US embassy cable - 03GUATEMALA571

UNCLAS SECTION 01 OF 03 GUATEMALA 000571 
 
SIPDIS 
 
SENSITIVE 
 
USDOL FOR ILAB:ROBERT WHOLEY 
DEPT FOR WHA/PPC, WHA/CEN AND DRL/IL 
 
E.O. 12958: N/A 
TAGS: ELAB, ETRD, PGOV, PINR, GT 
SUBJECT: AMBASSADOR PRESSES LABOR AGENDA WITH NEW LABOR 
MINISTER, UNION LEADERS 
 
REF: A. GUATEMALA 555 
     B. GUATEMALA 511 
     C. GUATEMALA 414 
     D. GUATEMALA 221 
     E. GUATEMALA 191 
 
1.  (SBU) Summary:  The Ambassador told Labor Minister Victor 
Moreira during a courtesy call March 3 that there is 
heightened USG interest in labor rights in Guatemala in the 
context of CAFTA negotiations, and urged Moreira to address 
cases in outstanding GSP petitions.  Moreira said that his 
priorities include steps to prevent similar cases of labor 
rights violations from arising in future, but that more 
ambitious reforms will not be possible in an election year. 
Investigating violence against union leaders, reforming the 
labor justice system, and reinstating illegally fired workers 
are not directly under the labor ministry's jurisdiction. 
Nevertheless, at President Portillo's insistence, Moreira 
said he would use the urgency of CAFTA negotiations to spur 
what progress he could.  In a separate meeting, labor union 
leaders urged the Ambassador to include strong labor 
protections in CAFTA.  We will continue to press for GOG 
measures that respond to GSP conditions and report on 
progress before April 15.  End Summary. 
 
Our Labor Rights Agenda 
----------------------- 
 
2.  (SBU) The Ambassador told Moreira that the GSP review 
decision is pending, and there is heightened interest in the 
petition in the context of CAFTA negotiations.  USG concerns 
include: 1) the urgent need for more effective investigation 
of violence against unionists, especially cases of killings 
of labor leaders, to end the climate of impunity for 
anti-union violence; 2) the need to streamline and strengthen 
the labor justice system; and 3) the need for better 
enforcement of labor court rulings.  Should Guatemala be put 
under review, the Ambassador said, Guatemala's labor rights 
protections will come under intense scrutiny by U.S. 
officials; loss of GSP privileges would affect prospects for 
a successful CAFTA negotiation. 
 
3.  (SBU) The Ambassador acknowledged that some of these 
issues fall outside the jurisdiction of the labor ministry, 
and mentioned his own efforts to enlist the cooperation of 
other GOG leaders on labor rights, including President 
Portillo (Ref b), the Attorney General (Refs a & d) the 
President of the Supreme Court (Ref c), and the Economy 
Minister (Ref e).  The Ambassador also raised with Morales 
the case of workers at Finca Maria Lourdes, which is 
highlighted in the AFL-CIO GSP petition.  This case involves 
a coffee plantation in Quetzaltenango department where 55 
workers were illegally fired in 1995 after organizing a 
union.  The labor courts ruled in favor of the workers and 
ordered reinstatement of the workers.  Finca owners have 
repeatedly refused entry to police attempting to serve the 
court order.  LabAtt expressed appreciation for the efforts 
by Moreira's predecessors to resolve difficult cases, and 
urged that he consider doing so in this case. 
 
Moreira's Priorities 
-------------------- 
 
4.  (SBU) Moreira said that he intended to use the attention 
to labor rights in the CAFTA talks to justify his own planned 
initiatives to meet ILO standards, as follows: 
 
--  Resolve the teachers strike.  (Note: The GOG made the 
teachers an offer on February 28 and teachers have rejected 
the offer but will meet with GOG negotiators (Moreira, the 
Education and Finance Ministers) under the facilitation of 
Archbishop Quezada Toruno on March 4.  End Note.) Moreira 
said that his predecessor, ex-minister Victor Hugo Godoy, was 
dismissed at the Vice President's request over collusion 
between ministry workers and the leaders of the teachers' 
strike. 
 
--  Legislation:  Introduce new child labor protections; 
unprecedented sexual harassment legislation; a universal 
"no-fault" severance system (which would help unclog the 
labor courts, where workers unjustly fired must petition for 
severance);" and reforms to permit social security coverage 
for domestic workers (paid for by workers, not employers); 
 
--  Labor Justice:  Moreira said that President Portillo had 
just called and asked him to emphasize the need for all three 
branches of government to cooperate to address labor rights 
issues.  Moreira is seeking a meeting with the Supreme Court 
president to discuss the need for labor justice streamlining 
(which will require legislation) and cooperation on specific 
cases cited by the GSP petitions (e.g. Finca Maria Lourdes); 
 
--  Minimum Wage-Setting Process:  Review the current system 
for fixing the minimum wage, which has been criticized by the 
private sector as being unilateral on the part of the 
Executive; 
 
--  Internal Reforms:  He has named a third vice minister, 
for administrative affairs, and plans new internal 
regulations.  Also hopes to achieve a collective bargaining 
agreement with ministry workers.  He wants to develop a 3-5 
year plan which includes budgetary needs to address the needs 
of the informal sector, CAFTA and longer-term necessary 
reforms to the labor code; 
 
--  Civil Service Reform:  Analyze the problems of multiple 
government personnel systems, and recommend reforms for the 
next government to consider; 
--  Public Employee Recreation Fund:  He hopes to spin this 
off to an autonomous institute; and, 
 
--  Union Registration:  He will offer an amnesty for fines 
during a six-month transition period. 
 
