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DE RUEHLC #0691/01 3331434
ZNY CCCCC ZZH
P 291434Z NOV 06
FM AMEMBASSY LIBREVILLE
TO RUEHC/SECSTATE WASHDC PRIORITY 9427
INFO RUEHYD/AMEMBASSY YAOUNDE 0743
RUEHKI/AMEMBASSY KINSHASA 1343
RUEHNJ/AMEMBASSY NDJAMENA 0408
RUEHUJA/AMEMBASSY ABUJA 0370

C O N F I D E N T I A L LIBREVILLE 000691 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 11/29/2016 
TAGS: EPET EINV ELAB PGOV GB
SUBJECT: PRESIDENT BONGO TWISTS ARMS, ENDS STRIKE 
 
REF: A. LIBREVILLE 688 
 
     ¶B. LIBREVILLE 624 
     ¶C. LIBREVILLE 337 
 
Classified By: DCM Katherine Dhanani. Reason: 1.4 (d). 
 
¶1. (C) Summary: The imminence of legislative elections has 
contributed to a rash of strikes, since workers expect the 
government to act to resolve strikes quickly at election 
time.  Following a three-day strike by oil workers, President 
Bongo instructed Mobil Oil Gabon to grant a wage increase and 
pay extra severance to employees bought out in 2005.  The 
company felt it had little choice but to do as it was told. 
This is the kind of incident that contributes to American 
companies' perception of Gabon as a hostile business climate. 
 End summary. 
 
¶2. (U) Strikes are a traditional part of Gabonese election 
seasons, since politicians are more likely to intervene to 
get workers back to work when they are concerned about 
attracting votes.  The current period before Gabon's December 
17 legislative election (Ref A) is no exception.  Workers for 
the post office have been on strike since October 31, and one 
teachers union went on strike November 16.  Workers in the 
petroleum sector carried out a three-day strike November 
21-23, demanding higher wages from all oil companies and 
resolution of grievances against several specific employers. 
 
¶3. (SBU) Henri Soudan, General Manager of Mobil Oil Maroc, 
currently managing Mobil Oil Gabon until shares are turned 
over to Tamoil (Ref B), briefed Emboffs November 28 about 
Mobil's experience with the strike.  The petroleum workers 
union had three grievances against Mobil.  The first 
concerned employees' desire to receive severance packages 
from Mobil before Tamoil took over.  Soudan said that 
Gabonese law is fairly clear on this, and the union was 
forced to give way.  A second complaint concerned voluntary 
buyouts Mobil carried out for 15 employees during 2005.  The 
union argued that the buyouts had been improper, and demanded 
that Mobil pay fines to supplement the packages employees 
voluntarily accepted.  The third demand was for a 4.4% salary 
increase retroactive to March 2006.  In March, distributors 
were granted an increase in their margin at the pump.  At the 
time, Total Gabon shared this with its workers by giving them 
all a 4.4% wage increase.  Mobil's employees wanted the same 
deal. 
 
¶4. (SBU) Soudan reported that Mobil felt it would be a 
dangerous precedent to ignore the voluntary protocols signed 
by the company and workers who accepted buyouts, and saw no 
basis for the demand.  It would also be difficult for Mobil 
to adjust salaries at mid-year, he said.  Soudan considered 
it likely that Tamoil might choose to make a generous gesture 
after taking over, but saw no reason for Mobil to do so. 
 
¶5. (SBU) Soudan said that petroleum companies were invited to 
a meeting at the Presidency on November 23 to resolve the 
labor disputes.  He said he quickly saw how the meeting would 
go when workers' demands against Shell-Gabon were raised 
first.  President Bongo summarily told Shell, which was 
offering about $2 million in layoff compensation while its 
employees demanded $8 million, that it should pay $4 million. 
 He told Shell managers they should consider themselves lucky 
that employees in Gabon are less militant than their 
counterparts in Cameroon and Nigeria, where Shell executives 
have been held hostage in labor disputes.  Moving on to 
Mobil, Bongo said he understood the company had acted 
illegally when it laid off workers in 2005, and it should 
accept the fines demanded by the union.  Soudan initially 
explained the company's point of view, but when he saw that 
his argument did not go down well, agreed to sit down with 
the Ministry of Labor and the union to settle the issue. 
 
¶6. (SBU) Soudan was relieved that the question of general 
salaries was not raised in the meeting, but his relief was 
short-lived.  On November 24, he received a copy of the 
minutes of the meeting, which he was requested to sign.  In 
the minutes it was stated that President Bongo had determined 
that Mobil should provide the 4.4% salary increase demanded 
by employees.  Soudan told Emboffs he signed the minutes, 
recognizing that he had no choice. 
 
¶7. (C) Comment: Despite the sale of most parastatals, the 
Gabonese government continues to play an important role in 
the economy.  Managing labor disputes is one element of that 
role; every strike affecting the public elicits government 
mediation.  The role, however, extends more generally into 
the boardrooms of private corporations, as the Canadian 
owners of Air Service learned earlier this year (Ref C). 
American companies without extensive African experience take 
poorly to such intervention, which contributes to what they 
see as a hostile business climate. 
 
WALKLEY