The EBRD and its president, Jean Lemierre, is under fire for stepping up lending to Schwarz, the anti-union supermarket group that is expanding in eastern Europe.
The bank has replied to critics by claiming that it has helped achieve an improvement in workers’ conditions in Schwarz-owned shops in Poland.
A E100 million loan to finance expansion into Romania by Kaufland, a discount retailer owned by Schwarz, was approved by the EBRD board earlier this year – despite protests by the German service workers’ union Ver.di and the campaign group Bankwatch.
Vasile Gogescu, president of the retail trades union federation of Romania, told Emerging Markets that Kaufland Romania managers had begun a dialogue with unions – but the German parent company had refused to promise that union members’ jobs would be safeguarded. Schwarz’s anti-union stance meant that Romanian employees work in an “atmosphere of fear” and are scared to join unions, Gogescu said.
On March 8, international women’s day, Gogescu and other campaigners distributed flowers and visiting cards to Kaufland Romania’s workers – who are mostly women – and received an angry phone call from the country manager in response.
Andreas Hamann of Ver.di, which has long campaigned to unionise Schwarz’s Kaufland and Lidl chains in western Europe, told Emerging Markets: “There is no freedom of association for workers in Kaufland stores in Poland or Romania. There is no union representation and no cooperation with workers’ representatives.”
The finalization of the EBRD loan to Kaufland Romania was held up for two weeks in February, while the bank consulted with unions and NGOs. A monitoring procedure was agreed on, which Hamann welcomed.
The unions and EBRD are divided on Kaufland’s record in Poland, and on the results of 30 Polish National Labour Inspectorate inspections at its stores between June 2005 and December 2006.
Bankwatch says the inspections showed “extensive non-compliance with labour legislation”, and weak timekeeping procedures that meant employees being “cheated” out of overtime pay.
But EBRD spokesman Axel Reiserer said that, while there were still numerous breaches, many of them minor, there had been an “enormous improvement” in Kaufland Polska’s labour policy.
Some Bankwatch accusations were “exaggerated”, in particular one that Kaufland used “child labour”, which referred to a 15-year old employed to distribute leaflets, he said.
Reiserer said that in addition to creating new jobs, Kaufland Polska was buying 85% of produce locally and stimulating business.
The campaigners dissent on this point, too. Boris Planer an economist who undertook a trade union-backed study on discount supermarket chains, said: “Local traders in central European markets can rarely offer much resistance and simply can’t compete with the large, professionally managed stores being opened by their western competitors.”