VENEZUELA: How workers sacked their bosses

by Jim McIlroy & Coral Wynter, Caracas
During its April-May tour of Venezuela, an Australian trade union brigade organised by the Australia-Venezuela Solidarity Network visited the Invepal paper plant at Moron, west of Caracas. After the owners attempted to shut the factory (which was a privately owned firm called Venepal at the time) and sack the work force, workers took the plant over and ran it under their control.

In January 2005, the government of President Hugo Chavez granted workers’ demand that the company be nationalised. Invepal is now run jointly by the workers, organised into a cooperative, and the state — a process referred to as co-management.

Alexis Pereira, a founding member of the Invepal cooperative, explained that in the 1998 presidential elections, when Hugo Chavez was a presidential candidate, “the conglomerate that owned the company announced that if Chavez won they were going to shut Venepal down”. The conglomerate had interests in several other industries in Venezuela, and they threatened to sack all their workers — more than 2000 nationally.

“Venepal workers got together to plan how we could get control of the plant. And at the time there was a very corrupt union involved, so we had to work to get rid of them as well.”

Venepal’s owner “had fled to Spain”, Pereira explained. “In 1996, there was a bank crash and the government got an International Monetary Fund package to save the banks. And as soon as the banks got the money from the IMF, their owners left the country — including Venepal’s owner, who also had a lot of financial capital in banking. The plant’s administrators made themselves the new owners.”

In September 2000, the Venepal workers won control of the union in elections.

“In 2001, the owners wanted to declare themselves bankrupt, but a court ruling gave them one year before they could be declared legally bankrupt. They began to sell off a lot of smaller factories owned by the conglomerate. Hundreds of workers were sacked through this process. They sold off cardboard-making machines to a US company, giving them a monopoly over cardboard-making in Venezuela.

“By July 2003, the workers had already started organising to stop this, and prevented the machines from leaving the factory. We held a popular assembly and we took the plant over.” The plant was shut for 87 days.

“After the ministry of labour came to an agreement with the company, the plant was reopened. [The agreement] didn’t meet all the workers’ demands, but the judge put forward an agreement that the workers would continue to work until another solution came along. The workers refused to sign that agreement, fearing the further solution would be in favour of the owners. We restarted work, but continued occupying the factory.”

“It was a very hard two months”, Pereira told Green Left Weekly, because the workers weren’t being paid. “Workers in the area started helping us, giving us food and so on. But mostly we were asking for money from on the freeway.” Pereira was the union’s secretary at the time.

“The workers were now taking control of production, managing the amount of goods that went in and came out. Of the 850 workers who were in the plant at the start of the stoppage, there were only 345 left. All the rest left through redundancies, including all the women, who had families to support.

“The employers launched psychological warfare against us. They said they didn’t have any money to pay us and they cut our transport. So the union had to get in contact with other unions for assistance. We started sending petitions and letters to the government. We held marches in Moron and Caracas.

According to Pereira, “The petitions were rejected by the state government so we went to the national government. The leaders of the National Union of Workers [UNT — a union federation that supports the revolutionary process led by the Chavez government] really pressured the government to act.” On January 23, 2005, the National Assembly voted to nationalise Venepal. Chavez signed the decree six days later.

“The workers had already formed a cooperative in August 2003, hoping to take over the plant. We had tried all the different legal and political avenues to get the plant under workers’ control.” When Chavez signed the decree, the government also gave the workers US$7 million in credit to aid the cooperative.

“What has come out of the assembly and the agreements with the government is a process called co-management — cooperation between the government and the workers. However, at this stage there is no union here [after the workers voted to dissolve the existing one].

“At the centre of the operation is the workers’ assembly, with 300 workers. The government has 51% ownership, while the cooperative has 49%. There is a management board of five, with two people from the government and three from the workers.

“Different sectors of workers, like the electricians or the mechanics, all have one representative elected by the workers in their department as coordinators. These coordinators meet twice a week, and if they can’t solve problems in those meetings, they’re taken to the assembly, made up of 300 workers.”

The cooperative also plays a role in the community, Pereira told GLW. “We have water trucks here, so where communities need water, we take it to those communities, and we donate paper to schools”.

Invepal workers haven’t had a co-management model they could use as an example. “We’re making this structure up as we go along”, Pereira said. “There is a lack of laws that govern co-managed industries. Laws have been introduced into parliament, but not yet passed.

“The initial worker administration of the cooperative, which had just been named, not elected, because of time constraints, were all replaced by the popular assembly in November because they were moving towards a capitalist-type company. The former president and treasurer were expelled. The rest of the old management team were put back on the shop floor.”

Pereira said that the members of the old management “were not personally corrupt, but were acting like capitalists, and here the workers are socialists, Marxists”. Pereira was included in the new management group.

“The labour minister came to supervise this process and she said that in the interim, while things were stabilising, she would name herself as the president of Invepal.” The Invepal workers said that the president position would be only symbolic and “would have no power, and that [the workers] would run the show”.

“There are associated plants carrying out downstream production that are also owned by Invepal. At Maracay, they have their own assembly. The workers there are on contract, but we are starting to instruct them in how to form their own cooperative.”

“Of all profits that come in, 51% go to the government and 49% go to the cooperative”, Pereira said. Out of the cooperative’s profits, 30% will be spent on health services, education or community spending, or for emergencies. “If there is an extraordinary profit one year, the assembly will decide which capital investment they will put it into, but they will invest it back into the plant. Any wage increase has to be discussed in the assembly and voted on, also taking into account that they need to be careful because they might not have that money next year.

“The owners of the other factories nearby don’t see workers’ control as very favourable to their interests ... Invepal workers have already helped out other workers ... such as at Inveval [a valve-making company also nationalised by the government and run under a co-management system similar to Invepal’s] and there’s a tomato sauce factory where the workers have taken over the plant.”

Invepal workers are also advising workers in other cooperatives, such as at the Gotcha clothing factory. Pereira added that the Invepal workers are giving advice to workers who have taken over a Caracas underwear factory, “so they don’t make the same mistakes as we have made”.

“We have very good relations with the workers in surrounding factories, and with the UNT. We’ve formed a bloc with other workers, and have been involved in marches and in helping put forward demands by other workers for collective agreements.

“Other workers are seen as brothers, and we want to show them that this model of co-management actually works. We want to show other workers that we have a very clear consciousness of what we are doing, and that we are just ordinary people, who did the right thing at extraordinary moments.

“In the years of union struggle, you had to come to some agreement. There always had to be some final position when you come to some agreement with the boss. And when capitalism is strong, they try to get rid of any honest union people. They only want to deal with corrupt unionists. That’s the way capitalism works. We are saying that this model of workers’ control is far in advance of that. You don’t have to come to agreement with any boss; you’re electing your own boss.

“The workers also develop the consciousness that a lot of what we are doing is affecting the local community. Our neighbours, the people we know, are affected by our decisions because any work that is contracted out from the plant isn’t going to be given to a private company. It’s going to be contracted out to a workers cooperative from the community.”

Pereira had this final message for participants in the trade union brigade: “We hope that when you return to Australia, you will take on this question of workers’ control and cooperatives. Australia, like any other country, experiences injustice. If the situation presents itself in Australia, you know that there is a solution to injustice suffered by the workers.”

[To find out how to participate in a solidarity brigade to Venezuela, visit .]

From Green Left Weekly, June 28, 2006.