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Cablegate: Mexican Federal and State Authorities Move

VZCZCXRO5330
RR RUEHCD RUEHGA RUEHGD RUEHHA RUEHHM RUEHHO RUEHJO RUEHMC RUEHNG
RUEHNL RUEHPOD RUEHQU RUEHRD RUEHRS RUEHTM RUEHVC
DE RUEHME #0126/01 0171638
ZNR UUUUU ZZH
R 171638Z JAN 08
FM AMEMBASSY MEXICO
TO RUEHOT/AMEMBASSY OTTAWA 2352
RUEHHO/AMCONSUL HERMOSILLO 3881
RUEHNG/AMCONSUL NOGALES 0577
RUEHC/SECSTATE WASHDC 0165
RUEHC/DEPT OF LABOR WASHDC
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHXI/LABOR COLLECTIVE
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEAHLA/DEPT OF HOMELAND SECURITY
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 MEXICO 000126

SIPDIS

SIPDIS

DEPT FOR DRL/AWH AND ILCSR, WHA/MEX AND USDOL FOR ILAB

E.O. 12958: N/A
TAGS: ELAB ECON PHUM PGOV PINR MX
SUBJECT: MEXICAN FEDERAL AND STATE AUTHORITIES MOVE
AGRESSIVELY AGAINST STRIKING MINERS

REF: 07 MEXICO 1927

MEXICO 00000126 001.2 OF 003


1. SUMMARY: On January 11, several hundred federal and state
policemen in the northwestern Mexican state of Sonora stormed
the approximately 1300 striking workers at the Cananea copper
mine. The strike at the Cananea mine began in July 2007.
GOM federal labor authorities have previously used minor
technicalities to declare the Cananea strike illegal but the
striking miners union successfully obtained a court ordered
injunction against the declaration. This time, although a
new federal labor authority declaration against the unionized
workers gave them 24 hours to end the strike and return to
their jobs, rather than risk being restrained by another
injunction, the January 11 police action began just a few
hours after the labor authorities issued their ruling. The
workers at the Cananea mine claim they are striking for
better pay and over poor health and safety conditions.
However, most informed observers strongly believe the strike
is also part of an effort to support the head of the union
who is in self-imposed exile in Canada awaiting the
resolution of federal corruption charges. According to
various media reports the strike at Cananea is costing the
mine,s owners over USD 3 million per day. At this point the
miners union has again obtained an injunction upholding the
legality of the strike but in the meantime federal and state
police now occupy the mine and several hundred workers have
reportedly crossed the picket line. This appears to be the
first time the government of President Calderon has used
force to intervene in a labor dispute. END SUMMARY.


THE ROOTS OF A LONG-RUNNING STRIKE
----------------------------------

2. In July of 2007 the unionized workers at the Cananea
copper mine in the northwestern Mexican state of Sonora went
on strike. The striking workers belong to the National Union
of Miners and Metalworkers of the Mexican Republic
(SNTMMSRM). Until September of 2007, the SNTMMSRM had been
the only such union in Mexico and it is still the country,s
largest miners and metalworkers union. The official reason
for the strike was to demand better pay and to protest poor
health and safety conditions. Both the owners of the Cananea
mine and some responsible elements with the GOM,s federal
labor authorities dismissed these claims as unfounded.
However, in October 2007 a bi-national delegation of health
and safety experts from Mexico and the U.S. visited the
Cananea mine and did preliminary health screening for 68 of
the 1300 strikers. The delegation documented unsafe working
conditions in the open-pit mine and processing plants where
workers were exposed to high levels of airborne silica, which
can cause fatal diseases like silicosis and lung cancer.
3. The seriousness of the claims regarding unsafe working
conditions notwithstanding, most informed observers and the
GOM,s Secretariat of Labor believe the strike is also part
of an effort to support the Secretary General of the
SNTMMSRM, Napoleon Gomez Urrutia. The leader of the SNTMMSRM
has been extremely critical of Grupo Mexico, the parent
company which owns the Cananea mine, and has gone to great
lengths to obtain favorable treatment for (himself and) the
union during collective bargaining negotiations. Gomez is
currently in self-imposed exile in Canada awaiting the
resolution of federal corruption charges for allegedly
embezzling USD 55 million in union pension funds. GOM
efforts to have Canada extradite Gomez have thus far been
unsuccessful due to a lack of compelling evidence and many
(but not all) of the changes against the SNTMMSRM leader have
been dismissed on appeal in Mexican federal courts.
4. Cananea is the largest copper mine in Mexico and it
employs some 1300 workers. It has a production capacity of
140,000 metric tons a year of copper concentrate and about
50,000 metric tons of refined copper. The Cananea strike is
reportedly costing the company an estimated USD 3 million a
day in lost sales, and also led it to lower its overall
copper target for 2007 from 670,000 metric tons to 620,000
metric tons at the most. The Cananea mine is owned by the
Southern Copper Corp. a publicly traded mining company based
in Phoenix, Arizona that is itself majority owned by Grupo

MEXICO 00000126 002.2 OF 003


Mexico. Because of the size of this operation Cananea,s
owners have repeatedly sought help from Mexican federal labor
authorities and from the state government of Sonora to try
and resolve its dispute with the union.

