VZCZCXYZ0001
RR RUEHWEB

DE RUEHBW #0433/01 1400745
ZNR UUUUU ZZH
R 200745Z MAY 09
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC 1303
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/USDOC WASHDC

UNCLAS BELGRADE 000433 
 
SIPDIS 
USDOC FOR 4232/ITA/MAC/EUR/OEERIS/SSAVICH 
 
E.O. 12958: N/A 
TAGS: ECON ELAB EFIN SR
SUBJECT: SERBIA: LABOR PROTESTS INCLUDE HUNGER STRIKES AND 
SELF-MUTILATION 
 
Reftel: (a) Belgrade 208, (b) 07 Belgrade 1514 
 
Summary 
------- 
 
¶1.  The desperate and radical acts of two workers' protests in 
Serbia drew considerable media attention in early May.  A group of 
workers from the privately-owned Partizan Leather Company in central 
Serbia went on an 18-day hunger strike demanding back wages.  The 
leader of the socially-owned Raska Textile Company in Southern 
Serbia cut off part of his finger and ate it in protest over the 
government's nonpayment of wages and benefits since 1993.  Serbia's 
two largest trade unions did not call for or participate in these 
strikes, but lent moral support to the workers.  The government, 
however, did not acquiesce to the radical protesters, but sent a 
message that it had neither the money nor the legal responsibility 
to pay the protesters back wages and benefits.  Instead, the 
government mediated a temporary solution for Partizan workers and 
promised to find a solution for Raska protestors at a later date. 
With the number of failed privatizations rising there is a threat of 
more radical protests, especially given the growing impact of the 
global economic crisis.  The government will soon need to find a way 
to balance addressing workers grievances with budgetary realities. 
End Summary. 
 
18-Day Hunger Strike 
-------------------- 
 
¶2.  On April 22, twelve workers of the Partizan Leather Company in 
the central Serbian city of Kragujevac began an 18-day hunger 
strike.  The workers demanded that the company pay social and 
pension contributions in arrears since 2004.  The Privatization 
Agency sold Partizan on the Belgrade Stock Exchange (BSE) in 2008 
after a failed privatization attempt.  Legally, the new owners of 
Partizan are not liable to pay past workers' wages and benefits or 
previously incurred company debt. 
 
"We Will Eat Our Body Parts" 
---------------------------- 
 
¶3.  On April 24, Zoran Bulatovic, a worker at the 1,100 person 
socially-owned Raska Textile Company in the southern Serbian city of 
Novi Pazar, cut off part of his pinky finger and ate it in protest 
of unpaid wages and benefits.  According to the media, Bulatovic 
said that since the workers "did not have anything to eat, they 
would eat parts of their own bodies."  The workers demanded that the 
government pay wages and social and pension benefits in arrears 
since 1993.  The protestors also asked that the ownership of Raska 
be transferred from the federal government to the city of Novi 
Pazar.  Bulatovic threatened that he and fellow protestors would cut 
off their hands and send them to the government if their demands 
were not met.  Labor and Social Policy Minister Rasim Ljajic urged 
protestors to stop cutting of their extremities and he promised to 
work with them to find a solution.  At an April 27 meeting in 
Belgrade, Bulatovic met with representatives from the Ministry of 
Labor and Social Policy, Ministry of Economy and Regional 
Development, Privatization Agency, and the Tax Administration. 
Bulatovic returned to join his fellow protestors who remain 
barricaded in the textile trade union office in Novi Pazar on a 
hunger strike, accepting only beverages and cigarettes. 
 
Trade Union's Reactions 
----------------------- 
 
¶4.  Branislav Canak, president of Serbia's second largest and 
independent trade union Nezavisnost, told us that the Raska and 
Partizan protests were not organized through trade unions (Ref A). 
Canak condemned the radical protests, but said trade unions should 
take responsibility for not doing enough for Raska and Partizan 
workers.  Canak conceded that the government had no legal obligation 
to help Partizan workers since the company was now private.  At the 
May 7 Social Economic Council meeting, Canak suggested that trade 
unions publicly accept blame for the radicalization of the protests. 
 According to Canak, Serbia's largest trade union, the 
state-affiliated Confederation of Autonomous Trade Unions of Serbia 
(CATUS), refused to take the blame. 
 
