US embassy cable - 03SANTODOMINGO6580

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 006580 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR WHA/CAR (MCISAAC), WHA/PPC (ROE) DRL/IL (WILSON) 
DOL JORGE PEREZ-LOPEZ, DOL CARLOS ROMERO 
STATE PASS USTR (CLATANOFF) 
 
E.O. 12958: N/A 
TAGS: ELAB, ETRD, KCRM, PHUM, DR 
SUBJECT: CAFTA LABOR TEAM VISITS DOMINICAN REPUBLIC 
 
REF: SANTO DOMINGO 4990 
 
1. (U) Summary.  On November 5-7 an inter-agency team 
discussed labor issues with the Dominican Republic in advance 
of free trade negotiations. In meetings with the Minister of 
Labor, leaders in Congress, civil society, employer 
federations and emboffs, team leader Assistant USTR Clatanoff 
stressed issues of freedom of association in free trade zones 
and trafficking in persons (specifically child prostitution 
and mistreatment of Haitian migrants).  Delegation members 
said the visit was useful and reassuring.  Labor unions and 
government reps told them a free trade agreement will 
mutually benefit partners and bolster respect for workers 
rights.  End Summary. 
 
CAFTA LABOR DELEGATION: FIRST VISIT TO DR 
 
2. (U) Assistant USTR for Labor Affairs William "Bud" 
Clatanoff led a USG inter-agency team to the Dominican 
Republic November 5-7 to review labor issues in preparation 
for negotiations on a free trade agreement.  Other members 
were Jorge Perez Lopez, Associate Deputy Under Secretary of 
Labor; Charlotte Roe, Senior Labor Advisor (WHA/PPC), Arlen 
Wilson, DRL/IL Deputy Director; and Carlos Romero, DOL 
economist. In preliminary comments to the Ambassador and 
emboffs, Clatanoff said that the text of the Dominican Labor 
Code appeared to be acceptable but the team needed to know 
more about standards of enforcement.  The different minimum 
wage structures in free trade zones and elsewhere in the 
country were a point of investigation (a concern was 
alleviated in later meetings -- see para 6). 
 
CONGRESS: GLAD TO BE OF SERVICE 
 
3. (U) House of Representatives Chairman Alfredo Pacheco and 
Senate President Jesus Vasquez said in separate meetings that 
they looked forward to close collaboration.  Pacheco did 
caution, however, that the free trade agreement would be 
finalized before any changes to the existing Labor Code 
(approved in 1992).  He said the country needed more time to 
fully implement it.  As for allegations of worker rights 
abuses in the free trade zones, Pacheco responded "this is an 
old problem."  He pointed to the success story of the Leon 
Jimenez company, which in his opinion has paved the way in 
developing top-notch worker benefit programs. 
 
4. (U) Both congressional leaders commented that a free trade 
agreement will promote increased respect for workers' rights. 
 Clatanoff stressed that the U.S. Congress is deeply 
concerned issues of trafficking in persons and child 
prostitution.  Pacheco cited the recent passage of a 
comprehensive law against trafficking in record time.  Both 
Pacheco and Vasquez spoke highly of Minister of Labor Milton 
Ray Guevarra, especially regarding the Ministry's efforts to 
eliminate the worst forms of child labor.  Vasquez commented 
that Ray Guevarra, having been a Senator, can appreciate the 
approach of the U.S. Congress to evaluating a free trade 
agreement.  Pacheco summed up, saying he was "glad the U.S. 
Government is so concerned with so points; the average 
Dominican thinks that the U.S. does not care about them." 
 
