VZCZCXRO8004
OO RUEHDE RUEHDIR
DE RUEHMK #0738/01 2131249
ZNR UUUUU ZZH
O 011249Z AUG 07
FM AMEMBASSY MANAMA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7104
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RHMFIUU/HQ USCENTCOM MACDILL AFB FL PRIORITY
RHBVAKS/COMUSNAVCENT  PRIORITY

UNCLAS SECTION 01 OF 04 MANAMA 000738 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DOL FOR ILAB/JAMES RUDE 
USTR FOR JBUNTIN 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON ELAB PHUM BA HUMRIT POL
SUBJECT: BATELCO ANTI-UNION ACTIVITY CRITICIZED BY GOB 
OFFICIAL; BAHRAIN UNION ACTIVITY ROBUST 
 
REF: A. MANAMA 194 
 
     ¶B. 2006 MANAMA 1979 
 
Sensitive but unclassified; please protect accordingly.  Not 
for Internet distribution. 
 
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Summary 
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¶1.  (SBU) Recent tension between Bahrain Telecommunications 
Company (Batelco) management and its union, including an open 
meeting at Batelco headquarters attended by 500 workers, 
resulted in the dismissal of the head of the union and his 
deputy.  Minister of Labor Dr. Abdulmajeed Al Alawi stated 
publicly that the firings were unjustified and that the 
workers should be reinstated.  Batelco management considered 
the union's activities to be illegal under Bahraini law, 
which identifies the telecom sector as a "vital sector" and 
therefore prohibits strikes by its workers.  Management used 
this rationale even though the union did not call for nor 
attempt a strike.  This is the first instance Post is aware 
of in which Executive Order 62 (ref B), which bans strikes in 
12 essential sectors, has been used by a company as 
justification for action against workers.  Union activity in 
several companies has resulted in favorable outcomes for 
workers in Bahrain.  End Summary. 
 
------------------------------ 
Unjustified Firings at Batelco 
------------------------------ 
 
¶2.  (U) Minister of Labor Dr. Abdulmajeed Al Alawi intervened 
publicly July 24 in the conflict between Batelco management 
and its union over the dismissal of the union's head and 
deputy head.  Al Alawi stated that the firings were not 
justified, because the law protects workers from being 
dismissed solely on the basis of participating in union 
activities, and urged the company to reinstate the two 
workers.  Al Alawi also expressed displeasure at the actions 
of the union, saying that the Ministry of Labor has been 
negotiating a salary increase between the two parties under 
an upcoming deadline, so any type of union activity at this 
time was premature and counterproductive.  He called on both 
parties to recognize their mistakes and work together to 
resolve outstanding issues. 
 
¶3.  (U) Approximately 500 Batelco workers (from just over 
1,600) engaged in what was described in Arabic dailies as a 
temporary work slowdown July 18.  They reportedly gathered at 
Batelco headquarters following the firing of trade union 
vice-president Majeed Suhrab allegedly for organizing the 
gathering.  At the gathering, union president Faisal Ghazwan 
expressed surprise at the firing of Suhrab and called for the 
dismissal of General Manager Patrick Key.  In addition to 
repeating long-time union demands that there be a general 
salary increase of 25 percent and an additional increase for 
workers in certain positions, Ghazwan also called for an end 
to the use of temporary contract workers.  At the close of 
his remarks to the workers, company security escorted Ghazwan 
off the premises and confiscated his work badge.  The union 
had notified the press to cover the gathering, but Batelco 
public relations manager Shaikh Ahmed Al Khalifa ordered that 
no reporters be allowed to enter the premises. 
 
¶4.  (SBU) Following the dismissals, Batelco issued a press 
release stating that the work slowdown was illegal under law 
49 of 2006, an amendment to the Trade Union Law (law 33 of 
2002).  Article 21 of this amendment provides the Prime 
Minister with full authority to designate essential services 
in which strikes are prohibited.  The passage of law 49 led 
to the implementation of Executive Order 62 that bans strikes 
in 12 "vital sectors," including the telecommunications 
sector.  GOB officials have justified the ban, saying that 
strikes in the identified essential services may result in 
the disruption of the daily life of citizens, potentially 
leading to security concerns.  (Note:  The dismissals of 
Ghazwan and Suhrab for encouraging allegedly illegal 
activities represent the first time in Post's knowledge that 
executive order 62 has been used as justification to take 
action against employees.) 
 
