Relations Confederation (SERC), one of the most powerful unions in Thailand (Ashayagachat 2012). In the United States, Change To Win (CTW) helped coordinate a media response with the United Food and Commercial Workers (UFCW) union and Human Rights Watch (HRW) in which they called on Walmart to address the issue and intervene on the workers’ behalf. Connecting the workers to Walmart in this way brought international media attention, making it harder for the company or the Thai government to sweep the case under the rug or retaliate against the workers. In a letter to Rajan Kamalanathan, vice president of ethical sourcing at Walmart, the UFCW said that “despite Walmart’s publicized commitment to socially responsible sourcing, the company’s purchasing practices, lack of transparency and refusal to uphold the rights of workers to freely organize, allow grave violations like this to persist. . . . We call on Walmart to intervene . . . to ensure that its purchasing agreements with suppliers do not result in the

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breaking of local laws and the violation of human rights” (United Food and Commercial Workers Union 2012, 1). Human Rights Watch also engaged Walmart shortly after the strike, both in the United States and on the ground in Thailand. HRW pointed out that reported conditions at Phatthana “appear to violate key provisions in your company’s ‘Standards for Suppliers.’ In particular, the provisions related to compliance with relevant laws, voluntary labor, labor hours, freedom of association and compensation” (Ganesan 2012, 1). Finally, Sum of Us, a global consumer rights group, launched a petition that gathered nearly 100,000 signatures. The result of this attention was that Walmart, Phatthana, and local Thai authorities had to fi nd a peaceful resolution to the crisis. Ultimately, the workers were able to regain control of their passports and return home. It was not a victory, but it could have been far worse. As of February 2017, the class action lawsuit against Phatthana Seafood was continuing. Plaintiffs won all pretrial motions and were entering the discovery phase.

conclusions Somehow the Sam’s Club seafood buyer’s “thank-you” anecdote perfectly sums up all that is wrong with the notion that corporations can be trusted to police their own supply chains and that we ought to trust them to do it satisfactorily. As John Sifton (2012, 1) of Human Rights Watch said: “It is comic—or, actually, tragic—to imagine a Sam’s Club buyer visiting the Songkhla facility, saying ‘thank you’ to a cadre of indentured laborers who are unable to speak openly about their labor woes.” If we step back for a second, we can actually imagine how great it would be if Sam’s Club representatives visited the Phatthana factory, not to say “thank you” to the “folks,” or to conduct some previously announced factory audit to prove once again that everything was okay, but rather, to conduct a good-faith negotiation with the democratically elected leaders of a union representing the workers who provide Walmart with shrimp. Although this idea would be anathema to the giant retailers of the world, it is precisely what is needed in order to win justice in global supply chains. At the peak of their strength, American garment workers’ unions won “jobbers” agreements from top-tier fi rms that covered all their contractors. The union was subsequently able to build power and set standards in a highly fragmented, subcontracted industry. Today groups like the International Union League for Brand Responsibility are fighting to do just that in the garment sector (Kumar 2013).

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That Walmart and fi rms like it are dominating global supply chains as never before is not in question. What is in question is what we want to do about it. Without opposition from civil society, Walmart and its peers will use their power to increase margins and make more money—at the expense of workers, the environment, and even the local suppliers on which it depends. As Scott Nova points out, two decades of corporate-led CSR activity have delivered very little in the way of material benefits to the workers in the Global South. To put it plainly: corporations have had their chance and they have failed. Building power in supply chains is no easy task, particularly since it requires that unions work across national and sectoral boundaries. However, it is essential if we are going to change companies like Walmart. Corporations have built elaborate global supply chains to maximize profit, and they have spent billions to construct a CSR edifice to protect their inherently predatory business models. Our job is to tear that edifice down and connect workers along the many supply chains around the world to fight for something better. notes 1. It is important to note that this website has been taken down since last accessed in 2016.

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dercurrentNews, October 30. Available at: https://www.undercurrentnews.com /2015/10/30/us-per-capita-shrimp-consumption-rises-11/. United Food and Commercial Workers Union (UFCW). 2012. Letter to Walmart, April. United Nations High Commissioner for Human Rights. 2014. “Human Rights and Human Trafficking.” Fact Sheet 36. New York: United Nations. Available at: http:// www.ohchr.org/Documents/Publications/FS36_en.pdf. Urbina, Ian. 2015. “Outlaw Ocean.” New York Times, July 17. U.S. Department of State. 2014. Traffi cking in Persons Report 2014. Washington, DC: U.S. Department of State. Available at: http://www.state.gov/j/tip/rls/tiprpt/2014 /index.htm. Walmart. N.d. “Responsible Sourcing.” Available at: http://corporate.walmart.com /sourcing-standards-resources. Worrell, Shane. 2012. “Strikers Claim Shots Fired.” The Phnom Penh Post, April 10. Available at: http://www.phnompenhpost.com/national/strikers-claim-shots-fi red.

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final reflections carolina bank muñoz, bridget kenny, and antonio stecher

T h e eigh t ch a p t e rs of this book offer a complex, multilayered portrait of the expansion of Walmart operations in the Global South. The overview provided by these heterogeneous studies, taken together, enables us to follow the contours, distinguish critical constitutive factors, and visualize the principal dynamics, practices, and actors that characterize Walmart’s entry into eight countries in the Global South. Our project understands each of the chapters as a focal point in a larger constellation that emerges once the points are connected (see Adorno 1984). This approach illuminates intersections and common lineaments, generates new questions, and provides new insights into the modes and implications of the expansion of a retail transnational corporation like Walmart in the Global South, in a manner that is both creative and productive for thought and action. By way of conclusion, we would like to address four key ideas brought together by the different case studies. Our first key idea is that Walmart’s entry into and operational strategies in each of the countries analyzed here are heavily influenced by the context and hallmark of its origin and its U.S. business model, which nevertheless must be adapted to new local contexts: labor laws and industrial relations regimes, the fi nancial regulations of the business sectors, domestic production and supply networks, consumer cultures, real estate regulations, and so forth. Firm embeddedness, as has been widely documented by economic geographers, is a complex process of conditioning and grounding, both in the country of origin (societal embeddedness) and in the institutional framework and supply chain of the country in which it arrives (territorial embeddedness), as well as in interfi rm and intrafi rm networks that sustain the company’s transnational operations (network embeddedness) (Coe and Wrigley 2007; Wrigley, Coe, and Currah 2005). Far from a linear, unilateral, and homogeneous process of imposing a sin-

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gle business strategy that emanates from company headquarters on the different countries where it operates, this book’s chapters have revealed complex articulations that combine logics of transfer and logics of adaptation in Walmart’s process of entering new markets. This results in a complex dynamic that produces a mutual transformation, both in the local context and in the company itself (Bloom and Hinrichs 2016). All of the chapters, in different ways, trace how Walmart has sought to imprint the genetic code of its American business strategy on the countries it has entered (Lichtenstein 2009; Durand and Wrigley 2009). For example, the company has implemented barriers and threats to labor organizations and supported pro-business unions and pro-business collective bargaining in Brazil (initially), Mexico, Argentina, Chile, and South Africa (through the large-scale use of temporary workers); it offers low prices on a permanent basis in Argentina, Mexico, and Chile; in Brazil, South Africa, and Mexico, it seeks to keep labor costs down through pervasive use of young, low-skilled female employees, with salaries close to minimum wage, high turnover, and in many cases unusual types of employment contracts; it optimizes supply chain benefits by using standardization and centralization strategies, controlling intermediaries, and imposing standards on and transferring costs to local producers in South Africa, Nicaragua, and Thailand; it has expanded stores throughout Chile, Mexico, Argentina, Brazil, and South Africa, in low-middle-income neighborhoods and in new smaller formats, in an effort to progressively become one of the two or three leading chains in each country, thus increasing its market power; it takes advantage of public subsidies or funds from international agencies in South Africa and Nicaragua; in Mexico, Argentina, Brazil, and Chile, it has actively implemented Walmart culture with a strong orientation toward infantilization, individualization, depoliticization, and fragmentation of workers (referred to as “associates”), who are expected to identify with the business family, submit to management authority, and exhibit a strong service orientation; and it works through the coordination of local suppliers and stores with broader regional or global management operations and supply networks in Thailand, Mexico, and South Africa. In addition, and together with the preceding, reading the chapters as a whole clearly illuminates the way in which Walmart’s global commercial strategy and business model have continually adapted to different aspects of the local contexts in which the retail transnational has inserted itself. A typical strategy has been to enter a country by acquiring a domestic company in order to take advantage of its knowledge and existing local net-

