JORDAN'S INDUSTRY AND TRADE MINISTER ON QIZ LABOR

C O N F I D E N T I A L AMMAN 003327

SIPDIS

SIPDIS

STATE PASS TO USTR

E.O. 12958: DECL: 05/11/2021
TAGS: ETRD KIPR ELAB JO IZ
SUBJECT: JORDAN'S INDUSTRY AND TRADE MINISTER ON QIZ LABOR
ALLEGATIONS, TRADE ISSUES, AND IRAQI PHOSPHATES

REF: A. AMMAN 3257

B. AMMAN 1199

C. 05 AMMAN 4297

Classified By: AMBASSADOR DAVID HALE FOR REASONS 1.4 (B & D)


1. (C) SUMMARY: Jordan's Minister of Industry and Trade
Sharif Zu'bi told visiting Commerce Department official Peter
Hale that he expects the GoJ to take further actions within
the next days against several garment manufacturing companies
accused of violating foreign workers' labor rights. These
violations were committed by a small number of companies and
subcontractors. On Jordan's DAMAN pre-inspection program
which has constituted a non-tariff barrier to trade, Zu'bi
said the contract with the company running the program will
not be renewed. On IPR, Zu'bi is proposing setting up an
independent government body to centralize all aspects of IPR,
including enforcement and training. On developing phosphate
resources in Iraq, Zu'bi said he had discussed the issue with
the relevant Iraqi minister that day, and that the deputy in
the ministry would come to Jordan shortly to pursue the issue
with the GoJ. END SUMMARY.

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The QIZ Labor Allegations
--------------


2. (C) On May 9, Jordan's Industry and Trade Minister Sharif
Zu'bi told Commerce official Peter Hale that the National
Labor Council report of allegations of abuse of foreign
workers was "extremely damaging." The government had been
aware of abuses for some time, with over 3,000 citations of
violations issued last year. However, he stressed that
Jordan's labor laws were up to international
standards, and had been verified by the International Labor
Organization (ILO) a number of times. The GoJ has been
challenged by the rapid increase in the amount of garment
manufacturers in the Qualifying Industrial Zones (QIZs),and
the Ministry of Labor (MOL) continues to face many challenges
in keeping up with the workload. Zu'bi expects reports from
both the MOL and the private sector to be released in the
next few days. He further expects the GoJ's official
response to be serious and include the closure of factories
not meeting Jordanian standards. He said the government will
also review environmental issues related to the QIZs,
including what he called "blue water" (the wastewater
produced by washing garments). NOTE: An U.S. EPA expert on
industrial waste on secondment to the Ministry of Environment
(MOE) as a Science Fellow will look into this issue promptly
and into MOE's response to it. END NOTE.


3. (C) Zu'bi said he would be traveling to the U.S. in the
next couple of weeks to meet with major U.S. buyers and with
USTR to assure them both that the GoJ is moving quickly to
investigate the allegations and take strong measures against
companies shown to be violating Jordan's laws. He added that
an ILO team is in Jordan at the moment to investigate the
allegations. Zu'bi said that the answer for Jordan in the
long-term is to replace all of the foreign workers in these
factories with Jordanians. He cited the government's
recently-launched training program under which the government
pays the salaries of Jordanian trainees in QIZ factories for
six months while they are receiving on-the-job training.


4. (C) Zu'bi stressed that the violations were committed by
a small number of companies in the QIZs, most of them smaller
companies or sub-contractors. The exports from the bad
actors constituted less than 20% of the total exports from
QIZs. Responding to allegations that foreign laborers had
not been paid salaries due them before they left Jordan, he
said the government would ensure that companies would pay
back wages to workers who were shown to be owed such wages.
Zu'bi noted that allegations of trafficking in persons
(Bangladeshis paying $1,000 to $3,000 to get a job in
Jordanian factories) was an issue to be pursued by the
Bangladeshi government. When the GoJ invited embassy
representatives from the various nationalities concerned to
visit the factories, no one from the Bangladeshi Embassy in
Jordan responded, according to Zu'bi.

