GAWU disappointed, sees bleak future for industry
The cash-strapped Guyana Sugar Corporation (Guy-SuCo) will have to find approximately $450 million by March of next year to pay sugar workers increased wages, after an arbitration panel ruled in its favour and awarded a 3% hike for those represented by GAWU.
Chairman of the Arbitration Panel Dr Gobind Ganga yesterday announced that the panel had decided to grant sugar workers a three percent increase across the board for this year, which was to be paid by March of 2010. However, the ruling irked General Secretary of GAWU, Seepaul Narine who described it as disappointing and said that it was a signal of “a bleak future” for the sugar industry. However, these sentiments were later disputed by the Chief Executive of GuySuCo Errol Hanoman.
GAWU had originally been demanding a 15% wage hike while GuySuCo refused to budge from 3%. At the end of October, GAWU cut their demand to 10% but GuySuCo remained at 3%. A deadlock was then declared in proceedings on October 29 leading to the arbitration proceedings.
The three-member tribunal, which also consisted of Yog Mahadeo and Sonya Roopnauth, was appointed on November 5 by Labour Minister Manzoor Nadir to rule in the wage dispute between GAWU and GuySuCo after negotiations between the two entities ended in a deadlock.
At a press conference held at the Bank of Guyana, Dr Ganga, Deputy Governor of the BoG, said that the panel took cognizance of the financial difficulties experienced by the company. He disclosed that given its current financial position, GuySuCo does not have the required financial resources to fund the union’s demand of a 10 percent increase in wages and salaries. He said that for this year, the sugar Corporation is projecting an accumulated debt of $13 billion. Of this amount approximately $4 billion is owed to local banks, $6.4 billion to creditors and $2.5 billion to Government in the form of taxes.
Dr Ganga further said that in 2010, the financial outturn of the company “is uncertain because it is targeting an output level of 280, 000 tonnes of sugar, which is a downward revision from 321,000 tonnes as projected in the Turnaround plan.” However, Dr Ganga noted that even this output level is uncertain since it depends on the Corporation achieving its targeted level of tillage and planting for 2009, which represents about 67 percent of the target for the year.
“It is the considered view of the Tribunal that the award should be based on the four principles of fairness, equity, social justice and compromise. However, the Tribunal is convinced that GuySuCo is in a precarious financial situation with declining receipts from lower output and (the) EU price cut as well as inability to borrow from the local banking system. The Tribunal believes that the welfare of employees depends on the viability of the corporation and the latter should not be unduly burdened…,” the tribunal ruled.
The Chairman of the panel said it was “heartened”, when GAWU’s President Komal Chand during the Tribunal sitting on November 25, 2009 gave the union’s and workers’ support towards increasing the production target for next year (2010) from the planned 280,000 to the original target of 320,000 tonnes.
Dr Ganga, however, said that the Corporation needed to improve its efficiency and noted that in addition to measures in the Turnaround Plan there are a number of immediate measures that can be adopted to improve its short term performance.
According to him, the company was not receiving value for its expenditure, notwithstanding the higher input cost and adverse weather conditions. “The Tribunal believes that a large part of this can be explained by a high level of inefficiency in the Corporation which is a consequence of poor governance”. This is costing GuySuCo in excess of $3 billion annually, he noted. He said that “a greater effort by all stakeholders and in particular the leadership in the Corporation is critical to alleviate the problems associated with inefficiency, corruption and poor governance.” He opined that “in the short to medium term, this can result in at least a 10 percent reduction in expenditure which can help improve GuySuCo’s financial position and fund part of the capital programme.
Work stoppages
Dr Ganga, however, noted that disputes between GAWU and GuySuCo had added to the Corporation’s woes. He noted that between January and October 2009, “the numbers of work stoppages and man days lost have been significant.” He noted that there were 210 strikes and 77, 252 man days lost of which 40,891 were on wage disputes. “Undoubtedly, this impacted unfavourably on production, productivity and the Corporation’s financial performance as well as on workers wages and salary”, Dr Ganga said.
Labour Minister Manzoor Nadir, who was also present at the press conference, thanked the members of the panel for their hard work and said he appreciated the challenges they had in arriving at their decision.
Speaking to sugar workers, Nadir said “we understand how hard you work and we understand how relatively low the wages are in the sugar industry.” Nadir noted that the problems of the industry affected all Guyanese.
According to him, the sugar industry needed to rebound and to produce over 280,000 tonnes per year or all of us will suffer.
He said that the $2.5 billion that the company owes the government could be used to address important issues facing the government; suggesting even increasing the salaries of public servants.
“GuySuCo has to get its house in order”, he said while adding that there were a lot of inefficiencies that needed to be corrected.
Meanwhile General Secretary of GAWU, Narine told the gathering yesterday that while the ruling was binding it was disappointing.
According to him, the award of three percent is “signalling a sad day ahead for sugar workers. “
In an address, which appeared to surprise members of the panel and senior officials of GuySuCo, the General Secretary said that there were several factors which ought to have ensured that the workers got in excess of a 3 percent increase. He said that the inflation rate for last year should have served as a guide for the minimum increase. Narine also noted that GuySuCo in its turnaround had projected a 5.2 percent increase in wages and salaries for workers based on the 250,000 tonnes production.” If this is to be used as a measurement of 235,000 tonnes, they ought to receive close to five percent increase…” he said.
“What we are seeing is a bleak future for the industry, for the people who work in the industry and finally for this nation”. “I hope that sometime those that are responsible will come to realize this”, the General Secretary said. He pointed out that in spite of the various plans to turnaround the industry, it was essential that steps were taken to ensure that the workers remained in the industry.
Narine noted that the report of the tribunal would have to be shown to the workers and stated that “no doubt, they will have to take note, of many of those who tried to suppress their interests, and who showed their hands in this arbitration process and even before, trying to deny them their just reward.”
Abide
He also disclosed that “initially we didn’t expect that we would have been given a fair deal…because of the events that happened before and some of the statements that were made by responsible people in high offices.”
Meanwhile, Chief Executive of the Sugar Corporation Errol Hanoman said GuySuCo was prepared to abide by the ruling of the tribunal.
Responding to Narine’s comments that the future of sugar was dim, the Chief Executive expressed the view that there is a good future for the sugar industry and for those associated with it. He, however, strongly emphasized that this good future required the management of GuySuCo, the union and the workers combining their efforts.
Questioned about possible pay cuts for senior management officials in an attempt to help solve some of the financial woes of the company, Hanoman said that such suggestions only created a distraction. “It is unfortunate that there are those who feel that they ought to make this an issue”, he said. Hanoman opined that “GuySuCo has got to strengthen its management team, GuySuCo has got to try to bring on Board competent managers” he said.
Asked about the March 2010 deadline for the payment of the increase, Hanoman emphasized: “the ruling says we’ve got to pay by March 2010, and we’ll pay by March 2010.” Explaining his optimism of the Corporation meeting this deadline, he said that significant aspects of the turnaround plan have started to be implemented since July and August and he said the “fundamentals of the industry, right now, is better than it was 12 months ago… and that work has to continue.”
Dr Ganga when asked about the deadline being too soon, opined that the company was given “a reasonable amount of time” to meet this deadline. He said that from now to March, presented GuySuCo with more than enough time to overcome its cash flow problems, which it is currently experiencing.