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works (as it did in Chile, Mexico, South Africa, and Argentina), thus facilitating its adaptation to the local context. The most noteworthy example is Walmart’s adaptation to and management of labor relations laws and frameworks in Chile, Mexico, Argentina, Brazil, and South Africa that, at least on paper, are more protective of unions and collective bargaining processes than those it faces in the United States. In addition to labor law, Walmart has adapted to a multitude of other local issues. For example, it had to abide by legal limits and regulations imposed by anti-monopoly laws on its efforts to expand and concentrate the markets in Brazil and South Africa; it engaged government demands for development funding for local producers and suppliers as a condition for entering South Africa; in Chile, South Africa, Brazil, and Argentina, it entered contexts of strong competition from other retail chains, both transnational and domestic, that were equally modernized and had been operating for many years; and in Nicaragua, it had to adapt to the practices of consumers who were accustomed to buying food at street markets or farmers’ markets rather than in supermarkets. As chapter 1, “Walmart in Brazil,” eloquently illustrates, in part because of Walmart’s long tenure in the country, an important aspect of adaptation or territorial embeddedness is that it is a dynamic process that changes over time. Walmart’s business strategy within a single country can shift depending on changes in the political context, the domestic regulatory framework, or the strength of union organizing. Finally, it is worth noting that reading these chapters is an invitation to ponder the dynamic and simultaneous character of these transfers and adaptations of the Walmart business model to the different contexts of the Global South. These processes have a local impact on a country’s retail industry, consumers, and production and supply chains, but they also reconfigure and transform the operations and strategies of the company itself. A second key idea that arises from reading the eight chapters is that union organization plays a critical role in improving working conditions and collective bargaining in a way that favors workers and limits Walmart’s business rationale in its exploitation of workers. As demonstrated by the cases of Chile, Brazil, and Argentina, where activist and autonomous union organizations are focused on defending workers’ rights and are truly independent of the company—whether at the level of the store, a group of stores, the holding company, or the economic sector—workers can make local gains in their daily work lives and achieve substantial objective improvements in working conditions. These organizations, as reflected in the cases of Argentina and Chile, often have to simultaneously

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combat the company’s anti-union practices, the presence of pro-business unions, and the individualism, fear, and lack of political culture that characterizes many workers in these stores. The chapters on Chile, Argentina, and Brazil also reveal the importance of context and broader political cycles in favoring or restricting the conditions that make it possible for independent, activist unions to operate in the retail industry. They also show that union actions and collective identity strategies are as diverse as specific local contexts and that the classic model of union organization can be creatively and innovatively modified, as illustrated by the cases of Chile and Argentina. Furthermore, many chapters provide evidence of the enormous influence of labor laws (Brazil, Argentina, Chile, Mexico, and South Africa) in either facilitating or blocking independent union organizing and collective bargaining. All of the cases analyzed describe labor laws that are, in principle, more favorable to union organizing than those in the United States, although there are significant differences in how these laws are implemented in the retail sector and how they promote, more or less, the construction of a strong union with bargaining power. As in Mexico, for example, there may be labor laws that are favorable to the existence of unions in principle, but very few independent unions that effectively bargain with the company in practice. Instead, so-called protection contracts have proliferated: recognized by the law, these contracts establish conditions just above the legal minimum based on backroom negotiations with pro-business unions, from which rank-and-file workers are excluded (see Tilly and Galván 2006). Likewise, the case of Chile illustrates a type of labor law, born of the military dictatorship (1973–1990), that in principle permits union organizing and collective bargaining but in practice hinders unions in many ways and profoundly fragments and weakens them. For example, Chilean law encourages the organization of unions at the store level rather than company- or sectorwide; the presence of more than one union per store; restrictions on the issues that can be negotiated; the absence of bargaining on a sectorwide level; ineffective strikes due to worker replacement; and the participation of non-union workers in bargaining. The chapters present extremes of labor law—from the prohibition, under Thai law, against immigrant workers organizing a union at the Phatthana factory, except with government permission, to the Brazilian and, to a lesser extent, Argentinean labor laws that establish large-scale bargaining at the sector level, thus providing an incentive for companies to negotiate with the union. The latter laws make it possible to build substantial agreements and encourage progressive trends toward improving

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working and employment conditions throughout an industry. Put another way, and along the lines of what has been posed by other authors (Carré and Tilly 2013; Coe and Wrigley 2007), institutional frameworks—labor laws, labor court systems, and regulatory frameworks for economic sectors—play a fundamental role in understanding the potential for the development, strengthening, and growing bargaining power of autonomous, activist unions, which cannot be analyzed outside these frameworks that determine, favor, and/or restrict them. On the other hand, as the interesting case of South Africa illustrates, even with pro-union laws, sectoral bargaining (which has not been successfully won in the retail sector), company bargaining, relatively high levels of unionization in the retail industry, and historically strong federations, there can be a low rate of union membership and organization as a result of the massive use of temporary (subcontracted) workers provided by employment agencies, as happened at the Walmart subsidiary Cambridge Food. Temporary workers have typically remained on the margins of the formal system of labor relations between Walmart and the shrinking group of workers directly hired by the company, who are more likely to be represented by unions. Finally, it is important to note, as illustrated by the chapters on Thailand and South Africa, the importance of global union organizations, the links between such unions and other civil society organizations, and the support provided both to workers and to local organizations, especially in contexts that offer, within the global production chain, conditions of greater precariousness, vulnerability, and difficulty in organizing. A third key idea is related to the cultural or symbolic dimension to Walmart’s entry into the Global South. As is clearly described in the chapters on Mexico, Argentina, Chile, and Brazil, a key element of Walmart’s management rationale is implementation of new values, meanings, and practices that seek to reshape labor culture and worker identity in its stores. The open-door policy, the morning greeting at store entrances, the corporate cheers, the songs and dances at the start of the workday, the use of the term “associates” instead of “workers,” the regulation of physical appearance, the constant appeals and references to the idea of Walmart as a “family” to which workers belong and to which they owe loyalty, the promotion of a cheerful attitude such that the worker is always available to the customer, the diverse mechanisms for evaluation and individualized monitoring (the “Mystery Shopper” program, the Employee of the Month), the quotes from and photographs of Sam Walton distributed throughout the workspace, and the constant appeals to service excellence and quality are evidence, among other aspects, of the web of devices

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through which Walmart seeks to install its corporate culture. As illustrated by the cases of Mexico, Argentina, and Chile, this paternalistic culture infantilizes the worker and combines a climate of cordiality and harmony, which is often praised by younger workers, with an authoritarian attitude of strong oversight and penalties for behaviors that do not conform to and/or that question the “Walmart culture.” As indicated in the chapters on Argentina and Mexico, the Walmart culture seeks to remake the subjectivity of the workers—usually lowskilled women and young people with no other formal employment experience—by pressuring them to think, feel, and act in a singular way with respect to themselves, their work, the company, and their colleagues and customers that promotes corporate objectives in two important ways. First, as Paul du Gay (1996) aptly illustrates in his work on the retail industry in England, control over the “worker’s soul” by getting workers to identify with the corporate culture becomes an important mechanism for controlling the work process in the context of a service sector characterized by flexible processes and organizations and a high degree of competition among companies. As has been widely discussed in the literature, the presence of and interaction with the customer in the workspace, the demands of emotional labor, the difficulty of anticipating and systematizing procedures for all situations within the store, the costs of direct supervision, and the dynamics of innovation and organizational change demand that retail companies develop new forms of managerial control that are based on self-regulation, consent, and the reshaping of labor subjectivity among the workforce (du Gay 1996; Karreman and Alveson 2004; Vallas 2011). Of course, these new forms of socio-ideological and normative control coexist with classic logics of control within stores: direct surveillance by supervisors, guards, and cameras; technical control over the work process through devices such as the belt and the cash register; and bureaucratic control based on defined roles, prescribed tasks, and establishment of goals and procedures for each workstation. These are all classic forms of control aimed at regulating and adjusting worker behavior more than reconfiguring their subjectivity by modifying workplace culture. Second, controlling workers’ souls and identity as part of the Walmart corporate strategy is aimed at diluting and deactivating the creation of a workplace culture and subjectivities based on other, more political and collective references that are antagonistic to the corporate rationale; these could be oriented toward the construction of autonomous, activist unions based on a “we” that asserts interests different from and to a great extent in opposition to those of the company. As shown in the cases of Chile, Ar-

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gentina, and Brazil, the struggle to build a union and achieve a significant part of its objectives (such as demanding that the term “workers” be used instead of “associates,” opposing forced participation in corporate cheers and songs, and criticizing control of workers’ bodies and appearance) plays out both in the stores and in the labor courts, against the hegemony of Walmart’s corporate culture. These are symbolic battles in which unions, while attempting to place limits on corporate discourse, seek to build, and offer to Walmart workers, alternative symbolic references. These alternatives allow workers to think for themselves and orient their actions toward the collective subject of the union, which affi rms a different “we” and puts the focus on collective bargaining to improve workplace and employment conditions. In addition, it is important to note that Walmart’s effort to impose its corporate culture in the Global South is limited not only by the presence of unions and workers’ organizations but also by the same objective conditions of employment, namely, low salaries, high turnover, physical exhaustion, mistreatment, and constant surveillance. These practices are all well illustrated in the case study of Mexico, where the company’s corporate discourse, transformed into empty rhetoric with no basis in workers’ daily experiences, had minimal capacity to effectively appeal to workers and shape their subjectivity. It is also interesting to note, as shown in the chapters on Chile and South Africa, that the form, timing, and strength with which Walmart deploys its corporate culture in its stores is variable. Deciding how to deploy its corporate culture is a part of the company’s strategic decision-making when it enters a new country that requires consideration of the preexisting organizational cultures in the retail companies it has acquired. Finally, it is important to analyze the cultural dimension of Walmart’s expansion in the Global South by considering, along with corporate culture and union organization, other symbolic anchors of identity formation, such as gender, age, race, ethnicity, territory, religious belief, and political engagement. These strong influences on the lives and subjectivities of Walmart workers operate as patterns of action and sources of meaning in the workplace and link in complex and heterogeneous ways to the corporate culture and/or the union culture, in some cases limiting them and in other cases reinforcing them. The chapters on Chile and Argentina situate the analysis of workplace culture in Walmart stores within the wider sociohistorical framework of the local society particularly well. Together, all the chapters of this book highlight the importance of the symbolic dimension of Walmart’s expansion in the Global South, provide evidence of

