US embassy cable - 05QUITO2386

UNCLAS SECTION 01 OF 03 QUITO 002386 
 
SIPDIS 
 
DEPT FOR WHA/AND, WHA/PPC, EB, AND DRL/IL. USDOL FOR CARLOS 
ROMERO. GENEVA FOR JOHN CHAMBERLIN. PLEASE PASS USTR FOR V. 
LOPEZ AND B. HARMON. 
 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, EC, Labor 
SUBJECT: ECUADOR LABOR UPDATE 
 
REF: QUITO 1788 
 
1.  Summary:  Following are recent labor-related developments 
of interest: 
 
-- MOL Currently Acting MinGov (para. 2) 
-- ILO to Draft Labor Code Reform (3) 
-- National Labor Council to Discuss Subcontracting Law (4) 
-- MOL to Hire More Child Labor Inspectors (5) 
-- Banana Workers Fired For Unionizing (7) 
-- Other Banana Workers To Be Reinstated (11) 
-- Teachers Demand Salary Increase (12) 
-- MOL to Combat Labor Discrimination (13) 
 
MOL Currently Acting MinGov 
--------------------------- 
 
2.  Since Oswaldo Molestina's resignation on October 12, 
Minister of Labor Galo Chiriboga has been serving as acting 
Minister of Government.  Vice Minister of Labor Jose Serrano 
is currently acting Minister of Labor and traveled to 
Washington on October 18 to discuss labor issues at the FTA 
mini-round of negotiations.  Serrano told press he would ask 
the U.S. to support a process of regularizing Ecuadorian 
workers in the U.S.  Chiriboga, meanwhile, is dealing with 
the political crisis precipitated by Molestina's departure. 
 
ILO to Draft Labor Code Reform 
------------------------------ 
 
3.  On October 5, LabOff and AIDOff met with Vice Minister of 
Labor Jose Serrano who said that at the Labor Ministerial in 
Mexico in late September, ILO head Juan Somavia offered to 
send the GOE an ILO expert who would prepare a first draft of 
a new labor code.  This first draft would be presented by the 
National Labor Council (a tripartite committee formed by 
employers, workers, and the government) later this year.  The 
National Labor Council would then discuss the reforms and 
suggest changes, and hire four experts (one to represent each 
of the three sectors and an international expert - possibly 
another ILO expert) to assist with the process.  In 
approximately six months, the labor code proposal would go to 
Congress.  Serrano said this process was discussed in the 
labor council on September 30 and the three sectors agreed to 
it. 
 
National Labor Council to Discuss Subcontracting Law 
--------------------------------------------- ------- 
 
4.  The National Labor Council is meeting October 24-25 to 
suggest changes to Congress' first draft of a subcontracting 
law.  Serrano said the ILO would provide technical assistance 
during these meetings.  At the end of these meetings, 
suggested revisions will be submitted to Congress and will be 
discussed in the bill's second debate in Congress, currently 
planned for the week of November 7.  LabOff received a copy 
of the proposed law which would set a 50% cap on the 
percentage of employees that may be subcontracted within any 
company.  The draft law says subcontracting could be used by 
companies under the following circumstances:  suspension of a 
worker's contract due to medical reasons, maternity leave, 
military service or similar reasons; temporary services; new 
and specific projects; initiation of new activities for the 
first 270 days; seasonal increases in labor needs; urgent 
needs; and work related to agriculture and construction. 
 
MOL to Hire More Child Labor Inspectors 
--------------------------------------- 
 
5.  On child labor, Vice Minister Serrano told LabOff on 
October 5 that the MOL would hire up to 25 inspectors soon. 
Serrano said that within the next week additional inspectors 
would be hired for Guayas, Manabi, and Canar provinces. 
Serrano said he wanted child labor inspectors to become 
federal employees instead of contracted employees, to 
increase their job stability.  He also wants the child labor 
inspectors to be integrated into the MOL's labor 
inspectorate.  As of October 13, the MOL employed only 13 of 
the 22 child labor inspectors required by law. 
 
6.  LabOff spoke with Jenny Cepeda in the MOL's child labor 
division on September 30.  Cepeda said that in June, her 
division requested $316,00 for the 2006 budget.  She said the 
average monthly salary of an inspector is $550 and the 
average monthly transportation cost is $150.  In order to 
cover the costs of 24 inspectors over the course of a year, 
this would total $201,600.  Cepeda said the MOL's child labor 
division would spend over $200,000 of their $316,000 budget 
for 2006 on child labor inspections. 
 
