Workers’ protests in Serbia

With the plans of the Serbian government to cut back public sector spending as a condition for receiving further funds from the International Monetary Fund (IMF) and thus, among others, to sell-off all formerly self-managed companies, a determined workers movement that refuses to bear the burden of economic restructuring after years of corruption has hit the scene.

There are over 30 strike actions throughout Serbia, including factory occupations, railway blockades, city-hall and police station takeovers, sleep-ins, hunger strikes or self-mutilation. Strikes have taken place in factories such as Jugoremedija, Zastava Elektro, Raška, Srbolek, Šinvoz, Ravanica, Trudbenik Gradnja, BEK also to protest against the ongoing corruption, which has bound together key Serbian business and political interests in the squandering of public funds.

  • First protests at Jugoremedija in Zrenjanin

(This section is based on information taken from http://freedomfight.net)

Given this precarious situation, Serbian workers from the factory Jugoremedija in Zrenjanin decided not to accept the present system of corruption and exploitation any longer. For more than two years they have been fighting for their factory and against the privatization of their work place. Throughout their struggle they lived partly in the factory, squatted the city hall for four months, protested in front of the agency for privatization in Belgrade, got beaten up, injured and imprisoned by the police and private security.

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During this period the workers were not on the payroll anymore and many were left behind by their families. However, in the end, Jugoremedija became the first factory amongst the “transition” countries in Eastern Europe undergoing neoliberal privatization to be recovered and controlled by its workers.

  • History of events at Jugoremedija

Serbian pharmaceutical factory Jugoremedija located in the town of Zrenjanin was privatized in 2000, in such a way that 58% of the shares were given to the workers, and the state held the remaining 42%. In 2002, the state sold its share to Jovica Stefanovic, a local capitalist, who made his fortune smuggling cigarettes, and who was wanted by Interpol at the time he bought the shares of «Jugoremedija». As all other buyers involved in Serbian privatization processes, Stefanovic was not even investigated in money laundering, because the Serbian Government’s position at that time was, and still is, that it’s better to have dirty money in privatization, than to let workers manage the company, because that will “bring us back to the dark days of self-management”.

The first attack on Yugoslav self-management happened before the break up of socialist Yugoslavia. The first organized attempt to dismantle the system of self-management in Serbia dates back to the times of Slobodan Milosevic. But the real full-blown process of privatization and curtailment of workers’ rights happened after Milosevic was sent to the Hague Tribunal. In this context, with the transition to capitalism and parliamentary democracy in Serbia, everything became allowed in the fight against what the new neoliberal government saw as the “ideological monster of self management” – even if it meant that the government and courts break laws.

Aside from the 16.5 million Euros for the Jugoremedija shares, Stefanović was also obliged under the terms of the privatization agreement to invest in the reconstruction of the factory in order to obtain European GMP (good manufacturing practice) certification for the factory’s production lines. After finishing the investment, he would then be allowed to ‘recapitalize’ Jugoremedija in order to increase his share and become the enterprise’s majority shareholder. The Jugoremedija workers and the other small, ‘external’ shareholders were not informed about the second part of this contract – i.e., that the state had actually sold Stefanović not only its 42% share of Jugoremedija, but that it also wanted him to become majority owner without consulting the firm’s 4,500 remaining shareholders.

Breaking all the rules, the state allowed the new co-owner of Jugoremedija, Stefanović, to become the dominant owner of the factory. Through various illegal manoeuvres the ownership structure was changed: Stefanović was given 68% of the shares and the workers portion was reduced to 32%. In December 2003, the workers began a strike, factory occupations, as well as a lawsuit against the recapitalization. This was the first work place occupation in post-socialist Yugoslavia.

In May 2004, the state, being put under pressure by the workers, investigated into the privatization of «Jugoremedija» and found that Stefanovic’ investment was in violation of the contract. The state did nothing to enforce the violation of the contract. In response the workers, mainly women, came to the capital, Belgrade, and occupied the state’s Privatization Agency for one whole day. Only after this occupation did the state begin to take the violation seriously. Meanwhile the factory occupation continued. During summer 2004, Stefanović’s private army tried several times to take over the factory, but the workers, with breathtaking courage, kicked them out. This kept the boss out, but he was to return. In September 2004, the private army was joined by the Serbian police, which had the order to evict the workers from «Jugoremedija». Police and the private army forced their way into the factory, resulting in the injury of many workers and the arrest of four of the strike-leaders. The workers were then charged with disturbing the peace. Criminal proceedings are still taking place. Now that he physically emptied the factory Stefanović illegally fired two hundred workers.

