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IdentifierCreatedClassificationOrigin
06SANJOSE2312 2006-10-20 19:38:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy San Jose
Cable title:  

PORT WORKERS PROTEST CONCESSIONS, TEST GOCR RESOLVE

Tags:   ELAB ECON PGOV CS 
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VZCZCXYZ0023
PP RUEHWEB

DE RUEHSJ #2312/01 2931938
ZNR UUUUU ZZH
P 201938Z OCT 06
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 6375
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
					  UNCLAS SAN JOSE 002312 

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR WHA/CEN JASON MACK

E.O. 12958: N/A
TAGS: ELAB ECON PGOV CS
SUBJECT: PORT WORKERS PROTEST CONCESSIONS, TEST GOCR RESOLVE

-------
SUMMARY
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1. A show-down between the government and unionized dock
workers in the country,s Atlantic ports may serve as a
harbinger of GOCR resolve and capacity for dealing with
promised mobilization against the country,s CAFTA-DR
commitments. Since September 23, the government and port
workers have been dueling over a collective bargaining
agreement payment and plans to allow an international
concessionaire to operate Limon and Moin, Costa Rica,s two
primary and adjacent Caribbean ports. In Limon, a slowdown
in late September generated long lines of waiting trucks and
costly delays. In Moin, which handles the vast majority of
Costa Rica,s agricultural exports, normal port functions
ceased altogether for a few days. The Ministry of Security
was slow to react, but police secured the port facilities
without incident early morning September 28. Operations in
Moin are now close to normal because Dole, Del Monte and
operating cranes and tugboats. Operations in Limon remain
severely affected due to a work-to-the-rule campaign by the
union. The GOCR and port workers met on October 19 but
failed to resolve the impasse. Since the bulk of shipped
cargo to and from Costa Rica passes through these ports, a
long-term work slowdown could cost exporters and importers
millions of dollars in losses. The government,s response
(sending in the police) may be a signal to unions that
similar tactics will not be tolerated during expected
anti-CAFTA strikes and protests. END SUMMARY.



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COSTLY SLOWDOWN; UNION SHOWDOWN


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2. On September 25, union port workers at the Caribbean ports
of Limon and Moin initiated a formal work slowdown, which
created a line of container trucks stretching for over two
miles outside the entrance to the port zone. These two
Caribbean ports transport 90% of Costa Rica's shipped
commerce. Since much of the cargo is very time-sensitive -
bananas, pineapples, and other perishable produce - delays
can destroy the value of the shipment. On September 27, 200
Costa Rican police were placed in the port zone and awaited
orders to take control of the facility. That evening, port
authority officials met with Minister of the Presidency
Rodrigo Arias, Security Minister Fernando Berrocal, and
Public Works Minister Karla Gonzalez to discuss the crisis,
which had caused five million dollars in losses for fruit
exporters to that point. Before dawn on September 28, the
police took control of the port without incident and began
ensuring that cargo trucks could enter the facility at a
normal rate. Non-union workers from Dole, Del Monte and
Chiquita were allowed to begin moving cargo in the port of
Moin.



3. Throughout the prior week, the leadership of the union of
port workers (SINTRAJAP) threatened the work slowdown if
workers were not paid $900,000 they believed the Atlantic
coast economic development port authority (JAPDEVA) owed as
part of a collective bargaining agreement. In 2003, the
government's then-regulator general deemed that certain
specific provisions within the collective bargaining
agreement between SINTRAJAP and JAPDEVA were excessive and
should not be paid. In 2005, then-president Abel Pacheco
avoided a work slowdown by convincing large shipping
interests such as banana exporting companies to pay for the
disputed provisions. This year, the companies declined to
pay. Hoping to avoid a costly slowdown, the public services
regulation authority (ARESEP), which oversees JAPDEVA, met
with ARESEP boss Fernando Herrero on September 24 to find a
solution after an informal work slowdown began September 23.
Late that night, they agreed that JAPDEVA would be allowed to
use part of a $20 million surplus it had accrued from
shippers fees to pay the $900,000 demanded by the port
workers.



