Feb 21, 2019 News
In 2004, United Company (UC) Rusal, now the world’s second largest aluminum company by primary production output, obtained a licence to develop bauxite mining in the Upper Berbice area, Region 10.The investment would have come at a time when Guyana badly wanted resources to be plugged to an industry that was all but dead.
The Bauxite Company of Guyana Inc. (BCGI) was established, with Rusal owning 90 percent and the people of Guyana the rest. Some 14 years later, the company says it has 540 locals working with a handful of ex-pats. That, in and of itself, would have been a good thing, except that several things are wrong with the picture.
For those 14 years, it is being reported that Guyana received little or no dividends for its 10 percent shares. It has been consistently declaring no profits. The company has been granted hundreds of millions of dollars in tax concessions during that time.
It begs the question whether enough attention was being paid or there were vested interests protecting the company.
There appears to be little lull in the operations of digging up the bauxite, which is loaded into huge vessels in the Berbice River and taken to Rusal’s factories to produce aluminum, used to make foils, kitchen utensils and window frames and airplane frames.
In fact, when the US slapped sanctions last year on the company after its principal, Oleg Deripaska, was accused of meddling with elections in that North American country, BCGI was busy in Guyana, stockpiling the material.
Today, the declaration of BCGI and its relations to Rusal are under the spotlight.
The company is under fire for terminating the employment of 61 employees over the weekend, following strike action rejecting an arbitrary one percent raise.
Rusal warned the employees to return to work last week, giving them hours. However, the miners, mechanics and equipment operators refused, and within hours were ordered to leave the Berbice operations. Many of the workers were living on site.
BCGI’s management next ordered its kitchen staffers to stop cooking. The workers started cooking for themselves and stayed put. On Monday, 61 of them had their services terminated.
The Department of Labour is attempting to mediate the matter now, but Rusal refused to meet on Monday with the Guyana Bauxite and General Workers’ Union (GB&GWU), the recognized bargaining body. Rather, the company had to be summoned, turning up on Tuesday in the company of Mohamed Akeel, a former Chief Labour Officer. They met the government officials.
The strike action and termination of staffers come almost a decade after the same company fired 57 workers for similar actions. That matter has never been resolved.
According to General Secretary of the union, Lincoln Lewis, from his investigations, the company has been ‘getting away with murder’ and not treated like normal companies in Guyana.
Rather, over the years, BCGI has not declared dividends and on some occasions did not even file tax returns, in keeping with the laws of Guyana.
Lewis believes that the company deliberately hides its profits, practising what is known as transfer pricing. This is when sister companies sell to each other, but uses accounting systems, which mask the lower costs of doing business. Lewis said that the company is selling to its own plants.
Consecutive governments failed to properly monitor the situation and there are reasons for this.
According to the union leader, what both governments have not done is have on board people who, over the years, understand the industry,
Recently, there appeared to be attempts to change the situation, with the appointment of Lance Carberry as a director of BCGI’s Board of Directors.
“What we have not been doing is monitoring…dealing with Rusal as a company like every other company and every other business,” Lewis asserted.
Asked why he believes the BCGI appears not to be taken seriously by Government despite workers’ rights being under threat, Lewis said that there is some thinking that politicians buy in to the notion that the private sector has been the engine of growth, and that they should not be questioned.
Responding to questions as to what happens if the company decides to shut its doors, the union leader warned that the freedom that was fought for by foreparents should be honoured and not easily sacrificed. He said that if the slaves did not fight slavery, their children would have been slaves. The same holds for indentured immigrants.
BCGI’s representative, Vladimir Permyakov, and Akeel both insisted Tuesday that workers have benefitted from Rusal, citing examples such as annual leave, bonuses, social packages, as well as subsidized electricity and cooking gas.
Permyakov dismissed Lewis’ contentions of the transfer pricing, insisting the books of BCGI are clean.
The official said that BCGI’s arrangement is a joint venture, with Rusal owning many aluminum plants, including in Ireland and Ukraine.
According to the official, it is a fact that Guyana’s bauxite costs more to produce than elsewhere. In fact, he claims, Guyana is producing at almost US$8 more than other companies in the region.
The Rusal official also said that there are other spin-offs to consider, including the dredging of parts of the Berbice River and the hiring of Oldendorff Carriers, a German company that transports the bauxite for BCGI.
Workers holed up in Region 10 operations have been cooking for themselves. A number of them blocked the Kwakwani roadway on Tuesday, with the police becoming involved.
A Russian delegation is expected to fly in to talk to Government, with a possibility of diffuse the situation.
BCGI and Rusal came under fire this week with the unions slamming the companies for terminating workers for exercising their rights to strike.
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