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Cablegate: May 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 001005

SIPDIS

DEPT FOR WHA/AND, WHA/PPC, EB, AND DRL/IL. USDOL FOR JORGE
PEREZ-LOPEZ. GENEVA FOR JOHN CHAMBERLIN. PLEASE PASS USTR
FOR A/USTR CLATANOFF, V. LOPEZ AND B. HARMON.

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

REF: QUITO 634

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

--Unions Make Demands to New Government (para. 2)
--New Minister of Labor Still Not Named (4)
--Presidential Decree to Remove Bureaucrats (5)
--New Unions Registering Independently (6)
--Judicial and Medical Workers End Strikes (7)
--Occupational Health and Safety Problems Underreported (9)
--Flower Social Forum Created (10)
--Economic Reform Struck Down in Congress (11)
--Union Blacklisting on Banana Plantations (12)
--Highest Rate of Labor Conflicts in Guayas (13)
--Former FM Reveals Mother Hired Underpaid Colombians (14)

Unions Make Demands to New Government
-------------------------------------

2. (U) During their march to celebrate International Workers
Day on May 1, workers asked President Alfredo Palacio's new
government to call for a referendum on the free trade
agreement, name a pro-labor Minister of Labor, repeal the
decree on hourly work, and review the decree on
subcontracting (both decrees were signed by former President
Gutierrez). Unions are asking for two specific changes to
the subcontracting decree: the lowering of the maximum
percentage of workers that can be subcontracted (currently
75%) and a clause stating subcontracting can only be used for
temporary jobs.

3. (U) There were approximately 3,000 workers who marched in
Quito on May 1, however, only about 500 gathered to hear
speeches by union leaders. In his remarks, Jaime Arciniegas,
head of the largest union confederation CEOSL, said the
Ministry of Labor needed structural reform. Mesias Tatamuez,
head of the group of union confederations FUT, asked for a
referendum on the free trade agreement and for the ending of
the agreement which allows USG use of Ecuador's Manta air
force base. In the city of Ambato, over 2,500 workers
marched asking President Palacio to review the free trade
agreement. In Guayaquil, 12 workers associations marched.
There were 3,000 marching in Cuenca, who also used the
opportunity to criticize Congress. Labor unions
(approximately 200 people) also marched in Quito on April 5
to protest the March 18 hourly work decree.

New Minister of Labor Still Not Named
-------------------------------------

4. (SBU) As of May 3, President Palacio had yet to name a
Minister of Labor. An Embassy source told LabOff that unions
had proposed two candidates: Galo Chiriboga, President of
the National Association of American Jurists, and Julio Cesar
Trujillo, a law professor at Quito's Catholic and Central
universities. Business groups had proposed Fabian Corral, a
law professor at Quito's San Francisco University. Roberto
Gomez, a former Minister of Labor under President Borja, is
reportedly the Palacio government's preferred candidate,
however, some think he is too close to the Democratic Left
party. Palacio has said none of his Ministers will be
affiliated with any particular political party.

Presidential Decree to Remove Bureaucrats
-----------------------------------------

5. (U) In one of his first official acts, President Palacio
signed a decree calling for the dismissal of all contractual
public servants hired since 2003. The decree would remove
8,727 bureaucrats from their posts, some of them political
appointees.

New Unions Registering Independently
------------------------------------

6. (U) Of the 51 new labor unions registered in 2003, only
11 were affiliated with CEOSL, the largest union
confederation in Ecuador, nine affiliated with other union
confederations, and 31 registered independently. According
to the Ecuadorian Statistics and Census Institute, in 2003,
60.2% of all workers were employed in companies with one to
five employees, effectively denying them the right to
unionize, which requires 30 workers in any one enterprise.
Guillermo Touma, acting president of CEOSL, told press on May
2 that allowing industry-wide unions would strengthen the
labor movement in Ecuador.

Judicial and Medical Workers End Strikes
----------------------------------------

7. (U) Judicial workers ended their 35-day strike on April
18 after the pro-Gutierrez Supreme Court was removed.
Regular judicial activities resumed on April 19. All 4500
judicial workers nationwide agreed to work an extra hour
daily without remuneration to address the backlog.

8. (U) Striking medical workers resumed work on April 26.
The workers have given the government 15 days to respond to
their demands of payment for work in excess of the regular
work day and salary raises based on education levels.

Occupational Health and Safety Problems Underreported
--------------------------------------------- --------

9. (U) The ILO estimates that there are 158,760 work
accidents and 18,900 cases of work-related illness a year in
Ecuador; few of these accidents are registered. In 2004,
3,486 work accidents were reported to the Ecuadorian Social
Security Institute (IESS), and 86 reported at the Ministry of
Labor. Only 86 work-related illnesses were reported in 2004.
Only a fifth of the population that should be registered to
receive benefits from the IESS is in fact registered,
according to Miriam Pozo of the Work Health and Safety
Division of the Ministry of Labor. The Ministry of Labor
estimates that 2,751 workers die from work-related causes in
Ecuador each year. The primary cause of work-related deaths
was cancer (32%), followed by circulatory illnesses (19%).

Flower Social Forum Created
---------------------------

10. (U) The Flower Social Forum, which will seek to combat
child labor in the flower sector, was created via ministerial
decree on March 10. The Forum will include representatives
from the Ministries of Labor and Agriculture, the National
Institute for the Child and Family, flower companies, ILO,
and UNICEF. The Forum has met informally and will have an
official launch ceremony in May

Economic Reform Struck Down in Congress
---------------------------------------

11. (U) The previous government's economic reform package
was unanimously rejected by Congress on April 7. Among the
law's proposals was the lowering of profit-sharing from 15 to
5% of company profits which are given to workers and their
families.

Union Blacklisting on Banana Plantations
----------------------------------------

12. (SBU) According to Guillermo Touma, president of the
FENACLE banana workers union, on February 6, workers at the
Josefa banana plantation in Los Rios province organized a
committee for the purpose of establishing a union. They
later submitted articles of incorporation and a petition of
complaints to the company. According to Touma, after the
workers did this, one of the plantations administrator's
Silvana Carrion Salazar, sent letters to several other local
plantations informing them of the workers' attempt to
organize a union and listing their names. Touma provided
LabOff with copies of Carrion's letter in which she stated
that she believed it necessary to share this information so
that these workers would not be able to "harm other
employers." Hiring discrimination against workers for union
activity is not illegal in Ecuador.

Highest Rate of Labor Conflicts in Guayas
-----------------------------------------

13. (U) Not surprisingly, Guayas province, home of Ecuador's
largest city, Guayaquil, had the most labor conflicts
registered in recent years. According to Ministry of Labor
data, between 1994 and 2003, Guayas had 336 cases of labor
disputes, compared with 217 in Pichincha (home to Quito) and
50 in Manabi provinces during the same period. 60% of
Ecuador's industrial sector is located in Guayas.

Former FM Reveals Mother Hired Underpaid Colombians
--------------------------------------------- ------

14. (SBU) Reflecting the Ecuadorian elites disregard for
minimum wage laws, Spanish newspaper "El Pais" reported that
former Foreign Minister Patricio Zuquilanda revealed in
public comments that his mother employed Colombian servants
on her farm, to whom she paid $70 a month (significantly
below the $150 minimum wage). MFA sources ridiculed
Zuquilanda for this gaffe, which they believed could only be
intended to aggrandize the status of Zuqilanda's family farm
to plantation status. A study conducted by "El Pais" found
that approximately 500,000 Colombians are now working in
Ecuador.
KENNEY

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