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TABADY(2)
CONFIDENTIAL
Background
Problems experienced by the Hong Kong and Shanghai Bank and
Standard Chartered Bank
1.
The Hong Kong Bank has had problems with a pay award for its
staff, determined by the Philippine Labour Department, and involving
a 38% increase over three years, mandatory loans to staff, and an
increase in non-contributory pensions provisions. The Bank say that
the award will make their operations in the Philippines
unprofitable. They are taking up the matter in the Philippine
Supreme Court. They have had a difficult year with their militant union, including harassment and a lock-in of management by pickets.
The Philippines have not taken any legal action against those
involved. Mr Purves, Chairman of the Hong Kong Bank, has suggested
that it would be helpful if the Secretary of State could intervene
in the matter. Standard Chartered Bank's Manila branch has
experienced similar problems concerning pay awards and have also expressed the hope that the Secretary of State should mention their
concern about Labour Ministry interference on the side of militant
unions.
2.
HMA Manila has mentioned the Hong Kong case to Concepcion and
Drilon and will touch on it when he sees Manglapus on 25 May. He
advises that Concepcion may be surprised if the subject is not raised, and that the point about the wider effect on investment
would come much more forcefully from the Secretary of State.
Joint Liaison Group
3. There are no specific Philippines angles on the implementation
of the Joint Declaration. We hope to approach the Filipino
authorities shortly with a draft Air Services Agreement to begin
separation negotiations.
Filipino Domestic Helpers
4.
There are over 37,000 foreign domestic helpers in Hong Kong of whom some 35,000 are from the Philippines. They are subject to
CONFIDENTIAL
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