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UNCLAS SECTION 01 OF 04 COLOMBO 001073 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/INS, SCA/RA, DRL KOHL GILL 
STATE PASS USTR FOR MICHAEL DELANEY AND ADINA ADLER 
DOL/ILAB FOR TINA MCCARTER 
 
E.O 12958: N/A 
TAGS: ELAB ECON ETRD EINV EAID PGOV KMCA CE
SUBJECT: SRI LANKA: AUSTR DELANEY DISCUSSES LABOR AND THE AFL-CIO 
PETITION 
 
REF:  COLOMBO 1063 
 
¶1.  (U) Summary:  During a November 11-14 visit, Assistant U.S. 
Trade Representative (AUSTR) Michael Delaney met with key Sri Lankan 
government officials and local trade union representatives to 
discuss the June 2008 AFL-CIO petition to USTR that alleges Sri 
Lanka's labor laws do not comply with internationally recognized 
worker's rights.  Trade union representatives asserted that they do 
not want Sri Lanka to lose the U.S. Generalized System of 
Preferences (GSP) and that the petition is meant to pressure the 
government to comply with ILO standards.  Meanwhile, Minister of 
Labor Relations and Manpower Athauda Seneviratne told AUSTR Delaney 
that the government is working hard with the ILO and that many of 
allegations made by the trade unions in the petitions are "false and 
fabricated."  While it is clear that more needs to be done to 
improve workers' rights (particularly in the EPZs), current 
conditions are comparatively good by South Asian standards and the 
Ministry of Labor is demonstrably committed to addressing specific 
issues when they arise.  We do not believe the petition accurately 
depicts general labor conditions in Sri Lanka.   End Summary. 
 
Trade Unions: We Want GSP to Remain 
-------------------------------------- 
 
¶2. (SBU) In June 2008 the AFL-CIO submitted a petition to USTR 
requesting the removal of Sri Lanka from the list of eligible 
beneficiary developing countries pursuant to 19 USC 2462(d) of the 
Generalized System of Preferences (GSP).  On November 14, AUSTR 
Delaney met with representatives from four large Sri Lankan trade 
unions (TU) to hear their concerns, learn more about the labor cases 
cited in AFL-CIO petition, and explore how the USG and specifically 
USTR could assist their efforts in working with the GSL on labor 
issues.  At the outset of the meeting, Palitha Athukorale, Chief 
Organizer of the main opposition United National Party's (UNP) trade 
union Jathika Sevaka Sangamaya (JSS), noted that the title of the 
AFL-CIO petition is misleading.  He stated the actual objective of 
the petition is to make Sri Lanka comply with core labor standards, 
not to remove it from the GSP program.  He noted that although Sri 
Lanka's labor standards are higher than others in South Asia, the 
government could and should improve its implementation of core labor 
standards.  As such, the trade union representatives agreed that the 
GSP petition should be used as an instrument to pressure the 
government to ensure private sector compliance.  Anton Markus, Joint 
Secretary of the Free Trade Zones and General Services Employees 
Union (FTZ&GSEU) and a key drafter of the AFL-CIO petition, 
concurred, stating "we want to make sure Sri Lanka gets the GSP and 
we support the government efforts to keep the GSP." 
 
¶3.  (SBU) Meanwhile, Leslie Devendra, Secretary General of the 
ruling Sri Lanka Freedom Party-aligned Sri Lanka Nidaas Sewaka 
Sangamaya (SLNS), said the petitioners had never canvassed SLNS for 
their opinion and argued that the cases cited in the petition are 
not sufficient reasons to request GSP removal as  the examples are 
primarily located in the FTZs.  Athukorale privately told ECON FSN 
that he did not subscribe to the petition in his capacity in the 
UNP/JSS.  He had contributed to the petition in his personal 
capacity as the head of Progress Union, a minor trade union working 
in the FTZs. He stated that if he had known the petition would seek 
to remove GSP status, he would have disassociated from it 
altogether. 
 
