MINISTER OF LABOR WILL WORK TOWARDS LABOR REFORM

UNCLAS SECTION 01 OF 02 QUITO 002129

SIPDIS

SENSITIVE

DEPT FOR WHA/AND, WHA/PPC, EB, AND DRL/IL. USDOL FOR JORGE
PEREZ-LOPEZ. GENEVA FOR JOHN CHAMBERLIN. PLEASE PASS USTR
FOR A/USTR CLATANOFF, V. LOPEZ AND B. HARMON.

E.O. 12958: N/A
TAGS: ELAB PGOV EC
SUBJECT: MINISTER OF LABOR WILL WORK TOWARDS LABOR REFORM


1. (SBU) Summary: In a September 14 meeting, the Ambassador
told Minister of Labor Galo Chiriboga that the FTA offered
the best opportunity for labor rights protection in Ecuador.
Chiriboga agreed that Ecuador needed a more modern labor code
and the International Labor Organization (ILO) must be
involved in any process of drafting the new code.
Chiriboga's goals included strengthening unions,
strengthening the tripartite National Labor Council,
improving the MOL's inspections system, combating child
labor, and increasing job opportunities for youth and women.
We will support these goals, while continuing to press for
needed labor code reform. End Summary.

New Labor Code
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2. (SBU) At her introductory September 14 meeting with
Minister of Labor Galo Chiriboga, the Ambassador told him
that the FTA offered the best opportunity for Ecuador to
achieve true labor reform and that it was important that
reforms be passed before the FTA goes to the U.S. Congress.
Chiriboga agreed that a more modern labor code was needed.
The Ambassador asked if the ILO would be involved in the
drafting of a new labor code and Chiriboga replied that they
must be involved. In July, the National Labor Council
prepared a list of priority topics for discussion which
included labor code reform. Chiriboga said one of his
priorities was strengthening the National Labor Council as a
space for dialogue between union and business leaders.

Strengthening Unions
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3. (SBU) Chiriboga, a labor rights lawyer by training, said
that there was a general negative perception and
"demonization" of unions in Ecuador. He said some unions,
particularly the public health workers and teachers unions,
added to a negative perception with their frequent disruptive
strikes that affected the well-being of a large number of
citizens. Chiriboga said both unions and employer
organizations needed to be strengthened in order to allow
them to be effective actors in society. Currently, union
membership was very low, he said, because many workers were
fired after attempting to form a company union. One of the
best ways to strengthen unions, according to Chiriboga, would
be by permitting industry-wide unions. Chiriboga said the 30
employee minimum to form a union should be lowered to
facilitate unionization. He also asked for USG help in
setting up a program for U.S. union leaders to visit Ecuador
to help strengthen Ecuadorian unions.

Subcontracting Law in Congress
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4. (SBU) Chiriboga spoke of the increased use of outsourcing
as a problem for Ecuadorian workers. He said he believed the
subcontracting bill currently pending in Congress would be
passed by this December. The law would replace the
presidential decree passed in October 2004. He will ask for
the opportunity to address Congress during the second debate
of the proposed subcontracting law. He added that the MOL
was conducting a study on subcontracting that would be
released at the end of September. The study found that there
were 4,500 subcontracting companies in the country.

Combating Child Labor
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5. (SBU) The Ambassador said that the USG and the MOL share
a common goal of eliminating the worst forms of child labor.
She said the U.S. Department of Labor would soon announce a
$4 million program to combat the worst forms of child labor
in indigenous communities. Chiriboga said the MOL is working
with an inter-agency group including the Ministries of
Health, Social Welfare, and Economy to cooperate on the
issue. For example, the Ministry of Education would help
provide scholarships for children removed from work and would
have the $25 school registration fee waived for them. The
Ministry of Labor would contribute with an employment plan
for parents of child laborers. Chiriboga said business
leaders had recently pointed out to him the need to also
focus on eliminating child labor in cities. He said he would
be coordinating with the Quito municipality on a program to
help get children off the street.

Improving MOL Inspections
--------------


6. (SBU) Chiriboga lamented that the MOL's budget is
currently only 0.08% of the government's national budget and
limits the MOL's ability to be effective. Chiriboga wants to
strengthen the MOL's inspection system which he feels
currently does not fully comply with Ecuador's ILO
commitments. (Note: It also does not conform with
Ecuadorian law.) He said he looked forward to bilateral
assistance in this area.

Increasing Opportunities for Youth and Women
--------------


7. (SBU) One of Chiriboga's priorities was increasing
opportunities and training for women and youth, who often
suffered most during periods of high unemployment. He said
he was working with the ILO on a program that would allow for
the training of 15,000 young people in Ecuador next year.

Comment
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8. (SBU) Chiriboga appears sincerely committed to improving
worker rights in Ecuador and he clearly understands the need
for a new, modern labor code. Any reform will be difficult
to carry out quickly and a challenge to get passed by
Ecuador's fractious Congress. Perhaps recognizing the
challenge of getting business and labor leaders to compromise
and agree to act, he evinced little sense that reform would
be quick or easy.
JEWELL