PRESIDENT BONGO TWISTS ARMS, ENDS STRIKE

C O N F I D E N T I A L LIBREVILLE 000691 SIPDIS SIPDIS E.O. 12958: DECL: 11/29/2016 TAGS: EPET EINV ELAB PGOV GB SUBJECT: PRESIDENT BONGO TWISTS ARMS, ENDS STRIKE REF: A. LIBREVILLE 688 ¶B. LIBREVILLE 624 ¶C. LIBREVILLE 337 Classified By: DCM Katherine Dhanani. Reason: 1.4 (d). ¶1. (C) Summary: The imminence of legislative elections has contributed to a rash of strikes, since workers expect the government to act to resolve strikes quickly at election time. Following a three-day strike by oil workers, President Bongo instructed Mobil Oil Gabon to grant a wage increase and pay extra severance to employees bought out in 2005. The company felt it had little choice but to do as it was told. This is the kind of incident that contributes to American companies' perception of Gabon as a hostile business climate. End summary. ¶2. (U) Strikes are a traditional part of Gabonese election seasons, since politicians are more likely to intervene to get workers back to work when they are concerned about attracting votes. The current period before Gabon's December 17 legislative election (Ref A) is no exception. Workers for the post office have been on strike since October 31, and one teachers union went on strike November 16. Workers in the petroleum sector carried out a three-day strike November 21-23, demanding higher wages from all oil companies and resolution of grievances against several specific employers. ¶3. (SBU) Henri Soudan, General Manager of Mobil Oil Maroc, currently managing Mobil Oil Gabon until shares are turned over to Tamoil (Ref B),briefed Emboffs November 28 about Mobil's experience with the strike. The petroleum workers union had three grievances against Mobil. The first concerned employees' desire to receive severance packages from Mobil before Tamoil took over. Soudan said that Gabonese law is fairly clear on this, and the union was forced to give way. A second complaint concerned voluntary buyouts Mobil carried out for 15 employees during 2005. The union argued that the buyouts had been improper, and demanded that Mobil pay fines to supplement the packages employees voluntarily accepted. The third demand was for a 4.4% salary increase retroactive to March 2006. In March, distributors were granted an increase in their margin at the pump. At the time, Total Gabon shared this with its workers by giving them all a 4.4% wage increase. Mobil's employees wanted the same deal. ¶4. (SBU) Soudan reported that Mobil felt it would be a dangerous precedent to ignore the voluntary protocols signed by the company and workers who accepted buyouts, and saw no basis for the demand. It would also be difficult for Mobil to adjust salaries at mid-year, he said. Soudan considered it likely that Tamoil might choose to make a generous gesture after taking over, but saw no reason for Mobil to do so. ¶5. (SBU) Soudan said that petroleum companies were invited to a meeting at the Presidency on November 23 to resolve the labor disputes. He said he quickly saw how the meeting would go when workers' demands against Shell-Gabon were raised first. President Bongo summarily told Shell, which was offering about $2 million in layoff compensation while its employees demanded $8 million, that it should pay $4 million. He told Shell managers they should consider themselves lucky that employees in Gabon are less militant than their counterparts in Cameroon and Nigeria, where Shell executives have been held hostage in labor disputes. Moving on to Mobil, Bongo said he understood the company had acted illegally when it laid off workers in 2005, and it should accept the fines demanded by the union. Soudan initially explained the company's point of view, but when he saw that his argument did not go down well, agreed to sit down with the Ministry of Labor and the union to settle the issue. ¶6. (SBU) Soudan was relieved that the question of general salaries was not raised in the meeting, but his relief was short-lived. On November 24, he received a copy of the minutes of the meeting, which he was requested to sign. In the minutes it was stated that President Bongo had determined that Mobil should provide the 4.4% salary increase demanded by employees. Soudan told Emboffs he signed the minutes, recognizing that he had no choice. ¶7. (C) Comment: Despite the sale of most parastatals, the Gabonese government continues to play an important role in the economy. Managing labor disputes is one element of that role; every strike affecting the public elicits government mediation. The role, however, extends more generally into the boardrooms of private corporations, as the Canadian owners of Air Service learned earlier this year (Ref C). American companies without extensive African experience take poorly to such intervention, which contributes to what they see as a hostile business climate. WALKLEY