— enero 18, 2021 a las 12:14 pm

Special: The darkside of Agro-Exports in Peru

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Grapes, mandarins, onions, avocados, asparagus, artichokes, paprika, pecans and tomatoes are some of the agricultural export products of the Ica region, which represents 17% of the country’s exports. According to the CIEN-ADEX Global Business and Economy Research Center, the supply of these products reached 76 international markets, mainly the US (US $ 468.9M), the Netherlands (US $ 168.0M), the United Kingdom, Spain, Hong Kong, China, Canada, Japan, and others. Behind the dynamism of this economic sector hides the working conditions of agricultural workers considered deplorable in 2014 by the International Commission of Jurists, which states in its report: “They constitute an example of precarious work and not in accordance with international standards regarding worker rights and other social rights. Many of these situations can constitute serious human rights violations.”

Written by Maga Zevallos and Marilyn Céspedes
In collaboration with Almendra Zevallos
Photos: Javier Dueñas / Hyperactiva Comunicaciones

During the last twenty years we have witnessed the rise of the agro-export model in Peru. This success has been consolidated, to a great extent, by the impulse given by José Chlimper Ackerman, current member of the board of the Central Reserve Bank (CRB), when he served as Minister of Agriculture in the government of Alberto Fujimori in 2000, who came from being a shareholder of one of the largest agro-export companies in Ica, Agrokasa S.A. Thus, Law No. 27360 was born, which declared investment and development in the agrarian sector is of priority interest for a period of ten years. This law gave tax privileges to agro-export companies, such as the reduction of 50% of income tax, the payment of 4% of social security compared to the 9% that the insured contribute to Essalud (the Peruvian public health care system), and anticipated depreciation of assets among others.

This same legal framework has allowed companies to use temporary contracts in a perverse way and guaranteed that workers cannot form unions for 20 years. That is to say, salary improvements have depended on the will of the business union, without the worker being able to have the capacity for collective bargaining that would allow them to protest and demand better working conditions.

A regime that originated as temporary lasted for two decades, the government of Alejandro Toledo extended the validity of the law until 2021, and former president Martín Vizcarra extended it until December 2031. For economist Pedro Francke, a law formed on a temporary basis that has been extended for more than two decades, demonstrates a lobby orchestrated by agro-export companies that seek to place their interests above the rights of their own workers.

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“There is a neoliberal ideology that does not care about labor rights and believes that all progress goes through giving more benefits and advantages to large companies. It is essential to change the logic with which we view the economy and agricultural development – that view has reached its limit,” says Francke.

The government of Francisco Sagasti has three deaths in the labor conflict. New law does not satisfy agricultural workers

That limit came twenty years later, on November 30, for the first time the agrarian workers of Ica and La Libertad raised their voice of protest and put in check the Congress and the transitory government of Francisco Sagasti until they broke with the privileges of the agro-exporters and job insecurity. Four days later (December 4), after the death of worker 19 year old Jorge Yener Muñoz, the law was repealed.

STRONG REGION

The southern region is one of the most prosperous cities in the country. It has four sectors that drive its economy: agriculture, mining, fisheries, and tourism. This region also has a port with modern infrastructure, which has allowed it to boost its national and regional economic growth. According to the report «Evolution of Monetary Poverty 2009-2016, prepared by the National Institute of Statistics and Informatics (NISI), less than 4% of the population is poor and the economically active population (EAP) represents 97.2% and the unemployed EAP 2.8%.

The industrialization process in Ica has been led mainly by agriculture. “In 1990 we did not exceed 100 million in exports, it grew to 400 million in a decade and from 2000 to 2019 it has multiplied 17 times. What has the most export volume is grapes. We have asparagus, avocado, citrus fruits to a lesser extent, and blueberries are entering more consistently. We have onions and to a lesser extent pecans and mango. The [exports to] countries where our products arrive are being expanded more and more. The primary block is the US, the European community, we are going to the east, and the Chinese market has moved to the market of India, Korea, Japan, Thailand, Indonesia; to many markets of 100 to 200 million inhabitants. We are reaching new markets every year,” says Jorge Vargas Corbacho, president of the Water and Agriculture Committee of the Ica Chamber of Commerce.

Vargas affirms that in the Ica region there are approximately 100,000 workers in agro-industry and agriculture. However, he acknowledges that there are no figures in the sector on the number of workers who are working informally.

