LABOR UPDATE FOR US-OMAN FTA HEARINGS

UNCLAS SECTION 01 OF 04 MUSCAT 000793 SIPDIS STATE FOR NEA/ARP (S. STEINGER),DRL (J. DEMARIA) STATE PASS USTR FOR J. BUNTIN, A. ROSENBERG, AND L. KARESH DOL FOR J. SHEA, B. SHEPARD, AND J. RUDE US MISSION GENEVA FOR LABOR ATTACHE E.O. 12958: N/A TAGS: ELAB ETRD PGOV PHUM MU SUBJECT: LABOR UPDATE FOR US-OMAN FTA HEARINGS REF: 05 MUSCAT 1874 -------------- Summary -------------- ¶1. The Ministry of Manpower confirmed on May 13 that it is researching and preparing ILO-consistent legislation to meet recent labor reform commitments for ratification of the US-Oman Free Trade Agreement. Labor committee members and government officials assert that, in practice, the government neither interferes with nor unduly involves itself in committee activities, but continues actively to support establishment of labor committees through private sector outreach and educational awareness. Although committees and members continue to face their own organizational challenges, a few are already achieving success in negotiating better working conditions for members. End Summary. -------------- No Government Interference -------------- ¶2. The Ministry of Manpower (MOM) asserts that it is not intrusively overseeing labor union representative committee (RC) activities as permitted in Ministerial Decision 135/2004, and claims that the actual application of the labor law is already ILO-consistent. In practice, committees do not give notice to MOM prior to general assembly meetings; nor do they provide the MOM a copy of their agendas or meeting minutes. Moreover, according to sources at the MOM and within the committees, no MOM official has ever attended any committee meetings or banned any RC from meeting without prior approval. To the contrary, committee members have expressed their displeasure at the MOM's non-attendance at and lack of involvement in committee organizing events and activities. ¶3. Although allowed in Ministerial Decision 135/2004, MOM dismissal of committee leaders for "committing acts that cause material or moral harm" has not occurred, and MOM has never rejected any elected RC leader for failure to meet restrictions set out in previous ministerial decrees. One committee member told PolOff that an MOM official told him "not to worry about restrictions in the law" with regards to establishing a committee because the MOM is more interested in encouraging their growth rather than in details of membership. As there are no official MOM application forms 
for establishing committees, employees wishing to establish a committee simply notify the MOM with a letter of intent and a list of elected officials comprising their leadership board. The MOM has visited over 400 companies to educate the private sector and encourage establishment of representative committees. The MOM and the MRC also hold regular awareness sessions throughout the year to discuss labor rights and establishment of RCs. -------------- Right to Organize and Committee Leadership -------------- ¶4. As of May 13, thirty representative committees have been established, representing roughly 49,000 employees. RCs have been established primarily in the construction, hotel service, transportation, oil and gas, telecommunications, and engineering sectors. There are no committees in the public sector, which is covered by Civil Service Law, and the labor law does not prohibit any category of worker from establishing worker committees. Of the committees established, company management holds officer positions of Saud Bahwan Group, Omantel, Port Services, and Suhail Bahwan Group committees. Candidates interested in leadership positions submit their name and are chosen by secret ballot elections. Many general assembly members also write-in names, such as for management, who may also be elected to leadership positions. ¶5. While Ministerial Decree 135/2004 delineates qualifications for leadership, such as the ability to speak and write Arabic, be employed more than one year, and not have been convicted of a felony, the MOM has not denied candidacy to anyone failing to meet these regulations, and, in fact, has encouraged people to participate regardless of proscriptions. Since committees do not yet require applications for membership, and do not have established procedures to collect dues, RCs currently represent de facto the entire workforce of a company, including those who have been employed less than one year. A February statistical bulletin confirmed the current private workforce of Oman to be 102,455 Omanis and 438,531 expatriates, meaning that approximately nine percent of the workforce is now represented by a union. Committees are expected to maintain their own finances and are not regulated by the MOM. ¶6. All established committees may participate in the national federation of unions, referred to as the Main Representative Committee (MRC). The MRC is currently the only umbrella organization to represent Omani unions internally and abroad, and members are chosen through secret ballot elections. Similar to the situation of the representative committees, members of the MRC do not give notice to MOM prior to general meetings; nor do they provide the MOM a copy