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Analysis

Union Influence in Mexico’s Mining Industry

Mon, 10/21/2013 - 13:09

The Mexican miners’ union is a private sector union that wields significant power and influence in the country. Known as the National Union of Miners, Metalworkers and Allied Workers of the Republic of Mexico (SNTMMSSRM), or the National Mining Union (NMU), a 2011 estimate put its membership at 260,000 miners and metalworkers throughout the country.

Whilst this represents a significant proportion of the country’s miners and metalworkers, the number has declined as a proportion of the overall number of employees in the industry over three decades. This is attributable to a number of changes in the industry: unionization as a declining tradition throughout Latin America; greater infiltration of the market by foreign companies that have a lesser culture of unionization; and the overall increasingly negative attitudes towards unions and strikes. However, even if the culture of unionization in Mexico is on the decline, the SNTMMSSRM’s sway within the industry cannot be underestimated. There also exist alternative unions to the SNTMMSSRM, such as the National Mining and Metallurgical Union, and the National Mining Alliance.

For many of the industry’s workers, union membership is appealing because of the bargaining power that unions still hold in Mexico. The labor unions have a strong track record making important gains for their members in negotiations with mining companies in areas such as improving working conditions, increasing salaries, and raising safety standards in mines. “The majority of mines in Mexico are affiliated either with the SNTMMSSRM or the National Mining and Metallurgical Union,” says Alfonso Rodríguez Arana, Director General of LegalMex. “The unions play an important role, and the leaders of these two unions work hard for the interests of their members.”

It is perhaps because of the level of power that they hold today that the mining unions are regarded with such ambivalence by the industry. The SNTMMSSRM in particular is considered to be aggressive and overly demanding, often having been a source of conflict between workers and mining companies. Cases in which the Union has been involved have led to mining projects being closed down and operations halted for a number of years, sometimes without resolution. This damages the industry in different ways: mining companies experience immediate losses as a result of closed mines; reserves of mineral resources remain unexploited; and the reputation of the industry and the country more widely as a place to do business can also suffer as a result. The general perspective in the mining industry is that the Peña Nieto administration must find a way to balance the level of power that the mining unions have, to avoid the negative impact of such actions in the future. “This is a delicate topic since mining unions are very strong in Mexico. The government will be careful in dealing with unions, and perhaps the new administration will try to push them to be clearer in the management of their finances, given the different amendments that have been made to the labor law,” says Rafael Cereceres Ronquillo, Partner at C&V Abogados.