Brazil: a brief history of the Flaskô workers’ struggle and the Movement of Occupied Factories

The Movement of the Occupied Factories in Brazil is a glorious chapter in the struggle of the working class. Last year the courts and the police intervened in an attempt to smash the movement. In spite of everything it still survives at the Flaskô plastics factory in Sumaré, Sao Paulo. Here we provide an account of the struggle of the Flaskô workers and background to the movement as a whole.

It is almost five years since the workers at Flaskô took control of the factory. In June the Movement of Occupied Factories in Brazil is holding a People's Trial to judge the Federal police intervention against the workers of Cipla and Interfibra.

On June 2, 2003, that is, almost five years ago, the workers of Flaskô took a historical decision: they resolved to take over the administrative, financial and operational control of the factory to defend their jobs and rights, as well as the plant facilities, such as machines and equipment. They decided to occupy the factory and put it to work under their own control.

Panamerican meeting of occupied factories in Joinville

The workers decided to put an end to the bosses' exploitation. For decades, these had built up their private wealth on the back of the workers' labour to the point where it was no longer necessary to resort to industrial production in order to pass it on to their heirs.

Thus it became clear from the 1990s onwards that their only objective was sheer looting. Investment became more and more scarce and a whole productive department was fully dismantled.

Clients and suppliers were lost with no explanation; the machinery was allowed to go rusty and mechanical engineers were forced to recycle pieces from dead machinery to keep production going, in a process known as cannibalism. Step by step, the workers' rights were eroded.

It was not only in Flaskô that this happened. Throughout the 1990s Brazil suffered the highest rate of unemployment in history. Social and labour rights were being attacked. The country was being bled in order to meet the requirements of the IMF programmes. The payment of the international debt, the privatisations, the opening up to international trade and finance brought about speculation and a process of mergers which, in turn, increased the monopoly control of the multinationals over the Brazilian economy, generating crisis, unemployment and the erosion of living and working conditions.

In 2002 two events took place. These were parallel and complementary and help explain the dynamics of the class struggle in Brazil. On the one hand, in October 2002, the candidate of the Workers' Party (PT, Partido dos Trabalhadores) Luís Inácio Lula da Silva, won the presidential elections in a second round. On the other, in Joinville, (a town in the State of Santa Caterina, in Southern Brazil) the workers of Cipla and Interfibra went on strike over wages.

The relation between these two factors in the equation was intensely debated by the workers of the two factories:

"Thus, a strike over wages became a strike to save jobs. This, in turn, posed the question of workers' control in the factories. And a new question was posed: that of the government's responsibility in the face of crisis to guarantee jobs. The workers came to the conclusion that they would not allow themselves to be sacked because the bosses couldn't make enough money; because the workers had no responsibility for markets, swindles, or the economic policy applied in the service of finance capital and the multinational companies. This posed the question of nationalisation and, consequently, the need for workers' action to save the productive fabric of the country, which was being liquidated by these imperialist policies. To face up to this question from a class point of view, the workers rose in defence of a threatened nation and the people of Brazil. The strategy of the struggle was born out of that experience. This is summed up in the slogan: ‘a closed factory is an occupied factory; an occupied factory must be nationalised'."

Further down, one can also read:

"the working people were able to gather their forces and strength after years of attacks and remove FHC [ex-president Fernando Henrique Cardoso - Editor's note] and his candidate for power. Lula's victory opened up a situation in which the working class feels confident and strong to seek what belongs to it and defend what it has conquered."

From then on, the history of the Brazilian working class would not be (and it is not) the same. These are two unique experiences that would not exhaust themselves, but, on the contrary, have a lot to teach.

Flaskô, which is in the city of Sumaré (interior of Sao Paulo State), wass occupied some months later. The workers had not received wages for three months and knew of the experience of Cipla and Interfibra. The three companies were part of the same business group. In an assembly it was decided that the workers would participate in the march to Brasilia organised by the workers at Cipla. Returning from Brasilia the march stopped at Flaskô. The workers waited in an assembly for a report. This convinced them that the only way out was to occupy, resist and start up production! And to fight for nationalisation under workers' control!

Brief historical background

Flaskô is a factory that processes plastic. It produces several models of industrial packaging. Currently it has a workforce of around 90, although during its best days it reached 900 workers. Founded at the end of the 1970s, it was part of the Holding Corporation of Brazil (CHB).

