In May 2015, 30,000 workers in the Turkish metal sector organized a mass strike to demand the right to organize and freely choose their union. 1,200 workers at Türk Traktör – a Turkish manufacturer of tractors and agricultural machinery – joined the strike. In response, the company fired 20 workers, some of whom were leaders in the strike. They filed a complaint at The European Bank for Reconstruction and Development (EBRD) aims to promote the transition to market-oriented economies in the countries of central and eastern Europe and Central Asia. It was founded in 1991 in London. It provides loans, equity investments and guarantees for private and public sector projects in the areas of finance, infrastructure, industry and commerce. The EBRD works in close cooperation with other international financial institutions such as the World Bank and the European Investment Bank (source: Bank Watch)., who provided a loan to the company while failing to ensure that its client, Türk Traktör, respected labor rights as required by its own policies.
Türk Traktör is a Turkish manufacturer of tractors and agricultural machinery. The company boasts that it produces every second a tractor in Turkey, and exports to more than 100 countries. Its majority is owned by Fiat and the Turkish Koç Holding.
Low wages for heavy work
Working conditions are harsh. The annual over-time in the Türk Traktör factory is compulsory and much higher than the legal maximum of 270 hours. Also, the work at the factory is officially classified as heavy work. This combination causes serious health problems. Much of the workforce have herniated discs or suffer other musculoskeletal disorders. The average wage in the workplace ranges between 1300-1400 TLs (approximately 430-460 Euros) per month. This is not sufficient to meet basic needs. As a result, many of the workers have incurred debt.
Unable to address problems
The workers of Türk Traktör are unable to address these issues because they cannot freely bargain for their working conditions. Türk Traktör has consistently denied its workers the right to organize and instead compelled them to join Türk Metal, a union that is closely connected to the Turkish government and Türk Traktör management, as a pre-condition for employment. As a result, for many years, Türk Metal union has been the competent union to make collective bargaining agreements in the workplace. Since workers have no choice but to join Türk Metal, the collective bargaining agreements do not adequately represent the interest of the workers.
In May 2015, 30,000 workers in the Turkish metal sector launched a mass strike. Workers fought for the right to organize and freely choose their union, and to be paid a living wage. 1,200 workers from Türk Traktör joined the strike.
Emre Cevizoglu, who worked for six years at the factory of Türk Traktör: “The strikes started at Renault’s car plant in Bursa in April 2015 and then jumped from factory to factory until it reached us at Türk Traktör.”
On June 1, 2015, the workers at Türk Traktör decided to end the strike and return to production. Despite assurances that it would not dismiss anyone because of the work stoppage, Türk Traktör fired 20 workers, including some of the organizers of the strike. The reason given by the company for the dismissals was that the action was an illegal strike and workplace occupation.Anonymous worker, involved in leading the strikes, stated that: “We just wanted to have better working conditions and be able to choose our union freely, that’s why we went on a strike, like thousands of other workers in the sector. As a result of exercising this right, we lost our jobs. Now it is impossible for us to find jobs in other factories because they know that we were dismissed because of leading the strikes.”
Involvement of the EBRD
The European Bank for Reconstruction and Development (EBRD) provided a 30 million Euro loan to Türk Traktör in 2013, in order to finance the construction of a tractor assembly plant in Sakarya and ongoing operations in its existing facilities in Ankara. As a client of the EBRD, Türk Traktör is required to comply with the bank’s policies, including the relevant provisions of The only tripartite U.N. agency, since 1919 the ILO brings together governments, employers and workers representatives of 187 member States, to set labour standards, develop policies and devise programmes promoting decent work for all women and men. related to freedom of association and collective bargaining. Workers and communities who feel they have or will be harmed by an EBRD-financed project can file a complaint to the If workers or communities have a problem with a project (to be) financed by the EBRD that (is likely to) causes harm, they can file a Complaint to the Project Complaint Mechanism. The PCM may be able to help in two ways: 1) Help in resolving a problem, including fact-finding, mediation, conciliation, dialogue facilitation, investigation or reporting; 2) Investigate whether the EBRD has failed to comply with its Environmental and Social Policy (all editions) and/or the project-specific provisions of the EBRD Public Information Policy in relation to an approved project of the Bank. EBRD’s independent accountability mechanism.
