LABOR TURMOIL CONTINUES IN JAMAICA

UNCLAS SECTION 01 OF 03 KINGSTON 000748

SIPDIS

SIPDIS

STATE FOR WHA/CAR (WBENT),WHA/EPSC (JSLATTERY),DRL

SANTO DOMINGO FOR FCS AND FAS

TREASURY FOR L LAMONICA

E.O. 12958: NA
TAGS: ECON EFIN ELAB JM
SUBJECT: LABOR TURMOIL CONTINUES IN JAMAICA

REF: KINGSTON 633


1. (U) Summary: There is no end in sight to the spate of
industrial disputes rocking Jamaica (reftel). During the
last week the country has had to address unrest at the
Jamaica Aluminum Company (JAMALCO) and strike action at
three GOJ-operated sugarcane factories. The ongoing
dispute at JAMALCO is particularly troubling given that
the company is in the midst of a USD 870 million expansion
program to double its refining capacity. Strikes from
public sector workers are also possible following their
rejection of a 20 percent wage cap. End summary.

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JAMALCO DISPUTE: Union Outraged Over Ultimatum
-------------- -


2. (SBU) On April 10, emboff spoke with General Secretary
of the Union of Technical, Administrative and Supervisory
Professionals (UTASP),St. Patrice Ennis, to get his
position on the Jamaica Aluminum Company (JAMALCO)
dispute. Ennis made it clear that UTASP has always had a
rocky relationship with management and was engaged in a
court action against the company on behalf of 250 workers
classified as contractors, but employed under the same
terms and conditions as full-time employees. Regarding
the current impasse, Ennis noted that both parties were
agreed on most components of the contract, including a 33
percent wage increase. However, they remained divided on
issues such as motor vehicle upkeep, interest-free loans,
educational benefits and the indexation of salaries to
inflation, which exists at other bauxite companies. Ennis
noted that management refused to meet further with the
union until their proposals were accepted, a position he
refers to as `gross insolence.'


3. (SBU) Against this background, he said, the union
served a 72-hour strike notice on the company, but the new
Minister of Labor, Derrick Kellier, obtained a court
injunction to postpone the industrial action. Ennis, who
maintains the Minster acted on bad advice, said the union
was initially inclined to defy the court action. Although
the workers were angry with government, in the end the
union decided against confrontation. Nevertheless, "the
Minister's use of the court as a weapon against the union
runs counter to the precepts of the ILO," he said. Ennis
suggested that the company's offer should be better, given
huge industry profits and costs down by almost 30 percent.
JAMALCO, he stated, was twice as efficient as any other
producer in the industry and had also received a waiver on
the GOJ bauxite levy.

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JAMALCO Strident In Its Position
--------------


4. (SBU) JAMALCO Public Relations Manager Brian Doy told
Emboff that UTASP issued the strike ultimatum while
negotiations were in progress, which is unusual. Doy
claimed that a very competitive package was on the table,
but by threatening to strike, UTASP was placing the offer
at risk. He said that the union was deliberately trying
to draw out the negotiations, hoping to pressure
management into a better settlement. Doy pointed out that
the company has been engaged in intense negotiations for
the last nine months during which management made a number
of concessions. He said the company consulted with the
other players in the sector and JAMALCO'S offer was equal
to or better than all other settlements in the industry.


5. (SBU) Doy said that the expansion was already underway
with a USD 77 million investment to increase production
capacity. However, the remaining USD 800 million
investment was contingent on the GOJ signing a natural gas
agreement with Trinidad and Tobago. When asked how the
dispute might impact the next phase of expansion, Doy
stated that ALCOA has opportunities all over the world and
that continued industrial unrest could not be in the best
interest of the country, as projects must be completed
within time and budget. Emboff also inquired about the
supply of skilled labor for the project. The JAMALCO
official pointed out that the core of the workforce (1,700
workers) was undergoing training at the National Training
Agency (NTA),but another 1,300 would be required at peak.
Doy expressed satisfaction with the quality of the NTA and

KINGSTON 00000748 002 OF 003


even told emboff that the company sent a welder from the
program to a trade show in Las Vegas, where he finished
second in the welding competition.

--------------
Sugar Strikes Hamper Production
--------------


6. (SBU) The GOJ-run Sugar Company of Jamaica (SCJ) on
April 12 finally persuaded workers to return to the fields
following strike action at three of the factories:
Duckenfield, Monymusk, and Frome. The actions in these
cases, however, revolve around management rather than
money. Workers at all three have called for the top
management to be dismissed, citing incompetence. The
workers returned, however, after an emergency meeting was
called by Agriculture Minister Roger Clarke (Note: Clarke
himself is a former sugarcane farmer. End note.)
Resposibility for SCJ returned to the Ministry of
Agriculture on Monday from the Ministry of Finance.
Septel will report in greater depth on the industrial
unrest at the sugar factories, and the political
machinations behind the industry's return to the Ministry
of Agriculture.


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Replacement MOU Stalled
--------------


6. (SBU) Despite an all out effort, Ministry of Finance
officials might not be able to negotiate a replacement MOU
before Finance Minister Omar Davies makes his budget
presentation on April 27. The process was delayed after
trade unions again expressed disapproval with the proposed
20 percent cap on salary increases. Ennis, who had
previously been pessimistic about a new contract, is now
confident that one could be concluded soon. In fact, he
told emboff that once the Nurses Association and the
Jamaica Labor Party (JLP)-affiliated Bustamante Industrial
Trade Union (BITU) can be satisfied, a new document will
be in place. However, Acting Senior Director of the
Ministry of Finance's Fiscal Policy Management Unit,
Courtney Williams - who had expected a smooth transition
to a new MOU - is now skeptical about getting an agreement
in place in the near future.


7. (SBU) Williams noted that several unions, led by the
BITU, calculated that they could negotiate a better
contract independently. He noted that this was a real
possibility, given that the police union took this
approach last year and negotiated a significantly better
deal than the rest of the public sector. He further noted
that there was strong political pressure being applied to
Dwight Nelson of the BITU. (Note: Nelson, a JLP Senator
and Shadow Minister for Information, was blamed for
negotiating the last MOU, which JLP supporters believe was
responsible for helping the ruling People's National Party
out of a fiscal rut. End note.) Additionally, bauxite
employees have already received substantial increases
(reftel),setting the stage for the rest of the labor
force. Union leaders, who have openly welcomed the
administration of Prime Minister Portia Simpson-Miller,
are also hoping that if negotiations are protracted then
the "caring" Simpson-Miller will intervene on behalf of
workers.

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Comment
--------------


8. (SBU) A ruling by the Industrial Disputes Tribunal
should bring an end to the action at JAMALCO, but the
industrial relations climate is unlikely to settle any
time soon. A new MOU with the public sector will not be
an easy task given the high expectation of public sector
workers, who have received paltry increases in the last
two years, amid high inflation. Both workers and trade
unions have also noted the pro-labor role of Simpson-
Miller in a West Indies Aluminum Company dispute and might
draw out their negotiations in order to get her
intervention in the process. Still more labor turmoil is
likely from workers in the private sector, who also
accepted lower increases during the period of the MOU.
These workers are aware of the crippling effects of work

KINGSTON 00000748 003 OF 003


stoppages on the bottom line of these companies and have
not been afraid to utilize this tactic in the past. End
comment.

JOHNSON