AMBASSADOR PRESSES LABOR AGENDA WITH NEW LABOR

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