PROPOSED WAGE FREEZE - ZCTU'S POSITION

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 000310

SIPDIS

NSC FOR SENIOR AFRICA DIRECTOR J. FRAZER
LONDON FOR C. GURNEY
PARIS FOR C. NEARY
NAIROBI FOR T. PFLAUMER

E.O. 12958: DECL: 02/09/2008
TAGS: ECON ELAB PGOV ZI
SUBJECT: PROPOSED WAGE FREEZE - ZCTU'S POSITION


Classified By: Laboff KRBel for reasons 1.5 (b) and (d).


1. (C) Summary. The Zimbabwe Congress of Trade Unions
(ZCTU) continues to negotiate with employers and the GOZ in
an attempt to find common ground for economic actions which
will ease the burden on the ordinary worker. Despite
widespread agreement between the working-level contacts on
the best way forward, the ultimate proposal stripped many
areas of consensus and focused only on wage freezes and price
controls. The ZCTU believes that its mandate is to advocate
-- with whomever is in power -- for the betterment of its
membership, rather than engage in politics or attempts at
government-building. Chibebe has yet to be convinced that
calling on the ZCTU's membership to be the "shock troops" for
a mass action will guarantee any benefits to the average
worker. Until the positions of the military and police
forces are clearly stated, the ZCTU remains wary of direct
confrontation. End summary.


2. (C) Laboff met with Wellington Chibebe, Secretary General
of the Zimbabwe Congress of Trade Unions, for a discussion of
the current Tripartite Negotiating Forum (TNF) process.
Labor has been meeting with representatives of both business
and government in an effort to come to some agreement on a
prudent plan for short-term economic management. However,
while technical experts from all sectors agree on the
practical steps necessary to stimulate the economy, the
ultimate proposal -- dubbed the TNF protocol -- focuses only
on a narrow range of actions.


3. (C) According to Chibebe, the TNF negotiators agreed on a
broad range of steps viewed as necessary to prod the economy
from stagnation. These included the wage freezes addressed
in the TNF protocol, and also encompassed addressing issues
of governance, stabilizing the fuel supply, devaluing the Zim
dollar, and tying controlled prices to the prices of inputs,
including labor costs. Despite widespread agreement in the
negotiating team, only the wage freezes and local product
price controls made it into the final proposal. Chibebe
believes that, even if the GOZ is negotiating in good faith,
the level of actual control it is able to exert on the
economy is likely to be limited. Nevertheless, he believes
it is incumbent upon them to continue with the negotiations
-- for the present.

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Wage Negotiations Likely to Threaten Accord
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4. (C) While the ZCTU is willing to engage in dialogue, even
though it does not believe the current regime to be
legitimate, Chibebe fears that the talks may reach a sticking
point on actual minimum wages. Chibebe believes that the GOZ
does not recognize the critical situation faced by most
workers. For instance, the minimum wage for agricultural
workers is only Zim $4,500 per month (US $3.21) while Chibebe
believes the poverty datum line is closer to Zim $20,000 (US
$14.28). Similarly, an industrial worker's minimum wage
stands at Zim $13,000 per month (US $9.28),but Chibebe
believes that poverty level for such a worker lies between
$36,000 and $42,000 per month (US $25.71 - $30.00). The
variance between these two representative ranges is the
result of differences between rural and urban living costs.
The cost of food, traditionally lower in the rural areas and
closer to the source of production, is now astronomical both
in urban and rural areas due to shortages and widespread
dependence on the costly black market. However, some
agricultural workers still benefit through subsidized
housing, subsidized food, and lower transport costs.


5. (C) The difficulties inherent in negotiating new minimum
wages are typified by the experience of GAPWUZ, the
agricultural workers' union. Last September, the
Agricultural Labor Board (ALB) of the Commercial Farmers'
Union (CFU) negotiated new minimum wages with GAPWUZ. At
that time, both parties agreed to increase the minimum wage
from $4,500 to $7,500, with future increases to $9,500 in
January 2003 and again to $11,500 in May 2003, and submitted
their collective bargaining agreement to the Minister of
Labor for "registration," or approval. Minister of Labor
July Moyo -- who himself is the recipient of a new farm,
along with his deputy and other interested decision makers --
rejected the agreement in December 2002, demanding that the
ALB and GAPWUZ renegotiate the agreement for a lower minimum
wage. The reason? Minister Moyo claimed that the negotiated
wage was too high for the newly-resettled farmers --
including himself -- to absorb, and constituted "sabotage"
against the land resettlement program. The irony, of course,
is that anybody unable to meet a statutory minimum wage is
entitled to request a waiver under the Labor Relations Act --
but this would then open the door for a review of the
appellant's financial status. Although the ALB has obtained
two legal opinions that hold the Minister of Labor does not
have the authority to demand that the two parties
re-negotiate a lower minimum wage, the Minister has refused
to recognize the collective bargaining agreement.

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Comment: Dialogue vs. Mass Action -- And the Aftermath
-------------- --------------


6. (C) According to Chibebe, the failure of the ZCTU to
support recent calls for mass action or widespread stayaways
is the result of careful evaluation rather than lack of
political will. The National Constitutional Assembly (NCA),
which has called for the past few failed stayaways, is quick
to cast ZCTU as a sellout for engaging in dialogue with a
discredited government. However, as Chibebe points out,
dialogue -- forcing the government to meet with its
adversaries -- is the traditional goal of mass action. If
the main benefit to be gained from mass action is
negotiation, why not engage in negotiation without the added
burden of requiring members to expose themselves, both
personally and financially, through strikes and stayaways?
Besides, he added, the GOZ has committed itself to enough
unachievable goals -- including reducing the deficit to
eleven percent, and reducing inflation to 95 percent by the
end of June -- that if it reneges on substantive matters such
as reasonable minimum wages, the ZCTU has adequate grounds to
call for mass action if and when the current dialogue has
clearly failed.


7. (C) Another reason that the ZCTU has been unwilling to
wholeheartedly support calls for mass action is that there
have been no clear statements of who would fill any resultant
power vacuum, and where the security forces will throw their
weight. If a mass action called by the NCA and supported by
the ZCTU proved so successful that the existing power
structures crumble, Chibebe's concerns would continue to
focus on the situation of the workers. Despite its close
relationship with the MDC, the ZCTU is not convinced that the
opposition party is prepared to manage the economy for the
benefit of the labor force should the Zanu-PF hierarchy
implode. Chibebe is also wary of the role of the military as
well as the police forces in a post-Zanu-PF government.
According to his talks with the MDC leadership, there has
been no indication of what role these powerful players would
take in a confrontation with Zanu-PF or in a post-Zanu-PF
government. Chibebe hopefully described a potential
situation wherein only "the first five or ten protesters
would be shot, and the security forces would then refuse to
be the enforcers and would come over to the side of the
protesters..." However, without any assurance that the
security forces are actually aligned with the goals of the
MDC, NCA and ZCTU, Chibebe remains completely unwilling to
put his membership at the forefront of a potentially fatal
conflict.


8. (C) As the tripartite negotiations demonstrate, the ZCTU
still thinks that it can best work from within the system,
and Chibebe believes firmly in dialogue at this stage. If
the dialogue nets no solid gains at the end of the period of
the negotiated wage freeze -- currently scheduled through
June -- mass action may again become the most appropriate
response. End comment.
SULLIVAN