Borjomi workers strike as Georgia prepares to take over Russian shares

As much as 400 staff at Georgia’s Borjomi mineral water manufacturing unit have gone on strike because the agency’s Russian proprietor has been hit by sanctions and the corporate stopped paying salaries.

The Georgian authorities, in the meantime, says it has labored out a plan to bail out the corporate by taking up the Russian shares.

In late April, Borjomi introduced that it was halting manufacturing, citing disruptions in market entry and banking providers attributable to the warfare in Ukraine. 

Whereas the corporate’s mineral water is an iconic Georgian model, Russia’s Alfa Group owns 60 p.c of its shares. On account of the Russian invasion the corporate and its co-founder Mikhail Fridman had been hit by American and European sanctions. 

The European Union mentioned in its announcement that Fridman had “actively supported materially or financially and benefited from Russian decision-makers liable for the annexation of Crimea and the destabilisation of Ukraine.”

As talks between staff and administration didn’t discover a new association to protect jobs throughout the disaster, the corporate in early Might dismissed a reported 50 staff, most of them manufacturing staff, via what the corporate known as a “reorganization.” The labor union argued that the transfer was a punitive measure towards staff who had led a profitable strike the yr earlier than. 

Within the meantime, the federal government and firm labored out a plan for the state to take over a portion of the shares – presumably 11 p.c – from Alfa, which would depart the vast majority of the shares in non-sanctioned palms. Georgian media have reported that the remaining 40 p.c of the corporate shares are owned by the household of late Georgian billionaire Badri Patarkatsishvili, which bought the controlling share of the shares to Alfa in 2013. 

“The state will grow to be a co-owner of Borjomi, which can remedy this drawback,” Prime Minister Irakli Garibashvili mentioned throughout a authorities session on June 6. Garibashvili mentioned that the Ministry of the Financial system had “virtually” concluded the talks with IDS Borjomi and the problem could be mentioned throughout a authorities session the next week.

Garibashvili made an identical promise on Might 21, two days after the corporate introduced that, following negotiations, it had introduced the Georgian authorities with “a proper supply to grant a part of its shares freed from cost.” With out specifying the variety of shares it was prepared to offer away, the corporate mentioned that the transfer would “allow the federal government of Georgia to participate in managing the worldwide firm.”

The prime minister then talked about a determine of “roughly $100 million price” of shares that the corporate was able to grant the federal government, which he mentioned would assist the corporate proceed to function with out disruptions.

However Garibashvili then headed abroad for visits to Jordan, Israel, and Slovakia, and with no deal in place and salaries nonetheless not being paid, staff on the plant took motion.

About 400 staff went on strike on Might 31, with calls for together with reinstatement of the dismissed staff, wage funds, indefinite contracts, pay raises, and a collective settlement. 

Staff “haven’t been paid salaries for 2 months, they’ve unlawfully dismissed 50 staff, they drive, blackmail, and threaten the workers into accepting and agreeing to exploitative situations,” Giorgi Diasamidze, head of a union representing Borjomi staff, mentioned as he addressed putting staff on June 6. 

The strike got here as the corporate introduced it had resumed manufacturing in small volumes, primarily to provide the Georgian market. 

Additionally on June 6, the Ministry of Well being, Labor and Social Affairs mentioned it was assigning the state Labor Inspectorate and a mediator to attempt to negotiate an settlement between staff and administration.

The corporate mentioned in a assertion that it was prepared to cooperate with the Inspectorate however cited “extraordinarily restricted monetary sources” and “challenges the corporate is going through amid imposed sanctions, frozen [bank] accounts, and complex entry to markets.”

IDS Borjomi Worldwide, which additionally operates water companies in Russia and Ukraine, runs two factories in Georgia via its subsidiary using over 600 folks, half of them manufacturing staff. In whole, greater than 1,000 staff had been anticipated to lose their jobs ought to the enterprise cease working, firm officers have mentioned.