Country Report Gabon April 2011

Economic policy: The cost of the strike is estimated at US$120m

According to ONEP's estimates, the latest strike cost the oil firms and the government together around CFAfr60bn (US$120m) in lost income, halting output, which averages around 240,000 barrels/day. By April 2nd there was a shortage of petroleum at filling stations around the capital, Libreville, as employees of the national distribution monopoly, Société gabonaise d'entreposage des produits pétroliers, affiliated to ONEP, downed tools. To bring the latest strike to a swift close the government announced measures to expedite an increase in the proportion of local workers in the oil industry. It promised to expel any foreign workers identified by an imminent audit of the sector as lacking the correct documents to work in the country. ONEP estimates that the number of foreign workers without the proper paperwork is around 1,300, although it is unclear how it arrived at this figure, which may be based on nothing more than a desire to see at least as many posts currently filled by expatriates turned over to local staff.

Although the government has ostensibly promised to comply with the unions' demands, it seems implausible that the foreign oil companies currently operating in Gabon would willingly replace all their current non-local executives with untried Gabonese staff. In practice, large exemptions are likely to be granted, either formally or tacitly. For example, foreign oil executives may be granted Gabonese citizenship in order to be kept on. Alternatively, companies may swell their payrolls with low-paying sinecures for Gabonese staff to improve the ratio of local to foreign workers. The Economist Intelligence Unit believes that the government still hopes that ONEP will in fact be satisfied with a significant increase in local employment rather than the near-total expulsion of foreigners that has been agreed.

A US firm, Alex Stewart International, has been employed by the government to carry out an audit of the sector, which will examine the industry's entire value chain, from exploration to production, and will examine every revenue-sharing agreement signed in the sector, comparing them with international norms to ensure that they are in the national interest of Gabon. The findings of this audit are due to be incorporated in a new mining code that is currently being developed. It may also go some way towards promoting the country's candidacy to join an international scheme to boost transparency in developing countries' mining sectors, the Extractive Industries Transparency Initiative (EITI). In October the EITI designated Gabon as a country that was close to compliance.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
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