CAMBODIA: UNIONIZATION EFFORTS STALL IN CASINO

UNCLAS SECTION 01 OF 02 PHNOM PENH 000602

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ELAB PGOV ECON PREL CB TH
SUBJECT: CAMBODIA: UNIONIZATION EFFORTS STALL IN CASINO
BOOM TOWN



1. (SBU) SUMMARY. Unionization efforts at a Thai-owned
casino on the Cambodian-Thai border were met with alleged
management intimidation and firing of union leaders.
Management objected to an arbitral award calling on them to
re-instate 11 of the 20 terminated workers, has refused to
implement the ruling, and declined further negotiations with
the union. Union leaders, who earlier had been committed to
leading a strike, now worry that housing difficulties, lack
of local support, and the potential for violence could
preclude a strike. The Thai Embassy has agreed to encourage
the Thai casino owner to negotiate with the union. The
union's problems in organizing workers in the gaming
industry--a logical next step for unionization
efforts--highlight the challenges confronting the labor
movement as it tries to expand beyond its garment and hotel
sector base in Cambodia's largely informal economy. END
SUMMARY.

Unions Allege Management Intimidation
--------------


2. (U) The Cambodian Tourism and Service Worker's Federation
(CTSWF),one of the most dynamic and fastest-growing unions
in the country, began attempts to organize casinos in the
Cambodian-Thai border town of Poipet in January 2005.
Working closely with the American Center for International
Labor Solidarity (ACILS),CTSWF organizers traveled
frequently to Poipet and met with workers from each casino.
Grand Diamond City Casino workers demonstrated the most
enthusiasm for unionization.


3. (U) Despite urging from ACILS to wait until the union at
Grand Diamond City was stronger and unions could be
established simultaneously at other casinos, the CTSWF went
ahead with local union elections on Nov. 15, 2005. Despite
having 500 dues-paying members, only 185 members voted due to
alleged management intimidation. In the two weeks following
the election, the president, vice-president, treasurer, and
advisor to the union were all fired without explanation.
Following union-management negotiations, the vice-president,
treasurer, and advisor were re-hired.


4. (U) In early December, management asked its 1,082
Cambodian workers to fill out a survey asking whether they
supported the creation of a union. When more than 700
workers responded with support for the union, management
reportedly pressured workers to change their answers. In
late December and early January, 20 workers who refused to
change their responses were terminated. In early February,
Grand Diamond Manager Jeelaphorn Khanaknith told EconOff that
the employees had been terminated because management had lost
confidence in them. Unlike the garment sector, casino
employees handle thousands of dollars each day, and trust is
critical. She noted that the casino had offered them
severance pay, but they refused to accept it.

Former Governor Unsympathetic to Union Efforts
-------------- -


5. (U) Former Banteay Meanchey province governor Gen. Heng
Chantha (FUNCINPEC) was unsympathetic to unionization efforts
at the casino, telling EconOff in February, "In the past,
labor disputes occurred only at garment factories (which are
located in other provinces),now this disease has spread to
our province." He described the dispute as "just a
misunderstanding" and chided the union for not asking the
provincial government to assist in getting management to
accept a union presence. Working conditions in casinos are
better than those in the garment factories in Phnom Penh and
Sihanoukville, he said. And casino workers are the
privileged few when compared to the thousands of residents of
Poipet who are homeless or living far below the poverty line.
(Note: Gen. Chantha was one of three FUNCINPEC governors
removed from their posts last week as part of CPP's political
infighting with FUNCINPEC. CTSWF President Ly Korm intends
to contact the new governor, Onn Sum (CPP),in the next few
days. End Note.)

