US embassy cable - 05DHAKA3375

UNCLAS SECTION 01 OF 02 DHAKA 003375 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ELAB, PREL, PGOV, ETRD, BG 
SUBJECT: BEPZA INVESTORS MEET TO DISCUSS WRWC AND OTHER 
ISSUES 
 
 
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 
organizations. 
 
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 
"betrayal." 
CHAMMAS