ECUADOR LABOR UPDATE

UNCLAS SECTION 01 OF 03 QUITO 002642 SIPDIS SENSITIVE SECSTATE FOR USTR USTR FOR BUD CLATANOFF, USDOL FOR JORGE PEREZ-LOPEZ, DRL/IL FOR GREG MAGGIO, EB FOR AMY HOLMAN, GENEVA FOR JOHN CHAMBERLIN E.O. 12958: N/A TAGS: ELAB PGOV EC SUBJECT: ECUADOR LABOR UPDATE REF: A. GUAYAQUIL 1064 ¶B. QUITO 2614 ¶1. (U) Summary. Following are labor-related developments of interest: --MOL to Consult Unions on Subcontracting Decree (para. 2) --Rules Proposed for National Labor Council (3) --MOL Computers for Child Labor Inspectors (5) --National Campaign to Eliminate Child Labor in Trash Sector (8) --Public Sector Protests Salary Standardization (9) --Strike Affects 120 Hospitals (11) --Galapagos Park Strike Ends (12) --Illegal Peruvian Migrant Workers Deported (13) --Profit Sharing Benefits Selected Workers in 2003 (14) --Unemployment and Informal Sector Stats (15) MOL to Consult Unions on Subcontracting Decree -------------- ¶2. (SBU) The Minister of Labor told LabOff on September 29 the decree will be signed no later than October 1 by the President and published officially the following week. Patricio Contreras of the Solidarity Center (AFL-CIO) told LabOff that Minister of Labor Izurieta will meet with unions again regarding the draft subcontracting decree on September ¶30. Operating Rules Proposed for National Labor Council -------------- -------------- ¶3. (U) According to the Sandra Jacomi, assistant to Minister of Labor Raul Izurieta, the National Labor Council has met three times since its creation in July. Council members have been named. On September 9, the ILO and the Chambers of Commerce and Industry separately proposed operating rules for the National Labor Council but these are still being studied and have not been approved yet. The MOL has yet to name the Technical Secretariat who will staff the National Labor Council. The ILO has proposed a profile for members of the Technical Secretariat. ¶4. (U) The Minister proposed on September 27 that Labor Code reform be one of the themes to be discussed in the Council. This includes the issues of company retirement and hourly work. There are no proposals pending from the union or business sectors on Labor Code reform. MOL to Provide Computers to Child Labor Inspectors -------------- -------------- ¶5. (U) Jenny Cepeda, Technical Secretary of the Division of Child Labor in the MOL, told LabOff on September 27 the MOL is acquiring computers for the child labor inspectors which should be in place by mid-November. She said the MOL has set aside $2000 a month for transportation funds for the inspectors. Currently, two child labor inspectors use the Institute of the Child and Family (INNFA) offices in Los Rios and El Oro. Four inspectors use INNFA vehicles in Guayas, El Oro, Los Rios and Pichincha. Bladimir Chicaiza of the ILO told PolOff there is a critical lack of resources for the rehabilitation of child workers. In Guayas, Los Rios and El Oro provinces, he said, transportation is provided by the Association of Banana Exporters. ¶6. (U) Ruth Mosquera, Director of the Division of Child Labor in the MOL, told PolOff on September 28 that two child labor inspectors had recently resigned. She said they will work until the end of the month when they will be replaced. Chicaiza said two training sessions have provided child labor inspectors with adequate knowledge of the legal framework related to child labor. He said there is willingness on the part of the MOL to offer further training to the inspectors. ¶7. (U) To confirm information in Ref A regarding inspections of Dole banana plantations, PolOff spoke on September 27 with Juanita LaRosa, the child labor inspector for Guayas province. LaRosa said that 18 out of the 55 banana farms she has inspected in Guayas since August 2004 have belonged to Dole (around 33%). She said this is because they are located close together and the MOL conducts inspections by geographic zone. LaRosa said that there are 50 Dole farms in this zone. Patricia Paez, Undersecretary in the MOL for the Coastal Region told PolOff on September 27 that all companies are getting equal treatment. Patricia Hoyos of UNICEF told PolOff on September 29 she believes the inspection sites are being selected impartially. Hoyos said there is no way for the inspector to know who the owner is of the haciendas marked on inspection maps. National Campaign Focuses on Children -------------- ¶8. (U) Press reported that on September 23, the second phase of a national campaign "Child Hope" began which aims to gain public support for eliminating child abuse. The first phase of the campaign, developed by UNICEF, focused on eliminating child labor in the trash sector by creating 25 micro-enterprises generating family income, educational scholarships and health services. Public Sector Protests Standardization of Salaries -------------- -------------- ¶9. (U) Patricio Contreras of the Solidarity Center (AFL-CIO) told LabOff on September 27 that various public sector workers were considering protesting the January 2004 Civil Service Law on standardizing public sector salaries. The law was proposed by the GoE as part of the last agreement with the IMF. The National Confederation of Public Workers (CONASEP) along with electrical, petroleum, telecommunication, health and municipal workers is participating and Ministry of Government workers announced they would strike if the law is not overturned by the Constitutional Court. On September 29, the Court ruled the law was constitutional. ¶10. (U) Unions are against the law because it sets maximum salaries that limit collective bargaining. The law also caps severance for fired workers at a maximum of $1000 per year of service. The law also adds new requirements for collective bargaining by stating that parties must have the approval of the Ministries of Finance and Labor as well as the Prosecutor General to begin collective bargaining. Health Workers Strike - 120 Hospitals Affected -------------- ¶11. (U) Press reported that health workers held a 48-hour work stoppage September 27-28 to demand respect of the 2005 budget and the signing of a ninth collective bargaining agreement. The strike affected 120 hospitals and 14,059 health workers participated. The agreement would provide higher wages, better work stability and overtime pay. If no solution is reached by October 4, health workers have threatened an indefinite strike. Galapagos Park Workers Strike Ends -------------- ¶12. (U) On September 28, the 19-day strike of 250 non-unionized workers in Galapagos National Park ended after Minister of Environment Fabian Valdivieso replaced Fausto Cepado with Victor Carrion as Park Director (Ref B). The Ministry of Environment agreed to issue individual work agreements with the park employees, a demand of the association of park workers. Park worker Carlos Macias stated to the press that the Government had also promised $700,000 for wage increases. Illegal Peruvian Workers Detained -------------- ¶13. (U) On September 13, Immigration officials detained 118 Peruvians for violating conditions of the Andean Migration Card to work on the sugar plantation Hacienda Sausalito in Guayas province, according to press reports. The Peruvian workers claimed they had worked twelve hour days, seven days a week for $130 a month. The workers were deported to Peru on September 16. Profit Sharing For Some Workers in 2003 -------------- ¶14. (U) Press reported that, according to the Ministry of Labor, in 2003, 3,518 companies distributed $102.2 million to 160,193 employees as mandatory 15% profit-sharing as required under the Labor Code. This represented a six percent decrease in payments compared with 2002. According to Ecuadorian law, 10% of a company's profits must be distributed to employees and 5% goes to employees' families. The largest sum paid to a single worker was $66,616 and eight companies paid out over one million dollars to their workers. The portion going to women increased by 129 percent from 1997 to 2003. In 2003, 51,861 women received $25.1 million in profit sharing. Unemployment and Informal Sector Statistics -------------- ¶15. (U) The press reported that, according to the Central Bank of Ecuador, unemployment in Ecuador has risen from 9.3% in December 2003 to 11.53 percent in May 2004. According to the National Institute of Statistics and Census (INEC),1.5 million Ecuadorians are currently employed in the informal sector. KENNEY