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the centrality of corporate culture as a mechanism of managerial control, underscore the importance of symbolic confl icts as a condition for enabling and advancing union organization, and describe the diverse strategies of active and passive resistance employed by workers themselves that produce tensions in the workplace and slow down the implementation of corporate culture. This book also highlights the importance of an intersectional perspective in studies of workplace culture that connects with a broader historic and sociocultural viewpoint. A fourth key idea that emerges from the book is that the diversity of interests and actors (governments, companies, unions, suppliers, civil society organizations, consumers), dimensions (economic, political, social, cultural, technological), and scales and levels of analysis (store, neighborhood, district, city, country, region, global networks) must be considered in the effort to understand Walmart’s operations in the Global South and the transnational’s impact on workers and countries. As has been extensively discussed from the global production networks perspective, understanding the networks that characterize contemporary capitalism and large transnationals such as Walmart requires a complex approach that recognizes the different actors, scales, and dimensions of those networks, how they are inserted into specific and changing spatial and temporal frameworks, and the multiple relationships of collaboration, cooperation, competition, and confl ict that emerge in the network, creating terrain that is disputed and intersected by power relationships (Coe, Dicken, and Hess 2008). Although individual chapters do not necessarily address each of these aspects, as a whole the book underscores the need for multidimensional approaches to understanding Walmart’s entry into the Global South and its many impacts on the world of work. This requires analyzing Walmart through a lens that goes beyond classic perspectives in the sociology of work, which are circumscribed by the limits of analyzing individual stores and the working conditions of the company’s direct employees in a given country. The last three chapters of the book (on South Africa, Nicaragua, and Thailand) discuss the importance of analyzing local and global production and the supply chains through which Walmart supplies its stores, based on principles of centralization, standardization, economies of scale, and optimization and imposition of purchasing conditions, all of which are characteristic of lean retailing. Of particular interest in a context dominated by analysis of the global supply chains of retail transnationals is scrutiny of local production chains for perishable items in Nicaragua and South Africa and the profound effects of Walmart’s arrival on local

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producers and domestic markets, with ambivalent and potentially negative consequences for sustainability, bargaining power, and autonomy and working conditions at local units (farms). Likewise, the chapter on Thailand and the global network of shrimp production for Walmart operations confi rms what has been widely reported by activists and reporters on the globalization of work: inhumane conditions, rife with human rights violations, are found in the most remote locations in the global production chains that supply large transnationals such as Walmart (Vallas 2011). In a related point, this expanded perspective on Walmart transcends the physical space of the stores and the workers hired directly by Walmart; the conditions, experiences, and forms of organization of other groups of workers also tied to Walmart’s operations must be considered. For example, in addition to discussing Walmart’s direct employees, chapters in this book have addressed temporary or outsourced workers both in stores and in management (South Africa and Mexico), workers at warehouses that supply retail stores (Chile), workers in the network of domestic suppliers (South Africa and Nicaragua), and global suppliers (Thailand). Along with the need to look beyond the stores and those directly employed by Walmart, the book illustrates the importance of an approach that encompasses more than a merely economic perspective, such as analysis of the global value chain. Economic approaches tend to view Walmart and other transnationals as the only relevant actor and focus on their business strategies and global production and distribution networks, neglecting other actors’ experiences and possibilities for agency. As stated previously, Walmart’s expansion in the Global South, its specific operational methods, and its labor and economic impacts cannot be understood without taking into consideration the roles of diverse actors, including: regulatory institutions and government policies (Brazil and South Africa) and other political actors such as legislators (Argentina); local and global labor organizations (Chile, Brazil, Argentina, and Thailand); agencies such as the World Bank and international NGOs (Nicaragua); activist civil society organizations and human rights organizations (Thailand) and the media (Argentina, Thailand, and South Africa); and local and global retail competitors (Carrefour in Brazil; Shoprite, Pick n Pay, Spar, and Woolworths in South Africa), among other actors. This incomplete list includes numerous actors and interests that are linked through many types of relationships (collaboration, cooperation, confl ict, and competition) and marked by the strong asymmetries of power that are present in Walmart’s global operations. Indeed, one of the objectives of this book has been to raise

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the visibility of citizens, workers, unions, civil society organizations, local producers, the media, and government in order to highlight their experiences and capacity for individual and collective agency in establishing limits and enacting regulations that attenuate to some degree the enormous asymmetry of power between a transnational company such as Walmart and the actors, especially workers, with which it interacts in its global production network. Finally, it is our hope that this book, besides offering a general framework and adding to the body of knowledge concerning Walmart’s expansion and operations in the Global South, contributes to strengthening collective action, solidarity, union organization, and worker activism at local and global levels. These are central elements in any effort to achieve decent employment and greater justice and democratization in our societies. references Adorno, Theodor W. 1984. Dialéctica negativa. Madrid: Taurus. Bloom, J. Dara, and Clare Hinrichs. 2016. “The Long Reach of Lean Retailing: Firm Embeddedness and Walmart’s Implementation of Local Produce Sourcing in the U.S.” Environment and Planning 49 (1): 168–185. Carré, Françoise, and Chris Tilly. 2013. “So Far from God, so Close to the United States, and Yet . . .: Unexpected Differences in Modern Retail Jobs between Mexico and the United States.” Revue Interventions Économiques 47. Coe, Neil Martin, Peter Dicken, and Martin Hess. 2008. “Global Production Networks: Realizing the Potential.” Journal of Economic Geography 8 (3): 271–295. Coe, Neil Martin, and Neil Wrigley. 2007. “Host Economy Impacts of Transnational Retail: The Research Agenda.” Journal of Economic Geography 7: 341–371. Du Gay, Paul. 1996. Consumption and Identity at Work. London: Sage Publications. Durand, Cédric, and Neil Wrigley. 2009. “Institutional and Economic Determinants of Transnational Retailer Expansion and Performance: A Comparative Analysis of Wal-Mart and Carrefour.” Environment and Planning A 41: 1534–1555. Karreman, Dan, and Mats Alvesson. 2004. “Cages in Tandem: Management Control, Social Identity, and Identification in a Knowledge-Intensive Firm.” Organization 11 (1): 149–175. Lichtenstein, Nelson. 2009. The Retail Revolution: How Wal-Mart Created a Brave New World of Business. New York: Metropolitan Books. Tilly, Chris, and José L. A. Galván. 2006. “Lousy Jobs, Invisible Unions: The Mexican Retail Sector in the Age of Globalization.” International Labor and Working Class History 70: 61–85. Vallas, Steven Peter. 2011. Work: A Critique. New York: Polity Press. Wrigley, Neil, Neil Martin Coe, and Andrew D. Currah. 2005. “Globalizing Retail: Conceptualizing the Distribution-Based TNC.” Progress in Human Geography 29: 437–457.

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Con t r ibu tors

Carolina Bank Muñoz is a Professor of Sociology at Brooklyn College and the CUNY Graduate Center. Her work focuses on labor, immigration, globalization, and Latin America. She is the author of Transnational Tortillas: Race, Gender, and Shop Floor Politics in Mexico and the United States (2008), which won the Terry Book Award, and Building Power from Below: Chilean Workers Take on Walmart (2017). Before joining Brooklyn College, she worked as a union organizer and researcher for UNITE and as a project director at the UCLA Labor Center. Bridget Kenny is an Associate Professor of Sociology at the University of the Witwatersrand in Johannesburg, South Africa. She works on precarious labor, service work, and gender and race issues in South Africa. She has published widely in journals and edited volumes and is the author of Retail Worker Politics, Race, and Consumption in South Africa: Shelved in the Service Economy (2018). She has worked with the South African labor movement for over twenty years. Antonio Stecher is an Associate Professor in the School of Psychology at the Universidad Diego Portales (Santiago, Chile) and is a researcher of the Labour Psychosocial Studies Program at that university. His research is in the field of new work studies in Latin America, with a focus on the processes of labor identity construction and labor subjectivities in the context of contemporary modernity in Latin America. He has written more than forty articles and book chapters on this subject, analyzing the impact of the processes of productive restructuring and labor flexibility on the experiences, identities, and work cultures of different groups of workers in Chile. His most recent book, with Lorena Godoy, was The Transformation of Work, Subjectivity, and Identities: A Psychosocial Approach from Chile and Latin America (2014). Katiuscia Moreno Galhera is a PhD candidate in political science at Universidade Estadual de Campinas (UNICAMP) and was a visiting scholar at the Center for Global Workers’ Rights at Penn State, both part of the Global Labour University. Her PhD research analyzes union networks in two sectors (garment and steel) as well as the international, racial, and gender division of labor in the global supply chain. Her publications include “Employment Relations in Latin America,” coauthored with Mark Anner, in The Routledge Companion to Employment Relations (2018) and, with João Paulo Cândia Veiga, “Monitoring Precarious and Forced Labour in Brazil: Sweatshops in São Paulo from a Gender Perspective” in Protecting Labour Rights in a Multipolar Supply Chain and Mobile Global Economy, edited by Jan Wouters (2014). In Brazil, she is a professor and activist in gender, workers’ rights, and immigrants’ rights. João Paulo Cândia Veiga is a Professor in the Political Science Department at the University of São Paulo and a researcher at the Center for International Negotiation Studies (Caeni). He has research experience in international relations in the areas of

