VZCZCXYZ0015
PP RUEHWEB

DE RUEHNR #5184/01 3540323
ZNR UUUUU ZZH
P 200323Z DEC 05
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC PRIORITY 8509
INFO RUEHXR/RWANDA COLLECTIVE PRIORITY

UNCLAS NAIROBI 005184 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT ALSO FOR AF/RSA, EB/TPP/MTA, AND DRL/IL 
DEPT ALSO PASS TO USTR FOR BILL JACKSON 
DEPT ALSO PASS TO LABOR FOR KELLY BRYANT AND JIM SHEA 
 
E.O. 12958:  N/A 
TAGS: ELAB AGOA ECON ETRD PHUM PGOV UG
SUBJECT: GSP/AGOA LABOR COMPLAINT ON UGANDA 
 
REF: A) Kampala 1652, B) State 107221, C) Kampala 1715 
 
SENSITIVE BUT UNCLASSIFIED.  FOR U.S. GOVERNMENT USE ONLY. 
 
¶1. (SBU) Summary: Ugandan officials, unions, and some 
employers are anxious to address the worker rights issues 
raised in the GSP complaint against Uganda to protect AGOA 
trade benefits.  President Museveni and the Cabinet sent 
four labor reform bills to Parliament and the GOU referred 
plant management's refusal to recognize unions to the 
Director of Public Prosecution (DPP).  Three garment 
producers, including sole AGOA exporter Apparels Tri-Star, 
finally signed a union recognition agreement. Final passage 
of the new labor laws should strengthen labor enforcement 
mechanisms.  Continued contacts by senior Department and 
USTR officials would help sustain GOU attention and efforts 
during the run-up to the February/March elections.  End 
summary. 
 
Most People Get It 
------------------ 
 
¶2. (U) Regional Labor Attache Randy Fleitman visited 
Kampala November 14-16 to consult with Embassy Kampala and 
discuss the status of worker rights issues raised in the 
AFL-CIO GSP petition with Labor Ministry officials, 
Presidential AGOA assistants, union leaders, employers, and 
plant managers.  Violent protests against the arrest of an 
opposition leader forced cancellation of some meetings. 
All interlocutors agreed that the petition had focused the 
highest levels of the GOU to address labor reform issues. 
All agreed the GOU and President Museveni were determined 
to preserve Uganda's GSP/AGOA trade benefits, and were 
taking some action, but the results may be slow to reach 
fruition. 
 
¶3.  (U) The union and employers had not prepared any 
submission for USTR's November 30 public hearing, but the 
GOU delegation to the hearing included Minister of State 
for Justice and Constitutional Affairs Adolf Mwesige, Labor 
Commissioner David Ogaram, and representatives from the 
Federation of Ugandan Employers National Organization of 
Trade Unions.  Labor Attache encouraged them to provide 
written submissions to USTR as soon as possible.  All 
interlocutors agreed on the importance of job security, 
increasing productivity, attracting more investment, 
training for unions, and the importance of conciliation, 
mediation and arbitration (CMA) to building good industrial 
relations once unions are recognized and collective 
bargaining agreement negotiations begin.  The only 
objections came from textile manufacturers, arguing that 
their employer associations protected worker's rights. 
These manufacturers, however, signed a recognition 
agreement with the union on November 23. 
 
Labor Ministry Welcomes Reform Bills 
--------------------------------------- 
 
¶4. (SBU) Ministry of Labor, Gender and Social Development's 
Labor Commissioner Dr. David Ogaram, Labor Director 
Claudius Olweny, Assistant Commissioner Andira Ojja, 
Assistant Commissioner Ruba Kalyegira and other senior 
Labor officials explained that the labor law reform process 
started back in 1990 and included ILO, World Bank and 
private missions and consultancies, but made little 
progress until the petition was filed and DepSec Zoellick 
focused President Museveni's attention on it at their 
meeting in June 2005 in Kigali.  They understood that the 
Cabinet, chaired by President Museveni, approved all four 
labor reform bills on September 26 and sent them to the 
Attorney General, who completed the legal scrub in record 
time at the request of the Prime Minister.  The Cabinet 
approved the revised drafts o/a October 4, and the Ministry 
of Labor submitted them to the Parliament for first reading 
o/a October 26.  Ogaram stressed the importance of the 
Ministry of Finance's change of position to support the 
bills.  The bills update legal provisions regulating 
unions, employment, safety and health, and labor disputes 
and are now with the Committee on Social Services for 
review. 
 
