US embassy cable - 04GUATEMALA529

UNCLAS SECTION 01 OF 04 GUATEMALA 000529 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ELAB, ETRD, GT 
SUBJECT: GSP DELEGATION PROMOTES LABOR LAW ENFORCEMENT 
 
 
1.  (U) Summary:  An inter-agency USG delegation visited 
Guatemala on February 23-24 to review GOG compliance with GSP 
labor conditions and encourage the new government to take 
steps to protect fundamental worker rights.  The group met 
with GOG officials, union, and business leaders to discuss 
the issues raised in outstanding GSP petitions. The 
delegation also conducted a press roundtable which generated 
articles in all major dailies and AUSTR Clatanoff 
participated in a radio program to describe USG concerns 
about labor rights enforcement. 
 
2.  (SBU) The GOG reported advances in the investigation and 
prosecution of cases of past violence against union leaders, 
ongoing efforts to streamline the labor justice system, and 
resolution of some cases involving reinstatement of workers 
illegally fired for unionizing activities.  The 
Inter-Institutional Working Group professed a strong GOG 
commitment to enforce its labor laws as well as to promote 
reforms to address gender and union discrimination in the 
workplace.  The Embassy considers the recent advances to 
represent significant steps in compliance with GSP 
conditions, and recommends that the GSP petition review be 
closed.  The delegation emphasized to the GOG the need for 
further steps and progress on CAFTA Track Two in the area of 
labor law enforcement and labor law reform.  We will continue 
to encourage and report any further progress.  End Summary. 
 
3.  (U) The USG delegation was comprised of William "Bud" 
Clatanoff, Assistant USTR for Labor; Charlotte Roe, Senior 
Labor Advisor, WHA/PPC; Amy Holman, Trade Economist, EB; and 
Carlos Romero, International Economist, ILAB/USDOL.  In each 
meeting, the delegation explained the USG GSP review process 
and expressed concern about the core issues contained in open 
petitions submitted in December 2002, including: 
 
-- the investigation and prosecution of cases of past 
violence against trade unionists; 
-- the speed and agility of the labor justice system; 
-- reinstatement of workers illegally-fired for unionizing 
activities; 
-- efforts to combat employment discrimination, especially 
blacklisting of union members; and, 
-- the need to strengthen the labor inspection system. 
 
Minister of Labor Outlines Priorities 
------------------------------------- 
 
4.  (SBU) On February 23, the delegation met with Minister of 
Labor Jorge Gallardo, First Vice Minister of Labor Cesar 
Castillo, Second Vice Minister of Labor Mario Gordillo, 
ministerial advisor Alejandro Argueta, Ministry Inspector 
General Celeste Ayala, and other members of the ministry. 
Gallardo welcomed the delegation and pledged full GOG 
cooperation.  AUSTR Clatanoff presented the delegation and 
explained the background for the visit, including the 
specific areas of concern outlined above.  In addition to 
prompting the GSP petition review, the labor rights situation 
in Guatemala would feature prominently in U.S. Congressional 
debate over CAFTA approval, he said.  For the unilateral GSP 
review, the USG would review the GOG's steps taken to protect 
labor rights; those same steps, taken in advance of the U.S. 
Congressional debate over CAFTA, would also improve the 
prospects of CAFTA approval.  We refer to actions taken in 
advance of CAFTA to strengthen labor laws and their 
enforcement as CAFTA's "Track Two."  CAFTA's "Third Track" 
involves USG support for capacity building measures, which 
include a new $6.7 million regional project to promote public 
awareness of labor rights and improve labor law 
administration including inspections, he said.  Ms. Roe 
emphasized the need for continued and visible GOG action to 
protect labor rights. 
 
