ECUADOR LABOR UPDATE

UNCLAS SECTION 01 OF 02 QUITO 002747

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 2386


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

-- ILO Advisors to Ecuador Named (para. 2)
-- Ambassador Highlights Labor Concerns (3)
-- Additional Child Labor Inspectors Hired (4)
-- Newspapers Highlight Child Labor (5)
-- Banana Labor Dispute Update (6)
-- Number of Maquilas Decreasing (9)

ILO Advisors to Ecuador Named
--------------


2. Acting Minister of Labor Jose Serrano told LabOff on
November 25 that the ILO had named two consultants to assist
Ecuador in the formulation of a new labor code: Adolfo
Ciudad of the ILO's Lima office and Ana Maria Garcia, a
Spaniard. The Ministry of Labor had submitted a request to
the ILO for technical assistance on the matter. The date of
their travel to Ecuador has not yet been determined.

Ambassador Highlights Labor Concerns
--------------


3. During an October 20 trip to Cuenca, the Ambassador
highlighted labor issues as a possible obstacle to the
conclusion of a free trade agreement and the need for labor
code reform. The comments, which were widely covered in the
press, came during a speech to the AmCham of Cuenca.

Additional Child Labor Inspectors Hired
--------------


4. Serrano told LabOff on November 25 that the Ministry of
Labor had hired additional child labor inspectors and
currently employed a total of 23 inspectors. The Ministry of
Economy had approved converting their status to permanent
government employees, not contractual employees, starting in
January 2006.

Newspapers Highlight Child Labor
--------------


5. Between October 13 and November 21, a spate of articles
(at least 10) explaining Ecuador's child labor issues
appeared in prominent Ecuadorian newspapers including leading
daily "El Comercio." The articles highlighted child labor in
gold mining, domestic work (press reported up to 247,000
children and adolescents aged 12-17 working in this sector),
carpentry, agriculture (press reported 198,534 children and
adolescents between 5-17 working in this sector),
brickmaking, and trash rummaging.

Banana Labor Dispute Update
--------------


6. The striking workers at El Zapote banana plantation
(RefTel) were removed from the premises on the night of
October 21 by police. A labor judge had issued a preliminary
ruling in favor of the laborers, but this ruling was later
voided by a civil judge, who cited evidence that some of the
laborers had forged documents. The MOL labor inspectorate of
the town of Quevedo in Los Rios province formally rejected
the complaint on November 18.


7. In protest of the MOL's rejection of the complaint,
banana workers physically occupied the coastal Subsecretary
of Labor's offices on November 24, accusing MOL employees of
corruption. FENACLE banana union leaders met with the acting
Minister of Labor Jose Serrano on November 28 asking that
Serrano designate a high level commission to analyze the El
Zapote conflict. Labor leaders also asked for administrative
investigations into two labor inspectors involved in the
conflict.


8. Guayaquil CG and PolOff met with Dole manager Mario
Padilla and Dole legal advisor Luis Vernaza on October 27 to
express concern about the case, which involves suppliers to
Dole. The Dole representatives said they had been urging the
plantation owners to settle the dispute. Vernaza said that
the workers protesting were not part of the plantation's
permanent staff, but rather were short-term contractors hired
to work during peak season. (FENACLE denies this.) Padilla
said that Dole had not been buying fruit from the plantation,
not because of the labor issue, but because the fruit quality
had fallen during the strike and did not meet their standards.
Number of Maquilas Decreasing
--------------


9. According to press, the number of "maquilas" or assembly
plants of imported component parts for re-export, in the
country has decreased from 150 to 43 due to bureaucratic
hassles related to the frequently changing staff of the
Ecuadorian Customs Corporation and constantly changing
interpretations of Customs Law. A 2003 reform to the Customs
Law added extra requirements for customs transactions. Many
of the maquila workers are hired under temporary contracts.
Nationwide 65 percent of maquilas are in Quito and Cuenca.
In Cuenca, the main activity is jewelry production.
BROWN