¶5. (SBU) Ogaram provided hard copies of the bills, and 
explained they were the result of ILO drafts and a tri- 
partite compromise by Ugandan stakeholders including 
workers, the private sector, NGOs and interest groups like 
the handicapped.  He believed the ILO was satisfied with 
the bills.  Ogaram said the reform bills reduce the minimum 
union membership for establishment from 1,000 to 20, remove 
entirely the 51% minimum participation for establishing a 
union at a workplace, allow more than one labor union 
confederation in Uganda, and set timeframes for union 
recognition, collective bargaining and strikes.  The 
reforms would raise the Industrial Court's status to that 
of High Court, making its decisions appealable only to the 
Court of Appeal.  The ILO has provided financial and 
program support for a two-day workshop for the Ministry and 
all stakeholders to brief the Committee members on the 
bills.  Ogaram hoped he could get even one day of the 
Members' time before November 30, but was concerned that 
the ruling party's National Convention and the ensuing 
campaign for the February or March elections would make it 
difficult.  Ogaram did not expect substantive issues to 
come up, but the Employers Federation indicated at a 
subsequent meeting that it may try to reopen some previous 
compromises. 
 
¶6. (SBU) Ogaram said that the bills were fairly detailed, 
but would still need implementing regulations.  The 
Ministry had already started working on them.  The 
regulations would need to be approved by the Minister and 
the Cabinet, but not Parliament.  The officials estimated 
that it would take three to six months after the bills are 
passed to complete and approve the implementing 
regulations, but warned this timeframe was very uncertain. 
Ogaram also said that the GOU recognized the need to 
restructure the Labor Ministry to implement the reform laws 
effectively, but he cautioned that the Ministry always had 
difficulty getting GOU resources or assistance from donors. 
The Ministry will need support to educate unions and 
employers on the reforms, and would like to see tripartite 
training in conciliation, mediation and arbitration (CMA). 
 
¶7. (SBU) Despite the GOU's written, direct order to Tri- 
Star, Phenix, Southern Range/Nytil Picfare in August to 
recognize the unions within the next month, none of the 
firms named in the petition had yet done so, and their 
responses were not satisfactory.  Ogaram said that the 
Ministry had informed both the managements and the unions 
that it would send the matter to the DPP if the unions were 
not recognized.  He said that the Ministry had sent the 
letter to the DPP o/a October 31, but had not informed the 
unions nor managers because it was an internal matter. 
 
President's AGOA Office Well-Versed 
----------------------------------- 
 
¶8. (SBU) Mr. Hashim Waswa had to stand in suddenly for his 
boss, President Museveni's personal AGOA Assistant Susan 
Muhwezi.  He recognized the importance of addressing the 
petition's issues and was confident President Museveni had 
made clear to garment plant managers that they had to 
recognize unions.  He did not confirm this was done at a 
face-to-face meeting, as asserted by the Ministry and 
unions.  He hoped for fast parliamentary approval of the 
bills, but could not predict a passage date given the 
upcoming election. 
 
Union Leaders Frustrated but Welcome President's Support 
--------------------------------------------- ---------- 
 
¶9. Chairman Chris Kahirita and Director Robert Matikhu of 
the breakaway Central Organization of Free Trade Unions 
(COFTU) said union recognition by garment plant management 
is the number one priority.  They welcomed the reform 
bills, but warned they would be useless unless the GOU 
would implement them to force "unionization."  Kahirita was 
still waiting to see the texts to determine how much union 
input they incorporated.  He claimed the Ministry of Labor 
was easily corrupted by bribes from plant managers, and 
that it had consistently diluted or weakened the 
President's and Susan Muhwezi's clear message to recognize 
unions.  He doubted the Ministry had followed through on 
its threat to refer the non-compliance to the DPP for 
action.  Kahirita recognized the importance of increasing 
productivity and using arbitration to minimize industrial 
friction and remain attractive to investors. 
 
¶10. (SBU) Textile, Garment, Leather and Allied Workers 
Union Chairman Cosmos Ekue and Secretary General Catherine 
Aneno confirmed that unionization was their top issue.  The 
union sent draft recognition agreements to all the garment 
producers in July.  On September 30, responding as the 
Chairman of the Uganda textiles and garments Manufacturers 
Association (TEMAU), Phenix Logistics Manager Kashiwada 
wrote that TEMAU would exclusively discuss all issues 
related to industrial relations with the union and the 
Ministry on its members behalf.  Negotiations did not begin 
in earnest until August 2005, and the three manufacturers 
cited in the petition finally signed a recognition 
agreement with the union on November 23.  The Agreement 
states that TEMAU will negotiate the collective bargaining 
agreement with the union, but that enterprise-specific 
issues will be negotiated at the factory level. 
 
