US embassy cable - 03GUATEMALA1170

UNCLAS SECTION 01 OF 04 GUATEMALA 001170 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR WHA/PPC:CHARLOTTE ROE; DRL/IL:ARLEN WILSON; 
EB: RANDY FLEITMAN 
LABOR DEPARTMENT FOR ILAB: JORGE PEREZ LOPEZ, CARLOS ROMERO 
AND ROBERT WHOLEY 
USTR FOR BUD CLATANOFF AND ANDREA DURKIN 
 
E.O. 12958: N/A 
TAGS: ELAB, ETRD, PGOV, GT 
SUBJECT: PRE-CAFTA ROUND GUATEMALA LABOR UPDATE (#3) 
 
 
1.  (SBU) Summary: The following labor developments in 
Guatemala are discussed in the paragraphs marked below. 
 
-- Special Prosecutor's Case Files--Violence Against 
Unionists (2) 
 
-- More May Day Marchers Reject CAFTA (3) 
 
-- President Portillo Touts Labor Priorities and CAFTA (4) 
 
-- U.S. Human Rights Report and UNICEF Child Labor Report 
Make Headlines (5) 
 
-- Banana Conflict Brewing (6) 
 
-- Social Security Institute Raises Rates (7) 
 
-- Unemployment Increased to 18% in 2002 (8) 
 
End Summary. 
 
2.  (SBU) Special Prosecutor Opens His Case Files 
--------------------------------------------- ---- 
 
On April 25 the Embassy received an update from the Attorney 
General on the status of investigations of violence against 
union leaders.  The report included actions taken by 
investigative authorities in the following murder and 
violence cases (see below) and also reported on 10 cases of 
threats, one of abuse of authority, one of union fraud, one 
of robbery, and one of falsification of documents involving 
union member victims (details not included here). 
 
a.  Murder of Baldomero de Jesus Ramirez, member of the Union 
of Municipal Workers of Santa Lucia Cotzumalguapa, Esquintla. 
 June 17, 1999. 
 
Status:  No suspects. 
 
b.  Murder of Oswaldo Monzon Lima, Secretary General, Union 
of Gas Truck Drivers, Esquintla.  June 22, 2000. 
 
Status:  Suspect:  Mario Roberto Ortiz Barranco.  No arrests. 
 
c.  Threats Against Gloria Rafaela Cordova Miranda and Gilda 
Esperanza Tecun Sazo, members of the Union of Workers at the 
Choishin Textile factory, Villa Nueva, Guatemala province, 
July 18, 2001. 
 
Status:  Suspect: Wal Jong Lee.  Judge dismissed the case on 
July 23, 2002 for lack of evidence.  Case still open in 
Prosecutor's Office. 
 
d.  Murder of Baudilio Amado Cermeno Ramirez, Organization 
Secretary, Light and Power Union.  Guatemala City.  December 
 
SIPDIS 
21, 2001. 
 
Status:  Indictment (but no arrest warrant) issued October 
29, 2002, for Rosa Maria Gonzalez Gonzalez, his companion. 
 
e.  Bullet wounds to Marcos Alvarez Tzoc, Union of Workers at 
El Arco Plantation, Chicacao, Suchitepequez, January 18, 2003. 
 
Status:  Suspect: Julio Enrique de Jesus Salazar Pivaral. 
Report to judge in Suchitepequez on April 14, 2003 requesting 
arrest warrant for Salazar. 
 
f.  Murder of Carlos Franciso Guzman Lanuza, leader of Union 
of Municipal Workers and Secretary General of the Labor Front 
of the South Coast, in Nueva Concepcion, Escuintla.  November 
27, 2002. 
 
Status:  Witnesses placed in witness protection program. 
Case referred to Presidential Secretariat for Specific Issues 
on orders of Attorney General.  (Note:  press reported that 
Rolando Chacon Escobar, first councilman of Nueva Concepcion, 
was arrested for this and other crimes on April 25, 2003. 
End Note.) 
 
3.  (U) May Day March Bigger Than Past Years 
-------------------------------------------- 
 
Between 25,000 and 35,000 workers marched in May Day parades 
in the capital, a significant increase over recent years. 
The marchers, ranks were swelled by teacher organizations, 
who concluded a successful nationwide strike in March. 
(Note: The teacher strike was ruled illegal by labor courts, 
but Congress passed an amnesty for strikers on April 2. 
Teachers remain in dialogue with the government on unresolved 
budgetary demands and the fate of an education 
decentralization teachers unions have labeled privatization. 
End Note.)  The May Day march was initially divided between 
two major groupings, the UASP labor federation, which 
includes teachers groups, and the other major federations 
(UGT, UNSITRAGUA, CSNP).  All came together in the central 
square and were unified in their common demands: 
 
-- job creation, decent wages, reinstatement of illegally 
fired workers, agrarian reform, greater freedom to organize 
unions and bargain collectively, full implementation of the 
Peace Accords, 
-- resignation of the Labor Minister (for abuse of authority), 
-- rejection of a CAFTA and FTAA, 
-- rejection of payments to ex-civil defense patrollers who 
committed human rights abuses, 
-- rejection of increased payroll deductions for Social 
Security, and demands for greater autonomy for the Social 
Security Institute, 
-- rejection of fuel and electricity price hikes, and 
-- rejection of privatization of education, health and social 
security. 
 
