NIGERIA: STRIKE POSES CONCERN FOR GON AND LABOR

C O N F I D E N T I A L SECTION 01 OF 02 ABUJA 001319 SIPDIS SIPDIS DEPT FOR DRL, AF/W DOL FOR SUDHA DALEY DOE FOR CAROLYN GAY E.O. 12958: DECL: 06/20/2017 TAGS: PGOV ELAB PREL PHUM ENRG ASEC NI SUBJECT: NIGERIA: STRIKE POSES CONCERN FOR GON AND LABOR REF: A. ABUJA 1317 ¶B. ABUJA 1303 ¶C. ABUJA 1302 ¶D. ABUJA 1294 ¶E. ABUJA 1278 ¶F. ABUJA 1155 ABUJA 00001319 001.2 OF 002 Classified By: Ambassador John Campbell for reasons 1.4. (b & d). ¶1. (C) SUMMARY. As the national labor strike finishes its second day, the GON appears to have dug in its heals on capitulating further to labor's demands. For its part, labor appears intransigent and may be changing its bottom line negotiating position (Ref. A). If so, the unions stand to lose credibility if the strike fizzles out. The strike has likely become caught up in the machinations of a presidency that needs to appear strong to prove legitimacy and new leaders in the labor movement out to prove their bona fides. Labor appears most likely to lose, as it appears the strike may fizzle out over the coming days if no agreement is reached. END SUMMARY. THE POLITICAL SIDE OF THE STRIKE -------------- ¶2. (C) The opposition AC and ANPP parties continue to endorse the strike. Former Senator and AC Vice Presidential candidate Ben Obi told the Ambassador on June 21 that the strike is likely to drag out. He maintained that President Yar'adua is "not seized with this issue." (COMMENT: This tracks with our sense that Yar'adua has completely turned over the labor negotiations to Kingibe.) The issue of the price board approving the fuel price increase is an important one to the trade unions, civil society and the political opposition, according to Obi. In addition, he indicated that the oil unions remain concerned about the sale of the Port Harcourt and Kaduna refineries and still seek the cancellation of the sales. GON MAY FEAR APPEARING WEAK -------------- ¶3. (C) Recent public statements from Secretary to the Government of the Federation (SGF) Babagana Kingibe indicate the GON will not concede to returning fuel prices to their previous level and that the GON believes at this point that the labor movement has a political, rather than labor, agenda. It is possible that the administration (at this point Yar'adua, Jonathan and Kingibe) fears that capitulating fully to all of labor's demands could be seen as a sign of weakness and ultimately threaten their ability to govern. An inability to bring Nigeria through the strike while maintaining at least the appearance of strength within the presidency could exacerbate the existing crisis of legitimacy. Though Defense Attache does not believe the military is ripe for a coup, the question really is whether Yar'adua percieves that an appearance of weakness endangers his government. LABOR STANDS TO LOSE IF STRIKE FIZZLES -------------- ¶4. (C) Given the cracks that have begun to appear in the strike as of mid-day on Day 2 (Ref. A),it is likely that the strike will lose momentum and participation over time. Less than 10 percent of Nigeria's total workforce is organized and the large informal sector relies on daily earnings for subsistence. Labor leaders will have a tough time convincing most informal workers to continue participating for long, as each day constitutes ill-afforded lost income. However, if labor leaders can keep truck drivers on strike and stop fuel distribution, the lack of fuel across the country would bring public and private transport to a halt and cause a de facto stay-at-home. ¶5. (C) On June 21, international press reported a PENGASSAN ABUJA 00001319 002.2 OF 002 spokesman saying that the union is holding talks with the GON. PENGASSAN and NUPENG have traditionally been slow to join in national strikes and have gained their negotiating strength from their ability to limit their demands to specific issues impacting the industry and, if necessary, to shut down oil production and exports. Given Obi's contention that the oil unions are still concerned about the refinery sales, this is possibly another sign of the breakdown in NLC/TUC management of the strike -- as the oil unions (who have power over petroleum production) negotiate independently on an issue the NLC and TUC have indicated they are satisfied with. That said, if the GON mismanages the negotiations with the oil unions, it could risk shutting down oil production and enhancing the position of the NLC and TUC. ¶6. (C) If the strike does fizzle out, labor stands only to lose. The decision to strike when the GON had met three and a half of its four demands appears at this point to be politically driven. It may be that the new labor leaders (both assumed office in early 2007) are using this opportunity to prove their bona fides and establish their strength in the Nigerian political arena. Unfortunately, their plan may backfire if the strike fizzles without reaching a settlement. Even if labor retains the concessions already offered, NLC and TUC will lose credibility and their position of strength if the strike does not hold. CAMPBELL