5.  (SBU) Minister Gallardo, who took office five weeks 
earlier, told the delegation that he intends to request an 
increase of the MOL budget during this year and next, to 
address severe budget constraints and low salaries, 
especially in the inspection branch.  The minister said he 
would give the inspectorate priority attention, emphasizing 
the need to combat corruption in the ranks through training 
and oversight (which he referred to as "systematization"). 
He said the ministry was in discussions with the Central 
American Economic Integration System (SIECA), to provide 
re-training to inspectors, and plans to reorganize the 
inspections division in consultation with workers and 
employers.  He highlighted the creation of two new inspector 
units, one for the maquila sector and the other to combat 
child labor.  He said encouraging dialogue between social 
groups and building consensus was a high priority for this 
government, as was implementing a long-term vision for the 
ministry.  To do so, he has been meeting with employers and 
unions and hopes to create a unit to help resolve and prevent 
conflicts through dialogue.  Gallardo said the GOG was 
prepared to present a report to the delegation responding to 
issues raised in the GSP petitions the following day.  In 
response to a question from Mr. Romero about cooperation 
between the Ministries of Labor and Economy to enforce labor 
rights in the maquila sector, Gallardo said he believed this 
cooperation must continue, and the MOL must use all GOG 
institutions to convince employers of the government's 
intention to apply the law. 
6.  (SBU) Vice Minister Gordillo said the GOG is very 
concerned about resolving cases cited in the petitions, and 
wishes to take measures to address them.  The ministry is 
also concerned about cases of violence and maintains close 
communication with the Special Prosecutor for Crimes Against 
Unionists who is investigating them.  Mr. Clatanoff said it 
is critical to prevent any future violence.  LabAtt noted 
that the UN-GOG agreement on formation of a Commission to 
Investigate Clandestine Groups includes a mandate to 
investigate attacks against trade unionists and other human 
rights defenders.  Gordillo added that the MOL hopes to 
strengthen its inspections and fines departments, as well as 
its Defense of Worker Rights Unit.  Defending worker rights 
in the maquila sector is another priority, and the ministry 
is coordinating with the Ministry of Economy (which controls 
export tax benefits) on this issue, through the maquila 
sub-commission of the GOG Inter-Institutional Labor Group. 
 
7.  (SBU) Asked about the prospects for pending labor 
reforms, Minister Gallardo said that the legislative package 
pending in the last Congress has been sent back to 
committees, which have 60 days to act on them.  The ministry 
has encouraged Congress to seek consensus from all sectors on 
the reforms as soon as possible, even if this takes 
additional time.  Vice Minister Gordillo pointed out that no 
one party has the majority in Congress.  Mr. Argueta said 
that in addition to responding to U.S. interest and concern, 
it is important for Guatemalan workers and employers to agree 
on their mutual interests.  Mr. Clatanoff agreed that efforts 
to build consensus and "ownership" are very important, 
especially given the historical context of labor relations in 
Guatemala.  He noted the strong differences between GSP 
review, which is unilateral, and CAFTA's labor chapter, which 
is not. 
 
Inter-Institutional Group Reports Progress 
------------------------------------------ 
 
8.  (SBU) On February 24, the Ambassador accompanied the 
delegation to a meeting of the GOG's Inter-Institutional 
Labor Group, hosted by Vice Minister of Foreign Affairs, 
Carlos Ramiro Martinez.  Also attending were Vice Ministers 
of Labor Castillo and Gordillo; Otto Marroquin, Supreme Court 
Magistrate; Beatriz de Barrera and Rolando Cabrera, Labor 
Court justices; Mariano Rayo, President of the Congressional 
Economic Commission; Marco Antonio Cortez Sis, Special 
Prosecutor for Crimes Against Trade Unionists; Ambassador 
Maritsa de Vielman of the MFA; Mario Lopez, the GOG CAFTA 
labor negotiator from the Ministry of Economy; and 
representatives from the Solicitor General's Office, the tax 
authority (SAT) and the Social Security Institute (IGSS). 
 
9.  (SBU) Vice Minister Martinez presented the GOG's latest 
report on the GSP petitions, which have been delivered to 
Washington agencies by the delegation.  The report included 
the following information on advances made in labor law 
enforcement and commitments by the Berger administration: 
 
-- a new vision: of permanent social dialogue between 
employers, workers and political actors in compliance with 
international trade agreements and ILO commitments; 
 
-- advances in the administration of labor justice: 
administrative efforts to extend coverage and competence of 
labor court judges; 
 
-- labor law reform: including 2001 reforms and pending 
(2003) reforms that will address gender discrimination, 
strengthen child labor protections and protect the rights of 
domestic workers 
 
