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Cablegate: Contested Election Between Textile Unions Will

VZCZCXRO0085
RR RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHNG RUEHNL RUEHQU
RUEHRD RUEHRS RUEHTM RUEHVC
DE RUEHME #0324/01 0361806
ZNR UUUUU ZZH
R 051806Z FEB 08
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 0405
RUEHC/DEPT OF LABOR WASHDC
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 04 MEXICO 000324

SIPDIS

SIPDIS

DEPT FOR DRL/AWH AND ILSCR AND WHA/MEX, DOL FOR ILAB

E.O. 12958: N/A
TAGS: ELAB ECON ETRD KTEX PGOV PHUM PINR MX
SUBJECT: CONTESTED ELECTION BETWEEN TEXTILE UNIONS WILL
PROBABLY END IN PYRRHIC VICTORY

REF: 07 MEXICO 5639


1. SUMMARY: In late 2007 the labor authorities in the
central Mexican state of Puebla organized an election to
determine which of three competing textile unions would
represent the workers at the Vaqueros Navarra blue jeans
factory. The election followed months of negotiations,
intense competition and often-credible allegations of threats
and intimidation from the employer and from the three
competing textile unions. Because of allegations of the
systematic abuse of worker rights, the situation at the
Vaqueros Navarra plant became the focus of attention of US
labor unions, of numerous internationally known American
clothing brands, as well as of NGOs from all three NAFTA
countries. The election arranged by the Puebla,s labor
authorities was held under conditions that were far from
ideal and completely at odds with a well-organized
international letter writing campaign. These factors
notwithstanding, the election was consistent with standard
(although often criticized) procedures under Mexican law.
What was not standard in this case was the presences of a
team of outside observers composed of representatives of
Canadian and Mexican NGOs as well as Mission Mexico,s Labor
Counselor. Ultimately, the union tacitly supported by the
American brands won the election. Sadly, this victory will
almost certainly be a pyrrhic one since in late December the
factory &temporarily8 closed and then in mid January
Vaqueros Navarra,s owners claimed a lack of new orders would
force them to permanently close the plant. END SUMMARY.


BACKGROUND
----------

2. In mid-2007 a pre-existing labor dispute at the Vaqueros
Navarra blue jeans plant in the southern Mexican state of
Puebla began to intensify. Vaqueros Navarra is one of 14
factories in Puebla owned by the Grupo Navarra, a major
producer of denim for such US major brands as The GAP,
Levi,s, American Eagle, Abercombie & Fitch, Tommy Hilifger,
Land,s End Old Navy and others. The origin of the dispute
is a claim by the workers that the company failed to abide by
the terms of a profit sharing agreement. In addition to the
disagreement over profit-sharing, according to Verite, the
independent non-profit organization which monitors
international labor rights abuses in off-shore production
sites, the NGO found credible evidence to indicate that the
company engaged in forced overtime, pregnancy testing,
abusive treatment of workers, safety and health violations
and numerous freedom of association issues.

3. Officially, the workers at the Puebla Vaqueros Navarra
plant were represented by the CROC (Revolutionary
Confederation of Workers and Peasants) labor union. The CROC
is perhaps Mexico,s third largest federation of labor
unions. At the national level, the CROC is a labor
organization with legitimate accomplishments in gaining and
protecting worker rights but, like many institutions in
Mexico and elsewhere, it has its bad elements. In the case
of the Vaquero Navarra plant in question it appears the CROC
all but ignores its responsibility to represent the interests
of the members and largely left the workers to fend for
themselves in their dealings with the company.

4. As the labor situation at Vaqueros Navarro deteriorated
the workers began to look for new union representation and
apparently settled on the September 19 Union. On July 10,
the September 19 union, which is affiliated with the UNT
(National Workers Union), Mexico,s second largest national
labor federation, filed with the Puebla state government
labor authorities to serve as the workers representative. At
roughly the same time another union the CROM (the Regional
Confederation of Mexican Workers), appeared on the scene and
petitioned the authorities for recognition as the workers
representative. The CROM is perhaps Mexico,s fourth largest
national level labor federation.