For the business community in this sector, the labor conflict that arose a month ago, which led to the repeal of Law No. 27360, and the approval of a new law, will have a setback in the growth indicators of the region. «Many companies are not going to support it, many companies in order to sustain themselves in the market are going to have to make a significant reduction in labor, that is, it will generate a lot of unemployment, and the other thing is that they will begin to mechanize the system with the purchase of machinery and the use of labor will cease, and a social problem will be generated,” says Eduardo Ojeda, president of the Ica Chamber of Commerce.

Although Ica has the lowest unemployment rate, 2.8%, in 2017 the informal employment rate was 62.2%. The southern region is one of the most prosperous cities in the country

Ica has one of the highest per capita income in the country and its poverty index is a single figure. In 2017 the informal employment rate was 62.2%, and working conditions in the agricultural sector are in conditions very close to deplorable, admits Vargas Corvacho. “We have recently and painfully discovered that in Ica, there is a porosity between the formal and the irregular sectors of employers who do not comply with rules – and there are fair claims from workers who are in conditions very close to deplorable. Those who have generated this problem are the irregular [employers] who may be in the sector in formal quotation marks but in the sector that is not formal,” says the businessman.

For Ojeda, part of the problem is due to the fact that we have an absent State. “Most of the complaints or testimonies of the workers were true, but there has not been a State that has been able to listen to them and a State that has been able to sanction these companies in their moment.”

CHEAP LABOR AND WITHOUT COLLECTIVE RIGHTS

 In the Ica region there are only three unions, which is Agrokasa, Chapi and Monsanto Peru – three unions compared to how many companies? Here there are more than 250 companies, large and small. The people are tired of so much humiliation, of so much mistreatment, the people woke up tired of this injustice,” declares indignant Paulina Velásquez, general secretary of the National Federation of Agroindustrial and related Workers (Fentagro).

Javier Mujica, labor lawyer and director of Peru Equidad points out that 80 thousand people work in the agro-industry in Ica and that the workers only managed to form three unions because the abuse of temporary hiring helped the companies to prevent unions from forming. “These special regimes have not served to promote decent work. They have only served to make working conditions more precarious, because they are tied to a labor regime that condemns them to receive miserable wages, that condemns them to be exploited through services and other forms of outsourcing. This has to change!” he maintains.

With the so-called Chlimper law, the labor precariousness of the agro-export sector included formal and informal companies

Mujica remarks that those who have benefited the most from the agrarian promotion law have been large companies with more than one hundred workers. In this sense, [he] proposes to look towards salaries, where beyond establishing a fixed amount, they bet on a minimum vital remuneration.

“I don’t think that an improvement in workers’ wages is going to take these companies out of the market. You can make a differentiated treatment and establish a minimum vital remuneration in agriculture where an additional percentage is established for companies with more than one hundred workers, which are the ones that use this regime the most. This is not a novelty because the minimum vital remuneration exists for workers in the mining sector and in civil construction.” stated the lawyer.

 Likewise, he pointed out that the new agrarian regime law should contemplate “equal treatment for all agricultural workers in accordance with the common regime; reinforced protection in some aspects that are needed in labor matters due to the peculiarity of the work carried out in the field; social protection measures regarding housing, food, health and hygiene care, transportation; right to training of workers; in addition to the prohibition of services and the promotion of collective rights and unionization”.

Large agro-industrial companies, they have not only benefited from a law that ensured twenty years of cheap labor. Various international treaties also benefited the sector

The export boom is not only due to the agrarian labor law, Mujica remarks, “Peruvian exports began to enter with great force in other markets where tariffs were reduced or eliminated, as is the case of the export program of the Andean countries (ABDEA), which was implemented by the US since the early 2000s. Peru ratified [trade agreements] with the US, Canada, the European Union and with about 20 countries. These trade agreements have promoted exports much more than any regime labor with fewer rights.” affirms the labor lawyer.

For his part, Fernando Eguren insists that with this crisis, attention should not only be paid to the labor issue, but the economic model must be reviewed and a more equitable policy should be promoted in which the number of beneficiaries is greater and not just focusing on entrepreneurship. Likewise, he pointed out the need to have the presence of trade union organizations that allow collective bargaining, “There must be an institutional framework that allows a relationship between capital and work in which there is a capacity for negotiation between both parties. If there is no one to negotiate with, entrepreneurs can do whatever they want. When this does not happen, the State has to intervene to balance the equilibrium between capital and labor so that workers gain power and relations are more symmetrical.” he says.