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political economy and institutions. He currently conducts research on the impact of environmental certification on Brazilian foreign trade. Scott B. Martin holds a PhD from Columbia University and lectures on international affairs at the New School and Columbia University. He also works as a regular freelance contributor to the Economist Intelligence Unit. With Ilán Bizberg, he coauthored Globalización y estado de Bienestar: El Caso de Norteamérica (2012), a comparative exploration of social policy and labor regulation in Mexico, Canada, and the United States. His areas of research and teaching specialization are comparative and transnational labor politics, comparative social policy, and labor and environmental standards in transnational corporations and global commodity chains. Paula Abal Medina holds a doctorate in social science from the Institute of Social Studies at the Universidad Nacional General Sarmiento (IDES-UNGS), where she is a Professor of Undergraduate and Graduate Studies, and she is a researcher at the Universidad Nacional San Martin (UNSAM-CONICET). She facilitates workshops and courses on the world of work and labor at various unions and also engages in participatory action research with grassroots organizations. She has written a number of books and articles, most notably ¿Existe la clase obrera? (2017), Ser sólo un número má: Trabajadores jóvenes, grandes empresas y activismos sindicales (2014), La Forma sindical en Latinoamérica (2012), and Colectivos resistentes: Procesos de politización de trabajadores en la Argentina reciente (2011). Gabriela Victoria Alvarado holds a PhD in social studies, with a concentration in labor studies, from the Autonomous Metropolitan University of México (UAM). Her PhD research examined collective actions, labor movements (electricians), collective memory, political culture, identity reconstruction, collective subjectivities, and union strategies. Her MA thesis, which focused on Walmart IT workers, won the Fray Bernardino de Sahagún Award in 2010. She has contributed to several books, including Marxismo, antropología, e historia (y filsofía), edited by Miguel Ángel Adame Cerón (2011), and Testimonios de mobbing: El Acoso laboral en México, edited by Florencia Peña and Sergo G. Guadalupe Sánchez (2009). Stephen Greenberg was a postdoctoral researcher at the NRF/DST Chair for Poverty, Land, and Agrarian Studies of University of the Western Cape at the time of writing. He currently works as senior researcher at the African Centre for Biodiversity in Johannesburg on issues of seed, food sovereignty, agroecology, and corporate power in agro-food systems. Jennifer Wiegel is Regional Coordinator for Central America at the International Center for Tropical Agriculture (CIAT), based in Managua, Nicaragua. Before joining CIAT, she worked for almost two decades in development in Central America, including seven years with the Tropical Agricultural Research and Higher Education Center (CATIE) and five years with Lutheran World Relief. Her PhD work in sociology and master’s work in rural sociology at the University of Wisconsin–Madison focused on agri-food systems in Nicaragua. In addition to research, she has worked on design, im-

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plementation, and evaluation of agricultural development projects in partnership with over ninety government and nongovernment organizations in Central America. Nicholas Rudikoff is a trade unionist with twenty years of experience as a research analyst and campaigner for the Service Employees International Union (SEIU) and Change To Win. For the past eight years he has helped build global campaigns that seek to unite workers across national boundaries in struggle against some of the world’s largest corporations.

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I n de x

Accenture, 232 Acuenta, 92–94 Adventist Development Relief Agency (ADRA), 205 AFL-CIO, 229 Africa Massmart/Walmart Shop Steward Alliance, 81–82, 82n1, 84n30 African Ambition, 190 African Development Bank (AFDB), 228 African National Congress (ANC), 17, 26n3, 84n21 agriculture: aquaculture, 21, 225, 227– 230; black farmers, 19, 181–183, 186– 187; and casual/informal labor, 184, 194, 216; in China, 188; deskilling of, 21, 216; farmer training, 20, 191; farmworkers, 20, 59n9, 181, 187; and gender, 184; modernization of, 200, 227–228; in Nicaragua, 19, 199–217; packing and processing, 192–194, 229; smallholder, 19; in South Africa, 19, 181–196; surveillance and monitoring, 212–213; use of antibiotics, 229; wages, 20, 22, 187. See also Direct Farmer Program; Ezemvelo; nongovernmental organizations (NGOs); TechnoServe Ahold. See Royal Ahold Americans for Tax Fairness, 7 antitrust and monopoly regulations, 6–7, 43–44 A&P, 6 Aracaju, Brazil, 44 Argentina: anti-union practices, 14, 243; Avellanada, 14; business unions in, 14, 16, 243; introduction of Walmart culture, 15–16, 23, 67; labor law, 87, 124–125, 244–245; military dictatorship, 118–119, 124–125, 132, 135– 136, 147n21; Ministry of Labor, 125, 134, 144; Peronism, 118–119, 146n7; precaritization of labor in, 119–120,

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122; resistance to Walmart culture, 10, 12, 23, 246–249; retail and supermarket sector, 124, 135, 199; sectoral unions in, 15–16, 87, 245; supplychain relations in, 4; unemployment, 119, 125–126, 144; union culture in, 118–148; union federations, 16– 17; Walmart IT support in, 155, 171; Walmart’s entry into, 66, 121, 244; workplace culture in, 23, 128–133. See also Kirchner, Néstor; Menem, Carlos; Perón, Juan Argentine Federation of Commercial and Services Employees (FAECYS), 123, 145n4 Asian Development Bank (ADB), 228 Association of Southeast Asian Nations (ASEAN), 223 Atacadão, 44 Avellanada, Argentina, 14, 119–121, 124–129, 132–134 Azcapotzalco, Mexico, 155 Bacon, Francis, 107 Ban, Yem, 234–235 Bangladesh, 226, 229 Bayer Corporation, 191 benefits: bonus and reward systems, 10, 37–38, 57, 79, 96, 101, 106–108, 112– 113, 115n21, 130, 132–133, 143, 157; health insurance (see health care); loans, 101; for outsourced and temporary workers, 53, 74–75; paid time off, 32–33, 108, 113, 124; performance-based, 37–38, 54, 224; profitsharing, 15, 30, 35, 37–38, 51–55, 157; reduction of, 33; release time for union leaders, 113, 142–143; retirement/pension, 98; sick time, 115n21; transportation, 101, 108, 113; and “union substitution,” 96, 158–159; at Walmart competitors, 98

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Bentham, Jeremy, 168–169, 178n30 Bentonville, Arkansas headquarters, 6, 151, 170, 233 Best Aquaculture Practices (BAP), 225, 230–232, 236 BIG brand, 41 BomPreço brand, 40–41, 44 Bonafi ni, Hebe de, 136 Botswana, 25n2, 83n5 Brasília, Brazil, 41, 48, 176n9 Brazil: Administrative Council of Economic Defense (CADE), 43–44; Bolsa Família program, 36, 41, 59n8; collective bargaining in, 12–13, 29; constitution, 36, 59n9; economy, 39, 42, 57; Estado Novo dictatorship, 31, 36; industrial relations system, 14–15; introduction of Walmart culture, 10– 13, 243; labor law, 15, 29, 31–38, 38n2, 43–44, 46–50, 55, 58n2, 59n9, 87, 244–245; Labor Ministry, 32, 36, 50, 56, 59n9; military dictatorship, 31, 118–119; minimum wage, 52, 54–55, 59n15; Regional Labor Tribunal, 47–48; regulatory framework for TNCs, 33; resistance to Walmart culture, 10, 12–13, 33, 246–249; retail and supermarket sector, 33, 42– 44; sectoral unions in, 15, 31; supplychain relations in, 4; union density, 13; union tax, 15; Walmart IT support in, 155, 171; Walmart labor violations in, 29–30; Walmart’s entry into, 40, 66, 121, 243; Walmart warehouses in, 40; workplace culture in, 12–13. See also Cardoso, Fernando Henrique; Central Única dos Trabalhadores (CUT) [Brazil]; Lula da Silva, Luis Inácio; Rousseff, Dilma; Temer, Michel; Vargas, Getúlio; Workers’ Party (PT) [Brazil] Brazilian Supermarkets Association (ABRAS), 40–42 Bun, Sophea, 234–235 Burma. See Myanmar C&A, 51 Cambodia, 21, 223–224, 233–237

