USNCP Final Statement on the Specific Instance between the United Steel Workers International Union and Birlesik Metal-Iscileri Sendikasi and Crown Holdings, Inc. for conduct in Canada and Turkey
U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises
Specific Instance between the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and Birlesik Metal-Iscileri Sendikasi and Crown Holdings, Inc.
for conduct in Canada and Turkey
Office of the U.S. National Contact Point
I. Summary of the Outcome of the Specific Instance
This Final Statement concludes consideration by the United States National Contact Point (USNCP) for the OECD Guidelines for Multinational Enterprises (the Guidelines) of the Specific Instance submitted on November 6, 2014 by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) and Birlesik Metal-Iscileri Sendikasi (Birlesik Metal-IS) with regard to the alleged conduct of Crown Holdings, Inc. subsidiaries in Canada and Turkey (Crown and Crown BevCan, respectively). After reviewing the Specific Instance and consulting the parties, the USNCP offered its mediation service for a voluntary mediation process between the parties, but such a process could not be established because Crown Holdings, Inc. did not accept the offer of mediation.
II. Context and Background on the USNCP
The Guidelines are voluntary, non-binding recommendations for responsible business conduct in a global context. The Guidelines are addressed to multinational enterprises (MNEs) operating in or from the territories of governments adhering to the OECD’s Declaration on International Investment and Multinational Enterprises, of which the Guidelines form one part. Adhering governments have committed to encouraging their MNEs to promote and implement the Guidelines in their global operations and appointing a national contact point (NCP) to assist parties in seeking a mutually satisfactory resolution to issues that may arise under the Guidelines.
As a part of its function, the USNCP addresses issues relating to implementation of the Guidelines, raised in the form of a Specific Instance, with regard to the business conduct of an MNE operating in or headquartered from the United States. The USNCP handles such instances in accordance with its procedures which are based on and consistent with the Guidelines.
The USNCP’s primary function is to promote adherence to the Guidelines. One important mechanism for such promotion is assisting parties, when appropriate, to reach mutually satisfactory resolutions of disputes (Specific Instances) under the Guidelines. It may offer mediation services to facilitate such resolutions and, where appropriate, make recommendations as to how the enterprise might make its business practices more consistent with the Guidelines. The USNCP does not make determinations whether parties are acting consistently with the Guidelines, and the USNCP does not have legal authority to investigate or adjudicate disputes submitted under this process.
Acceptance of a Specific Instance is in no way a determination on the merits of the claims presented in the Specific Instance, but merely an offer to facilitate neutral, third-party mediation or conciliation to assist the parties to voluntarily, confidentially, and in good faith, reach a cooperative resolution of their issues. In mediation, the parties are responsible for arriving at their own solution, and the process is designed to create an environment for cooperative problem solving between the parties. Entering into such mediation or conciliation does not guarantee that the parties will reach agreement. (See, e.g., the Procedural Guidance for NCPs under the Guidelines, section I.C.3)
III. Substance of the Specific Instance
On November 6, 2014, USW and Birlesik Metal-IS, both labor unions, submitted a Specific Instance with the USNCP alleging conduct inconsistent with Chapters II (General Policies, Canada issues only) and V (Employment and Industrial Relations) of the OECD Guidelines for Multinational Enterprises involving conduct by Crown Holdings, Inc.’s subsidiaries in Weston, Ontario, Canada and Izmit and Osmaniye, Turkey (Crown and Crown BevCan, respectively).
The events reported in the Specific Instance cover a period in Canada from 2013 to the submission date and in Turkey from 2012 to the submission date. The Specific Instance alleges intimidation and management interference with employees’ trade union rights in violation of international standards on freedom of association.
In addition to the Specific Instance with the USNCP, USW filed a complaint with the Ontario Labour Relations Board (“OLRB”) in Canada. On March, 13, 2015, the Ontario Minister of Labour appointed mediator-arbitrator Morton Mitchnick as the sole member of an Industrial Inquiry Commission to facilitate a resolution in the dispute between USW and Crown in Canada. The Industrial Inquiry Commission identified the issue preventing the resolution of the strike to be the disagreement between Crown Holdings and the union on return striking workers back to the workplace in preference to the replacement workers. On June 17, 2015, the Commissioner released his report, and the USW’s unfair labor practice complaint was referred to the OLRB. With the assistance of the OLRB the parties were able to reach a deal on July 8, 2015, which returned all striking workers back to work. The collective agreement was ratified on July 19, 2015. Both USW and Crown Holdings, Inc. reported to the USNCP a successful return to work on August 10, 2015, and stated that the issues reported in the Specific Instance submission regarding Canada were resolved.
