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Cablegate: Strike Begins Thursday, October 9

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS LAGOS 002069

SIPDIS


OPIC COLLECTIVE FOR CONAL DUFFY
AMEMBASSY GABORONE FOR LESLIE BASSETT
AMEMBASSY FREETOWN FOR ALEX SEVERENS


E.O. 12958: N/A
TAGS: ASEC CASC ELAB ENRG EPET KDEM NI PGOV PHUM
SUBJECT: Strike Begins Thursday, October 9

REF: (A) LAGOS 02043 (B) ABUJA 01700


1. Following its emergency National Executive Council (NEC)
meeting in Ibadan on Saturday, October 4, the Nigeria Labour
Congress (NLC) announced a nationwide strike to begin at midnight
on Thursday, October 9. NLC President Adams Oshiomhole said the
Thursday start date allows labor leaders and NGOs to strengthen
their mobilization efforts and gives workers time to prepare for
the anticipated long battle with the GON. Oshiomhole said the
strike and campaign against price deregulation in the oil sector
will be managed under the auspices of a broad coalition of trade
unions, civil society organizations, and other NGOs. This
partnership will be known as the Labor Civil Society Coalition
(LASCO). LASCO has demanded that gas prices return to the pre-
October 1 rate of 34 naira per liter, the repair and full
operation of all local refineries, and a publication of contracts
awarded for the repair of refineries.


2. Oshiomhole said the decision to deregulate fuel prices is not
a party policy or party agenda, but solely that of a President
"who does not care about the plight of his people." He added that
previous administrations offered specific strategies regarding the
use of money derived from such increases while the GON has not
explained how it plans to spend the money saved by deregulating
gas prices. Oshiomhole also warned that price hikes will occur
regularly and could reach two hundred naira before the end of
Obasanjo's tenure.


3. Aviation workers under the National Union of Transport Workers
(NUATE) and Air Transport Service Senior Staff Association of
Nigeria (ATSSAN) have decided to join the strike and advised
airlines not to use Nigerian airspace. Unlike the July strike to
protest an earlier price hike, ATSSAN claims air traffic
controllers are prepared to join the effort, which would likely
ground both domestic and international flights. Uncertainty
regarding air travel in Nigeria may affect the All Africa Games,
prompting many international visitors to consider whether they
should leave early or risk being trapped in Nigeria until the
crisis is resolved.


4. (SBU) Comment: While the least likely scenario would be a
resolution that includes a return to regulated prices and
government subsidies, it is still not clear how the GON will react
to the planned strike. Despite a deteriorating relationship
between the GON and NLC, Oshiomhole maintains a good working
relationship with Obasanjo and will likely seek a negotiated
resolution. If the two sides reach an agreement, Oshiomhole will
have to sell it to a constituency that already believes the GON
does not bargain in good faith, as the government has failed to
implement several agreements during the past year.


5. The GON continues to defend its decision to deregulate the
downstream sector, however, President Obasanjo and several top
government chieftains have consistently dissociated themselves
from actual increases in gas prices. Instead, government
officials have been quick to blame oil marketers for the price
hikes. The GON will likely refuse to negotiate the issue of gas
prices with labor under the pretext that it is not responsible for
the increases. A prolonged strike may force the GON to consider a
strategy that defines how the GON plans to spend money saved by
deregulating prices. This type of agreement is not without
precedent. The two previous administrations addressed criticism
of increased fuel prices by establishing socioeconomic development
initiatives. Babangida formed the Directorate for Food, Road and
Rural Infrastructure and Abacha established the Petroleum Trust
Fund. We predict that LASCO will back down on the issue of
deregulation, but it could push for a resolution that redirects
funds previously used for subsidizing imported fuel to repair
Nigeria's refineries and promote economic development. However,
it will be virtually impossible for the refineries to be brought
up to anything approaching a competitive standard in the near
future.


6. The duration of the strike depends largely on labor's ability
to convince Trade Union Congress (TUC) associations to join the
effort, particularly air traffic controllers under ATSSAN and the
Petroleum and Natural Gas Senior Staff Association of Nigeria
(PENGASSAN). ATSSAN would have a significant impact on
international travel at a time when Nigeria is hosting thousands
of international visitors, while the Department of Petroleum
Resources (DPR) employees under PENGASSAN can affect the oil
industry's ability to export petroleum products. DPR is Nigeria's
oil and gas industry's regulatory body responsible for authorizing
crude oil exports. Their involvement may bring the two sides to
the negotiating table sooner than expected. End comment.

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