This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 000887 
 
SIPDIS 
 
DEPT FOR EAP/PMBS, DRL/IL, INR/EAP 
LABOR FOR ILAB 
 
E.O. 12958: DECL: 02/28/2015 
TAGS: PGOV PHUM ELAB PINS RP
SUBJECT: CATHOLIC CHURCH MEDIATING VOLATILE LABOR DISPUTE 
 
REF: A. MANILA 790 
 
     ¶B. MANILA 734 
     ¶C. 04 MANILA 5901 
     ¶D. 04 MANILA 5552 
 
Classified By: Political Officer Andrew McClearn for 
Reasons 1.4 (b) and (d) 
 
¶1.  (C) Summary:  The Catholic Bishop's Conference of the 
Philippines (CBCP) is actively attempting to mediate a 
complex labor dispute at Hacienda Luisita, a large sugar 
plantation located north of Manila owned by the Cory 
Aquino/Cojuangco family.  The GRP's National Bureau of 
Investigation (NBI) has recommended that the Department of 
Justice (DoJ) file murder charges against nine policemen for 
their role in the November 2004 clash at the estate that left 
at least seven dead and dozens wounded.  According to the 
Armed Forces of the Philippines (AFP), extremist leftist 
groups linked with the CPP/NPA are instigating the labor 
unrest.  Observers hope that Catholic Church mediation can 
calm the situation down, but a quick solution is not in 
sight.  End Summary. 
 
Catholic Church Moves in 
------------------------ 
 
¶2.  (SBU) The CBCP is now actively attempting to mediate a 
complex labor dispute at Hacienda Luisita, a large sugar 
plantation located north of Manila owned by the Cory 
Aquino/Cojuangco family.  (Note:  See Refs C-D for details of 
the generations-old labor dispute, which sparked violence 
that left at least seven people and dozens injured in 
November 2004.  Striking workers have demanded a raise in 
wages and reinstatement of workers fired for walking off the 
job.  Management says it cannot afford to raise wages.  End 
Note)  Two key unions -- the Central Azucarera de Tarlac 
Labor Union (CATLU) and the United Luisita Workers Union 
(ULWU) -- and Hacienda Luisita's management began 
negotiations on February 21, 2005, with the CBCP helping 
facilitate the meeting and mediate the discussions. 
 
¶3.  (C) Archbishop Capalla, the head of the CBCP, has 
confirmed that five meetings involving labor and management 
and the CBCP have taken place.  Capalla publicly stated that 
&CBCP involvement in the Hacienda Luisita issue is purely 
pastoral,8 and he has made no predictions as to whether he 
believes CBCP mediation can resolve the dispute.  Monsignor 
Hernando Coronel, the Secretary General of the CBCP, told Dep 
Polcouns that the CBCP would continue to mediate the dispute 
&as long as both sides want us to.8  He said that recent 
meetings had made clear that &there was no easy solution in 
sight.8  Moderate labor contacts have claimed that the 
government plans to press both sides to accept binding 
arbitration if CBCP mediation fails. 
 
¶4.  (SBU) The large sugar refinery located at &Hacienda 
Luisita8 remains closed due to the strike.  Contacts 
confirmed that the refinery may shut down in a semi-permanent 
fashion should the strike continue.  (Note:  If the factory 
is shut down in such a manner, it raises the prospect of a 
so-called &dead season,8 where uncut sugarcane goes 
unprocessed and is simply piled up in the vicinity of the 
mill to rot.  Although the sugar operations remain closed, 
the tourist section of &Hacienda Luisita,8 which includes a 
museum, is open for visits. end note) 
 
Who's to blame? 
--------------- 
 
¶5.  (SBU) The NBI recommended to the DoJ on February 24 
filing murder charges against nine policemen for their role 
in the November 15-16 clash at the estate that left at least 
seven dead (a drop from earlier estimates) and dozens wounded 
(see reftels).  The NBI's report concluded that GRP security 
forces unlawfully killed strikers, and did not fire in 
self-defense, as some in the GRP have claimed.  According to 
an NBI source quoted in the press, NBI investigators 
conducted many interviews and reviewed media footage of the 
events, and had "found incredible the accusation of anti-riot 
forces that striking workers fired their guns at them," 
largely because investigators saw no armed men among the 
strikers, and because no policemen were wounded by bullets. 
 
¶6.  (U) On December 15, 2004, the Commission on Human Rights 
(CHR) started a public inquiry into the clash.  The CHR has 
not issued a final report as of yet. 
 
Claims of Leftist Involvement 
----------------------------- 
 
¶7.  (C) According to AFP sources, "extremist leftist" groups 
linked with the Communist Party of the Philippines/New 
People's Army (CPP/NPA) are involved in instigating unrest at 
the estate.  On January 22, the AFP Northern Luzon Command 
publicly declared the strike a &matter of national 
security.8  The AFP said it had seized documents showing 
that the CPP/NPA had infiltrated the ranks of CATLU and ULWU, 
and were orchestrating the labor unrest.  According to media 
reports, AFP sources discovered alleged rebel documents in 
the files of a laptop computer seized by the military after a 
3-day gunfight with the NPA in Pura, Tarlac late last year. 
AFP forces subsequently clashed again with suspected NPA 
rebels on January 26 in Victoria, a town located just north 
of Hacienda Luisita in Tarlac, killing four suspected rebels 
and leading to the arrests of four others.  According to 
labor contacts, the KMU -- a "radical" union with CPP/NPA 
links -- continues to send operatives to the Hacienda Luisita 
area (see ref A for details on the KMU). 
 
Comment 
------- 
 
¶8.  (C) Observers -- including contacts in the mainstream 
labor movement -- hope that Catholic Church mediation can 
calm the situation down.  The Church retains considerable 
influence in Philippine society and usually commands a great 
deal of respect.  However, the long-standing nature of the 
conflict, apparent involvement of leftist groups, and a 
management group little inclined toward flexibility do not 
bode well for a quick solution.  The most welcome recent news 
is that the NBI investigation did not result in a whitewash 
of the police role in the November clash, which would further 
have exacerbated tensions.  The ball is now in the DoJ's 
court as to whether it will seek to prosecute the accused 
policemen.  Given the high profile nature of this case, the 
DoJ will likely have to initiate at least some prosecutions, 
but such court cases will almost certainly drag on for years, 
in typical Philippine judicial style. 
 
 
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