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ILO meeting to discuss restructuring in the chemical industry

Some 90 Government, employers’ and workers’ delegates from more than 40 countries will discuss restructuring in the chemical and pharmaceutical industries, and ways to make it sustainable through improved industrial relations at a meeting which runs in Geneva from 24-27 October.

News | 21 October 2011

GENEVA (ILO News) – Some 90 Government, employers’ and workers’ delegates from more than 40 countries will discuss restructuring in the chemical and pharmaceutical industries, and ways to make it sustainable through improved industrial relations at a meeting which runs in Geneva from 24-27 October.

A new ILO report to the meeting highlights the strategic importance of the chemical industry to national economies. In 2009, world chemical sales were estimated at US$2,700 billion. The ILO estimates that there are up to 20 million people employed in the global chemical, pharmaceutical and rubber and tyre industries today.

The global economic crisis led to significant job losses in the sector in Western Europe and the United States. In the 27 Member States of the European Union, employment decreased from 3 million in 2005 to 2.8 million in 2008. However, in 2009, employment recovered attaining 3 million again, and by the first quarter of 2010 it even reached 3.1 million. The crisis resulted in further deterioration in employment in the United States chemical sector: between 2008 and 2009, nearly 70,000 jobs were lost, accounting for 5.1 per cent of the total workforce in the sector.

The ILO Tripartite Meeting on Promoting Social Dialogue on Restructuring and its Effects on Employment in the Chemical and Pharmaceutical Industries will provide governments, employers and workers in the chemical industry with examples of good industrial relations practices in the context of restructuring, and give guidance on measures to improve employer-employee relations in the industry.

The report examines the impact of restructuring strategies on people and employment. Between 1987 and the third quarter of 2009, a total of 2,203 mergers and acquisitions (M&A), worth more than US$1.6 trillion, have taken place in the chemical and pharmaceutical industries worldwide.

At the same time, global employment in the chemical industry has become concentrated in fewer countries, including the 27 Member States of the European Union, Brazil, China, India, Japan, Mexico, Republic of Korea, Russian Federation and United States. These countries account for nearly 60 per cent of total employment in the industry.

Employment in the chemical industry in Asian countries shows rapid growth, particularly in China and India. At the end of 2008, total employment in China’s chemical industry exceeded 4.5 million people. At the same time, employment in India’s chemical industry had reached nearly 2.2 million.

With respect to working conditions, the report notes long working hours as the norm in the chemical industry. Although weekly working time has been reduced in many countries over the past decade, chemical workers still worked more than 40 hours a week on average in 2008. In some countries, chemical production workers exceeded 50 hours a week.

According to the report, longer working hours may be related to high pay in the industry. However, chemical workers in some emerging economies earn much less than many workers employed in other industries and service sectors.

The report identifies a shortage of skilled workers and scientists as a major challenge for the chemical industry in recent years. The lack of scientists has prompted migration among developed economies, as well as between developed and developing economies. Many chemical firms are taking positive action to train workers using their own resources.

Despite similar measures to increase the number of women working in the industry, their percentage remains low and chemical firms have far fewer women executives than the average in the Fortune 500 listing of manufacturing sector firms.

With respect to industrial relations, the report notes that outsourcing and contract labour are often key issues in the chemical industry. On the other hand, in the context of the global economic crisis the promotion of training, retraining and lifelong learning, in order to increase the employability of workers has emerged as an area of convergence in a number of cases. According to the report, the crisis tested social dialogue in the sector and companies with effective social dialogue provided a higher return to shareholders than those with poorly managed employee communication.

Because globalization of the chemical industry is advanced, the Report points to the role of global social dialogue forums in enabling workers and their representatives to discuss not only corporate structural change, but also a range of business and employment issues at the transnational level of the chemical firm concerned.