Banana Workers Fired For Unionizing 
----------------------------------- 
 
7.  On October 3, police officers prevented workers at El 
Zapote banana plantation (owned by the Zapote Agricultural 
Company) who had formed a workers association on September 25 
and submitted a list of demands, from entering the workplace. 
 Zapote is a medium-sized banana plantation in Los Rios 
province that sells their product to Dole for export.  On 
October 12, LabOff spoke with FENACLE union leader Guillermo 
Touma who said the owner of the plantation was a close 
relative of banana magnate and presidential hopeful Alvaro 
Noboa. 
 
8.  LabOff spoke with MOL labor mediator Antonino Alarcon on 
October 13.  Alarcon said 136 workers had presented a list of 
demands for a pay raise prior to being prevented from 
entering the workplace, but the documentation had not been 
complete.  The workers involved in this case are 
subcontracted, he said, and had not been registered by the 
employer with Social Security.  Alarcon said company 
representatives claimed the workers had been fired before 
submitting the list of demands. 
 
9.  On October 6, approximately 25 armed persons guarded the 
El Zapote plantation entrance, preventing the workers from 
entering the company grounds, according to FENACLE sources. 
Police arrived later on October 6 to prevent any violence 
between workers and company representatives.  We have 
received no reports of violence at the Zapote plantation. 
The workers submitted a formal strike declaration to the MOL 
on October 6 and by law can assume a strike after 20 days 
have passed.  Alarcon told us he will continue to work for a 
compromise and the reinstatement of the workers.  We are 
planning to meet with Dole representatives to express concern 
about this case. 
 
10.  In a similar case, at the Maria Elisa banana plantation, 
a Dole supplier in Los Rios province, 126 workers presented a 
collective bargaining contract and documentation on the 
formation of a workers association to their employer on 
September 21.  On September 26, the employer prevented the 
workers from entering the plantation, informing them that 
their contracts had been canceled, according to FENACLE 
sources.  The workers declared a formal strike on September 
28 and protested outside of the plantation.  During the week 
of October 10, employees and employer reached agreement which 
resulted in the end of the strike. 
 
Other Banana Workers To Be Reinstated 
------------------------------------- 
 
11.  On October 14, the arbitration tribunal in Machala, El 
Oro province, ruled that the Maria Teresa banana plantation, 
also a Dole supplier, whose workers had been on strike for 10 
months, was required to reinstate the workers and pay them 
for the time they were on strike.  Also, the tribunal ruled 
that the employer is not allowed to fire any employees for 
the next two years.  Ten months ago, the workers formed a 
workers association and presented a list of complaints to the 
employer including non-payment of Social Security benefits, 
pay under the minimum wage, and lack of minimum health and 
safety standards in the workplace. 
 
Teachers Demand Salary Increase 
------------------------------- 
 
12.  The national teachers unions UNE, affiliated with the 
Marxist MPD party, went on an announced 48-hour strike on 
September 14 asking for salary increases and more resources 
for schools.  According to an Embassy labor source, UNE 
usually organizes these strikes 10-12 months before elections 
in order to raise their profile and gain supporters.  The 
source said most MPD deputies in Congress have at one time 
been presidents of UNE.  Government negotiators met with UNE 
representatives on September 30, but no agreement was reached 
and dialogue was broken off.  The government had offered a $7 
increase in monthly salaries for teachers starting in January 
2006, with an additional $3 in March 2006.  UNE leaders did 
not accept this offer and are demanding a $150 monthly salary 
increase. 
 
MOL to Combat Labor Discrimination 
---------------------------------- 
 
13.  Vice Minister of Labor Jose Serrano signed Ministerial 
Agreement 261 on October 5 that would sanction employers that 
discriminate by age, race, gender, and social condition in 
their solicitations for employees.  Employers could be fined 
up to $200.  Also of note, the MOL has signed a convention 
with the United Nations Development Program (UNDP) to protect 
the labor rights of those infected with HIV.  The MOL and 
UNDP met with Congress' human rights commission on October 4 
to discuss ways to work towards this goal. 
JEWELL