Oil Strike in Kuwait

With the decline in oil prices in global markets, the Kuwaiti government, as one of the exporting countries of this economic commodity, has faced significant financial problems. One of the proposed options to confront such a crisis, presented by the Minister of Commerce and Industry, is a slight reduction in salaries paid to government employees. Kuwait has about 600,000 salary earners, with their monthly payments amounting to 700 million Kuwaiti dinars, equivalent to more than 2.3 billion dollars per month. At the peak of oil prices, Kuwait was the first government in the region to increase the salaries of its employees by up to 25 percent. Currently, a government employee in Kuwait earns an average of 1,166 dinars, equivalent to 3,868 dollars per month. The government's austerity plan includes a reduction of 100 dinars from employee salaries, which has been implemented for all sectors except for oil workers. Anas Saleh, the Minister of Oil of Kuwait, initiated discussions on the slight salary reduction for oil sector employees with the leaders of the oil workers' union, which represents about 16,000 people. These talks continued for weeks, but on Sunday, April 17, oil workers suddenly went on strike, announcing a nationwide strike across all subsidiaries of the Kuwaiti Ministry of Oil. According to official sources in the Kuwaiti government, this strike reduced the country's oil production from 3 million barrels per day to 1.1 million, effectively halting nearly 70% of Kuwait's oil production. The Kuwait National Petroleum Company, which oversees three major refineries in the country, also announced that the production of oil derivatives decreased from 930,000 barrels to 520,000 barrels per day. In this situation, the national oil company declared a state of emergency, and the 'National Guard' was deployed to some oil production centers to attempt to resume operations in place of the striking oil workers. Currently, the Kuwaiti government is trying to assure its oil customers that it will provide oil without any interruptions. However, despite the nearly two million reduction in oil production, there is a likelihood of a certain disruption in the transfer of Kuwaiti oil, especially if the strike continues and the National Guard cannot activate all production centers. The government's estimate of the number of striking oil workers differs from the statistics provided by the oil workers' union. According to the government, only 6,000 people participated in the strike, while the union claims that the number of strikers exceeds 13,000. This is not the first time the Kuwaiti government has faced a strike in the oil sector. In 2010, oil sector employees also launched a widespread strike, but it was quickly contained and had no disastrous results for the country. Additionally, strikes in other sectors of Kuwaiti society have occurred in the past four years, such as the customs workers' strike in 2012 and the insurance company employees' strike in 2014. All these labor groups organized and supported by their respective unions acted to demand their rights. Despite the legal provision for the formation of workers' unions in Kuwait, particularly in the country's first legal text in 1962 and subsequent amendments in 1964, the labor union formation law was practically unenforceable until 2010 and remained ambiguous. However, Articles 99, 98, and 100 of the union formation law passed in 2010 clarified these ambiguities, granting workers official ownership of their unions. According to this law, workers submit the necessary documents to form their union to the Ministry of Labor and Social Affairs, which is obliged to grant permission for the union's activities within 15 days. If more than 15 days pass without a response from the ministry, and if the documents submitted by the union applicants are flawless, they can effectively begin their union activities. The law here protects workers, and the ministry's lack of response cannot hinder their activities. However, under the union formation law in Kuwait, workers cannot establish regulations for their union that conflict with national laws. Furthermore, workers cannot direct activities through their union that would harm the public interest of the country. Currently, the issue of the strike in the oil sector and the damages resulting from it has become a hot topic of 'damage to public interest' in government circles. The government argues that the oil workers' union strike has inflicted significant losses on the country's supreme interests, and therefore it has the right to take action against the strikers. The Kuwaiti Council of Ministers held a special session last Monday to address the strike issue and decided to deal with the strikers through legal and judicial channels. The Kuwait National Petroleum Company was also authorized to immediately hire new personnel to reopen the closed centers. Although in this process, the Kuwaiti government seeks to assert its authority over the strikers, it is unlikely that the current situation will lead to a direct confrontation between the government and the oil workers' union, and both parties may reach a middle-ground agreement.