CHB also owned Cipla and Interfibra, and was integrated into the Hansen Industrial Group until 1992. That year, after the death of Joao Hansen Junior (one of the founding members), Luis Batschauer (married to Eliseth Hansen) and his brother Anselmo took over at CHB. However, they lost a capital share in the Hansen Group necessary to modernise technology and equipment.

That way, whereas other groups' enterprises grew, CHB started to de-capitalise the factories under their command. Obviously, the Flaskô workers did not accept this passively. There were strikes in 1994 and 1997 against long working days of 12 hours, low wages and the management's disregard for previous agreements. Only after the factory was occupied and put under workers' control did a profound change take place.

The debts strangle the workers

It was not easy to return to production and it has not been easy either to keep up production to guarantee jobs and wages. The owners left Flaskô hugely indebted and without any access to credit. All the factory equipment was impounded by the courts because of the debts the old owners had incurred. Close to 80% of those debts are with state departments, because the owners did not pay taxes! The rest of the debts are with private commercial enterprises and with ex-employees. There are also debts with the electricity company. It is a constant struggle, a difficult and very stressful one, for the workers to raise the money to pay all these debts, which in total amount to around $130 millions.

The fact is that the workers have no responsibility for the debts accumulated by the owners. They were also stripped of their rights and are fighting to recover them. Throughout all this period these are the problems the workers have had to face.

"President Lula: We elected you to protect our jobs"

An analysis of the role played by the courts in this situation reveals the true nature of the judiciary in Brazil. When the workers request legal authorisation to run the factory on behalf of the Factory Council or a Workers' Association their demand is rejected. But when an action against the factory is to be carried out, the courts try to get the workers' representatives to accept the removal of machinery or the impounding of the factory income.

There is almost no need to mention the "incredible" coincidence of actions ordered by the judges during the period of workers' management. This had never been so efficient when the bosses were running the factory when they placed it on the verge of bankruptcy. Now, when the factory is being run by the workers, the judiciary is constantly harassing them, trying to strangle them economically and persecuting their leaders.

In all these years, hundreds of court hearings, aimed at seizing and auctioning off the machinery and impounding the income, have been blocked by the mobilisation of the workers and their supporters in the community. However, machinery has been taken away to pay for the debts left by the owners, instead of being used to produce and guarantee jobs. For that reason, whenever there is any court order, the workers always demand: "stop impounding, stop auctioning, we want to work in peace!"

More than stopping this or that court order, what the workers are looking for is a truce. They want the courts to stop their attacks on them, and at the same time they are demanding that Lula's government guarantees their jobs and rights.

In this sense, the workers managed to get an agreement with the Labour tribunals, which, although it has not solved the problem, it does lift some pressure. Every month, 1% of the factory's takings must be allocated to paying off the debt.

Through this mechanism the workers are starting to receive what the bosses' owed them after a long and hard battle for their jobs. Many waited up to ten years to get back what the bosses had stolen from them. And this was only possible thanks to the workers' determination to keep Flaskô open. However, numerous court orders keep bearing down on the workers. Three new orders have been issued by the courts to seize some factory assets to auction them off on behalf of the State of Sao Paulo and the National Treasury. Ironically, the documentation that accompanies the Federal court decisions includes bulletins and journals produced by the factory workers as evidence that the factory is working and, therefore, the courts can proceed to seize their assets. The courts are also increasing the level of the instalments that the Treasury is demanding. If the Treasury demands 2% of the income in debt repayments, the courts raise this to 10% or even 30%.

Those who have followed with interest the movement of the occupied factories know that this is a new and savage attempt to put an end to this experience of workers' control. One must remember that Cipla and Interfibra were the victims of judicial intervention as a result of a court procedure initiated by a State body.

Another heavy burden on the workers' shoulders is the cost of electricity. If someone stops payment of his or her electricity bill for three months, the supplying company will cut off all power. The same happens with Flaskô, because due to the conditions inherited from the owners the workers are forced to stretch the payments to the limit. Every month during the last five years the workers have faced the same dramatic situation. But there is more. After intense mobilisations and negotiations, the Compañía Paulista de Froça e Luz (CPFL), which was privatised in 1997, agreed to postpone the payment of the owners' debt. Thus, every month, the workers not only have to pay for what the factory has used in its production process, but also for the debts of the old owners!

