Saudi Arabia sued for billions of dollars owed to US workers
In the largest lawsuit ever filed against Saudi Arabia, American law firm Henrichsen Siegel has submitted a class-action complaint to the US District Court of Columbia against the Kingdom to recover billions of dollars held by the Saudi Pension Fund, belonging to thousands of US expatriate workers.
Filed on behalf of engineer John W. Peterson and American workers similarly situated, the complaint refers to the period between 1969 and 1987, when thousands of skilled workers from the US and other Western nations contributed to an employee/employer funded pension scheme in Saudi Arabia. Workers such as Peterson made their contributions in anticipation of a secure pension at retirement. Without warning, the Saudi government discriminately cancelled the program in March 1987, singling out only foreign workers from the coverage of the pension plan.
The Saudis established the General Organization of Social Insurance (GOSI) in 1969. It entailed a mandatory system of contributions, obligating employers and their employees in the private sector and in some semi-government agencies, to contribute 13 percent of the total value of an employee's wages and benefits. The employee contribution was five percent and the employer contribution, made in the employee's name and for his benefit, was eight percent.
From the program's inception, Peterson and other US citizens and permanent residents involved in the pension program expected the Saudi government would distribute GOSI benefits to non-Saudi workers upon their return to their country of origin. To the dismay of millions of foreign workers, the Saudi government, in March 1987, issued a decree excluding non-Saudi workers from GOSI pension scheme.
"We are calling on the Saudi government to fulfill its obligation to these American workers and return to them that to which they are entitled," said co-counsel Stephen A. Saltzburg.
Saudi Arabia has relied and continues to rely heavily on the labor of millions of foreign workers in its development. Despite the heightened security concerns in the Kingdom, it is estimated that there are approximately 35,000 Americans living in Saudi Arabia, contributing to its economic development.
Upon his return to the United States, Peterson sought to recover the money that had been placed in his name. In 1990, he received a check for five percent minus his own contribution to the GOSI plan. The remaining eight percent, based on the employer contribution, has been withheld, despite his frequent attempts to glean information about its disposition.
"In some cases, we are finding out that even the five percent contribution made by American employees has not been refunded by GOSI, despite their demand. Unfortunately, the Saudi government has adopted a deliberate policy of dragging its feet, instead of honoring its commitments in a timely manner," said Saltsburg.
The vast amount of money belonging to American workers in GOSI has been borrowed by the Saudi government. The remaining funds are invested by GOSI in various domestic Saudi corporations, international banks and organizations.
"There is a heightened realization today on the part of the Saudi royal family that they need to get their act together and fix their image for obvious reasons, including their ability to gain entry to the World Trade Organization," added Saltzburg. — (menareport.com)
© 2003 Mena Report (www.menareport.com)