VZCZCXRO6952
RR RUEHGR
DE RUEHKG #0748/01 1082028
ZNR UUUUU ZZH
R 182028Z APR 06
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC 2636
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHSJ/AMEMBASSY SAN JOSE 1815
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 03 KINGSTON 000748 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/CAR (WBENT), WHA/EPSC (JSLATTERY), DRL 
 
SANTO DOMINGO FOR FCS AND FAS 
 
TREASURY FOR L LAMONICA 
 
E.O. 12958:  NA 
TAGS: ECON EFIN ELAB JM
SUBJECT:  LABOR TURMOIL CONTINUES IN JAMAICA 
 
REF: KINGSTON 633 
 
¶1. (U) Summary:  There is no end in sight to the spate of 
industrial disputes rocking Jamaica (reftel).  During the 
last week the country has had to address unrest at the 
Jamaica Aluminum Company (JAMALCO) and strike action at 
three GOJ-operated sugarcane factories.  The ongoing 
dispute at JAMALCO is particularly troubling given that 
the company is in the midst of a USD 870 million expansion 
program to double its refining capacity.  Strikes from 
public sector workers are also possible following their 
rejection of a 20 percent wage cap.  End summary. 
 
--------------------------------------------- - 
JAMALCO DISPUTE: Union Outraged Over Ultimatum 
--------------------------------------------- - 
 
¶2. (SBU) On April 10, emboff spoke with General Secretary 
of the Union of Technical, Administrative and Supervisory 
Professionals (UTASP), St. Patrice Ennis, to get his 
position on the Jamaica Aluminum Company (JAMALCO) 
dispute.  Ennis made it clear that UTASP has always had a 
rocky relationship with management and was engaged in a 
court action against the company on behalf of 250 workers 
classified as contractors, but employed under the same 
terms and conditions as full-time employees.  Regarding 
the current impasse, Ennis noted that both parties were 
agreed on most components of the contract, including a 33 
percent wage increase.  However, they remained divided on 
issues such as motor vehicle upkeep, interest-free loans, 
educational benefits and the indexation of salaries to 
inflation, which exists at other bauxite companies.  Ennis 
noted that management refused to meet further with the 
union until their proposals were accepted, a position he 
refers to as `gross insolence.' 
 
¶3. (SBU) Against this background, he said, the union 
served a 72-hour strike notice on the company, but the new 
Minister of Labor, Derrick Kellier, obtained a court 
injunction to postpone the industrial action.  Ennis, who 
maintains the Minster acted on bad advice, said the union 
was initially inclined to defy the court action.  Although 
the workers were angry with government, in the end the 
union decided against confrontation.  Nevertheless, "the 
Minister's use of the court as a weapon against the union 
runs counter to the precepts of the ILO," he said.  Ennis 
suggested that the company's offer should be better, given 
huge industry profits and costs down by almost 30 percent. 
JAMALCO, he stated, was twice as efficient as any other 
producer in the industry and had also received a waiver on 
the GOJ bauxite levy. 
 
-------------------------------- 
JAMALCO Strident In Its Position 
-------------------------------- 
 
¶4. (SBU) JAMALCO Public Relations Manager Brian Doy told 
Emboff that UTASP issued the strike ultimatum while 
negotiations were in progress, which is unusual.  Doy 
claimed that a very competitive package was on the table, 
but by threatening to strike, UTASP was placing the offer 
at risk.  He said that the union was deliberately trying 
to draw out the negotiations, hoping to pressure 
management into a better settlement.  Doy pointed out that 
the company has been engaged in intense negotiations for 
the last nine months during which management made a number 
of concessions.  He said the company consulted with the 
other players in the sector and JAMALCO'S offer was equal 
to or better than all other settlements in the industry. 
 
