CAMBODIA: GARMENT SECTOR STRIKES RISE SHARPLY

UNCLAS SECTION 01 OF 02 PHNOM PENH 000655

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, DRL/IL, EB/TPP

E.O. 12958: N/A
TAGS: ELAB ECON PGOV KTEX CB
SUBJECT: CAMBODIA: GARMENT SECTOR STRIKES RISE SHARPLY

REF: PHNOM PENH 526


1. (SBU) SUMMARY. More than twice as many workers (16,000)
were involved in strikes in February and March of this year
than in the two previous months. The dramatic increase is
probably due to a number of factors: resurgence of activism
after months of economic and political uncertainty,
leadership changes at large unions, increased unilateral and
anti-union action by factory managers, frustration with the
arbitration process, and the approaching Khmer New Year
holidays. Industrial action is also taking on a new
character, as strikes which earlier comprised workers
demanding severance pay and other basic rights for themselves
are increasingly about raising wages and have the support of
other workers striking in solidarity. While unions'
increased comfort level with the tool of striking is a
positive sign, their sometimes rash behavior and unrealistic
demands show that the labor movement still has much maturing
to do. END SUMMARY.

Strikes Rise Dramatically in February and March
-------------- --


2. (U) Strikes in the garment sector rose significantly in
February and March, according to manufacturers and union
representatives. Ken Loo, Secretary General of the Garment
Manufacturer's Association of Cambodia, reported that while
there were three garment factory strikes each in December
2005 and January 2006; there were eight strikes in February
2006 and five in March 2006. Whereas 2,881 workers
participated in strikes in December and 1,943 participated in
strikes in January; on February 10, 220 workers went on
strike and 5,800 workers went on strike in March. According
to a partial list compiled by American Center for
International Solidarity (ACILS) director Alonzo Suson, the
pro-opposition Free Trade Union of Workers of the Kingdom of
Cambodia (FTU) and the independent Cambodian Coalition of
Workers Democratic Unions (CCAWDU) have led the majority of
the strikes; but other unions, including pro-CPP groups, have
led strikes as well.

Ministry of Labor: What strikes?
--------------


3. (SBU) Koy Tepdaravuth, Director of the Labor Dispute
Department of the Ministry of Labor and Vocational Training,
denied that the number of strikes had increased, but pledged
his commitment to send his staff to conciliate any strike
that does occur. (Comment: The Ministry of Labor and
Vocational Training has been largely ineffective since it
split from the Ministry of Social Affairs, Veterans, and
Youth in July 2004. This response likely indicates an
unwillingness to officially recognize a problem that the
ministry should be taking a larger role to solve. End
Comment.)

Multiple Causes for Increased Labor Unrest
--------------


4. (U) Labor observers point to multiple factors
contributing to the increased number of strikes:

-- Return to a more relaxed political and economic climate:
During the economic uncertainty following the end of the
quota system in January 2005 and the political uncertainty
following the October 2005 and December 2005 crackdowns on
union and human rights leaders, unions were afraid to take
action. Now that both the economic and political climates
have improved, they have adopted a more active posture.

-- Return of FTU leader Chea Mony: Mony reports that
employers took advantage of his union members while he was in
self-imposed exile in Europe. Now that he has returned, his
unions are addressing their grievances. Other labor
observers suggest that perhaps Mony is trying to demonstrate
his strength and re-assert himself on the labor scene after
his extended absence.

-- Departure of CCAWDU leader Chhorn Sokha: CCAWDU Vice
President and former President Chhorn Sokha was forced out of
CCAWDU in a very public fight with CCAWDU president Ath Thorn
in February 2006. While the removal was ostensibly over
charges that Sokha accepted bribes, labor observers saw the
dispute as a power struggle between the elected president and
his charismatic vice president, who, as a vocal, effective,
and female union leader, was the darling of the international
labor community. Many believe that Sokha was the voice of
pragmatism within the union, and with her departure, the
union is acting more rashly. Ath Thorn may also be trying to

PHNOM PENH 00000655 002 OF 002


show his strength and decisiveness as a leader now that Sokha
is out of the way.

-- Increased anti-union harassment and unilateral changes in
contracts: Better Factories Cambodia's latest factory
monitoring reports document increased union harassment,
including termination of union leaders, and the unilateral
change of contracts from undetermined length to fixed length
(reftel). Alonzo Suson reports that these are key themes in
several of the labor disputes over the past two months.

-- Frustration with the arbitration process: Mony reported
that many of his union members are frustrated with
non-implementation of arbitral awards. (Note: Although
participation in the arbitration process is mandatory, either
the union or the employer can object to an arbitral award,
making the award non-binding. End Note.) Union members see
no value in going through the time and hassle of arbitration
if the employer is likely to throw out the decision. As a
result, several of his factory level unions have opted to
(illegally) conduct strikes before arbitration begins.

-- Approaching holidays: There is often a small rise in the
number of strikes in the weeks before Khmer New Year (April
14-17),one of Cambodia's most important holidays, as workers
demand additional holidays, a holiday bonus, etc.

Garment Sector Strikes Take On a New Character
-------------- -


5. (U) In addition to becoming more frequent, garment
sector strikes are showing increased participation by
solidarity strikers, as opposed to just strikers with a
personal stake in the dispute. Ken Loo reports that whereas
in the past, strikes were often confined to a single
department within a large factory, now there is a "It's our
department now, but it could be your department later"
feeling within factories. Several days after CCAWDU's March
6 announcement that several hundred Flying Dragon workers
would march to the U.S. embassy to ask for support in a labor
dispute, CCAWDU President Ath Thorn threatened to involve
25,000 workers in a multi-factory strike centering on Flying
Dragon issues. Labor Assistant dissuaded CCAWDU from leading
what would appear to outsiders as a protest against the
embassy. EconOff admonished CCAWDU leadership for its
actions' potential to make enemies for the union and their
appearance of being unreasonable through their rash decisions.


6. (U) The types of demands made by unions are also
changing -- becoming less about demanding respect for
workers' basic rights and more about demanding higher wages.
Alonzo Suson told EconOff that last year most demonstrations
and strikes were due to the closing of factories without
giving severance pay to the workers. This year, in addition
to strikes over unilateral changes in contracts and
anti-union harassment, unions are increasingly demanding
higher wages and lower piece-rate quotas. Ken Loo reported
that, at the Bright Sky factory, workers demanded that every
worker receive a USD 5-10 per month incentive bonus that was
recently introduced to reward top performers and motivate
workers. Moreover, Loo reports that workers frequently make
unrealistic demands, including asking for wages that would
push labor costs over what the factory is paid to produce
each piece.


7. (SBU) COMMENT. Increased labor disputes signal both
good and bad news for Cambodia. On the positive side, the
increased strikes are a refreshing return to activism after
more than a year of economic and political fears that
dampened union activity. However, the strikes also
demonstrate the labor movement's immaturity. Some of the
unions lack the experience to understand what realistic wage
demands are, and a few union leaders seem eager to showcase
their power in unwise and illegal pre-emptive strikes rather
than participate in the legally-mandated labor mediation and
arbitration process.
Mussomeli