US embassy cable - 05NEWDELHI2116

UNCLAS SECTION 01 OF 04 NEW DELHI 002116 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR DRL/IL, G/TIP, INL and SA/INS 
LABOR FOR ILAB - ROWEN, MEUGENIO, MMITTELHAUSER, AND SHALEY 
 
E.O. 12958: N/A 
TAGS: ELAB, PHUM, ECON, KCRM, KWMN, EAID, IN, Indo-US, Labor 
SUBJECT: DEPUTY SECRETARY OF LABOR LAW'S INDIA VISIT 
 
 
1.  (SBU) Summary: Deputy Secretary of Labor Steven J. Law's 
February 21-27 visit to India to review progress on the DOL- 
sponsored INDUS Child Labor effort and other DOL-sponsored 
projects was well received by GOI officials, project 
managers, and participants.  The highest-ranking Labor 
Department official ever to visit India, D/S Law also met 
with national, state and local government officials, NGOs, 
and business leaders to discuss child labor and general 
labor-related issues.  He was accompanied by representatives 
from DOL's International Child Labor Program and the Bureau 
of International Labor Affairs.  The visit also focused 
attention on the problem of trafficking and bonded labor in 
India, indicating that these issues are likely to become 
areas of greater interest to DOL in the future.  From the 
Mission standpoint, the INDUS projects are outstanding 
examples of "quiet successes" that address important 
humanitarian problems while also advancing US-India 
relations.  End Summary. 
 
INDUS Child Labor Project Site Visits 
------------------------------------- 
 
2.  (U) D/S Law traveled to two INDUS project sites, 
Kanchipuram (Tamil Nadu) and Aurangabad (Maharashtra), 
meeting with officials and rehabilitated child laborers 
enrolled in school as a result of the INDUS Project on 
Preventing and Eliminating Child Labor in Identified 
Hazardous Sectors, a technical cooperation venture between 
the USG and GOI implemented and monitored by the ILO's 
International Program on the Elimination of Child Labor. 
D/S Law, accompanied by senior ILO officials, expressed 
satisfaction with the advanced state of the programs and 
with the efforts of local officials and project managers to 
coordinate activities with parents and employers.  The INDUS 
project is currently providing educational and training 
opportunities to more than 44,000 children.  The INDUS 
project appears to have made impressive progress in Tamil 
Nadu and Maharashtra, and the program is likely to reach 
over 100,000 children by the time it expires in 2007. 
 
3.  (U) After witnessing how the INDUS project had improved 
children's lives at both sites, the D/S commented that the 
programs there could serve as examples for the rest of India 
and South Asia region.  Children and their parents spoke 
movingly about their aspirations for the future, with school 
children in Aurangabad imploring the USG to continue its 
support for the project beyond its anticipated three-year 
life.  NGOs in Tamil Nadu commented that while the state 
government had been proactive on child labor, authorities 
needed to do a lot more to meet their goal of eradicating 
child labor by 2007 (one of the 15-point Action Plan goals 
of the state's Chief Minister).  NGOs remarked that the 
legislative framework was good, but that enforcement had to 
be improved drastically. 
 
ILO-DOL 
------- 
 
4.  (U) D/S Law also held discussions on two joint DOL-ILO 
projects -- Decent Employment for Women in India and the 
Prevention of HIV/AIDS.  He noted that the success of these 
projects serves to engage Indian officials and could be 
replicable elsewhere in South Asia. 
 
5.  (U) During a visit to the Decent Employment for Women 
project site in New Delhi, D/S Law was moved by success 
stories that beneficiaries - economically deprived women - 
shared with him.  Touring the shanty town slum just after a 
stop by visiting Afghan President Karzai, Law witnessed many 
women and children whose lives had undergone a distinct 
change after participating in the project.  The project has 
trained over 3000 women in Bangalore and New Delhi, 
providing them with skills that have enabled them to find 
productive decent employment. 
 
