The Arbitration Tribunal in the Guyana Sugar Corporation (GuySuCo) and Guyana Agricultural and General Workers Union (GAWU) wages and salaries dispute yesterday recommended a three per cent payout to workers across the board for 2009.

GuySuCo CEO Mr. Errol Hanoman (left) receives a copy of the tribunal report from Minister Nadir. GuySuCo representative, Ms. Sonya Roopnauth, looks on. (Cullen Bess-Nelson photo).

Chairman of the Tribunal, Dr Gobin Ganga, made the announcement in the presence of Labour Minister Mr. Manzoor Nadir and representatives from both parties at a press briefing at the Central Bank, Avenue of the Republic, Georgetown.

Ganga ordered that the increase be paid no later than March 2010, and pointed out that it was the Tribunal’s considered view that the award should be based on the principles of fairness, equity, social justice and compromise.

However, he said the Tribunal is convinced that GuySuCo is in a precarious financial situation with declining receipts from lower output and European Union (EU) price cut, and is unable to borrow from the local banking system.

The Chairman stressed that the welfare of the workers 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 to successfully implement the Turnaround Plan.

“GuySuCo is anticipating a deficit of $8B in 2009, which will add to the 2008 deficit of $3.2B and would have to be financed from borrowings. This will undoubtedly result in interest cost amounting to more that $300M,” Ganga disclosed.

He reported in 2010, the Corporation’s financial out-turn may be uncertain but there is insufficient evidence to suggest that it will be any better than 2009.

Although GuySuCo is projecting a higher output level of 280,000 tonnes of sugar, the Chairman, who is also the Deputy Bank of Guyana Governor, said this may not result in an appreciable improvement in its financial position if the targeted output is not met, capital expenditure is not undertaken, tillage and planting are not achieved, and inefficiencies are not effectively addressed.

He said too that the current expenditure is relatively high when compared to output and receipts after accounting for the high fuel and fertiliser price increases in 2007 and 2008.

Deficiency
“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 believes that a large part of this can be explained by a high level of inefficiency in the Corporation which is a consequence of poor governance. A conservative estimate by the Tribunal is that this is costing GuySuCo in excess of $3B annually,” Ganga revealed.

He also told the gathering that the Tribunal was heartened by a pledge from GAWU President, Mr. Komal Chand, that the union and workers will support GuySuCo in increasing production levels next year from a planned 280,000 tonnes to 320,000 tonnes.

He said in addition to measures in the Turnaround Plan to put GuySuCo on the recovery path, there are a number of immediate measures that can be adopted to improve its short term performance.

Ganga said the Tribunal believes that greater effort by all stakeholders and in particular the leadership in the Corporation is critical to alleviate the problems associated with inefficiency, corruption and poor governance.

“In the short to medium term, this can result in at least a 10 per cent reduction in expenditure which can help improve GuySuCo’s financial position and fund part of its capital programme.

“The interest cost of borrowing is a burden on the Corporation, and therefore the Tribunal believes that alternative and innovative instruments of financing can be sought to help alleviate this situation,” he contended.

The Chairman also said the Tribunal notes the just arguments by the union that factory and field workers should, at least be compensated for the nature of the work they do and the increase in cost of living to maintain their real wages.

Similarly, he said the Corporation promises to pay higher wages in the future when its financial position improves.

Minister Nadir said the toil of the workers and their low wages are understandable but noted that the three per cent payout to 18,000 persons on the various estates will cost GuySuCo about half billion dollars, which will be added to its wages bill.

Get house in order
He said too that the Corporation has to get its house in order to stamp out inefficiencies as sugar has to rebound to a production of 280,000 tonnes per year or all Guyanese will suffer.

Bleak days ahead
GAWU General-Secretary, Mr. Seepaul Narine, said the three per cent is below the union’s expectation and represents a bleak day ahead for the sugar workers and the future of the industry.

He said GAWU has taken note of those who want to suppress the workers and deny them their just wages, and made it clear that union did not expect a fair deal, pointing out that his comment is based on statements made by certain individuals.

GuySuCo Chief Executive Officer, Mr. Errol Hanoman, acknowledged the work ahead of the Corporation and said he looks forward to working closely with the union and the workers to take the industry forward.

Hanoman, unlike Narine said there is a good future for the industry and those associated to it, but all will have to work as a team to make this a reality.

He also stressed that GuySuCo has to strengthen its management team with more competent managers and urged that one must not lose sight of the Turnaround Plan for the industry. Work has already started on that initiative.

The union in the negotiation has initially demanded a 15 per cent wages and salaries increase from GuySuCo, but later reduced their demand to 10 per cent after considering the financial straits of Corporation.

The Corporation throughout the negotiation maintained that it can only offer the union a three per cent increase. The negotiation was declared deadlock on October 29 last and was subsequently referred to the Arbitration Tribunal.