”Strike!” Is Egyptian Petroleum Safe from Industrial Unrest?

Mahalla – the spiritual home of Egypt’s labor movement.
For 12 days in February, workers at the state-owned Misr Spinning and Weaving Company staged a massive strike demanding the removal of holding company Chairman, Foaud Abdel-Alim, and the implementation of a EGP 1,200 minimum wage promised to public sector workers in January. After a fortnight of failed negotiations, Mahalla’s workers made a patchy deal with the government on February 22: “You have two months to meet our demands, or we strike again.” The government has promised to implement the minimum wage. Before, an agreement between workers’ representatives and Labor Minister Kamal Abu Eita to oust Abdel-Alim was left unsigned by the Investment Ministry. The minister, Omar Saleh, instead offered a replacement board of “experienced members,” an offer flat-out rejected by striking workers.

“We overthrow Mubarak but not him?” one worker, Iman Khali, asked not far from the imposing chimneys of the Nile Delta textiles plant. “Why?”
Conversations often come back to the revolution, the power of the workers. In the days, months and years leading up to Hosni Mubarak’s fall, what now appears more of a historical inevitability than what at the time was a revolutionist pipe-dream, workers helped drive the uprising. Stanford University History Professor Joel Beinin wrote just after the 18 Days how workers “in textiles, military production, transportation, petroleum, cement, iron and steel, hospitals, universities, telecommunications and the Suez Canal” joined together as a significant force. “The demographic and economic weight of workers in the popular uprising was likely one of the factors that persuaded Egypt’s military chiefs to ask Mubarak to step aside,” Beinin claimed.

Fuel labor safe?
On the one hand, Egypt’s fuel sector looks safe. Its workers are on average higher earners. According to the latest Central Agency for Public Mobilization and Statistics (CAPMAS) annual figures, a public sector worker in exploration earned an average wage of approximately EGP 1,400, whereas a manufacturing worker in the public sector would receive around EGP 1,100, (although some Mahalla workers are reported to earn as little as EGP 500). Plus, the petroleum sector is not going away any time soon.

Compare this with the textiles industry. Its workers exist in a more unstable sector, threatened by competition from overseas (countries such as Bangladesh, China and India) where labor is cheaper and production higher. The sector still contributes 26.4 percent to Egypt’s national Gross Domestic Product (GDP), according to official figures for 2007-2008, but some fear the future of the industry.

A far lower percentage of Egyptian petroleum workers are also members of trade unions, although unions have not – at least not on the national level – pushed for industrial action during Egypt’s post-Morsi transition.

“Egyptian workers understand that [the country] is in a fortress against terrorism,” said Egyptian Trade Union Federation (ETUF) head Gebaly al-Maraghy. Egyptian Federation of Independent Trade Unions (EFITU) leader Malek Bayoumi also said the labor movement was in a “holding period” of grass-roots organization and consolidation during the transitional period. The labor ministry, despite being headed by former EFITU chief Kamal Abu Eita, has also repeatedly called for calm from Egypt’s labor movement.

“No strikes” has been the top-down consensus for some time now. But for two weeks, Mahalla posed a threat to that consensus.
Petroleum industry bosses say they are unphased. “I don’t think this is going to spread,” a source at one of Egypt’s major petroleum firms claimed, speaking on condition of anonymity. “Strikes like that don’t spread sector to sector…they [tend to] concern particular companies, case by case.”

On the one hand, this is true of the latest Mahalla strike. Since Mahalla Textiles Holding Company Chairman Abdel-Alim entered the company, workers have repeatedly demanded his removal alleging corruption, inefficiency and deliberate attempts to squander the company’s resources in order to privatize it at a later date.
But solidarity strikes, protests and sit-ins followed. Textile workers in Helwan, Kafr al-Dawar, Tanta and Zagazig joined Mahalla, often making similar or identical demands.

In February, Mada Masr also reported that “resurgent” industrial unrest was beginning to bleed over into new sectors. Low-ranking police officers in Minya, Sharqiya and Wadi al-Gadeed launched partial strikes for better bonuses and compensation payments, as well as the minimum wage. Police protests in Gharbiya and Alexandria did the same. Doctors Syndicate employees have also continued partial strikes for weeks, demanding improved salaries, working conditions and a larger national healthcare budget.

The petroleum industry has witnessed similar creeping industrial unrest before. In February 2013, workers at the Arab Petroleum Pipelines Company (SUMED) staged strikes and sit-ins demanding permanent contracts. Similar protests continued after the revolution, including one in October 2011 with demands “spiring from [employees’] ambiguous employment position,” state-run newspaper Al-Ahram reported at the time.

“Things like that can spread,” said Mika Minio-Paluello, a Cairo-based campaigner on social justice in the global petroleum sector. “You could see a spread within public sector oil and gas operations on issues like that. [But] it’s more likely to happen with service sector issues and state companies…rather than Shell, Exxon [and] Mobil.” This is borne out by a two-week strike by Egyptian Natural Gas Holding Company (EGAS) bill collectors in December 2012 over pay. While many oil and gas exploration agreements are based on a 50-percent public stake, the public ratio in distribution and service-end jobs can be much higher.

Sectorial fragmentation
But is this simply a sectorial issue? Yes, Mahalla’s textile workers staged their walk-out against a holding company management structure deemed to be inefficient, corrupt and unpopular. But workers were also demanding a minimum wage, promised by the end of January for all public sector workers (translating to approximately 30 percent of Egypt’s total workforce). In fact, Misr Spinning and Weaving workers were the first to make the demand for a EGP 1,200 basic salary during a strike in 2006. Employees at the Mahalla Textile Holding Company, which administers 31 other operations across the country, are still waiting.

Experts have warned that the threat of a groundswell in industrial action based on pay and conditions – particularly the much-discussed minimum wage – is a real one.
“It would be expected that some sectors might find it more difficult to implement the minimum wage than others,” explained economist and Al-Hayat columnist Lahcen Achy. “That’s why in some countries they have sectorial minimum wages and sectorial negotiations.” Other Arab states, like Morocco and Algeria utilize this system with different wages set for agricultural and manufacturing sectors. And yet Egypt’s complex, and at times esoteric, organization of labor can make initiatives like this harder to realize. “That’s why in Egypt where there isn’t the same organized labor force, it makes it difficult to do these kinds of negotiations.”

In more vulnerable sectors, like textiles, that means more industrial unrest. “I would expect to see strikes and, I’d say…anarchic strikes,” Achy claimed. For now, the petroleum sector may see a very limited spill-over from a broader wave of public sector unrest currently trundling through sections of the Egyptian economy.
“I wouldn’t expect it to spread in a big way,” explained Minio-Paluello. “Both the government and the companies themselves really don’t want this to happen.” Tourism and petroleum are traditionally two of Egypt’s main economic driving forces. After the death knell of February’s bomb attack on a tourist bus in South Sinai, later claimed by jihadi group Ansar Bayt al-Maqdis, the state will probably have to acknowledge that tourism revenues are not flooding back any time soon. The fuel sector may have to take up the slack.

Without a genuine wave of workers’ unrest to rally around, like that seen before the 2011 revolution, prospects for major petroleum sector strikes remain limited. And the government will likely not have forgotten April 6, 2008, the day Mahalla’s textile workers demanded the fall of the regime and created a new rallying point for activists, unions and workers alike.

At the same time, Egypt’s government and business community must factor in workers’ demands at a time of economic uncertainty and energy hardship. If not, they risk provoking the steamroller of Egypt’s labor movement once again.

Tom Rollins is a freelance journalist based in Cairo.
He tweets at @TomWRollins


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