Apr 24, 2018 News
After a week of deep worry for bauxite workers in Upper Berbice, Region 10, over their jobs, there may be some respite. Yesterday, the US government announced an ease of sanctions on Rusal. The company has more than 500 workers in Aroaima and Kurubuka, two mines in the Upper Berbice River, Region 10.
In Guyana, Rusal’s operating company is the Bauxite Company of Guyana Inc. (BCGI).
The U.S. Treasury, according to news report from Bloomberg, threw a potential lifeline by making clear it’s not pushing for the company’s (Rusal’s) collapse.
“The U.S. government is not targeting the hardworking people who depend on Rusal and its subsidiaries,” Treasury Secretary Steven Mnuchin said.
The Treasury Department softened its position in three ways. Mnuchin said it was considering a request to lift the sanctions against the company, it extended the period during which companies could keep trading with Rusal by almost five months, and it clarified exactly what dealings were permissible during that time.
The speed of the reaction showed how far the sanctions had roughed up the aluminum market. The biggest supplier of the metal outside China, Rusal found itself shut out of international markets and the impact had started to cascade through the entire industry: traders stopped buying Rusal’s metal, ship owners refused to carry its products and miners couldn’t supply its plants with raw materials, the Bloomberg report said.
It’s not clear whether the Treasury’s moves yesterday will automatically allow international companies to resume their deals with Rusal. Mining majors Rio Tinto Plcand Glencore Plc have already declared force majeure on some contracts, while many traders, banks and shipping companies have frozen all dealings with the Russian company.
“Things have ground to a halt in terms of Rusal’s dealings with major western companies,” said Maximilian Hess, a senior political risk analyst at AKE International. “This extension going out until October will allow some of the supply contracts to be completed.”
Nonetheless, while the Treasury’s moves may give some respite to Rusal, traders are likely to remain cautious. The license allowing companies to continue transactions applies only to existing contracts, not new ones, and it’s not clear whether companies that have already wound down dealings with Rusal are allowed to restart.
In the longer term, the U.S. put the resolution of the sanctions in Moscow’s hands, saying it would drop the curbs on Rusal if billionaire owner Oleg Deripaska were to sell his stake and relinquish control.
In Guyana, the unions have been meeting with stakeholders, including with Government.
According to the Guyana Bauxite and General Workers Union (GB&GWU), unions and the Ministry of Natural Resources met yesterday over Rusal sanctions and the impending closure of the German-owned Oldendorff Carriers.
The shipper has announced a June 5th pullout unless the US reverses the sanctions against Rusal.
The GB&GWU said it met yesterday with Minister of Natural Resources, Raphael Trotman, Minister within the Ministry, Simona Broomes and their team to discuss issues, including the news of Oldendorff Carriers’ (the shipping company) closure.
The meeting was also attended by the People’s United and General Workers Union (PU&GWU) which represents the workers at Oldendorff.
The Government of Guyana has 10 percent share in BCGI.
“The union proposed the establishment of an advisory team of competent skills, unique to bauxite, to meet and deliberate on a way forward and urged Government to maintain working relationships with the unions whose members (i.e. the workers) will be affected by the decisions impacting Rusal/BCGI and Oldendorff.”
GB&GWU said it warned Government to avoid the Jamaica experience where Rusal shuttered its operation, yet at the same time held on to the country’s strategic bauxite reserves.
“That decision adversely impacted on the workers (who were laid off), the economy and government’s ability to utilise the resource.”
Meanwhile, the PU&GWU said it will submit to the Ministry before the week is out, a proposed payment package for Oldendorff Carriers’ workers, who are likely to lose their jobs as a result.
“The Ministry explained that Oldendorff had related that it would be closing its operations by June 5 if no major change had occurred in relation to the US sanctions. The Ministry informed that Oldendorff has also declared their intention to pay the workers their severances.”
The union, however, said in such likelihood, that since acquiring legal status to represent Oldendorff workers in November 2015, the company has failed to commit to a wages and salary agreement, and has continued to impose same on workers.
Oldendorff has its base in the Berbice River.
“We informed the ministry that Oldendorff had also taken two years before they recognized the union as the workers’ representative. The union had sought the support of the last administration and the current, to hold Oldendorff responsible but did not receive it. Our agreement spoke to possible closure of the business where they would have been required to open an account to place workers’ payments before they left. The agreement also involved the company not being able to move any of its assets until workers were paid off.”
However, PU&GWU complained, without this collective agreement, workers stand to get very little despite their years of service to a company that has been operating in Guyana for some 13 years.
“The severance pay…legal requirements point to minimal benefits which the union believes is unacceptable for the workers who faced many challenges under this company. The PU&GWU will propose the package and the ministry has promised its support, with the engagement of all parties.”
The Ministry of Natural Resources also informed the union that there are interested parties who are willing to replace Oldendorff.
“The union has opted to provide the ministry with information regarding the Oldendorff workers as we advocate for them receiving first preference amongst these new companies.”
The Treasury Department has accused Deripaska of involvement in money laundering, extortion, and, on at least one occasion, murder. Trump campaign manager Paul Manafort reportedly offered the oligarch private briefings on the 2016 presidential race shortly after Donald Trump secured the Republican nomination.
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