USW/ Birlesik Metal-IS allege that the management of Crown BevCan, the Crown Holdings, Inc. subsidiary in Turkey, attempted to intimidate workers from joining the union from the beginning of Birlesik Metal-IS’ efforts to organize Crown BevCan’s two Turkish facilities in 2012. According to the unions, one worker was dismissed for involvement in union organizing in February 2012, and another four were dismissed in June 2012, for their organizational activities. The unions reported that a total of 26 employees had been dismissed during organizational efforts. The unions alleged that Crown BevCan officials threatened employees with termination of their employment, that Crown BevCan used legal methods to delay Turkish Government approval of Birlesik Metal-IS as the legitimate representative of the workers and, when the courts decided against Crown BevCan and approved Birlesik Metal-IS as legitimate representatives, Crown BevCan began again to dismiss union leaders.
Birlesik Metal IS and Crown Holdings, Inc. reported that criminal complaints were filed in courts in Osmaniye and Izmit against a factory manager for Crown BevCan. The manager was accused of using violence and threat in order to force workers not to join the union in 2012. The court in Izmit found the manager guilty, while the court in Osmaniye acquitted him. Both rulings have been appealed to higher courts.
According to the unions, collective bargaining with the company was not fruitful and after two failed rounds, the union applied to the government for permission to strike under the relevant legislation. The unions allege that Crown BevCan pressured workers to withdraw their signatures from the application to the Regional Directorate of Labor, resulting in 33 workers withdrawing their signatures on the same day that the signatures were submitted. According to the unions, the Directorate did not approve the strike because of the withdrawals.
In its response to the USNCP, Crown Holdings, Inc. denied all of the allegations in the Specific Instance. Crown Holdings, Inc. also stated that none of the issues raised in the Specific Instance Submission were substantial or material, that any outstanding issues were being addressed by the judicial and/or administrative legal systems of the respective countries, and that neither the effectiveness nor purposes of the OECD Guidelines would be furthered by considering the allegations raised in the Specific Instance submission.
Specifically, Crown Holdings, Inc. emphasized that Turkey’s Regional Directorate of Labor denied the application by employees for a strike vote. Crown Holdings, Inc. denied that workers were pressured to withdraw signatures and asserted that Birlesik Metal-IS lost its collective labor authorization from the Regional Directorate of Labor when it called a strike and workers did not honor the call. Crown Holdings, Inc. asserts that Birlesik Metal-IS has no legal basis to claim any bargaining authority or obligation on behalf of the company’s employees as the Turkish Directorate of Labor has denied the request of the union for reauthorization or reinstatement of its authority to bargain on behalf of the employees and that denial has been confirmed by Turkish courts. With regard to the alleged dismissal of 26 employees for union activities, Crown Holdings, Inc. states that these cases are working their way through the Turkish judiciary process. Crown Holdings, Inc. also asserts that most of these individuals are not and never have been employees of Crown BevCan.
Crown Holdings, Inc. provided as an attachment to its submission a list of 33 cases filed against the company by its employees, 24 of which are labeled “Re-employment,” “Unfair dismissal,” or “Union case.” In later correspondence, Crown Holdings, Inc. provided copies of four decisions by the Supreme Court of Turkey on cases included on the list. Crown Holdings, Inc.’s representative stated that, “There are additional cases pending and we anticipate receiving similar decisions.” In three of the four cases, the Supreme Court overturned a lower court ruling that the termination had been motivated by the employee’s union activity and ruled, instead, that the employee had not met the burden of proof to demonstrate that the termination of employment was due to union activity. It also ruled in each case that the employer had not justified the termination of employment and that, therefore, the termination was nullified and the employee must be reemployed. If the employee was not allowed to resume employment at the Company’s option, then the Court ordered Crown Holdings, Inc., to pay compensation to the employee. In each case, the court also ruled that Crown BevCan pay the litigation expenses of the employee. (In the fourth case, the Supreme Court upheld a lower court ruling against the employee.) Crown Holdings, Inc. reported to the USNCP that it intended to pay compensation, but would not reinstate employees. The Company confirmed that court-ordered compensation had been paid to seven former employees as of the date of this Final Statement.
The Issue of Confidentiality
In its response to the USNCP, Crown Holdings, Inc. stated that the submitters of the Specific Instance had provided copies of the Specific Instance to customers of Crown Holdings, Inc., threatening to bring similar cases against them for their relationship with the company. Crown Holdings, Inc. argues that the failure to maintain confidentiality by the submitters is a breach of the good faith necessary to the effectiveness of the specific instance process of the OECD Guidelines and is sufficient grounds for the USNCP to conclude that the matter is not bona fide and does not deserve further examination. Additionally, Crown Holdings, Inc. submits that such breaches undermine the effectiveness of the Guidelines and the confidence of employers in the OECD process and serve as disincentives for employers to participate in a proposed offer of good offices.
