Developing workers control in Venezuela

John Cleary was an active member of the Builders Labourers Federation in  the 1970s before becoming an electrician, delegate and member of the Electrical Trades Union. He was an ETU organiser for 12 years until 2001. Since then he has been active in solidarity with Venezuela and Colombia, including organising and participating in seven solidarity brigades to Venezuela. He presented a talk on workers’ control at the Latin America Solidarity Conference held October 8-9 in Melbourne. Direct Action’s Sam King spoke with him at the conference.

In your speech you described Venezuela as a “socialist country in transformation”. Can you tell us what you meant by that?

I think that the direction and the ideological positions taken by the leadership of the PSUV [United Socialist Party of Venezuela] are attempting to advance towards a socialist state. Venezuelans talk about “Socialism of the 21st century”, which is not clearly defined as yet, but they mean constructing a state that will serve the interests of the people before the interests of private capital. The role of private enterprise is clearly going to diminish. They see this as a transitional stage. I believe there will continue to be a small capitalist class or small businesses in the future, but for anything significant or strategic in the economy, they believe it needs to be under state ownership eventually.

Are you able to paint the level of state control of the economy now?

A lot of the economy is still run by private capital. It is still by far the largest employer. In fact, private sector employment has grown in comparison to the social missions and the cooperatives. This is essentially because the ruling class and small business owners have benefited hugely from the continuous growth in the economy. Money is being diverted from PDVSA, the oil company, into social missions and raising the standard of living of all Venezuelans, who spend that money in the Venezuelan economy. That is enriching a sector of the capitalist class. The contradictions are deepening.

Private enterprises still control a majority of the radio and telecommunications industry. Quite serious attempts are being made [to counter this]. There are many, many alternate radio and television stations, and they are having some effect. However, with the exception of RCTV, the media are still largely in the hands of the capitalist class.

In other key industries, we have seen a deliberate strategy. Every industry that is seen to be important for managing and controlling the economy is now in state hands. In telecommunications there is now a state alternative. Electricity is now totally in state hands; they have reversed the privatisation that occurred before Chavez. With [the large steel mill] Sidor being nationalised last year, iron ore extraction and steel production, all the bauxite extraction and production of aluminium are all in state hands.

The current battle is over food. Polar, the major private food distribution company, controls most of the beer market and more essential items such as food. There is a serious conflict between the government and the management of Polar right now. The government is introducing systems like Mercal [state-run food stores], which has 30,000 supermarkets across the country. These provide basics for people so they don’t depend on private networks. Friosa was a company that had a virtual monopoly on food distribution in the state of Bolivar, and the government has nationalised that. Key areas of the economy have been nationalised. Sometimes nationalisations are a decision of the state to ensure that food sovereignty can be developed.

They are encouraging locally grown food production with some success. The distribution of that food is not through the private sector. New streams of food are going through the state-owned market system. This creates serious conflicts with the large private companies such as Polar. They are accused of hoarding, particularly sugar and rice, and growing a particular type of rice that is not price controlled. That confrontation is sharp, and I think it is very likely that, unless Polar operates without price gouging and hoarding of food to raise prices, the government will take the next step and nationalise that company as well.

Cargil is a Canadian-based company that was nationalised a couple of years ago. Along with Monsanto, they control seed and transgenic products [internationally]. They were trying to introduce transgenic soy and other products that were banned. Cargil were a major distributor of rice and very basic goods like corn flour, and they were hoarding. Through creating scarcity, [they hoped to create] rebellion among the people. So the government used the law on sovereignty and food security — which is a [constitutional] law ensuring Venezuelans get an adequate and safe supply of food — to nationalise the company.


PDVAL food distribution centre

What is happening with the former assets of Cargil?

Mostly it was split up. PDVAL (the food subsidiary of PDVSA, the national oil company) was created with oil money. That is a new food distribution and marketing system that works alongside the Mercal system. PDVAL also puts funds directly into agricultural producer cooperatives that are attempting to fill the gap [in agricultural production]. [In the past] the wealthy could buy whatever they wanted in supermarkets. The poor didn’t have a chance. They were hungry.

