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Cablegate: Burmese Workers Demand Higher Wages

VZCZCXRO9096
RR RUEHBZ RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGO #0893/01 2600946
ZNR UUUUU ZZH
R 170946Z SEP 07
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC 6533
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHGG/UN SECURITY COUNCIL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1521
RUEHBY/AMEMBASSY CANBERRA 0517
RUEHKA/AMEMBASSY DHAKA 4614
RUEHLO/AMEMBASSY LONDON 1994
RUEHNE/AMEMBASSY NEW DELHI 4049
RUEHUL/AMEMBASSY SEOUL 7607
RUEHKO/AMEMBASSY TOKYO 5164
RUEHCN/AMCONSUL CHENGDU 1200
RUEHCHI/AMCONSUL CHIANG MAI 1086
RUEHCI/AMCONSUL KOLKATA 0063
RUEATRS/DEPT OF TREASURY WASHDC
RHHMUNA/CDR USPACOM HONOLULU HI
RUEHGV/USMISSION GENEVA 3298
RHEHNSC/NSC WASHDC
RUCNDT/USMISSION USUN NEW YORK 0953
RUEKJCS/SECDEF WASHDC
RUEHBS/USEU BRUSSELS
RUEKJCS/JOINT STAFF WASHDC
RUEADCR/DEPT OF LABOR WASHDC

UNCLAS SECTION 01 OF 03 RANGOON 000893

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, EB/TRA
PACOM FOR FPA
TREASURY FOR OASIA:SCHUN
GENEVA FOR LABOR ATTACHE

E.O. 12958:N/A
TAGS: ELAB ECON EINV PREL PGOV BM
SUBJECT: BURMESE WORKERS DEMAND HIGHER WAGES

REF: A) RANGOON 817 B) RANGOON 749

RANGOON 00000893 001.2 OF 003


1. (SBU) Summary. Between January and August, Burmese workers in
industrial zone areas protested more than 60 times, often calling
for higher wages or improved working conditions. Approximately
180,000 workers are employed in industrial zone factories, making an
average of $23 a month. Laborers in industrial zones must work
48-hour weeks, and often work 20 hours of overtime. While some
factory owners maintain excellent working conditions and treat their
staff well, others take advantage of their employees by paying them
low wages and forcing them to work in cramped and decrepit
buildings. The GOB discourages workers from living together in an
attempt to prevent them from organizing. Although the majority of
labor strikes end with laborers obtaining higher salaries, the GOB
does not ensure that factories follow labor laws. End Summary.

Workers in Industrial Zones
---------------------------

2. (SBU) The Ministry of Industry (I) reports that more than 9,500
factories operate in the 18 industrial zones located throughout
Burma (ref A). As of August 2007, these factories employed a total
of 179,966 workers, most of whom were women. Under Burmese labor
laws, these factory employees are considered to be skilled workers
(despite their actual skill levels) and must work 48-hour/six-day
work weeks. These workers receive an average salary of 30,000 kyat
($23) per month, which is double the legal minimum wage. Often
times, they are called upon to work overtime, and while they should
receive double salary for the extra time worked, several employees
told us that they receive only 5,000 kyat ($3.50) in addition to
their regular pay.

3. (SBU) While some factories provide housing quarters to a limited
number of employees, most of the workers live close to the
industrial zone areas, renting small apartments with four or five
other workers. Julia Chung, Director of Crocodile Trading Company,
informed us that because of government regulations, many factories
no longer maintain employee dormitories. She explained that the
government did not allow workers to live together due to concern
that the employees would be more likely to either try to form a
union or band together and cause political unrest. Many factories
now provide transportation ("ferries") for staff, which acts as an
incentive for workers and also ensures that they arrive to work on
time. Many of the workers' families remain in their villages, so
workers share apartments close to the industrial zones and often
return home on weekends to visit their families and remit money.

Protesting Industrial Zone Conditions
-------------------------------------

4. (SBU) During the past few weeks, we visited several factories,
touring facilities and observing operations and labor conditions.
The factories we visited were either 100 percent Burmese-owned or
registered under Burmese names but received funding from foreign
companies. (Note: Burma's investment laws do not favor foreign
companies, which must pay their bills and taxes in foreign currency
at the official exchange rate of 6 kyat/$1. Locally owned companies
pay in kyat at the market rate of 1350. Many companies registered
under Burmese names are actually financed by foreign companies. End
Note.) Interestingly, none of the foreign factories responded to
our meeting requests. During the factory tours, owners were happy
to point out their "modern" facilities (some more than others),
explain how the factory was run, detail how their staff was
organized, and emphasize their sterling labor practices. Owners
were also quick to highlight that not all factories upheld the same

RANGOON 00000893 002.2 OF 003


high labor standards, and pointed out that in many instances,
laborers are treated poorly and forced to work long hours with
little or no extra pay.

5. (SBU) According to Myat Thin Aung, Treasurer of the Chamber of
Commerce, 61 worker protests took place in industrial zone factories
this year. The majority of protests occurred in garment factories,
and 37 transpired in factories in Rangoon's Hlaing Thayar industrial
zone, the largest industrial zone in Burma. The workers demanded
higher salaries, shorter hours, and/or improved working conditions.
Julia Chung explained that while government factory employees work
in the worst conditions, they do not strike because they fear they
will be arrested.

6. (SBU) These labor protests are fairly uniform, U Kyaw Win of
Tri-Diamond Trading detailed. After agreeing upon what issue to
raise and designating a spokesperson, workers arrive at the factory
and, instead of working, gather outside and "protest." These labor
strikes, U Kyaw Win clarified, are neither violent nor politically
motivated; the workers just want better conditions. Factory owners
then meet with the designated spokesperson, evaluate whether the
demands are reasonable, and start negotiations. At times, the
factories call in a Ministry of Labor representative to assist with
negotiations. U Kyaw Win noted that more than 90 percent of these
protests end within one day, with the factories meeting at least
part of the workers' demands. However, earlier this year, one
factory closed after the staff demanded an additional 15,000
kyat/month ($11) per person for 1,000 workers. The owner decided
that he was not making enough profit to cover the salary demands,
and instead closed the factory.

7. (SBU) Julia Chung told us that after the fuel price hike in
mid-August (ref B), many factories faced these types of protests.
The increase in fuel prices triggered an increase in the cost of
transportation and basic food commodities, as well as the
depreciation of the kyat from 1305 kyat/$1 on August 14 to 1370/$1
on September 7. In this case, most factories responded by providing
additional compensation from 5,000 to 10,000 kyat per person per
month.

Government Protection of Rights?
--------------------------------

8. (SBU) U Kyaw Win emphasized that although the Ministry of Labor
may become involved in a labor protest and encourage a company to
settle with the workers, the government has little concern for labor
rights. Instead, he explained, the government tries to ensure that
companies continue to operate as normal and that labor strikes do
not become political. The GOB does little to ensure that factories
in industrial zones uphold labor laws and continues to deny the
formation of unions.

Comment
-------


9. (SBU) Although we were unable to see firsthand the factories
that are the worst violators of labor rights, we hear horror stories
from workers about the terrible conditions. State-owned factories
are one of the worst violators of labor rights, and continue to
disregard the basic needs of the people. Senior generals believe
that by repressing the workers and impeding their ability to
organize, they can contain any political frustrations they may have.
As economic conditions continue to deteriorate, the workers have
less to lose, raising the risk of political backlash.

RANGOON 00000893 003.2 OF 003

VILLAROSA

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