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.

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SUMMARY
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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rescinded the decree for now.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.

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CBG CUTS BENEFITS
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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.

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CUTS PROVOKE ANGER, TRAGIC UNINTENDED CONSEQUENCES
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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.

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CBG AND GOVERNMENT RESPONSES DO NOT QUELL ANGER
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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.

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COMMENT
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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