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McDonald's Faces Global Crackdown In Brazil; Chicago Worker Testifies

Workers from five continents, elected leaders from around the world testify before Brazilian Senate at first-ever global hearing on McDonald's 'race to the bottom'

Citing a pattern of illegal behavior that is undercutting Brazil's workers and economy, Brazilian leaders Thursday called for major investigations into McDonald's that will place the fast-food giant under the microscope in its most important Latin American market.

Brazilian Labor Ministry prosecutor Leonardo Mendoca announced the formation of a task force to investigate extensive allegations of labor law violations by McDonald's throughout Brazil, which could find the company in breach of a national accord it signed in 2013 pledging to respect the country's labor laws. Mendoca also said Brazil's new prosecutor general would continue to support enforcement and investigations involving McDonald's.

Additionally, Brazilian members of Congress Carlos Zarattini (ruling PT Party) and Antonio Carlos Mendes Thame ( PSDB Party) called for the reopening of a Parliamentary Commission of Inquiry into slave labor, the highest level of investigation possible, to probe so-called "social dumping" and poor working conditions at McDonald's.

The announcements were made at an extraordinary global hearing before the Brazilian Federal Senate, where McDonald's workers from five continents joined elected officials and labor leaders from around the world to testify on how McDonald's - the world's second-largest private-sector employer - is undermining workers, governments, competitors, suppliers and consumers through its low-road business model.

"McDonald's is one of the most recognized brands around the world, and this hearing makes clear that its corrosive business model spans the globe as well," said Sen. Paulo Paim, chairman of the Human Rights and Participative Legislation Committee in the Brazilian Federal Senate, who called the hearing Thursday. "Brazil can be the country that leads the way in holding this company accountable. Let this hearing mark a moment where governments around the world join together to demand that global companies like McDonald's do better by workers and the public as a whole."

The hearing, which drew attendees from 20 countries, marks a significant escalation of a global campaign to hold McDonald's accountable for its low-road business model, featuring wide-ranging testimony on the company's mistreatment of workers and bad corporate citizenship around the world, including low wages, dangerous working conditions, labor law violations, tax avoidance, and abusive business practices, among others.

"The verdict of today's hearing is clear: no company is more responsible than McDonald's for driving a global race to the bottom," said Scott Courtney, assistant to the president at the Service Employees International Union. "McDonald's has pioneered and perfected a brand of 'cannibal capitalism' that chews up and spits out the very people and communities that it needs in order to be successful in the long term. It is unsustainable from a business perspective, but more importantly it is morally wrong.

"McDonald's has a choice - it can continue dragging down standards nearly everywhere it operates, or it can use its considerable power and influence to help improve the lives of workers around the world. Today's hearing shows that there is a global consensus in support of McDonald's stepping up and leading a better way forward."

McDonald's workers from countries including the United States, France, Korea and Brazil testified on how the company's low wages and harsh conditions - including racial and sexual harassment and widespread health and safety hazards - drag down economies across the world.

"When I look around at other McDonald's workers who are here today from five different continents, I know that I am speaking not just for myself, but for hundreds of thousands of cooks and cashiers like me who are fighting for better jobs and a better life at McDonald's," said Adriana Alvarez, a McDonald's cashier and Fight for $15 leader from Chicago.

Alvarez, who is paid just $10.50 an hour after five years on the job, broke down in tears describing how hard it is to come up with the $75 a week she needs for child care for her son Manny following recent government cuts.

Elected leaders from around the world testified on McDonald's record of aggressively dodging taxes. In the European Union - McDonald's second-largest market by sales - the company is the subject of a preliminary investigation by the European Commission over allegations of tax avoidance. From 2009-2013, McDonald's deliberately avoided more than one billion euros in corporate taxes throughout Europe, according to a report released in February by a coalition of European and American unions and NGOs.

"McDonald's way of doing business is costing European governments and taxpayers dearly," said Jutta Steinruck, a member of the European Parliament from Germany, in her testimony before the Senate. "McDonald's has the power to play a positive role in the European economy. But instead, it has created a tax scheme designed to pad its own profits by dodging taxes throughout Europe. This is draining European governments and taxpayers of money desperately needed to support investment in public goods like health care and infrastructure, all for the purpose of making a billion-dollar American company even richer."

Last week, one of Brazil's most powerful unions filed a complaint asking Brazil's public prosecution service to open a civil inquiry into allegations of tax dodging, unfair competition and violations of franchise laws by McDonald's. Calling McDonald's largest franchisee, Arcos Dourados, "recalcitrant in its breach of employer obligations in Brazil," the General Workers' Union (UGT) filed a petition calling on the Public Prosecution Service to launch a wide-ranging civil investigation into the burger giant's alleged illegal business practices in the country.

"These companies come to Brazil and want to treat us as if we are still in colonial times," Ricardo Patah, president of UGT, said at the hearing. "They think they can exchange trinkets. We are the seventh largest economy in the world and get treated like a banana republic."

The Senate hearing follows months of heightened scrutiny over McDonald's illegal activity in Brazil. Earlier this year, a coalition of trade unions has filed two lawsuits accusing the company of widespread and systematic labor and health and safety violations. One of the suits accuses McDonald's of "social dumping," an anti-competitive practice that drives standards down for workers across the country, and seeks to prevent the company from opening new stores unless it complies with Brazilian law. Also, McDonald's agent in Latin America and the Caribbean, Arcos Dorados, has come under scrutiny, with an investor group asking the New York Stock Exchange to review the company's corporate governance.

The hearing Thursday also featured testimony from underpaid workers outside the fast-food industry, who declared that McDonald's low-road business model is undermining pay and working conditions for workers throughout the economy.

"When I hear about the McDonald's workers' low pay and poor working conditions, I hear my own story too," said Nadaije Paul Jajaoute, a child care worker from Tampa, in her testimony. "McDonald's is one of the largest companies in the world. You can find at least one in nearly every city. And that means that McDonald's way of doing business is driving down standards not only for McDonald's workers - or even fast-food workers - but also for workers across the economy."

In the United States, the federal government recently launched a case against McDonald's, accusing the fast-food giant of rampant labor-law violations, and arguing that the corporate parent, and not just franchisees, are responsible for the illegal actions. This is all on top of suits alleging wage theft and racial discrimination in the U.S.; more than two-dozen complaints filed with the Occupational Safety and Health Administration alleging McDonald's workers are being burned on the job, with many told to use condiments like mustard to ease the pain; and the more than $1 billion in public assistance taxpayers spend to subsidize its low wages here.

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See also:
* Guardian: McDonald's Faces Global Scrutiny At Brazilian Senate's Human Rights Hearing.

* New York Times: Union Takes A McDonald's Challenge Overseas.

* Reuters: McDonald's Grilled Over Labor, Tax Practices At Brazil Hearing.

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Comments welcome.



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Posted on August 21, 2015


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