US embassy cable - 03TEGUCIGALPA1548

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 001548 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR DRL/IL, EB, WHA/PPC, WHA/EPSC, AND WHA/CEN 
STATE PASS USTR 
DOL FOR ILAB 
USDA FOR FAS 
GUATEMALA FOR AGATT 
 
E.O. 12958: N/A 
TAGS: ELAB, EAGR, EINV, ETRD, PHUM, PGOV, HO 
SUBJECT: LABOR/MANAGEMENT RELATIONS EXCELLENT AT STANDARD 
FRUIT (DOLE) IN HONDURAS 
 
REF: A. 02 TEGUCIGALPA 3276 
     B. 02 TEGUCIGALPA 1861 
 
1. (SBU) Summary:  Standard Fruit (Dole) and its union 
maintain good relations, with both sides saying that the two 
have worked closely together since Hurricane Mitch in 1998. 
In fact, Dole has announced an expansion of its investment in 
Honduras.  While the union has declined in numbers and 
strength, it remains a key player in Honduran labor, and is 
the base of the important FESITRANH federation which in turn 
controls the CTH confederation.  It is ironic that Standard 
Fruit, long criticized for its actions in this former "banana 
republic," now is an excellent example of harmonious 
labor/management relations and the benefits foreign 
investment can bring to Honduras when both sides bring a 
constructive attitude to the table.  End Summary. 
 
Dole Management: No Problems with Labor Unions 
--------------------------------------------- - 
 
2. (U) Ambassador, Econ Counselor, AID Director, and LabAtt 
met with Gerald Brunelle, General Manager, and other top 
officials Dole's Honduran subsidiary Standard Fruit of 
Honduras and toured Dole's pineapple plantations, processing 
plants, and laboratories in La Ceiba May 15.  Dole officials 
said the Maya Division, which includes both Honduras and 
Guatemala, employed 5,500 workers who belonged to five 
different unions (the main union being SUTRASFCO).  Dole had 
approximately 769 salaried personnel and also contracted with 
independent producers.  Dole's Maya Division produces 10 
million boxes of bananas per year and independent banana 
producers 4-5 million boxes per year for Dole.  Dole also 
produces four million boxes of pineapples per year. 
Pineapple workers were mainly contract labor (in the past 
they had been unionized).  Dole recently announced an 
important expansion of investment in Honduras. 
 
3. (U) Dole officials said the company had excellent 
relations with its unions, especially SUTRASFCO, and noted 
that Hurricane Mitch had brought management and labor closer 
and had led to improved productivity at the company. 
Unionized workers receive some of the best pay and benefits 
for workers in Honduras (housing, medical care, etc.); 
non-unionized pineapple workers made considerably less (some 
only approximately USD 1/day). 
 
Labor Union Praises Dole and Calls for More Investment 
--------------------------------------------- --------- 
 
4. (U) LabAtt met May 15 with the main Standard Fruit Company 
Workers' Union (SUTRASFCO), led by President Carlos Lopez. 
SUTRASFCO is a key union in the Federation of Workers' Unions 
of Honduras (FESITRANH), the base of power for Confederation 
of Workers of Honduras (CTH) Secretary General Dinora 
Aceituno.  (Note:  The CTH is one of three Honduran labor 
confederations and is affiliated with the International 
Confederation of Free Trade Unions (ICFTU).  End Note.) 
SUTRASFCO leadership confirmed that the union had had good 
relations with Dole ever since Hurricane Mitch in 1998, with 
the two sides working together to improve the company and 
labor/management relations.  The union, which has an upcoming 
election, is currently negotiating a new three-year 
collective bargaining agreement.  The contract will cover 
1,300 permanent workers, and for the first time will cover 
some temporary workers.  Like Chiquita's union (ref A), 
Dole's union leaders bemoaned the slow but steady decline in 
jobs at Dole, which in turn led to the relative decline of 
the union.  From 18,000 members in 1954 to 5,000 workers in 
1975 (when the railroad and the port in La Ceiba were 
nationalized), the union continued to decline, and lost 550 
jobs after the devastation of Hurricane Mitch. 
 
5. (U) While there are of course minor problems, union 
officials said they had no major problems with Dole.  The 
major problem was a lack of any other job opportunities in 
the La Ceiba area besides Dole.  With only a couple of 
maquilas in the area, union officials gave an impassioned 
pitch for increased private investment. 
 
Pesticide Court Case Continues to Block Settlement 
--------------------------------------------- ----- 
 
6. (U) Over the past two presidential administrations, the 
GOH has been coordinating tripartite negotiations for an out 
of court settlement of workers and ex-workers affected by 
DibromoChoropropane, or Nemagon, a pesticide used on Dole 
banana plantations in the 1960s and 1970s (ref B).  In a 1997 
judgment against Shell Oil Company, Dow Chemical, and 
Occidental Chemical Corporation, a U.S. court charged Nemagon 
producers USD 41.5 million for damages due to sterility of a 
few hundred Honduran workers, and another 25,000 workers in 
11 countries worldwide.  Most of the Honduran plaintiffs have 
already received payments as a result of this settlement. 
However, a larger number of Honduran workers suffering a 
wider array of claimed side-effects have been clamoring for 
some form of workers' compensation from Dole.  A class action 
suit against Dole remains in the U.S. courts and has impeded 
any national resolution.  Despite efforts by a 
government-sponsored commission of management, labor, and 
government officials from the Ministries of Justice, Labor, 
and Health, and a desire by Dole to settle the lawsuit, the 
class action suit in U.S. courts has yet to be dropped by the 
workers.  This has impeded Dole from proceeding with an out 
of court settlement in Honduras.  SUTRASFCO officials said 
they understood Dole's position and hoped that a settlement 
could be reached. 
 
Standard Fruit a Positive Example 
--------------------------------- 
 
7. (SBU) Comment.  It is somewhat ironic that it Standard 
Fruit, long criticized for its actions in this former "banana 
republic," is now an excellent example of harmonious 
labor/management relations and the benefits foreign 
investment can bring to Honduras when both sides bring a 
constructive attitude to the table.  Not unique in their 
devastation from Hurricane Mitch, Dole and Chiquita both have 
invested to rebuild their Honduran operations in contrast to 
several Honduran banana companies that did not.  If workers 
drop their U.S. lawsuit, an out of court settlement of the 
pesticide case would then solve the only outstanding labor 
issue.  End Comment. 
Palmer