Has there been much of an increase in local food production?

Yes, it has been quite significant. Food imported is currently around 62-63%. That doesn’t seem like a huge decrease from [the previous figure of] 75%, but you must take into consideration that the standard of living has gone up and people are eating more. People had to get by on one meal a day in the past; now they can eat two or three. So the demand for food has gone up rapidly, but even so they have been able to supply significantly more from their own resources.

In your speech you said the Venezuelan government currently supports an organisational model for cooperatives that is different from two previous models. Can you talk about that?

Invepal was the first company taken over by workers after a struggle. All the workers were sacked and there was closure of the paper plant, and they took it over. After a long struggle, the government provided funding to get the plant back in operation and took 51% ownership. Forty-nine percent belonged to the cooperative. The cooperative started to act in their own interest. The law on cooperatives says that somebody who works for a cooperative should become a member. At Invepal the cooperative was sacking people just before three months to keep the benefits to themselves. There is a tendency for cooperatives to look after their own interests.

Inveval, on the other hand, makes huge valves for the oil industry. There was a highly political leadership that was influenced by one of the Trotskyist organisations in Venezuela. They took the view right from the start that there was a danger in the cooperative movement that instead of having one capitalist you would get a cooperative of capitalists making similar decisions and ultimately acting in the interests of that enterprise or that group of workers and not for the welfare of all Venezuelans. So they took a decision right from the start that it should be 100% state owned, but 100% worker controlled. The workers would make all the decisions about how it ran, but the actual owner was the state, and if it made a profit, that would be for the state to redistribute.

Has the Inveval model now been adopted at all the cooperatives?

It has been adopted in principle, and virtually all the new takeovers and nationalisations are aiming at that. We visited Norco, a plant that makes high pressure-resistant pellets from bauxite that are used by PDVSA in oil drilling. That company was once part of PDVSA but had been sold off and then run down. The owners had extracted as much profit as they could and then said we can import this product from somewhere else cheaper. The workers have now taken it over and are restoring it. Like all the new occupations and new nationalisations, Norco will be 100% state owned, but 100% worker controlled.

In the heavy industries like Sidor and Alcasa — aluminium and steel — that’s where the discussion is at now. They have produced Plan Socialista Guayana, which clearly spells out that industry should remain in the hands of the state. The task now is to develop systems of workers’ control and systems of wealth distribution to surrounding communities. All that is outlined in the plan, and now they are working at developing what all that means. They are having serious discussions about previous models of workers’ control [such as] the soviets in Russia in 1917 immediately after the revolution as a model of running production and society. The works of [Italian Marxist Antonio] Gramsci [are discussed]. There is a lot of interest in the participatory democracy and budgeting that goes on in Porto Alegre in Brazil. So they are considering a whole number of models. A clear ideological decision has been taken to move to a position where workers can control their enterprises and get rid of the management — or the management will have to be involved as equal partners rather than dominating and making all the decisions like they do now in the state enterprises.

Is that the same discussion as the one about workers councils?

It is. That is the latest development. The discussion around workers control has been going on for a couple of years in stops and starts — for some years in the case of Inveval. Just what is meant and what the form of workers control will be has not been clarified. The workers council proposition has been drafted and put in front of the National Assembly. For a number of reasons, they haven’t passed that yet. That will give broad guidelines about what workers councils can do and what their powers and rights are.

The union movement has until now been opposed to workers councils. A number of unions thought the role of unions would be threatened by a new organisation of workers in the factory. Recently some clarification has come. The UNT [National Union of Workers] has adopted a position put forward by the Communist Party of Venezuela that the two organisations can and should exist side by side. The workers councils will be democratic, with decisions made by assemblies. They will make decisions about production issues like resources and investment in new plant and equipment.

Ultimately they see that as the way that production will be organised, replacing managers. It has been clarified there still will be a need for unions in those workplaces. The unions will still have to negotiate a collective contract with the management of those plants. They will still have to deal with issues such as dismissals or access to training. The traditional issues that unions need to fight about will still exist. There is no reason union activists cannot also be active in the workers council.

