Cablegate: Batelco Anti-Union Activity Criticized by Gob

DE RUEHMK #0738/01 2131249
O 011249Z AUG 07





E.O. 12958: N/A


B. 2006 MANAMA 1979

Sensitive but unclassified; please protect accordingly. Not
for Internet distribution.


1. (SBU) Recent tension between Bahrain Telecommunications
Company (Batelco) management and its union, including an open
meeting at Batelco headquarters attended by 500 workers,
resulted in the dismissal of the head of the union and his
deputy. Minister of Labor Dr. Abdulmajeed Al Alawi stated
publicly that the firings were unjustified and that the
workers should be reinstated. Batelco management considered
the union's activities to be illegal under Bahraini law,
which identifies the telecom sector as a "vital sector" and
therefore prohibits strikes by its workers. Management used
this rationale even though the union did not call for nor
attempt a strike. This is the first instance Post is aware
of in which Executive Order 62 (ref B), which bans strikes in
12 essential sectors, has been used by a company as
justification for action against workers. Union activity in
several companies has resulted in favorable outcomes for
workers in Bahrain. End Summary.

Unjustified Firings at Batelco

2. (U) Minister of Labor Dr. Abdulmajeed Al Alawi intervened
publicly July 24 in the conflict between Batelco management
and its union over the dismissal of the union's head and
deputy head. Al Alawi stated that the firings were not
justified, because the law protects workers from being
dismissed solely on the basis of participating in union
activities, and urged the company to reinstate the two
workers. Al Alawi also expressed displeasure at the actions
of the union, saying that the Ministry of Labor has been
negotiating a salary increase between the two parties under
an upcoming deadline, so any type of union activity at this
time was premature and counterproductive. He called on both
parties to recognize their mistakes and work together to
resolve outstanding issues.

3. (U) Approximately 500 Batelco workers (from just over
1,600) engaged in what was described in Arabic dailies as a
temporary work slowdown July 18. They reportedly gathered at
Batelco headquarters following the firing of trade union
vice-president Majeed Suhrab allegedly for organizing the
gathering. At the gathering, union president Faisal Ghazwan
expressed surprise at the firing of Suhrab and called for the
dismissal of General Manager Patrick Key. In addition to
repeating long-time union demands that there be a general
salary increase of 25 percent and an additional increase for
workers in certain positions, Ghazwan also called for an end
to the use of temporary contract workers. At the close of
his remarks to the workers, company security escorted Ghazwan
off the premises and confiscated his work badge. The union
had notified the press to cover the gathering, but Batelco
public relations manager Shaikh Ahmed Al Khalifa ordered that
no reporters be allowed to enter the premises.

4. (SBU) Following the dismissals, Batelco issued a press
release stating that the work slowdown was illegal under law
49 of 2006, an amendment to the Trade Union Law (law 33 of
2002). Article 21 of this amendment provides the Prime
Minister with full authority to designate essential services
in which strikes are prohibited. The passage of law 49 led
to the implementation of Executive Order 62 that bans strikes
in 12 "vital sectors," including the telecommunications
sector. GOB officials have justified the ban, saying that
strikes in the identified essential services may result in
the disruption of the daily life of citizens, potentially
leading to security concerns. (Note: The dismissals of
Ghazwan and Suhrab for encouraging allegedly illegal
activities represent the first time in Post's knowledge that
executive order 62 has been used as justification to take
action against employees.)

Not a Strike

MANAMA 00000738 002 OF 004

5. (SBU) Meeting with EconFSN July 24, a senior official at
the Ministry of Labor said that he had been meeting with
company and union officials to defuse tension between the two
and work through unresolved issues. He noted that in reality
union leaders had taken Executive Order 62 into consideration
in their planning, not calling for a strike or temporary work
stoppage but a gathering during the workers' authorized break
period. He claimed that public statements by company
officials in the wake of the dismissals were misleading and
that the firings of Ghazwan and Suhrab were not justified.
He anticipated that the two would regain their jobs but
admitted that the company had taken a very hard line and was
resistant to changing the decision.

6. (U) After being dismissed, Ghazwan and Suhrab spoke to
the press and claimed that the gathering had been organized
in response to Batelco management's unresponsiveness to their
demand for a pay increase, originally called for in November
2006. Company officials, however, maintain that salary
surveys from Hay International and Ernst & Young showed that
Batelco employees are in the top 25 percent of Bahraini wage
earners. The union's response to this claim was that
executive pay had increased while general worker pay had not,
skewing the consultant firms' figures. Batelco's CEO refuted
this claim at a union general assembly meeting, saying that
the company's salaries are above the market average and
annual increases are given to offset inflation and other
market factors.

Al-Marai Dairy Company

7. (U) More than 120 union members at the Al-Marai Dairy
Company returned to work July 24 following a one-day strike
for higher salaries and improved work conditions. The
Bahraini, Indian, and Sri Lankan workers claimed that the
company had not implemented an agreement, which had satisfied
the union's demands, for five months and had taken steps to
weaken the union by firing union members. According to union
head Abdulnabi Abdulla Alheela, 40 of the striking employees
receive only BD 100 ($265) per month despite a Ministry of
Labor non-binding "suggestion" that private sector employers
pay their workers at least BD 200 ($530). (Note: Bahraini
law does not impose a minimum wage on private sector
companies.) Following an intervention by Ministry of Labor
officials, who are conducting ongoing talks between the
parties, the striking workers returned to their jobs.
According to press reports, just prior to the strike the
union received support from 25 expatriate non-union employees
for the work stoppage, however, these workers did not
participate in the strike because management reportedly
threatened to fire them if they participated. Al-Marai
brought in expatriate workers who normally do various
cleaning jobs for the company to work in place of striking
workers on the day of the strike.