FEDERAL AND STATE ACTION AGAINST STRIKING MINERS
--------------------------------------------- ---

5. Mexico,s constitution guarantees freedom of association
and the right to strike. The statutes that codify these
rights are contained in Mexico,s &Federal Labor Law.8 In
order to exercise the right to strike, Federal Labor Law
establishes various administrative requirements, the two most
important in this case being: (1) that only officially
recognized unions can call for a strike and (2) before a
strike can be considered legal a union must receive approval
of a strike notice from the appropriate labor authorities.

6. In the case of the Cananea strike the appropriate
authorities were the Sonora offices of the Federal
Conciliation and Arbitration Board (JFCA) which operates
under the jurisdiction of Mexico,s Secretariat of Labor.
There is no question that SNTMMSRM is an officially
recognized union and that it obtained formal approval from
the JFCA to launch a strike. After approval was received,
and apparently at the request of Grupo Mexico, the JFCA
reviewed the strike notice and subsequent labor actions and
decided to declare the strike illegal because it allegedly
began several hours earlier than the time authorized on the
approved strike notice.

7. According to a statement by the Sonora Governor, Eduardo
Bours, the state government was informed by the JFCA at some
unspecified time on January 10. Governor Bours said that the
JFCA had declared the strike illegal and that state
authorities had been asked to support federal policemen in
their efforts to ensure the safe entrance to the mine of any
employee who wanted to return to work. It is not clear when
the workers or the SNTMMSRM union were informed of the
decision to declare the strike illegal. The formal JFCA
decision to declare the strike illegal also contained
standard language giving the workers 24 hours to end their
labor action and return to their jobs or face dismissal.

8. On January 11, Mexican federal and Sonora state police
gathered mid-morning launched an assault to evict striking
workers from the Cananea mine. There are unconfirmed reports
that federal and state police, supported by the Mexican army,
used tear-gas and rubber bullets to dislodge SNTMMSRM members
from the mine. Mexican press accounts reported roughly 20
miners were injured and around 30 others briefly detained
during the eviction. A counterattack by miners armed with
Molotov cocktails resulted in some damage to property and
vehicles, government officials charged. The police action
came just hours after the JFCA declared that the strike was
illegal. State and federal authorities have denied that
anyone was injured in the attack on the workers but a
SNTMMSRM spokesman repeatedly affirmed that injuries did take
place.


THE SITUATION AT CANANEA
------------------------

9. As soon as word of the police action became known lawyers
striking workers filed a formal appeal in Mexican federal
courts for an injunction against the for the JFCA ruling.
While this was occurring, both the GOM,s Secretariat of
Labor and the Sonora state government authorities defended
the use of force at Cananea. By the morning of January 12, a
formal injunction had been approved granting provisional
approval for the strike to continue. The injunction gives
the union approximately a week to respond to allegations that
the strike was an illegal labor action. In the meantime, all
striking workers have been expelled from the mine and Cananea
is now in the hands of federal and state police authorities.

MEXICO 00000126 003.2 OF 003


10. Once federal and state police succeeded in removing
striking workers from the mine, they quickly facilitated the
return to the workplace of any Cananea employee who wanted to
resume their jobs. As an extra incentive to those
considering returning to their jobs Cananea, offered striking
workers a USD 1500.00 bonus, as well as subsidies to pay for
home gas and electricity. Either because of the incentives
or because of harsh economic reality, up to a quarter of the
total striking workers have returned to the mines. At
present the SNTMMSRM union members have the law on their side
but the police and Grupo Mexico now have possession of the
Cananea mine.


COMMENT
-------

11. The Cananea incident is the latest episode in a nearly
two-year-old battle involving Napoleon Gomez, the SNTMMSRM
union, Grupo Mexico and the GOM. This ongoing conflict
significantly escalated after a February 2006 explosion at a
Grupo Mexico coal mine in the northeastern state of Coahuila
killed 65 workers. Soon thereafter, the administration of
then President Vicente Fox pressed legal charges originating
from an earlier accusation of embezzlement against Napoleon
Gomez. Parallel to the legal moves against Gomez, the former
Secretary of Labor recognized a rival leader who

SIPDIS
unsuccessfully attempted to take complete control of the
union. Meanwhile, as noted above, Gomez fled to Canada, and
the two union factions battled for leadership of the
organization. Presently a company-friendly union headed by
former Grupo Mexico contractor Francisco Gamez is vying with
Gomez,s union to represent SNTMMSRM workers and the
administration of Mexico,s current President, Felipe
Calderon has recently approved the formation of two other
mining unions.

12. The police action against the striking Cananea mine
workers appears to be the first time the Calderon government
has used force to intervene in a labor dispute. Undoubtedly
there are times when the use of force is clearly justified
but the Cananea incident does not appear to be one of them;
especially when the justification for the police action was
that the union started its strike a few hours early. The
Cananea incident could have multiple implications for US.
Aside from the obvious human rights issues, there are
American interests involved on both sides of this labor
dispute. On one side there is a US company (Southern Copper
Corp.) as a significant shareholder in the Cananea mine and
on the other side the striking SNTMMSRM workers are heavily
supported by the American United Steelworkers (USW) Union.
No matter what the ultimate outcome of this incident, and at
the moment the situation does not favor the striking union
workers, one group or another in the US is going to be
displeased.

Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North American
Partnership Blog at http://www.intelink.gov/communities/state/nap /
GARZA

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