AERO MONGOLIA: UNION BUSTING, STATE COMPLICITY

C O N F I D E N T I A L SECTION 01 OF 02 ULAANBAATAR 000054

SIPDIS

STATE FOR EAP/CM, DRL;
COMMERCE FOR ZHEN GONG-CROSS

E.O. 12958: DECL: 02/23/2020
TAGS: ELAB PHUM SMIG EAIR PGOV PREL MG
SUBJECT: AERO MONGOLIA: UNION BUSTING, STATE COMPLICITY

Classified By: Political Officer Dan Rakove for reasons 1.4 (b) and (d)


1. (C) SUMMARY: A labor strike at domestic carrier Aero
Mongolia raises new concerns about the deficiencies of law
enforcement and the political influence of corporations.
Exercising their legal right, all 70 employees of Aero
Mongolia organized a trade union in the fall of 2008 and
registered it with the Ministry of Social Welfare and Labor
(MSWL). Aero Mongolia's management threatened the unionists,
fired the four elected leaders, and legally challenged the
MSWL's decision to recognize the union. The court sided with
the MSWL and required management to hire and compensate the
sacked employees. Reports are that management refused to do
so, instead intimidating them, hiring under-skilled
replacement technicians and mobilizing state support to
undermine the union. In the process, Aero Mongolia
demonstrated its impunity and the state its complicity in
violating bedrock labor law. END SUMMARY


2. (C) Aero Mongolia is a subsidiary of the powerful and
politically connected Mongolian corporate conglomerate
Monnis. Heavily financed by Canadian, Chinese, and Japanese
investors, Monnis is also the official distributor of Good
Year, Nissan, and other foreign commercial products, and is a
large mining and construction equipment distributor. CEO B.
Chuluunbaatar is reportedly a friend of former President
Enkhbayar (MPRP),and MP Bat-Erdene (MPRP) sits on the
Executive Board. Despite there being no political donation
recorded in their names for the 2008 election, it is commonly
believed that Monnis supports the MPRP and receives state
contracts in return.


3. (SBU) According to the Confederation of Mongolian Trade
Unions (CMTU),in the fall of 2008, all 70 employees of Aero
Mongolia successfully filed for recognition of their new
trade union with the MSWL. Aero Mongolia challenged this
decision in court and threatened the new union members with
firing. Faced with this threat, all but the 14 engineers and
technicians abandoned the union. Of these, four assumed
leadership roles and were summarily fired. The remaining ten
went on strike, beginning on November 24, 2008.


4. (SBU) These maintenance workers persisted in demanding
collective bargaining to improve wages and work conditions,
both of which fall below that of Mongolian Airlines (MIAT),
which no longer operates domestically. Salaries average
500,000 MNT (345 USD) per month and workers consistently log
15 hour days beginning at 5 AM. As the company lacks a
hangar, they work outside in temperatures that fall to -40 in
the winter. Workers rest 3-4 days a month although this is
not fixed as there are no written individual employment
contracts. Whereas the state sponsored airline MIAT employs
more than 100 workers to service a fleet of four (of which
two are operational),Aero Mongolia retains 14 workers to
maintain a fleet of four (of which only one is currently
operational).


5. (SBU) Despite successive court verdicts declaring the
union lawful and requiring management to rehire and
compensate the four fired union leaders, management has
refused to obey these court orders. When confronted with the
court order by the fired workers, the company rejected it and
threatened violence against the workers and their families.
The strikers subsequently picketed, but were denied entrance
as management posted signs with their pictures, stating they
were not to be admitted onto the premises. In another
picket, the police forcibly removed the striking workers from
the grounds while threatening arrest. The workers applied to
other airlines for jobs but were unsuccessful, speculating
they had been blacklisted.


6. (SBU) Meanwhile, Aero Mongolia hired one worker from the
Netherlands to supervise maintenance of the Dutch planes. By
immigration law, foreigners can only be hired for tasks that
Mongolians cannot carry out (waivers can be obtained for a
fee). There is no provision granting an exception if those
skilled workers are on strike. Nonetheless the Immigration
Agency granted a visa and the MSWL a work permit to the Dutch
engineer. Aero Mongolia also attempted to hire one Fokker
maintenance worker from Air Astana in Kazakhstan (all four
Aero Mongolia planes are Fokkers; two 50-seaters and two
100-seaters). The Confederation of Mongolian Trade Unions

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(CMTU) persuaded the Kazakh workers to refuse, appealing for
labor solidarity.


7. (C) To fill the remaining manpower vacancy, Aero Mongolia
promoted the trainees of the striking workers despite their
lack of qualifications. By regulation of the Mongolian Civil
Aviation Authority (MCAA),airplane maintenance and repair
staff must have five years of hands on training outside of
technical school. Additionally, Aero Mongolia traditionally
employed staff who had taken specialized Fokker maintenance
courses in the Netherlands. The trainees lack both of these
prerequisites. The strikers attributed these lapses in turn
to a 2009 incident in which an Aero Mongolia aircraft's motor
halted mid-flight; post has also heard reports that one of
that aircraft's two engines exploded shortly after takeoff.
The plane made an emergency landing.

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COMMENT
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8. (C) The labor strike raises new concerns about workers
rights to organize, the political influence of corporations,
and the inefficacy of the courts. Whereas the judicial
system sided with the unions, their decision remains
unenforced. To the contrary, the Ministry of Social Welfare
and Labor, Civil Aviation Authority, Immigration Agency, and
agencies of law enforcement demonstrated complicity in the
company's actions against the union.
HILL