US embassy cable - 04QUITO3153

UNCLAS SECTION 01 OF 03 QUITO 003153 
 
SIPDIS 
 
SENSITIVE 
 
SECSTATE PLEASE PASS TO US TRADE REPRESENTATIVE 
 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, EC, Labor 
SUBJECT: ECUADOR LABOR UPDATE 
 
REF: QUITO 2642 
 
1.  (U) Summary:  Following are recent labor-related 
developments of interest: 
 
--Changes at the MOL (para. 2) 
--MOL Izurieta Meets With Congress' Paez (3) 
--Chamber of Commerce Challenges Subcontracting Decree (5) 
--Hunger Strike by Public Sector Workers (6) 
--Penitentiary and Health Worker Strikes (7) 
--ILO Reaches Out To Unions (9) 
--MOL Working on Child Labor Issues (10) 
--CRS DOL-Funded Child Labor Project Underway (12) 
--Former Petroecuador Workers Remain Jobless (13) 
--Immigrants Vulnerable to Employer Abuse (14) 
 
Changes at the MOL 
------------------ 
 
2.  (SBU) At a December 2 meeting, Ministry of Labor (MOL) 
Finance Director Genny Velez told LabOff the MOL will be 
reorganized starting in January 2005.  The Ministry will be 
renamed the Ministry of Labor and Employment, and will get 
computers for every office, including a computer for every 
labor and child labor inspector.  The MOL will also begin 
publishing a regular statistics bulletin.  (We have been 
urging this to complete our reporting requirements.)  Velez 
said that during a conference in Cancun, she had visited 
Mexican job banks and would like to promote the same in 
Ecuador.  Velez requested USG assistance in bringing Mexican 
experts to advise on this project.  We will investigate 
options within the Mission and Washington agencies. 
 
MOL Izurieta Meets with Congress' Paez 
-------------------------------------- 
 
3.  (SBU) Velez said she and Minister of Labor Raul Izurieta 
had met with Andres Paez, President of the Labor Commission 
in Congress, earlier on December 2.  According to Velez, 
Izurieta and Paez discussed labor reform, particularly of 
some specific issues raised in the National Labor Council 
such as eliminating or reforming mandatory company retirement 
schemes and setting a maximum number of days for strikes. 
They also discussed the subcontracting law proposals 
currently under review in Congress.  Velez said Paez will 
raise the proposals at the next session of the National Labor 
Council.  As far as we know, this would be Paez's first 
invitation to attend a National Labor Council meeting. 
 
4.  (SBU) In a December 1 meeting, Paez told PolChief and 
LabOff he had already unified the four subcontracting law 
proposals in Congress.  Paez also requested funds for 
computers and other equipment for the new oral system in the 
labor courts.  By all accounts, the oral system has been very 
successful, reducing the average time of a labor trial from 
2-3 years to 2-3 months, and will be implemented in other 
courts.  We hope to be able to contribute to the reform's 
continued success and are investigating possible funding 
sources. 
 
Chamber of Commerce Challenges Subcontracting Decree 
--------------------------------------------- ------- 
 
5.  (SBU) Alberto Dassum, President of the Chamber of 
Industry of Guayaquil, informed EconOff on November 18 that a 
constitutional challenge to the presidential decree on 
subcontracting had been submitted to the Constitutional 
Court.  Dassum said the Chamber had argued that the decree 
establishes obligations and restrictions that limit 
individual rights, and introduces regulations not covered in 
the labor code, both violations of the Constitution.  Dassum 
said the Chamber would also try to convince the Labor 
Minister to modify the decree. 
 
Hunger Strike by Public Sector Workers 
-------------------------------------- 
 
6.  (U) On October 14, 41,000 public servant workers in the 
Ministries of Education, Agriculture, Environment, 
Government, and Commerce went on strike demanding a $100 
million 2005 budget to fund a public sector unified salary 
structure approved by Congress in September 2003.  Eight 
public servants went on a hunger strike on November 16 to 
pressure Congress to approve the requested funds.  On 
November 30, Congress approved a total of $60 million, $30 
million more than the $30 million the Government had 
originally proposed to finance salary unification.  Of the 
additional $30 million, $10 million will come from the 
Ministry of Economy and $20 million will come from unrelated 
cuts in personnel costs.  Public sector workers, however, 
continue to protest.  Press reported that the Government 
planned to offer 5,000 retirement packages in 2005 to reduce 
the budget for salaries, funded with a $100 million dollar 
loan from the Inter-American Development Bank (IDB). 
 
