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UNCLAS SECTION 01 OF 02 LONDON 000305 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ELAB ETRD EINV UK
SUBJECT: Wildcat Strikes Hit UK Energy Plants In Response To Foreign 
Workers Dispute 
 
LONDON 00000305  001.2 OF 002 
 
 
¶1.  (SBU) Summary: Workers at the UK's third largest oil refinery 
went on strike January 28 in protest at the use of foreign labor for 
a new construction project.  A wave of wildcat strikes across the UK 
followed, with workers demonstrating support for those at French oil 
company Total's refinery in Lindsey, in northeast UK.  Media reports 
indicate the dispute could become a diplomatic incident, with the 
Italian government threatening the employment of British workers 
there. Business Secretary Lord Mandelson defended EU labor laws 
during an emergency session at the House of Lords February 2 and 
said Total had given assurances that it did not discriminate against 
British workers.  Mandelson said the dispute was fuelled by the 
"politics of xenophobia."  PM Gordon Brown publicly called the 
strikes indefensible and counter-productive - a sharp contrast to 
his 2007 Labour party conference statement calling for "British jobs 
for British workers" (which has become the unofficial slogan of the 
strikes), a statement which the opposition Conservative party 
attacked as "irresponsible."   A trade union official told the 
embassy that Total's lack of transparency fuelled concern and 
suspicion amongst workers and that Mandelson's comments were 
unhelpful.  End summary. 
 
Foreign Labor Strikes Spread Across UK 
------------------ -------------------- 
 
¶2.  (U) Workers at the Lindsey oil refinery in North Lincolnshire, 
the UK's third largest, walked off the job on January 28 in protest 
at the use of foreign labor at the site.  This strike began 
following a dispute about Total's decision to award Italian company 
IREM part of a GBP 200 million contract to build a new hydro 
desulphurization facility at the Lindsey refinery.  (Note: The main 
contract for the hydro desulphurization unit was awarded to Jacobs, 
a U.S. company, which sub-contracted some work to IREM.  End note.) 
Five British companies and two other European contractors bid for 
the work before it was awarded to IREM, which at the time of the 
tender indicated it would supply its own permanent workforce from 
Italy and Portugal. 
 
¶3.  (U) Workers and their union representatives accused Total of 
discriminating against British workers.  Total rejected the 
accusation saying: "IREM was selected, through a fair and 
competitive tender process, as the most appropriate company to 
complete the work."  Officials from Unite, the UK's largest union, 
said workers were angry that labor was used from outside the UK when 
British workers near the refinery were out of work.  They dismissed 
Total's claim that the foreign labor was in specialist trades and 
said most of the work could be done by UK workers. 
 
¶4.  (U) Since January 28, workers at energy plants across the UK 
have shown support for the action in Lindsey through a series of 
wildcat strikes.  Workers at Ineos Group Holdings' Grangemouth 
refinery in Scotland, BP's terminal at Kinneil in Scotland, and RWE 
AG's Didcot power facility in southern England joined a wave of 
strikes across the country.  Most recently, workers at two nuclear 
sites, Sellafield and Heysham, joined the strike action. 
Approximately 900 contractors in Sellafield and 300 in Heysham 
agreed to walk out for 24 hours in sympathy with the Lindsey 
protest. 
 
Economic, Political Consequences 
---------------- ---------------- 
 
¶5. (U) Despite the walk outs, the UK Department of Energy issued a 
statement that it was unaware of any current or potential impacts of 
the strikes on gas, electric or fuel supplies.  Lord Mandelson 
confirmed there was no disruption of production at any of the sites. 
 The Department for Business asked ACAS, the UK's independent 
arbitration service, to meet the employers and unions to examine the 
accusations and mediate the dispute.  Workers have so far rejected a 
February 3 deal proposed in ACAS talks that would have given 25 
percent of the new jobs to British workers.  Negotiations will 
continue. 
 
¶6.  (U) Some media commentators note the dispute threatens to 
escalate into a major diplomatic incident.  The Italian government 
has described the strikes as "indefensible" and the Governor of 
Sicily warned that the employment of Britons on the Italian island 
may be threatened.  The British Ambassador in Rome was reportedly 
sent to reassure the Italian government that Italians would not face 
discrimination in the UK. 
 
Mandelson Warns Against "Politics of Xenophobia" 
---------------- -------------- ----------------- 
 
¶7.  (U) Business Secretary Lord Mandelson defended EU labor laws in 
a statement to the House of Lords, February 2.  He said HMG is 
 
LONDON 00000305  002.2 OF 002 
 
 
determined to uphold European rules governing the operation of 
companies and mobility of labor throughout the EU.  In the 
statement, he said Total had given assurances that it had not 
discriminated against British workers.  He highlighted the 
importance of Europe to the UK, particularly with regards to trade 
and investment, and noted that there are 300,000 UK companies 
operating elsewhere in Europe.  Separately, Mandelson claimed the 
dispute was fuelled by "the politics of xenophobia."  He said 
protectionism would be a "sure-fire way of turning recession into 
depression."  Gordon Brown said the strikes were indefensible and 
counter-productive.  However, the dispute has caused a split in the 
Labour party.  Two former Cabinet ministers, Peter Hain and Iain 
McCartney, led a chorus of Labour MPs who said HMG urgently needed 
to recognize there was a problem.  Peter Hain said something had 
gone "badly wrong" with the UK's labor laws, which did not seem to 
have "adequately protected local workers." 
 
Reaction: Tories and Unions 
--------------------------- 
 
¶8.  (U) Gordon Brown's "irresponsible" comments at the 2007 Labour 
party conference calling for "British jobs for British workers" 
stoked the wildcat strikes, argued Shadow Business Secretary Kenneth 
Clarke.  (Note: Placards held by striking workers displayed the PM's 
statement.  End note.)  Clarke said understandable worries over the 
UK's economic climate have turned into direct action as a result of 
the PM's statement.  He said: "This was populist nonsense at the 
time he used it and part of some curious 'Britishness' agenda... 
(he)was more concerned with his job security than anybody else's job 
security in this country."  He said however aggrieved people felt, 
industrial action at power stations and oil refineries at a time of 
"national crisis" was not the way forward. 
 
¶9.  (SBU) A lack of transparency around the IREM contract fuelled 
concern amongst workers, according to the Trades Union Congress' 
International Affairs Director Owen Tudor.  Tudor told the embassy 
that Total's initial reluctance to confirm how many Italian, 
Portuguese and British workers would be employed under the new 
contract proved unhelpful and increased suspicion.  He said Lord 
Mandelson's xenophobia comments were equally unhelpful and could 
stir up further disagreement.  He noted, however, that when members 
of the BNP, a far right-wing British political party, turned up at 
the Lindsey demonstration, they were turned away by workers.  While 
the TUC is not sure how long the dispute will last, officials noted 
that IREM's work is set for completion in April, so action is 
unlikely to continue beyond then.  He commented that the strikes in 
Sellafield are "mildly ironic" as work in nuclear stations requires 
security clearance and the workforce will therefore be 100 percent 
British. 
 
¶10.  (SBU) Comment: Growing concern about the length and depth of 
the UK recession has heightened tension in this foreign labor 
dispute.  Rising unemployment coupled with slowing output has 
sparked concern about the impact of EU labor laws on British 
workers.  The TUC, which has monitored the effect of the European 
Commission directive on the right to move and reside freely since 
2004, had only seen sporadic outbreaks of concern regarding foreign 
workers until the Lindsey case.  As the recession deepens, 
industrial action may become more widespread. 
 
TUTTLE