ECUADOR LABOR UPDATE

UNCLAS SECTION 01 OF 03 QUITO 002386

SIPDIS

DEPT FOR WHA/AND, WHA/PPC, EB, AND DRL/IL. USDOL FOR CARLOS
ROMERO. GENEVA FOR JOHN CHAMBERLIN. PLEASE PASS USTR FOR V.
LOPEZ AND B. HARMON.

E.O. 12958: N/A
TAGS: ELAB PGOV EC
SUBJECT: ECUADOR LABOR UPDATE

REF: QUITO 1788


1. Summary: Following are recent labor-related developments
of interest:

-- MOL Currently Acting MinGov (para. 2)
-- ILO to Draft Labor Code Reform (3)
-- National Labor Council to Discuss Subcontracting Law (4)
-- MOL to Hire More Child Labor Inspectors (5)
-- Banana Workers Fired For Unionizing (7)
-- Other Banana Workers To Be Reinstated (11)
-- Teachers Demand Salary Increase (12)
-- MOL to Combat Labor Discrimination (13)

MOL Currently Acting MinGov
--------------


2. Since Oswaldo Molestina's resignation on October 12,
Minister of Labor Galo Chiriboga has been serving as acting
Minister of Government. Vice Minister of Labor Jose Serrano
is currently acting Minister of Labor and traveled to
Washington on October 18 to discuss labor issues at the FTA
mini-round of negotiations. Serrano told press he would ask
the U.S. to support a process of regularizing Ecuadorian
workers in the U.S. Chiriboga, meanwhile, is dealing with
the political crisis precipitated by Molestina's departure.

ILO to Draft Labor Code Reform
--------------


3. On October 5, LabOff and AIDOff met with Vice Minister of
Labor Jose Serrano who said that at the Labor Ministerial in
Mexico in late September, ILO head Juan Somavia offered to
send the GOE an ILO expert who would prepare a first draft of
a new labor code. This first draft would be presented by the
National Labor Council (a tripartite committee formed by
employers, workers, and the government) later this year. The
National Labor Council would then discuss the reforms and
suggest changes, and hire four experts (one to represent each
of the three sectors and an international expert - possibly
another ILO expert) to assist with the process. In
approximately six months, the labor code proposal would go to
Congress. Serrano said this process was discussed in the
labor council on September 30 and the three sectors agreed to
it.

National Labor Council to Discuss Subcontracting Law
-------------- --------------


4. The National Labor Council is meeting October 24-25 to
suggest changes to Congress' first draft of a subcontracting
law. Serrano said the ILO would provide technical assistance
during these meetings. At the end of these meetings,
suggested revisions will be submitted to Congress and will be
discussed in the bill's second debate in Congress, currently
planned for the week of November 7. LabOff received a copy
of the proposed law which would set a 50% cap on the
percentage of employees that may be subcontracted within any
company. The draft law says subcontracting could be used by
companies under the following circumstances: suspension of a
worker's contract due to medical reasons, maternity leave,
military service or similar reasons; temporary services; new
and specific projects; initiation of new activities for the
first 270 days; seasonal increases in labor needs; urgent
needs; and work related to agriculture and construction.

MOL to Hire More Child Labor Inspectors
--------------


5. On child labor, Vice Minister Serrano told LabOff on
October 5 that the MOL would hire up to 25 inspectors soon.
Serrano said that within the next week additional inspectors
would be hired for Guayas, Manabi, and Canar provinces.
Serrano said he wanted child labor inspectors to become
federal employees instead of contracted employees, to
increase their job stability. He also wants the child labor
inspectors to be integrated into the MOL's labor
inspectorate. As of October 13, the MOL employed only 13 of
the 22 child labor inspectors required by law.


