DEPUTY SECRETARY OF LABOR LAW'S INDIA VISIT

UNCLAS SECTION 01 OF 04 NEW DELHI 002116

SIPDIS

SENSITIVE

DEPARTMENT FOR DRL/IL, G/TIP, INL and SA/INS
LABOR FOR ILAB - ROWEN, MEUGENIO, MMITTELHAUSER, AND SHALEY

E.O. 12958: N/A
TAGS: ELAB PHUM ECON KCRM KWMN EAID IN US
SUBJECT: DEPUTY SECRETARY OF LABOR LAW'S INDIA VISIT



1. (SBU) Summary: Deputy Secretary of Labor Steven J. Law's
February 21-27 visit to India to review progress on the DOL-
sponsored INDUS Child Labor effort and other DOL-sponsored
projects was well received by GOI officials, project
managers, and participants. The highest-ranking Labor
Department official ever to visit India, D/S Law also met
with national, state and local government officials, NGOs,
and business leaders to discuss child labor and general
labor-related issues. He was accompanied by representatives
from DOL's International Child Labor Program and the Bureau
of International Labor Affairs. The visit also focused
attention on the problem of trafficking and bonded labor in
India, indicating that these issues are likely to become
areas of greater interest to DOL in the future. From the
Mission standpoint, the INDUS projects are outstanding
examples of "quiet successes" that address important
humanitarian problems while also advancing US-India
relations. End Summary.

INDUS Child Labor Project Site Visits
--------------


2. (U) D/S Law traveled to two INDUS project sites,
Kanchipuram (Tamil Nadu) and Aurangabad (Maharashtra),
meeting with officials and rehabilitated child laborers
enrolled in school as a result of the INDUS Project on
Preventing and Eliminating Child Labor in Identified
Hazardous Sectors, a technical cooperation venture between
the USG and GOI implemented and monitored by the ILO's
International Program on the Elimination of Child Labor.
D/S Law, accompanied by senior ILO officials, expressed
satisfaction with the advanced state of the programs and
with the efforts of local officials and project managers to
coordinate activities with parents and employers. The INDUS
project is currently providing educational and training
opportunities to more than 44,000 children. The INDUS
project appears to have made impressive progress in Tamil
Nadu and Maharashtra, and the program is likely to reach
over 100,000 children by the time it expires in 2007.


3. (U) After witnessing how the INDUS project had improved
children's lives at both sites, the D/S commented that the
programs there could serve as examples for the rest of India
and South Asia region. Children and their parents spoke
movingly about their aspirations for the future, with school
children in Aurangabad imploring the USG to continue its
support for the project beyond its anticipated three-year
life. NGOs in Tamil Nadu commented that while the state
government had been proactive on child labor, authorities
needed to do a lot more to meet their goal of eradicating
child labor by 2007 (one of the 15-point Action Plan goals
of the state's Chief Minister). NGOs remarked that the
legislative framework was good, but that enforcement had to
be improved drastically.

ILO-DOL
--------------


4. (U) D/S Law also held discussions on two joint DOL-ILO
projects -- Decent Employment for Women in India and the
Prevention of HIV/AIDS. He noted that the success of these
projects serves to engage Indian officials and could be
replicable elsewhere in South Asia.


5. (U) During a visit to the Decent Employment for Women
project site in New Delhi, D/S Law was moved by success
stories that beneficiaries - economically deprived women -
shared with him. Touring the shanty town slum just after a
stop by visiting Afghan President Karzai, Law witnessed many
women and children whose lives had undergone a distinct
change after participating in the project. The project has
trained over 3000 women in Bangalore and New Delhi,
providing them with skills that have enabled them to find
productive decent employment.

IJM/Bonded Labor
--------------


6. (SBU) In an expression of increasing DOL interest in the
issue of bonded labor in India, the D/S met with
representatives from NGOs and the US-based International
Justice Mission (IJM) in Chennai and Mumbai for briefings on
child and bonded labor in India. He listened to the
testimony of freed bonded laborers at a site visit on the
outskirts of Chennai hosted by IJM. Workers recounted how
entire families worked at rice mills in Tamil Nadu to pay
off loans taken from the mill owners. The laborers
indicated that while they had been rehabilitated under
government-sponsored programs, they were free today largely
due to the efforts of IJM activists. (Comment: The area
from which the laborers were rescued has been under intense
media and government scrutiny in recent months. In November
2004, India's National Commission for Women held a public
hearing in the region on the condition of bonded laborers
and castigated the local administration for not tackling the
issue. A report of this hearing has been pouched to DRL and
DOL/ILAB. End Comment.)

Software and Chambers of Commerce & Industry (FICCI)
-------------- --------------


7. (U) In Chennai, D/S Law held productive discussions with
members of the National Association of Software and Service
Companies (NASSCOM),India's largest and most important IT
industry group (890 member firms),on the growing
interaction between Indian and US businesses in high
technology sectors. Arguing that outsourcing had become an
integral part of the world economy that no one could stop,
Indian participants expressed concern over the length of
time it took to obtain visas (e.g. alleging twelve week
waits for a six-week assignment),and urged the USG to
develop a "business passport." Interlocutors also did not
wish India to be viewed as "low cost labor," but rather
"quality labor." In view of the extensive and rapidly
expanding US-India linkages in the IT sector, interlocutors
were especially keen to identify issues that could impact
their future ties with US firms.