-- labor law enforcement and compliance: maquila sector 
efforts coordinated between MOL and Economy Ministry; efforts 
to strengthen the labor inspection function; formation of two 
new inspection units; resolution of the Choi 
Shin/Cimatextiles case; modernization of the MOL and case 
flow tracking system for inspection and fines divisions; 
renewed MOL efforts to support the National Commission for 
the Prevention and Eradication of Child Labor and Protection 
of Adolescent Workers; 
 
-- progress in cases of violence against trade unionists: 
arrest on February 20, 2004 of Mario Roberto Ortiz Barranco 
for the murder of Oswaldo Monzon Lima; February 12, 2004 
request to judge to call the prime suspect in the murder of 
Baldomero de Jesus Ramirez; February 17, 2004 request by 
District Attorney to reopen the investigation of the murder 
of Baudilio Amado Cermeno; request for a hearing on the 
intended homicide case against Julio Enrique de Jesus Salazar 
Pivaral for threats, slight injuries and illegal detention of 
a union member on his plantation. 
 
-- progress on labor cases cited in GSP petitions:  several 
cases are still in the courts; however, most (8 of 12), with 
the most notable exception being the Finca Maria Lourdes 
case, are reported resolved amicably. 
 
10.  (SBU) In response, AUSTR Clatanoff praised the formation 
and efforts of the Inter-Institutional Group, and said the 
progress reported would be favorably considered by the USG. 
In particular, he acknowledged the Special Prosecutor for his 
recent success in prosecuting cases of violence, urged him to 
follow arrests with prosecutions and investigations with 
further arrests; and the Ministries of Labor and Economy for 
their coordinated efforts to enforce labor law in the maquila 
sector.  These are concrete advances we hope will continue, 
he said, and expressed cautious optimism that Guatemala has 
ended a history of violence against labor leaders.  AUSTR 
Clatanoff then asked what progress had been made on the issue 
of effective enforcement of labor court decisions in favor of 
illegally-fired union members, and inquired about the 
prospect of further labor code reforms. 
 
11.  (SBU) Labor Court magistrate de Barrera said there had 
been advances in reinstatement of illegally-fired workers in 
the public (municipal government and national level) sector, 
citing a recent case in the municipality of Coban, Alta 
Verapaz province. Labor court judges, she remarked, are 
working very hard to eliminate backlogs, even resorting to 
mobile courts to augment the capacity of Guatemala's 
overcrowded courts. The problem that remains, she said, is 
employer resistance to court rulings in the agricultural 
plantation sector.  These employers resist by changing their 
corporate identity and using legal delaying tactics to 
prevent effective reinstatement of illegally-fired workers. 
Often, these cases turn into land disputes, as workers squat 
on land they demand as compensation for what they are owed by 
the landowner. 
 
12.  (SBU) Noting that the reform package had been sent back 
to Commission, AUSTR Clatanoff asked officials to comment on 
the prospects for Congressional action on a second generation 
of labor law reform.  Vice Minister Gordillo said this 
Administration wants to see the legislation passed, and is 
working to build consensus for the reforms.  Vice Minister 
Martinez added that independently from CAFTA, the government 
realizes it needs to harmonize its labor law with ILO 
recommendations. 
 
Business and Union Leaders Briefed 
---------------------------------- 
 
13.  (SBU) On February 24 the Ambassador hosted a lunch in 
honor of the delegation with union leaders which included 
Jose Pinzon, SecGen of the Union of Guatemalan Workers (UGT); 
Nery Barrios, SecGen of the Unity of Social and Popular 
Action confederation (UASP); and Reynaldo Gonzalez, SecGen of 
the Bank Workers union (FESEBS).  The union leaders expressed 
appreciation for USG GSP and CAFTA pressure on Guatemala. 
Barrios credited the Berger administration for taking steps 
to resolve some pending labor disputes.  Pinzon commented 
that in a recent meeting labor court judges had told him the 
government had asked the labor judges to clean out their case 
backlogs, "because CAFTA is coming."  Gonzalez agreed, saying 
that some labor judges were "pulling some old cases out of 
the drawers" and almost always ordering the reinstatement of 
fired workers "because CAFTA requires it." 
 