Are there any workers councils already in existence?

Yes. Inveval has for a long time operated as a workers council. The workers council is not simply the workers in the plant. It also involves the community around there. A large amount of the work at Inveval has been operating the missions. The education and health missions operate out of that factory, so it is a community resource.

In the Mercal system they have organised into 97 different workers councils that make decisions about the local areas of food distribution and the supply of the supermarket. It has been subdivided into areas. There is a workers council for each and now they have created a general council of the 97 councils. Mercal was set up with a state-appointed management and administration, so how much the workers council controls the process is still unknown.

You said workers at the Sidor steel factory will be crucial in influencing future developments. Why is that?

The victory at Sidor (in Guayana, in the state of Bolivar) caused a major lift in morale of the workers in the whole area. It was a struggle that started over wages and conditions. The Argentine-Italian conglomerate [Techint] that owned Sidor had driven wages down to around one-third of wages for similar industries in the same area. That is where the struggle started, but it developed into a struggle for nationalising the company. Initially Chavez refused to do that because of his sensitivities to the government’s relationship with Argentina. He extracted promises from the owners that they would service the Venezuelan market for steel before they exported any, and that they would negotiate a fair collective contract with the union. Neither of those things was done. In Venezuela there is a massive housing project going on and a need for steel. They were importing steel, while Sidor was exporting it.


"Make socialism fly". Caracas mural by
the Communicational Liberation Army

This is part of a more general discussion around the Plan Socialista Guayana. In that region they have heavy primary industries. They produce aluminium ingots that are exported to the world market. The major producers in Australia and Canada control the price for aluminium, yet Venezuela is importing aluminium products. The demand from workers in that area is to develop those secondary industries like extrusion and rolling and develop aluminium products and steel products for the local area. This is a very necessary next step towards sovereignty. The major profit is being made by overseas corporations selling products back to Venezuela.

In Sidor the struggle radicalised the workforce on the question of control. Initially it was just about state ownership rather than private rapacious ownership, but during the struggle many people started to ask: Once we’ve got control of the plant, how are we going to run it? Are we just going to leave it as a state enterprise controlled by a select management like most still are?

This was an opportunity because much of the management was going to leave along with the Argentine owners, and the company had a much smaller bureaucratic management than, for instance, [the aluminium smelting company] Venalum or other enterprises. It started becoming a concrete question about what co-management or workers control would mean. What was going to be the role of the workers beyond a just wage outcome and getting rid of the private owner? So those people are quite advanced in their thinking.

Are the workers running Sidor?

No, it is still in process. In that region Alcasa was the first company to set up a form of co-management. Alcasa made a profit in only one year in the last 20, and that was the year they ran co-management. They increased productivity; they increased efficiency when they took notice of what the workers were saying. It was a form of co-management where management made the key decisions about investment but they had to take notice of the workers, and the workers redesigned their workplaces. Unfortunately, the consciousness of the workers was not high enough on the issue, and they supported a change in union leaders who campaigned on the basis that the existing leadership was too close to management. They were talking to management about new systems of worker involvement. That was painted as being too close to management, and the new leadership took over and stopped the process, but it didn’t stop the discussion throughout the whole region.

The Sidor dispute re-energised the whole discussion about workers control and co-management and now discussion is happening across the CVG [Corporacion Venezolana de Guayana], which is the body that controls steel, aluminium and electricity — the key industries of that area. Now there have been workers elected to the management of the CVG. The boss of that is elected from the workplace. That was the first step.

But appointing one or two people to the top doesn’t change the structure and how they operate. That is the process that is deepening now through the development of Plan Socialista Guayana, and it involves all of those industries including places like Venalum that were regarded only two or three years ago as backward. The union there was described to me as right wing. There was no chance of raising workers control or co-management there. But it is happening there too. It is happening across all those heavy industries at the one time. They believe that the working tables will be finished by the end of this year. They are fleshing out the blueprint in the plan into an actual methodology of rights of workers and how you elect your workers council. That’s all being developed and argued right now. The implementation will follow over the next year.