On many occasions the workers have had to stop production and picket the electricity supply equipment in order to prevent CPFL from cutting off power. Faced with the workers' determination, the company had no other option but to negotiate with them. But the capitalists also learn from the class struggle. Weeks before they tried to extend the Federal police intervention to Flaskô, as they had done at Cipla, the CPFL attached a device to the electricity supply that allowed them to cut off the supply remotely. That is, from their offices the company directors and managers can cut off all electricity supplies to the factory whenever they want to.

Eventually, the long feared cutting off of the power supply took place in the middle of last year, coinciding with the Federal State's attempt to intervene in the factory. The workers resisted in the dark for over 40 days. They had no power to produce and therefore no way of getting their wages. However, they resisted and managed to stop the intervention, renegotiate the debt and return to production, in even more difficult conditions.

Previously, in 2005, jobs had already been threatened by a court order taken out on behalf of Braskem, a multinational company of the petrochemical sector. The courts attempted to seize the main machines of the factory but after a magnificent campaign of mobilisations and petitions, the multinational agreed to leave the machinery in the factory in exchange for 0.5% of the factory's revenue. The workers threatened to occupy Braskem's headquarters in Sao Paulo and this clearly played an important role in reaching this agreement.

The gains

What is most incredible is that in the midst of so many threats and attacks it was possible - and still is to this day - to conquer some rights. Machines, equipment and facilities were recovered. The factory was reorganised to improve the conditions of work, avoid wastage, increase productivity and reduce the level of wastage in each unit of production. Practically all plastic material wasted in the productive process is recycled on site. In this respect the work done by the "Zero Wastage Committee" is what won the factory the ISO 9001 award.

The running of the factory is extremely democratic. Every day new suggestions and critical comments are raised. The Factory Council, elected by the workers, meets once a week to discuss proposals and plan the running of the factory, from the supply of raw materials to marketing. The Factory Council's minutes are published on the information boards and at least once a month the assembly votes on the budget and the main decisions.

There is no outsourcing of any kind and all workers receive wages above the minimum fixed in the collective bargaining agreement. Union membership is high amongst the workforce. The workers participate in campaigns to improve wages collectively with other petrochemical workers against the bosses' federation. However, the most noteworthy conquest has been the reduction of the working day. Two years after establishing workers' control in the factory the working week was cut from 44 to 40 hours, maintaining the same level of wages and productivity. This way, the workers won Saturday as a day off to rest or enjoy with family and friends. Now, five years after the occupation began the working week has been reduced for production workers from 40 to 30 hours. The workers in the processing areas have now working days of barely 6 hours a day. But they committed themselves to keep the productive levels of the factory as before. At the moment, this measure is of an experimental character, taking into account the difficult situation of the factory and the need to cut electricity consumption to survive.

These facts demonstrate one thing: that capitalists are not necessary for society; they are nothing but a parasitical social class. If the workers are able to democratically administer and recover a factory without bosses, following their own class interests and not the capitalist's thirst for profit, then they can administer all factories, lands and banks. They can control the country and the world so that the wealth, which is collectively produced, is shared out on an egalitarian basis.

Surrounded by solidarity

The people in the neighbourhood around Flaskô are fully aware of what is happening to the workers. The factory, which was already a point of reference, being located as it is in a densely populated area, is an object of interest and a source of pride. The workers' struggle stimulates consciousness and popular participation that is intertwined with the desires, needs and struggles of their own community.

A major problem in the region is housing. The dwellings are ramshackle and rent takes up a big share of the family budget. The government building programmes for the workers and the poor is non-existent. For that reason, along with the workers at Flaskô, hundred of families decided to occupy a desolate plot of land that belonged to Flaskô. They decided to build their homes in an empty area that had served as a graveyard for victims of drug trafficking and police violence.

March on Brasilia

After discussing the question, the local community and the Factory Council decided to give a small part of the plot of land to the workers and the rest to the community to be distributed among those wishing to occupy it. Today there is already a community there, called the "Workers' and People's Village", in which close to 300 families live. They mobilised, together with the Flaskô workers, to have access to electricity and a system of refuse collection and a sewage system. In truth, this struggle for basic living conditions, such as sewage, as well as the legalisation of these homes continues to this day. The plot is still considered as private, but the workers and the community are demanding that it be recognised as an area for housing.

