Cablegate: Labor Slowdowns Begin Political Season

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PP RUEHBI RUEHCI
DE RUEHLM #1037/01 3200946
ZNR UUUUU ZZH
P 160946Z NOV 09
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC PRIORITY 0763
INFO RUEHKA/AMEMBASSY DHAKA PRIORITY 2040
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 9068
RUEHKT/AMEMBASSY KATHMANDU PRIORITY 7310
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 3465
RUEHCG/AMCONSUL CHENNAI PRIORITY 9631
RUEHKP/AMCONSUL KARACHI PRIORITY 2566
RUEHCI/AMCONSUL KOLKATA PRIORITY 0452
RUEHBI/AMCONSUL MUMBAI PRIORITY 6925
RUEHC/DEPT OF LABOR WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 COLOMBO 001037

SENSITIVE
SIPDIS

DEPARTMENT PASS TO USTR MIKE DELANEY/VICTORIA KADER

E.O. 12958: N/A
TAGS: CE ECON ELAB PGOV
SUBJECT: LABOR SLOWDOWNS BEGIN POLITICAL SEASON

1. (SBU) Summary. Labor unions affiliated with the
opposition political parties UNP and JVP held a three day
labor slowdown Nov 11-13 in the government run electricity,
petrol, water and port companies. The labor action had a
limited impact, but post expects continued labor actions in
advance of the planned elections next year. The workers have
not received expected wage increases this year, so there are
economic reasons behind the labor slowdowns. The main
purpose, however, is likely political, to weaken the position
of the ruling government. End Summary.

Work-to-Rule Labor Actions

2. (U) The leaders of the trade unions affiliated with
the opposition UNP and JVP parties announced a work-to-rule
labor action November 11-13 to protest that they have not
received salary increases this year. Union members only
worked to rule at key government-run utilities such as
electricity (Ceylon Electrical Board), petroleum (Ceylon
Petroleum Corporation), the Water Board, and the government
operated dockyards in the Port of Colombo. The work-to-rule
labor action means that the workers would only work as
strictly prescribed by the rules, and they would not work
overtime or go beyond their prescribed duties to solve
problems. The work-to-rule action is significant, because
workers do much of their jobs in overtime work to earn more
money. For example, the CPC workers have eight hour shifts,
but that is not enough time for them to deliver gasoline to
service stations in outlying areas and get back to Colombo.
In this case, unlike a JVP union strike last year, the
independent Engineers union agreed to join the strike.

3. (U) The Sri Lankan labor situation differs from that
in the United States with almost all of the unions affiliated
with a political party, and different unions working at the
same work site. Therefore, although the UNP and JVP unions
are on strike at the four utilities, workers belonging to
unions affiliated with the government SLFP party will
continue to work. It is unclear the relative strength of the
unions at each site. Leslie Devendra, the General Secretary
of the government-affiliated union SLNNS claimed that his
union controlled the majority of workers at all four
utilities, whereas the union affiliated with the UNP claimed
broad membership in these areas. Members of the
government-affiliated union even held a protest march
November 10 against the planned work to rule labor slowdown.

4. (U) The work-to-rule slowdown caused disruptions, but
it did not create an immediate crisis. According to news
reports, deliveries of petroleum were reduced by 50% on
November 11, and that the Colombo dockyard drastically
reduced its container unloading rates. There was no impact
on electricity or water supplies. A JVP spokesman claimed
that petroleum deliveries were so disrupted that the
nation,s gasoline stations would run out of petrol in
several days. The GSL has declared on November 15 that
fuel, water, power and port services are essential services,
so strikes would be prohibit strikes in these areas. Under
these emergency regulations, a work-to-rule action will
apparently become illegal.

Some Legitimate Economic Grievances

5. (SBU) The Government of Sri Lanka has not granted
any wage increases to these workers in 2009, and had refused
to meet with the UNP and JVP unions until the threatened
labor action. The government usually provides wage increases
in a three year collective bargaining agreement (CBA),
although the government union claimed that the collective
bargaining agreements were just informal deals. In any case,
the last CBA expired in January 2009, and the GSL refused to
provide salary increases, initially due to the war against
the LTTE, and now because of the IMF agreement. (Note. The
IMF letter of intent does not address salary increases, but
merely sets goals for the government budget deficit, and for
the Ceylon Petroleum Company and Ceylon Electrical Board to
become breakeven enterprises by 2011. End Note.) The JVP-
and UNP-affiliated unions say that inflation in 2007 and 2008
eroded their real wage rates, although now inflation is low.

COLOMBO 00001037 002 OF 002

6. (SBU) The GSL has now offered a 22% salary increase to
the CEB, CPC, water and port workers starting January 2010.
The GSL provides the same salary increase equally to all
workers at a utility, regardless of whether they are members
of a SLFP, JVP or UNP affiliated union. Srinal De Mel,
Secretary General of the UNP-affiliated union, was skeptical
of the GSL promises, and noted that the GSL did not have any
provision in the supplementary budget for a salary increase.
The opposition-affiliated unions have been planning
additional labor actions.

Apparent Political Agenda

7. (SBU) The GSL and outside observers argue that the
primary motivation for the strikes is political, i.e. an
effort to embarrass and disrupt the ruling government. The
UNP affiliated union head disagreed, claiming that the
motivation was not political, although he said with a smile
that this was the right time for bargaining because they had
good leverage. It is also noteworthy that the UNP and JVP
affiliated unions are cooperating even as those political
parties are considering nominating a joint presidential
candidate against President Rajapaksa. The GSL is expected
to soon announce that presidential elections will be held
early next year.

8. (SBU) Comment. Although there are legitimate economic
issues, the work-to-rule slowdowns are clearly politically
motivated. The best proof is that the government-affiliated
unions demonstrated against the labor actions; by doing so
they were demonstrating against a salary increase for
themselves. Post expects that these labor actions will
continue, and probably increase, as we enter the political
season. This entire episode also illustrates how Sri Lanka
labor unions have been primarily co-opted for political
purposes. End Comment.
BUTENIS

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