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Cablegate: New Foreign Labor Law in Macau to Severely

VZCZCXRO5381
RR RUEHCHI RUEHCN RUEHDT RUEHGH RUEHHM RUEHVC
DE RUEHHK #1953/01 2940605
ZNR UUUUU ZZH
R 210605Z OCT 09
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC 8780
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHOO/CHINA POSTS COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 HONG KONG 001953

SIPDIS

STATE FOR EAP/CM

E.O. 12958: N/A
TAGS: ECON EFIN EINV ETRD ELAB HK CH
SUBJECT: NEW FOREIGN LABOR LAW IN MACAU TO SEVERELY
RESTRICT WORKERS' ABILITY TO CHANGE EMPLOYERS

1. SUMMARY: Macau's Legislative Assembly passed a
controversial bill on October 9 that will establish stiff
criminal penalties for employers of illegal migrants. Upon
becoming law in the second quarter of 2010, the bill's
provisions will also impede foreign workers from changing
employers in Macau and require them to leave for six months
before applying for a new work permit with a different
employer. Groups representing migrant workers criticized the
bill, stating it would lead to increased abuse of migrant
workers by employers and effectively prevent foreign workers
from improving their wages by changing employers. The bill
is part of broader government of Macau (GOM) efforts to
replace foreign workers with Macau residents. Several
legislators were disappointed that the bill did not include
specific caps on imported labor. END SUMMARY

Employers of Illegal Workers Face Prison
----------------------------------------

2. Macau's 81,500 legal non-resident workers account for
approximately one-fourth of Macau's total workforce. After a
legislative debate described by local media as "heated,"
Macau's Legislative Assembly passed a bill on October 9 that
will establish strong criminal penalties for employers of
illegal foreign workers. Anyone found guilty of employing a
non-resident worker without a valid work permit may be
incarcerated up to two years; repeat offenders may be
sentenced up to eight years. The bill states that an illegal
worker found on a construction site will be presumed to have
entered into an employment relationship with the respective
contractor. Legal analysts stated this latter provision may
violate the "presumption of innocence" principle for
defendants and will likely be challenged in Macau's courts.
(Note: The original draft bill submitted by the GOM to the
Legislative Assembly purposely excluded special provisions
and penalties for employers of foreigners on construction
sites. The Legislative Assembly added the provisions to the
bill's final text over the objections of Secretary for
Economy and Finance Francis Tam. End Note)

Migrant Workers "Locked In" to Existing Employers
--------------------------------------------- ----

3. A separate controversial provision in the bill requires
all non-resident workers (whether skilled or unskilled)
seeking to change employers to leave Macau for six months
before reapplying for a new work permit. This so-called
"cooling off" period also applies to workers who terminate
their employment contracts prior to expiration -- typically
to join a higher-paying employer. Migrant workers noted that
employers will have little incentive to provide pay raises or
improve working conditions for foreign workers, as these
workers will be "locked in" their current positions by the
new law.

4. Various groups representing foreign workers criticized the
new cooling off period, stating it would tighten the grip of
Macau's employers on low-income foreign employees and lead to
increased employer abuse of migrant workers. Macau NGO Care
for Indonesian Migrant Workers Group spokesperson Cindri
Purnasari told media sources, "I'm worried that employers
will not hesitate to treat their (foreign) workers badly.
And if an employer doesn't renew our contract, we will be
unemployed for at least six months until we can possibly get
a new work permit." She added that most foreign workers fill
relatively low-paid positions and could not afford such an
extended period without pay. NGO Macau Migrants Rights
Network (MMRN) sent a letter signed by 2,000 workers to
Legislative Assembly President Susana Chou describing the new
law as "racist and discriminatory." In their letter, MMRN
stated they would present their concerns to the International
Labor Organization and the UN Committee to End Racial
Discrimination. The Philippine Consul General in Macau
released a statement on October 10 that called for the Macau
government to observe applicable international labor
conventions and ensure fair, non-discriminatory treatment of
migrant workers.

Some Macau Legislators Want Even Tougher GOM Stance
--------------------------------------------- ------

5. Four Legislative Assembly members who represent the labor
sector issued a joint delaration on October 9, after passage
of the bill, stating the new law would not sufficiently
protect Macau resident workers' rights. They called on Macau
to cap the number of foreign workers -- both skilled and
non-skilled -- and prohibit employment of foreign workers in

HONG KONG 00001953 002 OF 002


some (unidentified) sectors and professions. They also
stated that real estate developers should receive stiffer
punishment for the illegal workers employed by local
contractors. If enacted, such a provision would impact U.S.
gaming companies that might occasionally employ local
contractors and thousands of migrant workers to complete the
various construction projects around Macau.

6. The bill is expected to become law in 2010, 180 days after
its pending publication in the Official Gazette.
MARUT

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