Poisoned chalice?

The June 8 disclosure by RUSAL’s Chief Executive Officer, Evgenii Nikitin regarding the company’s plan to invest heavily in the upgrading of its bauxite-mining operations in the Caribbean, including its operations in Guyana, is likely to attract a muted welcome here. On the one hand the disclosure would appear to provide some measure of assurance that RUSAL’s operations here will, for the foreseeable future, persist, as will the jobs that those operations afford Guyanese. Some critics of RUSAL’s management style would have preferred to see the back of the Russians.

The real question that arises here has to do with the nexus between RUSAL sinking more financial resources into its Guyana operations and its ongoing relations with its local work force and with the Government of Guyana, the ‘minority partner’ in the agreement with the Russians.

Going forward, it is the enduringly unwholesome relationship between management and the workers and their union that is the biggest issue. RUSAL’s managers have decidedly not endeared themselves to the Guyanese workforce. What has not helped is the protracted ambivalence of the Government of Guyana, across political administrations, to meaningfully throwing its weight behind the improvement of relations on the ground. Truth be told, there have been times when the RUSAL employees serving with BCGI here in Guyana have appeared indifferent to, even decidedly contemptuous of the Government of Guyana.

That said, both the Guyanese workers and, one expects, the political administration, will see the planned RUSAL injection of funds into its Guyana operations as providing some indication that relations between management and workers may improve. That, however, is by no means a fait accompli. The Russians may well decide that RUSAL’s new investments in its Guyana operations justifies a doubling down on a management style that has made them widely unpopular in Guyana.

It will be recalled that in December 2004 RUSAL signed an agreement with the Government of Guyana from whence emerged the Bauxite Company of Guyana Inc (BCGI). RUSAL holds 90% of the shares in the entity. The Government of Guyana holds the remaining 10% which, it is no secret, counts for nothing as far as management control is concerned. The RUSAL Russian managers are the sole and unquestioned rulers at the company’s bauxite operations. Guyana’s primary substantive concern has to do with the fact that RUSAL’s local bauxite operations provide employment in a community that offers few alternative job opportunities.

As has already been said Guyana’s 10% share in BCGI, insofar as management control is concerned, isn’t worth the paper on which the agreement is written. It is RUSAL that runs things, through its succession of Russian managers and its ill-concealed disinterest in the country’s labour laws. In truth, the term BCGI hardly ever gets mentioned in public discourses that have to

do with the company, the proper name of the entity having long been subsumed beneath the title of the real bosses, RUSAL. All this, as has already been said, has, over many years, been ‘sucked up’ by successive political administrations, striking submissive postures in response to the excesses of the Russian RUSAL bosses. The workers, it has to be said, against considerable odds, have, to their credit, persisted with little real help outside of their own ranks, to find ways of demonstrating their resistance to the tyranny.

Mr. Nikitin’s ‘big bucks’ investment announcement regarding the upgrading of RUSAL’s bauxite plants in the Caribbean is not surprising. The company’s decision would have been influenced by what Moscow sees as the bigger picture. Strategically, global perceptions of Guyana and the region as a whole would have changed significantly over the past five years or thereabouts…and the Russians are acutely aware of this. That strategic significance is reflected in the unearthing of several world class oil finds in waters offshore Suriname and Guyana in just over five years.

There is more. Moscow would not be unaware of the recent inclusion of bauxite on the European Commission’s Critical Raw Materials list, given what the Commission says is its strategic importance “in applications like renewable energy, batteries, electricity systems, resource-efficient packaging, energyefficient buildings, and clean mobility.” Russia has always been inclined to embrace strategic insurances

against future vulnerability; its recent significant investment in boosting its bauxite mining operations in the Caribbean, including Guyana, factors in its awareness that that global demand for aluminium is expected to increase by around 50% over the next twenty-five to thirty years and, accordingly, that it is in its interest to develop a sourcing strategy for bauxite that is uncluttered by the risk of supply chain disruptions.

From Guyana’s standpoint, successive political administrations have failed to rein in the excesses of RUSAL’s Russian managers who appear to have been strategically directed by their bosses in Moscow to treat the company’s bauxite holdings here and their Guyanese workers as though these were an ‘offlimits’ outpost of some remote part of the Russian Federation.

It is for the Government of Guyana to assert itself in a way that reminds the Russians that their bauxite interests here do not translate into anything even remotely resembling sovereignty. Up to this time government has been studiously evading that responsibility.