ONE YEAR LATER: THE STRIKE AT PORT OF SALALAH-

C O N F I D E N T I A L SECTION 01 OF 03 MUSCAT 000348

SIPDIS

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

E.O. 12958: DECL: 05/12/2018
TAGS: PGOV PHUM ELAB ETRD KMPI MU
SUBJECT: ONE YEAR LATER: THE STRIKE AT PORT OF SALALAH-
FUNDAMENTAL ISSUES STILL UNRESOLVED

REF: A. 07 MUSCAT 473

B. 07 MUSCAT 531

Classified By: Ambassador Gary A. Grappo for Reasons 1.4 b/d.


1. (C) Summary: One year after a May 2007 strike at the Port
of Salalah, Oman's largest transshipment facility, contacts
suggest that there remains a high degree of distrust between
the port's management and its workers. Management has
adopted polices to protect itself from future labor unrest,
while several of the strike leaders whom the port fired after
cessation of the strike are pursuing civil actions for
wrongful dismissal. The government, meanwhile, has enlisted
management's assistance to establish a union at the port as
the centerpiece of its strategy to help improve labor
relations. Management, labor and government have yet to
develop an effective means of communicating and resolving
grievances, a problem, contacts say, that needs to be
addressed to avoid future strikes. Post continues to
advocate strongly for a senior Omani delegation to visit the
U.S. to explore multiple alternatives for dispute resolution.
End summary.

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The Anniversary of a Strike
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2. (C) On May 11, 2007, approximately 270 Omani drivers at
the Port of Salalah went on strike over wages and work
conditions (refs A, B). The strike was the second work
stoppage at the port in as many years and the first and
largest collective action by workers anywhere in Oman since
the labor reforms of 2006, which legalized unions and the
right to strike. Contacts suggest that the strike
highlighted how unprepared government, labor and management
were to respond to a major labor dispute. Management and
labor at the port entered the strike with little record of
communicating about working conditions, Ministry of Manpower
(MOM) officials lacked basic skills in dispute resolution,
and the workers largely were unorganized and unaware of their
rights and responsibilities under Omani labor law.


3. (C) Since the strike, there has been no serious attempt
among the three parties to review and learn from the lessons
of the work stoppage and what may portend for the future of
labor relations in Oman. On the one year anniversary of the
strike, contacts indicate that many of the conditions that
precipitated it remain unresolved, and that there continues
to be a lack of trust and communication between the port's
management and its mostly local Omani workforce.

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Management's Hard Line
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4. (C) Management at the port still is largely dismissive of
the strike and the workers' core demands. Ahmed Akaak, the
Port of Salalah's head of human resources, told poloff that
the strike was initiated by a handful of workers who lacked
broad-based support among port employees. He complained that
the striking workers made unrealistic demands that the port
could not meet without sacrificing efficiency or its ability
to compete on cost with other ports in the region.


5. (C) For instance, he said, the workers demanded an
increase in wages even though the port already paid drivers
250 Omani Riyal (OR) (USD 650) per month - significantly more
than the MOM's minimum wage of 170 OR (USD 441) for that
position and higher than the average wage for drivers in
other regional ports. The workers also demanded a change in
overtime policy to give them a long uninterrupted period of
rest, which Akaak claimed would have impeded the port's
ability to ensure 24-hour coverage. (Note: Drivers and crane
operators work a four-day on, four-day off schedule, but the
port can call in a worker during his rest period to cover an
open shift. End note.) "The workers didn't do their homework
(about conditions at other ports) before submitting their
demands," he said, and therefore came across as unreliable
negotiating partners.


6. (C) Akaak told poloff that since the strike, the port has
taken a number of steps to protect itself from future labor
unrest. It fired the seven ringleaders of the strike, whom
Akaak accused of stoking tribal and family loyalties to rally
support for their demands. The port amended new worker
contracts to give management the ability to fire a worker for
engaging in "illegal strikes." In order to ensure 24-hour

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operations, the port hired an additional 400 expatriates and
gave them priority for overtime opportunities during their
rest days. "It is the entire local community who lost on
this issue," Akaak stated, adding that expatriates are more
reliable than Omanis because they "are in country solely to
work for you."


