New Zealand paper mill workers locked out for nearly a month

For nearly four weeks, 145 workers at the Essity paper mill in the town of Kawerau, New Zealand, have been locked out after rejecting an effective pay cut and 67 workers have gone on a limited strike.

Kawerau in New Zealand’s North Island with the Essity paper mill in the distance. [Photo by Kawerau District Council]

The lockout, which began on August 9, demonstrates the increasingly ruthless measures that big business is taking against workers, in New Zealand and around the world, in order to drive down wages and increase employment. exploitation. The ruling class is making workers pay for the worsening economic crisis, triggered by the pandemic and the US-NATO proxy war against Russia.

The workers, who make Purex toilet paper and similar products, rejected an offer of just 3% a year, for the next three years, plus a lump sum of $4,500. With annual inflation currently at 7.3%, that’s a significant pay cut.

Essity falsely claims that she cannot afford a decent pay rise. On August 25, the managing director of the Kawerau plant, Peter Hockley, made a threatening statement to Things that even the Pulp and Paper Workers’ Union (PPWU) call for the company to adjust to inflation, which would be an effective wage freeze, “has real potential to cost local jobs “. It is a Swedish-based multinational that employs 46,000 people worldwide and made a profit of NZ$1.8 billion in 2021 and $330 million in the first half of 2022.

In fact, PPWU Secretary Tane Phillips (who is also a member of the ruling Labor Party) has publicly stated that he is prepared to negotiate an annual raise below inflation. He obviously felt unable to enforce the company’s 3% demand immediately, due to the intense anger of the workers.

On September 1, the PPWU and Essity management began facilitated negotiations, overseen by the government’s Labor Relations Authority. The following day, Essity said there had been “positive progress”, without providing details. He said the plant would “remain closed while talks continue” next week. The statement should be seen as a warning that the company and union leadership are preparing a sellout deal.

Meanwhile, Essity launched punitive attacks on the locked-out workers, aiming to crush their resistance. On August 26, the union revealed that workers were being barred from making “hardship withdrawals” from their own retirement savings in Asaleo Care Super (ACS), the pension scheme controlled by Essity. A letter sent to a worker by ACS read: “We have been advised by your HR this week, that all financial hardship claims must be approved by the company, and they will not agree to any withdrawals during this time.”

On August 29, the PPWU announced that Essity had taken legal action against the 67 individual employees who had gone on strike several days before the lockout. The company alleges the action was illegal and wants to make the workers liable for a total of $542,852 in damages plus costs, or $8,102 per worker.

Phillips of the PPWU denounced Essity’s actions as “starvation tactics”. At the same time, he tried to deflect the anger of local management workers in New Zealand, demagogically accusing “Australian management” of being responsible for the lockout.

Council of Trade Unions (CTU) chairman Richard Wagstaff, after remaining silent for the first three weeks of the lockout, told Radio NZ on August 30 that Essity was “trying to intimidate this union and its workers so that they don’t need to negotiate. They want these workers to be somehow forced back to work and take a pay cut.

Unions, however, are complicit in seeking to isolate and exhaust workers. The CTU has launched a website where people can donate to the PPWU, and other unions have also announced donations. But the fact that some workers have tried to withdraw their retirement savings indicates that they clearly do not have enough to survive. This is despite the enormous resources of the unions, which collectively collect tens of millions of dollars in annual dues.

The WSWS understands that locked-out workers receive a $200 supermarket voucher and a $50 fuel voucher per week from the PPWU. Some have been forced to apply for government welfare in order to pay their rent and mortgage and feed their families.

The mother of a young worker told the WSWS that her son had weekly bills of $700 to $800, including $380 for rent, “so he had to get unemployment benefit, which is $240; then he gets his $200 bond from the union, which still leaves him behind. She said there were likely many workers in similar or worse situations.

Another worker, Francis, said workers were worried about the length of the lockout and wanted it to end. He described Essity’s attempted legal action against those who went on strike as a “load of bullshit” designed to scare them into accepting a low offer, as prices for “petrol , diesel, food, everything went up.”

Francis felt that the PPWU was “doing the best it could”, but that its strength had waned over the years. He said the fact that Essity union members had been “split” into three groups with separate collective agreements based on their occupation, rather than being united, had “weakened” their position. This meant that only one group of workers went on strike before the lockout.

Francis agreed that more support from workers across the country was needed, saying: “Imagine if the rest of the unions in New Zealand closed [their workplaces] to support us and we all held together like that. That would be great.”

Decent jobs in Kawerau are becoming increasingly rare, explains Francis: “When I arrived in Kawerau in 1995, it was a booming town. Many people worked either in the sawmills or in the companies that supplied the sawmills, and everyone else worked in forestry. The closure last year of one of the town’s three mills, owned by Norske Skog, “had a big impact”, with more than 160 people made redundant.

The issues facing Essity workers are far from unique. Virtually every workplace in the country faces the same determination from employers to drive down wages and working conditions. The Labor Party-led government and companies rely on the unions – made up of privileged bureaucrats who act as an arm of management and the Labor Party – to isolate every dispute and prevent a unified movement against austerity.

Firefighters, for example, staged nationwide strikes last month after rejecting a below-inflation pay deal that contained nothing to address dangerously low staffing levels and faulty equipment. After just two hour-long shutdowns, on August 31, the Professional Firefighters Union abruptly called off any further industrial action and resumed secret talks with the government and the Fire and Emergency NZ agency. The union said it would make no further statement on the dispute until September 30.

To break the isolation imposed on them by the union bureaucracy, the workers need new organizations: works councils independent of the base which they control themselves. With such a committee, Kawerau workers can fight to connect with workers across the country and overseas, including tens of thousands of Essity workers around the world. This requires a socialist and internationalist strategy, in opposition to the nationalism advocated by the unions to divide the workers.