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Cablegate: Courts Consider Two Controversial Strikes at Drummond And

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DE RUEHBO #3127/01 2781554
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R 051553Z OCT 09
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 0218
INFO RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RHMFISS/DEPT OF JUSTICE WASHINGTON DC
RHMFISS/FBI WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEHBR/AMEMBASSY BRASILIA 0063
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEHCV/AMEMBASSY CARACAS 0062
RUEHGL/AMCONSUL GUAYAQUIL
RUEHPE/AMEMBASSY LIMA 0069
RUEHQT/AMEMBASSY QUITO
RUEKJCS/SECDEF WASHINGTON DC

C O N F I D E N T I A L BOGOTA 003127

SIPDIS

E.O. 12958: DECL: 2019/10/05
TAGS: ELAB EAID ETRD KJUS PHUM PREL USTR CO
SUBJECT: COURTS CONSIDER TWO CONTROVERSIAL STRIKES AT DRUMMOND AND
FENOCO

REF: BOGOTA 1751

CLASSIFIED BY: Marcos C. Mandojana, Deputy Political Counselor;
REASON: 1.4(B), (D)

SUMMARY

-------

1. (C) Two controversial court cases concerning strikes in the coal
sector have reached the highest levels of the Colombian judicial
system. The National Mining and Energy Industry Workers' Union
(SINTRAMIENERGETICA) initiated the first strike over work-safety
issues at Drummond's La Loma coal mine, shutting down production
for four days in March 2009. The National Union of Workers in
Metal Mechanics, Metallurgy, Iron, Steel, Electro-Metals, and
Related Industries (SINTRAIME) convened the second strike on March
24 at Northern Colombian Railways (FENOCO) -- 41% Drummond-owned --
due to the company's refusal to recognize the union. SINTRAIME
halted regional rail shipments of coal for 26 days, until local
authorities forcibly reestablished rail service. Together the two
strikes cost Drummond, FENOCO, and regional governments millions in
revenue and royalties. The Supreme Court recently ruled that the
SINTRAIME strike was illegal, and FENOCO fired 16 SINTRAIME leaders
as a result. Drummond has not fired anyone yet, but Drummond
executives said they would fire 15-20 SINTRAMIENERGETICA leaders if
the Supreme Court upholds a lower court ruling that the strike was
illegal. End Summary.


STRIKE ONE: UNION CHARGES COMPANY NEGLIGENCE

--------------------------------------------

2. (SBU) SINTRAMIENERGETICA leaders and Drummond executives
confirmed that the March 22 death of DagobertoClavijoBarranco
precipitated the March 23 strike. Clavijo died when he lost
control of a tanker truck and it plunged off a 15-meter embankment.
SINTRAMIENERGETICA XXXXXXXXXXXX characterized the accident as the latest in a series of deaths and injuries attributable to company negligence. Clavijo, who had only been on the job a month, was hired via a contractor and never received adequate training in operating the vehicle, XXXXXXXXXXXX said. XXXXXXXXXXXX told us that nine mine workers and two dock workers have been killed, and 275 workers
seriously injured, in the 13 years that Drummond has operated mines
in the region.


3. (SBU) Drummond Vice President of Corporate Affairs Jose Miguel
Linares supplied PolOffs with Mr. Clavijo's training reports and a
copy of the internal investigation into the accident. Company
records show that Clavijo received 106 hours of tanker truck
operation and safety instruction in February 2009, and scored
"adequate" to "excellent" on each module/exam. The internal
investigation concluded that neither "substandard conditions" nor
"mechanical failure" caused the accident. Linares told us that
"operator error" was the likely cause. He also said that the
safety incidence rate -- an index measuring time lost due to safety
incidents per 100 employees per year -- at Drummond's mines has
been consistently lower than the U.S. average in surface mining
activity (.33 compared to 1.33 in 2008).


4. (SBU) An estimated 8,000 direct and indirect Drummond employees
participated in the four-day strike, including 2,200
SINTRAMIENERGETICA members. XXXXXXXXXXXX for the
United Federation of Workers in the Mining, Energy, Metallurgy,
Chemical, and Similar Industries (FUNTRAENERGETICA) -- the umbrella
confederation that includes SINTRAMIENERGETICA -- said that the
strike ended when a majority of the workers decided to return to
the mine, citing their financial imperative to work given hard
economic times. Drummond issued a statement on March 27 calling
the strike illegal and thanking workers for breaking ranks with
union leaders and returning to their jobs.


