The unions of Linden Mining Enterprise (Linmine) have drawn up their position on the proposed takeover of the company by Cambior, which includes the tabling of the deal in parliament and its submission to the Auditor General.

The unions, Guyana Bau-xite and General Workers Union and Guyana Mines Metal and General Workers Union, asserted that transactions of this nature must not be done in secrecy and charges of "sell-out" must be avoided.

Talks between Cambior and the government of Guy-ana began yesterday on Cambior's plan to revive the Linmine operations.

In their proposal, forwarded to President Bharrat Jagdeo, Leader of the Opposition Desmond Hoyte, and co-chairmen of the Joint Bauxite Committee, the unions suggested that the new entity be converted into a public company with tradable shares so that it would secure the flexibility to issue shares to past and present workers.

The unions stated that the entire deal should be revisited in the event that the company made no profits in the first five years. They said all concessions should be for a period of five years and must be subject to reviews.

The unions stated that Guyana must be represented in all the top positions of the company and involved in the co-management. They said this was to avoid foreign control of the management and a board, which reported only to itself.

The unions described Cambior's proposal to reduce the company's work force as draconian and said it came as a shock to them. "We were always made to understand that foreign investment is a good thing inherently because it creates jobs. Here it is going to destroy jobs with a vengeance," the unions stated. They said this should be carefully scrutinised and the positions to be eliminated should be clearly stated by Cambior.

The unions recommended that a system of voluntary severance be used and those so inclined should be identified as a first phase.

"Any reduction of the work force in excess of these volunteers would have to be justified and negotiated with the unions," they said.

They asserted that it would be imperative to restrict the employment of foreign workers in the new entity and to justify the need for each one of them. "In any event, there must be put in place a strict and enforceable Guyanisation programme in the shortest possible time," the unions said.

They also stated there ought to be a restriction on the emoluments of the foreign personnel so that a small percentage of them did not take home a huge majority of the pie.

The unions want the question of the workers' pension plan revisited and straightened before the deal is closed and the investor be made to pay royalties.

The unions also recommended that the shares be issued free of charge. They envisaged the share structure to be: investor - 60%, government - 20%, and workers - 20%. The shares should all be common shares and the investing company must not be allowed to issue itself preference shares bearing a fixed up-front interest dividend on the equity contribution similar to that of Omai Gold Mines Ltd (OGML) and Guyana Power and Light Inc, the unions stated.

The unions explained that the preference shares route was a standard one whereby one partner kept receiving a huge dividend in the form of interest payments out of the profits while the other shareholders received nothing.

The unions asked that in the issuance of shares to workers, preference should be given to displaced workers, existing workers, and workers who have served the industry in the past.

The unions stated that the deal should be a capitalisation transaction so that the funds go into the company for its rehabilitation. They said it must be made absolutely sure that the funds were truly available and they were used for the designated purposes and a mechanism must be established to monitor and ensure this.

The unions want the equity contribution to be professionally valued by competent external parties who can detect any attempt to pass off previously used and fully depreciated equipment as equity.

Some other proposals the unions have are:

(a) That all sales be made at arms length and that transfer pricing be prohibited at all costs. Mechanisms must be put in place to monitor this, eg a strong competent audit sub committee of the board.

(b) Government loans should remain on the books at 0% interest for the first five years in the form of debenture to be paid off with dividends. This will act as an incentive to show profits and pay dividends.

(c) Withholding tax on interest payments should be the normally prescribed tax, subject to application for waivers.

(d) Since the company would no longer be assisting the community it should make a statutory contribution to the regional and municipal authorities in keeping with its good fortunes.

The formula should be - year one to five - one per cent of revenues; year six to ten - two per cent of revenues; year 11 to 15 - 2.5% of revenues. These could be reviewed if the company is not doing as projected and the payments would be tax deductible.

The unions said they were sickened by the Aroaima Bauxite Company experience, which was a 50-50 joint venture with government but no royalty or taxes were paid in the ten years of its existence. It also pointed out that the five per cent equity holdings in OGML did not yield a cent nor did the 20 per cent equity in Guyana Telephone and Telegraph Co in nine out of 11 years of profits. "History will judge us harshly if we fail to gain, if we continue to repeat the mistakes of the past," the unions stated.

Cambior proposed to cut some 850 persons from the present work force of 1,250. The proposal projects Linmine's production being increased from 190,000 tonnes to 415,000 tonnes; switching from draglines to the use of excavators for the recovery of bauxite; and trucks and trailers replacing the present railway system. The restructured company will also market its product directly to its customers.