Someone's untruthful in Chile

By David Stenerud
& Jorge Escalante
NorWatch

In an article in the US monthly magazine Latin Trade, heavy critisism is directed against Mainstream Salmones y Alimentos, a sea farming company owned by the norwegian state food company Cermaq, former Statkorn Holding. The article bears alligations against the company both for over-using antibiotics and for under-paying its workers.

The magazine has chosen to take a close look at Mainstream primarily because of the extreme speed of growth in the Cermaq-owned company over the last years. During the three-year period from 1998 through 2000 no other sea farming company in Chile can compete with Manstream's 346 percent growth in value, nor its 1730 percent increase of income.

NorWatch has visited Mainstream in Chile. We wanted to explore whether the alligations pressed forward by Latin Trade were true.

Media shy
We are received in the "sea farming capital" of Puerto Montt in the southern part of Chile, by Francisco Ariztia, director and head of Mainstream Salmones y Alimentos. His office is situated on the 10th floor in a relatively new business complex, giving him probably the best view possible over the the city.

  - Latin Trade claims that the director refused to speak with the magazine's journalists?

  - Nonsense, we were never contacted by the magazine, replied Ariztia. After a while, though, he does admit it is not all that unlikely that the journalists did in fact call - and that they were, almost automatically, told off.

  - I like to be a private person. You won't see my face in the papers, explained the director.

NorWatch got the appointment for this interview only after contacting the Cermaq overall head of sea farming operations in Norway. Beforehand, we had allready tried to get a response to our request for an interview directly from Ariztia for about two weeks.

There at last, though, we were granted in a polite and pleasant manner by Mr. Ariztia.  He told us that he is very satisfied with the new Norwegian owners. Still, he pointed out; the shift of owners has not influenced the operations of Mainstream in any way. He is also pleased also with Mainstream's current position in the sea farming business in Chile; the company now has a market share of close to 9 percent, making it the second biggest unit in the segment.

Denies
When NorWatch began to refer more specifically to subjects in the Latin Trade article, it soon became aparent that Fransisco Ariztia did not meet unprepared.

- The article is full of lies, Ariztia stated firmly.

He put on the table three documents:

One consisted of signatures from more than twenty work-unit representatives (there are no labour union in Mainstream) confirming that the employees all enjoy satisfying working conditions - environmentally as well as salary-wise.

An other document is signed by an executive of the pharmaceutical company ScheringPlough, stating that Mainstream does not have trade relations with the company, and never did. This document relates to the gravely negative statements made by ScheringPlough spokes woman Mariela Romero to Latin Trade on the subject of over-use of antibiotics in the Chilean aquacultural business.

The third doument relates itself directly to a statement to Latin Trade made by one Hector Moyano with the local labour inspection office (Inspecci¢n del Trabajo) in Puerto Montt.

Mr. Moyano is quoted as follows in Latin Trade, February 2001: "Mainstream is currently under investigation for breaking Chilean labor laws. (...) It is paying its workers less than minimum wage for overtime. Those hours have to be at least minimum wage. If we can't negotiate a settlement, we will have to fine them."

The document Fransisco Ariztia was now showing us, was signed by Hector Moyanos boss, regional head of working inspections, Alejandro Cardenas. This piece of writing categorically denies that Mainstream is under investigation. According to the statements in this document, the sea farming company has not been under any kind of investigation during the period 1st of January 2000 to passed the date of the Latin Trade article in 2001.

- I was really angry with that article, I have to say, Ariztia commented.

- Too much antibiotics
The Chilean resource organisation Terram has recently documented that Chilean sea farmers use 75 times more antibiotics per produced unit of salmon, than their counterparts in Norway. This is critisism Mr. Ariztia can relate to:

- I guess it is true that the Chilean sea farming industry in general, that includes Mainstream, uses to much antibiotics, admitted Arizia. 

- But that is becauce we haven't developed vaccines, he explained. - You see, we have a government that is not interested in investing in the research and development needed.

- Cannot the industry do that itself?

- No, we couldn't. Mayby we could set aside 1 or 2 percent of our income to vaccine development, but that would not be enough.

