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PP RUEHLMC
DE RUEHUM #0054/01 0540835
ZNY CCCCC ZZH
P 230835Z FEB 10
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC PRIORITY 3430
INFO RUEHTA/AMEMBASSY ASTANA PRIORITY 0307
RUEHBJ/AMEMBASSY BEIJING PRIORITY 6631
RUEHMO/AMEMBASSY MOSCOW PRIORITY 2887
RUEHUL/AMEMBASSY SEOUL PRIORITY 4091
RUEHTC/AMEMBASSY THE HAGUE PRIORITY 0031
RUEHKO/AMEMBASSY TOKYO PRIORITY 3719
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 ULAANBAATAR 000054 
 
SIPDIS 
 
STATE FOR EAP/CM, DRL; 
COMMERCE FOR ZHEN GONG-CROSS 
 
E.O. 12958: DECL: 02/23/2020 
TAGS: ELAB PHUM SMIG EAIR PGOV PREL MG
SUBJECT: AERO MONGOLIA: UNION BUSTING, STATE COMPLICITY 
 
Classified By: Political Officer Dan Rakove for reasons 1.4 (b) and (d) 
 
¶1. (C) SUMMARY: A labor strike at domestic carrier Aero 
Mongolia raises new concerns about the deficiencies of law 
enforcement and the political influence of corporations. 
Exercising their legal right, all 70 employees of Aero 
Mongolia organized a trade union in the fall of 2008 and 
registered it with the Ministry of Social Welfare and Labor 
(MSWL).  Aero Mongolia's management threatened the unionists, 
fired the four elected leaders, and legally challenged the 
MSWL's decision to recognize the union.  The court sided with 
the MSWL and required management to hire and compensate the 
sacked employees.  Reports are that management refused to do 
so, instead intimidating them, hiring under-skilled 
replacement technicians and mobilizing state support to 
undermine the union.  In the process, Aero Mongolia 
demonstrated its impunity and the state its complicity in 
violating bedrock labor law.  END SUMMARY 
 
¶2. (C) Aero Mongolia is a subsidiary of the powerful and 
politically connected Mongolian corporate conglomerate 
Monnis.  Heavily financed by Canadian, Chinese, and Japanese 
investors, Monnis is also the official distributor of Good 
Year, Nissan, and other foreign commercial products, and is a 
large mining and construction equipment distributor.  CEO B. 
Chuluunbaatar is reportedly a friend of former President 
Enkhbayar (MPRP), and MP Bat-Erdene (MPRP) sits on the 
Executive Board.  Despite there being no political donation 
recorded in their names for the 2008 election, it is commonly 
believed that Monnis supports the MPRP and receives state 
contracts in return. 
 
¶3.  (SBU) According to the Confederation of Mongolian Trade 
Unions (CMTU), in the fall of 2008, all 70 employees of Aero 
Mongolia successfully filed for recognition of their new 
trade union with the MSWL.  Aero Mongolia challenged this 
decision in court and threatened the new union members with 
firing.  Faced with this threat, all but the 14 engineers and 
technicians abandoned the union.  Of these, four assumed 
leadership roles and were summarily fired.  The remaining ten 
went on strike, beginning on November 24, 2008. 
 
¶4. (SBU) These maintenance workers persisted in demanding 
collective bargaining to improve wages and work conditions, 
both of which fall below that of Mongolian Airlines (MIAT), 
which no longer operates domestically.  Salaries average 
500,000 MNT (345 USD) per month and workers consistently log 
15 hour days beginning at 5 AM.  As the company lacks a 
hangar, they work outside in temperatures that fall to -40 in 
the winter.  Workers rest 3-4 days a month although this is 
not fixed as there are no written individual employment 
contracts.  Whereas the state sponsored airline MIAT employs 
more than 100 workers to service a fleet of four (of which 
two are operational), Aero Mongolia retains 14 workers to 
maintain a fleet of four (of which only one is currently 
operational). 
 
¶5. (SBU) Despite successive court verdicts declaring the 
union lawful and requiring management to rehire and 
compensate the four fired union leaders, management has 
refused to obey these court orders.  When confronted with the 
court order by the fired workers, the company rejected it and 
threatened violence against the workers and their families. 
The strikers subsequently picketed, but were denied entrance 
as management posted signs with their pictures, stating they 
were not to be admitted onto the premises.  In another 
picket, the police forcibly removed the striking workers from 
the grounds while threatening arrest.  The workers applied to 
other airlines for jobs but were unsuccessful, speculating 
they had been blacklisted. 
 
¶6. (SBU) Meanwhile, Aero Mongolia hired one worker from the 
Netherlands to supervise maintenance of the Dutch planes.  By 
immigration law, foreigners can only be hired for tasks that 
Mongolians cannot carry out (waivers can be obtained for a 
fee).  There is no provision granting an exception if those 
skilled workers are on strike.  Nonetheless the Immigration 
Agency granted a visa and the MSWL a work permit to the Dutch 
engineer.  Aero Mongolia also attempted to hire one Fokker 
maintenance worker from Air Astana in Kazakhstan (all four 
Aero Mongolia planes are Fokkers; two 50-seaters and two 
100-seaters).  The Confederation of Mongolian Trade Unions 
 
ULAANBAATA 00000054  002 OF 002 
 
 
(CMTU) persuaded the Kazakh workers to refuse, appealing for 
labor solidarity. 
 
¶7. (C) To fill the remaining manpower vacancy, Aero Mongolia 
promoted the trainees of the striking workers despite their 
lack of qualifications.  By regulation of the Mongolian Civil 
Aviation Authority (MCAA), airplane maintenance and repair 
staff must have five years of hands on training outside of 
technical school.  Additionally, Aero Mongolia traditionally 
employed staff who had taken specialized Fokker maintenance 
courses in the Netherlands.  The trainees lack both of these 
prerequisites.  The strikers attributed these lapses in turn 
to a 2009 incident in which an Aero Mongolia aircraft's motor 
halted mid-flight; post has also heard reports that one of 
that aircraft's two engines exploded shortly after takeoff. 
The plane made an emergency landing. 
 
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COMMENT 
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¶8. (C) The labor strike raises new concerns about workers 
rights to organize, the political influence of corporations, 
and the inefficacy of the courts.  Whereas the judicial 
system sided with the unions, their decision remains 
unenforced.  To the contrary, the Ministry of Social Welfare 
and Labor, Civil Aviation Authority, Immigration Agency, and 
agencies of law enforcement demonstrated complicity in the 
company's actions against the union. 
HILL