Wildcat Strikes Hit UK Energy Plants In Response To Foreign

UNCLAS SECTION 01 OF 02 LONDON 000305 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON ELAB ETRD EINV UK SUBJECT: Wildcat Strikes Hit UK Energy Plants In Response To Foreign Workers Dispute LONDON 00000305 001.2 OF 002 ¶1. (SBU) Summary: Workers at the UK's third largest oil refinery went on strike January 28 in protest at the use of foreign labor for a new construction project. A wave of wildcat strikes across the UK followed, with workers demonstrating support for those at French oil company Total's refinery in Lindsey, in northeast UK. Media reports indicate the dispute could become a diplomatic incident, with the Italian government threatening the employment of British workers there. Business Secretary Lord Mandelson defended EU labor laws during an emergency session at the House of Lords February 2 and said Total had given assurances that it did not discriminate against British workers. Mandelson said the dispute was fuelled by the "politics of xenophobia." PM Gordon Brown publicly called the strikes indefensible and counter-productive - a sharp contrast to his 2007 Labour party conference statement calling for "British jobs for British workers" (which has become the unofficial slogan of the strikes),a statement which the opposition Conservative party attacked as "irresponsible." A trade union official told the embassy that Total's lack of transparency fuelled concern and suspicion amongst workers and that Mandelson's comments were unhelpful. End summary. Foreign Labor Strikes Spread Across UK -------------- -------------- ¶2. (U) Workers at the Lindsey oil refinery in North Lincolnshire, the UK's third largest, walked off the job on January 28 in protest at the use of foreign labor at the site. This strike began following a dispute about Total's decision to award Italian company IREM part of a GBP 200 million contract to build a new hydro desulphurization facility at the Lindsey refinery. (Note: The main contract for the hydro desulphurization unit was awarded to Jacobs, a U.S. company, which sub-contracted some work to IREM. End note.) Five British companies and two other European contractors bid for the work before it was awarded to IREM, which at the time of the tender indicated it would supply its own permanent workforce from Italy and Portugal. ¶3. (U) Workers and their union representatives accused Total of discriminating against British workers. Total rejected the accusation saying: "IREM was selected, through a fair and competitive tender process, as the most appropriate company to �00A;complete the work." Officials from Unite, the UK's largest union, said workers were angry that labor was used from outside the UK when British workers near the refinery were out of work. They dismissed Total's claim that the foreign labor was in specialist trades and said most of the work could be done by UK workers. ¶4. (U) Since January 28, workers at energy plants across the UK have shown support for the action in Lindsey through a series of wildcat strikes. Workers at Ineos Group Holdings' Grangemouth refinery in Scotland, BP's terminal at Kinneil in Scotland, and RWE AG's Didcot power facility in southern England joined a wave of strikes across the country. Most recently, workers at two nuclear sites, Sellafield and Heysham, joined the strike action. Approximately 900 contractors in Sellafield and 300 in Heysham agreed to walk out for 24 hours in sympathy with the Lindsey protest. Economic, Political Consequences -------------- -------------- ¶5. (U) Despite the walk outs, the UK Department of Energy issued a statement that it was unaware of any current or potential impacts of the strikes on gas, electric or fuel supplies. Lord Mandelson confirmed there was no disruption of production at any of the sites. The Department for Business asked ACAS, the UK's independent arbitration service, to meet the employers and unions to examine the accusations and mediate the dispute. Workers have so far rejected a February 3 deal proposed in ACAS talks that would have given 25 percent of the new jobs to British workers. Negotiations will continue. ¶6. (U) Some media commentators note the dispute threatens to escalate into a major diplomatic incident. The Italian government has described the strikes as "indefensible" and the Governor of Sicily warned that the employment of Britons on the Italian island may be threatened. The British Ambassador in Rome was reportedly sent to reassure the Italian government that Italians would not face discrimination in the UK. Mandelson Warns Against "Politics of Xenophobia" -------------- -------------- -------------- ¶7. (U) Business Secretary Lord Mandelson defended EU labor laws in a statement to the House of Lords, February 2. He said HMG is LONDON 00000305 002.2 OF 002 determined to uphold European rules governing the operation of companies and mobility of labor throughout the EU. In the statement, he said Total had given assurances that it had not discriminated against British workers. He highlighted the importance of Europe to the UK, particularly with regards to trade and investment, and noted that there are 300,000 UK companies operating elsewhere in Europe. Separately, Mandelson claimed the dispute was fuelled by "the politics of xenophobia." He said protectionism would be a "sure-fire way of turning recession into depression." Gordon Brown said the strikes were indefensible and counter-productive. However, the dispute has caused a split in the Labour party. Two former Cabinet ministers, Peter Hain and Iain McCartney, led a chorus of Labour MPs who said HMG urgently needed to recognize there was a problem. Peter Hain said something had gone "badly wrong" with the UK's labor laws, which did not seem to have "adequately protected local workers." Reaction: Tories and Unions -------------- ¶8. (U) Gordon Brown's "irresponsible" comments at the 2007 Labour party conference calling for "British jobs for British workers" stoked the wildcat strikes, argued Shadow Business Secretary Kenneth Clarke. (Note: Placards held by striking workers displayed the PM's statement. End note.) Clarke said understandable worries over the UK's economic climate have turned into direct action as a result of the PM's statement. He said: "This was populist nonsense at the time he used it and part of some curious 'Britishness' agenda... (he)was more concerned with his job security than anybody else's job security in this country." He said however aggrieved people felt, industrial action at power stations and oil refineries at a time of "national crisis" was not the way forward. ¶9. (SBU) A lack of transparency around the IREM contract fuelled concern amongst workers, according to the Trades Union Congress' International Affairs Director Owen Tudor. Tudor told the embassy that Total's initial reluctance to confirm how many Italian, Portuguese and British workers would be employed under the new contract proved unhelpful and increased suspicion. He said Lord Mandelson's xenophobia comments were equally unhelpful and could stir up further disagreement. He noted, however, that when members of the BNP, a far right-wing British political party, turned up at the Lindsey demonstration, they were turned away by workers. While the TUC is not sure how long the dispute will last, officials noted that IREM's work is set for completion in April, so action is unlikely to continue beyond then. He commented that the strikes in Sellafield are "mildly ironic" as work in nuclear stations requires security clearance and the workforce will therefore be 100 percent British. ¶10. (SBU) Comment: Growing concern about the length and depth of the UK recession has heightened tension in this foreign labor dispute. Rising unemployment coupled with slowing output has sparked concern about the impact of EU labor laws on British workers. The TUC, which has monitored the effect of the European Commission directive on the right to move and reside freely since 2004, had only seen sporadic outbreaks of concern regarding foreign workers until the Lindsey case. As the recession deepens, industrial action may become more widespread. TUTTLE