6. LabOff spoke with Jenny Cepeda in the MOL's child labor
division on September 30. Cepeda said that in June, her
division requested $316,00 for the 2006 budget. She said the
average monthly salary of an inspector is $550 and the
average monthly transportation cost is $150. In order to
cover the costs of 24 inspectors over the course of a year,
this would total $201,600. Cepeda said the MOL's child labor
division would spend over $200,000 of their $316,000 budget
for 2006 on child labor inspections.

Banana Workers Fired For Unionizing
--------------


7. On October 3, police officers prevented workers at El
Zapote banana plantation (owned by the Zapote Agricultural
Company) who had formed a workers association on September 25
and submitted a list of demands, from entering the workplace.
Zapote is a medium-sized banana plantation in Los Rios
province that sells their product to Dole for export. On
October 12, LabOff spoke with FENACLE union leader Guillermo
Touma who said the owner of the plantation was a close
relative of banana magnate and presidential hopeful Alvaro
Noboa.


8. LabOff spoke with MOL labor mediator Antonino Alarcon on
October 13. Alarcon said 136 workers had presented a list of
demands for a pay raise prior to being prevented from
entering the workplace, but the documentation had not been
complete. The workers involved in this case are
subcontracted, he said, and had not been registered by the
employer with Social Security. Alarcon said company
representatives claimed the workers had been fired before
submitting the list of demands.


9. On October 6, approximately 25 armed persons guarded the
El Zapote plantation entrance, preventing the workers from
entering the company grounds, according to FENACLE sources.
Police arrived later on October 6 to prevent any violence
between workers and company representatives. We have
received no reports of violence at the Zapote plantation.
The workers submitted a formal strike declaration to the MOL
on October 6 and by law can assume a strike after 20 days
have passed. Alarcon told us he will continue to work for a
compromise and the reinstatement of the workers. We are
planning to meet with Dole representatives to express concern
about this case.


10. In a similar case, at the Maria Elisa banana plantation,
a Dole supplier in Los Rios province, 126 workers presented a
collective bargaining contract and documentation on the
formation of a workers association to their employer on
September 21. On September 26, the employer prevented the
workers from entering the plantation, informing them that
their contracts had been canceled, according to FENACLE
sources. The workers declared a formal strike on September
28 and protested outside of the plantation. During the week
of October 10, employees and employer reached agreement which
resulted in the end of the strike.

Other Banana Workers To Be Reinstated
--------------


11. On October 14, the arbitration tribunal in Machala, El
Oro province, ruled that the Maria Teresa banana plantation,
also a Dole supplier, whose workers had been on strike for 10
months, was required to reinstate the workers and pay them
for the time they were on strike. Also, the tribunal ruled
that the employer is not allowed to fire any employees for
the next two years. Ten months ago, the workers formed a
workers association and presented a list of complaints to the
employer including non-payment of Social Security benefits,
pay under the minimum wage, and lack of minimum health and
safety standards in the workplace.

Teachers Demand Salary Increase
--------------


12. The national teachers unions UNE, affiliated with the
Marxist MPD party, went on an announced 48-hour strike on
September 14 asking for salary increases and more resources
for schools. According to an Embassy labor source, UNE
usually organizes these strikes 10-12 months before elections
in order to raise their profile and gain supporters. The
source said most MPD deputies in Congress have at one time
been presidents of UNE. Government negotiators met with UNE
representatives on September 30, but no agreement was reached
and dialogue was broken off. The government had offered a $7
increase in monthly salaries for teachers starting in January
2006, with an additional $3 in March 2006. UNE leaders did
not accept this offer and are demanding a $150 monthly salary
increase.

MOL to Combat Labor Discrimination
--------------


13. Vice Minister of Labor Jose Serrano signed Ministerial
Agreement 261 on October 5 that would sanction employers that
discriminate by age, race, gender, and social condition in
their solicitations for employees. Employers could be fined
up to $200. Also of note, the MOL has signed a convention
with the United Nations Development Program (UNDP) to protect
the labor rights of those infected with HIV. The MOL and
UNDP met with Congress' human rights commission on October 4
to discuss ways to work towards this goal.
JEWELL