IJM/Bonded Labor 
---------------- 
 
6.  (SBU) In an expression of increasing DOL interest in the 
issue of bonded labor in India, the D/S met with 
representatives from NGOs and the US-based International 
Justice Mission (IJM) in Chennai and Mumbai for briefings on 
child and bonded labor in India.  He listened to the 
testimony of freed bonded laborers at a site visit on the 
outskirts of Chennai hosted by IJM.  Workers recounted how 
entire families worked at rice mills in Tamil Nadu to pay 
off loans taken from the mill owners.  The laborers 
indicated that while they had been rehabilitated under 
government-sponsored programs, they were free today largely 
due to the efforts of IJM activists.  (Comment:  The area 
from which the laborers were rescued has been under intense 
media and government scrutiny in recent months.  In November 
2004, India's National Commission for Women held a public 
hearing in the region on the condition of bonded laborers 
and castigated the local administration for not tackling the 
issue.  A report of this hearing has been pouched to DRL and 
DOL/ILAB.  End Comment.) 
 
Software and Chambers of Commerce & Industry (FICCI) 
--------------------------------------------- ------- 
 
7.  (U) In Chennai, D/S Law held productive discussions with 
members of the National Association of Software and Service 
Companies (NASSCOM), India's largest and most important IT 
industry group (890 member firms), on the growing 
interaction between Indian and US businesses in high 
technology sectors.  Arguing that outsourcing had become an 
integral part of the world economy that no one could stop, 
Indian participants expressed concern over the length of 
time it took to obtain visas (e.g. alleging twelve week 
waits for a six-week assignment), and urged the USG to 
develop a "business passport."  Interlocutors also did not 
wish India to be viewed as "low cost labor," but rather 
"quality labor."  In view of the extensive and rapidly 
expanding US-India linkages in the IT sector, interlocutors 
were especially keen to identify issues that could impact 
their future ties with US firms. 
 
8.  (U) D/S Law also met with a large group from the 
Federation of Indian Chambers of Commerce and Industry 
(FICCI), a major trade association headquartered in New 
Delhi.  In a presentation on the overall labor scene in 
India, labor law expert Dr. C.S. Venkata Ratnam argued that 
reforms in India's archiac labor laws were necessary, but 
maintained that existing legislation was not a major 
impediment for companies (in-depth analysis follows septel). 
Ratnam also called for better enforcement of existing laws 
relating to child and forced labor. 
 
9.  (U) In each of his meetings with business executives, 
D/S Law stressed that while US-India economic ties would 
continue to grow, business leaders and politicians should 
pay more attention to social issues like child labor, which 
play an important role in the American debate on 
outsourcing.  The D/S urged his interlocutors to use their 
influence with the GOI to prevent these social issues from 
becoming problems in the bilateral economic and political 
relationship, because this could affect otherwise strong and 
growing commercial relationships. 
 
Ministry of Labor 
----------------- 
 
10.  (SBU) D/S Law met with Minister of Labor K. Chandra 
Shekar Rao, Labor Secretary K.M. Sahni, and Joint Secretary 
K. Chandramouli on February 24 to discuss the INDUS project 
and to reiterate US concerns over child labor in India. 
Briefing on his perspectives on the INDUS Projects, D/S Law 
noted that despite the slow start in negotiations, the 
project's results and commitment of local officials and NGOs 
had impressed him, but stressed that continued high-level 
GOI support was necessary to keep the programs on track. 
 
11. (SBU) Asserting their strong commitment to preventing 
child labor, Ministry officials highlighted GOI efforts to 
create public awareness of the problem via the National 
Child Labor Project (NCLP) instituted by the government.  In 
a meeting attended by the Ambassador, Labor Minister Rao 
described child labor as a "shame" and reiterated GOI 
commitment to remove children from all hazardous occupations 
by the end of 2007.  The Minister stressed that India would 
approach this problem in a progressive manner as it had with 
bonded labor.  Joint Secretary Chandramouli indicated that 
the GOI intends to incorporate lessons from the INDUS 
program into its NCLP plans, and that INDUS would become a 
catalyst for self-sustaining Indian efforts to combat child 
labor.  He also observed that while the GOI had addressed 
the bonded labor problem via legislation, the problem of 
child labor was "much more complex." 
 
