Sri Lanka unions threaten indefinite strikes over pension plan

Tue May 31, 2011 10:36am EDT

* Unions say govt trying to force pension change

* More than 200 injured in Monday's clash

* BOI closes main free trade zone for 2nd day

By Shihar Aneez and Ranga Sirilal

COLOMBO, May 31 (Reuters) - Sri Lanka's major trade unions threatened on Tuesday continuous strikes unless the government scraps a proposed private pension fund, a day after thousands of workers clashed with police to protest against the retirement scheme.

Although President Mahinda Rajapaksa's ruling party suspended the pension bill temporarily on Monday after the violence, unions said the move was merely a delaying tactic.

Police and thousands of protesters clashed on Monday at a free trade zone near Sri Lanka's only international airport, 33 km (20 miles) north of the capital, Colombo, in the first big union action since the end of 25-year civil war in 2009. [ID:nL3E7GU1PW]

"We will go for indefinite strike until the government totally withdraws this bill," said Amarapala Gamage, leader of one of 26 unions representing about 500,000 workers which have united under the Joint Trade Union Alliance.

Police, hospital and union officials said about 200 people including police officers were wounded in the clashes, which involved rock-throwing by protesters answered by tear gas and gunfire by the police. Most injuries were minor.

Unions, many linked to the Marxist Janatha Vimukthi Peramuna (JVP) opposition party, have traditionally been influential in Sri Lankan politics, and been a bellwether for unrest. Rajapaksa has managed to keep them largely sidelined.

Strikes could cripple Sri Lanka's $50 billion economy at a time when the government is doing its best to boost sagging foreign direct investment despite enjoying a third full year of peace, and generate record growth of 8.5 percent this year.

"TRYING TO STEAL"

Workers again took to the streets on Tuesday at another free trade area in Biyagama, about 20 km (9 miles) from Colombo, after the government closed the one near the airport until Thursday to restore peace among its 50,000 workers.

"We are against this scheme, the way they are bringing it in is not acceptable," said 42-year old Ajith Premalal, a worker at money printing firm De la Rue's plant. "The government is trying to steal workers' money by this bogus pension scheme."

Both employees and employers have opposed the plan, which would mean workers have to wait longer to access their savings and would add more costs to employers.

"Why is the government trying to impose this bill by force if this is good and beneficial?" Gamage told a news conference.

Rajapaksa met trade unions who support the bill at the Finance Ministry.

"Until such time as it is marketed properly and we've shown that it addresses concerns, we will wait. It is not an urgent bill you need to do tomorrow," a senior government official who attended the meeting told Reuters on condition of anonymity.

Meanwhile, Rajapaksa has ordered an investigation into the violence at the free trade zone. Initially, unions had threatened to strike at all 12 of the Indian Ocean nation's free trade areas, all run by the state's Board of Investment. (Editing by Bryson Hull)

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