8. (U) D/S Law also met with a large group from the
Federation of Indian Chambers of Commerce and Industry
(FICCI),a major trade association headquartered in New
Delhi. In a presentation on the overall labor scene in
India, labor law expert Dr. C.S. Venkata Ratnam argued that
reforms in India's archiac labor laws were necessary, but
maintained that existing legislation was not a major
impediment for companies (in-depth analysis follows septel).
Ratnam also called for better enforcement of existing laws
relating to child and forced labor.


9. (U) In each of his meetings with business executives,
D/S Law stressed that while US-India economic ties would
continue to grow, business leaders and politicians should
pay more attention to social issues like child labor, which
play an important role in the American debate on
outsourcing. The D/S urged his interlocutors to use their
influence with the GOI to prevent these social issues from
becoming problems in the bilateral economic and political
relationship, because this could affect otherwise strong and
growing commercial relationships.

Ministry of Labor
--------------


10. (SBU) D/S Law met with Minister of Labor K. Chandra
Shekar Rao, Labor Secretary K.M. Sahni, and Joint Secretary

K. Chandramouli on February 24 to discuss the INDUS project
and to reiterate US concerns over child labor in India.
Briefing on his perspectives on the INDUS Projects, D/S Law
noted that despite the slow start in negotiations, the
project's results and commitment of local officials and NGOs
had impressed him, but stressed that continued high-level
GOI support was necessary to keep the programs on track.


11. (SBU) Asserting their strong commitment to preventing
child labor, Ministry officials highlighted GOI efforts to
create public awareness of the problem via the National
Child Labor Project (NCLP) instituted by the government. In
a meeting attended by the Ambassador, Labor Minister Rao
described child labor as a "shame" and reiterated GOI
commitment to remove children from all hazardous occupations
by the end of 2007. The Minister stressed that India would
approach this problem in a progressive manner as it had with
bonded labor. Joint Secretary Chandramouli indicated that
the GOI intends to incorporate lessons from the INDUS
program into its NCLP plans, and that INDUS would become a
catalyst for self-sustaining Indian efforts to combat child
labor. He also observed that while the GOI had addressed
the bonded labor problem via legislation, the problem of
child labor was "much more complex."

Frank Talk
--------------


12. (SBU) Labor Secretary Sahni, Joint Secretary
Chandramouli, and D/S Law later held a frank discussion on
child labor and the possibility that India might be
downgraded in the upcoming Trafficking in Persons (TIP)
report, which could impact World Bank loans and damage
Indian's international image. D/S Law offered DOL
cooperation in working with the Labor Ministry to help
develop a strategy for dealing with the trafficking of child
labor. Chandramouli commented that the definition of child
labor was open to interpretation, and that there should be a
distinction between forced/trafficked child labor and
children who traditionally work with their families.
Arguing that as long as a child was receiving an education,
it was "acceptable to work at home," he said that the GOI
"should not presume to know more than the parent" about
children's welfare.


13. (SBU) Labor Secretary Sahni expressed the hope that the
USG would view the child labor issue "in the broader Indian
social context" (i.e. in view of widespread poverty),and
not only as a possible trade policy issue that "could be
used against India." He asked bluntly whether the USG was
planning to raise TIP or child labor during trade and
economic negotiations, as had happened in the WTO context,
noting that he has had to be "very stiff with colleagues in
the past" and wanted to be prepared for it. He asked the US
delegation to organize an "experience sharing" regional
South Asian mini-summit within the next four months to
discuss trafficking issues and to compare notes with other
regional leaders in combating this problem. He also
expressed interest in further USG support to the NCLP in a
"plus" capacity, specifically in funding micro-enterprise
financial assistance credit for post-vocational training and
help in setting up a business once child laborers complete
their education under the INDUS Project, although made no
direct request for USG assistance.


14. (SBU) Briefing on the other DOL-funded projects in
India, Joint Secretary Chandramouli called the Coal Mine
Safety and Health Project (that ends in June) "a tremendous
success," adding that the GOI had hoped for a second phase
of funding. Joint Secretary for Employment and Training
K.K. Mittal briefed on the progress made on the Decent
Employment for Women Project (that also ends in June).
Observing that the GOI wanted to expand the project's reach
to Mumbai and Kolkata, he requested that DOL consider
funding an expansion of the project to these cities.


15. (SBU) After D/S Law expressed concern about bonded
labor, Chandramouli maintained that it was a "very limited"
phenomenon in India, with Sahni expressing surprise that it
was still occurring at all and asking whether it was an
issue the U.S. was "worried or concerned about." If the USG
is concerned, he said, it was worth investigating, and asked
for specific evidence. D/S Law pledged to pass along any
specific information he received.


16. (SBU) The Ambassador also hosted a lunch for D/S Law
that was attended by media, business, human rights and NGO
leaders. The Ambassador called attention to the TIP issue,
which he pointed out could become an irritant in US-India
relations and could require the USG to have to vote against
India in international lending institutions if India were to
fall to Tier III from its position on the Tier II Special
Watch List. This prompted a flurry of questions to the INL
Office Director by business and media representatives about
steps the GOI could take to forestall such a step. The INL
Office Director discussed the issue at some depth with
several guests, pledging to send them more information on
TIP issues in India.

Comment
--------------


17. (SBU) D/S Law's visit was well received by the GOI and
by media at the project sites, although his interest in
bonded labor caused the Ministry of Labor to send a
diplomatic note to the Embassy urging against a visit to the
IJM site in Tamil Nadu, indicating continuing anxiety in
parts of the state government and in New Delhi about calling
attention to the bonded labor problem.


18. (U) From the Mission's standpoint, the INDUS projects
are outstanding examples of "quiet successes" that address
important humanitarian problems while also advancing US-
India relations.


19. (U) D/S Law cleared this cable.
MULFORD