4. However, on September 25, SINTRAJAP leaders announced that
the disputed payment was only part of their demands, and that
their new priority was preventing the government's plans to
contract an international firm to run the ports. SINTRAJAP
secretary general Rolando Blear stated that the slowdown

SIPDIS
would continue until he received a signed letter from
President Arias promising not to go ahead with the
concession. Minister of the Presidency Arias flatly rejected
this demand, reiterating the government's commitment to
proceed with the concession, as has already been done with
the Pacific port of Caldera. Labor minister Francisco
Morales also labeled the demand unacceptable, adding that
during the election campaign, President Arias was very clear
about his intention to bring in international concession to
run the Caribbean ports.



5. That JAPDEVA had accrued such a large surplus became a
separate issue, as Costa Rican law forbids public enterprises
such as JAPDEVA from operating for profit. Herrero asked
ARESEP to study the issue to determine if port rates could be
lowered and/or investment into port improvement increased.
SINTRAJAP leadership cited the surplus as proof that JAPDEVA
could operate profitably and have sufficient funds for
necessary infrastructure improvements, thus negating the need
for private investment.



--------------------------



--------------------------


SITUATION CLOSE TO NORMAL IN MOIN; LIMON REMAINS SEVERELY
AFFECTED


--------------------------



--------------------------





6. As of October 19, port operations were improving, albeit
extremely slowly. Port workers continue to work to rule in
Limon, causing delays of several hours, but not as long as
during the September slowdown. In Moin, workers from the
main (U.S.) agricultural exporters are now effectively
running the port. Cargo at Moin was being transported in
sufficient quantity to avoid the large financial losses
incurred in the initial days, although as of October 12 Costa
Rican importers and exporters had lost an estimated 10
million dollars due to the port problems. Police presence
has decreased, and there have been no altercations or
sabotage. Labor minister Francisco Morales met with
SINTRAJAP leaders on October 7 and unsuccessfully lobbied the
union to end the slowdown while negotiations between the
government and the union proceed. The two sides met again on
October 19 but again failed to end the impasse.



7. Econoff and Poloff met on October 12 with an official
from Dole to discuss the slowdown and its effects on the
large fruit exporters that use the Caribbean ports. This
official explained that Moin was operating with private
workers under the control of the fruit exporters and was
functioning close to normal. Limon, however, operated with a
mixture of private workers and slow-working union members,
and was operating at only a fraction of the normal rate (i.e.
three containers per hour versus the normal 25 containers per
hour). According to the Dole official, losses of fruit were
significant before the security forces took control of the
ports on September 28. While crediting the government,s
securing of the port for helping to restore operations, he
criticized the government for not acting sooner.



--------------------------


COMMENT: DRY RUN FOR CAFTA?


--------------------------





8. The Arias administration had to demonstrate resolve in
this one, with union protests against CAFTA scheduled for
October 23-24. The government's initial attempt to placate
the port workers -- giving into demands deemed excessive
three years ago -- emboldened SINTRAJAP to press for their
real goal: continued operation of the ports by the
government. The union seems to have overplayed its hand,
however, underestimating the determination of the Arias
government to allow an international concessionaire to
operate the ports and to avoid strengthening the unions
before the CAFTA ratification process begins in earnest. In
addition, the union protest has drawn little public support,
with media reports at first showing the waiting trucks and
warning of spoiled exports and lost commerce, and later
contrasting the problems in Limon with the more efficient,
concession-run operations at the Pacific coast port of
Caldera. If the Caribbean ports fully return to normal as a
result of the government,s action, it would be a signal to
union leaders and other anti-CAFTA forces that the Arias
administration is prepared to maintain order when necessary.
The on-going slowdown in Limon, however, underscores the
challenges still facing the government.
FRISBIE