REQUEST FOR FY 2005 LABOR SECTOR SUPPORT IN MOZAMBIQUE

UNCLAS MAPUTO 001606

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 unions, 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
government officials, union groups, and the private sector.
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." In addition, during this period the
USG supported a confederation of business associations pushing
policy change in the legal system 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. The seminar was 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 the 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.


5. The GRM is currently considering revisions of the
Mozambican labor law. Areas under discussion for revision
include provisions on hiring foreign labor, the system of
labor inspections, and the need for labor arbitration centers.
However, to date the only proposed bill receiving unanimous
support from government, unions and the private sector deals
with labor arbitration. Currently only a limited number of
labor disputes are subject to arbitration, and then via
procedures that neither employers nor unions find attractive.
Moreover, even though the law provides for their creation, at
present no labor arbitration courts have been set up. This
has led to the creation of a substantial backlog of labor
cases awaiting decisions. Mozambique compares unfavorably in
this regard with other countries in the region, all of which
have functioning labor courts and well-developed alternative
dispute resolution (ADR) forums.


6. It appears likely that the GRM will approve the labor
mediation bill and implement new labor legislation by late

2005. The GRM then will require assistance in establishing
new labor mediation centers and training mediators.


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 government,
unions, and the private sector. The groundwork that the USDOL
has already laid through its labor mediation training (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.
LA LIME