Frank Talk 
---------- 
 
12.  (SBU) Labor Secretary Sahni, Joint Secretary 
Chandramouli, and D/S Law later held a frank discussion on 
child labor and the possibility that India might be 
downgraded in the upcoming Trafficking in Persons (TIP) 
report, which could impact World Bank loans and damage 
Indian's international image.  D/S Law offered DOL 
cooperation in working with the Labor Ministry to help 
develop a strategy for dealing with the trafficking of child 
labor.  Chandramouli commented that the definition of child 
labor was open to interpretation, and that there should be a 
distinction between forced/trafficked child labor and 
children who traditionally work with their families. 
Arguing that as long as a child was receiving an education, 
it was "acceptable to work at home," he said that the GOI 
"should not presume to know more than the parent" about 
children's welfare. 
 
13.  (SBU) Labor Secretary Sahni expressed the hope that the 
USG would view the child labor issue "in the broader Indian 
social context" (i.e. in view of widespread poverty), and 
not only as a possible trade policy issue that "could be 
used against India."  He asked bluntly whether the USG was 
planning to raise TIP or child labor during trade and 
economic negotiations, as had happened in the WTO context, 
noting that he has had to be "very stiff with colleagues in 
the past" and wanted to be prepared for it.  He asked the US 
delegation to organize an "experience sharing" regional 
South Asian mini-summit within the next four months to 
discuss trafficking issues and to compare notes with other 
regional leaders in combating this problem.  He also 
expressed interest in further USG support to the NCLP in a 
"plus" capacity, specifically in funding micro-enterprise 
financial assistance credit for post-vocational training and 
help in setting up a business once child laborers complete 
their education under the INDUS Project, although made no 
direct request for USG assistance. 
 
14.  (SBU) Briefing on the other DOL-funded projects in 
India, Joint Secretary Chandramouli called the Coal Mine 
Safety and Health Project (that ends in June) "a tremendous 
success," adding that the GOI had hoped for a second phase 
of funding.  Joint Secretary for Employment and Training 
K.K. Mittal briefed on the progress made on the Decent 
Employment for Women Project (that also ends in June). 
Observing that the GOI wanted to expand the project's reach 
to Mumbai and Kolkata, he requested that DOL consider 
funding an expansion of the project to these cities. 
 
15.  (SBU) After D/S Law expressed concern about bonded 
labor, Chandramouli maintained that it was a "very limited" 
phenomenon in India, with Sahni expressing surprise that it 
was still occurring at all and asking whether it was an 
issue the U.S. was "worried or concerned about."  If the USG 
is concerned, he said, it was worth investigating, and asked 
for specific evidence.  D/S Law pledged to pass along any 
specific information he received. 
 
16.  (SBU) The Ambassador also hosted a lunch for D/S Law 
that was attended by media, business, human rights and NGO 
leaders.  The Ambassador called attention to the TIP issue, 
which he pointed out could become an irritant in US-India 
relations and could require the USG to have to vote against 
India in international lending institutions if India were to 
fall to Tier III from its position on the Tier II Special 
Watch List.  This prompted a flurry of questions to the INL 
Office Director by business and media representatives about 
steps the GOI could take to forestall such a step.  The INL 
Office Director discussed the issue at some depth with 
several guests, pledging to send them more information on 
TIP issues in India. 
 
Comment 
------- 
 
17.  (SBU) D/S Law's visit was well received by the GOI and 
by media at the project sites, although his interest in 
bonded labor caused the Ministry of Labor to send a 
diplomatic note to the Embassy urging against a visit to the 
IJM site in Tamil Nadu, indicating continuing anxiety in 
parts of the state government and in New Delhi about calling 
attention to the bonded labor problem. 
 
18.  (U) From the Mission's standpoint, the INDUS projects 
are outstanding examples of "quiet successes" that address 
important humanitarian problems while also advancing US- 
India relations. 
 
19.  (U) D/S Law cleared this cable. 
MULFORD