ABC assumes control of Bermine
Severance paid; pensions still unresolved
Stabroek News
September 8, 2002
As of today, Aroaima Bauxite Company (ABC) is running the Berbice Mining Enterprise (Bermine). But questions about the Bermine workers’ pension payments and thrift plans are still unresolved.
A letter signed by Bermine’s new chairman, Winston Brassington, says that a number of measures are being taken by the government with the objective of maximizing “the amount of funds to be made available for Bermine employees via pension, deferred pension, or payment as determined by the Trustee, GNCB Trust.”
The letter said the severance payments would have been made by yesterday, but that the “final calculations on the Bermine portion of the BIPP [Bauxite Industry Pension Plan] will not be completed until early next year.”
With reference to the Thrift Plan, which is managed by GNCB Trust, the letter said it was to have been wound up by today and “all outstanding contributions due by Bermine will be paid to the GNCB Trust....” A status report on the plan, the letter says, “will be available to the persons interested.”
Earlier this year the Bermine workers at Everton and Kwakwani accepted the government’s proposal to merge Bermine and ABC after Bermine ran into financial difficulties and had to close down its operations at Kwakwani. The government, as a result, had stepped in to provide those social services that were being provided by Bermine. As a result, in winding up the Bermine operations, government will be expending some $340 million to ensure the severance and training grant payments, funding the estimated $37 million pension deficit and making the outstanding contributions to medical costs NIS and PAYE and un-remitted pension deductions likely to amount to about $50 million.
The merger of Bermine and ABC will result in the employment of Bermine’s more than 500 workers being terminated. ABC will employ 150 of them under its pay and conditions of work. According to the letter “hiring has just started and persons in production are likely to receive letters from ABC before [today].”
Brassington’s letter says too that the 150 persons being employed “does not include the persons for social operations such as water, hospital and electricity” and that “various contractors may also rehire persons and ABC will encourage contractors to hire persons from the areas of operation.”
When the merger was first announced, the government had said that only 130 would be re-employed.
As a result of the decision by the workers, the unions representing them have taken a hands-off position, leaving the committee elected by the workers to negotiate with the government on the separation terms.
Secretary of the Guyana Bauxite Union, Lincoln Lewis, told Stabroek News that while his union has a legal responsibility to represent the interests of the workers, the workers had opted to represent themselves. As such, he said that the union had no option but to stand on the sidelines even though the collective labour agreement in force at Bermine was between the management and the union.
Another union official told Stabroek News that despite promises by President Bharrat Jagdeo the severance package was back to what was contained in the collective labour agreement.
Brassington’s letter confirms this, explaining that the committee comprised representatives of the Bermine employees, the government, ABC and Bermine’s parent company, BIDCO. It said too that 80 per cent of Bermine’s 460 workers “will see the total value of their severance and training grant being equivalent to four weeks for each year of service worked, or twice what their entitlements are, as per the Collective Labour Agreements.” The payments are tax-free and the government paid over to Bermine $212 million to facilitate the payments.
President Jagdeo had promised to improve the severance arrangements but instead announced a training grant and the promise of house lots either at Kwakwani or on the coast. However, the applications for house lots have to be processed by the Ministry of Housing.
According to the letter, only persons without will be allocated house lots when the officers of the Ministry of Housing visit the Everton and Kwakwani areas.
It said, too, that persons who own house lots in Kwakwani “may exchange them for lots outside the area subject to availability.”
The letter said that 356 persons (189 from Everton and 177 from Kwakwani) have applied to the Housing Ministry for house lots and “additionally certain persons may be eligible for reimbursement.”
It said, too, that the expected cost to the government to provide the house lots would be $40 million.
The Housing Ministry officers were to have visited Kwakwani yesterday and Thursday and to be at Everton today and tomorrow.
Prime Minister Sam Hinds who has portfolio responsibility for the bauxite industry told Stabroek News that the pensions issue was still to be discussed by the committee managing the pension funds, which includes representatives of Bermine management and workers. He said that the committee has heard a number of presentations from experts but a final position is yet to be arrived at.
Brassington’s letter said that last month actuaries from Bacon Woodrow DeSouza visited Everton and Kwak-wani and that the workers could obtain copies of their presentations on request. It said, too, that Bermine’s portion of the deficit stood at $37 million at the end of 1998 And that the government would be paying the outstanding contributions of $12 million due at the end of July within a week.
Prime Minister Hinds said that the decision about the pension plan has to take account of the impending privatization of Linden Mining Enterprise (Linmine), which could result in the pension scheme being discontinued. The folding of the scheme, he explained, would have implications for the decisions that would be made. As a condition of its proposed majority participation in Linmine, the Canadian mining company Cambior which operates Omai Gold Mines Ltd, wants to sever the more than 1,200 workers and reemploy just 400 of them.
The Prime Minister ex-plained that workers with under a certain amount of service would be refunded their contributions to the pension fund. Those above that threshold service mark, he said, are locked into the fund and separate arrangements have to be made for them. Those arrangements have to be worked out once the workers are informed about the options available to them, he said.
But Lewis says that the existing pensioners and those nearing retirement or early retirement are the ones who would be immediately affected. He said that there are provisions for some aspects of their pensions to be converted into annuities, but the process would not address the immediate needs of the pensioners.
Lewis says that unlike Bermine, the union was in negotiation with the Linmine management as the collective labour agreement provides, explaining that the procedure did not allow for the government at the bargaining table except through the instructions it would issue to Linmine managers.
With regard to the arrangements for providing economic opportunities for the displaced workers at Everton and Kwakwani, Brassington’s letter explains that a group of senior officers from the State Planning Secretariat, Ministry of Housing, Lands and Surveys NARI, the Forestry Commission, the Basic Needs Trust, the Public Works Ministry and Regional officials have prepared a “Socio-Economic Assessment of Kwakwani and is to now prepare an implementation plan. The plan the letter says will show the actions and timeframes to achieve many of the recommendations addressing areas such as forestry, agriculture, marketing credit, transportation across the river and down to New Amsterdam, housing, water, health and education.
“There is therefore the expectation that some level of economic diversification will occur and the quality of the social services in the community will be improved.”