Labour

A strike at Morila in Mali was triggered in June 2004 by a dispute over a productivity bonus payment arising from a period of unusually high gold production during the second half of 2002. Members of the Malian mineworkers union, Section Nationale Des Mines Industries (SECNAMI) staged three days of industrial action. The union provided the legally required strike notification and employees were not paid for the period of the strike. The dispute was eventually settled on 5 November 2004.

The dispute arose following the exceptional increase in the grade recovered per ton of ore mined during the third quarter of the 2002 as Morila mined through a geological anomaly colloquially called the 'gold pot'. These high grades were not foreseen, nor were they part of the long-term plan of the mine owing to the high variability in the Morila orebody and the smoothing nature of long-term forecasts.

As a result of this exceptional performance, and to ensure that employees also benefited from this grade windfall, the board of Morila paid all employees an additional one month's gross salary. A further once-off contribution of $500,000 was made to establish a community development fund. The mine also sponsored the building of mosques in the communities of Sanso and Domba in response to requests from community members.

However, the union demanded the payment of a 'prime de rendement' (productivity bonus) claiming that, in terms of the Industry Collective Agreement, it was obligatory that the mine paid employees a share of the additional gold produced.

The Morila management board views the 'prime de rendement' as a bonus for improvements in efficiencies. Management is also of the view that it has the right, in consultation with the union, to set appropriate criteria for the payment of such a bonus. In consultation with the union, a bonus scheme was introduced using plant throughput, costs, safety performance and gold produced as criteria, encouraging improvements in productivity and rewarding people's efforts primarily in areas over which they have influence. This also encompasses a degree of profit sharing.

As per article 84 of the Industry Collective Agreement, in November 2003 the union and management agreed to refer the dispute to the Interpretation Committee to establish clarity on the legal obligations and method of calculation of a bonus scheme. Unfortunately the Malian labour authorities were unable at that time to convene an interpretation committee. This committee had never been convened before. (According to the agreement the committee should consist of the original authors of the document - only one of the original authors is still living in Mali.) The dispute was therefore referred to arbitration.

On February 10, 2004, the Arbitration Counsel requested Morila to pay a productivity bonus. The dispute on the interpretation was never addressed and no value was attached to the decision. The lack of a definition of productivity and absence of any clarification of the procedure for agreeing criteria and the method of calculation of the productivity bonus led the union committee to resort to its own calculation based on gold production. This calculation resulted in an amount of CFA17.5 billion ($32.5 million) for three years of mine activity equivalent to approximately 10 to 20 times the annual gross salary of a Morila employee.

After months of negotiations a settlement was finally reached when the parties agreed to the implementation of a productivity-based bonus scheme for the future, and the settlement of payment to employees for past performance amounting to between two and five months salary.