Bitter Reality of Bahrains Only Sugar Refinery: Lack of Funding and Forced Labour

2017-02-08 - 4:09 am

Bahrain Mirror (Exclusive): There are currently official attempts by the Bahraini authorities to cover up grave violations committed against Bahraini and foreign workers at the Arabian Sugar Company (ASC) located in the Hidd area. This came after the company suffered from a relapse, caused by parties believed to have wanted to take over the project to which the social security authority contributes and invests a considerable amount in the workers' savings via an asset management company.

There are numerous scandals involving violations and abuses committed against the working staff that even reached the extent of forced labour. 170 workers at the factory now await an unknown fate, as they have not received their salaries since last October 2016. The majority of the Bahraini workers having stopped working despite attending, whereas there are around 80 foreign workers, most of whom are from African countries, who are obliged to do their jobs, forced into "unpaid labour" for long 12-hour shifts, out of their need for the free lunch that the factory offers them. Unfortunately, those foreign workers work for 12 hours on a daily basis just to get one meal in return. This constitutes a serious crime, and considered an act of exploitation and enslavement.

In addition to not paying the workers' salaries, the factory's administration refrained from paying the rent of the building where the foreign workers reside for 6 months, and thus they are at risk of being evicted.

The administration also rejected the request of Bahraini workers, the majority of whom have university degrees, to be provided with provide a lay-off certificate, which allows them to refer to the Labour Ministry and ask for their rightful insurance against unemployment while they search for new jobs. The company instead told them to submit their resignations, so they would not be able to ask for their right to receive about five-months worth of salaries to compensate for their sudden termination of employment.

On a separate note, there has been suspicions surrounding the current state of the company whose success was guaranteed according to experts. The Arabian Sugar Company has invested $160 million in a new plant that was designed with European technology. It is the third largest sugar factory in the GCC states. Located in the Bahrain Industrial Investment Park, it will serve the whole of the GCC market area.

The plant has been exposed to odd circumstances and it seems that there is a plot to take over the company from parties that have not been determined yet, as a local newspaper has leaked statements made by company officials revealing the many difficulties that the company has experienced.

One of the strange decisions taken in the past two years was renting a pier, after the original plans for the project aimed at achieving the necessary licences and constructing a special peir for the factory that would allow the direct reception of goods from the ship delivering the raw sugar. However, not receiving the required licenses to build that pier increased the operating costs, which eventually led to raising the cost of one ton of sugar, compared to other sugar refineries in the region.

One of the other issues that the refinery is suffering from is that one of the banks, with which an agreement was made, is balking at providing the loan agreed upon for finishing the project, which forced the company into using its capital, amid the global financial crisis that intensified in 2008.

The sugar company succeeded in producing high quality sugar and occupying a significant position in the Bahraini and Saudi markets. The stockholders; however, failed to commit to their funding which contributed to the huge relapse the factory suffered from.

In the midst of all this, the Government of Bahrain continued to act as a spectator despite the fact that sugar is an economic commodity of great significance. Two companies have currently made offers to stockholders to take over the factory, yet the offers included very harsh terms. The ASC is still waiting for another offer that would save the company and provide it with some funding.

ASC is the only cane sugar refining company in Bahrain and hitherto the third in the GCC, with a designed yearly production capacity of over 600,000 tons of high grade refined sugar in its initial phase.

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