UAE LABOR MINISTER NOTES MEASURED PROGRESS ON TREATMENT OF

C O N F I D E N T I A L ABU DHABI 001331

SIPDIS

E.O. 12958: DECL: 11/19/2033
TAGS: PREL ELAB PHUM AE
SUBJECT: UAE LABOR MINISTER NOTES MEASURED PROGRESS ON TREATMENT OF
WORKERS

Classified by Ambassador Richard Olson, reasons 1.4 (b) and (d).


1. (C) Summary: UAE Labor Minister Saqr Ghobash told the Ambassador
that electronic payment of wages and enhanced living conditions are
key labor concerns. He is trying to persuade banks to assist in
creating accounts for workers to facilitate an enforceable electronic
payment regime. Living conditions for workers are improving, he
asserted, while warning against raising standards unrealistically in
the short term. He has ample inspectors to enforce standards but
wants to improve the quality of their work, partly through ILO
technical support. Ghobash said the visa sponsorship system was too
difficult to change and he saw no obvious alternative in the near
term. End summary.


2. (C) Minister of Labor Saqr Ghobash cited UAEG progress on labor
reforms with the Ambassador November 18. Ghobash said much work to
protect workers predated his (early 2008) appointment as the UAE
faces the challenge of balancing a large foreign labor force with
national security concerns. He cited "representation" (i.e.,
collective bargaining and unions) as a particularly prickly issue
when over 90% of the labor force does not hold citizenship; there are
few good models for effective worker "protection without
representation." (Comment: the other problem, unsaid, but the
elephant in the room, is that even UAE citizens do not have political
rights. End comment.) The workers' top priority is timely payment
of wages, he asserted, followed by living conditions. Both require
viable mechanisms (including government-defined standards) and
consistent enforcement.


3. (C) Ghobash said it is difficult to persuade banks to cater to a
clientele that only deposits small amounts per month, although
electronic salary transfer (and associated transparency) is
impossible without each worker having an account. He has met with
banking officials and the Central Bank to apply "a little pressure,"
and has coordinated with chambers of commerce and money exchange
houses to address the challenge of timely electronic deposits with
reasonable overhead costs. He plans to let ideas percolate among the
local business community for a time to see what solutions emerge
before opening the bidding internationally. Once an enforceable
payment mechanism is in place the Ministry can verify timely and
accurate payment, track delinquent companies, focus the efforts of
its inspectors, and build other worker protections into the system.
A minimum wage, if ever agreed to, could also be enforced.


4. (C) The Ministry is also keen to improve the living conditions of
workers. Ghobash anticipated Cabinet approval "within two to three
months" for enhanced worker accommodation standards, for example,
which are continually being upgraded. He noted the importance of
giving the private sector time to comply with new standards, which
give inspectors solid criteria to enforce. Enforcement without
preferential treatment to big-name companies is the goal, which the
Minister supports by calling companies himself when necessary. MoL
has no trouble employing a sufficient number of inspectors thanks to
the strong commitment of the UAE leadership to a serious inspection
regime, said Ghobash, although he does face a challenge in getting
the quality he needs in those inspectors. He has encouraged the
Cabinet to increase inspectors' salaries to attract higher quality
applicants. The job of inspector is tough, sensitive, and
influential, he said, noting that the UAEG is receiving ILO technical
support to strengthen its inspection capacity.


5. (C) When the Ambassador noted the political importance of labor
protections internationally, Ghobash reiterated his commitment to
improved standards yet cautioned against raising them too high or
demanding hasty compliance. The UAE does not need "five star" labor
camps, but is working to provide good accommodations that take time
to prepare. Eventually, it seeks realistic standards which a company
should meet before contracts are approved. He also noted the option
of a housing allowance (in lieu of provision of housing directly),
which he said was fine so long as the allowance is paid verifiably
through the banking system.


6. (C) When POLOFF, asked about potential long-term alternatives to
the sponsorship system (by which residents are beholden to the
sponsor of their visa),the Minister said that sensitive topic was
not ready for in-depth discussion. The current system was a rational
approach when it was designed and continues to serve the country
well; in the absence of a viable alternative it will likely remain
the norm. (Comment: it seemed to us that Ghobash understood the flaw
in the visa sponsorship system, but thought it too politically
sensitive to tackle at present, at least at his level. End comment.)

OLSON