Also, at the end of 2007, Flaskô and the Neighbourhood Association of Parque dos Bandeirantes, the area where the factory is located, decided to use the old factory canteen as the site of the new association. This association carries out dozens of cultural, social and sporting activities. Capoeira and judo classes are now taught in a disused department of the factory. Each month, thousands of children, teenagers, elderly people, men and women, visit the factory and know that these facilities are the fruit of the workers' struggle.

The project to set up a community radio station is also moving apace. It will be called "Radio Struggle" and its broadcasting mast will be placed on top of the factory's water tower; such that in spite of the transmitter being not very powerful, it will be possible to listen to it over a wide area, not to mention the blog and the email network that updates the whole of Brazil with news from the workers' experience.

Destiny linked to the Venezuelan revolution

In October 2005, the movement of occupied factories participated in the organisation of the Latin American Gathering of Factories Recovered by the Workers. This event, which took place in Caracas, Venezuela, counted with the participation of representatives from 13 countries, 20 union federations and 235 companies under workers' control. There was an extremely interesting debate about what was the way out for these companies. The proposal to struggle for their nationalisation, put forward by President Chavez himself at the opening session, prevailed.

The final declaration, elaborated by the Discussion Group of Recovered Factories, stated things like: "each factory closed is a graveyard for workers' jobs, as landlordism is in the countryside. Therefore, the rural and urban workers have the right to occupy factories and land to defend their jobs and the sovereignty of our nation. That's why we occupied the factories and put them to work."

"They close the factories, we open them. They steal the land, we occupy it. They make wars and destroy nations; we defend peace and the people's sovereign integrity. They divide and we unite. Because we are the working class. Because we are the present and the future of humanity."

Also, at the end of this gathering an agreement was signed between Petroquímica da Venezuela (Pequiven) and the Movement of Occupied Factories. In this agreement the Chavez government committed itself to sending shipments of raw materials to Cipla, Interfibra and Flaskô in exchange for technicians and specialists able to collaborate in the development of the Petrocasa project in Venezuela. This consists in the development of "socialist factories" able to produce plastic materials for the building of cheap public housing.

Cipla has the technology and a vast knowledge in the sector of "Plastic houses" and had already presented the governments of Cuba and Brazil with a plan, but it was in Venezuela where the project was actually taken up. The first Petrocasa factory was inaugurated in June 2007, and there are plans to create similar factories to overcome the lack of housing in Venezuela.

The first shipment of raw materials arrived from Brazil in 2006. This was of great help for the occupied factories; it gave a breathing space to the workers so that they could continue with their difficult struggle. In the Venezuelan labour movement the reaction to the intervention in Cipla was immediate and strong. The Movement of Occupied Factories is promoting in Brazil the "Hands off Venezuela Campaign", highlighting the Chavez government's anti-imperialist and social initiatives and, above all, the role that the working class is to play if the revolution is to triumph.

Throughout these years, the Movement of Occupied Factories has promoted discussions and debates on the how to defend jobs, social rights, industry and implement agrarian reform. It has spread the word about the experience of the occupied factories and gained support up and down the country. The three national conferences and the Pan-American gathering, with thousands of participants and international guests, sum up in their proposals and resolutions the importance of this movement for the working class of Latin America and the world, showing that working class unity is possible and necessary to topple imperialism and put an end to its system of war and exploitation.

The struggle for nationalisation under workers' control and the Federal police intervention in Cipla

Ever since the first factory was occupied in 2002, the road taken by the workers of Cipla, Interfibra and Flaskô, inspiring thousands of workers and militants, has been that of the struggle for nationalisation under workers' control. The workers have marched on Brasilia, the capital of the country, on three occasions. Setting out from the South East, North East, South and Centre West, they demanded the nationalisation of the occupied factories and the re-nationalisation of the railways, mines and all that had been privatised, along with demands for an agrarian reform and other questions.

