CAMEROON: EXXON FEARS EMPLOYEE UNREST IN SALE TO

UNCLAS YAOUNDE 001566

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: EINT ENRG ELAB ETRD EPET LY CM
SUBJECT: CAMEROON: EXXON FEARS EMPLOYEE UNREST IN SALE TO
LIBYAN OIL FIRM



1. (U) Summary. ExxonMobil representatives told Charge
October 11 that they feared their 85 employees in Cameroon
might take "illegal action," possibly to include violence, to
pressure Exxon to make cash concessions to its employees as
part of the pending share sale of Exxon's Africa operations
to Libyan oil company Tamoil Africa Holdings. Company
officials assessed Tamoil's interest in Exxon as part of
Libyan leader Qaddafi's strategic decision to divest Tamoil
of its European assets and focus instead on growing Tamoil's
holdings in Africa. End summary.


2. (U) Jose Fabrega, Exxon Sales and Operations Manager for
the West African Cluster, and two Exxon negotiators requested
to brief CDA on their efforts to complete the sale of Exxon's
fuel and lubricant businesses in Cameroon to Libya's Tamoil
Africa holdings as part of a share sale that will also
transfer ownership of Exxon assets in Gabon, Cote d'Ivoire,
Kenya, Senegal, and Reunion. Fabrega explained that,
although the deal was signed on October 9, Exxon would retain
day-to-day control over the operations pending CEMAC
approval, a process he expected would take about two months.


3. (U) In the meantime, Exxon officials worry, Exxon's 85
office workers may resort to "illegal action" to further
their demands that Exxon compensate them as part of the sale.
According the Fabrega, the employees claim compensation
under Article 42 of the Cameroonian labor code, which
establishes employee rights to compensation in the event of a
merger or similar action resulting in a new employee
contract. Since the Exxon sale is a share sale, with no
change of employee contract, argued Fabrega, Article 42 does
not apply and the workers are due no compensation. Exxon has
met with the Cameroonian Prime Minister and the Ministers of
Labor, Energy, and Finance. Fabrega told us that the
Cameroonian authorities uniformly share Exxon's assertion
that Article 42 does not apply in this situation. At the
request of the Cameroonian government, Exxon is negotiating
with the employees through a neutral "commission."


4. (U) Nonetheless, Fabrega explained, given the worrying
precedent where Cameroonian workers have been able to wring
concessions from foreign companies through violence and
threat of violence, Exxon remains worried that its employees
may resort to illegal actions to further their demands.
Recalling that local employees of Shell and Wackenhut
kidnapped senior managers to win concessions in similar
disputes, Fabrega lamented, in Cameroon, "there is a
precedent that violence pays." Exxon has contracted security
firm Sterling Company, whose unarmed consultants will seek to
preempt any violence against Exxon representatives. CDA told
the Exxon officials that the Embassy would be prepared to
intervene with Cameroonian authorities to help prevent
violence and to help ensure that relevant Cameroonian
regulations were respected.


5. (U) Fabrega assessed Tamoil's interest in Exxon as part
of Libyan leader Qaddafi's strategic decision to divest
Tamoil of its European assets (currently for sale) and focus
instead on growing Tamoil's holdings in Africa.


6. (U) Minimize considered.
NELSON