After participating in a Peoples’ Global Action conference in Belgrade, in August 2004, workers from «Jugoremedija» joined with workers from other factories to form the Union of Workers and Shareholders of Serbia. Initially, the Union’s mission was limited to fighting against corruption in privatization, but after experiencing different aspects of Serbian privatization, the Union came out with another demand – the call for a constituent assembly. They believe that the people should make the decisions that affect their lives and work places, and a new constitution can help make this happen. Graffiti appeared on the walls of Belgrade asking, “Who owns our factories?”

Over the next two and a half years, this group of 150 worker-shareholders, now without jobs, struggled – with the support of Jugoremedija’s other small-shareholders, local unions and left activist groups and intellectuals from Serbia and abroad – through direct action and within the courts to prove that Stefanović had broken his contract with the state. In the summer of 2006, Noam Chomsky and Naomi Klein were among the many intellectuals and activists from around the world who addressed Serbian President Boris Tadić and Prime-Minister Vojislav Koštunica with letters of support for the Jugoremedija workers.

Finally, as a response to a series of direct and legal actions, in May 2006 the Serbian Supreme Court reached the decision that recapitalization was not in line with the contract, and ordered Zrenjanin Economic Court to re-open the case. Finally, Zrenjanin Economic Court re-established the ownership structure at 58% to 42%. On 1 March 2007, Jugoremedija became the only factory in Serbia operated by worker-shareholders. After the court cancelled the state’s contract with Stefanović, all small-shareholders (both ‘internal’ and ‘external’ shareholders), voted for the workers to establish their own management in the factory. Zdravko Deurić is now serving as the CEO of Jugoremedija.

Realizing that he was going to lose this battle, Stefanović tried to halt production in November 2006, hoping to ruin Jugoremedija in order to take it over later as a majority creditor. After March 2007, the state attempted several times to declare Jugoremedija bankrupt because of the tax-related debt incurred under Stefanović’s management. However, the workers quickly succeeded in reorganizing the company’s production lines and to pay the whole debt owed to the state within only a few months.

Another big challenge was the reconciliation process between the workers who were fired, and those who stayed to work for Stefanović – especially with those who supported him in public during the struggle. Even though there were several incidents between these groups in March and April 2007, both the workers’ new management and the union took a stand that no act of revenge on strike-breakers would be tolerated. They also decided that former strike-breakers could no longer count on the privileges they were granted under Stefanović at the expense of their striking co-workers.

During the Shareholders’ Assembly in September 2007, the workers’ management proposed their own investment plan to Jugoremedija’s shareholders – this time, the hope was not to seek a ‘solution’ to the problem of GMP certification by looking for an outside investor, but to do so through Jugoremedija’s own revenues. The 15 million Euro investment plan was supported by the Assembly. The state, now again in possession of 42% of the shares, abstained from voting. After the Shareholders’ Assembly’s vote, Serbia’s Economic Ministry decided not to try selling its share of Jugoremedija before the reconstruction of the factory was completed.

Reflecting on the outcome of their victory, it is important to note that this particular model of workers’ control unfortunately cannot technically be applied to most workplaces under Serbia’s current legal order regulating privatization. Nonetheless, Jugoremedija has become a symbol for workers’ struggles throughout Serbia, because it has shown that solidarity, as well as persistent and clever activism can triumph over powerful enemies like Jovica Stefanović and the state administration.

The current struggle by Jugoremedija workers to reconstruct and develop their factory shows how responsibility for property can provide peace and understanding between people with such opposing standpoints as workers and shareholders, or even strikers and strike-breakers. Inspired and helped by the workers of Jugoremedija, other workers in Zrenjanin have since radicalized their own struggles as well. The most distinguished example being the struggle waged by the workers of the Šinvoz train factory. However, the Šinvoz case also shows that the Government and the bosses in Serbia have learnt valuable lessons from the Jugoremedija experience. In 2007, a new strategy targeting workers’ unions and small-shareholders was launched – a strategy aimed at deliberately putting the company into bankruptcy.

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