TI Briefing 10: Multinational Companies in the Railways

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How did multinational companies first get involved in foreign rail markets?

Through deregulation and privatisation of the industry, which began in the early 1990s. The first acquisitions were made by operators from Great Britain and the US, who acquired liberated rail markets in countries such as Great Britain, New Zealand and Australia. Such companies included Wisconsin Central (US), Stagecoach, FirstGroup and National Express (Great Britain).

Their immediate objectives appeared to be to establish themselves as reputable global operators through international acquisitions, and to satisfy their shareholders with good performances on the stock market. However, more than a decade later, Wisconsin Central has retreated from the New Zealand market, to be replaced by Toll Holdings, and the British firms are increasingly confining their business activities in the US market.

What are the other major companies and trends?

Two Australian companies in cooperation – namely trucking firm Tolls Holdings and port operators Patricks – are taking over the rail freight business in Australia and New Zealand. They are also aiming to reorganise their freight transport system in road, rail, maritime and aviation, in order to re-establish themselves as a major transport logistics operator.

In Africa, the parastatal South African railway company Spoornet is embarking on cross-border freight operations, for example the Beitbridge-Bulawayo line, between South Africa and Zimbabwe. The same company also operates Comazar, between Côte d’Ivoire and Burkina Faso. It has expressed support for joint concessioning to take place simultaneously in Kenya and Uganda.

The reorganisation of the rail business in Europe is expected to be greatly affected by the liberalisation of European rail freight operations in conjunction with rail reform in Russia, and the opening of long distance rail corridors across countries.

How are unions responding to the impact of multinational companies in the railways?

Unions in Great Britain and the US are engaged in a major recruitment campaign, targeting school bus workers employed in the US by the British firms National Express and First Group. The Australian Rail, Tram and Bus Industry Union (RTBU) held a conference in Melbourne in September 2004 to discuss international players in public transport, and is seeking further cooperation with its counterparts in New Zealand as well as unions in Europe.

Rail operator Connex in France for example, is expanding its operations in Australia. Connex is part of Veolia, which covers waste management, water, energy and electricity distribution as well as transport. For this reason, the transport workers and public services workers’ unions in Europe are working closely to negotiate a European works council agreement with management.

Rail unions in Europe are also discussing the possible establishment of a European works council in Deutsche Bahn AG.

How is the ITF involved?

The ITF’s urban transport committee monitors the movement of multinational companies operating in road and rail transport and regularly distributes company information by email to interested parties. At its Vancouver Congress in 2002, the ITF resolved to establish global agreements with such companies, on issues including basic trade union rights.

Can you give an example of progress in securing such agreements?

The South Africa company Spoornet has a joint venture in Zimbabwe and concession agreements in Côte d’Ivoire, Burkina Faso, Cameroon, Zambia, and Mozambique. In Zimbabwe local Spoornet management tried to ignore the traditionally agreed terms of negotiation with the unions. They returned to the negotiation table only after the unions took industrial action.

The ITF is working closely with the railway workers’ unions in Africa to establish a Spoornet network for its affiliates. Members of the network hope to formulate an international agreement with the management in line with ITF Congress resolutions.

Sponsored by the German-speaking railway unions in Europe, national seminars were organised in 2004 in South Africa and Swaziland. Several more meetings are planned in early 2005 with a major Spoornet conference later in the year.

How else might the ITF influence rail multinationals?

Through simple communication, and the facilitation of solidarity actions. Senior managers from the British based multinational company Serco, for example, have been in communication with the ITF since a major airport dispute in South Africa. The company is involved in transport (rail, aviation, road, ports), defence, civil government (including justice, education, health and leisure), science and the private sector.

The Johannesburg Airport dispute is now resolved, with many solidarity actions having been taken by ITF affiliates worldwide. However the Australian RTBU is in dispute with Serco over health and safety on board tourist trains operated by the company.

What are the main challenges for rail unions in dealing with multinational companies?

- Global (and regional) agreements with multinational companies on codes of conduct.

- Agreements on licensing standards and/or workers’ conditions for companies that operate cross-border transport.

- Trade union participation in tripartite discussions on global safety standards.

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Issue 19 April 2005

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