The USNCP requested further information and views of both parties. Both responded by providing copies of letters sent in November 2014 by USW to customers of Crown Holdings, Inc. The Specific Instance was an attachment to those letters, which apparently went to six customers.
In its response to the USNCP, USW/ Birlesik Metal-IS explicitly recognized the expectation of confidentiality with respect to the Specific Instance process, and asserted that there was no malicious intent or bad faith on the part of USW in providing copies of the Specific Instance to Crown Holdings, Inc.’s customers as part of its ongoing campaign. USW/ Birlesik Metal-IS stated that the letters covering the Specific Instance had already been approved and were being sent when notice of the USNCP policy on confidentiality was received. USW/ Birlesik Metal-IS argues that, as there were no proprietary secrets or other confidential business information revealed as a result of the communications with customers of Crown Holdings, Inc., and as nothing shared was learned during the NCP process, the policy reasons for the confidentiality rules were not breached. The unions also argue that the impact of the release was minimal given the public record of this dispute. USW/ Birlesik Metal-IS also states that no further release of the Specific Instance took place after November 2014.
IV. Guidelines Provisions Cited
The Specific Instance alleges inconsistencies with Chapter II.A.11 and Chapter V.2.b in Canada, Chapter V.7 in Turkey, and Chapter V.1.a and Chapter V.1.b in both countries. (The Guidelines are available online at http://www.oecd.org/daf/inv/mne/48004323.pdf.)
V. Role of Other NCPs and the Interagency Working Group
The Specific Instance was submitted by USW/ Birlesik Metal-IS to the USNCP, copying the Canadian and Turkish NCPs. The three NCPs determined that, given that the headquarters of Crown Holdings, Inc. is in the United States, that the issues raised in the Specific Instance seemed to relate to corporate headquarters practices, and that the issues raised covered both Turkey and Canada, the USNCP would be best placed to process this Specific Instance. The USNCP has consulted with both the Canadian and the Turkish NCPs throughout the process.
Per procedures, the USNCP consulted and received input from the U.S. government interagency working group throughout this process, as well.
VI. Initial Assessment
The launch of a mediation process between the parties in Canada and the ultimate success of mediation by the Ontario Labour Relations Board significantly delayed the issuance of an initial assessment of this Specific Instance and the offer of mediation by the USNCP. The USNCP took no action on the Specific Instance while other mediation was underway and then waited until a successful return to work at Crown’s Toronto facility by USW members had taken place.
An Initial Assessment, together with an offer of mediation was provided by the USNCP to the parties on November 3, 2015. After thorough review of information provided in writing and in oral briefings by both parties, the USNCP decided to accept the Specific Instance and determined that the issues raised by USW/ Birlesik Metal-IS were substantiated and merited further consideration under the Guidelines. The USNCP offered mediation services to assist the parties to undertake a dialogue to seek a mutually agreed upon resolution of issues related to Crown BevCan operations in Turkey. The Canadian and Turkish NCPs were consulted in the preparation of the Initial Assessment and provided with copies of the Assessment when it was released to the parties.
Per the Guidelines, the USNCP took the following points into account when considering whether USW/ Birlesik Metal-IS’s concerns merited further consideration. Given that issues related to Crown’s operations in Canada had been resolved, there was no need for an offer of good offices in that regard and the below explanation of this decision will focus on the issues related to Crown BevCan operations in Turkey only.
a. Identity of the party and its interest in the matter
USW is a large and diverse labor union, with members in many sectors of the economy of North America and the Caribbean. Birlesik Metal-IS’s is a large Turkish labor union with members principally in the metal sector of the Turkish economy.
Crown Holdings, Inc. is a multinational company headquartered in Philadelphia, Pennsylvania and operating in 40 countries. Through its subsidiaries, Crown Holdings, Inc. is a leading supplier of packaging products to consumer marketing companies around the world.
The USNCP is satisfied that USW/ Birlesik Metal-IS are able to provide information about the Specific Instance and have an interest in the issues raised.
b. Whether the issue is material and substantiated
USW/ Birlesik Metal-IS have provided information in the form of reports, and statements alleging the use of intimidation and other forms of interference with employees’ rights to organize.
