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FM AMEMBASSY PHNOM PENH
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INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUEHXI/LABOR COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 PHNOM PENH 001757 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/MLS, DRL/IL--MARK MITTELHAUSER 
 
E.O. 12958: DECL: PUBLIC ANNOUNCEMENT OF ACTION AGAINST KYFTU 
TAGS: ELAB KCOR PGOV CB
SUBJECT: CORRUPT CAMBODIAN UNION UNDER INVESTIGATION 
 
 
Classified By: Poleconoff Jennifer Spande for reason 1.4(b). 
 
¶1.  (C) SUMMARY.  The Cambodian government has formed a 
commission to investigate the Khmer Youth Free Trade Union 
(KYFTU), a labor union notorious for extorting garment 
factory management and beating rival union leaders.  If the 
commission can find sufficient evidence of illegal 
activities, the union is likely to be dissolved and may be 
fined as well.  The Ministry of Labor is worried that such a 
move may be misconstrued as an attack on freedom of 
association.  In conversations with Ministry of Labor 
officials, Poleconoff stressed the need for the government to 
emphasize that it was cracking down on one highly corrupt 
labor union and not the labor movement as a whole, and has 
offered to provide background information about KYFTU 
activities.  END SUMMARY. 
 
Khmer Youth Union Under Investigation 
-------------------------------------- 
 
¶2.  (C) During a Sept. 12 meeting, Prak Chantha, Secretary of 
State at the Ministry of Labor and Vocational Training, told 
Poleconoff and Labor Assistant that Ith Sam Heng, Minister of 
Social Affairs, Veterans, and Youth and chair of the National 
Strike and Demonstration Commission, had recently formed a 
sub-committee to investigate the Khmer Youth Free Trade Union 
(KYFTU).  The sub-committee, which includes representatives 
from the Ministries of Justice, Labor, Social Affairs, and 
Interior, as well as the municipality of Phnom Penh, was 
currently gathering evidence against the union.  While union 
leaders could be subject to criminal charges for suspected 
cases of arson, property damage, and other offenses, Prak 
Chantha thought it was most likely that the union would 
simply be dissolved and perhaps fined in accordance with 
Cambodian labor law.  No other unions are under investigation 
or expected to be investigated. 
 
¶3. (C) Despite receiving complaints about KYFTU activities 
from the Ambassador, senior Gap officials, and the Garment 
Manufacturers Association, Prak Chantha remained concerned 
about the potential diplomatic and international reaction to 
such a move.  Poleconoff assured her that the Embassy was 
well aware of the KYFTU's corrupt activities and the damaging 
effect that they had on the garment sector and the reputation 
of other unions, but said that the Ministry would have to 
make it clear that it was cracing down on one extremely 
corrupt union, and not the labor movement as a whole. 
 
The Notorious KYFTU 
------------------- 
 
¶4. (SBU) In a country where corruption is endemic and even 
the most credible labor unions are thought to have occasional 
cases of bribery, the KYFTU has a well-earned reputation as 
the nation's most corrupt union.  Distrusted by employers, 
government officials, other unions, and international 
observers, the KYFTU operates as an extortionist gang, using 
a small number of members at large factories to create labor 
unrest unless they are paid off by factory management.  In 
the first eight months of 2006, the KYFTU was responsible for 
22 garment sector strikes--more than any other union. 
Several of these strikes involved less than 20% of the 
workforce, but still managed to bring production to a halt. 
In a recent case, two KYFTU supporters falsely claimed to 
represent workers who had signed a petition with 14 demands 
about working conditions.  In fact, most of the demands had 
already been resolved, the petition had been altered after 
signatures were gathered, and KYFTU had just five supporters 
in a factory employing 4,000 workers. 
 
¶5. (SBU) The KYFTU has also been accused of being "thugs for 
hire" utilized by unscrupulous garment factory management to 
harass legitimate unions.  During a recent meeting with 
Poleconoff, the presidents of the Coalition of Cambodian 
Apparel Workers Democratic Union (CCAWDU) and the Free Trade 
Union (FTU) accused management at four garment 
factories--Bright Sky, Suntex, Rainbow, and Yung Wah--of 
hiring the KYFTU to beat CCAWDU and FTU factory-level union 
leaders at those factories. Several other union presidents 
reported KYFTU members threatening factory-level leaders of 
rival unions. 
 
¶6. (C) COMMENT.  The government is taking a step in the right 
direction by starting an investigation that is likely to lead 
to the dissolution of the KYFTU.  Combined with 
garment-sector wide labor negotiations currently underway, 
dismantling this extortionist gang could go a long way 
towards quieting the excessive labor unrest in the garment 
industry.  However, the government's concerns about how such 
a move will be perceived are well-founded, as KYFTU leaders 
 
PHNOM PENH 00001757  002 OF 002 
 
 
are likely to raise loud objections to buyers, international 
press, and corporate social responsibility groups who may not 
be familiar with the KYFTU's illegal activities.  Poleconoff 
has offered to provide background on alleged KYFTU activities 
and its reputation.  END COMMENT. 
MUSSOMELI