Arbitration Proceeds, but Award is Rejected
--------------


6. (SBU) Under Cambodian labor law, labor disputes that
cannot be successfully conciliated by the Ministry of Labor
are sent to the Arbitration Council, a uniquely transparent
dispute resolution body founded with US support.
Participation in the arbitration process is mandatory, but
either party can object to an award, making the award itself
non-binding. Most arbitration cases have dealt with garment
or hotel sector disputes in Phnom Penh and Siem Reap, and the
Arbitration Council is now well accepted in these two

PHNOM PENH 00000602 002 OF 002


industries and geographic areas. In many other industries
and cities, few employers are familiar with the arbitration
process and may fear participating in a judicial proceeding
whose outcome they cannot control. Arbitration Council
Foundation staff worried that as a foreign owner operating
far outside the usual geographic and sectoral scope of the
Arbitration Council's cases, Thai casino owner Phunphorn
Asawahem might refuse to participate in arbitration. In such
a case, the government would be unlikely to intervene against
a powerful tycoon, setting the damaging precedent that
arbitration proceedings can simply be ignored. (Note:
Phunphorn Asawahem is reportedly the son of former Thai
Minister of the Interior Watana Asawahem. End Note.)


7. (U) Econoff and Labor Assistant visited Poipet in early
February to meet with union leaders and casino management,
and to encourage both sides to refrain from any industrial
action until after arbitration, and to participate in the
arbitration process. Both the union and the casino
participated in arbitration hearings, which were held
February 8 and 28. The arbitral award issued on March 9
called for the reinstatement of 11 of the 20 terminated
workers, finding that workers who claimed to be union members
but had not voted in union elections in November were not
covered by laws protecting workers from anti-union
discrimination. Casino management objected to the award on
March 16, and so far has refused to negotiate further with
the union.

Violence, Housing Fears Make Strike Less Palatable
-------------- --------------


8. (U) Despite strong support for a strike in December and
January, now that union members are taking a closer look at
the logistics of a strike, some members are losing interest
while a fervent core continues to urge industrial action. As
part of their employment contract, the casino provides
dormitory-style accommodation for most of its workers. If
the workers go on strike, they will need to find new places
to stay. Most workers are migrants from other regions of
Cambodia and do not have relatives in the area who could
offer them accommodation. There are not enough low-priced
hotel rooms in Poipet to house striking workers, and CTSWF
leaders report that traveling to and from Poipet and
participating in the arbitration process exhausted most of
the funds they saved to support a strike. Moreover, local
residents--many of whom live below Cambodia's poverty
line--are unlikely to be sympathetic toward striking workers,
whom they may regard as well-paid whiners. CTSWF leaders
also worry about the potential for strike-related violence,
particularly as police in Poipet are unaccustomed to dealing
with striking workers.

Thai Embassy: What Labor Dispute?
--------------


9. (SBU) In a meeting March 27, Thai Political Officer
Songchai Chaipatiyut told Econoff and Labor Assistant that he
was unaware of the labor dispute or unionization efforts in
Poipet, and explained that the Thai government does not
support Thai-owned casinos in Cambodia due to concerns about
money laundering and other crimes, and tries to keep its
distance from the casinos. However, he was receptive to our
concerns about the potential for violence and the potential
economic impact of a strike. He agreed to encourage the
casino to negotiate with the union and, above all, to avoid
violence.


10. (U) COMMENT. The Cambodian labor movement, which started
in the garment sector and was given a huge boost by the labor
provisions of the US-Cambodia Bilateral Textile Agreement,
has slowly moved into other sectors of Cambodia's small
formal economy, most notably luxury hotels and schools.
Outside of these sectors, and outside of Phnom Penh and Siem
Reap, few of Cambodia's workers are organized. CTSWF's
effort to expand the reach of organized labor to casinos in
the busy and fast-growing border town of Poipet is an
important and logical next step. However, if the reaction of
Grand Diamond City owner Phunphorn Asawahem is any
indication, casinos are unlikely to accept unionization
without resistance. Whereas hotel and garment sector
unionization efforts benefited greatly from international
attention and a boycott of hotels involved in labor disputes,
casino unions are unlikely to find such support from
international activists, the predominately Thai casino
patrons, or their neighbors in Poipet. The Cambodian labor
movement has already grabbed the "low hanging fruit;" future
unionization efforts will be more difficult. END COMMENT.
Mussomeli