¶5. Head of the International Department for CATUS, Ivan Pavicevic, 
told us on May 15 that CATUS supported the protesting Partizan 
workers, but did not support Raska workers as CATUS "could not 
support every ongoing protest in Serbia."  However, Pavicevic blamed 
the government for the lack of a "real social dialogue" with workers 
which lead to the radical protests that were not under trade unions' 
control. 
 
The Government's Reaction 
------------------------- 
 
¶6.  On May 7, Deputy Prime Minister and Economy Minister Mladjan 
Dinkic said the government would not pay any past debt owed to 
 
workers no matter how radical protests became, as there were no 
funds or legal framework to do so.  Any exception to this decision 
would open the flood gates with requests from other companies. 
Minister Ljajic, however, quickly stepped in to mediate talks 
between Partizan and workers' representatives.  The parties reached 
an agreement on May 9 in which Partizan would pay unpaid benefits 
and severance.  Protestors ended their hunger strike on the same 
day.  A Nezavisnost representative in Kragujevac told us the 
government quietly promised to compensate Partizan for the payment 
to workers with a favorable commercial loan, as it was the only way 
to resolve the conflict. 
 
¶7.  President of the European Movement branch in Novi Pazar Bisera 
Seceragic has been visiting Raska protestors daily.  Seceragic told 
us on May 12 that negotiations between the government and Raska were 
ongoing, but that Bulatovic vowed to "cut the other four fingers of 
his left hand if their requests were not fulfilled."  During a May 
14 government session, the government set a deadline of May 22 to 
come up with a plan for Raska workers. 
 
Also Making the News 
-------------------- 
 
¶8.  Two days of protest by employees of a recently-privatized state 
department store in front of the Government Building brought 
Belgrade traffic to almost a halt.  Workers of Robne Kuce Beograd 
department stores blocked traffic on May 13 and 14, demanding 
additional severance pay from government (Ref B).  The government 
replied in writing saying that there was no legal ground justifying 
an increased severance payment.  Dragan Skakovski, a protestor, told 
us on May 15 that the workers would consult with lawyers as their 
next step, but would most likely not protest in the future since 
they received the government's decision.  On May 14, trade unions 
from the state railway company announced they would strike on May 25 
for additional money from the government for daily operations, 
severance payment, and modernization of the company. 
 
More Protests to Come Soon 
-------------------------- 
 
¶9.  In a May 5 press interview, the Privatization Agency's Executive 
Director Zora Ilic said the Agency had cancelled 25 privatization 
contracts in the first quarter of 2009, compared to 66 for the whole 
of 2008.  The 25 companies would likely be sold on the BSE like 
Partizan and may suffer similar back salary disputes.  Ilic said the 
Agency was under pressure as a result of the current protests.  He 
feared more radical protests would occur due to the failed 
privatizations and the economic crisis.  Buyers were requesting more 
flexible purchase terms because of the crisis and their subsequent 
liquidity problems.  Minister Dinkic said Privatization Agency 
Director Vesna Dzinic resigned on May 13 due to the pressure the 
protests have put on her Agency. 
 
Comment 
------- 
 
¶10.  With roots that date back to the Milosevic era, the issue of 
unpaid wages and benefits is not a new one and will not be resolved 
in the short-term as the government does not have money to pay its 
debts to wokers.  The financial crisis only exacerbates this 
situation for both the government and workers.  The increasingly 
radical nature of protests has prompted the government to take on 
the difficult task of finding ways to appease workers without 
actually paying them.  In the case of socially-owned companies like 
Raska, there is still the opportunity to sell off the company and/or 
its land to pay workers.  However, with now privately-held companies 
like Partizan, where the government sold the company without 
settling significant outstanding debts, there may be little recourse 
for workers.  With divided and weak trade unions of little help, 
radical protests may be the only way disaffected workers' voices 
reach the government.  End Comment. 
 
 
MUNTER