- Couldn't the whole industry join up?

- Yes, we have tried that, claimed Ariztia. - But then there are companies that all of a sudden have bad results and find they can't contribute after all... no, it hasn't worked.

Only so far
When we were through interviewing director Ariztia, we were transported out to one of the three areas of sea farming that Mainstream owns and operates near of Puerto Montt.

Vice-director of production Javier Herrara is responsible for the operation at these sites. He told us here they produce both salmon, trout and cojo here. The workers told us they have very high saleries. Some of the workers have to live out by the sites all week. 

The day passed; our tour of the sea farms had been lenghty, and we weren't on our way back to Puerto Montt until around 8 pm. We expected to be taken to the filet factory down town, but were disapointed.

- There is no-one there now, nothing to see, said Herrera.

Admits poor wages
Fransisco Ariztia told us that the workers earning less in the Mainstream system, are the filet factory workers - the ones we didn't get the opportunity to meet. These workers only make 132.000 Chilean pesos (CHP) a month, less than 200 US dollars (USD). That is still well over minimum legal salery in Chile, at present set to 105.500 CPH, just less than 160 USD.

In order to illustrate how low the wages at Mainstream really are, we can compare to an other Cermaq-owned company in Chile; the Karl Samsing lead EWOS fish feed company. The workers earning least in the EWOS factory make 180.000, more than 270 USD, a month, that's adding 40 percent to the minimum Mainstream salaries. Still, Samsing told NorWatch: "It is hard to support a family on those wages."

Even though Mainstream's Ariztia  had admittid to supplying very low salaries to his factory workers, we were still less than certain that all the cards were on the table. That is; why does the labour authorities have a split tongue?

Muzzle
We decided to address the labour inspector office in Puerto Montt first, asking the mentioned Hector Moyano:

- Is it true that you spoke to Latin Trade?

- Yes, I remember that, said Moyano?

- Is it correct what you said to that magazine that Mainstream is under investigation?

- I cannot talk about this.

- But you have spoken to journalists before...

- Yes, but now I can't talk about this matter, you have to contact the regional head, Alejandro Cardenas.

So we did:

- Can you explain why Hector Moyano has claimed that Mainstream is under investigation for under-paying its workers, at the same time as Mainstream-director Ariztia has in his possession a document on which you have given your signature to the oppsite?

- I cannot talk about this case.

- But surely you can either confirm or deny...

- Send me a fax with questions, and I'll see what I can do.

Since NorWatch spoke with Alejandro Cardenas, claims have been made by the Inspecci¢n del Trabajo office that the fax never arrived. Recently, however, the work inspector's secretary have confirmed to us that Mr. Cardenas have indeed received our questions on fax. Several weeks later we still haven't received an answer. Instead Mr. Cardenas has made himself unreachable. Only once since our first conversation, have we been able to talk with him directly - but as soon as he realised who was on the other end of the line, Mr. Cardenas hung up.

CEO Geir Isaksen of Cermaq, Mainstream's mother company, have been made familiar with this case, and said he would get in touch with his people in Chile.

- But in principle, obviuosly, I have to trust my collegues' words, he concludes.

FACT BOX
Cermaq: Mainstream & EWOS in Chile
The Cermaq Group, formerly Statkorn Holding, last year had a turnover of 500 million USD. The Norwegian state, represented by the Ministry of Trade and Industry, owns 79,38 percent of Cermaq. Additionally Norgesinvestor owns 12 percent. The rest is owned by some one hundred smaller shareholders, of which Odin Fond is the bigger.

During 2000, Cermaq bought all shares in several Chilean companies, among them Mainstream and EWOS. Mainstream Salmones y Alimentos has over the last years held the position as fastest growing sea farming company in Chile. This year the company expects to end at an 80 million USD turnover. The company is second largest on salmon farming in Chile. EWOS is an international fish feed company with factories in Norway, Canada, Scottland and Chile. The company has a global market share on feed for trout and salmon approaching 40 percent. EWOS was formerly owned by the multinational food giant Cultor.