COURT DECISION ON STRIKE LEGALITY PENDING

-----------------------------------------

5. (SBU) The matter was referred to the courts pursuant to Law 1210
of 2008, which transferred authority to determine strike legality
to the court system in line with ILO recommendations (reftel). On
July 21, the Administrative Tribunal of Valledupar, Cesar ruled
that the strike was illegal because it had not taken place as part
of a collective bargaining process in accordance with Substantive
Work Code (CST) Article 444, nor had it been carried out using the
proper procedures as defined by CST Article 445. The legal window
for initiating a strike is 2-10 days following a general assembly
vote in favor of striking. The SINTRAMIENERGETICA strike was
extemporaneous, and did not adhere to the proper legal procedures.
SINTRAMIENERGETICA has appealed the decision to the Supreme Court,
where it is pending.


6. (C) According to Colombian labor law (CST Article 450), a
company may dismiss employees who participated in an illegal
strike. (NOTE: Colombian labor leaders advocate deletion or
revision of Article 450, while private sector companies say it
constitutes an important check and balance in company-labor
relations. End Note.) In a September 23 press statement, Drummond
said it had dismissed five union workers for illegal activities --
destruction of property and violence -- during the strike, and
suspended an additional four as a step towards dismissal pending
the Supreme Court ruling on strike legality (expected in two to
three months). Drummond's Linares told us the company may fire up
to 20 of the most active organizers if the court rules in the
company's favor.


STRIKE TWO: UNION PROTESTS NON-RECOGNITION

------------------------------------------

7. (SBU) Problems between SINTRAIME AND FENOCO began on November 4,
2008 when 350 FENOCO workers joined the metals industry union and
attempted to initiate collective bargaining. The railway company
refused to recognize SINTRAIME, largely on the basis that it had a
preexisting collective bargaining agreement with another union.
FENOCO argued that Law 904 of 1951 prohibited more than one
convention from existing within the same company. It also claimed
that SINTRAIME, a metals industry union, had no legal right to
organize workers in the transportation sector.


8. (SBU) SINTRAIME appealed to the Ministry of Social Protection
(MPS) to force FENOCO to negotiate, but the MPS ultimately took a
legal position favorable to the company. On March 16, the MPS
issued a resolution declaring that FENOCO was not legally obligated
to negotiate with SINTRAIME because the union did not meet the
legal requirements to organize FENOCO workers. On March 24,
SINTRAIME declared the strike and occupied the rail lines, citing
FENOCO's failure to fulfill its legal obligation to negotiate and
"MPS passivity" in the matter, unions leaders said.


9. (SBU) The strike lasted 26 days, until April 18 when the MPS
ordered local authorities to dislodge the protestors and restore
rail transportation on the grounds that the railway service
provided by FENOCO under government concession was certified by the
National Institute for Concessions (INCO) as an "essential public
service." Under Colombian law, such certification prohibits
strikes by employees of contract companies. The MPS is no longer
the final arbiter of strike legality though (Law 1210 of 2008).


Accordingly, the matter was referred to the Superior Tribunal of
Santa Marta.


FENOCO WINS ON APPEAL, FIRES 16 UNIONISTS

-----------------------------------------

10. (SBU) The Labor Chamber of the Superior Tribunal of Santa Marta
ruled on April 23 that the company must recognize and negotiate
with SINTRAIME in accordance with ILO Convention 154, regardless of
whether it has a preexisting convention with another union. The
Tribunal also ruled that the company must recognize the union even
if its mandate and statutes do not extend to the workers involved,
since unions are free to revise and extend their articles of
incorporation. Finally, it ruled that transporting coal to port by
rail did not constitute an "essential public service." FENOCO
appealed to the Supreme Court.


11. (C) The Supreme Court upheld the lower court's ruling that
multiple conventions may coexist within a single company. It
further ruled that transportation is an essential public service,
citing Constitutional Court judgment C-450 of 1995, but said each
case should be interpreted on an individual basis (the judgment was
equivocal on whether transportation was essential in this specific
case). Finally, the Supreme Court ruled that the strike was
illegal because SINTRAIME initiated it after the legal period set
forth in CST Article 445. FENOCO President and CEO Peter Burrowes
told us that the company fired 16 union leaders on the basis of the
ruling. SINTRAIME leaders interpreted the affair as a victory in
terms of the revenue losses ($150 million) they were able to impose
on Drummond and FENOCO.
BROWNFIELD

=======================CABLE ENDS============================

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