As a result of these mobilisations, President Lula met with workers' representatives and set up a Committee to look into the situation of the occupied factories. In spite of stating that "nationalisation is not on the government's agenda", he promised to do anything possible to save the jobs, asking the Ministry of Labour and Social Security and the National Development Bank (BNDES) to produce a report on the issue to try to sort the situation out.

The BNDES presented its report in February 2005. It stated:

"As everyone knows, the bulk and the most burdensome part of the debts of these companies is with Federal and State institutions (taxes, contributions, etc.). Faced with the size of this deficit ($294 million) as a proportion of their assets and the expected revenue generated by production there is only one way of saving the factories and guaranteeing jobs. We suggest that by a decision of the Federal and State governments these debts be transformed into shares to be held by the BNDES."

"We do understand that this is a difficult but possible road to take. We also understand that the only way to achieve the most urgent task at the moment (safeguarding jobs) demands that the public sector takes control of the companies through social development banks, the BNDES and State institutions."

From then on the arguments against nationalisation collapsed like a house of cards. President Lula, however, refused a new meeting with the workers' representatives to discuss the conclusions of the BNDS report. And this was not because we did not remind him! In June 2005 the workers of Interfibra, Cipla and Flaskô marched together with twenty thousand landless peasants of the MST, but no nationalisation was announced and neither was an agrarian reform plan!

After Lula was re-elected in 2006 thanks to the popular vote against the bourgeoisie's preferred candidate, the make up of the government worsened. The economic growth that reigned throughout his first term in government guaranteed colossal profits to the capitalists and bankers while allowing for certain social policies that benefited millions of poor people and an improvement in access to credit for workers. Lula and the PT are now using their popularity to form a coalition with right-wing parties and politicians. Ministries and important offices have been reserved for these "allies".

Raw materials arrive from Venezuela

The left-wing social movements are losing ground. There is a generalised feeling that the country is doing well and this makes it easier to slander, repress and criminalise them. At the same time they are invited to "collaborate" with the government. Repression and cooperation are two sides of the same coin. It was no different with the occupied factories. The government and its agents have insisted over the years on the need for the workers to abandon their demand for nationalisation under workers' control, while the bourgeoisie started to sharpen up their language and called for repressive measures against the workers in 2007.

The 30-hour week at Cipla without cuts in wages, the running of the factory under workers' control and the agreements reached with the Chavez government were the last straw that broke the camel's back. These are unacceptable measures for the Brazilian bosses. In January 2007, the president of the Federation of Industry of Sao Paulo (FIESP) stated in the country's biggest newspaper:

"Traditional sectors of industry do not like this help from Chavez, who supports this type of [factory] occupations in Venezuela and Latin America. For the FIESP this type of collaboration means they are meddling in Brazil's internal affairs. The FIESP respects national sovereignty and does not recognise any interference by any other country in the country's internal affairs", stated Paul Skaf, president of the industrialists' federation: "President Chavez's opinion is his own business and is no reference point for any decision to be taken in Brazil."

In May 2007, weeks before the intervention against the occupied factories, the ABIPLAST (the plastic industry's bosses' federation) wrote in its bulletin's editorial:

"As the press has already informed us, the Venezuelan government supports the occupation by workers of plastics factories in Brazil. There are already three factories (Cipla, Interfibra and Flaskô) that receive support in the form of subsidised raw materials from Venezuela. This type of meddling by a foreign government in the internal affairs of a Brazilian company is utterly unacceptable: it is the duty of employers and of the Brazilian government to firmly denounce how absurd this meddling of a foreign government in the affairs of Brazilian businesses is.

"These attitudes render it indispensable for businessmen and civil society to organise a protest against these sorts of practices before they become a daily occurrence that would harm our democracy. It is necessary to recover our ability to feel outraged at any meddling in our affairs; otherwise we incur the risk of being too understanding and passive in the face of such a level of interference."

That very May, as part of a national day of action called by the CUT, MST and other organisations, the workers of Cipla, Interfibra and Flaskô occupied the regional headquarters of the National Institute of Social Security (INSS). They demanded an end to judicial harassment against the occupied factories and came away with a commitment signed by the INSS representatives in Joinville.

However, one of the legal proceedings that the workers wanted to stop was used later to perpetrate the fraus legis that decreed the federal police intervention on May 31, 2007. The INSS, a body linked to the national government, refused the workers' petition to suspend the payment of debts left by the bosses. This way, a federal judge in Santa Caterina appointed an auditor to take over the control of Cipla. The court decision was taken in secrecy, while the police forces were brought in to break up the Factory Council and imposed the administrator by the use of force.

