US embassy cable - 04BOGOTA4950

C O N F I D E N T I A L SECTION 01 OF 03 BOGOTA 004950 
 
SIPDIS 
 
GENEVA FOR DELAURENTIS AND CHAMBERLIN 
LABOR FOR ILAB 
 
E.O. 12958: DECL: 05/13/2014 
TAGS: PGOV, ELAB, EPET, PHUM, CO 
SUBJECT: SETTLEMENT OF ECOPETROL STRIKE HINGES ON 
REINSTATEMENT OF DISMISSED UNION MEMBERS 
 
 
Classified By: Ambassador William B. Wood for reasons 1.4 (b) 
and (d). 
 
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Summary 
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1. (SBU) Twenty-two days into the Syndicated Workers Union's 
("Union Sindical Obrero," or USO) strike against Ecopetrol -- 
Colombia's state-owned oil company -- the lone issue 
remaining on the negotiation table is whether Ecopetrol will 
re-hire nearly 180 workers dismissed for their participation 
in a strike previously declared illegal by the Ministry of 
Social Protection (MSP).  The MSP decision was based on a 
1995 Constitutional Court ruling that all hydrocarbon sector 
employees perform "essential public services" and are 
prohibited from striking.  USO declared its "political 
strike" to protest the GOC's restructuring of Ecopetrol, 
claiming that the plan would result in the company's 
liquidation and hand control of Colombian oil fields to 
foreign firms.  Both USO and Ecopetrol agree that most of 
their strictly labor-related disputes were resolved well 
before USO declared the strike.  USO's failure to articulate 
or to achieve its objectives has severely weakened the 
union's public standing and its ability to keep workers from 
crossing the picket line.  END SUMMARY. 
 
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Background 
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2. (U) The Syndicated Workers Union's ("Union Sindical 
Obrero," or USO) declared a "political strike" on April 22 to 
protest the GOC's restructuring of Ecopetrol, Colombia's 
state-owned oil company.  USO representatives told us that 
the restructuring will result in the privatization of 
Ecopetrol and a loss of Colombian control over Colombian 
natural resources.  On the same day, the Ministry of Social 
Protection (MSP) declared the strike illegal on the basis of 
a 1995 Constitutional Court ruling prohibiting hydrocarbon 
sector workers from striking on the grounds that they perform 
"essential public services."  USO workers represent 
approximately one-half of Ecopetrol's 6,600 member work 
force.  We recently met separately with USO's national human 
rights director Daniel Rico Serpa, former USO human rights 
director Jose Fernando Ramirez Lozano, Ecopetrol President 
Isaac Yanovich and Minister of Mines and Energy Luis Ernesto 
Mejia to discuss ongoing negotiations and to assess the 
possibility of reaching a settlement. 
 
3. (SBU) Ecopetrol and USO entered into negotiations on a new 
labor contract under their collective bargaining agreement in 
November 2002.  Under Colombian labor law, parties have 20 
days to reach an agreement before submitting to mediation 
and, after an additional 20 days, binding arbitration. 
Colombian law requires each party to name an arbitrator.  If 
the two named arbitrators are unable mutually to agree on a 
third arbitrator, the third arbitrator is selected by the 
MSP.  In March 2003, the GOC imposed binding arbitration on 
both parties.  In September 2003, after waiting six months 
for USO to name an arbitrator (USO refused to do so), the MSP 
named an arbitrator on USO's behalf.  Mejia told us the 
arbitrator named was a lawyer sympathetic to the union's 
position with a long history of defending unions in labor 
disputes. 
 
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Labor Issues Resolved, "Political Strike" Declared 
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4. (SBU) USO representatives and Yanovich both told us that 
the parties were able to resolve key labor-related points of 
disagreement in the context of binding arbitration between 
September and December 2003.  In January 2004, USO walked 
away from the negotiating table to protest the GOC's division 
of Ecopetrol into two entities, the original company and the 
National Hydrocarbons Agency (NHA), a regulatory agency for 
the hydrocarbon sector.  USO leaders maintained that the 
restructuring would result in Ecopetrol's privatization and 
eventual liquidation and would effectively hand control of 
Colombia's oil fields to foreign firms. 
5. (SBU) According to Mejia, the restructing permits 
Ecopetrol to compete more transparently with foreign oil 
firms by ceding Ecopetrol's traditional authority to 
negotiate contracts with foreign oil firms on newly 
discovered oil fields to the NHA.  Ecopetrol retains its 
financial autonomy, a government-appointed board of 
directors, and authority over all oil fields under Ecopetrol 
control as of December 31, 2003.  The plan also permits 
Ecopetrol to sell stock without ceding GOC control of the 
company.  In reaction to the GOC decree, which went into 
effect on January 1, 2004, USO publicly raised the 
possibility of a strike.  According to USO's Daniel Rico 
Serpa, the "political strike" was an attempt to raise 
consciousness among Colombians and to protect Colombian 
natural resources from being exploited by foreign oil firms. 
When asked what concessions they hoped to achieve by 
striking, neither USO representative could provide an answer. 
 