LABOR PRECARITY

Despite the agro-export “boom” and the growth of this sector, various studies show that there is an unequal relationship between the income of agro-industry companies and the wages received by workers. Until the new law was approved, the basic salary of agro-industry workers amounted to S/.39.19 [$10.82 USD] per day.

The increase in the basic salary has been one of the central demands of the workers, since they affirm that this amount includes the benefits of vacation pay, CTS (compensation for time of service) and the July and December bonuses within the same payroll when they should be delivered separately. Added to this is the fact that workers do not have complementary workers compensation insurance, despite the fact that they may develop occupational diseases due to the physical activities they carry out in the field and the constant use of pesticides and toxic substances to which they are exposed.

Photo: Andina

While the workers’ claims seek tangible changes in the legislation, they also require more humane treatment by engineers and foremen in their workplaces. In this regard, the general secretary of the Agrokasa company’s Workers’ Union, Rony Guerrero, points out that, “Attention must also be paid to the work parameters that continue to promote exploitation and force [the workers] to go through intense working hours. When the foreman assigns tasks, the worker knows that as soon as he is finished he can go home, but that does not happen because they are forced to stay more hours until they complete their shift and on top of that they are assigned more tasks, despite the fact that they have performed a great deal of physical wear. That is why we also ask for a fair treatment from the engineers and foremen towards us. They do not realize that the staff is of vital importance for the economic growth of the company,” says Guerrero.

The workers have also made public the harassment and violence with which the foremen operate

Paulina Velásquez adds that it is the foremen who watch, shout, and stop the workforce at any time. They are the ones who fire, and those who give inhuman treatment to the workers in the field. For this they request that the employers guarantee that the workers do not continue to be mistreated by their foremen and they should even train them to stop harassing and accosting [the workers].

“If you finish the task early, the next day the foreman gives you more work and so on. We leave our homes at four in the morning – at six we are already working. There are those who work part-time until two in the afternoon, others all day until six in the afternoon. It is hard to harvest the asparagus, weed, grab the shovel. And the plants are big, imagine that you are shoveling there until twelve or one o’clock in the day, the steam burns you, you choke, you suffocate; that is why we ask to leave the mountain at eleven or twelve o’clock in the day.” says Paulina.

She also states that it is not only about improving working conditions but also about addressing the entire structural problem generated by the agro-industry, «Today they say that Ica is the boom, but how many sick do we have? How many workers who harvest asparagus have bad spines? How many who work in the grapes have bad eyesight? How many protectors or glasses do they give us? Because sulfur does not ruin sight, and that is not counted. That is the problem of what happens in the Ica Valley.”

One of the most visible voices in all this conflict is that of the leader Susana Quintanilla, president of the Committee for the Fight of the Agrarian Sector of Ica, who reported before the Economic Commission of Congress harassment and called on the Ica leaders for making job insecurity visible.

“We do not have studies, but we are human beings and we are not paid for our profession, but only for our workforce. Our net (weekly) wage reaches 162 soles [$45 USD]. Tell me, what human being lives with that? Ica is not a poor city: the cost [of living] is high and that amount is not enough for us to live. When you are going to thin a bunch to a small parcel, they pay us 0.10 cents, and they ask us to make that bunch beautiful so that it remains a top quality product.» Susana declares and adds, «We ask that they give us a fair treatment of being human, don’t yell at us, threatening us at work and yelling at us when they want to. I cannot name companies, but it has happened to all of us. If they are going to say why they generalize when they say that the payment is seven hundred some soles, are they not oppressing us by not paying us our rights»?

LESS RIGHTS, ZERO OBLIGATIONS OF EMPLOYERS

Mujica argues that legislation in the most competitive countries in the export of food in the world gives equal treatment to all workers. That is, they have the right to receive the same benefits. In Chile housing is provided to rural workers and their families, while Argentina establishes the use of decent transport, its legislation also establishes the obligation of employers not only to inform workers about the risks to their health of handling pesticides or other toxic substances, but to provide them with the protection, tools and clothing necessary to protect their health.

The laws of other countries establish obligations to protect farm workers

“There is none of that in Peruvian legislation. The laws of these countries establish the obligation to provide education to the children of rural workers, provide nurseries so that the mothers of rural workers can have their children protected while they are working every day in the sun for 8, 10 and 12 hours. It also establishes the obligation to provide food to field workers when they do not have the opportunity to get it in the vicinity of where they carry out their tasks (…). It would take a long time to relate everything that these norms established to reinforce the protection of farm workers. We follow the reverse path, a special and differential regime, fewer rights and zero obligations for employers.” says the lawyer.

