US embassy cable - 05DHAKA3695

UNCLAS SECTION 01 OF 02 DHAKA 003695 
 
SIPDIS 
 
LABOR COLLECTIVE 
 
SENSITIVE 
 
STATE PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, ETRD, BG, Labor Issues 
SUBJECT: BEPZA AND RING SHINE FACTORY MANAGER COMPLAIN OF 
LABOR UNREST 
 
 
1. (SBU) Summary: BEPZA Executive Chairman Hossain and 
factory representatives from Bangladesh's two largest export 
processing zones met with CDA to take issue with the recently 
filed AFL-CIO GSP petition.  They alleged that nascent labor 
unrest in the EPZs was the result of "outside influences," 
claiming a consistent pattern of escalation in several recent 
incidents.  End summary. 
 
2. (SBU) On July 25, Charge d'Affaires met at the Embassy 
with Bangladesh Export Processing Zones Authority (BEPZA) 
Executive Chairman Mohammed Zakir Hossain; Youngone Group 
President Peter Bauer; and Youngone Advisor to the Chairman 
A.S.A Nur.  Also present were Hsiao Hai He, Director of Ring 
Shine Textiles, M.D.J. Kim, A-One (BD) Ltd., and M. Nasir 
Uddin, Chairman of Pacific Jeans.  Chief Economic Officer and 
Labor Officer (note taker) also attended this one hour and 15 
minute meeting. 
 
3. (SBU) Hossain began by describing BEPZA's implementation 
of the Export Processing Zone (EPZ) law, forged last year 
from extensive discussions among the BDG, BEPZA, and AFL-CIO 
through the locally-based American Center for Labor 
Solidarity (ACILS or Solidarity Center.)  As of mid-July, 171 
out of 183 EPZ factories had completed elections.  He said 
the remaining 37 factories (out of 220 EPZ factories) were 
not required to hold elections at this time.  He expressed 
satisfaction with the conduct of these elections, the first 
ever labor elections held in the EPZs, saying there were few 
allegations of irregularities. 
4. (SBU) Hossain defended the pace of the election process, 
citing the time required to educate workers about both the 
election process and the function of the Workers' Recreation 
and Welfare Committees (WRWC) established under the law.  He 
claimed that elections have been held in nearly 95% of the 
eligible factories within 12 months of the adoption of the 
EPZ Law on July 18, 2004.  He argued that BEPZA and the 
factory owners were acting in good faith to implement the 
law's requirements in a timely manner. 
 
5. (SBU) Hossain addressed recent strikes and work stoppages 
at several EPZ factories.  He noted strikes in the EPZ are 
illegal, and attributed the unrest to "outside influences." 
He also claimed that some worker demands were not yet subject 
to negotiation, citing wage demands and demands related to 
hiring, firing and disciplining of administrative and 
supervisory personnel.  He attributed these demands to 
misinformation from "outside influences," and noted efforts 
by BEPZA to continue worker education, including the recent 
hiring of 65 counselors, tasked with mediating between 
workers and management to resolve any problems. 
 
6. (SBU) Youngone's Peter Bauer echoed Hossain's key points. 
Clearly angry, he pointed out that the EPZ law was negotiated 
with ACILS' input.  For AFL-CIO to file a new petition so 
soon after the law took effect was "duplicitous" and an act 
of bad faith, he said.  Bauer argued that "the law is being 
implemented" but it takes time, as "they (the laborers) don't 
really understand what it means to negotiate; we taught the 
(WRWC) at Youngone on what they need to do."  He referred to 
as "devious" AFL-CIO's offer to train workers in factories, 
saying, "they never offered to train workers at Youngone." 
 
7. (SBU) Bauer argued that a clear pattern was evident from 
recent incidents at seven EPZ factories, which pointed to an 
organized effort by "outside influences" to disrupt labor 
relations.  In each case, Bauer claimed, WRWCs would make one 
or two small demands, often involving wages.  Once management 
agreed to discuss or accept the demands, new demands were 
made, until an impasse was reached, usually over demands that 
supervisors or administrative personnel be disciplined or 
fired (issues, he claims, that are not subject to negotiation 
under this phase of the law.)  At this point, an incident 
would occur, usually involving an assault by workers on a 
supervisor or damage to factory property, followed by work 
stoppages, strikes and lockouts.  Bauer said he worried that 
this pattern would continue at other factories in the EPZ. 
 
8. (SBU) Hossain, Bauer, and Hsiao Hai He, Director of Ring 
Shine Textiles, addressed recent problems at Ring Shine. 
According to media reports, on July 20, up to 200 workers at 
Ring Shine were injured when police used batons to break up 
striking textile laborers.  Workers reportedly demanded the 
removal of abusive supervisors and the withdrawal of 
management complaints against workers expressing their views. 
 According to ACILS, workers had complained about an abusive 
foreign technical supervisor.  The supervisor had threatened 
a laborer with a steam iron and the worker defended himself, 
with other workers coming to his aid.  ACILS confirmed that 
workers assaulted the supervisor and coworkers, but said the 
assault was triggered by the supervisor's assault on the 
factory worker, resulting in severe burn injuries to the 
worker. 
 
9. (SBU) Hsiao denied the alleged assault by the supervisor. 
Hossain claimed the injured employee could not be identified 
and that no one with injuries consistent with steam burns had 
sought medical treatment at the factory or elsewhere.  Bauer 
said the incident was consistent with the pattern seen in 
other factories.  Hsiao also described an escalating series 
of worker demands, nearly all of which he claimed to have 
resolved through negotiation, despite nearly two weeks of 
work stoppages and strikes.  When he thought all issues were 
resolved and work would resume, new demands were made and 
workers remained on strike.  At that point, he obtained BEPZA 
permission to shut down the factory (i.e., to impose a 
lockout).  Hsiao confirmed complaints had been filed against 
some workers, but disputed the numbers reported in the media 
and said the complaints were limited to those involved in the 
assault on the supervisor. 
 
10. (SBU) In response to a question about management attempts 
to work with laborers either at Ring Shine or other factories 
to better deal with labor demands, Hossain replied that the 
BEPZA counselors had intervened in regards to earlier reports 
of alleged abuse from this supervisor; however, Hossain 
admitted that the counselors made only a verbal report and 
there were no written guidelines for the counselors to 
follow.  Bauer interjected sthat the first role of the 
counselors is as a teacher and guide, and not as a negotiator. 
 
11. (SBU) When asked how much training workers received on 
the new WRWC and their potential role, Hossain and others 
admitted that BEPZA provided maybe one hour of training, 
mostly on election procedures but claimed they were 
adequately trained and educated in their roles.  As for the 
WRWC at Ring Shine, Hsiao said, "I'm not speaking to them." 
 
12. (SBU) Comment:  BEPZA and the factory owners clearly 
believe that recent labor unrest is the direct result of 
improper intervention and agitation by the Solidarity Center 
in conjunction with the AFL-CIO.  Solidarity Center, not 
present at this meeting, would have painted a different 
picture of labor activities in the EPZs under the new law. 
It is not clear who has the stronger case.  Either way, 
industrial relations in Bangladesh are having growing pains 
and the dispute at this one factory shows the pitfalls in the 
transition to full worker rights to organize and bargain 
collectively in the EPZs.  End comment. 
CHAMMAS