PROTESTS IN KAMSAR AS LABOR DISPUTE SPARKS EMPLOYEE ANGER

UNCLAS SECTION 01 OF 03 CONAKRY 001665 SIPDIS SIPDIS SENSITIVE DEPT ALSO FOR DS, CA/OCS TREASURY FOR OFFICE OF AFRICAN NATIONS E.O. 12598: N/A TAGS: ELAB EMIN PINS ASEC CASC GV SUBJECT: PROTESTS IN KAMSAR AS LABOR DISPUTE SPARKS EMPLOYEE ANGER SENSITIVE BUT UNCLASSIFIED. CONTAINS PROPRIETARY INFORMATION. NOT FOR POSTING ON INTERNET. -------------- SUMMARY -------------- ¶1. (SBU) Summary. Senior managers of the Compagnie des Bauxites de Guinee (CBG),in which the U.S. firm Alcoa is a major partner, are the targets of passionate protests by CBG employees and their dependants, angered by recent cutbacks in long-provided benefits and services. Protesters -- mainly wives of CBG employees -- have demanded that key managers be fired and that full benefits and services be reinstated. CBG argues that its move is aimed at reducing corruption and abuse of company-financed services. However, under pressure from protesters, CBG has relented and rescinded the decree for now. At its apex, the protest halted production at CBG's plant in the port city of Kamsar, as protesters blocked the rails that deliver bauxite to the facility. ¶2. (SBU) Protests have been impassioned but peaceful, and there have been no reports of injuries or arrests. However, after protestors surrounded the houses of six Guinean CBG managers, they left Kamsar with their families. CBG's Director General considered evacuating expatriate dependants but suspended the initiative upon receiving assurances the Government of Guinea would provide security. Alcoa has also expressed concern. We are confirming the number of U.S. citizens employed by CBG but understand it is about five. Minister of Territorial Administration and Decentralization Moussa Solano and Minister of Mines Dr. Ousmane Sylla have both addressed the protesters in recent days, seeking an acceptable solution. The trouble is thus far confined to the CBG campus. Life in Kamsar proceeds normally, and CBG's mines and plant are operating. Most local residents are firmly in support of the protesters but see the issue as a labor dispute between CBG and its employees. End summary. -------------- CBG CUTS BENEFITS -------------- ¶3. (SBU) Long troubled by issues of abuse and fraud in its employee benefits packages, CBG recently restructured its benefits plan. In addition to reducing food subsidies, CBG also reduced the amount of free electricity it provides its subsidized employee housing from 24 to 12 hour coverage. CBG-run health centers also had their operating hours reduced from eight to four hours a day, and the number of patients was limited to ten per day. Many of CBG's employees are polygamous. While acknowledging they lack the ability to identify all CBG dependants, the company limited the health coverage to two wives and ten children per family. -------------- -------------- CUTS PROVOKE ANGER, TRAGIC UNINTENDED CONSEQUENCES -------------- -------------- ¶4. (SBU) The abrupt introduction of benefit reductions infuriated employees and their families. CBG employees took their concerns to the company's employee association and to the subprefect, the Guinean government's chief representative in the area. Though angry, employees continued to work without formal protest until Wednesday, October 25. ¶5. (SBU) On that date, a CBG health center refused service to two children whose mother could not prove they were CBG dependants. The two children reportedly died later that day. A spontaneous protest developed after the children's burials. On October 26, a pregnant woman was refused service and reportedly hemorrhaged to death. A large number of women with CBG connections donned red shirts and bandanas and took to the streets in protest declaring the blood of the woman and her unborn child were on the hands of the CBG managers who limited health services. The women stopped plant operations by standing on the rails preventing the delivery of bauxite to the facility. ¶6. (SBU) The "face" of the protests is a sympathetic figure -- the wife of a longtime CBG employee, confined to a wheelchair and renowned for her community work with orphans. While Kamsar residents not employed by CBG see the dispute as something not their direct concern, they are positively disposed towards the local women who are affected by the cuts. -------------- -- CBG AND GOVERNMENT RESPONSES DO NOT QUELL ANGER -------------- -- CONAKRY 00001665 002 OF 003 ¶7. (SBU) Since October 26, protesters have several times blocked operations. They have demanded CBG's Human Resource director, Logistics director, and the four managers in their direct chain of command be fired, and demonstrated outside the homes of the managers, all Guinean. Fearing for their safety, the managers and their families fled Kamsar on November 2. ¶8. (SBU) On November 3, Minister of Territorial Administration and Decentralization Moussa Solano came to Kamsar. Demonstrating women blocked his car, and he was forced to walk about a kilometer to reach the platform to