US embassy cable - 05QUITO1005

UNCLAS SECTION 01 OF 03 QUITO 001005 
 
SIPDIS 
 
DEPT FOR WHA/AND, WHA/PPC, EB, AND DRL/IL. USDOL FOR JORGE 
PEREZ-LOPEZ. GENEVA FOR JOHN CHAMBERLIN. PLEASE PASS USTR 
FOR A/USTR CLATANOFF, V. LOPEZ AND B. HARMON. 
 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, EC 
SUBJECT: MAY LABOR UPDATE 
 
REF: QUITO 634 
 
1.  Summary:  Following are recent labor-related developments 
of interest: 
 
--Unions Make Demands to New Government (para. 2) 
--New Minister of Labor Still Not Named (4) 
--Presidential Decree to Remove Bureaucrats (5) 
--New Unions Registering Independently (6) 
--Judicial and Medical Workers End Strikes (7) 
--Occupational Health and Safety Problems Underreported (9) 
--Flower Social Forum Created (10) 
--Economic Reform Struck Down in Congress (11) 
--Union Blacklisting on Banana Plantations (12) 
--Highest Rate of Labor Conflicts in Guayas (13) 
--Former FM Reveals Mother Hired Underpaid Colombians (14) 
 
Unions Make Demands to New Government 
------------------------------------- 
 
2.  (U) During their march to celebrate International Workers 
Day on May 1, workers asked President Alfredo Palacio's new 
government to call for a referendum on the free trade 
agreement, name a pro-labor Minister of Labor, repeal the 
decree on hourly work, and review the decree on 
subcontracting (both decrees were signed by former President 
Gutierrez).  Unions are asking for two specific changes to 
the subcontracting decree:  the lowering of the maximum 
percentage of workers that can be subcontracted (currently 
75%) and a clause stating subcontracting can only be used for 
temporary jobs. 
 
3.  (U) There were approximately 3,000 workers who marched in 
Quito on May 1, however, only about 500 gathered to hear 
speeches by union leaders.  In his remarks, Jaime Arciniegas, 
head of the largest union confederation CEOSL, said the 
Ministry of Labor needed structural reform.  Mesias Tatamuez, 
head of the group of union confederations FUT, asked for a 
referendum on the free trade agreement and for the ending of 
the agreement which allows USG use of Ecuador's Manta air 
force base.  In the city of Ambato, over 2,500 workers 
marched asking President Palacio to review the free trade 
agreement.  In Guayaquil, 12 workers associations marched. 
There were 3,000 marching in Cuenca, who also used the 
opportunity to criticize Congress.  Labor unions 
(approximately 200 people) also marched in Quito on April 5 
to protest the March 18 hourly work decree. 
 
New Minister of Labor Still Not Named 
------------------------------------- 
 
4.  (SBU) As of May 3, President Palacio had yet to name a 
Minister of Labor.  An Embassy source told LabOff that unions 
had proposed two candidates:  Galo Chiriboga, President of 
the National Association of American Jurists, and Julio Cesar 
Trujillo, a law professor at Quito's Catholic and Central 
universities.  Business groups had proposed Fabian Corral, a 
law professor at Quito's San Francisco University.  Roberto 
Gomez, a former Minister of Labor under President Borja, is 
reportedly the Palacio government's preferred candidate, 
however, some think he is too close to the Democratic Left 
party.  Palacio has said none of his Ministers will be 
affiliated with any particular political party. 
 
Presidential Decree to Remove Bureaucrats 
----------------------------------------- 
 
5.  (U) In one of his first official acts, President Palacio 
signed a decree calling for the dismissal of all contractual 
public servants hired since 2003.  The decree would remove 
8,727 bureaucrats from their posts, some of them political 
appointees. 
 
New Unions Registering Independently 
------------------------------------ 
 
6.  (U) Of the 51 new labor unions registered in 2003, only 
11 were affiliated with CEOSL, the largest union 
confederation in Ecuador, nine affiliated with other union 
confederations, and 31 registered independently.  According 
to the Ecuadorian Statistics and Census Institute, in 2003, 
60.2% of all workers were employed in companies with one to 
five employees, effectively denying them the right to 
unionize, which requires 30 workers in any one enterprise. 
Guillermo Touma, acting president of CEOSL, told press on May 
2 that allowing industry-wide unions would strengthen the 
labor movement in Ecuador. 
 
