VZCZCXYZ0023
PP RUEHWEB

DE RUEHSJ #2312/01 2931938
ZNR UUUUU ZZH
P 201938Z OCT 06
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 6375
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY

UNCLAS SAN JOSE 002312 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA/CEN JASON MACK 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV CS
SUBJECT: PORT WORKERS PROTEST CONCESSIONS, TEST GOCR RESOLVE 
 
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SUMMARY 
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¶1. A show-down between the government and unionized dock 
workers in the country,s Atlantic ports may serve as a 
harbinger of GOCR resolve and capacity for dealing with 
promised mobilization against the country,s CAFTA-DR 
commitments.  Since September 23, the government and port 
workers have been dueling over a collective bargaining 
agreement payment and plans to allow an international 
concessionaire to operate Limon and Moin, Costa Rica,s two 
primary and adjacent Caribbean ports.  In Limon, a slowdown 
in late September generated long lines of waiting trucks and 
costly delays. In Moin, which handles the vast majority of 
Costa Rica,s agricultural exports, normal port functions 
ceased altogether for a few days.  The Ministry of Security 
was slow to react, but police secured the port facilities 
without incident early morning September 28.  Operations in 
Moin are now close to normal because Dole, Del Monte and 
operating cranes and tugboats.  Operations in Limon remain 
severely affected due to a work-to-the-rule campaign by the 
union.  The GOCR and port workers met on October 19 but 
failed to resolve the impasse.  Since the bulk of shipped 
cargo to and from Costa Rica passes through these ports, a 
long-term work slowdown could cost exporters and importers 
millions of dollars in losses.  The government,s response 
(sending in the police) may be a signal to unions that 
similar tactics will not be tolerated during expected 
anti-CAFTA strikes and protests.  END SUMMARY. 
 
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COSTLY SLOWDOWN; UNION SHOWDOWN 
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¶2. On September 25, union port workers at the Caribbean ports 
of Limon and Moin initiated a formal work slowdown, which 
created a line of container trucks stretching for over two 
miles outside the entrance to the port zone.  These two 
Caribbean ports transport 90% of Costa Rica's shipped 
commerce.  Since much of the cargo is very time-sensitive - 
bananas, pineapples, and other perishable produce - delays 
can destroy the value of the shipment. On September 27, 200 
Costa Rican police were placed in the port zone and awaited 
orders to take control of the facility.  That evening, port 
authority officials met with Minister of the Presidency 
Rodrigo Arias, Security Minister Fernando Berrocal, and 
Public Works Minister Karla Gonzalez to discuss the crisis, 
which had caused five million dollars in losses for fruit 
exporters to that point. Before dawn on September 28, the 
police took control of the port without incident and began 
ensuring that cargo trucks could enter the facility at a 
normal rate.  Non-union workers from Dole, Del Monte and 
Chiquita were allowed to begin moving cargo in the port of 
Moin. 
 
¶3. Throughout the prior week, the leadership of the union of 
port workers (SINTRAJAP) threatened the work slowdown if 
workers were not paid $900,000 they believed the Atlantic 
coast economic development port authority (JAPDEVA) owed as 
part of a collective bargaining agreement.  In 2003, the 
government's then-regulator general deemed that certain 
specific provisions within the collective bargaining 
agreement between SINTRAJAP and JAPDEVA were excessive and 
should not be paid.  In 2005, then-president Abel Pacheco 
avoided a work slowdown by convincing large shipping 
interests such as banana exporting companies to pay for the 
disputed provisions.  This year, the companies declined to 
pay.  Hoping to avoid a costly slowdown, the public services 
regulation authority (ARESEP), which oversees JAPDEVA, met 
with ARESEP boss Fernando Herrero on September 24 to find a 
solution after an informal work slowdown began September 23. 
Late that night, they agreed that JAPDEVA would be allowed to 
use part of a $20 million surplus it had accrued from 
shippers fees to pay the $900,000 demanded by the port 
workers. 
 
