Latest update November 26th, 2024 1:00 AM
Dec 09, 2009 News
– poor governance, inefficiency costing GuySuCo $3B annually
by Leonard Gildarie
An Arbitration Tribunal, ordered by government, has recommended a three per cent increase for sugar workers and the Guyana Sugar Corporation (GuySuCo) has until March next year to pay.
This was disclosed yesterday as the Tribunal’s report was handed over to the Corporation and the union, Guyana Agricultural and General Workers Union (GAWU), at the Bank of Guyana.
GAWU had demanded 10 per cent, down from an original 15 per cent earlier this year, but GuySuCo had remained steadfast on its three per cent offer.
In making its recommendations, the Tribunal said that it found that GuySuCo is “in a precarious financial situation with declining receipts from lower output and EU price cuts as well as an inability to borrow from the local banking system.”
The Tribunal believed that the welfare of the employees depends on the viability of the Corporation and the latter should not be unduly burdened given its current financial situation of almost $13B indebtedness and the need to acquire resources (both capital and labour for the successful implementation of the turnaround plan).
“Consequently, the Tribunal recommends an across the board increase of three per cent for 2009 which should be paid no later than the end of March, 2010.”
Strike
On October 29, wages/salaries talks between GuySuCo and GAWU was declared deadlocked after the union demands for a 10% increase was rebuffed by the Corporation, which said it could ill-afford. The Corporation countered with 3%.
Minister of Labour, Manzoor Nadir, had ordered compulsory arbitration and appointed Bank of Guyana’s Dr. Gobind Ganga as Chairman while Yog Mahadeo (Chief Financial Officer of GT&T) is the union’s representative on the panel. Former Permanent Secretary of the Health Ministry, Sonya Roopnauth, was representing GuySuCo. Secretary to the panel was Deputy Chief Labour Officer, Clive Nurse.
According to the report, earlier this year GAWU had submitted two sets of claims—one on March 24 and another June 11— for increased fringe benefits and a 15 per cent across the board increase for workers.
The Tribunal found that the two parties were not having cordial relationships on the wages/salaries issue and between January and October this year, there were 210 strikes and over 77,000 man-days lost of which more than 40,000 were due to wage dispute.
“Undoubtedly, this impacted unfavorably on production, productivity and the Corporation’s financial performance as well as on workers’ wages and salaries.”
Noting that GuySuCo’s financial performance is directly associated with the receipts of the levels of sugar production and its export price, the Tribunal noted that during 2005 and 2008, huge losses were made on account of lower receipts and higher expenditure.
According to the report, this year, the Corporation is projecting an accumulated debt of $13B.
“The amount owed to local banks is due to the last year’s deficit of $3.2B and this year’s estimated deficit of approximately $800M. The latter is due to a decline in earnings from lower output level of 235,000 tonnes as well as a decline in average export prices and relatively higher expenditure.”
Critical
“The Tribunal finds that the current expenditure is relatively high when compared to output and receipts after accounting for the high fuel and fertilizer price increases in 2007 and 2008. It is the considered view of the Tribunal that the Corporation is not receiving value for its expenditure, notwithstanding the higher input cost and adverse weather conditions,” the Tribunal found.
The Tribunal said that it believes a high level of inefficiency in the Corporation can explain a large part of this, which is a consequence of poor governance.
“A conservative estimate by the Tribunal is that this is costing GuySuCo in excess of $3B annually.”
The report said that although the Corporation is cash-strapped with accumulated debts of $13B by the end of this year, there is still the possibility of steering it to a path of recovery for it to become a viable and sustainable industry in the future. “This depends heavily on effective implementation of the Turnaround Plan for the period 2009-2013 which is the result of an intense work programme aimed to guide the industry on a path of prosperity.”
The Tribunal also noted that the arguments are just by the union that workers in the field and factory should be compensated for the nature of their work.
Meanwhile, member of the Tribunal, Yog Mahadeo, who was recommended by the GAWU to be on the board of that body, in a statement said that he is saddened that GuySuCo was speaking of its financial situation as “if helpless as to what is happening to or around them. Nothing is forced on anyone. The decisions and consequences of decisions are all theirs.” He noted that the decision was a difficult one as the workers deserve a fair wage, but the Corporation “may not seem to be able to afford it.”
Following the breakdown of wages talks last month, workers went on a weeklong strike.
GuySuCo had also said that the increase would have costed them an extra $500M monthly.
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