VZCZCXRO8283
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #4558/01 3070433
ZNR UUUUU ZZH
O 030433Z NOV 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3741
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUEHC/DEPT OF LABOR WASHDC IMMEDIATE

UNCLAS SECTION 01 OF 02 MANILA 004558 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/MTS, EAP/RSP, DRL FOR MARK MITTELHAUSER 
DEPT OF LABOR FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ELAB PGOV PHUM RP
SUBJECT: LABOR UNION STRIKES AT CAVITE ECONOMIC ZONE FACTORY 
 
REF: A. MANILA 4464 
 
     ¶B. 05 MANILA 4831 
     ¶C. 05 MANILA 688 
     ¶D. 04 MANILA 5552 
 
¶1. (SBU) Summary: Union members at Chong Won Fashion, a 
clothing manufacturer at the government-owned Cavite Economic 
Zone, launched a strike September 25.  The management of the 
factory refuses to negotiate with union leaders and initiated 
legal action against the union.  The strike has garnered 
international attention due to an e-mail and letter-writing 
campaign by the Workers Assistance Center, a reportedly 
left-leaning non-governmental organization based in Cavite, 
as well as speculation that the murder of a Philippine 
Independent Church bishop may have been connected to the 
labor dispute.  Wal-Mart, the only buyer of Chong Won goods, 
is active in negotiations to reach resolution.  The labor 
dispute illustrates the challenges faced by labor unions in 
the Philippines, especially within the special economic 
zones.  End Summary. 
 
--------------------------------- 
UNION SEEKS COLLECTIVE BARGAINING 
--------------------------------- 
 
¶2. (U) The Cavite Economic Zone (CEZ) is the largest 
government-owned and managed special economic zone in the 
Philippines.  The CEZ, located in Rosario, Cavite, about 20 
miles south of metro-Manila, currently houses 254 companies 
that employ more than 80,000 workers.  The majority of 
companies manufacture semiconductors and electronic 
equipment, but some companies also produce clothing, 
plastics, metal parts, and other items.  The Philippine 
Economic Zone Authority (PEZA), the government agency that 
manages the CEZ, estimates that approximately 10 percent of 
the labor force within the zone belongs to organized labor 
groups. 
 
¶3. (U) On September 25, 2006, the United Workers of Chong Won 
Fashion, a Korean-owned garment factory at CEZ, launched a 
strike with the assistance and support of the Solidarity 
Workers of Cavite -- a labor union federation -- and the 
Workers Assistance Center because of the factory's refusal to 
negotiate a collective bargaining agreement.  More than 100 
workers joined the picket line during the first days of the 
strike.  Chong Won Fashion, according to union leaders, 
immediately terminated 116 striking employees, allegedly 
without cause.  Because of the terminations, the striking 
employees have not been able to access the CEZ to re-join the 
picket line. 
 
----------------------------------- 
ALLEGED VIOLENCE ON THE PICKET LINE 
----------------------------------- 
 
¶4. (SBU) A clash between the striking workers and CEZ 
security guards erupted shortly after the union organized a 
picket line.  PEZA representative Mary Jane Arada told poloff 
that violence broke out when the CEZ guards attempted to 
secure a path through the picket line to the entrance of the 
Chong Won factory.  According to Arada, the striking 
employees were blocking entrances and preventing non-union 
workers from entering.  Arada showed poloff photos of CEZ 
guards who had minor stab wounds from sharp objects, 
allegedly inflicted by striking workers during the September 
25 incident.  CEZ has filed charges of physical injuries 
against members of the union.  Conversely, union leaders at 
Chong Won contend that it was the CEZ guards who assaulted 
and harassed workers on the picket line.  However, the union 
has not filed a formal complaint with police authorities. 
 
¶5. (U) Following the September 25 incident, a small 
contingent of local police was deployed to the CEZ to 
supplement the limited number of PEZA guards.  On September 
27, the striking employees barricaded the gates of the CEZ to 
prevent a cargo truck carrying finished goods from exiting 
the premises.  The local police intervened to allow the cargo 
truck to exit.  Union leaders claim they were harassed and 
beaten by the police during this intervention.  PEZA and 
local police authorities vehemently deny these allegations. 
 
------------------------------ 
LEGAL ACTIONS DELAY RESOLUTION 
------------------------------ 
 
¶6. (U) The United Workers has struggled since its founding to 
enter into negotiations with management.  According to union 
leaders, the union's first attempts for certification in 2001 
 
MANILA 00004558  002 OF 002 
 
 
were allegedly countered by management threats of employee 
terminations or a factory shutdown.  The union filed a 
petition for certification in 2002, but the company responded 
by terminating more than half of the union members and the 
majority of the union's officers.  The union members filed 
complaints of unfair labor practices with the Philippine 
Department of Labor and Employment (DOLE) and initiated their 
first strike, which lasted six months. 
 
¶7. (U) The union won certification in July 2005, when DOLE 
issued a final judgment certifying the union as sole and 
exclusive bargaining representatives of the factory.  Chong 
Won then filed administrative appeals with DOLE and the 
National Conciliation and Mediation Board (NCMB) and judicial 
actions before the courts.  Despite the union's numerous 
letters of intent to management to start collective 
bargaining negotiation and NCMB's mediation, Chong Won 
continues to refuse to negotiate.  Chong Won's position has 
been to wait until the legal process is exhausted before it 
considers negotiation with the union. 
 
------------------------------------------ 
No Apparent Connection to Ramento's Murder 
------------------------------------------ 
 
¶8. (SBU) Several media and non-governmental organization 
reports have linked the killing of Philippine Independent 
Church Bishop Alberto Ramento (ref A) with the ongoing labor 
dispute in Cavite.  Ramento previously served as chairman of 
the Workers Assistance Center, which helped the union 
organize the current strike, and was generally involved in 
workers rights advocacy in Cavite, his hometown.  The 
speculation that Ramento's murder was connected to the Cavite 
strikes appears to have originated on the website of the 
Workers Assistance Center.  However, Arnel Salvador, Deputy 
Executive Director of the Workers Assistance Center, told 
poloff that Ramento had no direct contact with the union and 
doubted there was any connection.  Philippine National Police 
contacts reported that Ramento's murder was the result of a 
robbery by a criminal gang in the Tarlac area, where the 
murder took place.  The police have arrested four individuals 
and have recovered items stolen from Ramento. 
 
------- 
COMMENT 
------- 
 
¶9. (SBU) Chong Won will likely exhaust all legal remedies 
before negotiating with the labor union and, given chronic 
delays in the Philippine judicial process, the dispute could 
drag on indefinitely.  Chong Won's legal maneuvering leaves 
it open to charges of infringement on the rights to freedom 
of association and collective bargaining and is illustrative 
of the challenges unions face in negotiating agreements. 
However, there are some positive signs.  Wal-Mart Country 
Representative Edwina Reunilla is actively engaging all 
parties in the dispute, and is setting up a meeting later 
this month involving management, the union, the Workers 
Assistance Center, and potential buyers.  So far, all parties 
have agreed to participate.  Post will continue to follow 
this case and report on further developments. 
 
 
Visit Embassy Manila's Classified SIPRNET website: 
http://www.state.sgov.gov/p/eap/manila/index. cfm 
 
You can also access this site through the State Department's 
Classified SIPRNET website: 
http://www.state.sgov.gov/ 
 
KENNEY