More layoffs for Berbice bauxite
-Hinds offers profit sharing deal
Stabroek News
January 1, 2004
The state-owned Berbice bauxite industry is to be further downsized.
Prime Minister Sam Hinds in a letter yesterday alerted union leaders and bauxite workers at the Aroaima Bauxite Company (ABC) to the impending changes which will see the closure of mining operations at Aroaima.
However, the government says it is willing to share with employees a significant portion of any cash achievements above the operational break-even budget for 2004.
The present downsizing comes within three years of the Alcoa/Reynolds withdrawal from the joint venture operations with the government, which resulted in several hundred workers being laid off as the company was given responsibility for the Bermine operations at Everton and Kwakwani.
It also comes in the wake of a two-week long strike early last month, which cost the company an estimated US$500,000. The ABC management's refusal to honour a 5 per cent pay increase for 2003 and a 6 per cent increase this year and its insistence on discussing the restructuring proposals, had sparked the labour withdrawal.
Stabroek News was unable to reach the offices of the Guyana Bauxite and General Workers Union, which represents the ABC workers for a comment. However, Leader of the Opposition, Robert Corbin expressed surprise that such a move was being taken and said he had not been informed despite the government's touted commitment to consultation. Corbin met with President Bharrat Jagdeo yesterday after the members of the Public Service Commission were sworn in.
Mining operations at Aroaima on the western back of the Berbice River are to be shifted to Kwakwani and the houses at Mapletown are to be offered to their occupants at a "very nominal sum" and 'some sort of community management committee is to be put in place by mid-2004," says Hinds' letter. The drying and loading activities will continue at Aroaima as the company's lack of funding at this time and its sales commitment make it impossible to relocate these activities further down river that would have allowed the bauxite ore to be trucked and loaded directly onto the JP Knight barges.
As a result of the intended downsizing and operational changes, which he said should have been taken three to six months ago, the Prime Minister indicated to the workers and their unions that all employee benefits "to this time will be met; in particular severance pay in accordance with the Collective Labour Agreement (CLA) and the Termination of Employment and Severance Pay Act, whichever is more advantageous to those whose employment could not be continued at this time."
He reiterated the government's preparedness to accommodate the option of `voluntary' severance.
He added that he had been assured that "the identification of others who are to go and those who are to stay is being done in accordance with the provisions of the CLA."
In a letter to the board of ABC, located on the Berbice River, the Prime Minister indicated that the company had depleted the positive cash balance it had inherited with the withdrawal of Alcoa/Reynolds and the consequent debt obligation to "below a safe level". He indicated that the rate of depletion was of the order of US$2M a year.
Earlier this year, Morris Stuart, who retired at the end of September as general manager at Aroaima, told Stabroek News that the company was nearing a cash neutral position.
As a result of the depletion, the Prime Minister pointed out that "further economies are essential" and the company would have to be "relieved of all the historical social and community responsibilities which it still carries" in order to achieve "the lowest costs of products at the point of shipping to survive." These particular responsibilities were not identified in the correspondence.
He also said, "The operations must be manned very tightly with every employee working continuously throughout the shift at things directly essential to production."
According to the Prime Minister, with the mining operations shifted to Kwakwani, where it is likely to be for the next three years, the workforce will be resident in the area rather than in some distant place and the road and bridge in place between the mines and the Kwakwani township with Mapletown by mid-2004 "will facilitate the trucking of ore directly to the drier, thereby eliminating a number of re-handling stages" as well as link the two communities.
It will also mean that the secondary school students from Mapletown and Hururu will have to attend the Kwakwani Secondary School which is being rehabilitated at a cost of $60 million.
The restructuring of the company will also cause dislocation at Everton which will become a trans-shipment and storage point for dried ore. The Prime Minister said, "New gainful utilisation (with the accompanying opportunities for employment) of the buildings and other facilities that will be freed up will be sought."
"Let me acknowledge in closing that these necessary changes would be disturbing and unsettling to those who will continue to work for and to those whose employment would be severed. At the level of the Government we will continue to work for and to facilitate and encourage opportunities for employment and self-employment for all."
He cautioned those whose services are to be retained that "sustaining the company would be even more demanding - your interest and alertness, flexibility on the job and harmonious relations between all employees will be essential for success.
As sole shareholder for the time being, the Government is willing to share with employees a significant portion, say 20 per cent, of any cash achievements above the operational break-even budget for 2004."