The Secretary-General of

International

Confederation of Trade Unions

S. Barrow

copy

the European Confederation of

Trade Unions

Dear Mr. Barrow!

We have to appeal to you because of the situation at the Zaporozhye Ferroalloy Plant (ZFP), whose employees are members of the Ukrainian public organization "Ukraine regional labor movement".

Because of a formal approach to tariff setting by the Ukrainian regulatory authorities the enterprise has a mass reduction of the workers. At the same time the authorities do not respond on appeals of the trade union of the enterprise.

By formal reasons ZZF has been transferred into the second class of power consumption. This led to an increase of expenses on energy by 40% (ferroalloy production technology implies that energy costs account for about 45% of product cost). At the same time Ukrainian ferroalloy enterprises pay for electricity 2-2.5 more than their foreign competitors. As a result, Ukrainian products are being displaced by foreign production in the domestic market of ferroalloys.

Rising prices on energy and uncontrolled import of ferroalloys have an extremely negative impact on ZFP. In order not to run with huge losses, the enterprise had to cut back production and, therefore, to lay off workers. Production of ZFP for 9 months of 2011 was reduced to 40% of the planned capacity. 1400 employees, who represented 39.5% of the number of ZFP employees, were involuntary dismissed. The average salary of the workers was forcedly cut by 20%. The social situation in Zaporozhye and region became much more complex.

The trade union organization of ZFP together with "Ukraine regional labor movement" try to resist layoffs and worsening of the employees situation. May 31 ZFP union held a protest of workers of metals and mining industry of Ukraine, members of which required adjustment of unreasonable actions in tariff setting for electricity. June 8 ZFP union in Kiev gave the corresponding appeal to the Prime Minister. The ZFP union proposals were supported by Committee of the Verkhovna Rada on Industrial and Regulatory Policy and one of the Entrepreneurship and the Social Policy and Labour.

June 10 at the meeting of the Ukrainian government it was decided to prepare and submit proposals for the solution of problematic issues that have emerged in the enterprises of metallurgical complex of Zaporozhye, in particular, regarding the issue of formation of the electricity tariff. But, unfortunately, the real action was not taken.

September 13 ZFP union and forcedly laid-off workers attempted to meet with government representatives to discuss the causes of failure of the above solutions. However, their demands were ignored.

The detrimental effect of a formal approach to tariffs in Ukraine has already led to the cessation of one of the largest manufacturers of aluminum - Zaporozhye aluminum plant (ZAlP). As a result of ZAlP transfer from the 1st to the 2nd class of power consumption, electricity price increased by 35%. Output of aluminum is extremely energy-consuming technology process and production of metal became unprofitable. ZAlP had to fire four thousand employees. Now the enterprise has a staff consisting of about 600 people, mainly - the security guards.

We are confident that without the active participation of authoritative international trade union organizations in Ukraine is impossible to solve the vital problems of workers-trade union members. In the difficult economic situation that is developing in Ukraine, it causes anxiety and concern.

Proceeding from the above mentioned we appeal to you in order to intervene in the situation, help to end the violations of rights of workers - union members of ZFP, together with us to oppose the further deterioration of the situation of ZFP workers.

Chairman of the NGO "Ukraine regional labor movement"     M.V. Golovin