USW/ Birlesik Metal-IS claim that:
- Crown BevCan has violated Chapter V “Employment and Industrial Relations” of the OECD Guidelines for Multinational Enterprises;
- Crown BevCan management has pursued an aggressive and ongoing campaign of interference with employees’ trade union rights in violation of international standards on freedom of association, dismissing employees and otherwise pressuring them not to join the union;
- When the union applied to the Regional Directorate of Labor for a strike vote with the required signatures of one-quarter of the workers, Crown BevCan management intimidated employees such that 33 workers withdrew their signatures from the request for a strike vote, resulting in the failure of the request.
- Crown BevCan management publicly threatened to close its plant in Izmit because of the actions of the union.
In its response, Crown Holdings, Inc. denied all of the allegations in the Specific Instance. Crown Holdings, Inc. maintained that none of the issues were substantiated or material, that the judicial process and/or administrative legal systems were addressing any issues in both countries and that neither the effectiveness nor the purposes of the OECD guidelines would be furthered by considering the allegations. Alternatively, Crown Holdings, Inc. asserted that it was not appropriate for the USNCP to make an initial assessment of the allegations, given the various proceedings underway in Canada and Turkey.
Specifically, on the issues in Turkey, Crown Holdings, Inc. denied the allegations, reserving its rights to further respond if necessary. In general, it asserted that Birlesik Metal-IS had not convinced any employee to go out on strike against Crown Holdings, Inc., noted that the cases of workers who claim to have been dismissed unfairly are before the courts of Turkey, and asserted that Birlesik Metal-IS had been denied reauthorization of its authority to bargain on behalf of the employees and thus had no legal basis to claim any bargaining authority or obligation on behalf of the company’s employees at its Turkish facilities. The Company denied that it had threatened to close its Izmit plant.
It is clear to the USNCP that the allegations of violation of the Guidelines are both material and substantiated. The USNCP per its established procedures makes no determination whether a violation of the OECD Guidelines has taken place.
c. Link between Crown BevCan’s activities and issues raised
The Specific Instance raised by USW/ Birlesik Metal-IS asserts that Crown BevCan interfered with its employees’ trade union rights in violation of international standards on freedom of association.
d. Relevance of applicable law and procedures, including court rulings
At the time the Initial Assessment was drafted, the USNCP was aware of pending lawsuits brought by numerous persons alleging that they were released from employment at Crown BevCan because of their affiliation with Birlesik Metal-IS. The USNCP is further aware that several such cases have been brought to completion. In three cases, lower courts found for the plaintiffs that they had been released from employment as a result of their union activities. The Supreme Court of Turkey had overturned these rulings, ruling that the reasons for termination of employment had not been proven, but ordering that Crown BevCan re-employ the workers.
The USNCP is not aware of any applicable law or procedures that would weigh against offering its good offices in this case. The USNCP is satisfied that its offer of good offices will not have any significant effect on the ability of the Turkish judiciary to move forward with the cases before it. The USNCP believes that while judicial action may resolve some of the issues at hand, a broader process of mediation could lead to resolution of issues which are not before the courts and will advance the implementation of the OECD Guidelines for Multinational Enterprises.
e. How similar issues have been, or are being treated in other domestic or international proceedings
The USNCP is not aware of similar proceedings.
f. Whether the consideration of the Specific Instance would contribute to the purposes and effectiveness of the Guidelines
The USNCP considers that its offer of mediation could play a positive role in assisting the parties in facilitating a dialogue on the issues raised in the Specific Instance and reaching a mutually acceptable solution. Consistent with the criteria in the USNCP procedures for Specific Instances (as established in the Guidelines themselves), the USNCP determined in the course of its Initial Assessment that the matters raised are bona fide, merit further consideration, and are relevant to the implementation of the Guidelines. The USNCP notes that the issues raised in this Specific Instance regarding conflicts between the employer and employees in Canada were resolved after a mediator was named as an Industrial Inquiry Commission to look into the case by the Ontario Minister of Labor and the USW took its unfair labor practice complaint to the Ontario Labor Relations Board, which ultimately assisted the parties in resolving the outstanding issues through mediation. The success of mediation of the Canadian issues suggests to the USNCP that mediation may be fruitful in resolving the Turkey issues, as well.
The USNCP considered the issue of confidentiality in this Specific Instance. Under USNCP policies, a failure to honor confidentiality expectations may be considered bad faith and may lead to the termination of the process. This policy is a reflection of the damage violations of confidentiality may do to efforts at confidence building and dialogue. The effectiveness of a system of voluntary guidelines such as those supported and promoted by the USNCP depends upon building confidence and promoting dialogue. The USNCP regrets the release of the Specific Instance by USW to customers of Crown Holdings, Inc. However, the USNCP does not find that this release, in and of itself, constitutes bad faith and continues to believe that mediation holds out the prospect for a resolution of the issues that divide the parties. The USNCP notes it is not aware that any information obtained through the Specific Instance process was released.
