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.
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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