--------------------------------------------- -----
Strikes in the Recent Past: Olayan Kimberly Clark
--------------------------------------------- -----

8. (SBU) Over the last several months a number of strikes
have occurred or been threatened, resulting in, from the
perspective of the unions and the General Federation of
Bahrain Trade Unions (GFBTU), benefits for workers. Olayan
Kimberly Clark's Bahraini employees warned management
February 28 that they would strike to attempt to break a
deadlock in pay negotiations. The union of the 80 employee
company sought a BD 350 ($928) annual bonus for 2006 and a 15
percent pay increase for 2007. On March 18th, a strike
scheduled for the next day was averted when the union and
company restarted negotiations. On March 19th, Olayan
Kimberly Clark satisfied the union's demands by agreeing to a
BD 250 ($663) bonus for 2006, a 15 percent increase in wages
for 2007, and a two percent wage increase in later years for
all employees except for the lowest paid, who would receive a
three percent increase. In a subsequent email exchange with
PolOff, an Olayan Kimberly Clark official said he was
satisfied that the labor dispute was resolved, despite the
resolution putting the company over budget. He said this
episode would likely affect the company's interest in
expanding its operations in Bahrain.

Bahrain Petroleum Company

MANAMA 00000738 003 OF 004

9. (U) On October 26, 2006, Bapco management held a meeting
with its trade union's leadership to discuss demands for a 25
percent increase in base salaries, a doubling of travel
allowances, an increase in the housing allowance, and an
annual bonus equivalent to two months, salary instead of the
current bonus of one month's salary. The next day the union
announced plans for a 30-minute protest because its members
felt the negotiations had not been "fruitful" and that Bapco
management had not been transparent with the union. On
October 31st the scheduled protest was called off after a
meeting between the union's head and Bapco's president, at
which time the president said that the company was
considering salary increases and an annual bonus. On
November 13th, Bapco announced that 3,100 of its employees
would receive pay increases of 14 to 19 percent, backdated to
October 1st. Bonuses, however, remained at one month's
salary, but the minimum was raised from BD 300 ($795) to BD
500 ($1,325). Other demands were not addressed.

Aluminum Bahrain

10. (U) On October 18, 2006, 1,750 Alba Union members
participated in a one-hour strike to protest a recently
instated 15 to 22 percent pay increase because it was below
the 30 percent demanded. Alba management responded by saying
that the 15 to 22 percent increase was in accordance with the
findings of a consultancy report that compared wages
throughout Bahrain. On October 19, 2006, management and the
union agreed to a 20 to 22 percent wage increase effective
immediately. Again on February 7, 700 members of the union
protested in support of a BD 1,000 ($2,650) bonus for all
employees, which represented a BD 250 ($663) increase over
the then maximum bonus of BD 750 ($1,988). Management again
sat down with union representatives and on March 5 jointly
announced their agreement to a BD 750 bonus for all employees
for 2006 and a minimum BD 1,000 bonus for 2007, pending
ongoing discussions to determine the exact figure.

--------------------------------------------- ------
Wildcat Strike: Mohammed Jalal Contracting Company
--------------------------------------------- ------

11. (SBU) In addition to the above cases of union-organized
strikes in some of the most prominent of Bahraini companies,
several companies, whose employees are primarily non-union
expatriate workers, have experienced wildcat strikes by
workers frustrated by low salaries or poor living conditions.
One such example: On May 6th over 350 Indian, Bangladeshi,
and Pakistani workers from Mohammed Jalal Contracting Company
participated in a strike to demand salary increases and to
have food allowances be considered within their base wages.
(Note: Bahraini law protects workers' base wages but not
allowances that are separate from base wages. Allowances
considered part of base wages are protected.) The workers'
wages ranged from BD 45 ($120) to BD 55 ($146) per month and
had not been increased in nearly ten years. The strike,
although technically illegal, lasted for three days, when the
company agreed to increase the base salary from BD 45 to BD
60 ($160) per month in addition to incorporating the BD 15
($40) food allowance into the workers' base wage. The
workers returned to work on May 9th. (Comment: Even though
employers have the force of law on their side in these
illegal strikes, the prospect of hiring and training a large
number of expat workers following a mass firing is sufficient
disincentive to want to pacify workers rather than dismiss


12. (SBU) Union and non-union activity alike have been quite
robust in the past several months. Unions and the Federation
(GFBTU) have become increasingly confident and savvy about
what works and what does not work in order to reach their
demands. However, there has been a tendency on the part of
unions to jump right to threats of a strike to wrench
concessions from management, thereby making it more difficult
to build trust between unions and their respective employers.
In light of successful outcomes resulting from recent union
activity, Post anticipates continued news of strikes and
other union and Federation actions.

MANAMA 00000738 004 OF 004

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