Egypt: Strike over IMF Privitization Policies

Egypt: Strike over IMF Privitization Policies

Under growing pressure from the IMF to privitized its large public sector, the Egyptian government has since 1991 instituted a series of regressive policies designed to preparing these companies for sale. Law 203 of 1991 has been used by the government to simultaneously weaken the trade unions, shrink the size of the work force, and skim money from wages to pay off debts resulting from poor management. The policies pursued at the Spinning and Weaving Factory in Kafr al Dawwar represent an extreme case of the implementation of these policies, and many believe that the factory was chosen as a test case to determine how far these policies could be pushed before workers would protest.

On 30 September 1994 seven thousand (workers from later shifts were refused entry by the State Security Forces) of the twenty-two thousand workers at the Kafr al Dawwar Spinning and Weaving factory began a peaceful occupation of their factory, maintaining production until management cut electricity and water lines to the plant on 1 October. On 2 October the government responded to the sit-in with a massive use of force. State Security Forces (SSF) fired tear gas and live ammunition on workers, members of their family who had come to bring them food and water, and school children who had just been sent home from schools near the factory. Four people were killed, at least 120 wounded (75 were hospitalized and many others refused to seek medical treatment because the SSF regularly arrest wounded individuals on the grounds that a bullet wound is evidence that some participated in an illegal activity), and 96 were arrested.

The 56 year old Spinning and Weaving factory is the largest factory in this city of 500,000 located 20 kilometers from Alexandria, employing 22,000 of the approximately 80,000 factory workers in the city. Many of its employees are the second generation to work in the factory, and there is a long tradition of community solidarity and worker grassroots organizing in the city and its surrounding villages. The factory has had major strikes in the past, including the now famous strike of 1984, when the entire city turned out to support workers protesting new legislation which would have entailed major wage cuts; until today that legislation has not been applied to the workers in Kafr al Dawwar, and until 1991 government bread subsidies in Kafr al Dawwar were more than twice those in the rest of Egypt.

The curent problems began in May 1993, after Fathi Muhammad Ali was appointed head of the Management Council. While initially promising a moderate administration, the new president quickly worked to co-opt the trade union leadership, forming a new union council whose members were transferred to administrative positions and are rumored to be receiving wages and bonuses as high as LE2,000/mo in a factory where the average base salary is around LE70/mo. Ali also appointed a board of 17 advisors to help surpervise his new policies; their combined salaries is reported to be close to LE250,000/year.

The situation began to decline after October 1993, when Ali, with the approval of the new union council and board of advisors, began to implement a series of policies designed to drive wages down. Among the new administrative decisions were a policy of surprise administrative and security searches whereby minor infractions such as being momentarily away from one s machine or being late for work would be punished by a 3 month loss of incentive pay and bonuses (note that the factory scale is such that the base salary accounts for only about 1/3 of workers salaries, thus making incentive and bonus pay crucial); and pay cuts for sick leave or other absences at the rate of one day for the first day, 3 days on the second day, 6 days on the third day, etc (these are penalties in addition to the days absent, and is the government s new reinterpretation of existing law which allows 1 day penalty per day of absence with a maximum of 5 days loss of wages).

Other policies undertaken during this period include laying off approximately 1,500 workers; transferring others to far away branch plants (many others who were to be transferred resigned or took early retirement); and attempts to evict over 200 families from company housing when they no longer had a head of household working for factory (note that some of these families had been living in the same house for 20 or 30 years); and the demolition and non replacement of other company housing, despite a housing shortage.

Despite numerous worker appeals to their national union, the union of workers, the minister of labor and the Egyptian president, as well as a decision issued by the government s central accounting office declaring the management policies illegal, Ali was allowed to continue in his position and to continue his attacks on the workers.

On Tues 27 September 1994 workers learned that the union council had agreed to a company proposal whose policies included a 3 month loss of incentives for workers taking 1 day sick leave or being caught sleeping or absent from your work site. Workers ending the afternoon shift staged protests and an hour long sit-in but then decided to end the sit-in when they couldn't find administration representative to meet with them. During the 28th and 29th negotiations were held with management, and an administrative announcement was circulated saying that the 3 month penalty had been withdrawn, but on Friday 30th the company president made an oral statement saying he had not issued that earlier written statement and the he would not recind those decisions. A new sit-in began that evening, with workers from the incoming shifts joining until they were prevented from entering the factory starting Saturday 1 October. The workers demands are as follows: 1) get rid of president Fathi Muhammad Ali; 2) reinstate fired workers (about 1,500); 3) return transferred workers; 4) nullify the oppressive policy decisions of the previous months; 5) pay back lost incentive pay; 6) replace the union council representatives (this is not legally feasible, but it shows the degree to which the workers feel they were sold out; during the sit in 3 of the reps were beaten up and the rest fled); 7) get rid of the new advisory board 8) make Friday a paid holiday and give those working Friday double time (Friday is the day off throughout the islamic world).

From Saturday morning onward the local units of the State Security Forces were out in full force, and special forces and reinforcements were brought in from neighboring Alexandria, Kafr al Shaykh, and al Bahariya. The sit-in became a de facto strike when management cut electricity and water to the factory at 1pm on Saturday, and production stopped. Saturday evening families began collecting food and sending it to the workers. Sunday morning at dawn the SSF attacked the nearby village of Nazir, which is know as a center of worker organizing and is usually the starting point for workers marches; they also cut the rope to a small ferry to deter workers from other villages from joining the protests. Shortly after the attack there was a confrontation at the factory gates when the SSF tried to turn back families bring food, then confiscated the food and threw it in a nearby canal. The families protested and started chanting, the SSF fired in the air, the families responded by throwing bricks, and the SSF then attacked with live ammunition and tear gas. Workers watching from inside the factory then opened fire hoses on the SSF in an effort to defend their families, and were fired on as well (contrary to management claims that the workers were damaging the plant, they put out fires that started when the teargas canisters hit bundles of cotton). At about the same time it was announced that school was cancelled for the day, and families went to collect their children and get them out of the way. (One of the killed was a 9 year old boy who was shot while his father was leading him by the hand to take him home from school.) Some of the older schoolchildren went to see what was happening, joined in the chants, were also fired upon.

Later during the day management issued an announcement saying it was accepting the workers demands and it was also calling a one week vacation. As workers were returning home 71 workers and family members were arrested, either in the street, at home, or from hospital. Another 22 were arrested from their homes on 4 Oct, as well as 1 arrested on 5 Oct, 1 on 8 Oct, and 1 on 16 Oct. Approx 7 others, including 4 minors, were also arrested but released before being processed by the prosecutor general s office. Numbers of wounded are harder to assess because may were afraid to go to hospital for fear of arrest, but 75 people were hospitalized and estimates are that the total wounded was at least 120. Among the hospitalized are 8 individuals who lost one or both eyes, and one who lost the use of his legs. To date (21 October) 94 of the arrested have been released on bail, 69 with fines of LE 50, and 22 with fines of LE 100. The remaining 2 are awaiting review of their cases. It is not known whether the government will bring charges in any of these cases. A government appointed committee investigating the incident found that the union did not play its proper role in defending worker interests, and that the worker demands were legal. Nevertheless, the worker demands have only been partially executed and the company president remains on an indefinite leave of absence.

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Date:  Thu, 3 Nov 1994 02:13:28 -0800

Editor: Ali B. Ali-Dinar
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From: "Arthur R. McGee" 
Subject: Egypt: Strike over IMF privitization policies (fwd)