VZCZCXRO0571
PP RUEHCHI RUEHDT RUEHHM RUEHJO RUEHNH
DE RUEHPF #2211 3550120
ZNR UUUUU ZZH
P 210120Z DEC 06
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC PRIORITY 7734
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUEHXI/LABOR COLLECTIVE PRIORITY
RUEHC/DEPT OF LABOR WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS PHNOM PENH 002211 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS, DRL/IL, EB/TPP 
STATE PLEASE PASS TO USTR FOR DAVID BISBEE 
COMMERCE FOR ITA/OTEXA 
LABOR FOR ILAB--CHRIS WATSON AND JONA LAI 
 
E.O. 12958: N/A 
TAGS: ELAB ECON KTEX CB
SUBJECT: CAMBODIAN UNIONS AND GARMENT FACTORIES AGREE ON 
NEW BENEFITS 
 
REF: PHNOM PENH 2084 AND PREVIOUS 
 
¶1.  (SBU)  A coalition of seven garment unions dropped its 
threat to hold a general strike after they reached a 
tentative deal with the Garment Manufacturers Association of 
Cambodia (GMAC). The agreement reached on December 19 -- 
which is not being disclosed publicly and is subject to 
agreement by GMAC members -- offers increased seniority 
bonuses to long-serving garment workers.  Currently, garment 
workers receive a USD 2 per month bonus after their first 
year of employment at the same factory, and receive an 
additional USD 1 per month bonus for each subsequent years. 
However, after five years of employment, the seniority bonus 
levels off at USD 5 per month regardless of the number of 
years worked.  The proposed deal would extend the additional 
USD 1 per year of service formula to workers who have between 
6 and 10 years of employment with the same company. 
 
¶2.  (SBU)  Union leaders also asked for an additional USD 1 
per month attendance bonus, though GMAC Director Van Sou Ieng 
thought it very unlikely that his members would agree to 
this.  This proposed bonus would affect all garment workers 
and act as a quasi-wage increase across the board.  GMAC had 
been very clear following the announcement of the minimum 
wage that it would not return to the negotiating table and 
discuss wages -- something the FTU and other unions wanted to 
do.  GMAC said that seniority issues and other benefits could 
be discussed, but refused to reopen discussions revolving 
around the minimum wage. 
 
¶3.  (SBU)  This latest proposed deal, if accepted by GMAC 
members, is the best the unions could hope for following 
their poor handling of the minimum wage negotiations with 
GMAC.  After six weeks involving four rounds of intense but 
slow-moving negotiations between GMAC and a coalition of 17 
garment sector unions, the government preempted further 
discussions and announced an increase in the minimum wage 
from USD 45 to 50 per month.  Although endorsed by 
pro-government union federations, this move was seen as 
embarrassing for the union movement as a whole, and 
independent and pro-opposition union leaders have been 
attempting to extract additional concessions from GMAC partly 
in an effort to save face.  Increasing the seniority bonus 
would also provide wage increases to long-serving workers who 
likely already earn more than the minimum wage. 
 
¶4.  (SBU)  Although the unions claim that this latest 
agreement (while still tentative) with GMAC was instrumental 
in forestalling a planned strike earlier this week, the 
unions did not have full backing of their membership to 
support a general strike.  The strike was slated to take 
place on December 18, but an Embassy straw poll of member 
unions on December 7 indicated that many were not in 
agreement.  Free Trade Union (FTU) President Chea Mony has 
also told us privately that he faced pressure from some FTU 
members and leaders to back away from his threatened general 
strike.  Although the tentative deal with GMAC is not 
everything the FTU might want, it likely represents the best 
deal that can be obtained and will give the trade federation 
something to take back to its members. 
MUSSOMELI