Cablegate: Ecuador Labor Update

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 QUITO 003153

SIPDIS

SENSITIVE

SECSTATE PLEASE PASS TO US TRADE REPRESENTATIVE

E.O. 12958: N/A
TAGS: ELAB PGOV EC
SUBJECT: ECUADOR LABOR UPDATE

REF: QUITO 2642

1. (U) Summary: Following are recent labor-related
developments of interest:

--Changes at the MOL (para. 2)
--MOL Izurieta Meets With Congress' Paez (3)
--Chamber of Commerce Challenges Subcontracting Decree (5)
--Hunger Strike by Public Sector Workers (6)
--Penitentiary and Health Worker Strikes (7)
--ILO Reaches Out To Unions (9)
--MOL Working on Child Labor Issues (10)
--CRS DOL-Funded Child Labor Project Underway (12)
--Former Petroecuador Workers Remain Jobless (13)
--Immigrants Vulnerable to Employer Abuse (14)

Changes at the MOL
------------------

2. (SBU) At a December 2 meeting, Ministry of Labor (MOL)
Finance Director Genny Velez told LabOff the MOL will be
reorganized starting in January 2005. The Ministry will be
renamed the Ministry of Labor and Employment, and will get
computers for every office, including a computer for every
labor and child labor inspector. The MOL will also begin
publishing a regular statistics bulletin. (We have been
urging this to complete our reporting requirements.) Velez
said that during a conference in Cancun, she had visited
Mexican job banks and would like to promote the same in
Ecuador. Velez requested USG assistance in bringing Mexican
experts to advise on this project. We will investigate
options within the Mission and Washington agencies.

MOL Izurieta Meets with Congress' Paez
--------------------------------------

3. (SBU) Velez said she and Minister of Labor Raul Izurieta
had met with Andres Paez, President of the Labor Commission
in Congress, earlier on December 2. According to Velez,
Izurieta and Paez discussed labor reform, particularly of
some specific issues raised in the National Labor Council
such as eliminating or reforming mandatory company retirement
schemes and setting a maximum number of days for strikes.
They also discussed the subcontracting law proposals
currently under review in Congress. Velez said Paez will
raise the proposals at the next session of the National Labor
Council. As far as we know, this would be Paez's first
invitation to attend a National Labor Council meeting.

4. (SBU) In a December 1 meeting, Paez told PolChief and
LabOff he had already unified the four subcontracting law
proposals in Congress. Paez also requested funds for
computers and other equipment for the new oral system in the
labor courts. By all accounts, the oral system has been very
successful, reducing the average time of a labor trial from
2-3 years to 2-3 months, and will be implemented in other
courts. We hope to be able to contribute to the reform's
continued success and are investigating possible funding
sources.

Chamber of Commerce Challenges Subcontracting Decree
--------------------------------------------- -------

5. (SBU) Alberto Dassum, President of the Chamber of
Industry of Guayaquil, informed EconOff on November 18 that a
constitutional challenge to the presidential decree on
subcontracting had been submitted to the Constitutional
Court. Dassum said the Chamber had argued that the decree
establishes obligations and restrictions that limit
individual rights, and introduces regulations not covered in
the labor code, both violations of the Constitution. Dassum
said the Chamber would also try to convince the Labor
Minister to modify the decree.

Hunger Strike by Public Sector Workers
--------------------------------------

6. (U) On October 14, 41,000 public servant workers in the
Ministries of Education, Agriculture, Environment,
Government, and Commerce went on strike demanding a $100
million 2005 budget to fund a public sector unified salary
structure approved by Congress in September 2003. Eight
public servants went on a hunger strike on November 16 to
pressure Congress to approve the requested funds. On
November 30, Congress approved a total of $60 million, $30
million more than the $30 million the Government had
originally proposed to finance salary unification. Of the
additional $30 million, $10 million will come from the
Ministry of Economy and $20 million will come from unrelated
cuts in personnel costs. Public sector workers, however,
continue to protest. Press reported that the Government
planned to offer 5,000 retirement packages in 2005 to reduce
the budget for salaries, funded with a $100 million dollar
loan from the Inter-American Development Bank (IDB).

