VZCZCXRO2011
PP RUEHBI RUEHCI
DE RUEHLM #0903/01 2660421
ZNR UUUUU ZZH
P 230421Z SEP 09
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC PRIORITY 0555
INFO RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 8948
RUEHKT/AMEMBASSY KATHMANDU PRIORITY 7186
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 3325
RUEHCG/AMCONSUL CHENNAI PRIORITY 9513
RUEHKP/AMCONSUL KARACHI PRIORITY 2528
RUEHCI/AMCONSUL KOLKATA PRIORITY 0420
RUEHBI/AMCONSUL MUMBAI PRIORITY 6814
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHC/DEPT OF LABOR WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 COLOMBO 000903 
 
SIPDIS 
 
DEPARTMENT PLEASE PASS TO USTR MIKE DELANEY/VICTORIA KADER 
 
E.O. 12958: N/A 
TAGS: ECON ELAB ETRD
SUBJECT: THE MALDIVES MOVING TOWARD COMPLIANCE WITH 
INTERNATIONAL LABOR STANDARDS 
 
¶1.     (U)  Summary.  The Government of the Maldives (GOM) 
has made great strides toward complying with international 
labor standards by approving a new employment law and a 
constitutional right to strike.  The Maldives is still 
implementing the labor by writing regulations and designing 
programs to enforce the law.  For instance, the Maldives has 
established labor tribunals and they are developing a system 
of health, safety and labor inspections.  Several nascent 
unions have begun, and there have been several threatened 
strikes at tourist resorts.  Many employers are concerned 
with the new rules, which will significantly increase their 
costs, and several predict that the informal sector will not 
comply with the new labor rules.  End Summary. 
 
The Bad Old Days( 
 
¶2.    (U)  Prior to 2008, the Maldives did not have any labor 
laws, so work hours, health and safety in the workplace, and 
labor representation were strictly between the individual 
employee and the employer.  In many cases shop assistants 
would work seven days a week, from morning to night.  There 
were also many abuses in the resort islands that form the 
core of the Maldives economy.  Although the Maldives has a 
high youth unemployment rate, there are 70-80,000 legal 
expatriate workers, and perhaps 30,000 illegal expatriate 
workers, who form one-third of the total population, and many 
of their rights were abused.  In 1995, the U.S. suspended GOM 
eligibility for tariff preferences under the U.S. Generalized 
System of Preferences (GSP) because the Maldives did not meet 
internationally recognized labor standards. 
 
Great Advances in Labor Rights 
 
¶3.    (U)  In 2008 the Maldives approved a new constitution 
which provides workers with the right to strike and form 
trade unions.  The Maldives also passed an employment act 
that established a 48 hour work week, annual and sick leave, 
maternity leave and provisions for workplace safety.  The 
Ministry of Human Resources, Youth and Employment is required 
to establish a pay advisory board to set minimum wages and a 
labor relations authority to implement the new employment 
law.   The law prohibits discrimination and applies to 
Maldivian as well as expatriate workers.  The GOM has 
established a seven member Labor Tribunal to oversee 
implementation of the law.  The GOM has not yet developed a 
system of labor, health and safety inspections, although 
employers are still legally required to meet the new 
requirements. 
 
¶4.    (U)  Workers are beginning to claim their labor rights 
through unions and labor actions.  The largest union is the 
Tourism Employee Association, which claims 10,000 members but 
is thought to have many fewer.  One of the founders used the 
union as a launch pad to become a member of Parliament. 
There are also much smaller unions of fishery workers and 
teachers.  The Maldives does not have an overarching labor 
organization.  Workers threatened to strike in four resorts 
in 2008, and the GOM facilitated an agreement between the 
resorts and their employees.  Many  resorts have 
representative staff committees, where the employees nominate 
representatives to a committee to discuss workplace issues 
with the employer.  GOM officials stated that these staff 
committee had been able to improve working conditions in 
resorts, but Econoff was not able to verify this claim 
independently. 
 
¶5.    (U)  Many employers have reservations about the labor 
laws because the reforms have substantially increased labor 
costs.  Ministry of Human Resource, Sports and Labor 
officials estimated that labor costs would increase 20-40% 
for employers, since employees were restricted to a six day 
48 hour work week unless the employers paid overtime.  In 
some cases shops are now open six days instead of seven so 
that the workers have one day off.  The Vice President of the 
Maldives Chamber of Commerce also complained that the 
government never consulted them about the new law, and the 
law does not recognize the unique situation of workers on a 
resort island.  A business consultant commented that some 
employees are upset, particularly expatriate workers, because 
 
COLOMBO 00000903  002 OF 002 
 
 
they are working fewer hours and receiving less pay. 
Government and private sources thought that many small 
employers, such as small shops on the street, will evade the 
legal requirements and become informal businesses.   The 
business consultant predicts that only the most established 
businesses would comply with the laws.  Finally, employers 
worry that employees could begin striking for a myriad of 
reasons, many unrelated to labor rights per se, and that 
these strikes could damage the economy. 
 
¶6.    (U)  The Maldives has adopted these labor rights at an 
economically difficult time.  The GOM is seeking to reorient 
their economy toward private industry, and as part of their 
initiative to reduce government spending they plan to 
retrench government employment by up to a third.  The GOM is 
the country,s largest employer, and traditionally the GOM 
absorbed all school graduates.  The downsized civil servants 
face a difficult transition, since many of them may need to 
seek jobs in the private sector. 
 
¶7.    (U)  Comment.  There will be bumps in the road, but the 
Maldives is taking the steps necessary to comply with 
international labor standards.  The GOM is very eager to 
become eligible for the GSP trade preference program, and 
related access to financing from the Overseas Private 
Investment Corporation (OPIC), so they are very open to USG 
and ILO suggestions to improve their labor rights.  End 
Comment. 
BUTENIS