UNCLAS SECTION 01 OF 02 MAPUTO 001584

SIPDIS
DEPT FOR AF/S - HTREGER and DRL/IL - JHARPOLE
LABOR FOR ILAB - BYOUNG, PWHITE, AZOLLNER, SHAHN
JOHANNESBURG FOR RLO - JCOLLINS
COMMERCE FOR RTELCHIN
E.O. 12958: N/A
TAGS: ELAB EINV ECON MZ
SUBJECT: REQUEST FOR FY 2005 LABOR SECTOR SUPPORT IN
MOZAMBIQUE

REF: a. MAPUTO 713

b. 03 Maputo 1275


1. This is an Action Request. See paragraph 8.


2. SUMMARY. The Mission, the Mozambican Minister
of Labor, labor unionsfederations, and private
sector leaders would like continued USG support for
labor projects in Mozambique in FY05. In
particular, there is an urgent need to continue the
USDOL-funded "Improving Industrial Relations in
Mozambique" project that provides labor mediation
training and support to union groups, government
officials, union groups, and the private sector
employers. END SUMMARY.


3. In 2003-2004, the Mission, in coordination with
USDOL - ILAB, State - DRL/IL, and the regional labor
officer, organized several successful events on
labor issues in Mozambique. These events included
training courses on labor mediation and industrial-
based bargaining, an HIV/AIDS prevention- in- the-
workplace program, a visit by the Director and
Deputy Director of the Federal Mediation and
Conciliation Service (FMCS), an 80-person seminar on
improving labor relations in Mozambique, and
authorship of the book, "Labour Relations in
Mozambique." The USG's assistance to the GRM comes
at a critical time, as the Mozambican labor law is
under revision. In addition, during this period the
USG supported The USG provided and continues to
provide significant support to this effort via
recently implemented programs and through its
support of CTA, a confederation of business
associations pushing policy change in the legal
system in order to create a more attractive business
and investment climate (Ref A).
?

4. During this period the USG, specifically
USDOL/ILAB, supported labor mediation training for a
group of 30-40 representatives from the private
sector, labor unions, and the government supported
an 80-person seminar on improving labor relations in
Mozambique. The seminar was s taught by FMCS
personnel, who visited Mozambique on four separate
occasions. Those receiving the training were solely
from the capital city, Maputo. Although some of
those trained took their knowledge "on the road" to
train employees in th

e central provinces of Sofala
and Manica, without funds or adequate teaching
skills, this effort was minimal. Nevertheless, the
program has received high praise repeatedly from the
Minister of Labor, leaders of the commercial
arbitration center (CACM), union leaders and
members, and employers (Ref B). The timing of the
labor arbitration training was key, as it coincided
with dialogue on labor law reform.


4. The GRM is currently considering further
revisions of the Mozambican labor law. Areas under
discussion for revision includeSeveral areas of the
law are being discussed, including provisions on
hiring foreign labor, the system of labor
inspections, and the need for labor arbitration
centers. However, to date the The only proposed
bill receiving unanimous support from the tripartite
group (government, unions and the private sector
deals with employers, and unions) sets forth the
creation of a public and several private labor
arbitrationmediation centers. Currently Under the
current labor law, only a limited number of labor
disputes areis subject to arbitration, and then
viaand under procedures that neither employers nor
unions seem to find particularly attractive.
Moreover, eEven though the law provides for their
creation, at present no labor arbitration courts
have been ever been set up. This has led to the
creation of This has allowed a substantial backlog
of labor cases awaiting decisions. bottleneck of
labor litigation to develop, and many cases are left
for years without resolution. Mozambique compares
unfavorably in this regard with other countries its
competitors in the region on this issue, all of
which have functioning labor courts and well-
developed alternative dispute resolution (ADR)
forums.
?

5. It appears likely that If the Ministry of
Labor's current dialogue is an indication of future
action, the GRM will approve thea e the draft labor
mediation bill and implement new labor legislation
by late 2005. The GRM then will require assistance
in establishing new Because it will be a key
addition to the new system, the structure of labor
mediation centers and the training of mediators must
be given proper attention.
The groundwork that the USDOL has set through its
labor mediation training (facilitated by FMCS),
"Improving Industrial Relations in Mozambique" is an
excellent forum for fostering the development of
formal labor mediation in Mozambique.


6. The 2003 USDOL-funded program, "Improving
Industrial Relations in Mozambique" received high
praise repeatedly from the Minister of Labor,
leaders of the commercial arbitration center (CACM),
union leaders and members, and employers (Ref B).
The training consisted of four FMCS visits by
excellent instructors that instructed a group of
thirty private sector, government, and union
representatives on industrial-based bargaining and
labor dispute resolution. These group trained was
solely from Maputo. 7. Comment: Changes to permit
liberal access to labor arbitration in Mozambique
are long overdue, however progress is being made.
There now is a clear opportunity for the USG to
support the GRM in making the transition to a labor
system that includes labor mediation practices for
employers and workers in government, unions, and the
private sector. The groundwork that the USDOL has
already laid through its labor mediation training
seminar (para 4 above) is excellent preparation for
further developing labor mediation in Mozambique.
In July, the Ambassador visited with USDOL/ILAB
staff to demonstrate the Mission's desire to see the
program continue.


8. Action Request: Mission requests USDOL continue
funding for the "Improving Industrial Relations in
Mozambique" program. Mission also requests guidance
from DRL/IL regarding the availability of Department
resources to support training in labor mediation.
Cognizant of the legislation changes likely to be
made, it is an opportune time to continue with
training for a wider group of government, union, and
private sector representatives. The formerly trained
group took some of their knowledge "on the road" to
train employees in the central provinces of Sofala
and Manica, but without funds or adequate teaching
skills, this effort was minimal.


7. Changes to permit liberal access to labor
arbitration in Mozambique are long overdue, however
progress is being made. There is a clear
opportunity for the USG to support the GRM in making
the transition to system that includes labor
mediation and be successful in this effort. To the
extent resources are to be made available, it would
be best used to continue training labor mediators
and arbitrators - both in Maputo and in other major
cities across the country.


8. Action Request: Mission requests USDOL consider
the request to continue the "Improving Industrial
Relations in Mozambique" program. Mission also
requests guidance from DRL/IL regarding the
availability of resources to support the labor
mediation effort.
LA LIME