US embassy cable - 04TEGUCIGALPA238

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 000238 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR DRL/IL, EB/TPP, WHA/PPC, AND WHA/CEN 
STATE PASS USTR FOR AUSTR RVARGO AND WCLATANOFF 
STATE PASS AID FOR LAC/CEN 
DOL FOR ILAB 
 
E.O. 12958:  N/A 
TAGS: ELAB, ETRD, PHUM, ECON, PGOV, KJUS, PINR, HO, ILO 
SUBJECT:  Honduras and CAFTA Labor Track II: Ministry of 
Labor Seeks to Enforce Labor Law But Lacks Resources 
 
Ref: (A) Olsen/Wilson e-mail 01/16/04 
 
     (B) State 6145 
     (C) 03 Tegucigalpa 2283 
     (D) 03 State 257469 
 
1. (SBU)  Summary:  In Honduras, there is good will in the 
Ministry of Labor (MOL) in general and Minister of Labor 
German Leitzelar in particular to protect core labor rights. 
Honduran labor law, while deficient in some areas with 
respect to ILO core conventions, is not the main issue for 
the protection of labor rights.  The enforcement of existing 
labor laws is key.  However, the overall budget crunch in 
the GOH severely hampers the MOL's ability to do just that. 
Nevertheless, the MOL does aggressively investigate 
prominent cases brought to its attention by labor unions and 
has improved significantly under Leitzelar's leadership. 
End Summary. 
 
Tight GOH Budget Means Decline in MOL Budget 
-------------------------------------------- 
 
2. (U) LabAtt met January 15 with the new Vice Minister of 
Labor for the GOH, Ada Gabriela Mejia Mejia, a psychologist 
and previously a National Party (ruling party) congresswoman 
with whom LabAtt previously worked on TIP/child labor 
issues.  LabAtt emphasized the importance of GOH's 
aggressive enforcement of labor law and briefed her on DOL's 
ongoing support for the MOL.  She seemed to understand the 
importance of this issue, especially as it relates to 
approval of CAFTA by the U.S. Congress, but she noted the 
MOL's relatively paltry budget limits what the MOL can do. 
 
3. (U) Below is a chart of the MOL's budget for the last 
several years, minus money that passes through the ministry 
for budgetary/organizational reasons but that does not fund 
MOL activities.  The lempira data comes from the MOL.  The 
dollar conversion and comparisons with previous years' 
figures are Post's calculations using exchange rates 
(lempiras/USD) as of January 1 of each calendar year. 
 
CYear     Budget (lempiras)   Budget (USD)   Exchange rate 
--------------------------------------------- ------------- 
2001      56,059,600          3,732.330      15.02 
2002      61,033,900          3,849,748      15.854 
2003      75,657,360          4,481,540      16.882 
2004      72,110,700          4,051,743      17.957 
 
4. (U) As one can see, after shooting up an impressive USD 
631,792 (16.4 percent) from CY2002 to CY2003, which was the 
first budget under the Maduro Administration, the budget was 
cut by USD 429,797 for CY2004, wiping out 68 percent of the 
CY2003 budget boost.  The cuts were part of an across-the- 
board reduction in government expenditures needed to reduce 
the budget deficit to a manageable level (and obtain an IMF 
program).  Post estimates the GOH allocated only 0.2 percent 
of its total expenditures (including foreign assistance) to 
the Ministry of Labor in 2002, including salaries of MOL 
employees. 
 
GOH Aggressive on Inspections But Needs Help 
-------------------------------------------- 
 
5. (U) The MOL inspection record has improved under the 
Maduro Administration and Leitzelar's leadership.  The MOL 
is quick to inspect companies when allegations are made 
public.  In the recent highly publicized case of NGO/union 
allegations of labor law violations by the SETISA maquila 
that makes t-shirts for the Sean John label, Leitzelar 
himself inspected the factory with several inspectors right 
after the allegations hit the press.  The MOL's quick 
action, combined with SETISA's openness to the MOL and 
press, has helped defuse a war of words over the alleged 
violations. 
 