"The Judiciary and Public Are Against Us" 
----------------------------------------- 
 
¶4. (U) AUSTR Delaney asked the representatives about the petition's 
allegation of increased judicial intervention in labor matters, and 
whether the rule of law is an effective basis for the employer and 
employee relationship.  He emphasized that labor issues can best be 
resolved by having independent and transparent negotiations with 
industry, and encouraged the trade unions to continue to facilitate 
interactions between members, industry partners, and the government. 
 Devendra complained that irresponsible TU actions have changed the 
mindset of the judiciary and, as a result, "we have the judiciary 
against us."  He described recent incidents where extreme 
politically left TUs disrupted essential services, such as the 
medical and teaching professions, by striking.  Because of such 
actions, the public has little sympathy for strikers, and the 
 
COLOMBO 00001073  002 OF 004 
 
 
judiciary generally supports the public.  Marcus added that the 
public sector has no proper mechanism to resolve public sector 
disputes and strikes.  (Note:  The Ministry of Labor (MOL) only has 
the legal authority to work with the private sector.  ILO currently 
is working on a proposal that would allow for the establishment of a 
dispute settlement framework for the public sector.)  AUSTR Delaney 
urged the representatives to first negotiate and litigate internally 
and to use its domestic courts and the MOL to assist them in 
resolving disputes. 
 
¶5.  AUSTR Delaney noted that it appears, from the cases cited in the 
petition, that FTZs lag behind the rest of the country in labor 
compliance.  Gerald Lodwick of the National Workers' Congress (NWC), 
which includes members who work at Export Processing Zones (EPZ), 
"generally agreed" that progress in labor compliance is slower in 
EPZs. 
 
Labor Ministry Counters AFL-CIO's Allegations 
--------------------------------------------- 
 
¶6. (U) In a separate meeting on November 14, AUSTR Delaney met with 
Labor Minister Athauda Seneviratne and other high level MOL 
officials.  The Minister underscored that although the MOL thought 
that some of the report's allegations were unsubstantiated and 
fabricated, the MOL was "open-minded and open for discussion" on the 
petition.  The Minister also pointed out that there were several 
large trade unions that did not support the AFL-CIO petition and 
that of the eight that subscribed to the petition, five were public 
sector trade unions that did not represent private sector workers. 
The Minister complained that the subscribers to the petition should 
have discussed their concerns with the MOL prior to submitting the 
report; Seneviratne wondered aloud why Delaney had held separate 
meetings with the trade union leaders and his office, arguing that a 
joint meeting would have been better.  MOL officials then detailed 
to AUSTR Delaney their following counter-arguments to the petition: 
 
 
a. Many of the cases cited in the petition are almost settled and/or 
currently at the courts.  Several cases, however, are not 
labor-related and thus cannot be reviewed by the MOL, including 
allegations of assassinations and child soldier recruitment. 
 
b. Trade union cancellation:  With approximately 18% of the 
country's workforce unionized, Sri Lanka currently has more than 
1,600 TUs, with 1,300 in the public sector and the rest in the 
private sector.  No TU has filed action against cancellation for 
several years.  (Note:  TUs can lose their ability to operate if 
they, for example, fail to file necessary paperwork with the 
government for several years.) 
 
c. The denial of TU rights to judicial, armed forces, police, prison 
and agricultural corps:  The Ministry noted that in Sri Lanka, as in 
much of Asia, certain categories of officers are not allowed to form 
unions.  They may form an association, but it cannot be registered 
as a union. 
 
d. Collective bargaining:  In response to the petition's request to 
reduce the requirement for TUs to represent 20% rather than 40% of 
the workforce when engaged in collective bargaining with the 
employer, the MOL asserted that not only have major TUs agreed to 
the 40% requirement, but many unions suggest an increase to a 50-60% 
requirement that "would foster stronger TUs." 
 
e. ILO conventions 87 on Freedom of Association/98 on Right to 
organize and collective bargaining are inadmissible:  The Ministry 
argued that the conventions ratified by the GSL have been 
established and recognized as law.  Referring to the Supreme Court's 
action to break the 2006 strike at the Port of Colombo, MOL 
officials said that the workers struck in the guise of a go-slow 
which is illegal under Sri Lankan law.  Further, the striking 
workers were acting violently and did not allow others to report to 
work.  Lastly, the officials said that the ILO Freedom of 
Association Committee recognized that the case was resolved in June 
¶2008. 
 
f. In regards to the fine against unfair labor practices: 
Officials said they are currently reviewing whether to increase the 
 
COLOMBO 00001073  003 OF 004 
 
 
fine against unfair labor practices, which is currently set at Sri 
Lankan Rupees 20,000 (approximately US $181).  Concerning overtime 
hours, officials said that the law limits a general work day to nine 
hours (including an hour for lunch) and twelve hours when coupled 
with overtime. 
 
g. Responding to the complaint that the Ministry has not filed any 
cases against unfair labor practices, officials said that it has 
been difficult to obtain sufficient evidence to file cases but that 
they are currently reviewing several files they hope to pursue. 
They did not comment on these specific cases. 
 
h. Access to EPZ's:  MOL officials told AUSTR Delaney that they have 
direct access to EPZs and can conduct inspections at any time.  They 
stated that salaries within EPZs are above the minimum wages set by 
the Wages Boards for industries (such as apparel) and are higher 
than the average salary for similar work outside the zones. 
Employee Councils, consisting of worker representatives, exist 
side-by-side with TUs in EPZs.  Although these councils are not 
registered as trade unions, there is no barrier for their 
registration as a TU if they follow the terms defined by the Trade 
Union Ordinance. 
 
