LABOR UNREST ROCKS RAS AL KHAIMAH CONSTRUCTION COMPANY

C O N F I D E N T I A L SECTION 01 OF 02 DUBAI 000268

SIPDIS

DEPARTMENT: NEA/ARP MASILKO, ROEBUCK, STEINFELD; DRL/ILSCR ANZALDUA

E.O. 12958: DECL: 7/10/2018
TAGS: PGOV ELAB PHUM AE IN
SUBJECT: LABOR UNREST ROCKS RAS AL KHAIMAH CONSTRUCTION COMPANY

DUBAI 00000268 001.2 OF 002


CLASSIFIED BY: Angela Allen, OMS, RSO, State.
REASON: 1.4 (b),(d)




1. (U) SUMMARY: Employees and sub-contractors of Al Hamra
Construction Company in Ras Al Khaimah were involved in a labor
protest on July 6 which culminated in the destruction of several
company vehicles and damages to company property. Reports
indicate that the incident, which began as a small dispute
between several employees and company security, escalated into a
large-scale clash between the laborers and Ras Al Khaimah police
backed up by forces from the federal Interior Ministry. After
the dust settled, police reportedly took several thousand
laborers into custody for questioning. Criminal charges and/or
other disciplinary action are currently pending a decision by
the public prosecutor. END SUMMARY.

Large-Scale Protest Initially Overwhelms Company Security,
Police Forces

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2. (SBU) On the evening of July 6, employees and sub-contractors
of Al Hamra Construction Company, a subsidiary of the 100
percent government-owned Ras Al Khaimah Investment Authority,
were involved in a protest on the company's grounds. Reports
differ on the number of employees involved, ranging from 300 to

3000. Haig Puzantian, General Manager of Al Hamra, told
Pol/Econ Officer that the protest began when several intoxicated
employees attempted to obtain food after the closing of the camp
cafeteria. (Media reports indicate that a large number of
laborers were unhappy about the quality of the food being
served.) When confronted by company security, he said, the
laborers, later joined by other camp residents, attacked
security guards and subsequent reinforcements provided by the
Ras Al Khaimah Police. In addition to throwing rocks and debris
at the responding security force, the rioters damaged several
company vehicles, buses, and camp facilities. Ultimately,
forces from the Interior Ministry were brought in to quell the
unrest.

Police Detain Thousands for Questioning

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3. (SBU) Police reportedly took several thousand employees into
custody for questioning. (Note: Reports on the number of
laborers taken into custody widely differ. Puzantian told
Pol/Econ Officer that between 300-600 employees and
sub-contractors were taken for questioning. Media reports,
however, indicate that as many as 3000 laborers, many of whom
are Indian nationals, were taken for questioning by the security
forces, even though many of these workers were likely not
involved in the unrest. End Note.) According to Jihad Quzmar,
legal advisor to the Ras Al Khaimah Royal Court, charges against
those responsible are currently pending in the Ras Al Khaimah
public prosecutor's office. Those found to have been involved
will likely face criminal charges and/or deportation.


4. (C) Media reporting and at least one internet blog suggested
that the unrest was caused, in part, by non-payment or partial
payment of wages. Puzantian, however, directly disputed this
notion, offering to show Pol/Econ Officer the company's records
which indicate that all wages were paid in full during the first
week of the month. When asked about Al Hamra's adherence to the
recently enacted Ministry of Labor policy directing private
companies to begin direct depositing employees' wages, Puzantian
responded that approximately 50 percent of Al Hamra's employees
receive wages electronically. The other half, he said, would
eventually receive their salaries in the same manner as soon as
the company could educate the employees about the new system.

Recruitment Agencies Criticized

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5. (C) Puzantian singled out the various recruitment agencies
which fill the company's personnel requests as contributing to
the problem, noting that these agencies often send employees
whose qualifications do not match the job description. He said
these employees frequently choose to continue working in a
position different from that which is specified on the initial
contract (and often at a lower salary). He explained that
confusion and frustration result when employees expect to
receive the salary specified in the initial contract but
ultimately receive wages commensurate with the lower-level job.
(Comment: A more jaundiced view is that Al Hamra is engaging in
the practice of "contract switching," whereby the company

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changes the contract terms once the employee has arrived and
assumed significant debt. End Comment.)

Comment

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6. (C) The extent to which the labor unrest was caused by a
dispute over the availability of food, food quality, or
non-payment of wages is uncertain at this point. The incident
does underscore the relatively tenuous labor situation in the
UAE. Though the country has escaped large-scale disruptions as
seen in the October and November 2007 labor protests in Dubai,
significant protests can occur with little notice.
Additionally, the absence of any reporting of this incident in
the mainstream press seems to suggest that both the local and
national governments have attempted to suppress widespread media
coverage of the incident in order to avoid the negative
publicity that surrounded last year's protests. Interestingly,
post believes that Al Hamra Construction Company is a sister
company of Al Hamra Real Estate Development Authority, 100
percent owned by the Crown Prince and de facto ruler of Ras Al
Khaimah, Sheikh Saud bin Saqr al Qassimi, and his son Mohammed.
If, in fact, the protest resulted from non-payment of wages or
other sub-standard working conditions (i.e., poor food quality),
it raises a number of important questions regarding the Ministry
of Labor's oversight of companies wholly or partly owned by
royal family members.
UNRUH