Around 150 men of the Federal and Military Police of Santa Caterina were deployed at the factory gates. Heavily armed, they prevented all workers connected with the Factory Council from entering the premises. The Factory Council and the workers' leaders, who had been at the forefront of the struggle for five years, were sacked and an administrator was put in their place. The industrialists' demands were achieved with the Lula government's connivance.

A People's Jury to judge the Federal police intervention

In theory, the administrator's mission is to "restructure" Cipla so that it can pay off its debts to the INSS left over by the bosses from 1998. However, one year has gone by and the public coffers have not seen a penny and, of course, they will not see any in the future either. This intervention is not a technical issue, but a political one. From the very beginning the attack has focused on destroying all the gains made by the workers' administration. In the first week, the working week was brought back to 44 hours. Security was outsourced. The air became unbreathable, with no rights of assembly and over four hundred workers sacked with no compensation. Wages are not being fully paid, etc. At the same time the bourgeois press is doing its best to spread a campaign of slanders. The administrator is praised and the workers' leaders, who have no jobs and receive no wages, are the victims of hateful slander. They are trying to break up the unity of the workers by taking advantage of the different levels of class consciousness.

Production line at Flaskô

However, the response was immediate. Messages of outrage poured in to Lula and the judges from all over Brazil and other parts of the world. The International Marxist Tendency organised demonstrations in front of the Brazilian embassies. Some days after the intervention, a protest took place outside the gates of Cipla, with hundreds of people from up and down the country and militants from occupied factories in Venezuela, Argentina and Paraguay.

The authorities have tried to extend their police intervention to Flaskô, basing themselves on the same court decision issued in Santa Caterina; but this time the workers were not taken by surprise and the administrator was not accompanied by heavily armed police. He thought that Flaskô would capitulate once Cipla had been taken, but he was faced with a strong picket and had to retreat.

However, the administrator did not give up and adopted another tactic: sabotage. Contrary to other occasions, the CPFL did not communicate the order that the electricity supply was to be cut off and refused to meet workers' representatives to negotiate, since for the administrator CPFL was now responsible for the factory. After a long struggle that lasted more than 40 days, the workers got the electricity supply back at the cost of having to accept ever more heavy commitments.

Finally, in August, the workers were able to take back Flaskô, but under changed conditions. Nationalisation was adamantly rejected by the very same government that the workers had twice helped to put in power. Financial and administrative problems have piled up. In spite of all this, the workers at Flaskô are approaching their fifth year under workers' control.

In the meantime, the Movement of Occupied Factories will neither abandon Flaskô nor will it forget the federal police intervention. For this reason it has organised a People's Jury on June 27 and 28, 2008, to pass judgement on the intervention. The administrator, the judge, the owners and the government will be in the dock, facing facts, evidence and statements, and the People' Jury will pass sentence. May workers' justice be done!

Facing up to the bourgeoisie is the task of the whole working class

The support of the national and international working class in defence of Flaskô is fundamental. In the end, it is not possible to fight against private property of the means of production with seventy, one hundred or one thousand workers; millions are needed.

Many militant workers and their sympathisers have already mobilised in support of this vanguard of the struggle for socialism. At the same time, the mobilised workers have always helped other sectors to rise against exploitation.

A popular saying goes: "I'm Brazilian and never give up!" In the case of the occupied factories this is most true. And it is not just one, but thousands! The working class of the country is numerous and organised and has proved capable of expressing its solidarity with the Movement of Occupied Factories on different occasions. At the same time, in all great (and small) struggles of the working class, of the youth and landless peasants, the Movement of Occupied Factories has been present.

If national boundaries are a limitation for world capitalism and with the attacks against the working class that are taking place everywhere on the planet, the struggle of an occupied factory is only meaningful as an integral part of the international proletarian army. There cannot be socialism in one country and much less so in a single factory or in a group of factories. Therefore, the present and the future of the Movement of Occupied Factories of Brazil are linked to the Venezuelan, Latin American and International revolutions. It is for that revolution that the Movement of Occupied Factories resists and fights!

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