--------------
Trade Issues
--------------


5. (C) Hale also raised a number of bilateral trade issues
with Zu'bi. Zu'bi reported that Jordan was preparing a
revised Jordanian offer at the WTO on a Government
Procurement Agreement. The revised offer would be submitted
in early June, and would address most of the issues currently
under discussion. He asked for any help the USG might be
able to give with the EU, especially with respect to
protections for small and medium enterprises.


6. (C) Turning to IPR issues, Zu'bi asked the head of
Jordan's Food and Drug Administration, Dr. Salah Muwajdeh, to
report on progress. Muwajdeh asserted that many
pharmaceutical products enjoy data protection in Jordan, and
referred to on-going exchanges on IPR with USTR (ref A and
previous). The GoJ is working on resolving the remaining
problems. He added that the government would no longer
interfere in the pricing of over-the-counter drugs.


7. (C) Zu'bi stressed that the challenge for the GoJ is to
introduce ex officio (based on the powers of an official's
office) powers for the government to seize counterfeited and
pirated goods. The government is also currently working on
suspending the release of suspect goods. However, the ex
officio powers of Jordan's Customs service are partial and
need to be strengthened.


8. (C) Jordan's main problem with respect to IPR, Zu'bi
continued, is that there are six agencies in charge of
monitoring Jordan's IPR law. Most of these agencies lack
capacity for monitoring and enforcement. Zu'bi said he is
working to establish a single independent agency in charge of
all IPR areas. The agency would be charged with enforcement,
but also with IPR-related training and education. He said
establishing such an agency will require legislation.


9. (C) Hale then raised DAMAN, the pre-inspection program
which has proved to be an expensive non-tariff barrier to
trade. Zu'bi stressed that the program had been established
to protect Jordanian consumers against counterfeit goods from
China and the UAE. Under its contract with the French
company, Bureau Veritas (BV),laboratories are being
established to inspect the four categories of goods covered
by DAMAN: new automobiles, electrical goods, toys and
protective equipment. Zu'bi reported that laboratories have
already been opened for cars and electrical goods. The lab
for inspecting toys should be open by fall 2006 and that for
protective gear by September 2007.


10. (C) Zu'bi said that the government has "no intention to
renew the program." NOTE: The BV contract expires in
September 2007. END NOTE. The head of the Jordan Institute
for Standards and Metrology (JISM; the agency responsible for
running the DAMAN program),Yasin Khayat, said that under its
Jordan-EU Association Agreement, there was a twinning program
with Germany for strengthening institutions, in the areas of
accreditation, standardization, conformity assessment,
metrology and market surveillance. The program with JISM
will last from October 2005 to October 2006, and JISM will
adopt European directives in those areas. JISM's regulatory
law will need to be amended, and the Accreditation Law - at
the legislative bureau which reports to the Prime Minister
since 2003 - will also have to be in place as must a
consumer protection law. Hale cautioned that the standards
adopted should be based on international and not German ones.


11. (C) Khayat said that DAMAN was now operating under a
risk-based system. Two hundred importers had been exempted
from the program because of the demonstrated low risk of
their products to consumers. Khayat said no U.S. companies
were currently required to send their products through DAMAN.
The inspection done on the products is visual.

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Iraqi Phosphates
--------------


12. (C) Hale also raised development of Iraq's phosphate
deposits, noting that current mining there was operating at
only 10% of capacity. Zu'bi had discussed the issue that
morning with the Iraqi Minister of Industry and Mining when
both were attending the Rebuild Iraq conference hosted in
Amman. The Iraqi minister said he would send his deputy to
meet with officials at Jordan's Ministry of Industry and
Trade to discuss potential Jordanian-Iraqi collaboration in

developing the Iraqi resource. NOTE: The issue had been
raised earlier this year during King Abdullah's meeting with
Commerce Secretary Gutierrez. END NOTE.


13. (U) Peter Hale cleared this cable prior to departure.
HALE