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Year of Colombia Labor Strife Starts in Cerrejon

Colombia is facing perhaps its more perilous year as it finalizes peace talks amid a grueling economic downturn as the economy prices in the global commodity price crash. And the country’s ability to navigate expected labor strife will be in display in coming days as cash-strapped Cerrejon, the country’s biggest miner, tries to avert a strike that could set the mood for the rest of the year.

Workers will finish voting Thrusday on one of the two options on the ballot, calling a strike or accepting government arbitration. Turnout has been huge, giving union leaders a strong mandate to act.

The outcome is hard to call though. While most workers say they will vote in favor of the strike, as government intervation is mistrusted, there is mounting public pressure on the union leadership from both its members and communities to avoid any industrial action.

If workers support a strike, the union leadership will have until 13 March to set a date. While the results are important to improve the union’s leverage, it’s the ongoing parallel negotiations that are the key to avoiding a strike, a person familiar with talks told me.

Daily talks restarted Sunday to clinch a deal, resulting in small breakthroughs. But it is uncertain whether they will ward off a strike. Cerrejon has offered a nearly 6.8% salary increase, basically covering inflation, which the union rejects as insufficient. Health benefits and employee bonuses are the biggest obstacle to a deal now though, the person said.

Workers are also conscious that coal prices have fallen to historic lows, a third of what they were only three years ago when they negotiated their last contract. Then, a 32-day strike did little to improve their gains, the person explained.

Setting the mood

The handling of Cerrejon’s strike threat will set the mood for labor strife across the country in coming months. A national one-day strike is already scheduled for March 17. More are sure to come as the brunt of the economic woes are only being unleashed.

President Juan Manuel Santos already delayed urgent tax and labor reforms to preserve his political capital as he readies to ask Colombians to validate the final peace deal with the Revolutionary Armed Forces of Colombia, FARC. The last thing he needs is a string of labor strife undermining his popularity.

So the stakes are high in Cerrejon negotiations. If both sides fail to reach a deal, Cerrejon workers could spark a wave of labor strife in the commodity, transport, and agriculture sectors. The opposite effect is just as possible if a strike is averted.