Minister ensures compliance to labor rights 
------------------------------------------- 
 
¶7. (U) The Minister underscored to AUSTR Delaney the GSL's and MOL's 
efforts to protect labor rights by first highlighting that the GSL 
ratified 40 ILO conventions, including eight core conventions.  The 
Minister proudly noted that in 2006, the MOL implemented the ILO 
"Decent Work" program in Sri Lanka, the first of its kind in Asia. 
In regard to its relations with TUs, the Minister described how he 
is in constant dialogue with the unions as chairman of the National 
Labor Advisory Council (NLAC), a tripartite body under the MOL 
comprised of the government officials, employers and unions.  The 
MOL also conducts monthly meetings with TUs throughout the country 
(except for the North, due to the conflict) via its social dialogue 
divisions and maintains a compliance unit and a multi-disciplinary 
inspectorate to monitor labor and health standards.  The Minister 
noted that there are currently no industries officially gazetted as 
essential services, where strikes are banned.  AUSTR Delaney thanked 
the MOL for its detailed review of the petition and urged the 
ministry and specifically its Labor Commissioner to continue working 
closely with trade unions and employers and to collect and publicly 
update resolved labor disputes. 
 
Comment 
---------- 
 
¶8.  (SBU) Sri Lanka has, if not the highest, some of the best labor 
standards in South Asia.  The government is nevertheless actively 
involved in working to improve local labor practices. The MOL plays 
a successful role in dispute resolution.  In 2007, it received 5,849 
complaints; 5,683 cases were settled and 32 were referred for 
compulsory arbitration.  To improve its ability to conduct 
inspections, the MOL hired 60 additional labor inspectors to date in 
2008 above its 2007 total of 682, and is in the process of hiring 85 
more.  In 2007, MOL reports that its officials inspected more than 
46,000 work places.  Following ILO recommendations in 2003, the 
government's Board of Investment issued guidelines to all BOI 
companies on labor standards and employment relations, amplifying 
MOL policies.  The BOI also revised its guidelines on the formation 
and conduct of employee councils, ensuring their independence. 
These various BOI guidelines require companies to respect the right 
of the workers to join trade unions and bargain collectively, and to 
refrain from unfair labor practices.  Employee councils were 
extended collective bargaining rights by the ILO in 2003. 
 
¶9.  (SBU) In assessing the petition's claims, a relevant (and 
complicating) factor is that trade unions in Sri Lanka are highly 
politicized actors in a frequently chaotic political climate, i.e., 
their activities are not always confined to a classic trade unionist 
agenda focused on improvement of work conditions.  That fact 
inevitably affects their relationship with the government. 
Nevertheless, the Ministry (which is led by a former trade unionist) 
appears genuinely open to working with trade unions to resolve any 
concerns.  (Note:  The one exception to this is specifically Anton 
 
COLOMBO 00001073  004 OF 004 
 
 
Markus; government officials, as well as many other trade union 
leaders and employers, find him "impossible.")  The Minister meets 
with representatives formally on a monthly basis, and on an ad hoc 
basis as needed or when requested.  Officials within the MOL are in 
frequent contact with TUs, formally and informally, and work to find 
acceptable resolution to disputes when they arise.  The Ministry is 
also currently training judges in an effort to ensure they are aware 
of, and can adequately uphold, local labor laws.  More generally, 
workers can associate freely, and can generally strike without 
concerns of retribution or interference.  In instances where 
retribution or interference has occurred, cases move (albeit slowly 
in some instances) through the mandated systems for resolution 
 
¶10.  (SBU) There is more to be done.  Post welcomes guidance and 
recommended changes for the GSL to make to enhance local adherence 
to internationally-recognized labor norms.  Nevertheless, Post 
firmly believes that the AFL-CIO petition for the removal of GSP 
should be rejected for further review by USTR.  The petition is not 
representative of the overall labor situation in country. 
Additionally, the local political situation -- in light of the EC's 
investigation of human rights concerns in conjunction with Sri 
Lanka's application for a renewal of GSP+ benefits -- demonstrates 
that the USG will be more successful at fostering change through 
discussion absent the acceptance of this petition. 
 
¶11.  (U) This cable has been cleared by AUSTR Delaney.