Tuesday, December 27, 2011

The Zhanaozen Violence Is Symptomatic of Larger Issue of Labor Unrest

The outbreak of violence between striking oil workers and police in the Caspian town of Zhanaozen reflects a larger issue of labor unrest and wealth disparity. Zhanaozen is neither a new Arab Spring nor is it the beginning of a widespread pro-democracy uprising in Kazakhstan. Labor unrest represents the most significant domestic hurdle to political stability.

The timeline of Zhanaozen events I compiled for Central Asia Newswire last week reveals how the December 16th  violence was an unfortunate explosion to a labor dispute in the works for several months. Violent clashes between striking workers and police broke out in Zhanaozen a few months earlier. On October 27, 2011, RFE/RL reported a striking worker was shot by a rubber-bullet from Zhanaozen police forces.

Labor unrest in the oil-rich Western Kazakhstan is a recurring narrative, particularly over the past ten years.

In August 2005, oil workers for Aktobemunaigaz protested against the new corporate structure after he Chinese National Petroleum Company (CNPC) acquired a 60% stake in the company.

In 2010, KazMunaiGaz employees went on strike to protest potential pay cuts, demand new executive management and request a new chairman of the trade union.

In May 2011, workers at Karazhanbasmunai, another Kazakh-Chinese joint venture, went on strike to demand better wages and official recognition of their trade union. According to the Institute for War and Peace Reporting (IWPR), one striking Karazhanbasmunai employee cited the success of strikes in Zhanaozen, where the wages for Ozenmunaigaz employees increased after massive protests. One Karazhanbasmunai protester was claimed to receive half the compensation of his counterpart at Ozenmunaigaz.

The IWPR article details additional labor strikes against Ersai Caspian Contractor and Aktobemunaigaz. Employee compensation, working conditions, labor-management relations and the legality of trade unions are recurring issues in workers’ strikes against oil companies in Western Kazakhstan.

For a newly independent state developing its economy and government like Kazakhstan, labor issues in the extractive industries sector are to be expected – it is a phase of history. Many countries have faced similar issues. In 1892, workers at the Carnegie Steel Company in Homestead, Pennsylvania staged a lockout and strike against the company’s leadership. The workers demanded improved wages and official recognition of their union. Eventually, the strike resulted in a violent standoff between the workers and the Pinkertons, a private fighting force. As Kazakhstan’s economy develops, the Nazarbayev regime must work with oil companies to mitigate labor issues in the extractive industries sector, particularly in Western Kazakhstan. For all economic sectors, employees’ rights, benefits and wages should be the top priority to policymakers in Kazakhstan.

To give credit where credit is due, the Kazakhstan government has taken considerable actions to accept accountability in the aftermath of Zhanaozen. The government has invited the United Nations to participate in an investigation into the Zhanaozen events. After receiving criticism that the regime is cracking down on Internet access, they permitted bloggers to tour Zhanaozen (granted, the government organized the trip and selected the bloggers). Additionally, President Nazarbayev reshuffled the executive management of Samruk-Kazyna, firing son-in-law Timur Kulibayev as head of the $78 billion sovereign wealth fund. According to Tengriz News, Kulibayev’s petition to resign cited the events in Zhanaozen as a primary reason for his departure. First Deputy Prime Minister Umirzak Shukeyev will replace Kulibayev as head of Samruk-Kazyna. In The Oil and the Glory, Steve Levine makes an excellent point that this is not the first time President Nazarbayev has fired Timur Kulibayev. Rather, Kulibayev’s career is a series of fires and re-hires from positions in finance, energy and infrastructure firms. Still, the timing of the Zhanaozen events following the Arab Spring and in the middle of the Moscow riots, Kazakhstan’s 20th anniversary of independence and before a parliamentary election, render the ousting of Kulibayev particularly notable.

When compared to Al-Assad’s repression of protesters in Syria or Karimov’s ousting of NGOs following the Andijan violence in 2005, President Nazarbayev has taken significant steps to maximize transparency and accountability. Moving forward, the Nazarbayev regime must ensure free and transparent parliamentary elections in January that produce multi-party representation in the Mazhilis and a thorough investigation with the UN into the Zhanaozen events.

The December 16th clashes in Zhanaozen are an extreme situation of a labor dispute. As illustrated by the 1892 Homestead strikes, the Zhanaozen events are tragic, but they are not unprecedented in the context of world history. The Nazarbayev regime must follow through on its commitment to transparency and accountability during the investigation into the events. Above all, the regime must make workers’ rights, entitlements and salaries in all sectors of the economy, a domestic policy priority.

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