7. (C) Akaak acknowledged, however, that the port is relying
primarily on locally available labor to fuel its rapid
expansion, which should see the addition of five new berths
by 2011 and require 1,000 additional workers. (Note: More
than 70% of the port's current workforce of 2,000 is Omani.
End note.) He stated that the port has instituted a new
training program for recruits and, unrelated to the strikers'
demands, recently gave workers a 20% increase in their cost
of living allowance, which raised drivers' monthly salaries
to 300 OR (USD 780).


8. (C) Yet the strike over demands for more money and less
work made management question whether Omanis in Salalah are
prepared to work for an internationally competitive company.
According to Akaak, young people in Salalah grow up seeing
their relatives work half-days for the government at full pay
and many are shocked when they discover that the port
requires them to work 12-hour shifts. The main source of
potential labor unrest is not disputes over wage rates, he
stated, but whether Omanis are willing to accept what it
takes to compete and thrive in the global economy. "The MOM
and the local community need to help change cultural
attitudes," said Akaak, if Oman and the port are to avoid
future strikes.

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The Community's Resentment
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9. (C) Community and worker representatives, however, tell
poloff that they are unwilling to accept responsibility for
causing the strike. Said al-Shahry, a lawyer and former
Majlis al-Shura (the elected lower house of Oman's bicameral
advisory body) representative from Salalah who negotiated on
behalf of the workers during the strike, criticized the port
for not paying enough attention to workforce development or
listening to worker complaints, which he asserted left
workers "little choice" but to strike. Shahry told poloff
that the workers he represented during talks were largely
unsophisticated and few if any had previous work or life
experiences outside their local communities. He continued
that the employees were completely unprepared to engage in
negotiations and that despite his and others' assistance, the
company ran roughshod over them. As a result, Shahry
claimed, many workers feel that the company took advantage of
them.


10. (C) Shahry informed poloff that his law firm currently is
representing four of the seven workers that the port fired in
a civil suit for wrongful dismissal. He stated that the
port's management had agreed orally during negotiations to
retain all of the workers who were involved in the strike in
their same positions. Following the cessation of the strike,
however, the port fired the seven workers whom it had
identified as ring leaders and "troublemakers." A court of
first instance already awarded the workers 25,000 OR (USD
65,000) each, Shahry said, but the port appealed and the
sides are waiting for an appellate court's decision. Shahry
said that he is prepared to take the case to Oman's Supreme
Court. "This is our first real strike (under labor
reforms)," Shahry said, "and the outcome of these legal
proceedings may set precedent."

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A Union in Management's Clothing?
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11. (C) Saleh al-Amri, Director General of Labor Affairs at
the MOM, told poloff that the government has focused its
efforts since the strike on getting the port's workers
unionized. A union would help improve communication between
labor and management, he argued, and raise awareness among
the port's employees about their rights and responsibilities.
He complained, however, that the workers have shown little
interest so far in organizing themselves. The Ministry,
therefore, approached Akaak and the port's management to help
jump start the process, al-Amri stated, and the port is
almost finished with its union application. "I know it may
not be correct (to work through management)," he said, "but
the port must have a union." Akaak told poloff separately

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that the port picked a select group of workers with "the
education and world view to lead in a constructive manner" to
help craft the union's by-laws and constitution.

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Comment
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12. (C) Developments since the strike at the Port of Salalah
reflect the state of labor relations nationally, contacts
suggest. Management is still suspicious of unions, workers
are weak and disorganized, and government is largely
unprepared to mediate disputes. One of the biggest problems,
contacts say, is that officials in government, business and
labor are not talking with each other and that no venue for
effective communication exists. Supporting the development
of such a venue to help Omanis discuss and learn from events
like the Port of Salalah strike presents a good opportunity
for future USG assistance to help ensure the success of labor
reform in Oman.


13. (SBU) One of the principle reasons behind Post's efforts
to get Minister of Manpower Juma bin Ali al-Juma to the U.S.
is to expose him and his accompanying delegation to new
ideas, including the many alternatives available to
government, labor and business to resolve disputes (ref C).
Post continues to believe strongly that the opportunity for a
call on U.S. Secretary of Labor Chou is the hook necessary to
persuade Juma to visit the U.S., meet with labor and business
leaders, and identify opportunities for cooperation and
growth.
GRAPPO