CARIBBEAN PORT SLOWDOWN ENDS POSITIVELY FOR

UNCLAS SAN JOSE 002581

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR WHA/CEN JASON MACK

E.O. 12958: N/A
TAGS: ELAB ECON PGOV CS
SUBJECT: CARIBBEAN PORT SLOWDOWN ENDS POSITIVELY FOR
GOVERNMENT

REF: A. SAN JOSE 2312

B. SAN JOSE 2431


1. (U) SUMMARY: On October 27, a month-long standoff between
dockworkers in the Caribbean ports of Limon and Moin ended.
A full strike over the last four days of the slowdown added
to the financial losses the region was already suffering,
causing a cruise ship with 3,000 passengers to cancel a
planned port call in Limon. The GOCR and dockworkers union
negotiated an end to the increasingly unpopular
slowdown/strike and announced a settlement in which the GOCR
would pay the workers a back-payment owed to them and not
punish the dockworkers for the slowdown. The union, most
importantly, agreed to no longer condition the end of the
slowdown on the GOCR,s ending plans to concession the ports.
The GOCR also unveiled plans to develop a "megaport" in the
region, but added that only a concession would have the 500
million dollars necessary to fund the project. The
successful end of the slowdown/strike was another late
October achievement for the Arias government which also
included a fizzled anti-CAFTA strike and setting a definitive
date (December 12) for a committee vote on CAFTA. END
SUMMARY.

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THE SLOWDOWN BECOMES A STRIKE
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2. (U) On October 27, the month-long standoff between the
1,100-member Caribbean dockworkers union (SINTRAJAP) and the
GOCR (Ref A) ended peacefully, but not without a last-minute
flare up. On October 23, workers in Limon port moved from a
work slowdown to a total strike as part of the nationwide
anti-CAFTA protests (Ref B) and to underscore their continued
opposition to the government's concession plan for the ports.
That same day, a Limon judge ruled that the work slowdown
was illegal, giving the government the power to fire
participating workers, if needed. During the evening of
October 24-25, protestors torched a tractor trailer cab and
several rowdy individuals were arrested in downtown Limon.
In an attempt to break the impasse, Minister of Labor
Francisco Morales met with SINTRAJAP on October 25 in Limon,
but the sides failed to reach agreement. The government was
fully prepared to pay an outstanding collective bargaining
agreement payment, but rejected demands to drop penalties
against striking workers and to halt its port concession
plan. The government also insisted that the strike had to
stop before any payment was made to the union, a condition
SINTRAJAP promptly rejected.

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ONE (MISSED) SHIP VISIT MAKES THE DIFFERENCE
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3. (SBU) The Limon strike and associated disturbances caused
the Carnival cruise ship "Victory" with 3,000 passengers
aboard to forego a scheduled Limon port call on October 26.
Acting swiftly, the President,s office issued a press
release (widely referred to in media reports) which estimated
that the cancelled stop had cost the impoverished Limon
region over $110,000. SINTRAJAP itself lost an estimated
$12,000 dollars in docking fees. (COMMENT: The Embassy may
have influenced Carnival,s decision. The firm,s chief
security officer called from Miami during the height of the
strike on October 24. Pol Couns and ARSO gave him a factual
update, based on our best information at the time, and that
evidently raised enough concern at Carnival,s headquarters
for the cruise company to skip Limon. END COMMENT.)


4. (U) The port visit cancellation seemed to tip the balance.
Minister Morales again met with SINTRAJAP October 26-27, and
after a six-hour overnight negotiation session, both sides
reached agreement. The GOCR agreed to pay dockworkers the
$900,000 collective bargaining payment and not to sanction
dockworkers who had participated in the September 23-October
22 slowdown. SINTRAJAP agreed that workers who took part in
the October 23-26 strike would have their pay docked. More
importantly, the union agreed not to condition the return to
normal work on the government's dropping its concession plan.
Finally, the government agreed to present its plans for the
economic development of the Limon province and to continue
dialogue with the union on the concession issue on October 30.


5. (SBU) On October 27, Limon was operated normally. The
Ambassador and Pol Couns, in Limon on other business,
observed two cargo vessels and the Holland America Line,s
1500-passenger "Amsterdam" tied up in the port that morning.
Local banking officials and reps from the major US firms
using Limon,s sister port of Moin (Chiquita, Del Monte and

Dole) told the Ambassador that the Limon area community was
tired of the strike and glad it was over. Local residents in
the depressed Limon economy badly needed the cruise ship
business, and resented that the union had dragged the problem
on so long.

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A LASTING SOLUTION?
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6. (SBU) Minister Morales told Poloffs on October 31 that
SINTRAJAP made "three mistakes" which cost them. First, they
went on strike in October, "carnival" season in Limon and
along the Caribbean coast, when the area expected additional
cruise ship visits and tourism. Second, they forced one ship
(the "Victory") away at a significant (and well-publicized)
cost for the local economy. Third, the union did not expect
the GOCR,s "tough" reaction, first using police to keep the
ports open during the initial slowdown in September, then
going on the public relations offensive when the "Victory"
visit was cancelled. Morales noted that Limon province
suffers 20% unemployment and many tour operators and small
vendors depend on cruise ships for their livelihood. Like
the US business reps who met with the Ambassador, however,
Morales acknowledged that this drama has not played out
completely, since the port concession issue remained to be
resolved.


7. (U) As promised in the agreement with SINJATRAP, Minister
w/o Portfolio Marco Vargas presented the GOCR's economic
development plan for Limon province to a group of local
political and labor leaders on October 30. The ambitious
plan envisions a "megaport" that would serve as a
distribution center offloading and loading cargo from large
international container ships for distribution by smaller
ships throughout the region. Vargas stressed that the $500
million investment necessary for a project of this magnitude
could only come from a successful concession operation. For
its part, the union maintained its anti-concession position,
but promised to study the GOCR proposal and respond within
coming weeks. President Arias also including Limon on his
agenda during his November 6-7 visit to Chile. He told the
media he had invited the same Chilean investors who had
helped modernize the Pacific Coast port of Caldera (now run
by a private concession) to do the same in Limon.
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COMMENT: NOT QUITE A "PATCO MOMENT"
--------------


8. (SBU) Minister Morales, like other GOCR officials we have
met with over the last two weeks, sounded confident and
pleased with the Arias Administration,s trifecta of
successes since late October. First, the anti-CAFTA protest
fizzled. Second, the Limon port strike was resolved (this
chapter, anyway). Third, the Legislative Assembly set a date
certain (December 12) for the International Relations
Committee to (finally) vote on CAFTA, the prerequisite for
sending it to the full plenary for action after the holiday
recess. The GOCR can (and should) take some satisfaction
from these successes, for now. Meanwhile, the anti-CAFTA
forces have vowed another round of protests, which could turn
violent. The Limon workers have been bought off, but the
longer-term viability of the port remains a question. Floor
debate on CAFTA likely will require skillful and determined
management by the government. For President Arias and his
team, their sternest political tests - what could be their
real "PATCO moments" - may lie ahead.
LANGDALE