Minivan News
Since the Employment Act was amended to include the tourism industry in October, the sector has come under heavy scrutiny.
A series of strikes from workers protesting for their labour rights, which they claimed had not been implemented since the revision of the Act, has brought to light both the flaws in the legislation but also the dissatisfaction felt by many employees.
Most notably, a strike held on 28 November at the One and Only Resort by over 200 staff ended in violence after police clashed with workers.
On the fourth day of the strike, the government intervened to reach a settlement, which President Mohamed Nasheed described as a “breakthrough”.
Sim Ibrahim Mohamed from the Maldives Association of Tourism Industry (MATI) talks to Minivan News about the state of the tourism industry and how recent strikes have cost the industry millions of dollars.
What do you think about the strikes that have taken place?
It’s really sad because these people who are striking have now become activists. But there are people with vested interests who are working behind the scenes.
It’s people who want to bring down the government and also hurt the tourism industry. We know the people involved but we don’t want to engage with them. We want to resolve this issue amicably. We want to remove the ambiguities within the law. That’s all we are trying to do.
The entrepreneurs that are investing in tourism have rights too. Just in the same way workers have rights. This has been forgotten because it’s the workers who are making a lot of noise. They were not justified in what they did because there is a grievance procedure. If you study the situation then you will see the management also had some complaints but these were not heard.
Are you satisfied with the settlement brokered by the government?
We are not happy with the resolution reached because the government has been held hostage, the management has been held hostage and the entire tourism industry has been held hostage. If these people are party to the MoU, it gives too much recognition to these kinds of actions. It justifies this kind of action on private property. They have caused damage to the property.
We have heard from the management that they have thrown sand at mothers. They have also damaged property, breaking and entering into the living quarters of the general manager’s family home. They also threatened tourists and really frightened and intimidated them by going into the eating areas at meal times. So these are some issues that we have heard about but MATI can’t vouch for these because we were not there.
How have the strikes affected the tourism industry?
Several people have cancelled their holidays at One and Only Reethi Rah but also in the Maldives. The damage caused by this kind of act is very hard to estimate but it’s in the millions.
And it’s going to take more millions to put this right in terms of damage control and reputation. The Maldives is no longer a safe destination; this is how people will perceive it now. But we have had setbacks like this before such as the tsunami and we have come through them.
Do you think the Employment Act was flawed?
Strikes are good and they exist in all countries. But we need to have provisions within the Employment Act to regulate these things. We must also insure that we protect ownership rights and the rights of the employer. The Employment Act was flawed. The constitution of the Maldives is very ambiguous. It says people can go on strike but it doesn’t say how or where.
How do you think recent events will change employer-employee relations?
There will be a greater distinction between the two. Much greater than exists at the moment. Things are different now because there are many family-owned resorts and there’s a bond between some of the workers who have been there for a long time and their employers.
Once we go by the letter of the law then it will be a different situation. It will be more professional which is good, but there will be more of a distance than in the current employer-employee relationship.
How is the global financial crisis affecting the tourism industry?
The financial crisis is not affecting us much yet but it will affect tourism from April next year. This is because people have already paid for their holidays for this year. But people developing resorts have found it difficult to continue because there is a squeeze of credit. It’s become very hard to borrow money to invest.
There are around 40 resorts that have been leased to be developed and for obvious reasons they have had difficult in finding finance and so the industry has not expanded because of this. We have to create investor confidence in the Maldives especially in funding institutions.
They have to think it’s a good place for people to invest and make money. Obviously it’s a huge task. Confidence building is a huge task. It’s not like building something with bricks and mortar.
What do you think of the government proposal to increase resort leases to 50 years?
We want an increase of 15 years and this has been spun in many ways. This has been distorted by politicians who are claiming erroneously that we want 50 years. What we are asking for is an extension of 15 years because of circumstances outside our control, such as the current global financial market and the time it will take for us to recover from the crisis.
We think that if we can get these leases it will be an incentive for new businesses to come to the country. If we don’t get the leases most people will pack up and leave. People need to know there will be enough of a return on their investment.
Do you think bed rents should be standardised? [Beds at resort today are leased at a rate of up to US$16,000 whereas the first resorts that opened up pay about US$2000. Many argue that bed rents should be standardised.]
There are contracts that are in place and if we were to break these contracts it would be a disservice to those who have bid and won those beds and it’s very likely that some of them would sue the government. The best way for the government to enhance their income is to tax the industry on profits. We are happy to pay taxes.
In all business everywhere in the world, there’s something called prior rates for those who were there before everyone else because they took the risk of investing. They were the pioneers. This happens all over the world.
I think it’s very fair because they have taken huge risks to make their business grown from nothing. If they are to be penalised because they are successful now then it’s a disservice. The new government are cashing in on the success on the first investors and that’s not right.
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