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Cablegate: Bepza Investors Meet to Discuss Wrwc and Other

This record is a partial extract of the original cable. The full text of the original cable is not available.




E.O. 12958: N/A

1. (SBU) Summary: BEPZA factory investors met with BEPZA
Chairman Hossain on implementation of the EPZ law. Hossain
told investors of the re-submission of the AFL-CIO's
petition, candidly described the worker-management situation,
stressing the problems are on both sides, and urged investors
to follow the rules and give "workers their due." He outlined
future BEPZA actions to improve worker-management relations
but categorically dismissed use of outside parties to aid in
this goal. End Summary.

2. (SBU) On July 12, Bangladesh Export Processing Zone
Association (BEPZA) Executive Chair Mohammad Zakir Hossain
briefed investors on implementation of the Workers Recreation
and Welfare Committee (WRWC). Laboff attended the three hour
meeting at the request of Hossain. The General Manager of the
Savar EPZ, Kamal Ahktar, started the meeting, by listing
current actions of workers: meeting outside of the EPZ and
making liaisons with outside associations, making contact
with representatives of other companies in the zone,
conducting "illegal strikes" and "making illegal demands to
management." Workers, he said, are influenced by outside

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3. (SBU) He faulted management for: hesitating to accept WRWC
as partners for settlement of grievances; not regularly
conducting WRWC meetings, not training workers of their
responsibilities, not hiring competent human resource and
personnel staff, not properly paying wages and other
benefits, unlawfully dismissing workers without prior
permission of the BEPZA Chairman, and not sitting down with
workers to discuss grievances.

4. (SBU) He stated several objectives: peaceful settlement of
worker grievances; establishing harmonious labor management
relations; and working with WRWC members in the hopes that
they choose not to institute Worker Associations (WA) in
November 2006.

5. (SBU) The Executive Chairman noted to investors that "now
is the time to come together" to resolve the situation. He
highlighted problems in the Comilla EPZ. There are problems
with workers over piece rate and overtime issues, and there
had been "difficult" talks between labor and management.
After the WRWC elections, he said, there was an immediate
change in attitude between the WRWC members and management.
The problems were "not with the other side. Had we engaged
with them, problems may not have appeared." There were "wild
demands" from laborers because of a lack of understanding
stemming from our failure to give them education. We are not
training them, and we are asking for grants to fund more
training, but we must realize and address our shortcomings.

6. (SBU) A manager described the situation at several
factories. He said that within the last two months, there
have been "excessive" demands at several factories. Examples
included: "after four hours of overtime, there should be a 30
minute lunch break in the cloth dying section, "and there
should be no retrenchment of workers, and workers should have
permanent appointment letters and be able to take weekly
government and other holidays off. He said that these
demands reflected guidance "by outside quarters."

7. (SBU) He also cited workers' legitimate claims: all
workers should have BEPZA ID cards, no suspensions without a
valid reason, dismissed workers should have their final pay
within seven days, a meal allowance should be provided when
working after hours, WRWC members should not be insulted, and
WRWC members should be informed when workers are fired.

8. (SBU) The manager then noted several needs: factories need
to appoint professionally qualified personnel managers,
enforce prevailing rules and regulations, promote the WRWC
activities, and provide WRWC training. He said that a strong
constructive WRWC can reduce necessary disputes. He closed
noting that there should be a "firewall between inside and
outside the EPZ" to prevent contamination and infiltration by
vested interests. He attributed the remark to the World Bank.

9. (SBU) The Executive Chairman told investors that the
demands noted were not major and could have been resolved if
management sat down with workers. He encouraged this, saying
that most WRWC members are not well educated, and while
factories don't have human resource staff, many situations
have been "mishandled" by management." "You have to give the
workers their due" and try to mold their attitude.

10. (SBU) He said that BEPZA has written a handbook for WRWC
staff in Bangla and will translate it into English. If
management discussions with labor fail, the parties should
use counselors that BEPZA has hired, and then, if needed,
with the arbitrators that BEPZA is starting to hire.

11. (SBU) Kihak Sung, Chairman and CEO of Youngone, a major
investor in the Chittagong EPZ, took issue with some of
Hossain's remarks. He said that many of the labor actions
seem to be "wildcat" in nature. Sung stated that there is a
"labor protection racket", and a "firewall" will never work.
Hossain responded that the government position is clear-there
can be "no outside politics to spoil the environment."

12. (SBU) After two hours listening to WRWC issues, the
investors spent two hours, raising questions on BEPZA
services. They demanded better traffic management outside of
BEPZA gates, treated water (many incur double costs
retreating their water supply to usable quality), regular
garbage pickup, consistent power generation, and that BEPZA
reply to factory owners and managers letters.

13. (SBU) During the meeting, Hossain noted AFL-CIO's renewed
petition to the USTR. He acknowledged that in some cases
some managers "have overused our authority," but said that
the problems were not systemic. He recalled how he and
Solidarity Center had negotiated the terms of the EPZ law,
and now after passage of the law, the re-submission was a

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