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### Viewing cable 10CAIRO195, FOREIGN WORKER AND LABOR PROBLEMS IN QIZ FACTORY

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
10CAIRO195 | 2010-02-11 16:04 | 2011-01-28 00:12 | CONFIDENTIAL | Embassy Cairo

`

    VZCZCXYZ0000
    RR RUEHWEB

    DE RUEHEG #0195/01 0421606
    ZNY CCCCC ZZH
    R 111606Z FEB 10
    FM AMEMBASSY CAIRO
    TO RUEHC/SECSTATE WASHDC 0225
    INFO RUEHEG/AMEMBASSY CAIRO
    RUEHTV/AMEMBASSY TEL AVIV 0002

` `

    C O N F I D E N T I A L CAIRO 000195

    SENSITIVE
    SIPDIS
    DEPT FOR NEA/ELA, DRL/ILCSR
    DEPT PASS TO USTR/SFRANCESKI AND GSTRICKLER

    E.O. 12958: DECL: 2020/02/11
    TAGS: ECON ELAB ETRD EG PGOV
    SUBJECT: FOREIGN WORKER AND LABOR PROBLEMS IN QIZ FACTORY

    REF: 09CAIRO0561; 08CAIRO2528

    CLASSIFIED BY: Donald Blome, Minister-Counselor, DOS, ECPO; REASON:
    1.4(B), (D)

    ¶1. (C) Key Points:

    -The manager of a ready-made garments factory participating in the
    Qualifying Industrial Zones (QIZ) program told EconOff that his
    company has been holding the passports of foreign workers and that
    it fired an Egyptian employee for organizing a strike.

    -This is first case of passports of foreign workers being held by a
    QIZ-participating employer that EmbOffs have encountered in regular
    visits to QIZ factories.

    -Embassy Cairo has raised the issue with the GOE. The Ministry of
    Trade and Industry has pledged to investigate the matter, and will
    inform us soon of their planned response to the case.

    -Despite this case, NGO's engaged in labor advocacy tell us that
    working conditions and labor standards are generally better in QIZ
    factories than in other private and public-sector factories.

    ¶2. (C) EconOff recently met with Oussama Abboud, the Managing
    Director for the Kazareen Textile Company, an Egyptian garment
    exporter participating in the Qualifying Industrial Zones (QIZ)
    program.  Kazareen reports $50 million in annual sales, with its
    biggest contracts coming from Wal-Mart and the New York-based
    Warnaco Group, the parent company for such brands as Calvin Klein,
    Speedo, and Chaps.

    --------------------------------------------- ----------------------
    ------

    Passports of Foreign Workers Held, Strike Broken

    --------------------------------------------- ----------------------
    -----

    ¶3. (C) Abboud said that he legally brought in approximately 60
    Bangladeshi workers to work in his factory in 2008, joining some
    1,700 Egyptians on Kazareen's overall staff. (Note:  Egyptian labor
    regulations limit the non-Egyptian workforce to 10%). Abboud
    bluntly told EconOff that Kazareen management held onto to the
    passports of the Bangladeshis. He complained that some of the
    Bangladeshi workers came to Egypt to use it as a "gateway" to
    illegally immigrate to Europe, and that about half of his
    Bangladeshi workers have since left Egypt for Italy via boat from
    Libya. The workers left Egypt without their passports, since they
    could not get them back from Kazareen.

    ¶4. (C) Abboud also said that he overcame a day-long work stoppage
    in April 2009 by firing the strike's leader, who had attempted to
    organize the workforce. With the dismissal of the strike leader,
    all of the other strikers returned to work, and there have been no
    further efforts to organize.

    -----------------------------------------

    GOE Response to the Case

    ----------------------------------------

    ¶5. (C) EmbOffs raised the USG's concern about the holding of
    foreign workers' passports to two different GOE ministries. The
    Ministry of Manpower and Emigration (MOMM), which handles labor

    issues, denied that such a phenomenon exists in Egypt. However, the
    Ministry of Trade and Industry (MOTI), which handles the QIZ
    program, has pledged to investigate the case and respond.

    ¶6. (C) In a January 21 meeting with EmbOffs, Assistant Minister of
    Manpower and Emigration Mervat Wahby said that MOMM has never
    discovered any cases of foreign worker's passports being held in
    Egypt.  Wahby noted that her ministry has 600 labor inspectors who
    monitor factory conditions in Egypt's 29 governorates.

    ¶7. (C) EconOff raised the issue of the alleged labor problems at
    the Kazareen factory to Haytham Abdel-Ghany, the Registration and
    Audit Manager at the QIZ Unit in the Ministry of Trade and Industry
    (MOTI). Abdel-Ghany expressed the ministry's concern about the
    alleged mistreatment, and said that the issue had been referred to
    Minister of Trade and Industry Rachid Mohamed Rachid to decide what
    action should be taken. Abdel-Ghany told us on February 10 that
    MOTI is investigating the case, and will inform Embassy Cairo soon
    of its plans to deal with the matter.  Abdel-Ghany emphasized that
    this was an "individual case," and that MOTI had not heard of any
    other QIZ factory holding the passports of its foreign workers.

    --------------------------------------------- ---

    Bangladeshi Embassy Response

    --------------------------------------------- ---

    ¶8. (C) Harun Rashid, Charge d' Affairs at the Embassy of Bangladesh
    in Cairo, told EconOff that cases of mistreatment of Bangladeshi
    workers, including the holding of passports, is a phenomenon that
    is "happening all the time" in Egypt.  Rashid said that the
    Bangladeshi Embassy has received numerous complaints from its
    nationals about it in the past, but has only heard 1-2 complaints
    in the past year.  Rashid was unsure if there had been a previous
    case of such mistreatment in a QIZ factory, and noted that many
    past cases involved non-QIZ companies.  Rashid says that the
    Bangladeshi Embassy does not raise complaints about such cases with
    the GOE, but instead appeals directly to factory managers to
    improve the conditions for Bangladeshi workers.

    --------------------------------------------- ---------------

    Labor Conditions Generally Better in QIZ's

    --------------------------------------------- ---------------

    ¶9. (C) Local NGO's advocating for labor rights report that working
    conditions are generally better in QIZ factories, compared to other
    manufacturers in Egypt. According to the Land Center for Human
    Rights, a workers' rights advocacy group, salary and benefits are
    particularly better in QIZ factories than in other private sector
    factories.  However, according to the Land Center, the lack of a
    union representation that plagues Egypt's private sector in general
    is also an issue in QIZ factories.

    --------------

    Comment

    --------------

    ¶10. (C) This case marks the first time a QIZ company has told us
    directly that it holds the passports of foreign workers. In
    pressing for an expansion of the QIZ program, MOTI has insisted
    that factories operating in QIZ's uphold proper labor standards and
    abide by QIZ rules. QIZ Unit officials have stated that labor
    problems previously associated with Jordanian QIZ's have not
    occurred in Egypt's QIZ's, and QIZ Unit officials have been

    particularly sensitive to comparisons between the Jordanian and
    Egyptian programs. Embassy Cairo will follow up on the issue with
    MOTI as it prepares a response to the case.

    ¶11. (C) EmbOffs have visited a number of factories in the past
    several months, and have not heard similar  reports regarding
    foreign workers in the factories that may employ up to 10%  foreign
    labor, typically from South Asia. Despite this recent case, labor
    conditions -- driven primarily by strong compliance programs of
    garment buyers -- are generally better in factories participating
    in the QIZ program than in those not participating in the program.
    SCOBEY

`