How oil supports Venezuela’s co-op movement

As Venezuelan president Hugo Chavez celebrates his tenth year in office, opinion both internationally and within the Latin American country remains divided as to the success of his...

Elected on the promise of equitably redistributing the country’s massive oil wealth across the population, his administration has been undermined by allegations of corruption within the state-owned oil company, Petroleos de Venezuela (PDVSA), and of the failure to deliver on his promise to redraw the country’s social and economic map.

There is also concern about his military past and his dictatorial style of governance, which includes ruling by decree.

Described as oil rich and dirt poor, Venezuela has some of the world’s largest oil and gas reserves. Since coming to power in 1999, Chavez has transformed the nationalised PDVSA’s business model and pledged to pour its immense oil revenue directly into community development projects.

Outsourcing PDVSA contracts to Venezuelan co-ops is one of the key strategies behind Chavez’s plan to invest in social enterprises and to use the oil revenue to develop the country’s economy. But in the shadows of downtown Caracas, large numbers of Venezuelans live in makeshift shanty towns without access to running water. Not everyone believes in Chavez’s dream.

A new documentary by Glasgow-based production company Media Co-op, explores the contradictions within Chavez’s vision and the irony of trying to effect social change by making the biggest corporation in Latin America trade with grassroots co-operatives.

“There are many contradictions within Chavez’s model for social change,” says Red Oil director Lucinda Broadbent. “In the film we try to be as faithful as possible to these and try to avoid pushing the viewer into a position of either supporting or condemning Chavez.

“It is a challenge, but if you’re not upfront about what the contradictions are then you are not really being true to what social change is all about.”

Red Oil highlights the work of a number of Venezuelan co-ops which trade goods and services with PDVSA, including the manufacturer of the oil company’s uniforms, a food co-op which runs the company’s staff canteen and a pig farm. “The equivalent here,” says Lucinda, “would be North Sea Oil awarding all their supply contracts to UK co-operatives. Oh, and helping them to set up as co-ops.”

Chavez’s policy of investing in and promoting co-operatives has led to a fundamental shift in the status of co-ops in the country.

Red Oil producer Aimara Reques is from Venezuela but has spent the last 20 years living in Scotland. She says it would have been impossible to imagine a co-operative movement in Venezuela 20 years ago. “It’s inspiring to see the enthusiasm for co-operative principles in Venezuela,” she says. “Everyone wants to set up a co-op now and it’s become a fashionable thing to do. It really is a movement in the sense that people are learning as they go along.

“This has led to criticism and debate about how well managed some of the co-ops are and how well prepared people are to run them. This may be open to debate, but in terms of the enthusiasm and passion for co-operative principles and the way the co-operative movement has mobilised people, this is very inspiring to see.”

Co-operators featured in Red Oil tend to be fervent supporters of Chavez’s socialist dream, with one woman declaring him ‘God’. This, explains Aimara, is typical of the passion Chavez arouses. “There is absolutely no middle ground in Venezuela. You are either for Chavez or against him.”

Plenty of people are against him, including the 18,000 PDVSA workers who were summarily sacked by Chavez after a two-month strike at the oil company in 2002.

As Chavez moved to take full control of PDVSA, those who hoped to block his plans for redistribution of the oil revenue called industrial action. Chavez fired the company’s top level management live on television and many of the remaining 18,000 skilled workers were notified of their sackings through public announcements in the newspapers.

Critics also highlight the incongruity of a socialist revolution financed by multinational capital, as 1.5 million barrels of Venezuelan oil is sold to the US every day. America, Chavez’s greatest enemy, is also his best customer.

But for those whose lives have improved through participation in the country’s numerous co-ops, and for those who live in hope that the revolution will deliver Chavez’s dream, the benefits are clear. PDVSA’s Co-op Development Officer, Antonia Rada, says simply: “This is financial democracy. It’s about making sure Venezuelans get their fair share, that everyone gets their own drop of the oil.”

Media Co-op spent four years making Red Oil. They admit one of the contradictions they struggled to reconcile was finding themselves, a production company founded on co-operative values, making a film about an oil company.

“We choose to make films with meaningful content,” says Lucinda. “And we use film to communicate about social change. When we started up five years ago we imagined making films for different companies and organisations but we felt pretty sure we’d never work for an oil company.

“Ethically, environmentally, there are so many issues with the oil industry that trouble us. But what I think the film shows is that it is possible to run an oil company on very different politics and values from the traditional model.

“How successful this is remains a question but it’s also debatable how successful conventional oil companies are.

“What I think the film shows is that things can be done differently. Socialism and co-operation are not distant dreams. They are happening with flaws and weaknesses and oppositions and troubles, but they are happening.”

• Red Oil was shown on More 4 on February 10th. For details of future screenings visit: or contact Media Co-op for details of a DVD release on 0141 551 9813 or visit the website:

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