14.  (SBU) However, the union leaders expressed concern about 
newer, more subtle means of undermining unions by both 
employers and government.  What is most lacking, according to 
Gonzalez, is the political will to reverse these attitudes. 
Mr. Romero described in detail the contents of the CAFTA 
labor chapter, and AUSTR emphasized the benefits to workers 
of trade liberalization (increased employment opportunities 
and higher real wages resulting in part from cheaper 
imports).  He agreed that worker benefits under CAFTA require 
from each government the political will to enforce the "rules 
of the game."  Although none of these unions support CAFTA, 
the conversation was respectful and helped dispel 
misconceptions held by union leaders about CAFTA labor 
provisions and enforcement mechanisms. 
 
15.  (SBU) A meeting with employer representatives also 
helped to dispel misconceptions about another CAFTA Track 
Three issue.   On February 23 the delegation met with Carlos 
Arias of the Chamber of Industries and Rolando Figueroa of 
the garment manufacturers export association (VESTEX).  Both 
men are members of the main employer group's (CACIF) labor 
commission, but requested a meeting outside CACIF because of 
lack of consensus in CACIF about whether to support the 
"Export Success in Central America" (ESCA) initiative.  After 
discussing the importance of effective labor law enforcement 
in the context of GSP review and CAFTA consideration by the 
U.S. Congress, the delegation addressed CACIF's concerns 
about the private-sector-led ESCA proposal.  Reassured that 
the ESCA, which calls for development of a unitary voluntary 
labor standard, would apply only to the textile sector; that 
those standards in each country would incorporate national 
labor law and (only) the ILO conventions each country had 
ratified; that only the ILO would be appropriate to monitor 
the standards; and after explaining that the phrase "best 
practices" referred only to labor monitoring procedures, not 
the uniform standard itself; Arias said that CACIF's concerns 
were fully met and he believed it would now fully support the 
initiative. 
 
Human Rights Commissioner Offers Help 
------------------------------------- 
 
16.  (SBU) The delegation met on February 23 with Frank 
LaRue, President of the Presidential Commission on Human 
Rights (COPREDH) and a former leader of a prominent NGO human 
rights organization.  LaRue said he was scheduled to attend a 
meeting with the President and Vice President with Bishop 
Ramazzini of San Marcos province.  The issue to be discussed 
was to be the land/labor conflict at the Finca Maria Lourdes 
in Quetzaltenango province (which is cited in the open 
AFL-CIO GSP petition), which is owned by a member of the 
First Lady's family.  LaRue said he would use that to try to 
encourage a resolution of the conflict in favor of the 
workers/squatters and, more generally, to ensure that court 
orders are applied more even-handedly.  LaRue described his 
commission's mandate as consisting of human (and labor) 
rights oversight of other GOG ministries.  He said that 
corruption was a barrier to effective enforcement, and 
suggested that in future COPREDH might conduct an audit of 
the Ministry of Labor's inspectorate division.  Learning of 
the CAFTA labor chapter provision for the establishment of a 
unit in each partner's labor ministry to process labor 
submissions, LaRue said this might be another area where 
COPREDH could help by conducting oversight of the 
establishment and functioning of that office, if CAFTA takes 
effect.  The delegation informed LaRue that a USDOL team to 
design future technical cooperation activities would be 
in-country beginning March 9, and encouraged him to meet with 
them. 
 
Comment 
------- 
 
17.  (SBU) The delegation's visit advanced U.S. interests at 
several levels.  Most importantly, it emphasized the need for 
active enforcement of labor rights and concrete progress in 
the near-term.  The delegation also raised public, employer, 
and union awareness of the content of the CAFTA labor 
chapter, and effectively advocated for sustained GOG efforts 
to protect fundamental labor rights and effectively enforce 
its labor laws. 
 
18.  (SBU) While much remains to be done by the GOG to 
translate its commitments into further advances, the Embassy 
believes the efforts reported by the GOG to date constitute 
positive steps in the right direction.  Of particular 
significance was the arrest in the Monzon Lima case, the 
Labor Minister's commitment to strengthen the labor 
inspectorate, efforts to strengthen the labor justice system, 
the resolution of many of the labor cases mentioned in the 
petitions, and the GOG's commitment to continue 
inter-ministerial coordination to enforce labor rights in the 
maquila sector. 
19.  (SBU) We therefore strongly recommend that the Trade 
Policy Sub-Committee consider the closure of the GSP petition 
review for Guatemala. 
HAMILTON