VZCZCXRO2986
PP RUEHMA RUEHPA
DE RUEHRY #1665/01 3121023
ZNR UUUUU ZZH
P 081023Z NOV 06
FM AMEMBASSY CONAKRY
TO RUEHC/SECSTATE WASHDC PRIORITY 0182
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZK/ECOWAS COLLECTIVE
RHMFISS/HQ USEUCOM VAIHINGEN GE//POLAD/J2//

UNCLAS SECTION 01 OF 03 CONAKRY 001665 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE 
 
DEPT ALSO FOR DS, CA/OCS 
TREASURY FOR OFFICE OF AFRICAN NATIONS 
 
E.O. 12598:  N/A 
TAGS: ELAB EMIN PINS ASEC CASC GV
SUBJECT: PROTESTS IN KAMSAR AS LABOR DISPUTE SPARKS EMPLOYEE ANGER 
 
SENSITIVE BUT UNCLASSIFIED.  CONTAINS PROPRIETARY INFORMATION.  NOT 
FOR POSTING ON INTERNET. 
 
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SUMMARY 
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¶1.  (SBU) Summary.  Senior managers of the Compagnie des Bauxites de 
Guinee (CBG), in which the U.S. firm Alcoa is a major partner, are 
the targets of passionate protests by CBG employees and their 
dependants, angered by recent cutbacks in long-provided benefits and 
services.  Protesters -- mainly wives of CBG employees -- have 
demanded that key managers be fired and that full benefits and 
services be reinstated.  CBG argues that its move is aimed at 
reducing corruption and abuse of company-financed services. 
However, under pressure from protesters, CBG has relented and 
rescinded the decree for now.  At its apex, the protest halted 
production at CBG's plant in the port city of Kamsar, as protesters 
blocked the rails that deliver bauxite to the facility. 
 
¶2. (SBU) Protests have been impassioned but peaceful, and there have 
been no reports of injuries or arrests.  However, after protestors 
surrounded the houses of six Guinean CBG managers, they left Kamsar 
with their families.  CBG's Director General considered evacuating 
expatriate dependants but suspended the initiative upon receiving 
assurances the Government of Guinea would provide security. Alcoa 
has also expressed concern.  We are confirming the number of U.S. 
citizens employed by CBG but understand it is about five.  Minister 
of Territorial Administration and Decentralization Moussa Solano and 
Minister of Mines Dr. Ousmane Sylla have both addressed the 
protesters in recent days, seeking an acceptable solution.  The 
trouble is thus far confined to the CBG campus.  Life in Kamsar 
proceeds normally, and CBG's mines and plant are operating.  Most 
local residents are firmly in support of the protesters but see the 
issue as a labor dispute between CBG and its employees.  End 
summary. 
 
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CBG CUTS BENEFITS 
----------------- 
 
¶3.  (SBU) Long troubled by issues of abuse and fraud in its employee 
benefits packages, CBG recently restructured its benefits plan.  In 
addition to reducing food subsidies, CBG also reduced the amount of 
free electricity it provides its subsidized employee housing from 24 
to 12 hour coverage. CBG-run health centers also had their operating 
hours reduced from eight to four hours a day, and the number of 
patients was limited to ten per day.  Many of CBG's employees are 
polygamous.  While acknowledging they lack the ability to identify 
all CBG dependants, the company limited the health coverage to two 
wives and ten children per family. 
 
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CUTS PROVOKE ANGER, TRAGIC UNINTENDED CONSEQUENCES 
--------------------------------------------- ----- 
 
¶4.  (SBU) The abrupt introduction of benefit reductions infuriated 
employees and their families.  CBG employees took their concerns to 
the company's employee association and to the subprefect, the 
Guinean government's chief representative in the area.  Though 
angry, employees continued to work without formal protest until 
Wednesday, October 25. 
 
¶5.  (SBU) On that date, a CBG health center refused service to two 
children whose mother could not prove they were CBG dependants.  The 
two children reportedly died later that day.  A spontaneous protest 
developed after the children's burials.  On October 26, a pregnant 
woman was refused service and reportedly hemorrhaged to death.  A 
large number of women with CBG connections donned red shirts and 
bandanas and took to the streets in protest declaring the blood of 
the woman and her unborn child were on the hands of the CBG managers 
who limited health services.  The women stopped plant operations by 
standing on the rails preventing the delivery of bauxite to the 
facility. 
 
¶6.  (SBU) The "face" of the protests is a sympathetic figure -- the 
wife of a longtime CBG employee, confined to a wheelchair and 
renowned for her community work with orphans.  While Kamsar 
residents not employed by CBG see the dispute as something not their 
direct concern, they are positively disposed towards the local women 
who are affected by the cuts. 
 
--------------------------------------------- -- 
CBG AND GOVERNMENT RESPONSES DO NOT QUELL ANGER 
--------------------------------------------- -- 
 
 
CONAKRY 00001665  002 OF 003 
 
 
¶7.  (SBU) Since October 26, protesters have several times blocked 
operations.  They have demanded CBG's Human Resource director, 
Logistics director, and the four managers in their direct chain of 
command be fired, and demonstrated outside the homes of the 
managers, all Guinean.  Fearing for their safety, the managers and 
their families fled Kamsar on November 2. 
 