MINISTRY OF LABOR: A DEPENDABLE PARTNER 
 
5. (U) Minister of Labor Milton Ray Guevarra, favorably known 
to majority of the delegation, assembled top advisors to 
brief the CAFTA labor team.  These included his wife (a 
candidate for the post of Ombudsman), an Assistant Secretary 
for general matters, the Director General for Labor, the 
Assistant Secretary in charge of child labor programs, the 
Director of Inspections, the Director of Mediation and 
Arbitration, and President Mejia's labor attache.  The 
Minister thanked the USG for its support, especially that of 
DOL.  He said his key objectives were eradicating child labor 
and social security reform.  Ray Guevarra cited the new law 
against trafficking and the launch of the Time Bound Program 
as tools to address commercial sexual exploitation of minors 
(reftel).  He emphasized that he and President Mejia strongly 
believe that a free trade agreement will strengthen and 
promote workers' rights. 
 
6. (U) The delegation asked about Labor Code enforcement. 
Minister Ray Guevarra informed the delegation that, like the 
Central American countries, the GODR had asked the ILO to 
study its labor laws and practices.  He said the labor code 
applies to all workers, Dominican citizens and foreign 
nationals -- including illegal or undocumented residents. 
The ministry thoroughly investigates any complaint. (Note: 
Trade union leaders and NGO activists confirmed this in 
separate meetings, but also pointed out that most Haitian 
migrant workers do not make complaints because they fear 
deportation.  End Note).  The minister acknowledged that 
abuse of foreign workers does occur, but this could not be 
attributed to a flawed labor code. 
 
7. (U) Ray Guevarra noted that 92% of cases that reach labor 
courts are decided in favor of workers.  As for minimum wages 
scales, these are determined by sector, profession and 
locale, since the cost of living varies significantly among 
the 31 provinces.  To address current inflation -- 
approaching 35 percent annually -- the National Committee for 
Salaries has approved an across the board 25% increase in 
minimum wages to be fully implemented by all companies by 
January 2004. 
8. (U) The Director General for Labor said the Ministry of 
Labor has been investigating allegations of abuses in the 
free trade zones, particularly in a case involving a Grupo M 
plant in Santiago.  The Ministry works closely with the 
National Council of Free Trade Zones on such allegations.  In 
two instances, company export licenses were suspended as 
punishment.  The Ministry pays for the services of more than 
50 defense lawyers for a major trade union, FENATRAZONAS 
(National Federation of Workers in Free Trade Zones).  There 
are 3,564 registered unions in the Dominican Republic, 160 of 
them in free trade zones.  The DG noted that a collective 
bargaining agreement was signed in October in a free trade 
zone in Bonao (Note: Details to follow in Human Rights 
Report.  End Note). 
 
BUSINESS COMMUNITY: SLIGHTLY ON THE DEFENSIVE 
 
9. (U) Jeannette Dominguez Aristy, President of the National 
Council of Free Trade Zones, appeared defensive in answering 
questions about freedom of association in the zones.  She 
called the labor code "very strong."  Dominguez finds its 
extremely biased in favor of workers, many of whom are 
"misguided" by financial self-interest when they join unions 
or bring complaints against employers.  Regarding the Grupo M 
plant in Santiago, Ms. Dominguez defended the firm as 
"leading the movement to recognize workers rights in free 
trade zones."  She said that unions in Central American 
countries are worse off than those in the Dominican Republic. 
 In her 15 years of experience with free trade zones, 
Dominguez said, she has seen many positive changes, 
particularly because workers are engaged and not left out of 
the process. 
 
COMMENT 
 
10. (SBU) The CAFTA labor team said the visit was useful. 
Their highest marks go to the Ministry of Labor for several 
reasons: the request for an ILO study, the agreement of all 
sectors that the Ministry does pursue complaints, and the 
fact that the Mejia administration kept on board experienced 
Ministry officials from the previous administration.  Trade 
unionists came across as credible activists with a permanent 
presence in the labor process.  Clatanoff commented that "the 
rule of labor law is respected and functioning."  Also to 
note was the agreement across sectors about the prospective 
benefits of a free trade agreement.  Issues remain to be 
explored, including particularly those of undocumented 
Haitian workers, freedom of association in free trade zones, 
and trade unionists' concerns with recent social security 
legislation.  The team found that the GODR had responded with 
a willingness to address these and could use its positive 
relations with unions to do so.  End Comment. 
HERTELL