CAMBODIA: FELONY CHARGES TO BE DROPPED AGAINST

UNCLAS SECTION 01 OF 03 PHNOM PENH 001264

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP, EAP/MLS, DRL/IL--MARK MITTELHAUSER, AND
EAP/TPP/ABT THOMAS LERSTEN
LABOR FOR ILAB--JIM SHEA AND JONA LAI
GENEVA FOR RMA
STATE PLEASE PASS TO USTR--BARBARA WEISEL AND DAVID BISBEE

E.O. 12958: N/A
TAGS: ELAB ECON PGOV CB
SUBJECT: CAMBODIA: FELONY CHARGES TO BE DROPPED AGAINST
UNION LEADERS



1. (SBU) SUMMARY: A labor dispute threatened to erupt into
violence on July 6 after striking workers illegally blockaded
the main gate at the Genuine garment factory and the garment
factory had three union leaders arrested on trumped-up felony
charges of human confinement, the first time unionists have
been charged with a felony since 2001. As the dispute heated
up, Poleconoff engaged in shuttle diplomacy, encouraging each
side to de-escalate the conflict and reverse its illegal
actions. By the end of the day, the union agreed to remove
the blockade in exchange for the factory management dropping
the felony charges, and both sides pledged to continue
negotiating the remaining issues with an eye towards
resolving the strike. This case demonstrates the extreme
distrust between unions and factory management and factory
owners' growing tendency to use the easily manipulated court
system rather than the more transparent but toothless
Arbitration Council. END SUMMARY.

Labor Dispute Escalates from Strike to Felony Charges
-------------- --------------


2. (U) On June 22, following a failed conciliation attempt
by the Kandal provincial Department of Labor, workers from
the Genuine garment factory went on strike to protest the
dismissal of four factory-level union leaders in connection
with a 2004 strike at the factory. As the strike progressed
without any resolution in sight, the garment workers
blockaded the main factory gate with wooden tables and
branches to prevent the factory from shipping out finished
products or transporting fabric and trim to other factories
in an effort to sub-contract the work. A smaller door,
through which people could walk in and out, remained
unobstructed.


3. (U) The evening of July 3, three of the four union
leaders who protested their termination were arrested; a
fourth went into hiding. The three union leaders were
charged with human confinement, a felony punishable by three
to five years in prison. Factory management alleged that the
blockade had trapped 25 Chinese and Taiwanese factory
managers in the factory for several days. (COMMENT: While
trumped-up misdemeanor charges against union activists are
not uncommon, this is the first time since 2001 that union
leaders have faced felony charges. END COMMENT.)

Embassy Urges Resolution to Dispute
--------------


4. (SBU) Poleconoff, LES Labor Assistant, and FTU Vice
President Sam Srey Mom traveled to the factory the morning of
July 6 to check on a reported clash between workers and
paratroopers. Both factory manager Calvin Yeh and workers
told Emboffs that paratroopers in civilian clothes, acting on
orders from factory management, had started to remove the
blockade early in the morning when there were only 20 workers
present. When the workers resisted, pushing and shoving
broke out and the soldiers allegedly threatened to use
electric batons. (Note: In response to a query from the
Defense Attache, the parachute brigade commander said that
two soldiers had gone to the factory to check on the wife of
one of the soldiers, who was working there. The brigade
commander said that no other personnel from his brigade were
at the factory. END NOTE.)


5. (SBU) Factory manager Calvin Yeh told Poleconoff that the
Chinese and Taiwanese managerial staff were able to come and
go from the factory, but required soldier escorts to
alleviate fears of violence from the workers. Yeh claimed
that the four terminated union leaders were troublemakers and
that the factory's bottom line was that they could not
continue to work at the factory. Poleconoff urged the
factory to drop the human confinement charges against the
three union leaders, noting that the factory staff were
clearly not confined in the factory compound and that factory
owners often manipulated the courts to gain an advantage in
labor disputes.


6. (SBU) Outside the factory, Poleconoff relayed to Sam Srey
Mom the factory's insistence on firing the workers and opined
that they were not likely to back down on this point.
Moreover, the union strikes and blockading the factory gate

PHNOM PENH 00001264 002 OF 003


were illegal. While the charges of human confinement were
unreasonable, the union leaders were guilty of lesser crimes
and, under Cambodian Labor Law, the factory legally had a
right to dismiss them. Poleconoff urged the FTU Vice
President to compromise, but Sam Srey Mom responded that no
compromise was possible.