address the crowd. Solano's visit did little to pacify the workers and their families. Security forces had strict orders not to respond with force to the protesting women and the demonstration ended peacefully. (Comment: Our analysis is that local authorities feared that allowing use of force would invite a replay of June 12, when security fired upon young protestors during a general strike, killing at least 11 countrywide and eliciting outrage across society.) ¶9. (SBU) Faced with the local backlash, CBG suspended its decree on benefits cuts but has not met demands to fire certain Guinean managers. Concerned about the implications for security, especially Minister Solano's instruction that the military should not intervene to protect CBG personnel from demonstrators, the CBG Director General, Nic Clift, began planning to evacuate expatriates and their families, although none had been directly threatened to our knowledge. We understand there are about five Americans among the 140 expatriate staff. When he learned November 6 that Minister of Mines Ousmane Sylla would visit Kamsar the next day to make clear that the government of Guinea would, in fact, guarantee security, Clift suspended evacuation plans. ¶10. (SBU) The Minister of Mines has provided a letter guaranteeing CBG security. However, he also took the opportunity to admonish Director General Clift for mobilizing an evacuation of expatriates without first consulting him, a perceived affront to his authority. At a recent conference in Dusseldorf, the Minister touted Guinea's vast investment opportunities in the mineral sector. He feared Clift's action could frighten potential investors and negate the conference's effective public relations campaign. ¶11. (SBU/PROPRIETARY INFO) Alcoa official Russell Williams contacted the Ambassador from Alcoa headquarters in Pittsburgh, extremely concerned about the security of CBG facilities and personnel. Williams strongly condemned Minister Solano's order for the military not to protect CBG assets or personnel from demonstrators. He acknowledged that Minister Sylla had subsequently given written assurances that the government would protect CBG. Williams criticized Sylla, however, for upbraiding CGB Director General Clift in front of assembled CBG personnel because he had decided to organize an evacuation without the Minister's permission. CBG (and Alcoa) remain adamant that, in case of a threat, they do not require the Minister's authorization to evacuate personnel. ¶12. (SBU/PROPRIETARY INFO) Russell Williams also told the Ambassador that CBG would review and amend its emergency action plan. The existing plan calls for the Guinean military to protect CBG personnel and, if necessary, to escort them to the small Kamsar airport for evacuation. Williams said that CBG had asked agents from Control Risk to come to Kamsar this week to review and revise the plan. Williams said that, in his view, it would be necessary to have a back-up plan to use a ship to extract CBG personnel from Kamsar port, where CBG offices and housing are physically located. Williams mentioned the possibility of stationing a ship offshore for this purpose. ¶13. (SBU) The Ambassador replied that CBG had to take whatever measures it deemed appropriate but that the stationing of a ship offshore seemed excessive. He said that it was important for CBG and the Guinean authorities to "ratchet down the rhetoric," to seek a solution to the labor dispute, and to agree on long-term security procedures. The Ambassador offered to meet with CBG, Alcoa, and Control Risk representatives to discuss the situation. He also expressed his willingness to intervene with the appropriate Guinean government ministers, if the situation warrants. -------------- COMMENT -------------- ¶14. (SBU) What began as a legitimate attempt on the part of CBG to curb fraud and mismanagement has evolved into an ugly labor dispute that highlights social issues long festering throughout Guinea. A unilateral decree rescinding benefits CBG employees have enjoyed for some 40 years was destined to anger employees. The reported death of three people following a refusal to provide medical treatment has CONAKRY 00001665 003 OF 003 only exacerbated the situation. From the employees' point of view (and we understand this is shared by local labor inspectors),the company should have engaged in a more consultative process. CBG will now have to negotiate the revision of benefits from a weakened posture. ¶15. (SBU) Although CBG is consortium between the government of Guinea (49%) and Halco (51%)(made up of Alcoa, Alcan and a small minority partner),its relationship with government ministers over the years has sometimes been contentious as each side jockeys for power. That dimension has been on display in this instance, complicated by additional jockeying for influence between local authorities and Conakry. Alcoa has been acutely concerned by the events of the last two weeks and the degree of support received (or not) from Guinean government authorities. McDONALD