Türk Traktör Timeline
At first, Birleşik Metal is a union in the Turkish metal sector, representing workers from Türk traktör. The union is recognized by the Turkish Ministry of Labour and Social Security as a competent trade union in the metal sector in Turkey. Birleşik Metal İş has membership in Türk Traktör and some of its members were directly affected by the incidents described in this complaint. did not want to file a complaint. They contacted the EBRD on June 3rd, after the first five workers were dismissed, with the hopes that EBRD could help seek a solution to their concerns. As detailed in the timeline, they did not receive a response for a month, during which time more workers were dismissed. EBRD’s response was to tell Birleşik Metal to contact the company directly. After another month, when no response was forthcoming from Türk Traktör, they were told to contact the metal employer’s association, MESS. In September 2015, Birleşik Metal finally received a response from the MESS, asserting that the strike was illegal and, thus, the dismissals were justified. But by then, it was too late.On September 2, 2015, Birleşik Metal filed a complaint with the PCM with the support of SOMO. The main issue raised in the complaint relates to the right to organize. It was the first complaint to the PCM to raise labor rights issues. The complaint also raised concerns about the working conditions.
Eyüp Özer, international secretary of Birleşik Metal: “The EBRD has a responsibility to make sure the basic workers’ rights are guaranteed in their business partners in Turkey.“
Birleşik Metal requested that the PCM undertake a problem-solving initiative to help all parties reach a solution, ensuring respect for workers’ rights at Türk Traktör. In lieu of a problem-solving initiative, Birleşik Metal requested that PCM undertake an independent investigation to determine whether the EBRD has complied with its own policies (Compliant Review).
Albab Akanda was assigned by the PCM to conduct the Eligibility Assessment. Akanda did not make any efforts to contact complainants to discuss the issues, nor did he take a site visit to Turkey to explore the willingness of the parties to engage in a problem-solving initiative. The Eligibility Assessment Report, published in December 2015, found that the complaint was eligible for a This function seeks to determine whether or not the EBRD has complied with relevant EBRD policy in respect of an approved project and, if this is not the case, to recommend remedial changes. but not eligible for a problem-solving initiative, asserting that the client was already engaging in a dialogue with workers. Complainants were never asked to verify that assertion. To our knowledge, no dialogue process was initiated by the client.
In January 2016, Halina Ward was assigned by the PCM to conduct the compliance investigation. She conducted a site visit in February 2016. In the course of her investigation, she reviewed documentation from EBRD and its client and was in contact with the International Labour Organisation (ILO) Freedom of Association Committee Secretariat, the office of the World Bank Group’s Compliance Advisor/Ombudsman (CAO), and with a UK-based labour expert with prior experience working in Turkey. The PCM Expert was regularly in touch with complainants to request additional information and update them on the status of the complaint.
As provided by the PCM rules of procedure, a draft compliance report and the bank’s Management Action Plan responding to the report’s findings were sent to complainants for their comments in December 2016. After the final report was sent to the EBRD board, either voluntarily or at the Board’s request, bank Management revised the Action Plan to include additional commitments to address the PCM’s findings.
In April 2017, the PCM published its investigation report, finding that the EBRD failed to ensure protection of core labor standards when providing the loan to Türk Traktör:
- The EBRD failed to adequately monitor issues around overtime, occupational health, and safety;
- The EBRD did not adequately assess and act upon issues related to freedom of association;
- The EBRD did not undertake an evaluation of the dismissals that took place at Türk Traktör following the industrial action in 2015, and failed to evaluate Türk Traktör’s adherence to the ILO Core Conventions;
- The EBRD failed to routinely monitor Türk Traktör’s implementation of a (required) external grievance mechanism.
EBRD’s response to the investigation
In response, the EBRD committed to improve their internal procedures and commission an analysis on the gaps between international labor law and national law. They commited to:
- Undertake an analysis of the differences between Turkish law and the International Labour Organization’s core conventions;
- Commission an independent analysis of the dismissals of the workers against the provisions of the ILO conventions;
- Update its internal guidance materials on freedom of association;
- Improve its due diligence process.
Eyüp Özer (Birleşik): “Turkey is one of the biggest markets for EBRD, but the country is also known for its failure to respect labor rights. EBRD has a responsibility to make sure at least its own investments don’t contribute to violations of the most basic human rights.”
Dismissed workers remain without remedy
Although EBRD’s intended policy review and improvements are a positive first step, none of the planned actions will provide remedy for or result in concrete changes in the conditions for current or formers workers at Türk Traktör. The workers who were fired after the strike still have not received compensation for their dismissals. The PCM will monitor the implementation of the MAP. Birleşik Metal and SOMO will continue to look for ways to ensure that EBRD and its clients respect labor rights and that those harmed receive remedy.