G8 Summit: Unions in international attack on private equity and hedge funds
Sunday, 3 June 2007
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The world's biggest unions will launch a multi-fronted attack on the private equity and hedge fund industries this week with a series of protests and policy proposals at the G8 meeting of industrial nations in Germany.
Members of the International Trade Union Confederation, the world's largest union federation representing more than 168m workers around the world, have marshalled their forces ahead of this week's conference in Heiligendamm. As part of a list of demands handed this weekend to Kajo Wasserhovel, Germany's Deputy Minister of Labour and Social Affairs, they will press for greater transparency from the buyout industry and a need for more dialogue between it and workers at the companies they buy. "When [buyouts] result in asset disposals and break ups, workers lose out," said an ITUC spokesman. The ITUC will also examine the possibility of blocking member pension funds from investing in buyouts firms that engage in activities detrimental to workers rights.
The GMB, the union which has mounted a vociferous campaign against the private equity industry in the UK, will today publish the findings of an inquiry ordered by its national executive into the effects on companies that are taken over by buyout firms. It will also send protesters to the conference.
The German DGB union, meanwhile, has organised an alternative summit in Rostock, Germany, that will bring together labour leaders from around the globe. The mobilisation comes amid astounding growth for both the private equity and hedge fund industries. Private equity firms have more than quintupled the money under their management over the last four years, allowing them to buy increasingly large, consumer-facing companies. The hedge fund industry has also exploded. These investment groups now control more than $2.5 trillion globally, and have become more aggressive in pushing for change at investee companies, which sometimes means restructuring and job losses. Their growth has inspired a movement spearheaded by German ministers to impose of a code of conduct to regulate the industry's activities. AIMA, the international hedge fund trade body, opposes this. Executive director Florence Lombard said: Contrary to perceptions, the hedge fund industry is already regulated, particularly in Europe and Asia, and AIMA continues to issue and update industry guides to sound practices. Therefore, the relevance of an additional code of conduct, as defined above, is questionable.
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