Home Letters Serious rebuttals of Mr. Lincoln Lewis’s misleading representations and propagation of a...
Dear Editor,
Instead, we quickly developed a base plan, which we soon disclosed at a meeting to which Mr. Lewis was invited and was present: a plan not to close, but to resume management of the operations, and to find and put together money to resume subsidy of the bauxite operations.
While I cannot immediately recall all the details of that plan, it would have been firstly a holding operation, based on the realities of recent production rates, costs, prices and losses.
We also quickly applied to the EEC/EU for a SYSMINS loan/grant, which was available for places where the legacy mining business was judged to be no longer sustainable. The processing of this application was protracted, about seven years to first disbursement, partly because, based on the relevant consultants’ reports, the various reviewing committees were slow to accept that the situation in Linden was as desperate as in other places applying for their support. Approval, finally, was a well-earned reward to our perseverance.
Mr Lewis charges us with reducing calcine (RASC) production at Linden. My recall is that whilst there might have been a target of 400,000 tons per year, production and sales were running at about 200,000 tons per year. Mr. Lewis declares, “Guyana never experienced a problem finding market for its bauxite products”, but he misses the point: What did/does he think of the huge losses since the mid- 1970s? Evidently, all and any production was being sold, but at prices far below what was required to cover all costs and provide a return on investment, or to create a future investment fund. As indicated in the KATSI (Kaiser Aluminum Technical Services Inc.) report of 1983, funded by the multilateral agencies, we (the bauxite operations) needed to get to where the sales-price-to-costs ratio was improved by a factor of 100:70.
To develop this question further, it was long recognised that as another thousand tons of RASC were produced and sold, it went to a market/user where steadily lower cost alternatives were available, but with a single product price differentiation in the total market, it was not sustainable. So, RASC price was being determined by the lowest price/value of the sales on the margin. Experience (unto BOSAI today) seems to suggest that there was/is a core demand for RASC of about 200,000 tons per year, for which the value/price return may be sustainable.
Lewis charges us with breaking up the Guyana bauxite workers’ pension plan, “the single largest pool of money owned by African workers”. There had been extensive discussions about what was to be done in preparation for, and on privatisation.
First, the Government had to find the monies to bring up-to-date a workers’ savings scheme, outstanding PAYE and NIS submissions, and an estimated fund to pay enhanced retrenchment benefits promptly. Preference was to close the old companies completely, provide all benefits promptly to workers, and start afresh with the new private companies. For a number of reasons, we took the decision to bring the pension scheme to an end, and return their entitlements directly to each worker:
a) As Guyana had experienced an inflation of 500 to 1000 over the time from its inception, the monthly pension payments would have been very small – even less than 20 per cent of the (also small) NIS pension
b) Charges for a commercial manager of this closed, non-receiving pension scheme may have quickly eaten up the principal.
Mr. Lewis has been upset that the PPP/C Administration did not hand over “this single largest pool of money owned by African workers”. I would guess that there would have been up to about 10 per cent [other peoples] to some self-proclaimed “African Leaders group”. We felt that our legal and moral responsibility was to provide to the individual workers whatever money was to their credit. We provided to the workers information on available commercial schemes, and the schemes also invited Mr. Lewis to sell his “fund” ideas directly to the workers. This was not a cynical move – for success and satisfaction of whatever was their alternative “fund” plan, a direct, earnest, deep, trusting relationship needed to be developed between the expected fund managers and the fund investors – the workers.
Mr. Lewis again seeks to justify continuing about the 90 per cent subsidised electricity prices across Linden as being “deferred wages/salaries” in a 1976 labour agreement; an arrangement whose roots go back to the 1940s and through the beginning of the ending of the isolation of that 100 per cent company town towards the end of the 1960s with the opening of the Soesdyke-Linden Highway. Up to about that time, upwards of 80 per cent of homes would have had one or more persons working directly with the bauxite company. Today, forty-plus years later, not more than 20 per cent of homes would have one member working with the new bauxite company. It was with a sense of a long overdue need for reform ( first signalled in 1976 by then President Burnham) that we, PPP/C, during the Government-Opposition talks following the reading of our 2012 budget, developed an understanding for a phased merger of the electricity supply in Linden/Region 10 into GPL. The reduction of subsidies over the transition period would have provided additional financing for the development of the people and the Region. We all know how that turned out – a reform still to be faced up to someday.
Mr Lewis raises again the event of the dismissal of some workers at Aroiama in 2009. I don’t know what assurances the then Opposition and now Coalition Government would have given to Mr. Lewis and the Union, explicitly and/or implicitly. My position was clear – whilst I understood the two different positions and recognised that the union expected Government support, I could not find that the behaviour of the fired workers was acceptable, and therefore I could not call on the Company to reverse its decision. I certainly wanted, and remained alert to, opportunities for reconciliation. As I have remarked before, it has been unfortunate that in the circumstances of the racial and social separation in the bauxite company towns, the black-white struggles internationally of the times, and in the run up to Independence and nationalisation, the behaviour of workers was tolerated and even instigated, which otherwise would have been unacceptable. Disappointments with each other, which one could anticipate, soon became evident in the gap which early appeared between bauxite workers and the Party and Government which they supported, made evident in the RILA protests which preceded nationalisation. This disappointment and ensuing rancour could be readily sensed in then Prime Minister Burnham’s speech in Linden on the 5th anniversary of nationalisation (in 1976), a speech in which he spoke about being the Prime Minister for all of Guyana, and not just for Linden, and of the decision to merge the electricity system of Linden into the national GEC.
Sincerely,
Samuel A.A. Hinds
Former Prime
Minister,
and Former President.
