The army’s encroachment on the civilian economy is costing Egyptian workers dearly

Workers at the Delta fertilizer company on 9 December 2020 after many long weeks of protest against the factory’s closure. ( Mahmoud Hefnawy)

Their faces marked by exhaustion and sadness, thousands of Delta fertilizer company employees continue with their sit-in protest against the decision taken by the Dakahlia Governorate to close and dismantle their factory. Since 2 December 2020, the workers, accompanied by their spouses and children, have been refusing to leave the company premises for fear that security forces will prevent them from returning. They are calling on President Abdel Fattah al-Sisi to intervene, to force the Ministry of Manpower to overturn the decision and to save the livelihoods of 2,500 families.

Behind them is a large portrait of the Egyptian president that reads: “The workers of Delta support the head of state”, because they know that they must not upset the authoritarian regime, for which the slightest criticism can be considered an act of terrorism that could lead to imprisonment. They do not want to suffer the same fate as the 2,300 workers of the al-Qumia cement company, closed in September 2018. Unlike the latter, who defied the regime and ended up on the pavement, the workers of Delta are handling the leaders with care, in a bid to advance their case.

But the government is turning a deaf ear to their demands for now. Between 31 December and 2 January, 13 workers at the company, including three members of the trade union committee, were arrested and brought before the Supreme State Security Prosecution, which is supposedly in charge of the fight against terrorism but is, in fact, being used as a tool of repression. They have been charged with inciting protest, disrupting production and committing acts of sabotage.

Built in 1965 in the Dakahlia Governorate, 120 kilometres north of Cairo, the state-owned Talkha Fertilizer plant (or Delta Company for Fertilizers and Chemical Industries) was producing around 800,000 tonnes of fertilizer a year until 2014. Since then, the company has been accumulating debts, following the government’s policy of liberalising gas prices combined with repeated breakdowns at the factory, which has pushed down production levels.

For over ten years, the government has ignored all calls to modernise the company, which has been steadily deteriorating for 40 years. “It cost the lives of two workers, and two others were injured [in 2014],” said one worker who wishes to remain anonymous.

Until 2017, all production went to the Ministry of Agriculture, which resold the subsidised fertilizers to farmers. The production at the factory covered 35 per cent of Egypt’s needs, according to an executive member of the workers’ union committee at the company. “Between 2014 and 2017, the Minister of Agriculture bought our output cheaper than the cost of production. This contributed to the mounting losses,” he tells Equal Times. The government then allowed the company to resell 45 per cent of its production on the local market.

In April 2020, an electrical fault shut down production. There are rumours that the company’s administration was behind the incident, wanting to use it to justify the decision to close the plant. Since then, the management has refused to fix the problem.

The Ministry is using the fall in turnover as an argument to justify closing the plant, but the project to build a housing complex on this site near the Nile seems to indicate that it has other interests in mind. On 5 January 2021, the Ministry decided to build a small fertilizer plant with some of the machinery and only 500 technicians from the Delta fertilizer company. The rest of the workers will be compensated for losing their jobs. On 19 January, the Public Prosecution Office also released 11 of the 13 arrested workers.

Workers hit by the military’s economic and industrial aspirations

For the government, there is no risk that the closure will affect the supply of fertilizers to farmers, given the recent increase in domestic output, driven by the army’s large-scale investment in the industry. The army, which owns around 30 companies, has been investing massively in all sectors of the economy since the election of Field Marshal al-Sisi in 2014. From cement to iron, marble to food produce, household appliances, chemicals and train construction, the Egyptian military is expanding its grip on large parts of the country’s industrial production.

Exempt from taxes, military companies are also given preferential treatment when it comes to the awarding of public procurement and major works contracts. And while the regime argues that its ambitions are driven by the legitimate desire for economic self-sufficiency, the military’s grip on the economy poses a serious problem. In May 2018, the International Monetary Fund expressed concern about the military’s extensive involvement in the economy and its impact on both the public and private sectors.

In August 2018, the army inaugurated the Middle East’s largest fertilizer production complex in Ain Sokhna. With its nine production plants, the new complex has an output capacity of 1.5 million tonnes of fertilizer a year. Nine months later, the al-Nasser company for intermediate chemicals, also owned by the armed forces, signed an agreement with German multinational ThyssenKrupp, for the construction of another fertilizer complex with six production plants.

It seems that each time the Egyptian army moves into a new sector of industry, it causes collateral damage, and the victims are the companies already in place and their employees.

Its big investments in the cement sector, for example, coincided with the closure of the al-Qumia cement company and the dismissal of 2,300 workers in 2018. And when it comes to public procurement, the government seems to prioritise the purchase of products from companies linked to the army, because no one dares to displease those in khaki fatigues in al-Sisi’s Egypt.

