VZCZCXYZ0001
PP RUEHWEB

DE RUEHNJ #0413/01 2671601
ZNR UUUUU ZZH
P 241601Z SEP 09
FM AMEMBASSY NDJAMENA
TO RUEHC/SECSTATE WASHDC PRIORITY 7259
INFO RUEHZO/AFRICAN UNION COLLECTIVE
RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNFUR/DARFUR COLLECTIVE
RHMFISS/HQ USAFRICOM STUTTGART GE
RHEHNSC/NSC WASHDC

UNCLAS NDJAMENA 000413 
 
SIPDIS 
SENSITIVE 
 
STATE FOR AF/C AND S/USSES 
LONDON FOR POL - LORD 
PARIS FOR POL - KANEDA 
ADDIS ABABA FOR AU 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD EPET PREL PREF CD
SUBJECT:   GOC STILL COLLECTING INCREASED WORK PERMIT FEES FOR 
FOREIGNERS 
 
REFTEL: NDJAMENA 338 
 
------- 
SUMMARY 
------- 
¶1.  (SBU) The Chadian Presidency's August decision to suspend 
implementation of a plan to demand large increases in expatriate 
work permit fees, following interventions by Esso and the USG, 
appears to have given some breathing room to some foreign workers 
and to firms who wish to employ them (including the oil consortium 
and its subcontractors, and also the USG).  Unfortunately, several 
local and foreign-owned businesses have been paying the higher fees 
(equivalent on one-month's salary) originally levied earlier this 
year by the GoC, despite assertions by the GOC's employment office 
that the August moratorium on increased fees applies to all 
companies.  In general terms, the work permit situation here does 
not speak well for the GOC or the business environment in Chad.  END 
SUMMARY. 
 
-------------------- 
ESSO'S MORATORIUM... 
-------------------- 
 
¶2.  (SBU) Following July and August 2009 interventions by Ambassador 
Nigro and Esso Director Stephane de Mahieu (reftel), the Chadian 
Presidency agreed to put on hold the implementation of two spring 
decrees governing foreign workers in Chad.  Esso and the USG 
objected on financial grounds to a GOC decree that raised the work 
permit fee for foreign workers from 250,000 CFA (500 USD) to the 
equivalent of one month of the employee's salary.  Esso objected on 
capacity grounds to a second degree requiring companies to transfer 
foreigner-encumbered positions to Chadians. 
 
¶3.  (SBU) We and ESSO believed at the time the government agreed to 
review the work permit fee increase that the moratorium would remain 
in effect only until the end of 2009.  But  Abdelkerim Batil, 
Director of the National Office for Employment Promotion (ONAPE), 
recently confirmed that implementation of the increased fee plan 
would not take place before an unspecified time in 20102010, and 
that all companies employing foreign workers would be exempt until 
then. 
 
--------------------------------- 
IS NOT ENJOYED BY OTHER COMPANIES 
---------------------------------- 
 
¶4.  (SBU) In the past several days, Embassy has learned that in 
practice, the GOC has been giving a pass only to Esso, its 
subcontractors, and certain other select companies.  (Embassy 
N'Djamena and other diplomatic missions have not been charged fees 
for our third-country nationals and would object strenuously on a 
variety of grounds if we were.)  An informal Embassy survey of both 
local and foreign businesses in Chad employing foreign workers 
reveals that many companies are already being assessed -- and paying 
-- the equivalent of one month's salary for foreign employees' work 
permits.  International hotels Novotel and Kempinski, Commercial 
Bank and ECObank, Ethiopian airlines, and the parastatal Chadian 
Sugar Company have all told us that they have paid one-month-salary 
fees for expatriates' work permits.  These companies were not made 
aware that the moratorium supposedly applied to all firms.  They 
assert that Esso has been the recipient of preferential government 
treatment. 
 
¶5.  (SBU) Esso director Stephane de Mahieu told Embassy staff 
September 18 that other companies should protest and refuse to pay 
the increased permits fees as Esso had done.  If companies 
capitulated, he noted, Esso's position would be harder to maintain. 
De Mahieu said he hoped that Esso's MOU with the government would 
ultimately protect the company from permit fees matter even if 
levying the fees became generalized. 
 
------- 
COMMENT 
------- 
 
¶6.  (SBU) Emerging facts in the work permit situation do not speak 
well for the GOC or the business environment in Chad.  From Esso's 
perspective, an increase in expatriate work permit fees to 
one-month's salary could lead to a shuttering of operations, as the 
company will not be able to afford expatriate technical staff 
required to run its oilfields.  Still, as oil accounts for 75 
percent of the GOC's revenue, the GoC is unlikely to take action 
 
that would lead to Esso's shutting down.  In a country fraught with 
corruption, the unequal application of regulations or even the 
appearance of preferential treatment is troubling as well.  We will 
continue to reach out to businesses and diplomatic counterparts to 
further assess the situation, and will of course resist being 
assessed fees for our own third-country nationals. 
 
¶7.  (U)  Minimize considered. 
 
 
SBREMNER