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Union organisations call for private equity regulation to safeguard workers’ rights
28 March 2007
Global labour organisations and trade unions are demanding that private equity firms be brought into line with other financial institutions to protect workers’ rights and promote long-term sustainable investment strategies that create wealth for all.
Currently exempt from many of the regulations and tax obligations that apply to traditional collective investment schemes, banks and insurance companies, these companies are putting employees’ working conditions and economic stability at risk.
The ITF was among 12 global union organisations and union leaders from 15 countries that met at the Organisation for Economic Co-operation and Development (OECD) in Paris, France, on 16 March. The group was calling for G8 leaders and OECD ministers to establish a regulatory taskforce on private equity. Regulatory measures could, the group argued, help prevent private equity “debt-driven” buyouts - which require high rates of return if they are to be financed – from impacting negatively on employees’ working conditions and job security.
The international regulatory taskforce on private equity should involve the OECD, the International Monetary Fund, the Financial Stability Forum, relevant United Nations agencies, and the International Labour Organization. It should address issues such as workers' rights to collective bargaining, information, consultation and representation within any private equity firm to secure the long-term interests of the company; ways of ensuring transparency; and a reconfiguration of how private equity firms are taxed.
Brendan Martin, representing the ITF at the meeting, commented: “Private equity funds are already moving into the transport sector. Their strategy is to restructure drastically the companies they take over, seeking very large and quick returns rather than making the long-term investments required for sustainable transport services. It is encouraging and vital that the whole global union movement is confronting this challenge in a united way."
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