INTERNATIONAL ATTENTION
-----------------------


MEXICO 00000324 002 OF 004


5. The September 19 union has very close ties with the
Mexico City office of the AFL-CIO and most likely because of
this the situation at the Vaqueros Navarra plant became the
focus of considerable international attention. NGO,s like
the Maquila Solidarity Network in Canada and CEREAL (Center
for Reflection
and Labour Action) in Mexico also took up the cause and
together organized a sustained letter writing campaign
directed toward various levels of the state authorities in
Puebla. The letters petitioned for the protection of
labor rights for workers at Vaqueros Navarro and urged the
authorities to promptly arrange for a secret ballot election
at a neutral location so the workers could choose which of
the three unions they wanted as their representatives. Most
of the letters, including those from the offices of the
American brands mentioned above, tacitly indicated a
preference for the September 19 union. The US Department of
Labor also received numerous inquiries about this case and
therefore followed it closely.


(STATE) GOVERNMENT ACTION
-------------------------

6. As this case became the focus of international attention
Mexican federal labor authorities hastily made clear that
they had no jurisdiction in this matter and that it was up to
the Puebla state government to deal with the Vaqueros Navarra
situation. Over the course of a series of visits to Puebla
Mission Mexico,s Labor counselor had multiple meeting with
the state,s Secretary of Labor, Jose Antonio Lopez Malo, and
senior members of his staff on the situation at the Vaqueros
Navarra plant. The Puebla labor authorities were extremely
open and appeared genuinely concerned with quickly reaching a
negotiated settlement regarding which of the three competing
unions would represent the workers at Vaqueros Navarra.

7. Notwithstanding the Puebla authorities, obvious desire
to resolve the union representation question, it quickly
became clear that they were equally (if not more) concerned
with scrupulously following the letter of Mexican Federal
Labor Law regarding the where, when and how of the union
elections. For example, as Mexican law does not require
secret ballots in union elections, and two of the competing

SIPDIS
unions were strongly against them, the Puebla Secretary of
Labor stated that he did not have the authority to impose
this method of voting. The Secretary and his staff also
insisted that Mexican law mandated that the election take
place at the factory with representatives from the company
and all three competing unions present as the workers casts
their votes.

8. With regard to selecting union representation, Mexican
Federal Labor Law allows the workers at any company to change
unions at any time whenever a majority of those workers
petition to do so. In theory, this petition process is
relatively simple. In practice, changing from one union to
another is a contentious process during which coercive
methods can and often are used to influence workers, votes.
Credible accounts of systematic intimation by the company and
two of the competing unions were presented to Mission
Mexico,s Labor Counselor by current and recently fired
Vaqueros Navarra workers during a trip to Puebla organized by
a representative of the AFL-CIO,s Mexico City. During a
subsequent visit to Puebla, Post,s Labor Counselor related
these accounts to the state,s Labor Secretary, Lopez Malo,
and his staff and received in return their assurances that
once the election took place arrangements would be made to
protect the workers and maintain the integrity of the union
election.


THE WORKERS FINALLY VOTE
------------------------

9. As a results of negotiations organized by Puebla,s labor
authorities an agreement was reached to hold an election on
November 23. A representative for the September 19 union and
Secretary Lopez Malo himself contacted Mission Labor

SIPDIS
Counselor and requested that he serve as a part of a team of
election observers. The other members of the team agreed to
by all three unions were a representative from the Canadian

MEXICO 00000324 003 OF 004


based NGO Maquila Solidarity Network and one from the Mexican
based NGO CEREAL.

10. The election itself was rigidly control by the Local
Conciliation and Arbitration Board at the Vaqueros Navarra
plant during normal working hours. The Board reports to
Labor Secretary Lopez Malo,s office and he had clearly
instructed them to be on their best behavior. His office
also arranged for a detachment of state police to be present
outside the factory to maintain order on election day. The
election took place at an extremely deliberate pace and the
workers were required to cast their ballots in front of their
employers, the three competing unions, numerous Board
officials and the Team of observers.

