Cablegate: Violence Leads to Calls for Greater Trade Unionism

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P 101040Z NOV 09
FM AMEMBASSY DHAKA
TO SECSTATE WASHDC PRIORITY 9645
INFO ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
AMEMBASSY RANGOON PRIORITY
CDR USPACOM HONOLULU HI PRIORITY
DEPT OF LABOR WASHDC PRIORITY
USCINCPAC HONOLULU HI PRIORITY

UNCLAS DHAKA 001030

SIPDIS

DEPT FOR: USAID, SCA/RA, SCA/INSB, EB, DRL, G, IWI
LABOR FOR TIM WEDDING, ANNE ZOLLNER AND RACHEL RIGBY

E.O. 12958: N/A
TAGS: ELAB ECON ETRD PHUM PREL BG
SUBJECT: VIOLENCE LEADS TO CALLS FOR GREATER TRADE UNIONISM
IN BANGLADESH'S GARMENT'S SECTOR

REF: A. DHAKA 1005
B. DHAKA 405

Summary
--------

1. (SBU) Three individuals died and over 100 were injured
following unrest at a garments factory outside Dhaka in late
October, leading to renewed moves by the Government of
Bangladesh to develop and strengthen trade unions in the
sector. Disgruntled workers allege that a factory owner had
suddenly announced closure of the factory without paying
three months back wages. The owner claimed, however, that he
had shut down the factory because of falling work orders and
that all wages would be paid in full. The factory owner and
the President of the Bangladesh Knitwear Manufacturers and
Exporters Association (BKMEA), suggested that local political
interests were likely to have had a hand in the rioting.
This recent spate of violence demonstrates the fragility of
labor-management relations in the garments sector.

Sudden closure provokes rioting
-------------------------------

2. (SBU) On October 31, a large group broke into the Nippon
Garments Factory outside Dhaka after the owner announced that
the factory was closing. Rioters clashed with the police who
were posted around the premises to prevent damage to the
property. Three bystanders were killed and over 100 were
injured in the subsequent rioting. Workers argue that the
owner had failed to provide any advance warning about the
factory's closure and pay back wages. Worker's rights
organizations concur, alleging that the factory owner had
failed to pay overtime to his employees and that he had a
history of late payment of salaries. The owner disputes this
claim, saying that he was current in his payments and that he
was due to give the workers their final salaries in a matter
of days.

Rivalries and political interests may have a hand
--------------------------------------------- ----

3. (C) The owner of Nippon Garments Factory alleges that
rival businessmen backed by local leaders of the ruling Awami
League (AL) had been pressuring him to sell his factory's
machinery and offer other concessions at a discounted rate.
He suggests that "outsiders" rather than his own employees
were behind the violence and destruction. He also pointed
out that temporary factory closures were not uncommon in the
industry, especially in the current economic climate, and
that the employee association had accepted his decision to
shut down the factory for an unspecified period of time.

4. (C) The President of the BKMEA speculated that business
rivals might have capitalized on the workers, sense of
insecurity following the closure, to foment unrest. He added
that in many similar cases, such groups often elicit
support from local members of the ruling party.

Trade unions as the solution?
-----------------------------

5. (SBU) Following the violence, the Prime Minister
instructed the Home Secretary to take necessary action
against the factory owner. The Ministry of Labor announced
the formation of a 12 member committee to formulate measures
designed to increase the prevalence of factory-based trade
unions in the garments sector. While the country,s labor
law permits full freedom of association, levels of union
activity in the garments sector are extremely low. According
to the American Center for International Labor Solidarity
(ACILS), large union federations are loosely connected with
workers in approximately 30 - 40 percent of garment
factories. In those factories they provide assistance to
workers but have no formal presence. ACILS estimates that
only 5 - 10 percent of factories in the garments sector are
unionized. The garments industry employs roughly 2 million
workers over 75 percent of whom
are women.

6. (C) The BKMEA President questioned the government's
decision to promote trade unionism and asserted that workers
were generally not interested in forming unions in the
garment sector. He added that workers often did not
remain at their places of employment for long periods of time
and were therefore focused more on short term gains rather
than collective bargaining for long term gains. He admitted
that employers disliked labor unions, viewing
organized labor as excessively "militant" and vulnerable to
manipulation by the political parties for partisan purposes.

Comment
-------

7. (C) Bangladesh's garments sector continues to suffer
growing pains despite being the engine of the country's
economic growth. Many factory owners routinely underpay
their workers or pay salaries late. Relations between labor
and management remain fraught with tension. Strife from one
factory has the potential to spread and affect others. Given
the presence of local rivalries and political interests, the
problems defy any easy solution. The GOB has correctly
identified improving workers rights as a priority. In this
regard, the Government,s measures are a step in the right
direction. The trick will be to develop non politicized
trade unions in the garments sector. In a recent visit to
Bangladesh, Assistant U.S. Trade Representative, Michael
Delaney, tied progress on labor issues to trade preferences
(Reftel A). Post will continue to urge all parties to work
together to achieve additional progress.

MORIARTY

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