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Cambridge Food, 64–77, 80, 83n4, 246 Camus, Albert, 128, 146n8 Canada, 8, 14, 25n2, 38–39, 177n25 Capital Grille, 230 Cardoso, Fernando Henrique, 32, 39–40 Cargill, 230 Carrefour: acquisitions, 44; in Brazil, 30, 40–44, 92, 250; collective bargaining, 67; compliance, 58n4; in France, 60n16; global framework agreement, 60n16; labor conditions, 3, 51, 57, 67; rivalry with Walmart, 41, 55; in South Korea, 66–67; unions in, 67, 103–104; wages, 67 Catholic Relief Services, 205 Cavalieri, Armando, 120 Cencosud Brasil Comercial Ltda., 43 Central American Retail Holding Company (CARHCO), 204–205 Central de Trabajadores de la Argentina (National Argentine Workers Union, CTA), 119, 141, 145, 147n22, 147n23 Central Única dos Trabalhadores (CUT) [Brazil]: and collective bargaining, 46; and CONTRACS, 29, 50–54, 56; founding, 32; global campaigns, 50, 56; and hours’ banks, 37; rival organizations, 32; ties with PT, 58n2. See also Workers’ Party (PT) [Brazil] Central Unitaria del Trabajador (CUT) [Chile], 105 Chan, Anita, 226 Change to Win, 222, 236–237 ChangoMás, 145n2 Chile: autonomous unions in (see unions); Central National de Informaciones (CNI), 95; company unions in, 16–17; Concertación governments, 90; consumer culture in, 92; education system, 89; introduction of Walmart culture, 111, 243, 248; labor law, 16, 87, 89, 96, 99–100, 103– 104, 114n2, 244–245; military dictatorship, 88–90, 92–93, 95, 102, 114n1, 114n2, 245 (see also Pinochet, Augusto); Ministry of Labor, 91, 95, 109, 111–112; neoliberalism in, 88–90, 92–93; precaritization of la-

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bor in, 99; resistance to Walmart culture, 10, 246–249; retail and supermarket sector, 92–100, 199; social movements in, 88, 100; social spending, 89; supply-chain relations in, 4; union democracy in, 87–115; union density, 90; union federations, 88; US intervention in, 114n1; Walmart’s entry into, 93, 121, 243–244; Walmart suppliers in, 91; warehouse workers in, 14, 16, 88–89 (see also Logística, Transporte, y Servicios [LTS]); workplace culture in, 23, 87–109. See also D&S China: agriculture in, 188, 201; manufacturing in, 7, 226; supermarket sector in, 201; Walmart’s entry into, 39, 41; Walmart supply chain in, 3, 175, 188; working conditions, 226 Choluteca Declaration, 230 Christianity, 2 CIFRA, 153, 160 Cisco, 170 Clark, Brett, 228 Clausen, Rebecca, 228 CLT (Consolidacao das Leis do Trabalho), 31. See also Brazil; labor law collective bargaining: in Argentina, 124, 245; at Carrefour, 67; centralized, 17, 49; and labor brokers, 72–74; and labor law reforms, 39, 96; in Mexico, 150–151, 156; non-union workers in, 46–47, 245; under Pinochet, 90, 114n2, 245; profit-sharing in, 51– 54; in South Africa, 68–69, 72–73; in Walmart Brazil, 29, 46, 51, 55 Comes, Guillermo, 146n9 Commercial Employees’ Union (SEC) [Argentina], 120, 123, 145n4 Commercial Workers Union of the City of São Paulo, 49–50 Community Legal and Education Center (CLEC), 223, 236, 250 Companhia Brasileira de Distribuçião, 42–43 Congress of South African Trade Unions (COSATU), 15, 17, 25n3, 77, 80, 84n21

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Constituyentes, Argentina, 143 Consumer Reports magazine, 229 consumers: awareness campaigns, 5, 22; culture of, 92; and debt, 82, 92–94 (see also credit); purchasing power of, 36, 200, 204; and retailer embeddedness, 66; of shrimp, 19, 227–230; trends among, 18–19 CONTRACS (National Confederation of Commercial and Service Workers, Confederacao Nacional dos Trabalhadores no Comercio e Servicos) [Brazil], 29–30, 33–34, 49–54, 56, 58n1 contracts: for Ekono workers, 113; fortyeight-hour, 133, 143, 146n15; and labor brokers, 72–74, 78–82; for migrant laborers, 224; part-time and temporary, 39, 59n9, 143; protection contracts, 103–104, 158, 175, 176n9, 176n10, 245; with Walmart suppliers, 211–212 Corporación Supermercados Unidos (CSU), 204–205 Costa Rica, 176n6, 195, 205 Council of Economic Advisers, 225 CP Foods, 230 credit: in Chile, 92–94; credit card companies, 44, 92–94 (see also Presto); for farmers, 192, 208–210, 212, 214; predatory practices, 93–94; for Walmart, 210, 213–214 Darden Restaurant Group, 230 debt: consumer debt, 44, 82, 92–94, 98; debt bondage, 223, 225, 233–234; for farmers, 192, 208–210, 212, 214 deregulation: and antitrust laws, 6–7; of banking, 89; and declining labor movements, 13–14; and global neoliberalism, 1, 18, 47, 93. See also neoliberalism development: foreign agencies, 5, 21 (see also International Monetary Fund [IMF]; U.S. Agency for International Development [USAID]; World Bank); and microfi nance organizations, 213; public-private partnerships (PPPs), 182; state agendas, 5, 21–23, 181–

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development (continued) 183, 186, 244; state subsidies, 215– 217, 244; and supermarkets, 199– 202; supplier development funds (SDFs), 181–183, 192, 194–196, 244; tax subsidies for, 7. See also foreign direct investment (FDI); International Bank for Reconstruction and Development; nongovernmental organizations (NGOs) Diaz, Sergio, 95 Direct Farmer Program, 19–20, 181–196. See also Ezemvelo D&S: acquisition by Walmart, 93, 102– 104; anti-union practices, 103–104; branded subsidiaries (see Acuenta; Ekono; Híper Ekono; Híper Líder; Inmobilaria SAITEC; Presto); distribution system, 92; Internal Security, 95; labor conditions, 94–95; origins, 92; preexisting unions, 16, 100–105 Ecuador, 227 Ekono, 92–94, 99, 113 El Salvador, 176n6 Espírito Santo, Brazil, 41 Everyday brand, 40 Ezemvelo, 19–20, 181–196. See also agriculture; development; Direct Farmer Program; food, fresh Fairway Market, 98 farmers. See agriculture Federación de Sindicatos Autonómos Walmart Chile (Federation of Autonomous Unions), 88 Federación Nacional de Trabajadores Líder (National Federation of Líder Workers) [Chile], 88 Federal Council of Retail and Allied Workers (FEDCRAW) [South Africa], 77 Federatie Nederlandse Vakbeweging (FNV), 50 Federation of Workers of the State of São Paulo (FECESP), 53–54

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Fields, Robert, 230 Fishman, Charles, 45 food, fresh: avocados, 192–193; certifying bodies, 224–226, 230–232 (see also Best Aquaculture Practices [BAP]; Global Aquaculture Alliance [GAA]); fish, 228; and food safety, 185, 188, 228–230; NGO involvement in production, 20–21, 181– 196, 199–217 (see also nongovernmental organizations [NGOs]; U.S. Agency for International Development [ USAID]); in Nicaragua, 18–19, 199–217; pesticide use, 210; prices, 192–194, 207–213, 217n4; processing plants, 229; production for local markets, 8, 181–196, 199–217; seeds and inputs, 209, 212; shrimp, 8, 19, 222–238; in South Africa, 18– 19, 181–196; supply chains, 5, 18– 19; tomatoes, 203–217, 217n1. See also agriculture; Direct Farmer Program; migrant labor; Walmart suppliers Food and Allied Workers Union (FAWU) [South Africa], 77–78 Food and Water Watch, 228 Força Sindical (Brazil), 29, 32, 37, 54 Ford Foundation, 114n1 Ford Motors, 7 foreign direct investment (FDI), 1, 22, 65–66, 182, 194–96. See also development Foucault, Michel, 168 France, 60n16, 67 Franco, Itamar, 39 Friedman, Milton, 89, 114n1 Friedman, Thomas, 225 Furman, Jason, 225 Galtieri, Leopoldo, 147n21 Ganz, Marshall, 88 G. Barbosa brand, 44 General Motors (GM), 7 Germany: labor law, 49–50; manufacturing in, 66; regulatory framework for TNCs, 66–67; unions in, 13, 49–50,

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58n3, 66–67; Walmart culture in, 33; Walmart’s failure in, 3, 13, 66 Ghana, 25n2, 83n5 Gifford, Kathy Lee, 226 Global Aquaculture Alliance (GAA), 230–232 Goiás, Brazil, 41 Gramsci, Antonio, 106 Grass Roots Commission, 178n29 Greenpeace, 228–230 Guatemala, 121, 176n6, 204 health and safety: Best Aquaculture Practices (BAP), 225, 230–232, 236; collective bargaining, 90, 115n21; ergonomics, 54, 131–132; and fresh food, 185, 188; of migrant laborers, 223; and shift work, 156–157, 173; union committees, 106; violations of standards, 54, 223, 231; worker victories, 108; workplace risks, 54, 132 health care, 7, 31, 45, 89. See also benefits Híper Ekono, 92–94 Híper Líder, 92–94 Honduras, 176n6 Hong Kong, 3 Hortifruti, 204 hours: breaks, 48, 54, 90; excessive, 54, 100, 147n18, 174, 229, 231; flexible scheduling, 11, 45, 53, 75–77, 80– 81, 99, 173; holidays, 53, 75–76, 113, 124; hours’ banks, 37, 39, 53, 58n6; in IT sector, 156; length of workweek, 32, 44; night shifts, 156; overtime, 15, 29–30, 75–77, 132–133, 143, 156, 164–165, 231; part-time, 39, 45, 98–99, 131–132; Sundays, 53, 75–76, 124, 143; and symbolic violence, 99, 173–174; unpaid (see wage theft) housing, 98, 224, 233–234 HP, 170 Humanity United, 232 Human Rights Watch, 236–237 human trafficking, 19, 21–22, 222–238. See also food, fresh; Thailand Humphrey, John, 200–202