of their agendas or meeting minutes. Moreover, no MOM official has ever attended any committee meetings or banned the MRC from meeting without prior approval. Members of the MRC maintain open relations with the MOM to discuss ongoing changes in the labor law and possible means to strengthen the labor unions. ¶7. The representative committees are experiencing growing pains in terms of organization and management. The MRC has not yet moved into a permanent office space or established a bank account to manage its finances. In addition, recent personnel changes at establishments have meant the addition of Issam al-Sheibany of Oman Oil Refinery and Aida al-Hashmy of the Al-Bustan Palace Hotel to the MRC, bringing the total number of MRC representatives to 13. In spite of logistical issues, however, MRC members continue to meet regularly with the International Labor Organization (ILO) and the Ministry of Manpower to discuss technical assistance and other needs to support a fully functioning MRC. Moreover, the MRC continues to mediate disputes and is informed of complaints with the MOM (reftel). ¶8. As part of its outreach and organization, the MRC recently established four sub-committees to focus on specific areas of concern: --External Relations - This committee manages conferences and is headed by mid-level officer Saud al-Jabri of Petroleum Development Oman; --Rights and Duties - This committee is headed by Oman's busiest labor advocate, Nabhan al-Battashi, of the Grand Hyatt Hotel Muscat; --Articles of Association and Membership - Abdullah al-Araimi heads this committee, which serves as a resource for newly established committees; and --Women's Issues - New MRC member Aida al-Hashmy of the Al-Bustan Palace Hotel heads up this important committee promoting women in the workforce. ¶9. The MRC is currently preparing for the upcoming annual meeting of the ILO in Geneva and recently appointed its participating delegates. In addition to senior members Saud al-Nahari and Abduladheem Abbas, junior MRC members Saud al-Jabri, Aida al-Hashmy, and Nabhan al-Battashi will attend the ILO for the first time. The government fully funds the participation at the ILO's annual meeting for a tripartite delegation of one employer, government official and one labor representative. The MOM has further supported the attendance of the other MRC members by officially requesting that companies allow designated representatives the necessary time off and pay for their travel. -------------- Success Stories -------------- ¶10. Although the committees are loosely organized and lack some basic management skills, the MRC has been active in mediating disputes and performing outreach. Nabhan al-Battashi, head of the Rights and Duties subcommittee, makes frequent trips throughout the country to promote the establishment of committees and liaise with private sector management to educate companies on the labor law and the important role of the committees. Two recent trips include visits to al-Jazeera Tube Mills in Sohar and Oman Flour Mills in Salalah. Although both companies were initially skeptical of the idea of a representative committee, company managers not only agreed to allow company time to hold meetings, but also provided space for the new committees as well. ¶11. At the enterprise level, the RC of the Grand Hyatt has made the most significant progress in negotiating better working conditions and advocating on behalf of its committee members. In recent months, the RC's President negotiated a new vendor contract for employee meals, reached an agreement to prohibit smoking in the staff cafeteria, secured an annual bonus for all staff, ensured payment of overtime, and negotiated 4 percent of the hotel's service charge to be paid directly to employees, a monthly increase of 209 USD for every employee. As a result of the committee's significant achievements, the Grand Hyatt dramatically reduced resignations from 166 in 2005 to zero for the calendar year to date. ¶12. While the law does not explicitly permit workers the right to strike (to be amended by October 31),there were 33 strikes involving 6,000 workers in 2004 and 4 strikes involving 1,083 workers in 2005. There are no restrictions on the right to strike and no activities associated with striking are grounds for dismissal. In 2005, there was one reported collective complaint that occurred during one of Oman's most widely publicized strikes. As reported in reftel, workers at Salalah Port closed Oman's largest seaport for two days while the MRC and the MOM negotiated the reinstatement of a committee representative who had been fired. In addition to the strike, workers took the opportunity to successfully renegotiate working hours and split-shift schedules. Although there are no penalties yet for anti-union discrimination (still under discussion),as evident by the Salalah example, the MOM and Oman's labor courts do not tolerate wrongful dismissal. ¶13. To date, there has been only one case of an individual terminated who was also a member of a representative committee (reftel). Neither employers nor managers have challenged the right of workers to form a representative committee, moreover, labor organizing is not