Striking Kazakh oil workers push past union to win concessions

A 19-day strike by between 6000 and 10,000 workers in Zhanaozen, in the Mangistau region of Kazakhstan, has won substantial concessions from the state-owned oil company Kazmunaigaz Exploration and Production (KMG E&P).

The strike – a large, long one by Kazakh standards – led to the scrapping of management proposals to reform the wages system, and the dismissal of the boss of Ozenmunaigaz, KME&P’s local subsidiary, who tried to imposed the changes.

According to local newspaper reports, the strikers demanded the dismissal of the trade union leader who recommended the new wages system; formed their own rank-and-file conciliation commission; and before returning to work secured promises that no rank-and-file strike leaders would be victimised by management or the police.

(Such demands, aimed against collaborationist unions and state repression, were typical of workers’ protests in Soviet times, and suggest that aspects of labour relations at KMG E&P remain unchanged since then.)

Management bullying triggered the walkout

KMG E&P estimated that the oil workers’ strike, between 1 and 19 March, cost about 2% of its daily output, or 12,000 tonnes of production. On 1 March, workers refused to leave the tents in which they are accommodated in working weeks. On 4 March the strike was made official. On 10 March it was declared illegal by the Zhanaozen city court, and 21 worker activists named as respondents.

The strikers’ first demand was that the company scrap proposals to consolidate into their basic wage premiums such as regional weighting payments and bonuses for dangerous working conditions. The regional weighting payment for Mangistau region – which has little economic activity besides oil production, extremely hot summers and cold winters, and to which most consumer goods have to be transported long distances – is 70% of the basic rate.

The strike seems in large part to have been triggered by bullying managers who told workers they had three days to sign a new contract, incorporating the changes, or be sacked.

Tabyn Ergenov, one of the strike leaders, was quoted in the Atyrau weekly newspaper Ak Zhaiyk as saying: “We were sent a notification [of the new pay system] that we had to sign within three days. It seemed to indicate that we were in for a substantial wage cut. People were furious that some workers were not even given the chance to consult with lawyers about the legality of these changes. They forced them to sign under threat of dismissal.”

Another activist, Sabit Tukenov, denied company claims that pay would increase under the new system. “No-one explained anything. They just brought this notification and tried to make people sign it. Of course many of us had questions. For example I work as a grade 5 driver; I drive a Kamaz with a trailer. For 168 working hours I would be paid, including all premiums, 135,000 tenge. Now, according to the notification, I would receive 106,000 tenge. Is our anger really so unreasonable?”

KMG E&P’s press service said that the new agreement would mean a pay increase of between 1% and 3%, that the guaranteed portion of salaries would rise from 55% to 77% of earnings and that a “9% inflation salary index” (?) had been introduced. Workers were clearly unconvinced – and , despite the proposals being introduced on the grounds that they were required by new labour legislation, management withdrew them at the end of the strike.

Workers turned on their union representative


The Zhanaozen strikers demanded the dismissal not only of Ozenmunaigaz’s director Baktygali Biseken and his deputy Amantaya Anshybaev, but also the president of the local oil workers’ trade union, M. Ibagarov.

Strike activist Ergenov said: “He [Ibagarov] approved changes in our pay in the name of the whole workforce of Ozenmunaigaz. Furthermore [the strikers demand] that [management] allow the formation of an independent trade union at the workplace. And we ask that Kairgeldy Kabyldin, the head of Kazmunaigaz [the national oil holding company that owns Ozenmunaigaz], and the heads of Samruk-Kazyny [the sovereign wealth fund through which the state owns Kazmunaigaz], and members of parliament, and the akim [governor] of Mangistau region, meet with us.”

(I don’t know the Kazakh oil workers’ union. But the information available suggests that it is a typical “traditional” or “official” post-Soviet union, i.e. a structure inherited from the thoroughly collaborationist organisations of Soviet times, with many of the same close links to management and top-down practices.)