¶11. (SBU) Aneno also expressed suspicion of the Ministry of 
Labor and alleged it was corrupted by bribes from plant 
managers.  She was not convinced the Ministry had sent the 
managers' refusal to unionize to the DPP.  She welcomed the 
reform bills and President Museveni's support for them, but 
was seeking meetings with the President and his AGOA 
assistant to ask them to press the managers to recognize 
the union.  While the petition had focused the President's 
attention on labor issues, Aneno feared the GOU would lose 
interest after the February/March elections.  ( 
 
Employers Federation Fears Investor Uncertainty 
--------------------------------------------- -- 
 
¶12. (SBU) Federation of Uganda Employers Executive Director 
Rosemary Ssenabulaya (a former union leader) expressed hope 
that Tri-Star would join the Federation and TEMAU.  She 
claimed that employers in other sectors in Uganda (banking, 
tea) negotiated collective bargaining agreements with 
unions through sector organizations.  She noted this would 
require less negotiating resources from both sides, set 
minimum wages/benefits, and create uniform conditions in 
the sector.  She said that firms would be free to pay above 
an industry minimum, but admitted that most employers would 
not do so.  She said there were local CMA professionals who 
could provide such training services, perhaps through 
reviving Uganda's moribund tripartite agency, the Labor 
Advisory Board.  Ssenabulaya also noted she had recently 
helped a firm design a comprehensive human resources manual 
to train its managers and supervisors on worker welfare and 
safety and health issues. 
 
¶13. (SBU) Ssenabulaya said the Federation and TEMAU had 
discussed tentative plans for union recognition that would 
include education for workers on the benefits of unions vs. 
employee associations and tri-partite training for union 
leaders and shop stewards on negotiating, industrial 
relations, and CMA.  Labor Attache noted that it would be 
important to give union leaders equal access to workers to 
present their views during such an education period, and 
expressed reservations about the effectiveness of employee 
associations in protecting worker rights. 
 
¶14. (SBU) Ssenabulaya said the Federation welcomed the new 
labor bills as needed to clarify the uncertainty about 
Uganda's labor laws that had made it more difficult to 
attract investors.  The Federation might raise its 
objections to some of the bills' provisions on dismissal, 
severance and safety and health, but Ssenabulaya thought 
the GOU's desire to see the bills enacted by the end of 
2005 would make any changes difficult to obtain.  She 
regarded the Ministry of Labor as competent but 
understaffed and short of resources.  She thought 
centralizing the inspection function might help it 
implement the reforms. 
 
Tri-Star Manager Unreconstructed 
--------------------------------- 
 
¶15. (SBU) Managing Director Vellupillai Kananathan gave an 
extended tour of the Tri-Star plant to Labor Attache and 
Kampala EconOff.  He also invited some reporters to do an 
impromptu press conference at which the Labor Attache 
described the GSP petition process, the importance to 
Uganda of addressing the issues, and the potential benefits 
to Ugandan exporters.  Kananathan showed no interest in 
recognizing the union, denied all union allegations of 
mistreatment, and claimed that Tri-Star had an employees 
association that effectively represented the workers, even 
to the point of obtaining wage increases.  He described his 
plans to seek support from U.S. firms and even the Ex-Im 
Bank for investment in a fabric producing plant to meet 
AGOA's 2007 requirement for locally-sourced inputs, but 
seemed oblivious to the difficulty the petition or a 
potential consumer boycott could create for such plans. 
Despite such clear resistance, Tri-Star unexpectedly signed 
a union recognition agreement on November 23. 
 
Comment and Analysis 
-------------------- 
 
¶16. (SBU) The GOU's support for the passage of new labor 
laws represents a serious effort to address concerns raised 
in the AFL-CIO petition.  It is also a good sign that the 
most obstinate employers, including Tri-Star, have signed a 
union recognition agreement.  Plans to persuade workers to 
join employee associations may generate further friction 
with and complaints from the union.  The Labor Ministry and 
the Industrial Court lack the resources to enforce Uganda's 
labor laws, current or new.  Therefore, while the draft 
reform bills may someday bring Uganda's labor laws into 
conformity with ILO standards, the GOU will need to 
maintain its political commitment to protect worker rights 
through enforcement. 
Bellamy