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### Viewing cable 06BOGOTA5384, IMPASSE ON DRUMMOND COAL STRIKE

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06BOGOTA5384 | 2006-06-14 15:03 | 2011-03-16 12:12 | CONFIDENTIAL | Embassy Bogota
Appears in these articles: http://www.elespectador.com/wikileaks

`

    VZCZCXYZ0023
    PP RUEHWEB

    DE RUEHBO #5384/01 1651555
    ZNY CCCCC ZZH
    P 141555Z JUN 06
    FM AMEMBASSY BOGOTA
    TO RUEHC/SECSTATE WASHDC PRIORITY 6012
    INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

` `

    C O N F I D E N T I A L BOGOTA 005384

    SIPDIS

    SIPDIS

    E.O. 12958: DECL: 06/13/2016
    TAGS: ELAB EMIN EINV CO
    SUBJECT: IMPASSE ON DRUMMOND COAL STRIKE

    REF: A. BOGOTA 4686
         ¶B. BOGOTA 4971
    ¶C. BOGOTA 5067
         ¶D. BOGOTA 5175

    Classified By: CDA MILTON DRUCKER FOR REASONS 1 (B) AND (D)

     ¶1. (C) Summary: Drummond has suspended talks with its coal
    workers, citing a lack of good faith negotiating on the part
    of union leaders.  While both sides remain far apart on
    compensation issues (salary and benefits), negotiations
    appear to be stalled over a "just cause" provision,
    protecting workers from termination without cause.  Such a
    provision was granted as a concession in the recent
    settlement of the Glencore strike (Ref D), but appears to be
    a non-starter for Drummond.  The company considers the
    situation at an impasse and is requesting immediate
    arbitration from the GOC.  End Summary.

    ---------------
    Talks Suspended
    ---------------

    ¶2. (C) On June 12, Charge met with Drummond Coal President
    Michael Tracy and Drummond Colombia President Augusto Jiminez
    to discuss the ongoing coal strike against the U.S. company
    (Ref A).  According to Tracy, Drummond has done all it can to
    get a "fair" contract with the union, but he expressed
    frustration at the union's "unwillingness" to negotiate in
    good faith.  As a result, Tracy announced Drummond had
    suspended negotiations and would be seeking binding
    arbitration from the GOC.  Under Colombian law, a strike
    lasting over 60 days automatically goes to government
    mediated binding arbitration.  Under certain circumstances,
    the Minister of Social Protection with the concurrence of the
    Colombian Supreme Court, can call for arbitration earlier
    than 60 days.  Union leaders have told Laboff they do not
    want arbitration, and it is unclear if the GOC will agree to
    the Drummond request.  Supporting Drummond, the embassy will
    ask the Minister of Social protection to accept Drummond's
    request.

    -----------------------
    The "Just Cause" Clause
    -----------------------

    ¶3. (C) According to Francisco Ramirez, Secretary General of
    the industry federation representing the miners' union, labor
    stability is one of the key issues impeding progress toward
    resolution of the strike.  The recent Glencore settlement
    included a provision restricting termination without cause, a
    common practice in coal operations.  The unions are demanding
    a similar clause in their contract with Drummond.  When
    Laboff raised the "just cause" issue in the meeting with
    Tracy, he said a coal mine could not operate without the
    flexibility to adjust its workforce, and Drummond has only
    fired 27 workers (in a workforce of over 2500) "without
    cause" over the past two years.

    ---------------------
    Salaries and Benefits
    ---------------------

    ¶4. (C) Drummond claimed it is making "more than generous"
    salary concessions.  Drummond further insists the union
    leadership is out of sink with its workers who want to accept
    the pay increases and return to work.  According to Tracy,
    Drummond is offering a 12.2 percent increase in salary and
    benefits over an employment package already considered to be
    the best available for coal miners in Colombia.  The union is
    seeking additional increases in salary and benefits,
    representing a 28 percent increase in the total compensation
    package.  According to Drummond, the union's request includes
    a significant increase in the housing allowance, three
    union-controlled medical clinics and a no cost cafeteria for
    residents who do not work for Drummond but live in the mining
    community.  Drummond insists the union demands escalate
    everytime a settlement appears within reach.

    -------
    Comment
    -------

    ¶5. (C) Drummond is frustrated over the lack of progress
    toward ending the work stoppage.  The difference between the
    parties on issues related to salary and benefits do not seem
    insurmountable.  The question of a termination without cause
    provision, however, appears to be more complicated.  The
    union's position appears to be strengthened by the Glencore
    settlement.  Drummond's push for binding arbitration could
    result in a settlement that maintains the company's current
    termination practices.  The union believes arbitration
    generally favors the employer in Colombia, and will try and
    keep the dispute out of arbitration as long as possible.  End
    Comment.
    DRUCKER

    =======================CABLE ENDS============================

`