STRIKE AT CANADIAN GOLD MINE IN SURINAME

UNCLAS PARAMARIBO 000291

SIPDIS

SIPDIS

STATE FOR WHA/CAR LLUFTIG, WHA/EPSC, OES/ENV, EB/IFD/OIA,
EB/ESC/IEC, AND CA/OCS

E.O. 12958: N/A
TAGS: EMIN ETRD ELAB ECON EINV SENV NS CA
SUBJECT: STRIKE AT CANADIAN GOLD MINE IN SURINAME

1. On Sunday, May 14, some 300-500 employees of the Rosebel
Gold Mines N.V. ("Rosebel"),a subsidiary of Cambior
(Montreal-headquartered international gold-mining company),
engaged in a work stoppage called by non-accredited union

representatives. This forced Rosebel to suspend all
activities at its gold mining operations in Suriname. The
group leading the strike demanded increases in salary, to be
denominated in U.S. dollars, improved health care, and
better working conditions. Workers, who took control of the
front gate and several buildings, prevented mine management,
including at one point as many as three American citizens,
from freely circulating or departing the premises of the
mine. A first group of 50-80 people fled the mine the
evening of May 15 via a back road, leaving some 20
expatriate workers including one American citizen on the
premises. Many of these were essential personnel overseeing
gold and explosives; they were eventually confined to one
administration building by the striking workers.


2. After pleas from Cambior and the Canadian Ambassador,
the Government of Suriname on the evening of May 16 told
labor leaders to return their grievances to the bargaining
table or face military action against what had effectively
become a hostage situation. As of May 17, equipment and
effective control of the mining site has been returned to
Rosebel, but miners have not yet returned to work.

3. Labor-management negotiations on the workers' demands
have been complicated by a lack of clarity on their current
union representation. The current officially certified union
responsible for representing the gold miners at Rosebel is
"C-47." Rosebel management claims the workers have not
voted to change their representation to the competing
Moederbond union which apparently was behind this work
action. In fact, one of the strike demands was that the
Moederbond be recognized, a step management rejected given
their uncertainty about employee preferences. Rosebel has
requested assistance from the Government of Suriname to
clarify workers' representation at the Rosebel mine.

4. The two-year-old Rosebel mine employs about 950 workers
in total. The open-pit gold mine, 100 kilometers south of
the capital of Paramaribo, is owned 95 per cent by Cambior
and five per cent by the Suriname government. The company
expects this year's production to amount to 335,000 ounces
of gold. The rise in international gold prices has spurred
growing cries for a renegotiation of Cambior's concession
terms among Surinamese pundits and politicians of all
stripes.

5. The union responsible for instigating this action - De
Moederbond - is Suriname's oldest labor union organization,
and is politically linked to former president Jules
Wijdenbosch's party DNP-2000, which now sits in the
opposition. The president of De Moederbond is Errol
Snijders, who previously served as Minister of Labor and
Minister of Foreign Affairs in Wijdenbosch's cabinet. He is
known to have been a strong supporter of opposition party
leader Desi Bouterse's NDP party before the rift between
Wijdenbosch and Bouterse leading to the formation of the DNP
party in 2000. C-47 is led by Robby Berenstein, who is a
former member of parliament, and is politically linked to
Suriname Labor Party (SPA) one of the parties of the current
ruling coalition.



6. The remaining American citizen employee arrived in
Paramaribo in the afternoon of May 17. It is yet to be
determined whether the company plans to take actions against
the striking workers, or when the two sides might reach the
bargaining table over the workers' demands.

7. Comment: The union's actions put the governing
coalition in a difficult spot, caught between workers'
demands against a multi-national corporation perceived as
reaping huge gains from increased world gold prices, and the
legitimate concerns for Suriname's investment climate image
should such aggressive actions as hostage-taking be allowed
to supplant the normal negotiating process. The story isn't
over yet, but a volatile situation has for the moment been
defused.
LEONARD