UNIONS INCREASING IN NUMBER BUT LACKING IN STRENGTH

C O N F I D E N T I A L SECTION 01 OF 03 MUSCAT 000970

SIPDIS

SIPDIS

DEPARTMENT FOR NEA/ARP AND NEA/PI
DRL FOR AANZALDUA
USTR FOR JBUNTIN AND AROSENBERG
DOL FOR JSHEA, BSHEPARD AND JRUDE

E.O. 12958: DECL: 10/22/2017
TAGS: PGOV PHUM ELAB ETRD KMPI MU
SUBJECT: UNIONS INCREASING IN NUMBER BUT LACKING IN STRENGTH

REF: A. MUSCAT 462

B. MUSCAT 473

Classified By: Ambassador Gary A. Grappo, reasons 1.4 b/d.



1. (C) Summary: The number of labor unions in Oman increased
substantially during the second and third quarters of 2007.
Contacts claim, however, that despite a few isolated
examples, unions remain weak and continue to lack effective
organization or leadership. The General Federation of Oman's
Laborers, the national level workers' representative body,
has been particularly ineffective, contacts state. In the
meantime, businesses are concerned that the lack of
knowledgeable and dependable union leaders offers them few
reliable bargaining partners, and presents a threat to labor
market stability. Post intends to continue to support
programming that builds union capacity and facilitates
opportunities for greater communication between management
and labor. End summary.

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Increased numbers
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2. (SBU) The number of unions in Oman has grown significantly
since June 2007 when workers at construction company "Galfar"
formed the country's first licensed union (ref A). According
to statistics from the Ministry of Manpower's (MOM)
Department of Labor Care, there currently are 18 unions
representing workers in most of the primary sectors of the
Omani economy, including the oil and gas, construction,
banking and hospitality sectors. Ministry officials assert
that the MOM is in the process of reviewing seven additional
union applications, which they expect the Ministry to approve
before the end of the year. Worker representatives who have
spoken directly to poloff further claim that employees in at
least three more Muscat-area companies are planning to submit
union licensing applications to the Ministry this November.

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Yet little strength or depth
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3. (C) The increase in the number of unions, however, has not
correlated with an increase in the strength or capacity of
organized labor. There is little union depth in any sector
) in both the banking and hospitality sectors, for instance,
there are only two unions. In addition, union leaders tell
poloff that many of their co-workers still question the value
of union membership, which makes it difficult for them to
organize workplaces. Some of these same labor leaders
themselves appear unable to clearly articulate their union's
purpose or goals in a way that would win their colleagues'
confidence. The president of the union at Galfar, for
example, who also is the company's general manager for human
resources, stated that he only formed the union because "the
government told me to." The head of the workers' committee
at the Crowne Plaza Hotel in Muscat, who said that he was
preparing to submit an application for union registration by
November, told poloff that the union would "serve as a medium
for communication between the workers and management," and
that the primary purpose of the union would be to "help
management drive hotel goals."

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Some bright spots
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4. (C) Despite an overall lack of effective union leadership,
some of the new and aspiring labor unions are organized and
focused. Daleel Petroleum's Contract and Procurement
Logistics Manager, who is spearheading union organization in
his workplace, told poloff that he has informed co-workers
that their welfare and safety would be the union's top
priority. As a result, 120 employees out of the company's
total workforce of 150 - 40 percent of whom are expatriates -
have signed the union's registration application and already
have identified two issues for the union to consider in
negotiations with management: increased annual leave for oil
field employees who are working a two-week on/two-week off
schedule; and an increase in inflation-adjusted salaries for
all of the company's employees. On the second issue, the
union organizer said that his first step would be to request
union representation on a task force that currently is
reviewing the company's pay scale. If management does not
agree to that demand, he said, the union would conduct its

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own study and consider further action to press worker demands
as needed.


5. (C) The president of the union at the National Bank of
Oman (NBO) told poloff that recent elections for the union's
executive committee energized the bank's employees and
substantially increased interest in the union. 56 percent of
the union's 412 members voted in the election, in which 17
candidates competed for five positions. Two women ended up
winning seats on the executive committee. The elections
provided a way for the bank's expatriate employees to get
more involved, the president stated, as he and other Omanis
had to rely on their Indian colleagues' experience with
democracy back home to help design and run the election
procedures. Further, the process of campaigning helped the
members of the executive committee learn to articulate their
reasons for forming a union, which, the president and union
secretary said, is to provide workers with "collective power"

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to negotiate for better wages, conditions and fair treatment.

