Tue | Aug 21, 2018

Phillip Paulwell | Avert Windalco crisis

Published:Sunday | June 10, 2018 | 12:00 AM
Phillip Paulwell
Russian oligarch Oleg Deripaska.
The Windalco plant in Ewarton, St Catherine.
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This is an edited statement delivered at a press conference on May 29.

 

Jamaicans should by now be aware of the serious negative effects that the threat of sanctions by the United States against Russian bauxite company UC Rusal is having on the operations of Rusal's Windalco plant at Ewarton in St Catherine. The situation has reached crisis proportions and endangers the jobs and livelihood of the approximately 1,000 direct and indirect workers at the plant.

In April, I urged the Government to find ways to safeguard the interest of the 600 direct and 400 indirect workers at Windalco. I have had discussions with both the Windalco management and the Minister of Mining Robert Montague separately and shared with them possible options for obtaining some financial reprieve for Windalco and for securing the jobs and livelihoods of the Jamaican workers.

Just over a week ago, I again drew the nation's attention to the fact that the company was facing a severe cash crunch, resulting in workers initially receiving only part of their salaries. On Monday, May 14, workers had received a communique from the company's general manager advising that they would receive only half of their monthly salary the following week.

Subsequently, the workers received not a half, but rather only a quarter of their salaries. Thankfully, since then, Windalco's management has employed creative methods and was able to sell some of their agricultural produce, which enabled them to pay salaries in full for the month.

The challenge still remains for the continued payment of salaries for next month and beyond and to keep the operations open, production going, and the workers employed.

It is my understanding that the cash-flow challenge at the company has arisen in large measure because Windalco has been denied access to financial resources through the banking system, even though the American government has itself delayed the imposition of the contemplated sanctions against UC Rusal. With this delay by the US, the banking system in other countries has continued to provide services to the company with the approval of the US authorities.

The Opposition is urging the Government not to sit idly by and allow more than 1,000 Jamaicans to be thrown out of work and to have to face the frightful reality of not being able to take care of their families.

While other governments around the world have utilised various initiatives, including diplomatic channels to secure the interest of their citizens employed by Rusal, the Jamaican Government has, so far, failed to take any similar or other action aimed at resolving the issue.

As opposition spokesman on mining, I have written to the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury, which administers and enforces economic and trade sanctions for the US government. As an Opposition and Government in waiting, we understand that the OFAC is mandated to conduct its work based on US foreign policy and economic and national security goals. We believe, however, that there is a strong case to me made through available diplomatic channels for the issue involving UC Rusal to be resolved in the mutual interest of the United States and Jamaica.

Other countries, including Ireland, Sweden, Guyana, have utilised these channels and have benefited from positive consideration and action by the United States in allowing significant reprieve under the sanctions regime.

The Opposition urges the Government of Jamaica to immediately pursue similar actions and representation in the interest of our country, the nation's continued economic development and on behalf of the 1,000 workers at Windalco. Continued inaction on this matter is not an option for Jamaica.

 

Insensitive to workers' plight

 

In the absence of any explanation by the Government, the inaction of the administration so far in this regard may be interpreted as reflecting a level of insensitivity to the plight of the workers.

This seeming insensitivity on the part of the administration is heightened by information that the Opposition has now received from reliable sources that the Government has, without notice to Windalco, terminated the company's mining licence to operate the Kirkvine plant in Manchester. The Opposition views this latest move by the Government as precipitous and unnecessarily callous and insensitive given the consideration of the current environment.

The Opposition is again calling on the Government to come to the nation with a detailed plan on how it intends to resolve this matter for the benefit of the workers and the wider national economy.

The Opposition further notes news reports that Russian businessman Oleg Deripaska, who is a main target of the sanctions initially announced by the US government, has stepped down as a director of En+ Group, which owns about half of UC Rusal. We are also aware of reports that Mr Deripaska will not be seeking re-election as a director of UC Rusal at the company's forthcoming annual general meeting.

UC Rusal was among 12 Russian companies and their principals that were targeted to be sanctioned on April 6 by the US government over what the US authorities considered Russia's "malign activities around the globe", including reported military interventions and cyber attacks.

UC Rusal, the world's second-largest alumina producer, owns 93 per cent of Windalco, which operates the Ewarton Works in St Catherine and the Kirkvine Alumina Refinery in Manchester. Up to two years ago, UC Rusal also owned the Alpart refinery in St Elizabeth. In 2016, UC Rusal sold its Alpart plant at Nain, St Elizabeth, to Chinese industrial group Jiuquan Iron & Steel under an agreement that was brokered by the then Government led by the People's National Party. Our Government at the time also made concessions to UC Rusal in a bid to save the jobs of its 600 full-time workers.

It is high time that this Government break its silence on this matter and protects the Windalco workers, as well as the wider national economic interest.

- Phillip Paulwell is the former minister of science, technology, energy and mining and is currently opposition spokesman on mining and energy, leader of opposition business in the House of Representatives and member of parliament for East Kingston and Port Royal. Email feedback to columns@gleanerjm.com.