The Government Does not participate in the Provision of Social-economic Guarantees to Miners

8EMC is reacting to media reports about the suspension of ore mining company “Georgian Manganese” activities for four months. We believe that the uncertainties associated with presented documentation on the suspension of the company’s activities, exclusion of the defenders of the interests of employees from the decision-making process and passive involvement from the Government creates a real possibility of violating workers’ labor rights, and threatens Chiatura with potential social and economic crises.

Labor unions and workers learned about the decision of “Georgian Manganese” to suspend company activities through an official letter of the enterprise, dated January 11th, 2016. According to the letter, the grave economic situation of the product in the international market in the last period had affected the activities of “Georgian Manganese” directly, forcing the organization to move to a special working time from January 20 to May 20, 2016. In accordance with the terms offered during the special working time, employees will receive 60 percent tariff rate of given salaries and will retain their insurance, but the prepaid deduction fees will be canceled. The company also offers solicitation with banks regarding loan liabilities to the employees. In the same letter, the company underlines its commitment to the completion of the special working time to take all measures to safeguard workers jobs. Some workers agreed to sign the document regarding the changes of their labor condition.

Due to the importance of the issue, the decision on the suspension of production should have been made with direct participation of the state, justification of the need for production suspension, consecutive risk assessment and creation of social-economic sustainability guarantees for the region and employees by the State. However, it can be assumed that a closed meeting took place between the state and the company, without the involvement of important stakeholders. Actual impact of the current crisis at the international market and its extension on the manganese factory’s activities, as well as workers’ rights and social conditions were discussed in any format, including the Tripartite Commission on Social Partnership, indicating the passivity and inaction of the State.  In addition, none of the State Entities, including the Ministry of Economy and Sustainable Development, Ministry of Labor, Health and Social Affairs, the Prime Minister’s Advisory – Economic Council and the Ministry of Environment and Natural Resources Protection have not made any evaluations regarding current events.

Temporary suspension of the company’s activities seriously affects the social condition of the workers, reduces their salaries and leaves them without corresponding resources to pay for bank loans. Yet, the suspension of the enterprise activities was carried out without proper representation of the employees’ interests, since neither labor unions nor civil organizations were involved. Engagement of the organizations in the process would have ensured full and fair representation of employees’ interests.

The company argued that after special working time recovery of the production capacity depends on the international market trends. These processes might even put the employees in Chiatura at the risks of losing their jobs. However, the State did not present a vision for creating social and economic guarantees for the region, which is particularly problematic in the case of Chiatura, since its population and economy depend on the enterprise and are highly vulnerable to any changes in the company. In fact, there is no alternative employment in Chiatura. For small enterprises who exploit ore in the region, the only major customer is “Georgian Manganese”. Therefore, the business condition of “Georgian Manganese affects not only up to 3700 employees and their families, but also competing enterprises’ employees and their family members, which ultimately correspond to a significant part of the population of Chiatura and its surrounding villages. The risk scale is aggravated by the fact that the suspension of the activities of the Chiatura manganese might have a negative impact on the activities of associated companies, their employees and other companies in nearby districts. In particular on the employees of the Zestaphoni ferroalloy plant, owned by “Georgian American Elloys’’ who handle raw materials obtained in Chiatura, as well as on hydropower station “Vartsikhe 2005” that supplies Zestafoni and Chiatura with electricity.

In addition, the decision made by the enterprise contains legal shortcomings. According to the Labor Union, the workers are not granted any time for qualified legal assistance to analyze the conditions of the proposed agreement, since the organization requests all employees to sign the agreement immediately. According to the legislation, it is important to give employees adequate time for legal advice and consent, as long as the downtime caused by the enterprise is fully paid. By signing the agreement, the employees give up their legislative guarantees and allow the employer to compensate the delay it is responsible for with tariffs of lower standards than those envisaged in the legislation.

The decision made by” Georgian Manganese” to suspend its activities can threaten Chiatura with an economic crisis and can have negative impact on the workers in Chiatura, as well as the general economic condition of the region.  At the same time, the economic and social sustainability perspective of other districts depending on Chiatura, as well as the production of minerals, becomes absolutely uncertain. Accordingly, EMC appeals to the State:

– Immediately discuss the suspension of the activities in the Chiatura manganese industry through the Tripartite Commission on Social Partnership to thoroughly assess the real reasons for the suspension of the enterprise and to apply measures to create social and economic guarantees for the employees. In addition, the Ministry of Environment should assess the reasons for the suspension of activities on mineral extraction in accordance with the current legislation;

– Entities responsible for the State’s economic policy should provide short term and long-term strategies for the duration of the special working time to protect the economic and social conditions of employees, and after the expiration of the special working time, assess the working prospects of the employees, as well as the economic and social risks to dependent enterprises in the district and the relevant preventive and reactive mechanisms.