Aftermath of Thai Labor Riots: Investigations and

UNCLAS SECTION 01 OF 02 TAIPEI 003856

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DEPT PASS AIT/WASHINGTON

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FROM AIT KAOHSIUNG BRANCH OFFICE

E.O. 12958: N/A
TAGS: ECON TW
SUBJECT: Aftermath of Thai Labor Riots: Investigations and
Practical Response

Ref: Taipei 03525


1. Summary. In the aftermath of the labor riots involving
Thai workers on Kaohsiung city's Mass Rapid Transit (KMRT)
system (reftel),various civil and criminal investigations
have begun, with some preliminary reports issued. Despite
the fact that the laborers remain the target of a criminal
investigation, steps have been taken toward resolving some
of the issues that led to the riot. End Summary.

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The Investigations
--------------


2. At the instruction of Premier Hsieh, Chang Ting, the
Kaohsiung Prosecutor's office has launched an investigation
into possible criminal acts relating to the August 21, 2005
Thai labor riots in Kaohsiung. The Chief Prosecutor in
charge of the investigation, Chief Prosecutor Gao Da-fang,
has met with several executives of the Kaohsiung Rapid
Transit Corporation (KRTC),the Hua Pan Management Company,
a Thai delegation composed of members of the Thai Parliament
and representatives of the Thai Labor Ministry, and a few
Thai workers. Inspectors have obtained copies of contracts
that were signed between the KRTC and the Hua Pan Management
Company (a labor brokerage firm) and the accounting books of
the two companies. According to an AIT/K source, KRTC had
allotted NT$29,500/month (USD920) for each worker. The
money was transferred to Hua Pan, which was responsible for
the distribution of the laborers' salaries, but only
NT$19,000/month (USD590) was given to each worker. Officials
are investigating what happened to the difference of
NT$10,500/month (USD330) that was supposed to be paid to
each laborer.


3. In the investigation to date, Prosecutor Gao has
completed interviews of eighteen Thai workers who allegedly
resorted to violence in the incident. The prosecutors have
detained Hua Pan's president Yen Shih-hwa and its financial
executive and also interviewed KRTC's responsible
executives. The prosecutor's investigation is limited to
activities that violated Taiwan's criminal laws, including
both the workers' actions, and the allegedly corrupt money
flow between KRTC and Hua Pan. While Gao reported progress
in investigating the Thai laborers, he had no comment on the
corruption investigation other than to say it was ongoing.


4. Having conducted its own investigation of the matter,
Kaohsiung City Government's Labor Bureau released a
preliminary report on the circumstances leading up to the
riot. According to the report, the incident stemmed from
the Thai laborers' dissatisfaction with treatment received
from the labor management company, including poor living
conditions, withholding of pay to which they were entitled,
and unreasonable restrictions including a prohibition on
making phone calls or consuming alcohol during their off-
duty time.


5. According to the report, neither the Kaohsiung City nor
Kaohsiung County governments were informed of the
contractor's policies for recruiting and managing Thai
workers. Kaohsiung City awarded the contracts for
construction of the KMRT, and, the Kaohsiung City Labor
Bureau determined that the City is responsible for
supervising KRTC's construction and safety procedures
However, since the Thai laborers are housed in Kaohsiung
County, they fall under the jurisdiction of the County
Government during their off-duty hours.


6. The report stated that the Executive Yuan's Council of
Labor Affairs (CLA),the KRTC, and the Hua Pan Management
Company all failed to submit required reports to the local
governments on the recruiting and management of foreign
laborers. Kaohsiung County Government, which is responsible
for the treatment of Thai workers at their dormitory, was
not informed by CLA or the Hua Pan Management Company of Hua
Pan's policies for managing the Thai laborers. The report
makes no mention of any effort by the City or County
Governments to obtain the delinquent reports. The Kaohsiung
County Government has only three employees assigned to
monitor the living situation for all foreign laborers living
in the area. The report points out that Kaohsiung City
Government's Labor Bureau did not receive any request for
assistance from Thai workers prior to the incident. Based on
the report, KRTC was fined NT$300,000 (USD9,000) for
mismanagement.


7. The Executive Yuan's Council of Labor Affairs (CLA) also
published an investigation report on the Thai labor riot.
The report was made by the special investigation team, which
consists of representatives of Thai government, local NGOs,
academics, and religious groups. The report focused mainly
on human rights, management, and the system for recruiting
foreign laborers. The report concluded that the central and
local governments shared some responsibility for the riot.
The report goes to recommend that KRTC be barred from hiring
foreign labor. The special team also recommends a formal
investigation into rumored corruption on the part of the
KRTC and Hua Pan Management. They specifically questioned
the design and financing of the dormitory that housed the
workers. The report criticizes Kaohsiung City Government
and County Government for negligence in supervising the
hiring and management of foreign laborers. It states that
the local governments failed to react to Thai laborers
complaints prior to the riot.


8. According to the report, the CLA has decided to
subsidize local governments so that they can hire civil
servants to hire and oversee foreign laborers.

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Practical Measures
--------------


9. In order to provide the Thai workers with a better
working environment, the Kaohsiung City Government has taken
the following steps:


1. Ordered KRTC to immediately improve the living
environment for foreign laborers. The existing dormitory,
designed to house 800 people, has been home to 1700 workers.

2. Arranged a permanent dormitory at Hsiaokang training
center for lodging of 150 Thai workers, who moved in on
August 30. Former Acting Mayor Chen spent the night with the
workers when the new facility opened.

3. Requested that KRTC not repatriate any Thai workers
involved in the incident.

4. Arranged to provide legal assistance and assign defense
attorneys if necessary

5. Set up a blue ribbon panel, led by Kaohsiung Deputy
Mayor Cheng, to investigate KRTC's activities, and to ensure
that KRTC makes improvements in the living situation for
foreign laborers.


10. In a further effort to resolve the situation, Acting
Kaohsiung Mayor Chen Chi-mai requested that the KRTC
terminate its contract with Hua Pan Management. Instead, he
requested that KRTC, with assistance of the city government,
directly manage the Thai laborers. The Kaohsiung City
Government is also considering making a request that KRTC
revise the composition of its board of directors. KRTC has
made a quick response to the city government's request that
vice chairman Chen Min-hsien step down from the vice-
chairman position in the board of directors, but, despite no
longer being vice-chairman, he still remains a member of the
board due to his holding of 7 percent of KRTC equity.


11. AIT will continue to follow and report on the case as
it develops.


Thiele

Keegan