Judicial and Medical Workers End Strikes 
---------------------------------------- 
 
7.  (U) Judicial workers ended their 35-day strike on April 
18 after the pro-Gutierrez Supreme Court was removed. 
Regular judicial activities resumed on April 19.  All 4500 
judicial workers nationwide agreed to work an extra hour 
daily without remuneration to address the backlog. 
 
8.  (U) Striking medical workers resumed work on April 26. 
The workers have given the government 15 days to respond to 
their demands of payment for work in excess of the regular 
work day and salary raises based on education levels. 
 
Occupational Health and Safety Problems Underreported 
--------------------------------------------- -------- 
 
9.  (U) The ILO estimates that there are 158,760 work 
accidents and 18,900 cases of work-related illness a year in 
Ecuador; few of these accidents are registered.  In 2004, 
3,486 work accidents were reported to the Ecuadorian Social 
Security Institute (IESS), and 86 reported at the Ministry of 
Labor.  Only 86 work-related illnesses were reported in 2004. 
 Only a fifth of the population that should be registered to 
receive benefits from the IESS is in fact registered, 
according to Miriam Pozo of the Work Health and Safety 
Division of the Ministry of Labor.  The Ministry of Labor 
estimates that 2,751 workers die from work-related causes in 
Ecuador each year.  The primary cause of work-related deaths 
was cancer (32%), followed by circulatory illnesses (19%). 
 
Flower Social Forum Created 
--------------------------- 
 
10.  (U) The Flower Social Forum, which will seek to combat 
child labor in the flower sector, was created via ministerial 
decree on March 10.  The Forum will include representatives 
from the Ministries of Labor and Agriculture, the National 
Institute for the Child and Family, flower companies, ILO, 
and UNICEF.  The Forum has met informally and will have an 
official launch ceremony in May 
 
Economic Reform Struck Down in Congress 
--------------------------------------- 
 
11.  (U) The previous government's economic reform package 
was unanimously rejected by Congress on April 7.  Among the 
law's proposals was the lowering of profit-sharing from 15 to 
5% of company profits which are given to workers and their 
families. 
 
Union Blacklisting on Banana Plantations 
---------------------------------------- 
 
12.  (SBU) According to Guillermo Touma, president of the 
FENACLE banana workers union, on February 6, workers at the 
Josefa banana plantation in Los Rios province organized a 
committee for the purpose of establishing a union.  They 
later submitted articles of incorporation and a petition of 
complaints to the company.  According to Touma, after the 
workers did this, one of the plantations administrator's 
Silvana Carrion Salazar, sent letters to several other local 
plantations informing them of the workers' attempt to 
organize a union and listing their names.  Touma provided 
LabOff with copies of Carrion's letter in which she stated 
that she believed it necessary to share this information so 
that these workers would not be able to "harm other 
employers."  Hiring discrimination against workers for union 
activity is not illegal in Ecuador. 
 
Highest Rate of Labor Conflicts in Guayas 
----------------------------------------- 
 
13.  (U) Not surprisingly, Guayas province, home of Ecuador's 
largest city, Guayaquil, had the most labor conflicts 
registered in recent years.  According to Ministry of Labor 
data, between 1994 and 2003, Guayas had 336 cases of labor 
disputes, compared with 217 in Pichincha (home to Quito) and 
50 in Manabi provinces during the same period.  60% of 
Ecuador's industrial sector is located in Guayas. 
 
Former FM Reveals Mother Hired Underpaid Colombians 
--------------------------------------------- ------ 
 
14.  (SBU) Reflecting the Ecuadorian elites disregard for 
minimum wage laws, Spanish newspaper "El Pais" reported that 
former Foreign Minister Patricio Zuquilanda revealed in 
public comments that his mother employed Colombian servants 
on her farm, to whom she paid $70 a month (significantly 
below the $150 minimum wage).  MFA sources ridiculed 
Zuquilanda for this gaffe, which they believed could only be 
intended to aggrandize the status of Zuqilanda's family farm 
to plantation status.  A study conducted by "El Pais" found 
that approximately 500,000 Colombians are now working in 
Ecuador. 
KENNEY