GAS STATION WORKERS STRIKE IN GUINEA

UNCLAS CONAKRY 001234

SIPDIS

SIPDIS
SENSITIVE

E.O. 12598: N/A
TAGS: PREL PREL KDEM ASEC GV
SUBJECT: GAS STATION WORKERS STRIKE IN GUINEA



1. (SBU) SUMMARY. Unionized gas station workers started a
nation-wide strike on November 11 in protest of low wages, long
working hours, and a lack of contracts and basic benefits. Business
owners say they cannot increase wages due to an already too low
profit margin resulting from government price fixing and increasing
world oil prices. During initial negotiations, employers reportedly
agreed to implement a contractual hiring process while workers
agreed to suspend the strike and return to work. However, union
leaders say that the strike is still in effect and if demands are
not addressed, they may reinstate it as early as November 14. END
SUMMARY.


2. (SBU) On November 13, Embassy staff met with a number of
business contacts representing gas stations and their employees. In
addition, poloff met with leaders of the Independent Union of
Guinean Labor Forces (SIFOG),which represents gas station
employees.


3. (SBU) Union leaders report that they filed all the necessary
paperwork required by law in order to organize a strike. Although
some advance notice was evidenced by the long lines of drivers in
front of capital gas stations the evening before the strike, one
station owner complained that she was unaware of the strike until
her employees failed to show up for work the morning of November 11.
Gas Station owners throughout the city said that strike activity
was generally peaceful with no demonstrations or destruction of
property. Despite a significant increase in the number of
pedestrians in the streets, people appeared to generally go about
their business as usual.


4. (SBU) Union representatives told poloff that they organized the
strike in order to negotiate better salaries, better working hours,
and implementation of contractual hiring practices. Currently, gas
station workers earn approximately $49 a month. Many employees
reportedly work from 7:00 AM to 12:00 midnight. Most gas station
workers do not have official contracts, which leaves them without
benefits and subject to firing without procedure or cause. Union
leaders said they have four key demands: contracts for all workers,
social security benefits, a 100% increase in salaries, and medical
insurance.


5. (SBU) Business owners acknowledged that workers' salaries are
low, but said they cannot increase wages due to the low profit
margin caused by government price fixing. With the per liter price
set at approximately $.80 (as compared to a regional average of
$1.46 according to contacts) and steadily increasing world oil
prices, business owners reported that their current profit margin
amounts to approximately two and a half cents per liter. Those
profits are used to pay salaries, taxes and all operating costs. To
maintain profitability, contacts said they need a minimum profit
margin of seven cents.


6. (SBU) During the first day of the strike, union leaders met with
gas station owners, as represented by the Patronat (an association
of businesses). During negotiations, they reportedly agreed that
employers would begin implementing a contractual hiring process, but
as of November 13, employers had not yet signed the agreement as
promised. Union leaders said that while they agreed to go back to
work, they will continue to fight in order to meet all of their
demands. They added that if no progress is made, they are prepared
to reinstate the strike as early as November 14. Business contacts
said that the Patronat is convening another meeting on November 13
to discuss the need for a larger profit margin and a strategy for
getting the government to adjust the fixed gasoline price.


7. (SBU) Several business contacts said that the Guinean government
simply cannot afford to maintain the current subsidy level. One
credible source reported that the government took a revenue loss of
$3.65 million for October alone, which was the result of tax breaks
given to gas vendors as an offset of the fixed price.


8. (SBU) COMMENT. The salary issue seems to be the main problem
for workers, but there is likely little that business owners can do
to address it until the Guinean Government agrees to adjust the gas
price or stop fixing the price altogether. The GoG is rapidly
losing millions of dollars in much needed revenues in order to
maintain the price subsidy, which is a huge budgetary drain. To
date, the GoG has been reluctant to adjust the subsidized fuel
price, which could be widely unpopular. However, the strike could
be a hidden opportunity for the GoG to adjust the subsidized price
under cover of meeting worker demands, which may be more palatable
to the general population. END COMMENT.

CARTER