VII. The USNCP Offer of Mediation
Under USNCP procedures, acceptance of the Specific Instance – including a finding that the issues raised by USW/ Birlesik Metal-IS were bona fide and merit further consideration– does not indicate the USNCP considered Crown Holdings, Inc. to have acted inconsistently with the Guidelines, but rather that the USNCP considers it appropriate to facilitate a discussion of the issues raised between the parties. For the Company’s part, a decision to participate in this process would not have implied any admission of conduct inconsistent with the Guidelines.
The USNCP believes the two sides could benefit from a mediation process, including an open exchange of perspectives, a beneficial examination of the core issues arising under the Guidelines, and potentially a mutually agreeable solution. Such an exchange might represent a valuable input to Crown’s due diligence process.
Both USW and Birlesik Metal-IS accepted the USNCP offer of mediation services. Regrettably, Crown Holdings, Inc. rejected the offer. In doing so, a Crown Holdings, Inc. representative stated that the Supreme Court of Turkey had ruled in the Company’s favor in a fourth case alleging inappropriate termination of employment. Crown Holdings, Inc. related to the USNCP that, “[b]ased upon the outcomes in the Company’s favor of the cases in Turkey decided so far, it is our view that the good offices offer would not further the interests of the employees in Turkey, the OECD Guidelines or the Company’s global operations.”
VIII. Conclusion and Recommendations
This Specific Instance is now concluded as a voluntary mediation process could not be established because Crown Holdings, Inc. was not willing to participate in mediation. The USNCP regrets the unwillingness of Crown Holdings, Inc. to participate in the process.
The following recommendations reflect the important fact that the Guidelines go beyond simply calling for respect for local law. In fact, the Guidelines extend beyond the law in many cases. Therefore, simply complying with the law of a particular jurisdiction does not necessarily place a company in compliance with the Guidelines.
Commitment to the OECD Guidelines for Multinational Enterprises: The USNCP recommends that Crown Holdings, Inc. explicitly commit itself to implementing the Guidelines. A commitment to implement the Guidelines includes a commitment to ensuring that rights are respected -- the rights of its workers, including the right of workers to establish or join trade unions of their own choosing, as well as the rights of other individuals affected by its business operations. Under the Guidelines, all multinational enterprises are expected to have in place a due diligence process to identify, prevent and mitigate adverse impacts on matters covered by the Guidelines, including violations of trade union rights, and to account for how such adverse impacts are addressed.
The USNCP notes that, in its communications, Crown Holdings, Inc. has suggested that the results of several Turkish court cases justified its conclusion that it has not violated the Guidelines. However, while the Turkish Supreme Court found that Crown BevCan’s employees had failed to sufficiently prove that their employment was terminated for union-related reasons, the Court also found that their termination was unjustified and ordered Crown BevCan to reinstate and/or compensate them and to cover their legal costs. These judgments, as well as the fact that national court systems do not always speak to the international standards of the Guidelines, emphasize the need for companies to commit themselves to the Guidelines and for processes such as this Specific Instance process.
Conduct Corporate-Wide Labor Review: The USNCP recommends that Crown Holdings, Inc. conduct a corporate-wide labor rights review, consistent with the recommendation of the Guidelines, focusing in particular on Chapters V.1.a and V.1.b, establishing that enterprises should respect the right of workers employed by the enterprise to establish or join trade unions and representatives of their own choosing, and respect the right of workers employed by the enterprise to have trade unions of their own choosing recognized for the purpose of collective bargaining, and to engage in constructive negotiations.
Mediation: The USNCP recommends that Crown Holdings, Inc. evaluate the allegations raised by the submitters and consider how to address them, including through formal or informal engagement with the submitters.
Confidentiality: Maintaining confidentiality within the Specific Instance process is important to building confidence and trust, which are crucial to reaching a mediated settlement of differences. The USNCP recommends that all submitters of Specific Instances maintain confidentiality within the Specific Instance process, including by not releasing the text of the Specific Instance itself to parties outside the process.
The Office of the USNCP remains available to assist the parties in facilitating dialogue in the future on these matters, if the parties later agree to pursue mediation or another form of alternative dispute resolution.
Melike Ann Yetken
U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises
 As this statement was being finalized, Crown submitted three more Supreme Court decisions to the USNCP, asserting that the rulings were also in Crown’s favor. As these decisions were provided only in Turkish, the USNCP has not assessed them.