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GOC Declares Strike Illegal 
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6. (U) According to Mejia and Yanovich, the MSP repeatedly 
informed USO that the strike would be declared illegal on the 
basis of the 1995 Constitutional Court ruling.  The 
arbitrators referred the matter to the Supreme Court, which 
ruled that the union was not permitted to strike and should 
return to the negotiating table.  On April 22, USO announced 
their intent to strike.  On the same day, Minister of Social 
Protection Diego Palacios declared the strike illegal.  USO 
maintains the GOC does not have the authority to declare the 
strike illegal, citing a 1999 Supreme Court ruling that the 
GOC may not intervene in labor disputes involving state-owned 
enterprises.  Ecopetrol and the GOC hold that the ruling 
explicitly exempts enterprises whose workers provide 
essential public services.  USO and other Colombian trade 
unions also cite earlier ILO rulings declaring that petroleum 
sector workers do not provide essential public services and 
therefore may strike. 
 
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Both Ecopetrol and USO Confident, Wary 
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7. (SBU) Ecopetrol and USO perceptions of union support and 
the prospects for USO's success differ tremendously.  USO 
workers represent one-half of Ecopetrol's 6,600 member work 
force.  USO maintains that 80 percent of union members are 
participating in the strike and that Ecopetrol's production 
has diminished precipitously as white-collar workers and 
untrained contractors have been tapped to fill in for 
striking workers.  Yanovich told us that only 25 percent of 
Ecopetrol's work force is participating in the strike and 
that the company has been able to maintain its production 
levels using contractors hired from other firms under the 
company's contingency plan.  Yanovich also maintains that 
Ecopetrol is slowly reincorporating workers who have crossed 
the picket line. 
 
8. (SBU) USO contends that Ecopetrol is pressuring striking 
workers with the threat of being fired; that Ecopetrol 
installations in Barrancabermeja have been militarized; and 
that uniformed soldiers frequently deliver dismissal letters 
to workers' families.  Ecopetrol states that a military 
presence is necessary to prevent vandalism and property 
damage and justifies the dismissal of nearly 180 workers, 
including USO President Gabriel Alvis and Vice President 
Hernando Hernandez, on the grounds that they had been 
informed that the strike was illegal.  On earlier occasions, 
the ILO has criticized Colombian labor laws, which give the 
GOC permission to dismiss workers for participation in an 
illegal strike.  USO leaders claim that striking workers have 
been threatened by paramilitaries and other armed actors, but 
have stopped short of alleging that paramilitaries are 
collaborating with Ecopetrol or the GOC. 
 
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Only One Issue to Resolve: Reinstatement 
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9. (SBU) Yanovich believes the company has convinced USO that 
the restructuring of Ecopetrol will not result in a loss of 
financial autonomy or production rights.  After five 
negotiation sessions over the past six days, both sides agree 
that the only issue to be resolved is whether Ecopetrol will 
re-hire dismissed USO workers.  Ecopetrol maintains that the 
workers were aware of the consequences of their actions when 
they decided to strike and refuses to offer them employment 
as direct hires.  However, Ecopetrol has indicated a 
willingness to help dismissed workers find new employment, 
possibly with some of Ecopetrol's external contractors. 
 
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Comment 
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10. (C) For the first time in USO's history, a strike against 
Ecopetrol has not resulted in significant declines in 
production or concessions in favor of organized labor.  The 
reasons behind USO's political strike were never clearly 
articulated to the public and even most USO leaders are 
unclear about the union's demands or objectives.  USO's 
obstructionist approach to all phases of negotiations with 
Ecopetrol has damaged the union's public credibility and 
considerably weakened the union, traditionally a giant of 
Colombian labor. 
WOOD