South of Cairo, thousands of Egyptian Iron & Steel Co. workers are poised to lose their jobs after the decision made in January 2021 to close the company, founded in 1954. The government blames the company’s losses, but the closure also comes at a time when the army is investing heavily in the industry, after receiving the government’s go-ahead. In September 2016, the government granted the army two out of four permits to build new iron works. A year later, the army announced that it had launched production, which, according to General Kamel al-Wazir, president of the military engineering authority, is to be dedicated to the “new capital” that the state is building in the desert, 45 kilometres east of Cairo. The army is also buying up existing companies, such as Egyptian Steel, acquired in 2018.

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The army’s encroachment on the civilian economy is costing Egyptian workers dearly. While some have seen their factories shut down for good, others, who now work in military-controlled factories, find themselves stripped of virtually all their trade union rights. Anyone daring to protest about working conditions risks being brought before a military court and subjected to a smear campaign.

In May 2016, the police used force to break up a sit-in staged by workers at the military firm al-Tersana in protest at working conditions. In October 2019, 900 workers were dismissed and 26 others were brought before a military court, which gave them a one-year suspended prison sentence. According to a report published in May 2018 by Committee For Justice, more than 11,000 people, including dissidents, journalists and workers were sent to military courts between July 2013 and December 2017.

State control over union action

The state’s desire to control the world of work dates back to the foundation of the Egyptian state by Gamal Abdel Nasser. One illustration of this is the Egyptian Trade Union Federation (ETUF), established in 1957, which until 2009 was the only body authorised to represent workers in Egypt. From the moment the union was founded, successive governments gave its leaders countless privileges to secure their allegiance to the ruling elite, at the expense of workers’ rights. “These leaders are also appointed to senior posts in public companies and state agencies as well as in parliament,” says Kamal Abou Eita, a trade unionist and founder of the Independent General Union of Real Estate Tax Authority Workers (IGURETA), the first independent union formed in Egypt in 2009, in an interview with Equal Times.

According to trade union rights experts, from the moment he came to power, in 2013, President al-Sisi has done everything possible to reverse the gains made by the trade union movement during Egypt’s 2011 Revolution. He has not forgotten the decisive role played by the workers in delegitimising the regime of the former rais, Hosni Mubarak, and in igniting the spark that led to its downfall. “Unlike Mubarak, who tolerated a degree of freedom of expression, allowing workers to voice their demands, al-Sisi is not taking any risks and has adopted a hostile policy aimed at eliminating trade union action,” says Abou Eita.

Abusive legal proceedings against, and the wrongful detention of, journalists and workers’ rights defenders – sometimes accompanied by ill-treatment – is on the increase in Egypt. These actions are strongly denounced by the international community, which has voiced deep concern about this growing repression, five years after the violent death of Giulio Regeni, an Italian PhD student who was researching trade unions in Egypt.

After the events of 2011, the board of the ETUF was dissolved and replaced with another composed of independent trade unionists. Then, six months after the July 2013 coup d’état, the new regime decided to dissolve this new board and to place figures close to the state at the head of the union federation.

“In 2014, a fresh offensive against trade union freedoms began. The new government became engaged in a policy of hostility towards workers and the trade union movement, and is pushing a narrative that seeks to tag workers wanting to strike or protest against working conditions as supporters of the former Islamist regime [of the Muslim Brotherhood], in other words, as enemies of the nation,” Kamal Abbas, founder of the Centre for Trade Unions and Workers Services (CTUWS), tells Equal Times.

The CTUWS report 2014 Assassination of Union Freedom, published in January 2015, revealed that the new regime had started to hunt down independent trade union figures and oust those working in public enterprises and state agencies.

In 2015, the government sent a document to its ministries, requesting their cooperation with the ETUF in the fight against independent trade unions and ringleaders within companies. At the same time, the state was cracking down on sit-ins and strikes, dismissing the organisers and prosecuting them in the courts. “The law applied by the Egyptian government since 2003 stipulates that strike action requires the approval of two-thirds of the union affiliated to the ETUF, which is impossible, because the ETUF always adopts the position of the state,” says Abbas. He explains that the law also prohibits all forms of protest in essential economic facilities, in a country where the state classifies most manufacturing companies and institutions as essential.

In September 2020, 10 workers at Egypt Textile in Shibin el-Kom, in the Nile Delta, 60 kilometres north of Cairo, were sacked and sentenced to six months in prison and a fine of 50,000 Egyptian pounds (approximately US$3180) for calling a sit-in to protest against the administration’s decision to stop work and cancel all bonuses during the coronavirus pandemic. Another 42 were suspended for taking part in the protest and are still being prosecuted for rioting and destroying public property.
The police used live ammunition and tear gas to disperse the workers,” Hassan Adel [not his real name], a worker who took part in the sit-in, tells Equal Times.