More Shuttle Diplomacy as Riot Police Deployed
-------------- -


7. (SBU) Later the same day, Poleconoff and Labor Assistant,
this time accompanied by FTU federation president Chea Mony,
returned to the garment factory after hearing that riot
police had been deployed. On the way to the factory,
Poleconoff suggested that, as a way to de-escalate the
situation, the FTU president propose removing the blockade in
exchange for the factory dropping the human confinement
charges against the three union leaders. Chea Mony
eventually agreed, saying he would be willing to remove the
blockade unilaterally. Upon arrival at the factory,
Poleconoff and Labor Assistant observed a larger, angrier
crowd of workers (now numbering about 350) and more
police--now about 50 officers, including 10 in riot gear with
tear gas guns as well as standard-issue sidearms.


8. (SBU) Talking privately to factory manager Calvin Yeh,
Poleconoff noted that the dispute had reached a critical
stage and that a violent confrontation might lead to injured
workers and create bad press that would likely reach the
factory's buyers in Europe, which could cause buyers to stop
ordering from the factory. Yeh responded that the factory
was willing to consider dropping the charges against the
three union leaders in exchange for the removal of the
blockade. He then agreed to negotiate directly with Chea
Mony.

I'll Trade You Three Freed Unionists for Removing One Illegal
Blockade
-------------- --------------


9. (SBU) Chea Mony and FTU Secretary General Mann Seng Hak
were ushered into the factory conference room where Calvin
Yeh, two unidentified Khmer women, Poleconoff, and Labor
Assistant were waiting. Poleconoff began by reminding
everyone that the current situation benefited no one and
could easily become violent. Both sides had taken illegal
actions, bore some of the responsibility, and should
compromise in order to resolve the conflict and avoid a
violent confrontation.


10. (SBU) Negotiations proceeded quickly, with one of the
unidentified women taking the lead for the factory. The
female factory representative expressed her suspicions that
Chea Mony was only here to negotiate a payoff, but Mony
assured her that that was not the case. The woman noted that
the factory had already prepared paychecks for the workers
for the upcoming payday, July 10, but planned to shut the
factory after paying the workers, and then later re-open with
new staff.


11. (SBU) Commenting that a factory closure would hurt both
sides, Poleconoff then asked both sides to reverse their
illegal actions, by dropping human confinement charges
against the three union leaders and removing the blockade.
First the factory representative and then Chea Mony agreed to
the idea in principle, though the factory representative
insisted that the union leaders be left in jail for 30 days
to "educate" them. Chea Mony responded that this was
unreasonable and that they should be released on July 10
instead. The factory representative agreed, and she and Chea
Mony swapped cell phone numbers, agreeing to keep talking and
setting a goal of resolving the dispute by July 10.

Blockade Removed; Union and Factory Thank Embassy
-------------- --------------


12. (SBU) Calvin Yeh, the two Khmer women, the FTU
representatives, and Poleconoff and Labor Assistant walked
out of the factory together to the applause of workers, who
immediately began dismantling the barricade on orders from
Chea Mony. The unidentified woman finally introduced herself

PHNOM PENH 00001264 003 OF 003


as Okhna Sheang Chanheng, Director of Heng Development
Company. (NOTE: Okhna is a Cambodian honorific, denoting
people who have contributed USD 100,000 or more to the ruling
CPP. END NOTE.) She was effusive in her thanks to the
Embassy for resolving the dispute, noting that even the
anti-riot police were unable to remove the barricade.


13. (SBU) Speaking over a loud speaker, Chea Mony praised
the workers for their courage, told them that they would be
paid on July 10, and asked them to trust his decision to
remove the blockade, saying that he felt the strike could be
ended soon. He did not mention the promised release of the
union leaders. In the car on the way back to Phnom Penh, he
thanked the embassy for its assistance, noting that the
embassy had helped to resolve seemingly intractable labor
disputes twice in one week.


14. (SBU) COMMENT. While the felony charges made this
dispute more serious than other garment sector labor
disputes, this case highlights many factors common to strikes
across the industry. Lack of communication and extreme
distrust between unions and factories, combined with
ineffective government attempts at conciliation, mean that
disputes often escalate to strikes before serious
negotiations are held. Unions are increasingly disappointed
by the Arbitration Council, which offers fair but
unenforceable rulings and is more and more often being
trumped by the easily manipulated court system. (Indeed, it
was rather remarkable to watch as the FTU president and the
factory owner negotiated how long the three union leaders
would stay in jail, with no one doubting that the factory
owner had the power to order their release whenever she
wished.) The situation is clearly driving unions and garment
factories to seek other solutions--such as the garment
sector-wide collective bargaining effort set to begin in
August--but it also means that negotiations start from a
position of intense distrust and suspicion. END COMMENT.
MUSSOMELI