Penitentiary and Health Worker Strikes
--------------------------------------

7. (U) In other strike action, penitentiary workers from 34
prisons nationwide went on strike November 26 to push
Congress to approve $78 million for their 2005 budget. The
Government had only approved $25 million.

8. (U) Meanwhile, approximately 14,000 health workers went
on strike October 4 to demand the signing of a two-year
collective bargaining contract which would take effect
January 1, 2005. This was not a total or national strike, as
some workers were not in favor of striking. The strike was
suspended in early November, but health workers have
announced they may strike again in December if the pact is
not approved.

ILO Reaches Out to Unions
-------------------------

9. (SBU) On November 19, unions attended a meeting of the
National Labor Council on November 18 where ILO Lima's
Ricardo Hernandez Pulido gave a presentation on generating
employment. Child labor ILO director in Ecuador Magne
Svartbekk also held meetings with the leaders of all five
union confederations encouraging them to stay engaged with
the Council despite their misgivings about the Labor
Minister's credibility.

MOL Working on Child Labor Issues
---------------------------------

10. (U) Starting in early November, MOL-produced commercials
with a child labor awareness message began airing on
Ecuadorian television. According to Dr. Ruth Mosquera of the
MOL's Child Labor Division, two spots will air for a total of
three months. The message of the first ad is to respect the
rights of working adolescents over 15. The message of the
second is to eliminate child labor. The MOL is also planning
a series of regional training workshops for those who monitor
child labor inspectors. Representatives from NGOs, union,
and other organizations accompany child labor inspectors to
prevent corruption. The workshops will begin on December 15
and are scheduled for Quito, Guayaquil, and Cuenca. Mosquera
said the MOL, in coordination with the ILO, held a workshop
November 30 to increase child labor awareness among 40
businessmen and women in the flower sector.

11. (U) According to a report presented by the ILO on
October 9, Ecuador, Guatemala, and Honduras have the highest
rates of child labor in Latin America. In Ecuador, 41% of
adolescents between 15 and 17 work while 15% of children 5
through 15 work. In the Andean region, 60% of child labor is
in the agricultural sector.

CRS DOL-Funded Child Labor Project Underway
-------------------------------------------

12. (U) Catholic Relief Services (CRS) has hired key staff
for the $3 million USDOL-funded child labor project awarded
in September. Thus far, they have hired a Director
(Alexandra Moncada), Education Specialist (Patricio Cajas),
Evaluation Specialist (Luis Stacey from CARE), and one
technical support person. CRS will be meeting on December 7
with a consultant, Donald Spears of Management Systems
International, hired by USDOL to develop their operational
plan. CRS plans to inaugurate the project in the first
quarter of 2005.

Former Petroecuador Workers Remain Jobless
------------------------------------------

13. (SBU) LabOff met with Mario Escobar, former state
petroleum company worker on October 5 at Escobar's request to
discuss the 2003 firing of Petroecuador workers. Employees
of the parastatal petroleum company claim they held peaceful
meetings in June 2003 to protest against the new Minister of
Energy and did not disrupt oil production. The Minister of
Energy assumed direct control of oil production with support
of the Armed Forces and accused the workers of sabotage and
terrorism. The Acting Vice Minister of Labor then gave the
Energy Minister permission to fire the 33 workers without
compensation. In August 2004, the Supreme Court found the
workers innocent of the charges. Twenty workers are filing
court cases to receive indemnization since under the labor
code reinstatement is not required for illegally firing
workers engaged in union activity.

Immigrants Vulnerable to Employer Abuse
---------------------------------------

14. (U) Press reported that day laborers from Colombia and
Peru receive lower wages and worse working conditions than
their Ecuadorian counterparts. Foreign workers seek
employment in Ecuador to earn higher wages. Luis Urgiles,
human rights ombudsman for Azuay province, publicly claimed
that Peruvian workers in the region do not make formal
complaints despite receiving bad treatment from employers.
KENNEY

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