Cablegate: Ecuador Labor Update

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





E.O. 12958: N/A


B. QUITO 2614

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

--MOL to Consult Unions on Subcontracting Decree (para. 2)
--Rules Proposed for National Labor Council (3)
--MOL Computers for Child Labor Inspectors (5)
--National Campaign to Eliminate Child Labor in Trash Sector
--Public Sector Protests Salary Standardization (9)
--Strike Affects 120 Hospitals (11)
--Galapagos Park Strike Ends (12)
--Illegal Peruvian Migrant Workers Deported (13)
--Profit Sharing Benefits Selected Workers in 2003 (14)
--Unemployment and Informal Sector Stats (15)

MOL to Consult Unions on Subcontracting Decree

2. (SBU) The Minister of Labor told LabOff on September 29
the decree will be signed no later than October 1 by the
President and published officially the following week.
Patricio Contreras of the Solidarity Center (AFL-CIO) told
LabOff that Minister of Labor Izurieta will meet with unions
again regarding the draft subcontracting decree on September

Operating Rules Proposed for National Labor Council
--------------------------------------------- ------

3. (U) According to the Sandra Jacomi, assistant to Minister
of Labor Raul Izurieta, the National Labor Council has met
three times since its creation in July. Council members have
been named. On September 9, the ILO and the Chambers of
Commerce and Industry separately proposed operating rules for
the National Labor Council but these are still being studied
and have not been approved yet. The MOL has yet to name the
Technical Secretariat who will staff the National Labor
Council. The ILO has proposed a profile for members of the
Technical Secretariat.

4. (U) The Minister proposed on September 27 that Labor Code
reform be one of the themes to be discussed in the Council.
This includes the issues of company retirement and hourly
work. There are no proposals pending from the union or
business sectors on Labor Code reform.

MOL to Provide Computers to Child Labor Inspectors
--------------------------------------------- -----

5. (U) Jenny Cepeda, Technical Secretary of the Division of
Child Labor in the MOL, told LabOff on September 27 the MOL
is acquiring computers for the child labor inspectors which
should be in place by mid-November. She said the MOL has set
aside $2000 a month for transportation funds for the
inspectors. Currently, two child labor inspectors use the
Institute of the Child and Family (INNFA) offices in Los Rios
and El Oro. Four inspectors use INNFA vehicles in Guayas, El
Oro, Los Rios and Pichincha. Bladimir Chicaiza of the ILO
told PolOff there is a critical lack of resources for the
rehabilitation of child workers. In Guayas, Los Rios and El
Oro provinces, he said, transportation is provided by the
Association of Banana Exporters.

6. (U) Ruth Mosquera, Director of the Division of Child
Labor in the MOL, told PolOff on September 28 that two child
labor inspectors had recently resigned. She said they will
work until the end of the month when they will be replaced.
Chicaiza said two training sessions have provided child labor
inspectors with adequate knowledge of the legal framework
related to child labor. He said there is willingness on the
part of the MOL to offer further training to the inspectors.

7. (U) To confirm information in Ref A regarding inspections
of Dole banana plantations, PolOff spoke on September 27 with
Juanita LaRosa, the child labor inspector for Guayas
province. LaRosa said that 18 out of the 55 banana farms she
has inspected in Guayas since August 2004 have belonged to
Dole (around 33%). She said this is because they are located
close together and the MOL conducts inspections by geographic
zone. LaRosa said that there are 50 Dole farms in this zone.
Patricia Paez, Undersecretary in the MOL for the Coastal
Region told PolOff on September 27 that all companies are
getting equal treatment. Patricia Hoyos of UNICEF told
PolOff on September 29 she believes the inspection sites are
being selected impartially. Hoyos said there is no way for
the inspector to know who the owner is of the haciendas
marked on inspection maps.

National Campaign Focuses on Children

8. (U) Press reported that on September 23, the second phase
of a national campaign "Child Hope" began which aims to gain
public support for eliminating child abuse. The first phase
of the campaign, developed by UNICEF, focused on eliminating
child labor in the trash sector by creating 25
micro-enterprises generating family income, educational
scholarships and health services.

Public Sector Protests Standardization of Salaries
--------------------------------------------- ------

9. (U) Patricio Contreras of the Solidarity Center (AFL-CIO)
told LabOff on September 27 that various public sector
workers were considering protesting the January 2004 Civil
Service Law on standardizing public sector salaries. The law
was proposed by the GoE as part of the last agreement with
the IMF. The National Confederation of Public Workers
(CONASEP) along with electrical, petroleum,
telecommunication, health and municipal workers is
participating and Ministry of Government workers announced
they would strike if the law is not overturned by the
Constitutional Court. On September 29, the Court ruled the
law was constitutional.

10. (U) Unions are against the law because it sets maximum
salaries that limit collective bargaining. The law also caps
severance for fired workers at a maximum of $1000 per year of
service. The law also adds new requirements for collective
bargaining by stating that parties must have the approval of
the Ministries of Finance and Labor as well as the Prosecutor
General to begin collective bargaining.

Health Workers Strike - 120 Hospitals Affected

11. (U) Press reported that health workers held a 48-hour
work stoppage September 27-28 to demand respect of the 2005
budget and the signing of a ninth collective bargaining
agreement. The strike affected 120 hospitals and 14,059
health workers participated. The agreement would provide
higher wages, better work stability and overtime pay. If no
solution is reached by October 4, health workers have
threatened an indefinite strike.

Galapagos Park Workers Strike Ends

12. (U) On September 28, the 19-day strike of 250
non-unionized workers in Galapagos National Park ended after
Minister of Environment Fabian Valdivieso replaced Fausto
Cepado with Victor Carrion as Park Director (Ref B). The
Ministry of Environment agreed to issue individual work
agreements with the park employees, a demand of the
association of park workers. Park worker Carlos Macias
stated to the press that the Government had also promised
$700,000 for wage increases.

Illegal Peruvian Workers Detained

13. (U) On September 13, Immigration officials detained 118
Peruvians for violating conditions of the Andean Migration
Card to work on the sugar plantation Hacienda Sausalito in
Guayas province, according to press reports. The Peruvian
workers claimed they had worked twelve hour days, seven days
a week for $130 a month. The workers were deported to Peru
on September 16.

Profit Sharing For Some Workers in 2003
14. (U) Press reported that, according to the Ministry of
Labor, in 2003, 3,518 companies distributed $102.2 million to
160,193 employees as mandatory 15% profit-sharing as required
under the Labor Code. This represented a six percent
decrease in payments compared with 2002. According to
Ecuadorian law, 10% of a company's profits must be
distributed to employees and 5% goes to employees' families.
The largest sum paid to a single worker was $66,616 and eight
companies paid out over one million dollars to their workers.
The portion going to women increased by 129 percent from
1997 to 2003. In 2003, 51,861 women received $25.1 million
in profit sharing.

Unemployment and Informal Sector Statistics

15. (U) The press reported that, according to the Central
Bank of Ecuador, unemployment in Ecuador has risen from 9.3%
in December 2003 to 11.53 percent in May 2004. According to
the National Institute of Statistics and Census (INEC), 1.5
million Ecuadorians are currently employed in the informal

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