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Cablegate: Egyptian Textile Factory Strike Ends

VZCZCXYZ0001
PP RUEHWEB

DE RUEHEG #2207 3291508
ZNY CCCCC ZZH
P 251508Z NOV 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC PRIORITY 4337
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
RHEHNSC/NSC WASHDC

C O N F I D E N T I A L CAIRO 002207

SIPDIS

DEPARTMENT FOR DRL/ILCSR

E.O. 12958: DECL: 11/25/2029
TAGS: ELAB PGOV PHUM SOCI EG
SUBJECT: EGYPTIAN TEXTILE FACTORY STRIKE ENDS

REF: CAIRO 1547

Classified By: Economic-Political Minister-Counselor Donald A. Blome for reason 1.4 (d).
1. Key Points: -- (SBU) Workers at Tanta Flax and Oil Company, a large textile factory in the Nile Delta City of Tanta (Gharabeya Governorate), who had been on strike since May, returned to work on November 21. -- (SBU) The strike, which the GoE-controlled General Union of Textile Workers supported, ended after the workers reached agreement with the recently privatized factory's Saudi owner on salary and layoff issues. -- (SBU) Egypt's Ministry of Manpower and Migration (MOMM) actively participated in negotiations to resolve the strike, and according to labor rights NGOs, agreed to pay the workers back wages for the period they were on strike.

2. (C) Comment: The GoE was heavily involved in the resolution of the strike, with MOMM representatives negotiating directly with factory management on behalf of workers. The GoE generally has responded to Egypt's ongoing wave of labor activism by acceding, in the case of state-owned enterprises, to economic demands. The GoE has taken a more hands-off approach to private sector disputes. In the case of the Tanta strike, the GoE probably felt pressure to act because the factory was formerly state-owned and the government's privatization efforts have been unpopular with Egyptian workers. Egyptian nationalist sentiment also played a role, with the GoE undoubtedly concerned that inaction would be viewed as acquiescence to the Saudi Arabian factory owner's perceived unfair treatment of Egyptian workers. ---------------------------------------- GOE Intervenes to Resolve Labor Dispute ----------------------------------------

3. (C) Workers at the Tanta Flax and Oil Company went on strike in May, protesting layoffs and the failure of the recently privatized factory's Saudi Arabian owner to pay GoE mandated public sector salary increases (ref A.) When the strike began, the local chapter of the state-controlled General Union of Textile Workers took the unprecedented step of endorsing the work stoppage. According to Tanta-based labor lawyer Ahmed Al Sangafly, despite the endorsement, the union failed to assist in negotiations and workers were unable to reach agreement with factory management

4. (C) According to XXXXXXXXXXXX, the length of the strike, and the perceived intransigence and mistreatment of Egyptian workers by the factory's Saudi Arabian owner, had become an embarrassment to the GoE. In recent weeks, the MOMM sent representatives to negotiating sessions to assist the workers. Eventually, the MOMM representatives took the lead in negotiating on behalf of the workers. In the end, the factory owner agreed to pay the public sector salary increases and "early retirement" benefits to laid off workers. Evidencing its interest in resolving the strike, the MOMM agreed to pay workers back-wages for the period they were on strike. Scobey

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