grounds for dismissal or arrest. While the MOM does keep a variety of labor statistics, there have been no reported cases of workers suffering retaliation for participating in worker committee activities. As with any labor dispute, workers are encouraged to submit complaints to the MOM and may sue employers for wrongful dismissal. Labor courts favor the worker in the majority of cases, regardless of the reason for termination. -------------- Foreign Workers and Child Labor -------------- ¶14. Foreign workers in Oman make up roughly 50 percent of the labor force and are concentrated in the following sectors: Construction - 28.2 percent Wholesale/Retail - 20.1 percent Domestic Servants - 13.4 percent Manufacturing - 11.8 percent Agriculture - 10.7 percent Hotels/Restaurants - 5.9 percent Health/Education/Community/Real Estate, Misc. - 10 percent ¶15. Non-Omani workers are informed of their labor rights through outreach by the Main Representative Committee, the MOM, and their embassies. While some employers have reportedly held passports of foreign workers, the MOM asserts that this practice is illegal and that legislation formalizing that will be forthcoming. Forced labor is prohibited by Oman's Basic Law and persons convicted of the crime are sentenced to five to fifteen years in prison. Oman has ratified ILO Convention 29 on Forced Labor and ILO Convention 105 on the Abolition of Forced Labor. ¶16. Child labor is also prohibited by Oman's Basic Law and existing labor law. Oman ratified ILO Convention 138 on the Minimum Age for Admission to Employment and ILO Convention 182 on the Worst Forms of Child Labor. The minimum age for employment is 15 years and minors (aged 15-18) are permitted to work only between the hours of 6 a.m. and 6 p.m. Minors are prohibited from working in hazardous occupations; may not work on weekends or holidays; many not work for more than six hours in a day; and are prohibited from working overtime. Workplaces that employ minors are required to post certain items for display, including: a copy of the rules regulating the employment of children; an updated log with the names of minors employed in the workplace and their ages and dates of employment; and a work schedule showing work hours, rest periods, and weekly holidays. ¶17. Forced or compulsory labor by children is specifically prohibited by law. Employers who violate the child labor provisions of the Oman Labor Law are subject to a fine of US ¶260. A second violation within a year can result in imprisonment for one week. In practice, most employers will ask prospective employees for a certificate indicating that he or she has completed basic education. Considering that most children usually begin their basic education at age 6, this means that workers, in most cases, will be at least 16 years old when they begin work. It is prohibited for anyone under the age of 21 to receive a visa to work in Oman. There have been no incidents reported of illegal child labor. ¶18. In other labor news, a recent landmark agreement between the Omani government and the Indian embassy now requires Omani employers to provide Indian nationals with a two-year insurance package. (Note: The decision does not cover Indian employees already in Oman. End Note.) The plan will require sponsors to pay a fee of 26 USD for two-year coverage plan and will cover 5,600 USD "blood money" (i.e., life insurance),100 percent disability, and 655 USD for miscellaneous medical expenses. This proactive solution by the Indian Embassy also set the minimum wage for housemaids at 131 USD a month. -------------- Labor Inspections -------------- ¶19. The Labor Care Directorate of the MOM is responsible for enforcement of, and compliance with, workplace laws and regulations. Its responsibilities include: occupational safety and health, labor inspections, dispute settlement, female employment, liaising with the Main Representative Committee, issues related to child labor and forced labor, and resolution of individual and collective labor disputes. The MOM employed approximately 82 labor inspectors who conducted 4,541 workplace inspections, including an unknown number of random inspections, in 2005 that represented 19 percent of the workforce. Labor inspectors are spread throughout the Sultanate. The MOM operates a 24-hour hotline (English and Arabic) for workers throughout Oman to report complaints, offer suggestions or seek responses to questions about the labor law. The MOM estimates that while it takes thousands of general inquiries a year on the hotline, it only receives about 150 complaints that require formal processing and action. -------------- Comment -------------- ¶20. Although committee members, businesses, and workers continue to work to understand the new labor climate and their labor rights under the 2003 Labor Law, all expect significant changes in the coming months as a result of recent commitments to Congress made by Maqbool Sultan, Minister of Commerce and Industry, and the impending ratification of the US-Oman Free Trade Agreement. Committee members and MOM officials both assert that as far as the practice of the law goes, committees are already working within an ILO-consistent framework. GRAPPO