11. To the credit of Board and Secretary Lopez Malo, state
authorities ensured that all workers present who were legally
entitled to vote, even those who had been recently laid off
or fired, were allowed to do so. Mexican law states that
only those workers actually employed at the start of a labor
dispute can participate in a union election. The law states
that even workers subsequently fired are entitled to vote and
the Board officials allowed some 20-30 recently fired workers
to enter the factory and cast their ballots. This action
occurred over the objections of the Vaqueros Navarra
factory,s lawyer and the representatives of the CROM. The
final election results were: September 19 Union ) 263
votes; CROM ) 178 votes; CROC ) 3 votes.


THE ELECTION WAS WON BUT THE BATTLE WAS PROBABLY LOSS
--------------------------------------------- --------

12. Following the election post,s Labor Counselor met with
the Board Officials and with some of the 178 workers who
voted for the CROM. The Board officials explained that the
results of the election would not be made official for at
least a week and probably more. During that time any party
in the election would be able to file formal objections
and/or appeals regarding the election process. Lawyers for
both the CROM and the September 19 Union left no doubt that
they planned to see each other in (Labor) court. The CROC,
which had been the official union of record, quietly accepted
its defeat as gracefully as it could.

13. The legal arguments of the lawyers for the CROM and
September 19 Union seemed fairly standard and great cause for
being overly concerned. What was troubling however were
Labor Counselor,s conversations with some of the workers who
voted for the CROM. These workers repeatedly expressed
their fears that the winning union would insist that they be
fired. They also alleged that in the lead up to the election
they had be threaten and verbally abused by members of the
September 19 union. Labor Counselor encouraged the concerned
workers and the CROM officials to immediately convey their
fears and their version of events to the proper authorities.
In a subsequent conversation with officials of the victorious
September 19 union and the other members of the observer team
Labor Counselor shared with them the concerns of the workers
who voted for the CROM. The September 19 union categorically
denied the allegation. However, the allegations and denials
were no different than those made by them against the CROM
and the CROC which were in turn categorically dismissed with
equal vigor by post,s Labor Counselor specifically asked
these two unions about the allegations.

14. In mid December Puebla,s labor authorities officially
declared the September 19 union the winner of the Vaqueros
Navarra election. This declaration was followed almost
immediately thereafter by the mass resignation of the 178
workers who had voted for the CROM. These employees claimed
they feared for their safety now that the September 19 union
was the legal representative of the Vaqueros Navarra workers.
At the same time, the entire Vaquero Navarra factory was
&temporarily8 closed for what was supposed to be several
weeks while the company awaited new orders. When asked about
this temporary closing by Mission Labor Counselor, the
Vaquero Navarra factory,s lawyer replied that it was
standard practice for the denim plant to close for about four
weeks each year beginning in mid December. However, when the
four weeks pasted Vaqueros Navarra,s owners announced that
no new orders had come in and they would probably be forced

MEXICO 00000324 004 OF 004


to permanently close the factory.


COMMENT
-------

15. It now seems clear that the September 19 union,s
electoral triumph at the Vaqueros Navarra factory was a
pyrrhic victory since it appears a certainty that the company
will permanently close. There is no doubt that the September
19 Union was the preferred choice of the majority of the
workers but their electoral victory was by no means a
landside and a large minority of workers preferred to have
the CROM as their union representative. In the end the
Vaqueros Navarra workers divided into two groups that were
unable to cooperate with each other. This situation was then
followed by an announcement by the company,s owners that a
lack of new orders is forcing them to permanently close the
factory.

16. It is not entirely clear that this announcement by the
owners is true since a major US clothing brand contacted
Mission Labor Counselor directly in December to ask about the
situation at Vaqueros Navarra. The US brand did not
specifically state an intention to send new orders to
Vaqueros Navarra but clearly it was considering taking such
an action. It is certainly possible that no new orders ever
arrived at the Vaqueros Navarra plant and the company,s
owners may have had no choice other than to close the
factory. However, it is equally possible that they chose
close the factory and send any new orders to one of their
other businesses rather than deal with a sharply divided and
then significantly reduced work force represented by a union
they knew they could not control.


Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North American
Partnership Blog at http://www.intelink.gov/communities/state/nap /
GARZA

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