------------ 
Not a Strike 
------------ 
 
 
MANAMA 00000738  002 OF 004 
 
 
¶5.  (SBU) Meeting with EconFSN July 24, a senior official at 
the Ministry of Labor said that he had been meeting with 
company and union officials to defuse tension between the two 
and work through unresolved issues.  He noted that in reality 
union leaders had taken Executive Order 62 into consideration 
in their planning, not calling for a strike or temporary work 
stoppage but a gathering during the workers' authorized break 
period.  He claimed that public statements by company 
officials in the wake of the dismissals were misleading and 
that the firings of Ghazwan and Suhrab were not justified. 
He anticipated that the two would regain their jobs but 
admitted that the company had taken a very hard line and was 
resistant to changing the decision. 
 
¶6.  (U) After being dismissed, Ghazwan and Suhrab spoke to 
the press and claimed that the gathering had been organized 
in response to Batelco management's unresponsiveness to their 
demand for a pay increase, originally called for in November 
¶2006.  Company officials, however, maintain that salary 
surveys from Hay International and Ernst & Young showed that 
Batelco employees are in the top 25 percent of Bahraini wage 
earners.  The union's response to this claim was that 
executive pay had increased while general worker pay had not, 
skewing the consultant firms' figures.  Batelco's CEO refuted 
this claim at a union general assembly meeting, saying that 
the company's salaries are above the market average and 
annual increases are given to offset inflation and other 
market factors. 
 
---------------------- 
Al-Marai Dairy Company 
---------------------- 
 
¶7.  (U) More than 120 union members at the Al-Marai Dairy 
Company returned to work July 24 following a one-day strike 
for higher salaries and improved work conditions.  The 
Bahraini, Indian, and Sri Lankan workers claimed that the 
company had not implemented an agreement, which had satisfied 
the union's demands, for five months and had taken steps to 
weaken the union by firing union members.  According to union 
head Abdulnabi Abdulla Alheela, 40 of the striking employees 
receive only BD 100 ($265) per month despite a Ministry of 
Labor non-binding "suggestion" that private sector employers 
pay their workers at least BD 200 ($530).  (Note:  Bahraini 
law does not impose a minimum wage on private sector 
companies.)  Following an intervention by Ministry of Labor 
officials, who are conducting ongoing talks between the 
parties, the striking workers returned to their jobs. 
According to press reports, just prior to the strike the 
union received support from 25 expatriate non-union employees 
for the work stoppage, however, these workers did not 
participate in the strike because management reportedly 
threatened to fire them if they participated.  Al-Marai 
brought in expatriate workers who normally do various 
cleaning jobs for the company to work in place of striking 
workers on the day of the strike. 
 
--------------------------------------------- ----- 
Strikes in the Recent Past:  Olayan Kimberly Clark 
--------------------------------------------- ----- 
 
¶8.  (SBU) Over the last several months a number of strikes 
have occurred or been threatened, resulting in, from the 
perspective of the unions and the General Federation of 
Bahrain Trade Unions (GFBTU), benefits for workers.  Olayan 
Kimberly Clark's Bahraini employees warned management 
February 28 that they would strike to attempt to break a 
deadlock in pay negotiations.  The union of the 80 employee 
company sought a BD 350 ($928) annual bonus for 2006 and a 15 
percent pay increase for 2007.  On March 18th, a strike 
scheduled for the next day was averted when the union and 
company restarted negotiations.  On March 19th, Olayan 
Kimberly Clark satisfied the union's demands by agreeing to a 
BD 250 ($663) bonus for 2006, a 15 percent increase in wages 
for 2007, and a two percent wage increase in later years for 
all employees except for the lowest paid, who would receive a 
three percent increase.  In a subsequent email exchange with 
PolOff, an Olayan Kimberly Clark official said he was 
satisfied that the labor dispute was resolved, despite the 
resolution putting the company over budget.  He said this 
episode would likely affect the company's interest in 
expanding its operations in Bahrain. 
 
