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### Viewing cable 06PHNOMPENH1204, CAMBODIA: GENERAL STRIKE CANCELLATION SETS THE

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06PHNOMPENH1204 | 2006-06-30 10:53 | 2011-07-11 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Phnom Penh

`

    VZCZCXRO5948
    PP RUEHCHI RUEHDT RUEHHM RUEHJO RUEHNH
    DE RUEHPF #1204/01 1811053
    ZNR UUUUU ZZH
    P 301053Z JUN 06
    FM AMEMBASSY PHNOM PENH
    TO RUEHC/SECSTATE WASHDC PRIORITY 6966
    INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
    RUEHXI/LABOR COLLECTIVE PRIORITY
    RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
    RUEHC/DEPT OF LABOR WASHDC PRIORITY
    RUEHGV/USMISSION GENEVA PRIORITY 1508

` `

    UNCLAS SECTION 01 OF 02 PHNOM PENH 001204

    SIPDIS

    SENSITIVE
    SIPDIS

    STATE FOR EAP, EAP/MLS, DRL/IL--MARK MITTELHAUSER, AND
    EAP/TPP/ABT THOMAS LERSTEN
    LABOR FOR ILAB--JIM SHEA AND JONA LAI
    GENEVA FOR RMA
    STATE PLEASE PASS TO USTR--BARBARA WEISEL AND DAVID BISBEE

    E.O. 12958: N/A
    TAGS: ELAB ECON PGOV CB
    SUBJECT: CAMBODIA:  GENERAL STRIKE CANCELLATION SETS THE
    STAGE FOR SECTORAL COLLECTIVE BARGAINING

    REF: A. PHNOM PENH 1202

         ¶B. PHNOM PENH 1199

    ¶1.  (SBU) SUMMARY.  The June 29 postponement of a general
    strike scheduled to start just a few days later paved the way
    for an announcement by garment manufacturers and eleven union
    federations that they will begin collective negotiations in
    August.  They have agreed to discuss wages, strikes,
    arbitration, and implementation of the Labor Law.  Despite
    this promising sign, success is far from certain as there is
    significant distrust not only between garment factory owners
    and unions but also among the various union federations.
    Nonetheless, the effort will almost certainly improve
    communication among actors in the garment sector and would
    yield substantial benefits if successful.  END SUMMARY.

    Collective Negotiations Announced
    ---------------------------------

    ¶2.  (U) The announcement by the Free Trade Union (FTU) and
    the Cambodian Independent Teachers Association (CITA) that
    they will indefinitely postpone their general strike (Ref A)
    sets the stage for negotiations on a garment-sector-wide
    labor agreement.  While post focused on averting a general
    strike threatened to start on July 3, the International Labor
    Organization (ILO) and the American Center for International
    Labor Solidarity (ACILS) have been working on a longer-term
    effort to bring garment manufacturers and the fractious labor
    movement together to negotiate a broader labor agreement.

    ¶3.  (SBU) On June 29, the Garment Manufacturers Association
    of Cambodia (GMAC) and 11 union federations issued a joint
    press statement announcing their intention to enter into
    negotiations about wages, strikes, arbitration, and
    implementation of the Labor Law.  The draft ILO/ACILS
    framework, which has not been made public, is a three year
    deal including an unspecified minimum wage increase,
    mandatory binding arbitration, and a moratorium on strikes
    and lock-outs for the life of the agreement.

    Unions, Factories, Ready to Trade Dirty Tricks for a Deal
    --------------------------------------------- ------------

    ¶4.  (SBU) A dramatic rise in the incidence of individual
    strikes at garment factories, as well as the threatened
    general strike, are symptomatic of a deterioration in labor
    relations over the past few months.  Unions are frustrated by
    factory owners' increased use of Cambodia's corrupt court
    system to penalize union activists via charges of destruction
    of property (often related to strikes), theft, and slander.
    Unions seem finally to have internalized the message from the
    embassy, the Cambodian government, and the garment industry
    that while unions have a right to strike, excessive illegal
    strikes will only hurt the garment industry and threaten
    workers' jobs.  For their part, factory owners are fed up
    with illegal strikes that stop production on short notice and
    cause missed deadlines and excessive overtime.  Each party
    now seems to be willing to consider turning away from its
    favorite dirty tricks (illegal strikes for unions,
    manipulating the court system for factory owners, and bribes
    on both sides) in exchange for agreeing to binding
    arbitration.

    ¶5.  (SBU) Cambodia's Arbitration Council, which was funded by
    the US Department of Labor and established under the guidance
    of the ILO, is the only transparent dispute resolution body
    in a sea of judicial corruption.  The Arbitration Council's
    decisions become non-binding if either party formally objects
    to the award within seven days of its issuance.  However,
    both parties can agree in advance of the arbitration process
    to accept the Council's decision as a binding one, and many
    collective bargaining agreements, particularly in the tourism
    sector, contain this provision.

    GMAC Negotiation Success Allows Chea Mony To Be First Among
    Equals
    --------------------------------------------- --------------

    ¶6.  (SBU) The embassy's work to help the FTU/CITA and GMAC
    come close enough to an agreement to avoid a general strike
    and ILO/ACILS' work to bring eleven different union

    PHNOM PENH 00001204  002 OF 002

    federations together to negotiate with GMAC have been
    mutually reinforcing.  FTU leader Chea Mony was clearly
    looking to the threatened general strike as a way to raise
    his political stature (Ref B), and was reluctant to trade the
    drama and publicity of tens of thousands of workers in the
    streets for the lower-key success of a negotiated agreement,
    particularly one that would be shared with ten other union
    leaders.  Chea Mony told ILO Chief Technical Advisor on June
    21 that he could not agree even in principle to the draft
    ILO/ACILS framework agreement.  And it was only pressure from
    the embassy and the ILO that brought him back to the table
    for further multi-union discussions on June 29.

    ¶7.  (SBU) In fact, it was the tremendous progress in
    negotiations between FTU/CITA and GMAC that gave Chea Mony a
    way to participate in the multi-union negotiation as the
    first among equals.  Because the FTU and GMAC had nearly
    reached a deal on the minimum wage already (GMAC offered a
    USD 7 increase over three years while FTU counteroffered with
    a USD 8 increase over three years), Chea Mony will be able to
    informally but legitimately claim most of the credit for
    raising the minimum wage.  At the same time, it will be up to
    the group of eleven union federations and GMAC to iron out
    the final details of the minimum wage deal in August, so all
    will be able to claim some degree of victory.

    ¶8.  (SBU) COMMENT.  Sector-wide collective bargaining is a
    very ambitious idea that will likely meet with slow progress
    and uncertain success.  Factory-level collective bargaining
    agreements (CBA) are rare in Cambodia's garment industry, in
    place in only five of the country's nearly 300 garment
    factories.  In addition, Cambodia's union federations are a
    wildly divergent bunch who will have a tough time reaching
    consensus.  In addition to pro-government, pro-opposition,
    and politically neutral unions, some unions are essentially
    pro-management and all trade allegations of violence,
    harassment, and corruption.  Nonetheless, the negotiating
    process is likely to build trust in an area where it is
    sorely lacking.  A framework agreement, if reached, would be
    a tremendous boon to the stability of Cambodia's
    all-important garment sector and would herald a new era in
    Cambodian labor relations.  END COMMENT.
    MUSSOMELI

`