4.  (U) President Portillo Touts Labor Priorities and CAFTA 
--------------------------------------------- -------------- 
 
The May 2 copy of the government's official daily, "Diario de 
Centro America," includes text of President Portillo's May 
Day speech, including the following comments on the labor 
clause of a CAFTA: 
 
-- The labor clause must be integrated into the main text of 
a CAFTA agreement, 
 
-- There should be a "cooperative focus" in the enforcement 
mechanism, 
 
-- Responsibilities of governments and companies should be 
clearly differentiated, 
 
-- Our right to require clarification and amplification of 
the text must be respected, 
 
-- It should be understood that we cannot assume short term 
solutions for structural problems that require medium and 
long-term solutions, 
 
-- The dispute settlement mechanism for labor issues must be 
separate from other disputes, due to its special nature and 
the ILO and bilateral rules. 
 
The speech also highlights other GOG labor priorities: 
 
-- Ministry restructuring (new Strategic 5-year Plan) to 
better meet today's realities (70% of workers in informal 
sector, 50% of workers located in rural areas, coffee crisis, 
a weak Labor Ministry). 
 
-- A Labor Ministry budget boost of 30% for 2004. 
 
-- A collective bargaining agreement for the ministry's 
workers. 
 
-- Labor Code reforms to be sent to Congress shortly: on 
child labor, domestic workers, sexual harassment, universal 
(no-fault) severance pay, and procedural and administrative 
process changes. 
 
-- Tripartite dialogue, formation of a national recreation 
institute for recreation for public sector employees, a new 
national core labor rights course. 
 
5.  (U) HRR and UNICEF Child Labor Report Get Headlines 
--------------------------------------------- ---------- 
 
Major daily Prensa Libre printed an opinion piece on May 2 
headlined "Labor Criticisms from the U.S. Against Guatemala" 
noting criticisms of labor rights violations in the context 
of CAFTA negotiations.  The article quoted extensively from 
the Department's Human Rights Report for 2002 (newly 
translated and on the Embassy's website).  Press also gave 
extensive coverage to a recent report from the National 
Statistical Institute, funded by UNICEF and the World Bank, 
which reported the following statistics for child labor in 
Guatemala: 
 
-- highest incidence of child labor in Central America 
(507,000 children working between ages 7 and 14 (66% male, 
56% indigenous, 77% rural); 418,000 between ages 15 and 17 
(66% male, 47% indigenous, 69% rural); a total of 925,000 
child workers). 
 
-- The rate of child workers has risen from 7.9% in 1994 to 
23.5% today. 
 
-- 68% of child workers work in the agriculture sector. 
 
-- 76% of child workers work for their families and are not 
paid for their labor. 
 
-- Child workers work an average of 47 hours per week. 
 
-- 8,000 child workers work in dangerous professions such as 
fireworks production and in mines. 
 
6.  (SBU) Banana Conflict Escalating 
------------------------------------ 
 
In early March, 38 workers at the Lourdes and Fatimah 
plantations owned by BANDEGUA and leased to independent 
producers were fired in retaliation for a two week work 
stoppage during which workers also blockaded an access road 
that serves a number of plantations, including some not 
involved in the work stoppages.  BANDEGUA is the Guatemalan 
subsidiary of Del Monte Fresh Produce of Coral Gables, 
Florida.  On April 24 the SITRABI banana workers union told 
U.S. Representative Levin that another 60 workers have since 
been fired, and all 98 workers and the SITRABI union 
leadership have been charged in criminal court for violations 
related to the loss of fruit and blockage of transit.  The 
Solidarity Center is considering including the conflict in 
its submission for CAFTA labor comments.  LabAtt inquired 
about this case on April 30 to Vice Labor Minister Monzon, 
and expressed concern that the ministry mediate labor 
conflicts before they escalate into criminal actions. 
Monzon's son, Sergio Monzon Ordonez, is reportedly the new 
operator of the plantations.  Monzon Sr. said a high level 
GOG group is being formed to seek resolution of the conflict 
and will provide additional information on May 7. 
 
7.  (U) Social Security Institute (IGSS) Raises Rates 
--------------------------------------------- -------- 
 
The IGSS has invested funds in a controversial new housing 
project, and been the subject of union and employer calls for 
greater political autonomy, and the subject of never-ending 
corruption scandals that leave hospitals without medicine. 
Even more controversial, however, was the decision by the 
IGSS board to increase employer and worker payroll deductions 
beginning in April.   By changing the calculation of base pay 
to include mandatory bonuses, the IGSS decision nearly 
tripled the average contribution by workers and employers. 
The board also decided to delay IGSS coverage for new 
registrants for four months after inscription.  The payroll 
tax increase sparked a constitutional challenge from 
employers (CACIF), a non-binding resolution in Congress 
asking the board to reconsider the increase, and protests 
from labor groups. 
 
8.  (U) Unemployment Rising 
--------------------------- 
 
Press reported that unemployment (including underemployment 
) jobs that once finished, lead to unemployment) jumped from 
10.8% in 2000 to 18.3% in 2002, according to the National 
Statistical Institute's August-September 2002 Survey of 
Employment and Income.  During the same period, however, 
employment (especially in the informal sector) has increased, 
as more women have entered the workforce (increasing from 
700,000 in 1989 to 1.8 million (of a total of 4.9 million) in 
2002).  In Guatemala City, 43% of women workers are 
unemployed or under-employed.  The agriculture sector, which 
includes 50% of all male workers nationwide and 18% of women 
workers, has the highest rate of informal employment (80%), 
where workers are not covered by social security or other 
legal protections. 
 
HAMILTON