Protest won’t affect business: Tiffany & Co.

A protest in early May by the United Steelworkers of America (USWA) outside Tiffany & Co. in Chicago, Ill., will not affect the flow of silver and gold to the luxury goods retailer from Kennecott Utah Copper (KUC).

The rally was in support of unionized workers at KUC’s operations in Magna, Utah, who have been without a contract since Sept. 30, 2002, when a 6-year deal expired. KUC is wholly owned by London-based Rio Tinto.

“We do not have a formal contract with Kennecott Utah Copper; however, we intend to continue purchasing gold and silver from Kennecott,” says a spokesman for New York City-based Tiffany & Co.

In a release, the union challenged Tiffany & Co. “to live up to its pledge to do business with suppliers that share its concern for sustainable development and fair treatment for workers.”

Last year Tiffany struck a deal with KUC, according to which Tiffany will buy more than 1 million oz. gold and silver (combined) from KUC.

“By purchasing such significant amounts of precious metals from Kennecott Utah Copper, Tiffany is significantly bolstering the bottom line of a company that seems hell-bent on a race to the bottom,” says Terry Bonds, USWA District 12 director. “Tiffany will only be behaving responsibly when it makes a serious attempt to reverse that race.”

The Chicago protest was the latest example in an ongoing global campaign by the USWA against Rio Tinto operations.

At the recent convention of the Canadian Institute of Mining, Metallurgy and Petroleum in Montreal, Leo Girard, international president of the USWA, said “Rio Tinto is going to become the poster child of what’s wrong with the global mining industry.”

Ian Head, a spokesman for Rio Tinto, responded by saying: “Unions have been waging campaigns for one reason or another since 1996. Rio Tinto sets high levels of corporate governance performance for its operations and the individuals who manage them.”

A major bone of contention with the Steelworkers was the dismissal of 16 workers at Rio’s Blair Athol coal mine in Australia in July 1998. At the time, the union filed a formal complaint and an inquiry was launched.

In December 2002, the country’s Industrial Relations Commission released a report that said Rio Tinto had maintained a blacklist of employees at Blair Athol who were seen as union activists. Moreover, the company targeted and singled out the blacklisted workers when selecting employees for layoffs. However, the commission did not force Rio to reinstate the workers, since the commission could not prove the workers would not have been laid off regardless of the blacklist. The union says it will appeal the case before Australia’s High Court.

Rio Tinto recently moved to have some of the dismissed Blair Athol workers evicted from company-owned homes. Head says eight of the former employees were given the choice of vacating the houses or continuing to occupy them at a commercial rate. Two chose to move out, and six decided to stay.

KUC had US$755 million in revenues and $78 million in net profits in 2002.