6. (U) The MOL benefits from several DOL-funded technical 
assistance programs that enhance the inspectors' ability to 
enforce the law.  The number of inspectors, after dropping 
in the recent past, went up in the last few years, and has 
now leveled off (figures from the MOL).  Of the 2003 figure 
of 115 inspectors, 101 are general labor inspectors and 14 
are occupational safety and health inspectors. 
 
CYear     Inspectors 
-------------------- 
1998      107 
1999      102 
2000      104 
2001      110 
2002      114 
2003      115 
 
7. (U) Unfortunately, the MOL's relatively limited number of 
inspectors means that the MOL is often unable to inspect 
work sites for routine violations of the law.  Budget 
constraints also mean that inspectors often lack vehicles 
and/or fuel to drive to work sites to conduct inspections. 
 
Potential Changes to Labor Law Unlikely 
--------------------------------------- 
 
8. (U) Minister Leitzelar's assistant Jackie Cruz told 
LabAtt on January 15 that there is not a specific tripartite 
commission to follow-up on shortcomings in Honduran labor 
law identified by the ILO study of Honduran labor law in 
comparison to core ILO conventions.  However, the Council on 
Economic and Social Issues, a tripartite body, is studying 
possible labor law reform.  Post notes, however, that this 
has been on the table for quite some time, is a political 
football, and reform is not likely to happen in the near 
future.  This is despite the fact that the recent ILO study 
comparing Honduran labor law to the ILO core conventions 
noted that Honduran law was not in accordance with the ILO 
core conventions in several areas. 
 
9. (U) One area in which changes to the labor law have been 
suggested concerns the requirements for collective 
bargaining.  Current law only requires there be more than 30 
workers to constitute a trade union (a requirement that has 
been criticized by the ILO as detrimental to the formation 
of unions in small and medium businesses), but has no 
further requirements for collective bargaining rights. 
Companies are bound by current law to negotiate a collective 
bargaining agreement once a union has been legally 
established and requests that negotiations begin.  However, 
as stated in the Human Rights Report, employers often refuse 
to bargain with a union.  The Ministry of Labor can and has 
administratively sanctioned an employer for failing to 
negotiate a collective bargaining agreement, or for 
violating a collective bargaining agreement.  However, 
employer intransigence often remains undeterred. 
 
10. (U) Honduran Apparel Manufacturers Association President 
Jesus Canahuati has suggested that the GOH propose 
legislation that would require unions to have more than 50 
percent worker representation in order to have collective 
bargaining rights.  He thinks that will clear the way for 
Honduras to have a better record on negotiating collective 
bargaining agreements, because employers will be less likely 
to resist bargaining when the unions represent a sizable 
amount of the workforce.  (Under the current law, employers 
point out, a union of only 30 members in a maquila of 500 
workers has the right to collectively bargain on behalf of 
all 500 workers.)  However, unions will surely oppose adding 
such a requirement to the law and it is unlikely to be 
proposed by the GOH to Congress absent a tripartite 
consensus on reforming the labor law. 
 
Doing More With Less 
-------------------- 
 
11. (SBU) Comment:  The bottom line is that there has been 
definite improvement in the Ministry of Labor under the 
Maduro Administration, mainly thanks to the leadership of 
Minister Leitzelar.  The MOL and Minister Leitzelar are 
seeking to enforce Honduran labor law, but the overall 
budget crunch in the GOH severely hampers the MOL's ability 
to do more.  Despite the fact that he is considered by many 
observers as one of the best ministers in President Maduro's 
cabinet, Minister Leitzelar and the MOL do not have much 
political clout either within the GOH or in Congress.  For 
example, Minister Leitzelar is not a member of the ruling 
National Party.  This makes boosting the MOL's budget in an 
extremely tight fiscal environment all the more difficult. 
Nevertheless, the MOL is aggressive when prominent cases 
come to light and seeks to use international technical 
assistance, such as that funded by DOL, to improve its 
capacity to better enforce the law.  End Comment. 
 
Palmer