¶4. However, on September 25, SINTRAJAP leaders announced that 
the disputed payment was only part of their demands, and that 
their new priority was preventing the government's plans to 
contract an international firm to run the ports.  SINTRAJAP 
secretary general Rolando Blear stated that the slowdown 
 
SIPDIS 
would continue until he received a signed letter from 
President Arias promising not to go ahead with the 
concession.  Minister of the Presidency Arias flatly rejected 
this demand, reiterating the government's commitment to 
proceed with the concession, as has already been done with 
the Pacific port of Caldera.  Labor minister Francisco 
Morales also labeled the demand unacceptable, adding that 
during the election campaign, President Arias was very clear 
about his intention to bring in international concession to 
run the Caribbean ports. 
 
¶5. That JAPDEVA had accrued such a large surplus became a 
separate issue, as Costa Rican law forbids public enterprises 
such as JAPDEVA from operating for profit.  Herrero asked 
ARESEP to study the issue to determine if port rates could be 
lowered and/or investment into port improvement increased. 
SINTRAJAP leadership cited the surplus as proof that JAPDEVA 
could operate profitably and have sufficient funds for 
necessary infrastructure improvements, thus negating the need 
for private investment. 
 
--------------------------------------------- ------------ 
SITUATION CLOSE TO NORMAL IN MOIN; LIMON REMAINS SEVERELY 
AFFECTED 
--------------------------------------------- ------------ 
 
¶6.  As of October 19, port operations were improving, albeit 
extremely slowly. Port workers continue to work to rule in 
Limon, causing delays of several hours, but not as long as 
during the September slowdown.  In Moin, workers from the 
main (U.S.) agricultural exporters are now effectively 
running the port.  Cargo at Moin was being transported in 
sufficient quantity to avoid the large financial losses 
incurred in the initial days, although as of October 12 Costa 
Rican importers and exporters had lost an estimated 10 
million dollars due to the port problems.  Police presence 
has decreased, and there have been no altercations or 
sabotage.  Labor minister Francisco Morales met with 
SINTRAJAP leaders on October 7 and unsuccessfully lobbied the 
union to end the slowdown while negotiations between the 
government and the union proceed.  The two sides met again on 
October 19 but again failed to end the impasse. 
 
¶7.  Econoff and Poloff met on October 12 with an official 
from Dole to discuss the slowdown and its effects on the 
large fruit exporters that use the Caribbean ports.  This 
official explained that Moin was operating with private 
workers under the control of the fruit exporters and was 
functioning close to normal.  Limon, however, operated with a 
mixture of private workers and slow-working union members, 
and was operating at only a fraction of the normal rate (i.e. 
three containers per hour versus the normal 25 containers per 
hour).  According to the Dole official, losses of fruit were 
significant before the security forces took control of the 
ports on September 28.  While crediting the government,s 
securing of the port for helping to restore operations, he 
criticized the government for not acting sooner. 
 
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COMMENT:  DRY RUN FOR CAFTA? 
---------------------------- 
 
¶8. The Arias administration had to demonstrate resolve in 
this one, with union protests against CAFTA scheduled for 
October 23-24.  The government's initial attempt to placate 
the port workers -- giving into demands deemed excessive 
three years ago -- emboldened SINTRAJAP to press for their 
real goal: continued operation of the ports by the 
government.  The union seems to have overplayed its hand, 
however, underestimating the determination of the Arias 
government to allow an international concessionaire to 
operate the ports and to avoid strengthening the unions 
before the CAFTA ratification process begins in earnest.  In 
addition, the union protest has drawn little public support, 
with media reports at first showing the waiting trucks and 
warning of spoiled exports and lost commerce, and later 
contrasting the problems in Limon with the more efficient, 
concession-run operations at the Pacific coast port of 
Caldera.  If the Caribbean ports fully return to normal as a 
result of the government,s action, it would be a signal to 
union leaders and other anti-CAFTA forces that the Arias 
administration is prepared to maintain order when necessary. 
The on-going slowdown in Limon, however, underscores the 
challenges still facing the government. 
FRISBIE