HONG KONG BAR-BENDER STRIKE TURNS POLITICAL

C O N F I D E N T I A L SECTION 01 OF 02 HONG KONG 002128

SIPDIS

NOFORN
SIPDIS

DEPARTMENT FOR EAP, EAP/CM
LABOR FOR ILAB
NSC FOR DENNIS WILDER, KURT TONG

E.O. 12958: DECL: 08/15/2032
TAGS: ELAB PGOV PINR PHUM SOCI CH HK
SUBJECT: HONG KONG BAR-BENDER STRIKE TURNS POLITICAL

Classified By: Acting E/P Section Chief Jeff Zaiser; Reason 1.4 (d)

Summary and Comment
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1. (C) More than 1,000 Hong Kong "bar-benders" (metal
workers) went on strike August 8, demanding higher pay and
shorter work hours. Over the weekend they scuffled with
police while conducting an unauthorized demonstration. Since
then, the labor dispute has escalated into a conflict between
Hong Kong's two major labor organizations, the pro-Beijing
Federation of Trade Unions (FTU) and the pro-democracy
Confederation of Trade Unions (CTU). The workers,
dissatisfied with the FTU's failure to consult them during
the negotiations, apparently have shifted their allegiance to
the CTU. As of August 15, the strike was in its seventh day
and reportedly had affected about sixty construction sites;
neither side appeared willing to compromise. CTU Secretary
General Lee Cheuk-yan told us that the negotiations were
deadlocked, the workers felt betrayed by the FTU, and the
strike had become a broader battle between the CTU and the
FTU for worker allegiance. He expected the strike would
continue for at least another week. End Summary.


2. (C) Comment: The FTU, which has long enjoyed support from
most construction workers, probably was eager to settle the
dispute quickly to preclude intervention by the CTU, its
political rival. The two organizations have been divided for
several years on the issue of a minimum wage law, which the
CTU actively supports while the FTU -- in deference to the
Hong Kong Government (HKG) and the central government in
Beijing -- attempts to play down. In addition to this
political dimension, the inability of the concerned parties
to settle their dispute also reflects Hong Kong's lack of
collective bargaining procedures and its undeveloped
mechanisms for labor-management relations. The HKG has tried
to remain a neutral mediator between the workers and
employers and to stay out of the contest between the FTU and
CTU, but it probably also fears that meeting the workers'
demands might provoke strikes by other relatively low-paid
and disgruntled labor groups. End Comment.

Negotiations Break Down
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3. (SBU) More than 1,000 Hong Kong "bar-benders" (metal
workers and welders, mostly on construction projects) went on
strike August 8, demanding higher pay and shorter work hours.
Several hundred of them demonstrated in front of the Central
Government Offices (CGO) and Government House (residence and
office of the Hong Kong Chief Executive). They demanded that
CE Donald Tsang and Secretary for Labor and Welfare Matthew
Cheung assist them to obtain a better offer from the Hong
Kong Bar-Bending Contractors Association (HKBCA),a group of
38 companies with which they had been negotiating
unsuccessfully. The 300,000-member, pro-Beijing FTU has
represented the roughly 5,000 workers in the negotiations,
but the workers became disgruntled when the FTU accepted a
daily wage offer from the HKBCA of HKD 850 (USD 109) for an
eight and one-quarter hour work day. At present, the workers
are paid HKD 500-600 (USD 64-77) per day for nine hours of
work. The workers claim their wages were cut from HKD 1,200
during the economic recession ten years ago, and have never
returned to their previous levels.

Rowdy Behavior
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4. (SBU) On Saturday, August 11, approximately 500 of the
metal workers staged an unauthorized demonstration, severely
disrupting traffic in central Hong Kong. (Note: Organizers
are required to obtain a permit from the police for any
public demonstration, parade, or rally in Hong Kong. The
permits usually are issued, and it is unusual for anyone to
demonstrate without a permit. End note.) Several consulate
staff and other contacts witnessed the workers scuffle with
police as they forced their way through hastily erected
barriers to stage a "sit-down" protest. On Sunday, Police
Commissioner Tang King-shing warned the strikers that any
further "rowdy" behavior would lead to their arrest. Tang
said he "understood" the workers' situation but would not
tolerate further incidents. The deonstrations have
continued, on a slightly smalle scale, every day since
Saturday at a less congeted site in Kowloon.

Competing Unions

HONG KONG 00002128 002 OF 002


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5. (SBU) Also over the weekend, the 170,000-member,
pro-democracy Confederation of Trade Unions (CTU),Hong
Kong's other major labor organization, entered the dispute,
apparently at the request of workers who were dissatisfied
with the FTU's efforts on their behalf. The CTU criticized
the FTU for negotiating with the employers, with HKG
mediation, without informing the workers. CTU Secretary
General and legislator Lee Cheuk-yan curtailed his vacation
in Italy because of the dispute and publicly criticized the
FTU for failing to consult the workers before accepting the
employers' offer.


6. (C) On August 13, the striking workers angrily dismissed
their FTU negotiators and asked Lee and the CTU to represent
them. On August 14, the police rejected an application by
legislator "Long Hair" Leung Kwok-hung and the strikers to
march through Kowloon, citing potential traffic disruption
and inconvenience to residents. As of August 15, the strike
was in its seventh day and reportedly had affected about
sixty construction sites. Neither side appeared willing to
compromise. CTU Secretary General Lee told us on August 15
that the negotiations were deadlocked. He said the workers
felt betrayed by the FTU and the strike had become a battle
between the CTU and the FTU, which was trying to shift blame
for the impasse to the CTU. Lee believed the strike would
continue for at least another week.


7. (SBU) One of the workers' spokesmen said more than half of
the 5,000 metal workers had lost confidence in the FTU. An
FTU spokesman blamed the CTU for provoking the workers and
claimed the employers group did not accept the CTU's
representation of the workers. The Hong Kong Labor
Department's Chief Labor Officer said she would continue to
mediate and attempt to settle the dispute, and said the
government would remain neutral. The HKBCA continues to
claim that the pay raise demanded by the workers would force
many construction companies to close.
Marut