VZCZCXRO4618
OO RUEHCHI RUEHDT RUEHHM RUEHJO RUEHNH
DE RUEHPF #1202/01 1801203
ZNR UUUUU ZZH
O 291203Z JUN 06
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6963
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUEHXI/LABOR COLLECTIVE PRIORITY
RUEHC/DEPT OF LABOR WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 1506

UNCLAS SECTION 01 OF 02 PHNOM PENH 001202 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR S, D, P, 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 KTEX PGOV CB
SUBJECT: UNION LEADERS CALL OFF GENERAL STRIKE; THANK U.S. 
EMBASSY FOR ITS INTERCESSION 
 
REF: PHNOM PENH 1199 AND PREVIOUS 
 
¶1.  (U) SUMMARY.  Union leader Chea Mony told the Ambassador 
today that he was calling off the general strike he had 
threatened to lead starting July 3.  While his Free Trade 
Union (FTU) and the Garment Manufacturers Association of 
Cambodia (GMAC) have not yet reached a final agreement, they 
have made such substantial progress that Chea Mony has agreed 
to postpone the strike and return to negotiations in August. 
Thanking the U.S. Embassy for its help in resolving the 
dispute, Chea Mony said that embassy efforts were critical in 
bridging the gap between the two sides.  This resolution is a 
victory for workers, factory owners, and the nation's economy 
as a whole.  END SUMMARY. 
 
Chea Mony:  General Strike Called Off... 
---------------------------------------- 
 
¶2.  (SBU) During a meeting with the Ambassador on June 29, 
Free Trade Union (FTU) President Chea Mony announced that he 
would call off the general strike he and Cambodian 
Independent Teachers Association (CITA) President Rong Chhun 
had threatened to lead starting on July 3.  Chea Mony said 
that after several rounds of negotiations with the Garment 
Manufacturers Association of Cambodia (GMAC), the FTU 
received a letter from GMAC offering to increase the minimum 
wage by USD 7 over three years.  While the FTU is still 
pressing for an USD 8 increase over three years, the 
difference between the two sides is small enough that the FTU 
has agreed to postpone the strike indefinitely.  Many GMAC 
leaders will be traveling to the US in July to press Congress 
for the passage of the TRADE Act, but both sides expect to 
conclude a deal when GMAC officials return in August. 
 
¶3.  (U) During the meeting, the FTU president made a point of 
thanking the embassy for its help in pushing both GMAC and 
the FTU closer to an agreement.  Chea Mony said that US 
efforts over the past two weeks--which included urging 
compromise via a roundtable discussion with union leaders and 
a meeting with GMAC, encouraging the Ministers of Commerce 
and of Labor to play an active role in resolving the dispute, 
informal analysis sessions with GMAC and FTU/CITA leaders, 
and frequent advice to the International Labor Organization 
(ILO)/American Center for International Labor Solidarity 
(ACILS) team putting together a draft sector-wide framework 
agreement--played a critical role in bridging the gap between 
the FTU and GMAC.  Chea Mony noted that Cambodia's democracy 
is still far from perfect, and said that "If the US turns a 
blind eye to Cambodia, the country will go astray." 
 
...But Unions Still Face Challenges 
----------------------------------- 
 
¶4.  (SBU) Despite the progress made in negotiations with 
GMAC, Chea Mony noted that unions faced challenges on several 
other fronts.  Some unions extort money from employers, he 
said.  Some union leaders also serve as government advisors 
and discourage workers from actively pressing for better 
working conditions or higher wages.  In addition, the FTU's 
reputation as a pro-opposition group is inaccurate, he 
insisted, distracts from the federation's true mission of 
serving its members, and sometimes leads to harassment from 
police. 
 
Ambassador:  Compromise Can Be Courageous 
----------------------------------------- 
 
¶5.  (U) The Ambassador praised Chea Mony for his pragmatism 
and his willingness to see all sides of the labor dispute. 
Courage is not about taking an extreme stand, he commented, 
it is about being reasonable and open to compromise.  There 
are a few unscrupulous actors within both GMAC and the labor 
movement, the Ambassador observed, but there are also enough 
good people on all sides to achieve good results.  This 
decision was the best for Cambodia's workers, he added. 
 
¶6.  (SBU) COMMENT.  The planned general strike, which would 
have driven some garment factories out of the country, could 
easily have led to violence and even political instability. 
It is still possible that resumed negotiations in August 
could encounter unforeseen problems, but we are hopeful that 
 
PHNOM PENH 00001202  002 OF 002 
 
 
the two sides will not reach an impasse when they have 
already come so far and have had time to cool down.  This 
process has institutionalized a negotiating process between 
the country's most powerful labor union and the garment 
manufacturers, solidified labor rights, and given workers a 
fair hearing.  Improved labor relations and fewer unwarranted 
strikes will help Cambodia's garment industry maintain its 
competitiveness in the region.  END COMMENT. 
MUSSOMELI