Kazakh copper strike not the end of
the matter By Margarita
Assenova
In Zhezkazgan, Kazakhstan, a
labor dispute at Kazakhmys - Kazakhstan's largest
copper mining company - was swiftly resolved
within three days after the management agreed to
satisfy miners' demands for higher pay and better
working conditions.
However, the long-term
problems of the single-industry town of Zhezkazgan
in the central Kazakhstan region of Karaganda,
where copper deposits are depleting, will require
more efforts to be resolved.
The strike
started on May 5, when 98 miners refused to come
out after a night shift at Annenskiy mine in
Karaganda region, and about 100 miners from the
morning shift refused to descend into the mine.
Workers from the nearby Vostochnyy, Zhezkazgan and
Yuzhnyy mines joined the strike organized by the
miners of the
Annenskiy mine. At the
peak of the strike, 250 people protested
underground and another 2,000 supported them on
the surface, according to Kazakhmys CEO Eduard
Ogay.
Kazakhmys is the world's
11th-largest copper producer, and is also engaged
in the production of zinc, silver and gold as
by-products The FTSE 100 company is listed on the
London Stock Exchange. Currently, the state of
Kazakhstan owns 26% of Kazakhmys, which operates
16 mines and two smelting and refining plants in
the country.
Annenskiy is one of six
underground mines operated by Kazakhmys is in an
area that produces about 70% of the company's
mined ore. For 2011, the company registered
revenues of $3.56 billion - an increase of 10%
over 2010 due to higher commodity prices - but
posted virtually flat core profits.
The
unusually cold winter took a toll on the company's
results for the first quarter of 2012 due to
disrupted transport and processing. The copper
miners' strike took place less than five months
after an oil workers' labor dispute in western
Kazakhstan descended into deadly clashes with the
police, leaving 16 killed and over 100 injured. As
the trials over the Zhanaozen events continue in
Aktau, the administrative center of Mangystau
region, both the authorities and the public have
become wary of labor disputes in single-industry
towns with few other means of employment.
The strike in Zhezkazgan, however, was
handled in a completely different way, following a
model developed by the Kazakh authorities after
the violence in Zhanaozen. The company's first
step was to take responsibility for the workers'
grievances. Tensions have been building at
Kazakhmys mines since the winter, when workers'
wages were reduced by 30% for failing to meet
targets of ore production. Admitting that the
company management failed to create conditions for
fulfilling the plan, CEO Ogay stated that the
labor conflict could have been prevented.
"There were management shortcomings, which
we will assess. Such a situation should not be
repeated again," he told the local media after the
mines resumed work on May 7.
Second, the
company management made sure that the strike would
not be deemed illegal by the prosecutor's office
and none of the striking workers would be
sanctioned. Ogay sent a letter to the prosecutor
of the nearby city of Satpayev and the local
authorities with a request to regard the event as
a labor dispute, and not to take any actions
against the workers. The prosecutor of Satpayev, E
Tashmetov, visited the site of the strike and
called on people to hold a constructive dialogue.
Third, the management involved
representatives of the local government in the
negotiations with striking miners, thus creating
conditions for tripartite negotiations. In
addition, the mayor of Satpayev, Batyrlan
Akhmetov, personally addressed the protesting
miners and urged the workers to calmly, peacefully
and constructively discuss the labor conflict. He
said that any illegal protests were not acceptable
in the town.
On May 7, the mines resumed
work after Kazakhmys agreed to increase salaries
across the board by 20%, and for certain
professions by around 30%. The wage fund will be
raised from 4.5 billion tenge (US$30.4 million) to
more than 6 billion tenge. In addition, Kazakhmys
stated that the process of establishing a trade
union of corporation workers was under way.
It was not immediately clear whether the
Kazakhmys trade union has started reorganizing
after proving ineffective in addressing workers'
grievances earlier, or whether the reference was
to the newly established branch of the Zhanartu
trade union, closely related to the Kazakhstan
Socialist Movement.
Reportedly, in April,
workers' representatives from four enterprises of
the Kazakhmys group - the Zhezkazgan power plant,
the ore enrichment factory, the copper smelting
factory and the Zhezkazgan regional enterprise
KazMekhServis - decided to leave their official
trade union and join the independent national
Zhanartu trade union.
According to Berik
Zhagiparov, deputy of the Zhezkazgan branch of
Zhanartu, wage increases will only temporarily
provide relief to the problems of the region. The
towns of Zhezkazgan and Satpaev were created
around copper deposits, and their populations rely
mainly on the copper mining and production
industry. According to geologists, however, the
ore deposits around Zhezkazgan are depleting and
new mines have not been developed, except for one
that was built seven years ago.
Ogay has
stated that Kazakhmys would leave the town in 15
years, which ultimately means the death of the
city. The company has already moved its
headquarters to Karaganda after Zhezkazgan lost
its status as an administrative center a few years
ago. These are the reasons for the very
pessimistic outlook of the workers, who would like
to see a change in the relationship of the
corporation with its workers, said Zhagiparov, who
is also the editor-in-chef of Zhezkazgan's "Youth
Gazette".
A new study by the Norwegian
Institute for International Affairs lists among
the factors provoking social tensions in the
single-industry towns of Zhezkazgan and Satpaev:
workers' fears of dismissal (it is impossible to
find well-paid work outside Kazakhmys), high rates
of injury and death at work (safety regulations
are not adequately observed by either workers or
the company), difficult working conditions,
environmental problems, and low awareness among
the population about company plans.
One of
the reasons for the difficult situation is the
weak link between the corporation's management and
the local authorities on the one hand, and civil
society on the other. The study recommends
establishing dialogue between these parties.
Public associations are encouraged to shift from
confronting the company to engaging with it.
However, dialogue alone without a comprehensive
government development program for the region may
only be a palliative measure.
Margarita Assenova is a
professional journalist and political analyst with
over 25 years of experience in print and broadcast
media, including Radio Free Europe/ Radio Liberty.
In 1997 she was awarded the John Knight
Professional Journalism Fellowship at Stanford
University for her reporting on nationalism in the
Balkans. Assenova has authored book chapters on
security, energy and democracy published by CSIS
Press, Brassey's, Freedom House, and Bertelsmann
Foundation Publishers.
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