¶8.  (SBU) On November 3, Minister of Territorial Administration and 
Decentralization Moussa Solano came to Kamsar.  Demonstrating women 
blocked his car, and he was forced to walk about a kilometer to 
reach the platform to address the crowd.  Solano's visit did little 
to pacify the workers and their families.  Security forces had 
strict orders not to respond with force to the protesting women and 
the demonstration ended peacefully. (Comment: Our analysis is that 
local authorities feared that allowing use of force would invite a 
replay of June 12, when security fired upon young protestors during 
a general strike, killing at least 11 countrywide and eliciting 
outrage across society.) 
 
¶9.  (SBU) Faced with the local backlash, CBG suspended its decree on 
benefits cuts but has not met demands to fire certain Guinean 
managers.  Concerned about the implications for security, especially 
Minister Solano's instruction that the military should not intervene 
to protect CBG personnel from demonstrators, the CBG Director 
General, Nic Clift, began planning to evacuate expatriates and their 
families, although none had been directly threatened to our 
knowledge.  We understand there are about five Americans among the 
140 expatriate staff.  When he learned November 6 that Minister of 
Mines Ousmane Sylla would visit Kamsar the next day to make clear 
that the government of Guinea would, in fact, guarantee security, 
Clift suspended evacuation plans. 
 
¶10.  (SBU) The Minister of Mines has provided a letter guaranteeing 
CBG security.  However, he also took the opportunity to admonish 
Director General Clift for mobilizing an evacuation of expatriates 
without first consulting him, a perceived affront to his authority. 
At a recent conference in Dusseldorf, the Minister touted Guinea's 
vast investment opportunities in the mineral sector.  He feared 
Clift's action could frighten potential investors and negate the 
conference's effective public relations campaign. 
 
¶11.  (SBU/PROPRIETARY INFO) Alcoa official Russell Williams 
contacted the Ambassador from Alcoa headquarters in Pittsburgh, 
extremely concerned about the security of CBG facilities and 
personnel.  Williams strongly condemned Minister Solano's order for 
the military not to protect CBG assets or personnel from 
demonstrators.  He acknowledged that Minister Sylla had subsequently 
given written assurances that the government would protect CBG. 
Williams criticized Sylla, however, for upbraiding CGB Director 
General Clift in front of assembled CBG personnel because he had 
decided to organize an evacuation without the Minister's permission. 
 CBG (and Alcoa) remain adamant that, in case of a threat, they do 
not require the Minister's authorization to evacuate personnel. 
 
¶12.  (SBU/PROPRIETARY INFO) Russell Williams also told the 
Ambassador that CBG would review and amend its emergency action 
plan.  The existing plan calls for the Guinean military to protect 
CBG personnel and, if necessary, to escort them to the small Kamsar 
airport for evacuation.  Williams said that CBG had asked agents 
from Control Risk to come to Kamsar this week to review and revise 
the plan.  Williams said that, in his view, it would be necessary to 
have a back-up plan to use a ship to extract CBG personnel from 
Kamsar port, where CBG offices and housing are physically located. 
Williams mentioned the possibility of stationing a ship offshore for 
this purpose. 
 
¶13.  (SBU) The Ambassador replied that CBG had to take whatever 
measures it deemed appropriate but that the stationing of a ship 
offshore seemed excessive.  He said that it was important for CBG 
and the Guinean authorities to "ratchet down the rhetoric," to seek 
a solution to the labor dispute, and to agree on long-term security 
procedures.  The Ambassador offered to meet with CBG, Alcoa, and 
Control Risk representatives to discuss the situation.  He also 
expressed his willingness to intervene with the appropriate Guinean 
government ministers, if the situation warrants. 
 
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COMMENT 
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¶14.  (SBU) What began as a legitimate attempt on the part of CBG to 
curb fraud and mismanagement has evolved into an ugly labor dispute 
that highlights social issues long festering throughout Guinea.  A 
unilateral decree rescinding benefits CBG employees have enjoyed for 
some 40 years was destined to anger employees.  The reported death 
of three people following a refusal to provide medical treatment has 
 
CONAKRY 00001665  003 OF 003 
 
 
only exacerbated the situation.  From the employees' point of view 
(and we understand this is shared by local labor inspectors), the 
company should have engaged in a more consultative process.  CBG 
will now have to negotiate the revision of benefits from a weakened 
posture. 
 
¶15.  (SBU) Although CBG is consortium between the government of 
Guinea (49%) and Halco (51%)(made up of Alcoa, Alcan and a small 
minority partner), its relationship with government ministers over 
the years has sometimes been contentious as each side jockeys for 
power.  That dimension has been on display in this instance, 
complicated by additional jockeying for influence between local 
authorities and Conakry.  Alcoa has been acutely concerned by the 
events of the last two weeks and the degree of support received (or 
not) from Guinean government authorities. 
 
McDONALD