17 May, 2010
The ICEM affiliated Kuwaiti union, the Oil and Petrochemical Industries Workers’ Confederation, vehemently opposed a Privatisation Bill that passed through the Persian Gulf country’s Parliament, especially the inclusion of the oil industry of the country.
The ICEM had closely monitored the situation since the legislation received strong backing in Parliament, on Thursday 15 April. Thirty-three MPs backed it, including the entire cabinet. This backing moved processing of the Bill to the Financial and Economic Committee of Parliament, where significant opposition moved the Committee’s secretary, MP Yusif Zalzlah, to announce on 3 May that the panel advised against the inclusion of the oil and natural gas sectors in the legislation.
The ICEM will remain alert to the threat of this legislation returning in the future, as MP Zalzlah stated that the government will remain “very flexible” on the issue in the future.
The Oil and Petrochemical Industries Workers’ Confederation opposed privatisation of the oil sector, seeing it as a transfer of government assets into the hands of a small number of wealthy individuals. The confederation, which serves as the umbrella organisation for six unions representing Kuwaiti workers in the sector, pointed to the recent privatisation of petrol stations in Kuwait, which saw high levels of job losses.
A total of 94% of Kuwait’s revenues come from oil. ICEM General Secretary Manfred Warda, in a letter to members of the Kuwaiti Parliament, stated, “Kuwait’s system of cradle-to-grave welfare is an example to all around the world; we believe strongly that the handing over of your oil assets would seriously jeopardise this welfare system.” See the full letter here.
The Privatisation Bill was passed by Kuwait’s Parliament on 5 May, but did exclude oil and gas production, as well as health and education. The bill angers Kuwaiti trade unionists, especially in sectors that were privatised. One trade union leader was forcibly removed from the public gallery during the parliamentary debate, for shouting slogans against the law.
The new law will be effective in six months time and opens up public services to private ownership. A “Higher Privatisation Council” will be created, to be headed by the Prime Minister, and this council will oversee sale of public assets.
There will be some regulation, with the law ensuring that when a public company is sold, 40% of its shares must first be offered for sale to Kuwaiti citizens, followed by 20% to be held by government, and 5% to Kuwaiti employees. The remaining 35% will be sold at auction to a local or foreign investor.
In Kuwait’s oil sector, striking workers at the Mina Al-Ahmadi oil refinery returned to work 14 May after a five-day strike was resolved. Workers at the utility unit, employed by the Kuwait National Petroleum Co., were protesting a cut in the workforce. Mohammad al-Hamlan, deputy president of the workers' union, reported that management had agreed to the union’s demands, ending the strike. The utility unit workers had been joined in solidarity by the facility’s tank farm workers since 11 May. The refinery is the country’s largest, with production of 460,000 barrels per day.