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Cablegate: Nicaragua: Amcit's Fishing Fleet in Trouble

VZCZCXYZ0001
RR RUEHWEB

DE RUEHMU #1019 2872131
ZNY CCCCC ZZH
R 142131Z OCT 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 4664
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

C O N F I D E N T I A L MANAGUA 001019

SIPDIS

E.O. 12958: DECL: 10/06/2029
TAGS: EINV ELAB ECON NU
SUBJECT: NICARAGUA: AMCIT'S FISHING FLEET IN TROUBLE

Classified By: Ambassador Robert J. Callahan for reasons
1.4 (b) and (d)

1. (C) Summary: A U.S. Citizen who owns shrimp boats and a
dry dock on the Atlantic Coast is now facing labor
difficulties that threaten to put him out of business. In
the past, the mission has contracted his dry dock for vessel
repair, but we are now investigating alternatives for this
service. End summary.

2. (C) U.S. citizen Ronald S. Herndon is the owner of Gulf
King Seafood S.A., which in 1993 began to operate shrimp
boats off the Atlantic Coast of Nicaragua. The company has a
fleet of 39 boats working out of Bluefields in the Southern
Autonomous Atlantic Region (RAAS). Herndon told emboffs on
October 5 that in recent months he had dispatched only a few
of those boats, because high fuel costs and a scarcity of
shrimp caused by "El Nino" weather patterns made shrimping
barely profitable. Lately, however, he said a labor dispute
prevented him from shrimping at all.

3. (C) Herndon explained that he recently has cut staff from
about 150 to fewer than 100, dismissing a few at a time.
Looking to avoid further layoffs, Herndon said he consulted
with a local Ministry of Labor (MITRAB) official, who told
him he could furlough workers instead of firing them.
However, when Herndon advised 52 of his remaining employees
that they would be furloughed for 90 days, 39 of them, plus
an additional 18 workers, decided to quit instead.

4. (C) Under Nicaraguan labor law, employees are entitled to
full severance pay even when they quit. As a result, Herndon
said he now owes $80,000 in severance pay to the 57 employees
who quit. Herndon told emboffs that he could not make the
payment because his business is strapped for cash. He is
looking to negotiate with his former employees for additional
time to pay them. Herndon said he asked for a 12-month grace
period at first but was now looking for a three month term --
the former employees expected immediate payment. In the
interim, his former employees have physically barred Herndon
from access to his office and fleet.

5. (C) Herndon told emboffs he believes his former workers
are being egged on by senior officials of the Nicaraguan
Government and Sandinista National Liberation Front (FSLN) to
refuse to accept anything less than an immediate cash
settlement. Herndon recounted difficulties with President of
the Nicaraguan Fisheries Institute (INPESCA) Steadman Fagoth
over the monthly certification he requires to be able to
fish. He said one local FSLN leader in particular, Lumberto
Campbell, "has it out for me" and is backing his former
employees' demands for severance pay as required by law.

6. (C) Herndon said things have been difficult since Ortega
took office. He contrasted that experience with his
treatment by the Chamorro administration, when he first
established Gulf King in Nicaragua. At that time, he said,
he was greeted with open arms. About relations with Aleman,
who was in office from 1997 to 2002, Herndon said, "You could
get things done, but it would cost you." When emboff asked
about the costs involved, Herndon recounted how, when he sat
down with Aleman, "Aleman would never ask for a dime, but he
would tell me to write $10,000 checks to different tribal
leaders along the Atlantic coast." Herndon concluded,
"You've got to work with it that way, that's how it is."

7. (C) Herndon said licenses for his shrimp boats would come
up for renewal in November. He said he was worried that
Fagoth would not provide the license or that he would require
some kind of payment for the licenses -- Herndon threw out
the figure of $500 per vessel. When emboff asked Herndon
what he would do if Fagoth asked him for money, Herndon
responded that he would have to "wait and see." (Note:
INPESCA whistleblowers accuse Fagoth of misusing government
resources, but the Office of the Controller General, the
entity charged with investigating corruption, refuses to look
into the matter. Recently, the Embassies of Japan and Norway
have complained to us about Fagoth's corruption, including
brazen requests for bribes. End note.)

8. (C) Comment: Herndon runs the only dry dock on Nicaragua's
Atlantic Coast. INL, MILGRP, and SOUTHCOM have used his
facilities at various times over the past several years for
vessel maintenance, repair, and refurbishment. Post is
evaluating alternatives for this kind of maintenance in the
future.
CALLAHAN

© Scoop Media

 
 
 
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