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Where is the General Federation?
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6. (C) Union contacts state that the General Federation of
Oman's Laborers, which the MOM has identified to be the
primary intermediary between the government, labor, business
and international organizations to help with union
development, has provided unions with little support or
strategic guidance to date. They contend that the General
Federation's inactivity has contributed to organized labor's
lack of strength and capacity. NBO's union president
rhetorically asked poloff, "Where is the General Federation?"
He complained that the Federation did not provide the bank's
employees with support during their union elections and that
none of the Federation's members have visited his new
executive committee.


7. (C) The Chairman of the General Federation, however, has
repeatedly stated that he lacks even the basic tools -- such
as dedicated office space and an independent source of
funding -- to be an effective advocate for unions. In
addition, while the Minister of Manpower has asked him to
help guide union development in its early stages, the
Chairman feels he lacks a foundation of support among
workers. He and the other members of the Federation were not
elected by unions to their positions, but appointed by the
Ministry of Manpower in 2005 to serve on the Federation's
precursor, the Main Representative Committee. As a result,
the Federation is disconnected from the unions it is meant to
serve. At a recent Post-sponsored reception for
representatives of labor, government and business, the
Federation Chairman responded to an invitation for dialogue
from the CEO of an employer's association by saying, "I
can't; I have nothing behind me and nothing to bring to the
table."

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Business Concerns
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8. (C) As labor unions increase in number, there appears to
be a growing consensus among employers that labor's general
lack of focus and leadership poses a potential threat to
labor market stability. In addition, several executives have
told poloff recently that Oman's regulations covering union
organizing, collective bargaining and the right to strike are
insufficiently precise to protect businesses' economic
interests. The Chief Operations Officer at the Port of
Salalah, which has been the site of two strikes over the past
two years (ref B),told poloff that the Port is considering
petitioning the government to identify dock workers as
essential employees, or adding a clause to its employee
contracts that would prohibit their involvement in "unlawful
strikes."


9. (C) Sohar Aluminum has hired a management consultant to
review Oman's labor laws and help the company develop a
strategy for working with unions. The consultant recently
told poloff that the company is particularly concerned that
these laws, which allow for the possibility of multiple
unions of at least 25 employees per firm, expose the company
to the risk of having to negotiate multiple agreements with
small units. There are bound to be pockets of workers among
the company's employees, the consultant opined, who do not
get a pay raise or promotion, and who will see unions as a
way to advance their narrow interests. Further, the company

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has concerns over language in a Ministerial Decision on the
renegotiation of valid collective bargaining agreements,
which it fears could adversely impact the stability of such
agreements. The company plans to discuss both issues with
the Minister of Commerce and Industry.

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Comment
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10. (SBU) Solidarity Center has received almost $500,000 in
funding from the Middle East Partnership Initiative (MEPI) to
conduct capacity building programming for unions starting in
January 2008. Solidarity Center's assistance and expertise
should go a long way toward addressing unions' institutional
and leadership deficiencies. It appears at this early stage
of union development, however, that there is little
communication -- but a great deal of distrust -- between
management and labor. Post is working to help bridge this
gap as demonstrated by the following examples:

-- A recent, Post-sponsored reception for labor and business
leaders turned into an impromptu roundtable discussion, which
some participants claimed was the first time that management
and labor have met to discuss concerns and issues in any
meaningful way.

-- Post has invited more than twenty senior executives from
companies in the Muscat area, as well as members of the
General Federation and local unions, to a November 22 event
to discuss effective labor-management relations and "win-win
negotiating" with a former member of the U.S. National Labor
Relations Board.

Contacts have expressed a keen interest in continuing this
kind of dialogue, and Post plans to continue to facilitate
opportunities for engagement between labor, business and
government. Finally, all parties involved -- government,
labor and business -- have requested continuing technical
training and assistance to equip Oman's unions and labor
leaders with the skills necessary to be effective. End
Comment.
GRAPPO