------------------------- 
Bahrain Petroleum Company 
------------------------- 
 
MANAMA 00000738  003 OF 004 
 
 
 
¶9.  (U) On October 26, 2006, Bapco management held a meeting 
with its trade union's leadership to discuss demands for a 25 
percent increase in base salaries, a doubling of travel 
allowances, an increase in the housing allowance, and an 
annual bonus equivalent to two months, salary instead of the 
current bonus of one month's salary.  The next day the union 
announced plans for a 30-minute protest because its members 
felt the negotiations had not been "fruitful" and that Bapco 
management had not been transparent with the union.  On 
October 31st the scheduled protest was called off after a 
meeting between the union's head and Bapco's president, at 
which time the president said that the company was 
considering salary increases and an annual bonus.  On 
November 13th, Bapco announced that 3,100 of its employees 
would receive pay increases of 14 to 19 percent, backdated to 
October 1st.  Bonuses, however, remained at one month's 
salary, but the minimum was raised from BD 300 ($795) to BD 
500 ($1,325).  Other demands were not addressed. 
 
---------------- 
Aluminum Bahrain 
---------------- 
 
¶10.  (U) On October 18, 2006, 1,750 Alba Union members 
participated in a one-hour strike to protest a recently 
instated 15 to 22 percent pay increase because it was below 
the 30 percent demanded.  Alba management responded by saying 
that the 15 to 22 percent increase was in accordance with the 
findings of a consultancy report that compared wages 
throughout Bahrain.  On October 19, 2006, management and the 
union agreed to a 20 to 22 percent wage increase effective 
immediately.  Again on February 7, 700 members of the union 
protested in support of a BD 1,000 ($2,650) bonus for all 
employees, which represented a BD 250 ($663) increase over 
the then maximum bonus of BD 750 ($1,988).  Management again 
sat down with union representatives and on March 5 jointly 
announced their agreement to a BD 750 bonus for all employees 
for 2006 and a minimum BD 1,000 bonus for 2007, pending 
ongoing discussions to determine the exact figure. 
 
--------------------------------------------- ------ 
Wildcat Strike:  Mohammed Jalal Contracting Company 
--------------------------------------------- ------ 
 
¶11. (SBU) In addition to the above cases of union-organized 
strikes in some of the most prominent of Bahraini companies, 
several companies, whose employees are primarily non-union 
expatriate workers, have experienced wildcat strikes by 
workers frustrated by low salaries or poor living conditions. 
 One such example:  On May 6th over 350 Indian, Bangladeshi, 
and Pakistani workers from Mohammed Jalal Contracting Company 
participated in a strike to demand salary increases and to 
have food allowances be considered within their base wages. 
(Note:  Bahraini law protects workers' base wages but not 
allowances that are separate from base wages.  Allowances 
considered part of base wages are protected.)  The workers' 
wages ranged from BD 45 ($120) to BD 55 ($146) per month and 
had not been increased in nearly ten years.  The strike, 
although technically illegal, lasted for three days, when the 
company agreed to increase the base salary from BD 45 to BD 
60 ($160) per month in addition to incorporating the BD 15 
($40) food allowance into the workers' base wage.  The 
workers returned to work on May 9th.  (Comment:  Even though 
employers have the force of law on their side in these 
illegal strikes, the prospect of hiring and training a large 
number of expat workers following a mass firing is sufficient 
disincentive to want to pacify workers rather than dismiss 
them.) 
 
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Comment 
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¶12.  (SBU) Union and non-union activity alike have been quite 
robust in the past several months.  Unions and the Federation 
(GFBTU) have become increasingly confident and savvy about 
what works and what does not work in order to reach their 
demands.  However, there has been a tendency on the part of 
unions to jump right to threats of a strike to wrench 
concessions from management, thereby making it more difficult 
to build trust between unions and their respective employers. 
 In light of successful outcomes resulting from recent union 
activity, Post anticipates continued news of strikes and 
other union and Federation actions. 
 
 
MANAMA 00000738  004 OF 004 
 
 
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