¶5. (SBU) Doy said that the expansion was already underway 
with a USD 77 million investment to increase production 
capacity.  However, the remaining USD 800 million 
investment was contingent on the GOJ signing a natural gas 
agreement with Trinidad and Tobago.  When asked how the 
dispute might impact the next phase of expansion, Doy 
stated that ALCOA has opportunities all over the world and 
that continued industrial unrest could not be in the best 
interest of the country, as projects must be completed 
within time and budget.  Emboff also inquired about the 
supply of skilled labor for the project.  The JAMALCO 
official pointed out that the core of the workforce (1,700 
workers) was undergoing training at the National Training 
Agency (NTA), but another 1,300 would be required at peak. 
Doy expressed satisfaction with the quality of the NTA and 
 
KINGSTON 00000748  002 OF 003 
 
 
even told emboff that the company sent a welder from the 
program to a trade show in Las Vegas, where he finished 
second in the welding competition. 
 
------------------------------- 
Sugar Strikes Hamper Production 
------------------------------- 
 
¶6. (SBU) The GOJ-run Sugar Company of Jamaica (SCJ) on 
April 12 finally persuaded workers to return to the fields 
following strike action at three of the factories: 
Duckenfield, Monymusk, and Frome.  The actions in these 
cases, however, revolve around management rather than 
money.  Workers at all three have called for the top 
management to be dismissed, citing incompetence.  The 
workers returned, however, after an emergency meeting was 
called by Agriculture Minister Roger Clarke (Note: Clarke 
himself is a former sugarcane farmer.  End note.) 
Resposibility for SCJ returned to the Ministry of 
Agriculture on Monday from the Ministry of Finance. 
Septel will report in greater depth on the industrial 
unrest at the sugar factories, and the political 
machinations behind the industry's return to the Ministry 
of Agriculture. 
 
 
----------------------- 
Replacement MOU Stalled 
----------------------- 
 
¶6. (SBU) Despite an all out effort, Ministry of Finance 
officials might not be able to negotiate a replacement MOU 
before Finance Minister Omar Davies makes his budget 
presentation on April 27.  The process was delayed after 
trade unions again expressed disapproval with the proposed 
20 percent cap on salary increases.  Ennis, who had 
previously been pessimistic about a new contract, is now 
confident that one could be concluded soon.  In fact, he 
told emboff that once the Nurses Association and the 
Jamaica Labor Party (JLP)-affiliated Bustamante Industrial 
Trade Union (BITU) can be satisfied, a new document will 
be in place.  However, Acting Senior Director of the 
Ministry of Finance's Fiscal Policy Management Unit, 
Courtney Williams - who had expected a smooth transition 
to a new MOU - is now skeptical about getting an agreement 
in place in the near future. 
 
¶7. (SBU) Williams noted that several unions, led by the 
BITU, calculated that they could negotiate a better 
contract independently.  He noted that this was a real 
possibility, given that the police union took this 
approach last year and negotiated a significantly better 
deal than the rest of the public sector.  He further noted 
that there was strong political pressure being applied to 
Dwight Nelson of the BITU.  (Note: Nelson, a JLP Senator 
and Shadow Minister for Information, was blamed for 
negotiating the last MOU, which JLP supporters believe was 
responsible for helping the ruling People's National Party 
out of a fiscal rut.  End note.)  Additionally, bauxite 
employees have already received substantial increases 
(reftel), setting the stage for the rest of the labor 
force.  Union leaders, who have openly welcomed the 
administration of Prime Minister Portia Simpson-Miller, 
are also hoping that if negotiations are protracted then 
the "caring" Simpson-Miller will intervene on behalf of 
workers. 
 
------- 
Comment 
------- 
 
¶8. (SBU) A ruling by the Industrial Disputes Tribunal 
should bring an end to the action at JAMALCO, but the 
industrial relations climate is unlikely to settle any 
time soon.  A new MOU with the public sector will not be 
an easy task given the high expectation of public sector 
workers, who have received paltry increases in the last 
two years, amid high inflation.  Both workers and trade 
unions have also noted the pro-labor role of Simpson- 
Miller in a West Indies Aluminum Company dispute and might 
draw out their negotiations in order to get her 
intervention in the process.  Still more labor turmoil is 
likely from workers in the private sector, who also 
accepted lower increases during the period of the MOU. 
These workers are aware of the crippling effects of work 
 
KINGSTON 00000748  003 OF 003 
 
 
stoppages on the bottom line of these companies and have 
not been afraid to utilize this tactic in the past.  End 
comment. 
 
JOHNSON