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Hygrotech, 191 Ibáñez family, 92. See also D&S IBM, 170 India, 3, 227, 233 Indonesia, 3, 39, 227 Inmobilaria SAITEC, 92 Inqolobane Yobumbano Co-Op, 190 Institutional Revolutionary Party (PRI), 176n2 Inter-American Development Bank (IADB), 228 International Bank for Reconstruction and Development (IBRD), 228 International Labour Organization (ILO), 29, 31, 33, 36, 39–40, 47, 51, 89–90 International Monetary Fund (IMF), 150 International Union League for Brand Responsibility, 237 Inter-Union Department for Statistics and Economic Studies (Departamento Intersindical de Estatistica e Estudos Economicos, DIEESE) [Brazil], 52–53 Japan, 3, 39, 66 Joemat-Pettersson, Tina, 195 Kallesen, Dan, 233 Kamalanathan, Rajan, 236 Kenya, 25n2, 83n5 Kirchner, Néstor, 126. See also Argentina Konefal, Jason, 228 Korema Farm, 190 Kosal, Sem, 234–235 Kraft Foods, 226 Kroger, 92, 98 KwaZulu-Natal, South Africa, 194 labor brokers. See subcontracting and outsourcing labor control: discipline and sanctions, 10, 72–74, 90, 96–98, 109–110, 112, 126–128, 132–135, 142–143, 159– 161, 163–165, 168–170, 172, 231, 243; feedback for improvement, 167–

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labor control (continued) 168; and labor law, 5; layoffs and dismissals, 18, 29, 40, 59n9, 72, 74, 77, 126, 129, 134–140, 159, 168; mobbing, 168–170; “Mystery Shopper” programs, 16, 146n9, 246; and outsourced workers, 72; psychological abuse and violence, 132–133, 168– 170, 178n31, 231; and remote workers, 172; surveillance and monitoring, 10, 16, 132, 146n9, 168–170, 174, 178n30, 246–247; symbolic, 11–12, 164–165, 173, 246–49. See also benefits; hours; Walmart culture; Walmart workers labor law: Alien Tort Statute, 233; in Argentina (see Argentina); in Brazil (see Brazil); in Chile (see Chile); and discrimination, 12, 29, 33, 48, 134–135; in Germany, 49–50, 66–67; and grievances, 36, 94–95; labor courts, 36– 37, 96, 246, 248; legal documents, 54; in Mexico (see Mexico); in Nicaragua (see Nicaragua); public labor prosecutors (MPT), 47–48; reforms, 4–6, 32, 55, 81, 90, 144; right to strike, 31, 36, 90, 245; “right-to-work” laws, 6, 45–46, 93; in South Africa (see South Africa); in Thailand, 223–224; and TNCs, 4–5; Trafficking Victims Protection Reauthorization Act of 2005, 233; and union recognition, 5, 15– 18; in United States (see United States) labor unions. See unions La Colonia, 216 La Fragua, 204 Lebapanke Trading and Products, 190 Leroni, Brian, 189 Lesotho, 25n2, 83n5 Líder Express, 92, 94 Limpopo province, South Africa, 189– 194 Logística, Transporte, y Servicios (LTS), 88, 91, 100–102, 105–108 logistics industry, 14, 19, 45, 66, 105– 108, 222–223, 230

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Longo, Stefano, 228 Lozano, Claudio, 147n23 Lula da Silva, Luis Inácio, 32, 36, 41, 55, 59n9, 120 Machado, Antonio Orlando, 141, 147n22 Macy’s, 6 Madres de Plaza de Mayo, 136 Malawi, 25n2, 83n5 Mangrove Action Project, 228, 232 Massmart: acquisition by Walmart, 19–21, 64–65, 68, 181, 195; Africa Massmart/Walmart Shop Steward Alliance, 81–82, 82n1, 84n30; Builders Warehouse, 69, 83n4; DionWired, 83n4; Game, 69, 81, 83n4; Makro, 69; Massbuild, 68, 83n4; Masscash, 68 (see also Cambridge Food); Massdiscounters, 68, 83n4; Masswarehouse, 68, 83n4; Rhino Cash & Carry, 83n4; southern African presence, 25n2, 64–69, 81, 83n5; supply chain, 181–196; union contracts, 68– 69; unions in, 17–18, 71, 77–79; as wholesaler, 185. See also Cambridge Food; Direct Farmer Program; food, fresh; South Africa Mato Grosso do Sul, Brazil, 41 Maxxi brand, 41 Menem, Carlos, 119. See also Argentina Mercadorama brand, 41 Mexico: corruption in Walmart management, 41–42; introduction of Walmart culture, 23, 111, 243, 248; IT sector in, 155; labor law, 87, 158, 172, 244–245 (see also contracts); and NAFTA, 8, 38; neoliberalism in, 150–151; opposition to Walmart in, 175; precaritization of labor in, 150, 173, 243; protection contracts, 103– 104; regulatory framework for TNCs, 67; resistance to Walmart culture, 23, 246–249; retail and supermarket sector, 3, 25n1, 153–155; structural adjustment programs, 150; supply-chain relations in, 4, 243; unions in, 67, 87–

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88, 145n1, 158, 243, 245; Walmart IT support in, 155; Walmart IT workers in, 14, 25n1, 150–178; Walmart’s entry into, 2–3, 38–40, 121, 150–151, 244 Michelson, Hope, 210 Michigan State University, 204–205 microcredit and microfi nance, 36 migrant labor, 19, 21–22, 222–238, 250 Migrant Workers Rights Network (MWRN), 223, 236–237 Minas Gerais, Brazil, 40 Mnothopansi Co-Op, 190 Monsanto, 226, 230 Movimiento de Trabajadores Argentinos (Movement of Argentine Workers, MTA), 119 Mozambique, 25n2, 83n5 Myanmar, 21, 223–224 Nacional brand, 41 NAFTA. See trade liberalization Nakry, Nol, 234–235 Namibia, 25n2, 69, 83n5 National Action Party (PAN) [Mexico], 176n2 National Chamber of Deputies (Argentina), 134, 137, 143–144 National Council of Trade Unions (NACTU) [South Africa], 77–78 National Institute Against Discrimination, Xenophobia, and Racism (INADI) [Argentina], 134, 144 National Union of Metalworkers of South Africa (NUMSA), 26n3 National Walmart Union Committee, 30, 51, 58n1 Natural Resources Defense Council (NRDC), 230 neoliberalism: in Argentina, 119; in Brazil, 39; and business unions, 119–120; “Chicago Boys,” 89, 114n1; in Chile, 88–90, 92–93; and individualist ideology, 170; in Mexico, 150–151, 173; and Reagan administration, 6; and retail industry, 1; and solidarity culture, 4–5; and sweatshops, 226, 229–

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230. See also deregulation; Friedman, Milton; trade liberalization Netherlands, 44, 50–51 New America Foundation, 226 New York Stock Exchange, 7, 42 Nicaragua: climate, 211; fresh food production in, 8, 18–19, 186, 199–217, 217n1, 243, 249; infrastructure, 208, 210; labor law, 205; NGO involvement in, 199–217; supermarket sector in, 201, 203–209, 213, 215–217, 244; supply-chain relations in, 4, 199–217, 250; TechnoServe in, 20, 186; Walmart’s entry into, 176n6, 202–207 Nigeria, 25n2, 83n5 Nkomo, Mandla, 191–194 nongovernmental organizations (NGOs), 134, 199–207, 211–217, 223, 230. See also Adventist Development Relief Agency (ADRA); Catholic Relief Services; Hortifruti; Human Rights Watch; microcredit and microfi nance; Partnerships for Food Industry Development; Project Concern International; Save the Children; TechnoServe; U.S. Agency for International Development (USAID); Winrock International Nova, Scott, 231, 238 Nova Central Sindical de Trabalhadores (New Workers Labor Centra, NCST), 58n2 Olive Garden, 230 Organization for Economic Cooperation and Development (OECD), 51 Organization United for Respect at Walmart (OUR Walmart), 110 overtime. See hours Página12 newspaper, 136–137 Palocci, Antonio, 36 Pão de Açúcar/Casino, 30, 42–44 Paraná, Brazil, 48 Partnerships for Food Industry Development, 204–205

