CATHOLIC CHURCH MEDIATING VOLATILE LABOR DISPUTE

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 000887

SIPDIS

DEPT FOR EAP/PMBS, DRL/IL, INR/EAP
LABOR FOR ILAB

E.O. 12958: DECL: 02/28/2015
TAGS: PGOV PHUM ELAB PINS RP
SUBJECT: CATHOLIC CHURCH MEDIATING VOLATILE LABOR DISPUTE

REF: A. MANILA 790


B. MANILA 734

C. 04 MANILA 5901

D. 04 MANILA 5552

Classified By: Political Officer Andrew McClearn for
Reasons 1.4 (b) and (d)


1. (C) Summary: The Catholic Bishop's Conference of the
Philippines (CBCP) is actively attempting to mediate a
complex labor dispute at Hacienda Luisita, a large sugar
plantation located north of Manila owned by the Cory
Aquino/Cojuangco family. The GRP's National Bureau of
Investigation (NBI) has recommended that the Department of
Justice (DoJ) file murder charges against nine policemen for
their role in the November 2004 clash at the estate that left
at least seven dead and dozens wounded. According to the
Armed Forces of the Philippines (AFP),extremist leftist
groups linked with the CPP/NPA are instigating the labor
unrest. Observers hope that Catholic Church mediation can
calm the situation down, but a quick solution is not in
sight. End Summary.

Catholic Church Moves in
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2. (SBU) The CBCP is now actively attempting to mediate a
complex labor dispute at Hacienda Luisita, a large sugar
plantation located north of Manila owned by the Cory
Aquino/Cojuangco family. (Note: See Refs C-D for details of
the generations-old labor dispute, which sparked violence
that left at least seven people and dozens injured in
November 2004. Striking workers have demanded a raise in
wages and reinstatement of workers fired for walking off the
job. Management says it cannot afford to raise wages. End
Note) Two key unions -- the Central Azucarera de Tarlac
Labor Union (CATLU) and the United Luisita Workers Union
(ULWU) -- and Hacienda Luisita's management began
negotiations on February 21, 2005, with the CBCP helping
facilitate the meeting and mediate the discussions.


3. (C) Archbishop Capalla, the head of the CBCP, has
confirmed that five meetings involving labor and management
and the CBCP have taken place. Capalla publicly stated that
&CBCP involvement in the Hacienda Luisita issue is purely
pastoral,8 and he has made no predictions as to whether he
believes CBCP mediation can resolve the dispute. Monsignor
Hernando Coronel, the Secretary General of the CBCP, told Dep
Polcouns that the CBCP would continue to mediate the dispute
&as long as both sides want us to.8 He said that recent
meetings had made clear that &there was no easy solution in
sight.8 Moderate labor contacts have claimed that the
government plans to press both sides to accept binding
arbitration if CBCP mediation fails.


4. (SBU) The large sugar refinery located at &Hacienda
Luisita8 remains closed due to the strike. Contacts
confirmed that the refinery may shut down in a semi-permanent
fashion should the strike continue. (Note: If the factory
is shut down in such a manner, it raises the prospect of a
so-called &dead season,8 where uncut sugarcane goes
unprocessed and is simply piled up in the vicinity of the
mill to rot. Although the sugar operations remain closed,
the tourist section of &Hacienda Luisita,8 which includes a
museum, is open for visits. end note)

Who's to blame?
--------------


5. (SBU) The NBI recommended to the DoJ on February 24
filing murder charges against nine policemen for their role
in the November 15-16 clash at the estate that left at least
seven dead (a drop from earlier estimates) and dozens wounded
(see reftels). The NBI's report concluded that GRP security
forces unlawfully killed strikers, and did not fire in
self-defense, as some in the GRP have claimed. According to
an NBI source quoted in the press, NBI investigators
conducted many interviews and reviewed media footage of the
events, and had "found incredible the accusation of anti-riot
forces that striking workers fired their guns at them,"
largely because investigators saw no armed men among the
strikers, and because no policemen were wounded by bullets.


6. (U) On December 15, 2004, the Commission on Human Rights
(CHR) started a public inquiry into the clash. The CHR has
not issued a final report as of yet.

Claims of Leftist Involvement
--------------


7. (C) According to AFP sources, "extremist leftist" groups
linked with the Communist Party of the Philippines/New
People's Army (CPP/NPA) are involved in instigating unrest at
the estate. On January 22, the AFP Northern Luzon Command
publicly declared the strike a &matter of national
security.8 The AFP said it had seized documents showing
that the CPP/NPA had infiltrated the ranks of CATLU and ULWU,
and were orchestrating the labor unrest. According to media
reports, AFP sources discovered alleged rebel documents in
the files of a laptop computer seized by the military after a
3-day gunfight with the NPA in Pura, Tarlac late last year.
AFP forces subsequently clashed again with suspected NPA
rebels on January 26 in Victoria, a town located just north
of Hacienda Luisita in Tarlac, killing four suspected rebels
and leading to the arrests of four others. According to
labor contacts, the KMU -- a "radical" union with CPP/NPA
links -- continues to send operatives to the Hacienda Luisita
area (see ref A for details on the KMU).

Comment
--------------


8. (C) Observers -- including contacts in the mainstream
labor movement -- hope that Catholic Church mediation can
calm the situation down. The Church retains considerable
influence in Philippine society and usually commands a great
deal of respect. However, the long-standing nature of the
conflict, apparent involvement of leftist groups, and a
management group little inclined toward flexibility do not
bode well for a quick solution. The most welcome recent news
is that the NBI investigation did not result in a whitewash
of the police role in the November clash, which would further
have exacerbated tensions. The ball is now in the DoJ's
court as to whether it will seek to prosecute the accused
policemen. Given the high profile nature of this case, the
DoJ will likely have to initiate at least some prosecutions,
but such court cases will almost certainly drag on for years,
in typical Philippine judicial style.


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