AGRO-EXPORTERS HAVE STOPPED PAYING AROUND 250 MILLION A YEAR TO ESSALUD

Francke points out that: “what EsSalud has lost with the contributions that have ceased to be received by agro-industry companies have reached 250 million soles [$69M USD] per year since the law came into force in 2000 and 150 million [$41M USD] since the approved increase in the contribution to 6% in 2019. That difference is paid by all the insured.”

According to Francke’s annual calculation, for eighteen years the agro-export companies have stopped contributing to EsSalud approximately four thousand five hundred million soles [$1.2B USD], considered 4%. And in the last 23 months – with the contribution increase to 6% – they stopped contributing approximately 287 million soles [$79M USD] to social security. «Those 150 million soles per year that the agro-exporter millionaires keep in their pockets are 150 million soles less in medicines, operations, equipment and personnel for the health care of workers and their families.» points out Francke.

From the same EsSalud, represented by its executive president, Fiorella Molinelli, it was learned of the figures that the agricultural sector demanded in health services. “As of December 2019, agricultural employers contributed just over 220 million soles [$60M USD] to Essalud. However, the use of health services is equivalent to more than 578 million soles [$151M USD] in the same period.” Molinelli reported.

She adds that for every 100 soles [$28 USD] of contribution, workers in the agricultural sector consume 262 soles [$72 USD]. «This difference in the contribution must be covered by the other employers, impairing  the attention of the insured from other productive sectors.»

Molinelli confirms that there is a distortion of the purpose of the law in terms of the principle of solidarity, since there are workers with salaries of 5,000 soles [$1380 USD] up to 100,000 soles [$28k USD] who benefit from this regimen. Thus, according to the EsSalud report, there are 2,886 holders who earn more than 5,000 soles, of that total, 118 earn 25,000 soles and three earn 100,000 soles.

Eduardo Ojeda responds to these questions that most of the workers are not permanent in the fields, that in the best of cases they work for up to two consecutive months. “The men pay EsSalud for two months and they are not treated, so it does not harm EsSalud at all because the employer pays 6% for a service that their workers do not receive. Even if they pay 9%, the service is not going to improve, because the EsSalud service is terrible. Anyone comes to EsSalud and there is no attention – they give you an appointment within six months.”

LABOR CONTROL

Photo: Andina

An issue that has been handled with great secrecy from the State is the labor inspection. A common complaint for many years is that agro-industrial companies do not allow the inspectors of the National Superintendency of Labor Inspection (Sunafil) to enter the farms so that they can carry out their labor inspection work; in the middle of social conflict, the Regional Governor of Ica, Javier Gallegos, reiterated it.

The report of the International Commission of Jurists indicates that at the regional level there would be more than 3,000 thousand companies, and that there are very few inspectors at the national level. In the case of Ica, as of 2014, there was only one inspector for the entire region and four to five auxiliaries. “There are very few inspectors at the national level and they are overloaded with work. Each one has about 70 cases in the Ica Region,” the report highlights.

On the business side, the main problem is that there is an absent State. “Most of the complaints or testimonies of the workers were true, but there has not been a State that has been able to listen to them nor a State that has been able to sanction these companies at the time. And so that is part of what we have lived, gone through and we have stopped perceiving.” says Ojeda.

On the other hand, this year Sunafil recently published on its website the registry of companies with labor sanctions in the country. Between the years 2017, 2018 and 2019 the ten companies in the agro-industrial sector in Ica with the highest labor sanctions add up to a total of 1,938,000 soles [$535M USD].

The Complejo Agroindustrial Beta S.A. leads the list with a fine of 840,000 soles [$231k USD] – a sanction filed in 2019 for failing to comply with the regulations on safety and health at work. In second place is the company Agrícola Chapi SAC, for 341,477 soles [$94278 USD]. The third place is held by the company Agro Victoria SAC with two sanctions totaling 230,137 soles [$63,538 USD]. It is followed by the company Monsanto Peru SA. with a sanction of 207,375 soles [$57,253 USD] and Agrícola Yaurilla SA, which is in liquidation, that between the years 2017 and 2018 accumulated seven fines with a total amount of 81,444 soles [$22486 USD].