The strikers’ refusal to act through the trade union caused managers additional problems, KMG E&P spokesman Daulet Zhumadil told reporters from Ak Zhaiyk. “The workers’ demands are illegal”, he said. “We will try to resolve the conflict through conciliation. But because the workers are disorganised, we can not start a reasonable dialogue. That’s why the employer has been obliged to go to court to complain of an unsanctioned strike.”

Later, KMG E&P negotiated with a conciliation commission, which seems to have been elected directly by the strikers – and announced that after “long and difficult negotiations”, agreement had been reached “on all issues”.

The strikers put ten formal demands, out of which seven – including Biseken’s dismissal, scrapping of the wages system reform, and guarantees that there would be no repression of strike leaders either by management or the security forces – were agreed by the company, Deutsche Welle’s Russian-language web site reported. The site said three demands had not been granted: full payment for strike days; the granting of separate legal status to Ozenmunaigaz; and the nationalisation of KMG E&P (which is majority-owned by the state, but also lists its shares on the London Stock Exchange and is 11% owned by China’s sovereign wealth fund).

The strike is the culmination of long-running labour disputes at Zhanaozen. Last year a smaller protest, by 30 workers, led to the award of a pay increase. The conflicts seem to exact a heavy price from KMG E&P in terms of managers: boss Biseken, sacked on 19 March as part of the settlement of this year’s strike, only took over from his predecessor Abylkhanov Daulbay in December, when he, too, was got rid of to satisfy strikers’ demands.

Fears of repression

Deutsche Welle quoted Kazakh opposition politician Vladimir Kozlov expressing fears that – despite the guarantees written into the settlement – there could be repression of the 21 conciliation commission members named by the Zhanozen court’s decision.

“Judging by the way the authorities have behaved in analogous situations before now, I would suspect that these people could be subject to harassment”, Kozlov said. “The psychology works like this: the mass of workers are back at work, and what happens afterwards will not bother them. And these 20 surnames will be remembered.”

Obviously that’s an issue for sympathisers with the workers’ movement the world over to watch.

Concerns about Chinese intentions

The reports of the strike in Ak Zhaiyk related the demands for nationalisation to workers’ concerns about Ozenmunaigaz being sold to Chinese companies. Reports about such a transfer had been aired on local TV and were strenuously denied by KMG E&P. The nature of the Chinese-Kazakh state relationship means that this particular rumour is probably baseless – but there is no doubt that Chinese involvement in the Kazakh oil industry, as both a major oil importer and an investor, is growing.

China shares a long border with Kazakhstan and its own undeveloped oil deposits in the Xinjiang-Uighur autonomous region are not far from Kazakhstan’s. As its thirst for oil rises, it makes sense to secure as much as possible from Kazakhstan, which is simply closer than other oil producers in which China is investing, particularly in Africa.

When the US financial crisis of September 2008 starved Kazakh oil companies of western debt finance, China stepped in with about $15 billion of loans, some tied to export deals, in 2009. There was a similar $25 billion package of loans for the Russian state-owned oil companies Rosneft and Transneft.

Kazakhstan’s 20 post-Soviet years could be interpreted as a shift from being a raw materials exporter to Russia, to being a raw materials exporter to China and the west (whose oil companies have made more headway in Kazakhstan than any other former Soviet state). For the next 20 years, you wouldn’t bet against China’s role rising constantly, and Russia’s declining further.

Perhaps during that time the Kazakh labour movement will take on some of the aggressive rank-and-file militancy, and intolerance for traditional union structures, that has characterised many recent strikes in China.

+++ You can hear about the strike on the Solidarity Report from Radio Labour. Download the latest (28 March) mp3 from here and go to the 2 minute mark.

Note. I have written this article on the basis of reports in Ak Zhaiyk and Deutsche Welle, and on KMG E&P’s web site. This was the most substantial information I could find (links below for Russian speakers). I would welcome further information from anyone who has it.,,5376521,00.html

2 Responses to Striking Kazakh oil workers push past union to win concessions

  1. […] movement in Kazakhstan and the prospects for militancy and consolidation within this movement. The successful strike in March of this year by KazMunayGas workers in Zhanaozen seems to prove many of the points Ainur […]

  2. Simon Pirani says:

    That’s well worth reading. Thanks.

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