VZCZCXRO5215
PP RUEHCHI RUEHDT RUEHHM RUEHJO RUEHNH
DE RUEHPF #0655/01 0970340
ZNR UUUUU ZZH
P 070340Z APR 06
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC PRIORITY 6412
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUEHXI/LABOR COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 PHNOM PENH 000655 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS, DRL/IL, EB/TPP 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV KTEX CB
SUBJECT: CAMBODIA:  GARMENT SECTOR STRIKES RISE SHARPLY 
 
REF: PHNOM PENH 526 
 
¶1.  (SBU)  SUMMARY.  More than twice as many workers (16,000) 
were involved in strikes in February and March of this year 
than in the two previous months.  The dramatic increase is 
probably due to a number of factors:  resurgence of activism 
after months of economic and political uncertainty, 
leadership changes at large unions, increased unilateral and 
anti-union action by factory managers, frustration with the 
arbitration process, and the approaching Khmer New Year 
holidays.  Industrial action is also taking on a new 
character, as strikes which earlier comprised workers 
demanding severance pay and other basic rights for themselves 
are increasingly about raising wages and have the support of 
other workers striking in solidarity.  While unions' 
increased comfort level with the tool of striking is a 
positive sign, their sometimes rash behavior and unrealistic 
demands show that the labor movement still has much maturing 
to do.  END SUMMARY. 
 
Strikes Rise Dramatically in February and March 
--------------------------------------------- -- 
 
¶2.  (U) Strikes in the garment sector rose significantly in 
February and March, according to manufacturers and union 
representatives.  Ken Loo, Secretary General of the Garment 
Manufacturer's Association of Cambodia, reported that while 
there were three garment factory strikes each in December 
2005 and January 2006; there were eight strikes in February 
2006 and five in March 2006.  Whereas 2,881 workers 
participated in strikes in December and 1,943 participated in 
strikes in January; on February 10, 220 workers went on 
strike and 5,800 workers went on strike in March.  According 
to a partial list compiled by American Center for 
International Solidarity (ACILS) director Alonzo Suson, the 
pro-opposition Free Trade Union of Workers of the Kingdom of 
Cambodia (FTU) and the independent Cambodian Coalition of 
Workers Democratic Unions (CCAWDU) have led the majority of 
the strikes; but other unions, including pro-CPP groups, have 
led strikes as well. 
 
Ministry of Labor:  What strikes? 
--------------------------------- 
 
¶3.  (SBU) Koy Tepdaravuth, Director of the Labor Dispute 
Department of the Ministry of Labor and Vocational Training, 
denied that the number of strikes had increased, but pledged 
his commitment to send his staff to conciliate any strike 
that does occur.  (Comment:  The Ministry of Labor and 
Vocational Training has been largely ineffective since it 
split from the Ministry of Social Affairs, Veterans, and 
Youth in July 2004.  This response likely indicates an 
unwillingness to officially recognize a problem that the 
ministry should be taking a larger role to solve.  End 
Comment.) 
 
Multiple Causes for Increased Labor Unrest 
------------------------------------------ 
 
¶4.  (U) Labor observers point to multiple factors 
contributing to the increased number of strikes: 
 
-- Return to a more relaxed political and economic climate: 
During the economic uncertainty following the end of the 
quota system in January 2005 and the political uncertainty 
following the October 2005 and December 2005 crackdowns on 
union and human rights leaders, unions were afraid to take 
action.  Now that both the economic and political climates 
have improved, they have adopted a more active posture. 
 
-- Return of FTU leader Chea Mony:  Mony reports that 
employers took advantage of his union members while he was in 
self-imposed exile in Europe.  Now that he has returned, his 
unions are addressing their grievances.  Other labor 
observers suggest that perhaps Mony is trying to demonstrate 
his strength and re-assert himself on the labor scene after 
his extended absence. 
 