Fundo San Luis SA. has a 2016 sanction for 64,487 soles [$17804 USD], while EMAPAVIGS has two sanctions (2019) for an amount of 48,626 soles [$13425 USD]. The company, Coexa (Cía Exp. Y Negocios Grales SA, has a fine (2017) for 28,500 soles [$7868 USD] and is followed by Agroindustria Casablanca SAC with a penalty (2019) of 27,720 soles [$7653 USD].

FALL OF THE “CHLIMPER” LAW

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On November 30, the debacle of Law No. 27360, also known as the “Chlimper” law, began. In four weeks the Congress of the Republic drew up a proposal that was approved on December 30 amid questions from workers and civil society. The new law did not calm the indignation of the workers, who have continued with their demands not to continue in precarious conditions. The conflict unleashed on November 30 of last year leaves a toll of three deaths, two seriously injured and fifty injured; after the approval of the new law Reynaldo Reyes (28) and a 16-year-old teenager died.

Thus, the transitional government of Sagasti has, under its management, three deaths in the agrarian conflict, where there was not only the intervention of the National Police, but also military personnel of the Peruvian Army. The worker Muñoz, who was assassinated on December 3, was killed by a bullet from a weapon that belongs to the PNP noncommissioned officer, José Ángel Hoyos. The National Police has already asked the Public Ministry for the preliminary arrest of the NCO as the alleged perpetrator of the crime against life, body and health.

“It is a law that was born with very little legitimacy and solves a short-term problem. What has happened now is an emergency exit, but it has to be aimed at a true agricultural worker law and it must be done by looking at other laws and listening to the workers. We have seen the spectacle in Congress where what has predominated have been the interests of agro-export companies backed by the government, which has not had a clear position on the matter.” says economist Eduardo Zegarra.

The law contemplates changes in areas related to basic remuneration, contracting of services, working conditions, tax benefits for companies, and labor inspection.

With this new law the basic remuneration (BR) is equivalent to the sum of the minimum vital remuneration (MVR) corresponding to 930 soles [$257 USD] plus an extraordinary Agricultural Worker Bonus that is equivalent to 30% of the MVR amounting to 279 soles [$77 USD], which add up to a total of 1,200 soles [$331 USD], plus the bonuses that are equivalent to 16.66% of the BR and the CTS that is equivalent to 9.72% of the BR. In addition, workers will be able to access 5% of the company’s profits for two years (from 2021 to 2023). In the next two years it should rise to 7.5%, until it reaches a 10% increase in 2027.

Basically, the right to daily remuneration is generated as long as more than four hours a day are worked on average and will not exceed eight hours a day or forty-eight hours a week. It can be established by law, agreement or unilateral decision of the employer for a day less than the ordinary maximums, without affecting the daily remuneration.

«The issue of services has been poorly handled by some companies that take these services and do not pay attention to the treatment they give their workers», Eduardo Ojeda

The approved law prohibits resorting to a mechanism of labor intermediation and outsourcing of services; says staff should be hired directly. And it establishes that if the hiring of an agricultural worker for a short term that within a period of one year exceeds two months, it gives him the right to be hired with preference each time the employer requires to hire workers in the same growing area. Likewise, companies that have different crops if they hire a worker for at least two seasons in the same year, he should have preference to be hired in the following seasons.

With respect to working conditions and the exercise of collective rights, the law maintains that dignified and safe conditions will be guaranteed in favor of workers, such as transportation to work centers, food, emergency care, adequate hygienic services and designated places of his choice. In the case of female workers, it is pointed out that the employer is prohibited from dismissing workers in a state of pregnancy or lactation. The employer must provide facilities for lactating babies in the workplace, as well as guarantee the right to pre and post natal rest for mothers.

On the other hand, the standard also promotes the collective right to collective bargaining. It is considered a very serious offense for employers to obstruct, coerce or impede the free exercise of workers’ rights to organize, strike and bargain collectively.

In addition, it establishes that the Executive Power must adopt the pertinent measures to institutionally strengthen SUNAFIL so that it can efficiently and effectively carry out its oversight work with respect to companies in the agricultural, agro-industrial and agro-export sectors. For this, the collaboration of workers with the institution’s inspectors is authorized.

Finally, the new law maintains the tax benefits until 2028, while the social security payment will continue at 6% and from 2025 they will only pay 9%, a general amount that even small companies pay.

Updated January 5, 2021

This special is part of the interactive documentary Wells in the Desert that we will premiere in March.

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