After more than 20 years at the company, this father of three children earns only EGP 2,500 (approximately €130 or US$159) in wages and EGP 500 (approximately €26 or US$31) in bonuses. To be able to provide for his family, he also works an eight-hour night shift in a restaurant, bringing his working week up to 80 hours. Since 2015, Hassan has been a witness to the dismissal of many of his colleagues with what the government deems to be ‘rebellious ideas’. It was in 2015 that a security officer was appointed to the company to monitor worker activity and report to the security agencies about activist workers.

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Whilst the authorities are doing all they can to hinder trade union action in the public sector, the situation is even more critical, it seems, in the private sector. Abandoned by the government, its workers are at the mercy of business interests. According to Egypt’s official statistics agency CAPMAS, only 34.5 per cent of workers in the private sector are covered by any form of social protection and only 39 per cent have health insurance. As many as 70 per cent of the people working in the private sector, and especially in the construction industry, have no employment contract.

Obstacles to trade union organising

In 2017, the state presented a bill on trade union organisations, introducing more restrictions on trade union action and the formation of trade unions. The bill proposed setting the minimum requirement for establishing a trade union committee at 100 workers. Independent trade unions criticised this figure as being excessive, as it deprives 70 per cent of Egypt’s workers of the right to form a trade union committee. Controlled by businesspeople, the Manpower Committee in parliament called for an increase in the number of founding members to 200 workers. One businessman/parliamentarian openly called for it to be increased to 500. “We don’t want to see political parties in our companies,” he said, in 2017, during the discussion of the bill.

As a compromise solution, the government and the parliament settled on 150 as the minimum number of workers required to set up a trade union committee. In addition, the law, passed in 2017, required at least 20,000 members to form a general union and at least 200,000 to form a union federation and gave all unions just three months to bring their organisations into line with the new legislation and re-register.

These excessive requirements led the International Labour Organisation (ILO) to put Egypt back on the list of countries that violate workers’ freedoms.

The country has only been removed from the list twice since 2008. In August 2019, to escape the blacklist, President al-Sisi amended the law, reducing the number required to set up a union committee to 50 workers. “Despite this amendment, this figure does not comply with the international conventions signed by Egypt, which usually prevent governments from setting the numbers required to form trade unions,” says Abou Eita. Other flaws in the law, he explains, include the fact that it also excludes people not in employment, such as pensioners, from the right to form trade unions.

While, for the first time, the law allows for the foundation of independent committees and unions, the government has adopted a hostile attitude towards unions and committees not affiliated to the ETUF. Hundreds of independent unions and union committees have seen their applications to regulate their status either declined or blocked without valid grounds by the Ministry of Manpower,” according to a report published by the CTUWS. At the same time, the Ministry was quick to approve the regularisation of ETUF unions.

In May 2019, the president of ETUF, Gebali al-Maraghi, openly called for the dissolution of independent trade unions, claiming that they operate illegally and do not help the workers. Al-Maraghi, who has been a member of parliament since 2015 and is considered a strong supporter of al-Sisi, said there is no place for independent trade unions under the new law.

“The state adopted a law and it is the state that isn’t respecting it,” says Abbas. In January 2019, 29 independent unions and committees signed a statement in which they called on the Ministry to respect the law and accept the regularisation documents duly submitted by the independent associations.

The state’s intransigent stance has only one objective: to force independent trade unions to join the ETUF. “Unfortunately, three general unions were forced to join the ETUF in 2018 and 2019, to escape this blockade,” says Abass, noting that “only one union” and fewer than 200 independent union committees have managed to regularise their situation since the law came into force in 2018.

After the law was passed, the state organised trade union elections within the ETUF in May and June 2018. Unparalleled since 2006, these elections offer clear evidence of the regime’s grip on the workers. Many of the candidates who were not to the authorities’ liking were imprisoned, intimidated or had their names erased from the lists. “They were the worst elections in the country’s contemporary history. It was a charade by the government to reinstate its men at the head of the unions”, says Abass. In the case of 14 out of the 27 ETUF affiliates, the presidents and board members were not even chosen by election but by simple acclamation. Only seven unions freely elected their presidents and board members.

Three candidates ran against the outgoing pro-government president of the workers’ union at Egypt Textile. “The police arrested two of them a few hours before the election, and the third, who is close to a member of parliament, was forced to run for the post of union board member. The pro-government candidate was returned without election,” explains Hassan.

For Kamal Abou Eita, this is a very sad period in the history of the trade union movement in Egypt. “The regime’s policy has succeeded in transforming workers’ unions into puppets that don’t actually play any role,” he concludes

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