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Pattison, Grant, 185 Perón, Juan, 118–119, 127. See also Argentina pharmaceuticals, 41, 129, 146n9 Phatthana Seafood Company, 223–225, 232–237, 245 Pick n Pay, 70, 75, 195, 250 Pinochet, Augusto, 89–90, 97, 104. See also Chile Preferred Freezer Services, 230 Premoli, Miguel, 145n6 Presto, 92–94 privatization. See neoliberalism produce. See food, fresh profit-sharing. See benefits Project Concern International, 205 PTN Group, 232 Public Citizen, 227–228 Québec, 25n2 Ralph’s supermarkets, 98 Rana Plaza tragedy, 226 Ratha, Keo, 233–235 Reagan, Ronald, 6 Reardon, Thomas, 199–202 Recalde, Héctor, 147n23 retail and supermarket sector: in Africa, 25n2, 64–69, 81, 83n5, 199 (see also South Africa); in Asia, 3, 39, 41, 66– 67, 199, 201; concentration of capital in, 1, 13–14; in Eastern Europe, 199; “embeddedness” of capital in host economies, 3, 65–68, 71, 80– 81, 83n3, 242–243; just-in-time production, 1, 45, 230; in Latin America, 92–100, 199 (see also Argentina; Brazil; Chile; Mexico); lean retailing, 1, 149–150, 249; local competition in host countries, 5; in South Africa, 70–71, 80–81, 83n2, 182–183, 250 Rio de Janeiro, Brazil, 40, 44 Rio Grande do Sul, Brazil, 48 Rousseff, Dilma, 32, 57 Royal Ahold, 44, 204, 215 Rubicon Resources, 224, 232

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safety. See health and safety Saint-Jean, Alfredo, 135–136 Saint-Jean, Alfredo Oscar, 135–136, 146n14, 147n21, 147n22 Saint-Jean, Ibérico, 125, 135–136 São Paulo, Brazil, 29, 40, 48 Save the Children, 205 Sears brand, 6 Sendas brand, 44 SentirBem brand, 41 sexual harassment, 33, 96 Shoprite, 70–71, 75, 83n2, 250 Sifton, John, 237 Sindicato de Empleados de Comercio de Lanus y Avellanada (SECLA) [Argentina], 147n22 Sindicato Interempresa Líder (SIL) [Chile], 103–104, 111 Singh, Sherry-Lee, 185, 189 Social Observatory Institute (Instituto Observatório Social, IOS) [Brazil], 29, 31–32 social security, 31, 47, 59n9, 89 Soderquist, Don, 176n13 Solidarity Center, 229 Sonae Group, 41 Songkhla, Thailand, 223, 236–237 South Africa: AgriBEE program, 186– 187; Competition Tribunal, ix, 19, 64–65, 68, 103–104; Department of Agriculture, Forestry, and Fisheries (DAFF), 64, 181–183, 195; Department of Trade and Industry (DTI), 64; Economic Development Department (EDD), 64, 181–183; fresh food production in, 8, 18–19, 65, 243, 249; introduction of Walmart culture, 10, 248; Johannesburg stock exchange, 64; labor brokers (see subcontracting and outsourcing); labor law, 15, 68–69, 72–73, 84n28, 87, 184, 244– 245; manufacturing in, 65; media, 64; post-apartheid policies, 19, 64, 181– 184, 186–187; precaritization of labor in, 68; Reconstruction and Development Program, 186; retail and supermarket sector, 70–71, 80–81, 83n2,

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182–183, 250; and sub- Saharan African market, 8, 64, 83n2; supplychain relations in, 4, 64, 181–196, 243; unemployment, 15, 194; union density, 13, 77; union federations, 25n3, 26n4, 68, 84n21 (see also Congress of South African Trade Unions [COSATU]; South African Commercial, Catering, and Allied Workers Union [SACCAWU]); Walmart’s entry into, 8, 64–84, 244. See also African National Congress (ANC); agriculture; Congress of South African Trade Unions (COSATU); Direct Farmer Program; Massmart; South African Commercial, Catering, and Allied Workers Union (SACCAWU) South African Commercial, Catering, and Allied Workers Union (SACCAWU), 17, 68–69, 71, 77–82, 82n1 South African Federation of Trade Unions (SAFTU), 26n3, 84n21 South Korea, 3, 39, 66–67 Spar, 70, 195, 250 Streeck, Wolfgang, 58n3 strikes: in Argentina, 119–120, 124–129, 141; in Chile, 90, 96, 100–102; of migrant laborers, 223–224, 236–237; right to strike, 31, 90, 245; in United States, 6; wildcat/illegal, 32, 100– 102. See also labor law; unions Subbiah, Ramesh, 185–186 subcontracting and outsourcing: discipline and sanctions, 72–74; divisions between permanent and contract workers, 13, 133, 143; exclusion from profit-sharing, 53; interns, 154; in IT sector, 156–158; labor brokers and temp agencies, 13, 18, 39, 69, 72– 82, 144, 222–223, 243, 246; as legal fiction, 46–48, 132, 172; and migrant workers, 230, 250; regulations on, 81; and TNCs, 11, 250; union organizing, 133, 223, 237, 246; among warehouse workers, 99, 107, 250 Swaziland, 25n2, 83n5

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Tanzania, 25n2, 83n5 taxes, 7, 15, 31, 36, 47, 56, 59n13, 89, 94 Tazreen tragedy, 226 TechnoServe, 20, 182, 189–194, 205 Temer, Michel, 15 Teresina, Brazil, 59n15 Tesco, 66–67 Thai Frozen Foods Association, 235 Thailand: economy, 223; environment, 228–230; labor law, 223–224; police, 235–236; seafood processing plants, 229; shrimp industry, 8, 19, 21–22, 222–238, 243; supply-chain relations in, 4, 243 Themba Enterprise Development, 190 Toreo, Mexico, 155 trade liberalization: in Brazil, 39; and Chinese goods, 7; free trade agreements, 1, 7; NAFTA, 8, 38; and Walmart growth, 8. See also neoliberalism training: at Cambridge Food, 75; on CAMINA internal network, 161– 164, 168–169, 173, 178n33; for farmers, 20, 191; food safety, 191; in Germany, 66–67; for IT workers, 159–164, 170–172, 178n33; during off hours, 174; orientation, 10; as reward, 10; Sector Education and Training Authorities (SETAs) [South Africa], 187 transnational corporations (TNCs): global framework agreements, 60n16, 82; host state subsidies of, 2; human resources, 34–35, 49; and local regulatory frameworks, 4, 23–25, 37, 43– 44, 66–68, 144, 243–246, 250; and procurement modernization, 202; reliance on logistics, 14, 66, 105–108, 222–223; scholarship on, 23–24, 34– 35, 58n7; strategic localization, 200. See also labor law; Walmart Tyson, 226 Uganda, 25n2, 83n5 UGT (General Union of Workers, União

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UGT (continued) Geral dos Trabalhadores) [Brazil], 29, 53–54, 58n2 unemployment, 15, 36, 119, 125–126, 144, 194 UNI Global, 54, 64, 81–82, 82n1 Union Force (Força Sindical). See Força Sindical (Brazil) Union Network International (UNI). See UNI Global unions: access to store floors, 29–30, 54, 95–96, 112–113, 121, 126–127; in Argentina (see Argentina); autonomous, 12, 16, 67, 80, 88, 102–104, 158, 244–245, 247 (see also Chile); in Brazil (see Brazil); business unions, 14, 16, 119–121, 142–143, 145n1, 243; at Carrefour, 67; challenges to Walmart, 14, 23; in Chile (see Chile); closed shops, 90, 103; collective bargaining (see collective bargaining); communications, 106, 133–135, 141–143, 146n10, 146n15; company unions, 102–103, 114n14, 145n1, 158; corruption in, 16–17, 88, 105, 130; democracy, 17, 88–89, 99–115, 126– 130; density, 13, 46–47, 90; dues, 32, 46, 96; enterprise-level, 16; federations, 16–17, 25n3, 84n21, 88 (see also Congress of South African Trade Unions [COSATU]; South African Commercial, Catering, and Allied Workers Union [SACCAWU]); formal recognition of, 5, 15–18, 23, 32, 69, 87–88, 96, 120–121; in Germany, 13, 66–67; global campaigns, 5, 22, 50, 64, 81–82, 147n22, 175, 222– 237, 246 (see also Africa Massmart/ Walmart Shop Steward Alliance; International Union League for Brand Responsibility; Organization United for Respect at Walmart [OUR Walmart]); grievances, 94–95; leadership, 31, 102, 126–131, 141–142; mapping production, 106–107; meetings, 91, 95–96, 106, 108–109, 112– 113, 126–127; in Mexico (see Mexico); militancy, 17, 88–89, 103–114,

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118–119, 129–135, 138, 244–245; and neoliberalism, 13–14, 89–90; offices, 108, 141; political education among, 78–79, 102, 106–108; public-sector, 119; rallies and assemblies, 91, 106, 132, 141; right to strike (see labor law); shop stewards, 18, 69, 78, 83n7 (see also Africa Massmart/Walmart Shop Steward Alliance); social unionism, 32, 119; solidarity among, 51; in South Africa (see South Africa); state repression of, 31, 36, 89–90, 118–119, 133, 138–139, 231; strategic capacity, 88–89, 104–108. See also collective bargaining; contracts; labor law; National Walmart Union Committee; strikes; individual unions United Food and Commercial Workers (UFCW), 6, 64, 91, 236–237 United Kingdom, 9, 247 United Nations, 224 United States: anti-union practices in, 6–8, 87, 94–95; business unions in, 145; Environmental Protection Agency, 210; Food and Drug Administration, 229; GDP, 108; labor law, 6–7, 49, 87, 233, 244–245; labor movement, 87, 91, 110, 236–237; logistics industry, 2, 222–223; neoliberalism in, 6–8, 14, 66; political power of Walmart in, 2; retail and supermarket sector, 98; shrimp consumption, 21, 224–225, 227; strikes, 6; wages in, 2, 67, 87, 98; Walmart culture in, 160, 163, 173; Walmart’s business model in, 33, 45–50, 56, 87; Walmart’s growth in, 6–8, 38, 93, 99, 242; warehouse workers in, 108; working conditions, 15, 49, 67, 87 U.S. Agency for International Development (USAID), 20–21, 203–207, 215. See also nongovernmental organizations (NGOs) Vargas, Getúlio, 31, 118–119 Vexogenix Packhouse, 190, 192 Vietnam, 227