5.  (SBU) Moreira agreed that the Finca Maria Lourdes case, 
like the DYMEL case resolved in 2002, is emblematic of 
egregious non-enforcement of court decisions.  Responsibility 
for addressing these cases lies in the jurisdiction of the 
courts.  He will discuss the case with the president of the 
Supreme Court.  Moreira said his goal as Labor Minister is to 
make key reforms to prevent similar cases from arising in the 
future.  Vice Minister Antonio Monzon told the Ambassador 
that there had been an agreement between local authorities, 
fired Maria Lourdes workers and the plantation owner for 
talks about how to resolve the situation, in which the labor 
ministry is participating. 
 
Biographic Information and Comment 
---------------------------------- 
 
6.  (SBU) Moreira is a former labor leader (Secretary General 
of the state electricity utility union, STINDE, in the 
mid-90's) who was named on January 30 to replace ex-minister 
Victor Hugo Godoy, now rumored to be named Guatemala's next 
Ambassador to the OAS.  Like Godoy, Moreira owes his 
allegiance directly to Portillo.  (Note:  Godoy resigned 
under pressure from the Vice President, after enduring 
constant potshots from the VP inside the Cabinet.  End Note.) 
 Moreira's relations with Reyes Lopez and Rios Montt are not 
known. 
 
7.  (U) Prior to becoming minister, Moreira was serving as 
Portillo's private sub-secretary after being named in June 
2001 as GOG Commissioner for the Promotion of Transparency 
and Against Corruption (he complained publicly about lack of 
funding for that commission in February 2002, but retains the 
title).  At the outset of the Portillo Administration Moreira 
served as sub-secretary of Strategic Analysis under 
now-Foreign Minister Edgar Gutierrez.  He is a close friend 
of the First Lady. 
 
8.  (SBU) In May 2002, Moreira was arrested and jailed for 
contempt of court after failing to appear at an earlier 
hearing on charges which dogged him from his position as head 
of the business department of the electricity institute (he 
pleaded illness).  He was released on bail after three weeks 
and later acquitted.  (He joked to the Ambassador that given 
the difficulty of resolving the teachers' strike, he was 
better off in jail.)  Moreira is reportedly a former member 
of the Guatemalan Workers Party (PGT) and a former member of 
a Marxist group called "January 6th."  An economist and 
social scientist by training, Moreira worked on the 
Historical Memory Project under assassinated Bishop Gerardi 
and also worked for the Myrna Mack foundation.  Moreira is 38 
years old and his wife is half-British. 
 
9.  (SBU) Moreira's feisty ministerial approach has already 
raised hackles in both CACIF and organized labor.  CACIF is 
privately furious that, after giving lip service to dialogue, 
he referred to management's representatives on the board of 
the national training institute (INTECAP) as hypocritical for 
being "bloodily repressive" to their own workers and 
characterizing the private sector in general as a "genocidal 
oligarchy."  An intense man, Moreira gives the impression 
that he is spoiling for the fight with the private sector, 
which seems inevitable in an election year.  His earlier, 
more ambitious legislative package, outlined to LabAtt on 
February 4, seemed designed to provoke that fight, and CACIF 
vows to reverse anything the FRG passes that it does not 
like. 
 
10.  (SBU) Meanwhile, Moreira's relations with organized 
labor are not looking much better.  Union leaders believe he 
was named to replace Godoy because Godoy refused to use tough 
tactics to bring the striking teachers to heel:  the ministry 
has processed thousands of penalties against individual 
teachers for absenteeism during the strike, and labor courts 
have ruled the strike illegal, making strikers liable to lose 
their jobs and even pay damages (unlikely to enforced).  Top 
labor leaders are also unhappy with Moreira's autocratic 
manner and lack of respect in tripartite meetings, and are 
particularly concerned about his inclusion of "no-fault" 
severance pay in his legislative priorities.  They worry that 
management will use this tool to rid employee ranks of union 
members. 
 
11.  (SBU) Moreira strikes us as serious about protecting 
labor rights, but politically vulnerable and wholly dependent 
on Portillo's support.  Clearly smarting from the bruising 
(and ongoing) teachers' strike and the cool reception from 
organized labor and private sector members of the tripartite 
labor policy commission, Moreira has already scaled back his 
agenda in the short time since taking office.  We will 
continue to press the minister to take steps to meet GSP 
labor conditions, but will also need to look elsewhere for 
stronger allies to be assured of progress. 
 
Union Leader Concerns 
--------------------- 
 
12.  (SBU) The Ambassador also discussed labor rights and the 
GSP petitions February 13 with four prominent labor leaders: 
Jose Pinzon, Secretary General of the CGTG industrial union 
and leader of the main labor federation (UGT); Nery Barrios, 
Secretary General of the other main federation (UASP); Julio 
 
SIPDIS 
Coj, Secretary of the independent UNSITRAGUA federation, and 
Carlos Mancilla, Secretary General of the CUSG federation, 
also a member of the UGT.  The union leaders complained about 
the lack of political will to support freedom of association; 
urged the USG to incorporate strong labor protections into 
the CAFTA to replace those under GSP, and thanked the USG for 
applying GSP conditions to leverage progress from the GOG in 
the past.  In response to the Ambassador's question, the 
union leaders said U.S. multinational firms are no better 
than local ones at respecting the right to association (he 
cited the maquila sector, Coke, and Pepsi, specifically). 
(Note:  Working conditions, including salaries, are 
significantly better than average in U.S. operations than 
elsewhere here.  End Note.) 
HAMILTON