US embassy cable - 05MUSCAT142

UNCLAS SECTION 01 OF 02 MUSCAT 000142 
 
SIPDIS 
 
STATE FOR NEA/ARPI (TROBERTS), DRL/IL (JDEMARIA) 
STATE PASS TO USTR (JBUNTIN) 
LABOR FOR ILAB/JSHEA AND HSUDHA 
 
E.O. 12958: N/A 
TAGS: ELAB, ETRD, PREL, MU, Labor 
SUBJECT: ELECTIONS ESTABLISH OMAN'S FIRST WORKERS' 
COMMITTEES 
 
 
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SUMMARY 
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1.  Assistant United States Trade Representative (AUSTR) 
for Labor William Clatanoff recently met with officials 
at the Oman Ministry of Manpower and the Under Secretary 
of Commerce and Industry to discuss trade and labor- 
related issues.  While talks focused on Oman's first 
elected workers' representational committees, other 
meetings touched on worker rights, Omanization, labor 
disputes, and Oman's adherence to core labor standards as 
defined by the International Labor Organization.  End 
summary. 
 
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AUSTR HIGHLIGHTS IMPORTANCE OF LABOR 
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2.  AUSTR William Clatanoff visited Oman on January 15 to 
hold labor consultations with officials from the Ministry 
of Manpower (MOM) and the Ministry of Commerce and 
Industry (MOCI).  In his opening remarks with Manpower 
Minister Juma bin Ali bin Juma, Clatanoff stressed the 
importance of furthering workers' rights in Oman as 
indicative of Oman's adherence to the International Labor 
Organization's Declaration on Fundamental Principles and 
Rights at Work.  Fourteen staff members and advisors from 
the Ministry participated in the meeting, illustrating 
Oman's keen interest in the labor aspects of the proposed 
Free Trade Agreement. 
 
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Omanization 
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3.  In subsequent talks with the Ministry's participants 
from a December 14 digital-video conference on labor 
issues, AUSTR Clatanoff requested more details on the 
process of Omanization and its impact on foreign 
corporations wishing to do business in the Sultanate. 
MOM stressed the dynamic nature of Omanization, urging 
AUSTR Clatanoff to consider this a flexible process in 
which both the private sector and government cooperate to 
create sector targets.  Targets of Omanization are set 
according to recommendations by Omani and expatriate 
companies who sit on sector committees and determine 
appropriate percentages based on negotiations, 
availability of trained Omanis in various fields, and a 
given sector's need for expatriate labor. 
 
4.  MOM stressed its flexibility in meeting target 
Omanization rates.  If a company cannot meet the target 
for its sector, for instance, it may appeal to the 
Ministry to negotiate its employment needs, Omani and 
expatriate.  MOM cited the example of Shangri La Hotels. 
Unable to meet its 60% Omanization target, the company 
appealed to MOM for assistance.  Both MOM and Shangri La 
Hotels agreed to a reduced target of 40% with a plan to 
reach 60% within a specific time frame. 
 
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Workers Representation Committees 
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5.  Indicative of the recent labor developments in Oman, 
AUSTR Clatanoff met with 15-20 newly elected 
representatives of Oman's first Workers Representation 
Committees.  Representing 7 companies, the participants 
discussed their optimism in the development of workers 
committees in Oman.  According to one participant, "We, 
as elected representatives, are here to make sure that 
the labor law is enforced, not cheated."  Another 
participant went on to say that "management is much more 
careful in taking decisions, knowing that employees have 
the ability to take issues back to the people." 
 
6.  The group's optimism, however, was tempered with 
commonly heard calls for the committees, and MOM, to take 
things slow.  New to the field of "unions" and 
participatory labor, the representatives stressed the 
time it will take for both employees and employers to 
understand the function of the committees as well as for 
workers to understand their rights.  "We don't want to 
rush in and create a problem rather than solve a 
problem." 
 
7.  To date, MOM has visited 56 companies.  Of those 
visited, 15 have held elections for representation 
committees and 7 committees have been certified from the 
following firms: 
     Oman Refineries 
     Saud Bahwan Auto 
     OFSIT 
     Crowne Plaza 
     Galfar Engineering 
     Intercontinental 
     Grand Hyatt 
 
Moreover, MOM intends to have the Main Committee (a 
national umbrella committee) established by June. 
Following its establishment, a delegation of elected 
representatives will attend the 93rd Session of the ILO's 
International Labor Conference later that month. 
 
8.  In an unexpected gesture, the workers' representation 
committee from Galfar Engineering, one of the largest 
employers in Oman, invited AUSTR Clatanoff to visit one 
of the local Galfar plants.  Galfar held committee 
elections in December and currently has 5 worker 
representatives.  During his visit, AUSTR Clatanoff 
observed safety and health standards, elicited opinions 
on the committees, and briefly chatted with expatriate 
workers, including one individual from India who has 
worked for Galfar for over 17 years (starting at the 
current minimum wage of USD 314 a month, he now earns 
over USD 1830 a month). 
 
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Labor Disputes 
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9.  AUSTR Clatanoff also met with the Manpower Ministry's 
Director of Dispute Settlements, Mr. Yaqoub Ali al- 
Kharboushi, who described the process of dispute 
settlement in Oman as one of negotiation and 
transparency.  Any individual, Omani or expatriate, may 
put forth a complaint with one of the six labor dispute 
centers in Oman, he explained.  The dispute center will 
assign an arbitrator to the case.  The arbitrator, in 
individual meetings with the two parties, attempts to 
clarify the law as it pertains to the case and make 
suggestions to resolve the issues.  If no compromise is 
reached, sometimes after 2 or 3 hearings, both sides are 
asked to submit their positions with supporting 
documentation.  According to Articles 106 and 107 of the 
2003 Labor Law, the case is then transferred to the 
appropriate court, which is typically the Court of First 
Instance, with labor specialists on the bench.  MOM makes 
no formal recommendations to the court. 
 
10.  In his meeting with the newly appointed Under 
Secretary for Commerce and Industry, Ahmed al-Dheeb, 
 
SIPDIS 
AUSTR Clatanoff took the opportunity to thank MOCI for 
its cooperation and reiterate the importance of Oman's 
commitments to the ILO in furthering workers' rights.  Al- 
Dheeb commented that in meeting ILO commitments via 
representation committees, the private sector has 
expressed concern about overt government protection of 
employees at the expense of employers' rights.  Al-Dheeb 
invited AUSTR Clatanoff to meet with workers throughout 
the country to hear the opinions and stories of the 
expatriate workforce in Oman. 
 
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Comment 
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11.  These frank discussions with workers' committee 
representatives, first-hand observations of MOM's labor 
clearance and employment services operations, and chats 
with expatriate workers at Galfar Engineering provided 
AUSTR Clatanoff with a better appreciation of Oman's 
current labor practices.  While issues such as the 
implicit right to strike (not prohibited by the 2003 
Labor Law), the role of collective bargaining with 
respect to individual contracts, and Arabic language 
proficiency requirements for elected committee 
representatives remain contentious, MOM nonetheless 
reiterated its firm commitment to improving worker's 
rights and adhering to ILO core labor standards. 
 
BALTIMORE