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Viewing cable 06MUSCAT1511, IMPENDING REGULATIONS MAY TRIGGER INCREASE IN

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Reference ID Created Released Classification Origin
06MUSCAT1511 2006-10-22 10:55 2011-08-26 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Muscat
VZCZCXRO6620
RR RUEHDE RUEHDIR
DE RUEHMS #1511/01 2951055
ZNR UUUUU ZZH
R 221055Z OCT 06
FM AMEMBASSY MUSCAT
TO RUEHC/SECSTATE WASHDC 7316
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
RUEHGV/USMISSION GENEVA 0118
UNCLAS SECTION 01 OF 02 MUSCAT 001511 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR DRL, NEA/ARP 
USDOL FOR ILAB 
STATE PASS FOR USTR (J. BUNTIN, A. ROSENBERG) 
 
E.O. 12958: N/A 
TAGS: ELAB EWWT PGOV ETRD ECON MU
SUBJECT: IMPENDING REGULATIONS MAY TRIGGER INCREASE IN 
STRIKES 
 
REF: A. MUSCAT 1458 
 
     B. MUSCAT 1874 
 
1. (SBU) Summary: Workers at one of Oman's publicly-owned 
power plants went on strike before arriving at a settlement 
on wages and job security.  Contacts suggest that the 
publication of implementing regulations for recent labor law 
reforms may herald more strikes in the coming year.  While 
contacts are uniform in anticipating a surge in worker action 
to win salary increases, union representatives at the 
national level warn that they are unprepared to help resolve 
strikes and worker complaints.  End summary. 
 
- - - - - - - - - - - - - - - - - - - 
Workers Strike at Electric Power Plant 
- - - - - - - - - - - - - - - - - - - 
 
2. (SBU) Local press on October 16 reported that employees of 
the Rusail Power Plant, a publicly-managed electric power 
station northwest of Muscat, went on strike the morning of 
October 14, curtailing operations for approximately 24 hours. 
 Employees called the strike after the plant's operator, the 
National Electric Company, circulated a letter announcing 
that it planned to terminate all employee contracts as of 
January 2007, when the plant is scheduled to be privatized 
and handed over to new foreign management.  According to Post 
contacts, the letter explained that the new company would 
conduct interviews with each employee, but did not guarantee 
continued employment. 
 
3. (SBU) Contacts also reported that 38 workers sent a 
petition to the plant's management approximately one week 
before the strike, arguing that the company's action was 
illegal.  The workers maintained that Omani law guarantees 
jobs for up to five years after privatization or until the 
government is able to place workers in a comparable position. 
 The strike ended after officials from the Ministry of 
Manpower (MOM), Royal Oman Police and Oman's Electricity 
Holding Company negotiated a settlement with employee 
representatives, in which the Holding Company agreed to pay 
the salaries of those workers not rehired for up to five 
years if no alternative employment is available. 
 
- - - - - - - - - - - 
More Strikes to Come? 
- - - - - - - - - - - 
 
4. (SBU) The strike by the plant's non-unionized workers 
occurred while the government is drafting regulations to 
implement recent reforms to its 2003 labor law, which are 
expected to define workers' right to strike, bargain 
collectively and form unions (ref A).  Most contacts 
anticipate an increase in strikes after the government 
publishes its regulations, and believe that the total number 
of strikes will exceed the six that the MOM reported in 2005. 
 Union representatives in particular suggest that the 
regulations may encourage workers to strike to secure wage 
increases and greater job security.  Awab al Shaary, union 
president at the Crowne Plaza Hotel in Salalah, told Poleoff 
that workers throughout Salalah are complaining of stagnant 
wages, unpaid overtime and long hours.  He reported that many 
long-time hotel employees are frustrated by a perceived lack 
of support from the hotel's management, citing complaints 
that many have been working at the same jobs for more than 
ten years without a bonus or pay increase.  Union contacts in 
other parts of Oman state that workers may decide to strike 
for an increase in the minimum wage for Omani citizens, 
arguing that the current rate of 120 Omani Riyals (OR)/month 
is depressing wages across the board. 
 
5. (SBU) Contacts in management say they are aware of general 
worker dissatisfaction on the issue of salaries, and are 
concerned that union membership and strikes may proliferate 
under the new regulations.  Chief officers at Port of 
Salalah, where a strike on December 11, 2005 paralyzed 
operations for two days (ref B), however, were dismissive of 
worker complaints, arguing that their workers already are 
overpaid and under-skilled.  Ahmed Akaak, Director of Human 
Resources at the port and a leader in its union, 
characterized his dock workers as young and immature and 
unable to understand their role and responsibilities to both 
employer and union.  Akaak and other officers at the port 
stated that they hope the regulations ban involvement from 
outside activists and international groups in local union 
activity in order to help curb what they anticipate could be 
 
MUSCAT 00001511  002 OF 002 
 
 
an increase in worker agitation. 
 
- - - - - - - - - - - - - - - - - - - - 
The General Federation Unprepared to Act 
- - - - - - - - - - - - - - - - - - - - 
 
6. (SBU) Representatives of the General Federation of Workers 
of the Sultanate of Oman (Federation) warn that if there is a 
surge in strikes, the Federation is unprepared to help 
resolve them.  Federation contacts further claim that they 
currently lack a clear understanding of their relationship 
with the MOM in resolving worker complaints.  Regarding the 
strike at the Rusail Power Plant, Federation leaders contend 
that power plant employees informed the Federation of their 
intention to strike almost ten days before they took action. 
The Federation then immediately informed the MOM's Director 
General of Labor Affairs of the impending strike.  The 
Ministry reportedly did not consult with the Federation 
again, however, and the Federation alleges that it only 
learned about the resolution of the strike through the local 
newspapers.  Federation contacts stated that they intend to 
write a letter of complaint to the Minister of Manpower, Juma 
bin al-Juma, requesting that he clarify Federation and 
Ministry roles in negotiating work stoppages. 
 
7. (SBU) Comment: Most contacts anticipate that the impending 
regulations on the right to strike, collective bargaining and 
freedom of association may change the status quo in labor 
relations.  Many believe that workers may feel emboldened to 
improve their wages once they have a firmer legal backing. 
Other, more cynical voices- mostly among management 
representatives- worry that the law will encourage a herd 
mentality, in which workers join unions and strike simply to 
take advantage of a newly felt sense of freedom.  Ultimately, 
it may be Oman's labor market- in which the pool of workers 
currently is larger than the number of available jobs- that 
has the most significant effect on whether strikes increase. 
FONTENEAU