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wages: in Brazil, 44–45, 54–55, 59n15; at Carrefour, 67; in Chile, 98, 100– 102; in collective bargaining, 49, 54– 55, 57; at department stores, 98; for farmworkers, 181, 184, 187; flexibilization of, 36; indexation clauses, 39; for IT workers, 159; for migrant laborers, 223, 229, 233; minimum wage, 36, 52, 54, 58n6, 59n15, 243; in South Africa, 74–75, 181; for union delegates, 142–143, 147n27; “Walmart effect,” 2, 45, 96, 98, 243; for warehouse workers, 222–223; worker victories, 4, 100–102, 107– 108, 113 wage theft, 18, 75–77, 100, 131, 223 Walmart: acquisition of local companies as entry strategy, 19–21, 40–41, 64–65, 68, 93, 102–104, 181, 195, 243–244; advertising, 94; anti-union practices, 2, 14, 16–17, 25n2, 35, 47, 95–96, 107–108, 122–129, 132–135, 147n24, 158, 176n11, 231, 243–245 (see also labor control; labor law; unions); in Argentina (see Argentina); branded subsidiaries, 15, 40 (see also individual brand names); in Brazil (see Brazil); in Canada (see Canada); in Chile (see Chile); in China (see China); corporate culture (see Walmart culture; Walmart management); corporate social responsibility, 215–217, 224–225, 230–233, 238; discriminatory practices, 12–13, 25, 33, 48, 74, 94, 96–98, 109–110, 127– 128, 135, 140, 246, 248; “everyday low prices,” 2, 18, 45, 50, 87, 132, 225–226, 243; expansion in Africa, 8, 243; expansion in Asia, 39, 41–42; expansion in Europe, 8, 39; expansion in Latin America, 8, 39, 41–42, 87, 121, 176n6, 203–205, 213, 243; failed market entries, 3–4, 13, 39, 66– 67; fraud allegations, 42; in Germany (see Germany); global headquarters (see Bentonville, Arkansas headquarters); in Hong Kong (see Hong Kong); human resources, 34–35, 51–54, 122,

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145n6, 158–159, 172, 176n12; human rights abuses, 95, 125, 132, 144, 175, 222–238, 250 (see also human trafficking); ideology (see Walmart culture); in India (see India); in Indonesia (see Indonesia); in Japan (see Japan); lawsuits against, 12, 48, 233; in Mexico (see Mexico); in Nicaragua (see Nicaragua); origin story, 2, 6–8, 38, 45 (see also Walmart culture); recognition of unions, 5, 15–18, 23, 69, 87–88, 96, 120–121; rural/ urban geographic strategy, 40, 201, 204, 242; sales numbers, 7–8, 42–43, 66, 93, 145n3, 154; Sam’s Club, 230, 232, 237; size of workforce, 87, 154; in South Africa (see South Africa); in South Korea (see South Korea); state subsidies of, 2, 243; in sub-Saharan Africa, 64–69; Super Walmart, 92; in Thailand (see Thailand; Walmart suppliers); “union substitution” practices, 35, 46, 158–159, 172; in United Kingdom (see United Kingdom); in United States, 87, 98, 108, 163, 242; work with NGOs (see nongovernmental organizations [NGOs]); as world’s largest retailer, 1, 9, 216. See also wages; Walmart culture; Walmart Foundation; Walmart management; Walmart suppliers; Walmart workers; Walton family Walmart culture: 100 in Culture program, 161, 173; ceremonies and rituals, 10, 33, 122, 151, 162–163, 173, 246; chanting, 33, 94; cheers, 2, 8, 130, 132, 143, 146n11, 163, 166– 167, 178n25, 246, 248; and Christianity, 2, 45; commitment programs, 10; as company identity, 8, 110–111; corporate strategies for constructing, 11, 15–16, 160–164, 176n13, 178n33, 246–247; dancing, 48, 132, 163, 246; discipline and sanctions (see labor control); Employee of the Month programs, 94, 162–163, 246; and English language, 130, 132–133, 146n11; and “family,” 2, 8, 11, 127–128, 134,

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Walmart culture (continued) 243; greetings, 2, 8, 177, 246; “group dynamics” practices, 33; handbook, 110, 115n19, 161; ideology, 2, 45, 92, 110–112, 134–135, 160, 168, 177n19, 243; individualism, 2, 92, 167, 174, 243; management culture (see Walmart management); and neurolinguistic programming (NLP), 164; open-door policy, 8, 13, 87, 94, 122, 130–132, 134, 146n12, 147n19, 164– 167, 246; Quality of Life program, 161, 173; resistance to, 4–5, 10–11, 23, 33, 109–114, 127–128, 164–167, 246–249; scholarship on, 110; singing, 48, 122, 143, 178n25, 246, 248; smiling, 8, 133, 161, 246; variation across countries, 4–5, 23, 111, 166; Walton, Sam, 6, 92, 134, 158, 160, 163, 176n11, 246; and work environment survey, 163–167; and workplace culture in the Global South, 10, 109– 110, 153 Walmart de México y Centroamérica. See Mexico Walmart Foundation, 163 Walmart management: 100 Women in Leadership program, 41; “confl ictual cooperation,” 29–30, 58n3; corruption in, 41–42; intimidation by, 2, 132–133, 137–140, 168–170, 178n31, 231; layoffs and dismissals, 134; management culture, 3, 134, 150–152, 160–164, 177n15, 177n18, 177n19; and profit-sharing programs, 52; resistance to Walmart culture, 177n25; work rules, 30. See also training Walmart suppliers: in Chile, 91; delayed payments to, 208–209, 213–214; in Mexico, 154; in Nicaragua (see Nicaragua); and nongovernmental organizations (NGOs), 199–217; in South Africa (see South Africa); Standards for Suppliers, 225–226, 236–237; in Thailand (see Thailand); valuechain fi nancing, 187. See also Best Aquaculture Practices (BAP); Direct

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Farmer Program; Ezemvelo; Walmart suppliers Walmart Today magazine, 151, 164 Walmart workers: aesthetic standards, 12, 94, 96–98, 109–110, 127–128, 135, 140, 246, 248 (see also Chile; labor law); in Brazil (see Brazil); in Canada, 14; in Chile (see Chile); Córdoba, Gustavo, 135, 145; Cristian, 100; demographics of, 13, 71; Falcón, Martin (Blacki), 127, 145; and gender, 13, 25, 33, 74, 96–98, 248; grievances, 94–95, 112, 132; identities and subjectivities, 5, 10–11, 129– 135, 246–249; in information technology (IT), 14, 25n1, 150–178; job titles and nomenclature, 11–12, 54, 94, 99, 110–112, 127, 132–133, 167, 176n12, 243, 246, 248; Laura, 97– 98; Mauricio, 96–98, 109–110; in Mexico (see Mexico); promotions, 75, 157, 175; psychological abuse of, 132–133, 168–170, 178n31, 231 (see also labor control); and race, 13, 25, 33, 248; resistance to Walmart culture, 10–11, 16–17, 23, 33, 109–114, 127–128, 164–167, 174–175, 246– 249; “Respect at Work” campaign, 97–98, 109–110; Ricardo, 112; right to union representation inside workplace, 29–30, 54, 95–96, 112–113, 121, 126–127; Rodrigo, 100–101, 106; Sandra, 95, 97–98, 109–110; in South Africa (see South Africa); surveillance and monitoring (see labor control); turnover among, 11, 33, 36, 159, 243; uniforms, 97, 113, 132; wages (see wages); warehouse workers (see Logística, Transporte, y Servicios [LTS]; warehouse workers). See also hours; labor control; unions Walton, Sam. See Walmart culture Walton family, 7, 38 warehouse workers, 14, 16, 88–89, 98, 105–108, 113, 222–223. See also Logística, Transporte, y Servicios (LTS) [Chile]

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Warehouse Workers United, 222–223 Warne, Kennedy, 228 Winrock International, 205 Woolco, 38–39, 177n25 Woolworths, 6–7, 70, 250 Worker Rights Consortium (WRC), 231 Workers’ Party (PT) [Brazil], 15, 23, 32, 41, 55, 58n2 working conditions: in collective bargaining, 49, 129–131; in IT sector, 155–157, 172; of migrant laborers, 21–22, 222–238; for remote workers,

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156–157, 172; and symbolic control, 11–12, 153, 164–165; in Thailand shrimp industry, 19, 21–22, 222– 238; in United States, 49; work environment survey, 163–167, 177n15, 178n32; worker victories, 4, 100–102, 107–108, 113. See also collective bargaining; health and safety; labor control; wages; Walmart workers World Bank, 21, 150, 227–228, 250 Zambia, 25n2, 69, 83n5

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