-- Departure of CCAWDU leader Chhorn Sokha:  CCAWDU Vice 
President and former President Chhorn Sokha was forced out of 
CCAWDU in a very public fight with CCAWDU president Ath Thorn 
in February 2006.  While the removal was ostensibly over 
charges that Sokha accepted bribes, labor observers saw the 
dispute as a power struggle between the elected president and 
his charismatic vice president, who, as a vocal, effective, 
and female union leader, was the darling of the international 
labor community.  Many believe that Sokha was the voice of 
pragmatism within the union, and with her departure, the 
union is acting more rashly.  Ath Thorn may also be trying to 
 
PHNOM PENH 00000655  002 OF 002 
 
 
show his strength and decisiveness as a leader now that Sokha 
is out of the way. 
 
-- Increased anti-union harassment and unilateral changes in 
contracts:  Better Factories Cambodia's latest factory 
monitoring reports document increased union harassment, 
including termination of union leaders, and the unilateral 
change of contracts from undetermined length to fixed length 
(reftel).  Alonzo Suson reports that these are key themes in 
several of the labor disputes over the past two months. 
 
-- Frustration with the arbitration process:  Mony reported 
that many of his union members are frustrated with 
non-implementation of arbitral awards.  (Note:  Although 
participation in the arbitration process is mandatory, either 
the union or the employer can object to an arbitral award, 
making the award non-binding.  End Note.)  Union members see 
no value in going through the time and hassle of arbitration 
if the employer is likely to throw out the decision.  As a 
result, several of his factory level unions have opted to 
(illegally) conduct strikes before arbitration begins. 
 
-- Approaching holidays:  There is often a small rise in the 
number of strikes in the weeks before Khmer New Year (April 
14-17), one of Cambodia's most important holidays, as workers 
demand additional holidays, a holiday bonus, etc. 
 
Garment Sector Strikes Take On a New Character 
--------------------------------------------- - 
 
¶5.  (U)  In addition to becoming more frequent, garment 
sector strikes are showing increased participation by 
solidarity strikers, as opposed to just strikers with a 
personal stake in the dispute.  Ken Loo reports that whereas 
in the past, strikes were often confined to a single 
department within a large factory, now there is a "It's our 
department now, but it could be your department later" 
feeling within factories.  Several days after CCAWDU's March 
6 announcement that several hundred Flying Dragon workers 
would march to the U.S. embassy to ask for support in a labor 
dispute, CCAWDU President Ath Thorn  threatened to involve 
25,000 workers in a multi-factory strike centering on Flying 
Dragon issues.  Labor Assistant dissuaded CCAWDU from leading 
what would appear to outsiders as a protest against the 
embassy. EconOff admonished CCAWDU leadership for its 
actions' potential to make enemies for the union and their 
appearance of being unreasonable through their rash decisions. 
 
¶6.  (U)  The types of demands made by unions are also 
changing -- becoming less about demanding respect for 
workers' basic rights and more about demanding higher wages. 
Alonzo Suson told EconOff that last year most demonstrations 
and strikes were due to the closing of factories without 
giving severance pay to the workers.  This year, in addition 
to strikes over unilateral changes in contracts and 
anti-union harassment, unions are increasingly demanding 
higher wages and lower piece-rate quotas.  Ken Loo reported 
that, at the Bright Sky factory, workers demanded that every 
worker receive a USD 5-10 per month incentive bonus that was 
recently introduced to reward top performers and motivate 
workers.  Moreover, Loo reports that workers frequently make 
unrealistic demands, including asking for wages that would 
push labor costs over what the factory is paid to produce 
each piece. 
 
¶7.  (SBU)  COMMENT.  Increased labor disputes signal both 
good and bad news for Cambodia.  On the positive side, the 
increased strikes are a refreshing return to activism after 
more than a year of economic and political fears that 
dampened union activity.  However, the strikes also 
demonstrate the labor movement's immaturity.  Some of the 
unions lack the experience to understand what realistic wage 
demands are, and a few union leaders seem eager to showcase 
their power in unwise and illegal pre-emptive strikes rather 
than participate in the legally-mandated labor mediation and 
arbitration process. 
Mussomeli