Penitentiary and Health Worker Strikes 
-------------------------------------- 
 
7.  (U) In other strike action, penitentiary workers from 34 
prisons nationwide went on strike November 26 to push 
Congress to approve $78 million for their 2005 budget.  The 
Government had only approved $25 million. 
 
8.  (U) Meanwhile, approximately 14,000 health workers went 
on strike October 4 to demand the signing of a two-year 
collective bargaining contract which would take effect 
January 1, 2005.  This was not a total or national strike, as 
some workers were not in favor of striking.  The strike was 
suspended in early November, but health workers have 
announced they may strike again in December if the pact is 
not approved. 
 
ILO Reaches Out to Unions 
------------------------- 
 
9.  (SBU) On November 19, unions attended a meeting of the 
National Labor Council on November 18 where ILO Lima's 
Ricardo Hernandez Pulido gave a presentation on generating 
employment.  Child labor ILO director in Ecuador Magne 
Svartbekk also held meetings with the leaders of all five 
union confederations encouraging them to stay engaged with 
the Council despite their misgivings about the Labor 
Minister's credibility. 
 
MOL Working on Child Labor Issues 
--------------------------------- 
 
10.  (U) Starting in early November, MOL-produced commercials 
with a child labor awareness message began airing on 
Ecuadorian television.  According to Dr. Ruth Mosquera of the 
MOL's Child Labor Division, two spots will air for a total of 
three months.  The message of the first ad is to respect the 
rights of working adolescents over 15.  The message of the 
second is to eliminate child labor.  The MOL is also planning 
a series of regional training workshops for those who monitor 
child labor inspectors.  Representatives from NGOs, union, 
and other organizations accompany child labor inspectors to 
prevent corruption.  The workshops will begin on December 15 
and are scheduled for Quito, Guayaquil, and Cuenca.  Mosquera 
said the MOL, in coordination with the ILO, held a workshop 
November 30 to increase child labor awareness among 40 
businessmen and women in the flower sector. 
 
11.  (U) According to a report presented by the ILO on 
October 9, Ecuador, Guatemala, and Honduras have the highest 
rates of child labor in Latin America.  In Ecuador, 41% of 
adolescents between 15 and 17 work while 15% of children 5 
through 15 work.  In the Andean region, 60% of child labor is 
in the agricultural sector. 
 
CRS DOL-Funded Child Labor Project Underway 
------------------------------------------- 
 
12.  (U) Catholic Relief Services (CRS) has hired key staff 
for the $3 million USDOL-funded child labor project awarded 
in September.  Thus far, they have hired a Director 
(Alexandra Moncada), Education Specialist (Patricio Cajas), 
Evaluation Specialist (Luis Stacey from CARE), and one 
technical support person.  CRS will be meeting on December 7 
with a consultant, Donald Spears of Management Systems 
International, hired by USDOL to develop their operational 
plan.  CRS plans to inaugurate the project in the first 
quarter of 2005. 
 
Former Petroecuador Workers Remain Jobless 
------------------------------------------ 
 
13.  (SBU) LabOff met with Mario Escobar, former state 
petroleum company worker on October 5 at Escobar's request to 
discuss the 2003 firing of Petroecuador workers.  Employees 
of the parastatal petroleum company claim they held peaceful 
meetings in June 2003 to protest against the new Minister of 
Energy and did not disrupt oil production.  The Minister of 
Energy assumed direct control of oil production with support 
of the Armed Forces and accused the workers of sabotage and 
terrorism.  The Acting Vice Minister of Labor then gave the 
Energy Minister permission to fire the 33 workers without 
compensation.  In August 2004, the Supreme Court found the 
workers innocent of the charges.  Twenty workers are filing 
court cases to receive indemnization since under the labor 
code reinstatement is not required for illegally firing 
workers engaged in union activity. 
 
Immigrants Vulnerable to Employer Abuse 
--------------------------------------- 
 
14.  (U) Press reported that day laborers from Colombia and 
Peru receive lower wages and worse working conditions than 
their Ecuadorian counterparts.  Foreign workers seek 
employment in Ecuador to earn higher wages.  Luis Urgiles, 
human rights ombudsman for Azuay province, publicly claimed 
that Peruvian workers in the region do not make formal 
complaints despite receiving bad treatment from employers. 
KENNEY