Honduras and CAFTA Labor Track II: Ministry of

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 000238

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DOL FOR ILAB

E.O. 12958: N/A
TAGS: ELAB ETRD PHUM ECON PGOV KJUS PINR HO ILO
SUBJECT: Honduras and CAFTA Labor Track II: Ministry of
Labor Seeks to Enforce Labor Law But Lacks Resources

Ref: (A) Olsen/Wilson e-mail 01/16/04

(B) State 6145
(C) 03 Tegucigalpa 2283
(D) 03 State 257469


1. (SBU) Summary: In Honduras, there is good will in the
Ministry of Labor (MOL) in general and Minister of Labor
German Leitzelar in particular to protect core labor rights.
Honduran labor law, while deficient in some areas with
respect to ILO core conventions, is not the main issue for
the protection of labor rights. The enforcement of existing
labor laws is key. However, the overall budget crunch in
the GOH severely hampers the MOL's ability to do just that.
Nevertheless, the MOL does aggressively investigate
prominent cases brought to its attention by labor unions and
has improved significantly under Leitzelar's leadership.
End Summary.

Tight GOH Budget Means Decline in MOL Budget
--------------


2. (U) LabAtt met January 15 with the new Vice Minister of
Labor for the GOH, Ada Gabriela Mejia Mejia, a psychologist
and previously a National Party (ruling party) congresswoman
with whom LabAtt previously worked on TIP/child labor
issues. LabAtt emphasized the importance of GOH's
aggressive enforcement of labor law and briefed her on DOL's
ongoing support for the MOL. She seemed to understand the
importance of this issue, especially as it relates to
approval of CAFTA by the U.S. Congress, but she noted the
MOL's relatively paltry budget limits what the MOL can do.


3. (U) Below is a chart of the MOL's budget for the last
several years, minus money that passes through the ministry
for budgetary/organizational reasons but that does not fund
MOL activities. The lempira data comes from the MOL. The
dollar conversion and comparisons with previous years'
figures are Post's calculations using exchange rates
(lempiras/USD) as of January 1 of each calendar year.

CYear Budget (lempiras) Budget (USD) Exchange rate
-------------- --------------
2001 56,059,600 3,732.330 15.02
2002 61,033,900 3,849,748 15.854
2003 75,657,360 4,481,540 16.882
2004 72,110,700 4,051,743 17.957


4. (U) As one can see, after shooting up an impressive USD
631,792 (16.4 percent) from CY2002 to CY2003, which was the
first budget under the Maduro Administration, the budget was
cut by USD 429,797 for CY2004, wiping out 68 percent of the
CY2003 budget boost. The cuts were part of an across-the-
board reduction in government expenditures needed to reduce
the budget deficit to a manageable level (and obtain an IMF
program). Post estimates the GOH allocated only 0.2 percent
of its total expenditures (including foreign assistance) to
the Ministry of Labor in 2002, including salaries of MOL
employees.

GOH Aggressive on Inspections But Needs Help
--------------


5. (U) The MOL inspection record has improved under the
Maduro Administration and Leitzelar's leadership. The MOL
is quick to inspect companies when allegations are made
public. In the recent highly publicized case of NGO/union
allegations of labor law violations by the SETISA maquila
that makes t-shirts for the Sean John label, Leitzelar
himself inspected the factory with several inspectors right
after the allegations hit the press. The MOL's quick
action, combined with SETISA's openness to the MOL and
press, has helped defuse a war of words over the alleged
violations.


6. (U) The MOL benefits from several DOL-funded technical
assistance programs that enhance the inspectors' ability to
enforce the law. The number of inspectors, after dropping
in the recent past, went up in the last few years, and has
now leveled off (figures from the MOL). Of the 2003 figure
of 115 inspectors, 101 are general labor inspectors and 14
are occupational safety and health inspectors.

CYear Inspectors
--------------
1998 107
1999 102
2000 104
2001 110
2002 114
2003 115


7. (U) Unfortunately, the MOL's relatively limited number of
inspectors means that the MOL is often unable to inspect
work sites for routine violations of the law. Budget
constraints also mean that inspectors often lack vehicles
and/or fuel to drive to work sites to conduct inspections.

Potential Changes to Labor Law Unlikely
--------------


8. (U) Minister Leitzelar's assistant Jackie Cruz told
LabAtt on January 15 that there is not a specific tripartite
commission to follow-up on shortcomings in Honduran labor
law identified by the ILO study of Honduran labor law in
comparison to core ILO conventions. However, the Council on
Economic and Social Issues, a tripartite body, is studying
possible labor law reform. Post notes, however, that this
has been on the table for quite some time, is a political
football, and reform is not likely to happen in the near
future. This is despite the fact that the recent ILO study
comparing Honduran labor law to the ILO core conventions
noted that Honduran law was not in accordance with the ILO
core conventions in several areas.


9. (U) One area in which changes to the labor law have been
suggested concerns the requirements for collective
bargaining. Current law only requires there be more than 30
workers to constitute a trade union (a requirement that has
been criticized by the ILO as detrimental to the formation
of unions in small and medium businesses),but has no
further requirements for collective bargaining rights.
Companies are bound by current law to negotiate a collective
bargaining agreement once a union has been legally
established and requests that negotiations begin. However,
as stated in the Human Rights Report, employers often refuse
to bargain with a union. The Ministry of Labor can and has
administratively sanctioned an employer for failing to
negotiate a collective bargaining agreement, or for
violating a collective bargaining agreement. However,
employer intransigence often remains undeterred.


10. (U) Honduran Apparel Manufacturers Association President
Jesus Canahuati has suggested that the GOH propose
legislation that would require unions to have more than 50
percent worker representation in order to have collective
bargaining rights. He thinks that will clear the way for
Honduras to have a better record on negotiating collective
bargaining agreements, because employers will be less likely
to resist bargaining when the unions represent a sizable
amount of the workforce. (Under the current law, employers
point out, a union of only 30 members in a maquila of 500
workers has the right to collectively bargain on behalf of
all 500 workers.) However, unions will surely oppose adding
such a requirement to the law and it is unlikely to be
proposed by the GOH to Congress absent a tripartite
consensus on reforming the labor law.

Doing More With Less
--------------


11. (SBU) Comment: The bottom line is that there has been
definite improvement in the Ministry of Labor under the
Maduro Administration, mainly thanks to the leadership of
Minister Leitzelar. The MOL and Minister Leitzelar are
seeking to enforce Honduran labor law, but the overall
budget crunch in the GOH severely hampers the MOL's ability
to do more. Despite the fact that he is considered by many
observers as one of the best ministers in President Maduro's
cabinet, Minister Leitzelar and the MOL do not have much
political clout either within the GOH or in Congress. For
example, Minister Leitzelar is not a member of the ruling
National Party. This makes boosting the MOL's budget in an
extremely tight fiscal environment all the more difficult.
Nevertheless, the MOL is aggressive when prominent cases
come to light and seeks to use international technical
assistance, such as that funded by DOL, to improve its
capacity to better enforce the law. End Comment.

Palmer