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### Viewing cable 06QUITO579, STATE OF EMERGENCY DECLARED FOR OIL WORKER STRIKE

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06QUITO579 | 2006-03-09 22:21 | 2011-05-02 00:00 | UNCLASSIFIED | Embassy Quito

`

    VZCZCXYZ0030
    OO RUEHWEB

    DE RUEHQT #0579/01 0682221
    ZNR UUUUU ZZH
    O 092221Z MAR 06
    FM AMEMBASSY QUITO
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 3828
    INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 5429
    RUEHCV/AMEMBASSY CARACAS PRIORITY 1626
    RUEHLP/AMEMBASSY LA PAZ MAR 9713
    RUEHPE/AMEMBASSY LIMA PRIORITY 0410
    RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 0074
    RHMFISS/CDR USSOUTHCOM MIAMI FL

` `

    UNCLAS QUITO 000579

    SIPDIS

    SIPDIS

    E.O. 12958: N/A
    TAGS: PREL PGOV PHUM EPET ELAB EC
    SUBJECT: STATE OF EMERGENCY DECLARED FOR OIL WORKER STRIKE

    ¶1.  Summary:  President Palacio declared a state of emergency
    on March 7 in the three provinces of Napo, Orellana, and
    Sucumbios after 4,000 oil workers went on strike and took
    over installations at five PetroEcuador oil fields.  On March
    8, the military retook control of the oil wells and the
    government announced its intention to negotiate with the oil
    workers.  The methods used by striking workers fits a pattern
    becoming common here, with disruption at the local level
    used, often successfully, to obtain resources from the
    national government.  An unrelated national one-day strike
    and march in Quito by workers, teachers, and students took
    place on March 8, disrupting traffic but little else.  End
    Summary.

    Oil Workers Strike, State of Emergency Declared
    --------------------------------------------- --

    ¶2.  Early on March 7, 4,000 employees of subcontractors
    Petroproduccion, a subsidiary of PetroEcuador, went on strike
    demanding back pay and to become regular employees of
    PetroEcuador.  The workers took over the installations at
    five key PetroEcuador oil fields:  Auca, Sacha, Shushufundi,
    Libertado, and Lago Agrio.  On the evening of March 7,
    President Palacio declared a state of emergency in the
    eastern provinces of Napo, Orellana, and Sucumbios.  This
    measure includes the suspension of constitutional rights and
    militarization of the area.

    ¶3.  On March 7, oil production fell to 132,000 barrels
    (compared to a usual 197,000) due to the strike, however, oil
    exports were not suspended as there were reserves in other
    locations.  Credit Suisse has stated that they do not believe
    the strike will have serious economic consequences.

    Government Seeking to Negotiate
    -------------------------------

    ¶4.  On the morning of March 8, the GOE military retook the
    oil installations in the five fields to begin the
    normalization of operations and the president of the Regional
    Federation of Subcontracted Petroleum Workers, Remigio
    Sornoza, was arrested along with several other protesters.
    The Ministry of Economy publicly announced a planned transfer
    of $35 million to cover back pay for the workers and Minister
    of Government Alfredo Castillo announced the government's
    willingness to negotiate with the oil workers on March 8,
    saying their demands had merit.

    ¶5.  Provincial leaders in Orellana and Sucumbios announced
    they would join the oil workers strike from March 10, setting
    the stage for a prolonged negotiation.  Vice Minister of
    Government Felipe Vega told EmbOffs on March 9 that the GOE
    was committed to pressing ahead with charges against those
    that broke the law.  Meanwhile, four more Sierra provinces
    are threatening to strike from March 13 if the GOE does not
    meet their demands.

    Workers Lead National One Day Strike
    ------------------------------------

    ¶6.  A relatively small number of workers, reportedly in the
    thousands, led by umbrella United Workers Front, and joined
    by far-left teacher and student groups (who largely stole the
    spotlight from workers with their more violent tactics), held
    a one-day "national" protest on March 8 to protest the
    minimum wage, subcontracting, the free trade agreement, and
    to demand the ouster of Occidental Petroleum.  The protesters
    blocked some roads and marched to the presidential palace and
    the Congress building where they were met with tear gas.  The
    worker protest largely fizzled, with low turnout and its
    impact limited to public schools in the capital, which were
    closed.

    Comment
    -------

    ¶7.  PetroEcuador's financial woes are unlikely to get any
    better in the near term and its current employees have
    already protested against the new president of the
    state-owned company (the third since Palacio took office 11
    months ago).  With the provinces now joining in, the trend
    toward local strikes to get economic concessions is likely to
    continue, at high economic cost.  However, if Vega's
    statement is true that violent protesters will be prosecuted,
    this could change their disruptive methods.  Meanwhile, the
    national worker strike was not widely observed, and in Quito
    protest marches quickly dispersed after rain began.  Still,
    such protests should keep President Palacio distracted in his
    last 10 months in office, helping to make any real progress
    on the political or economic front unlikely.

    JEWELL

`