GUATEMALA'S CAFTA LABOR PROJECT PROPOSALS

UNCLAS GUATEMALA 000440 SIPDIS SIPDIS DEPT FOR USAID/LAC/RSD:BARRY MACDONALD, WHA/PPC:MIKE PUCCETTI, DRL/IL:PAT DEL VECCHIO LABOR FOR ILAB:JANE RICHARDS E.O. 12958: N/A TAGS: ELAB EAID ETRD GT SUBJECT: GUATEMALA'S CAFTA LABOR PROJECT PROPOSALS REF: STATE 26123 ¶1. As requested reftel, below please find six proposals for labor projects in CAFTA-DR countries. The proposals are not assigned to specific branches of the U.S. government as we hope the proposals will be discussed on their merits before any of them are linked to specific agencies or offices (although in a few instances we have named implementing partners that have particular expertise). With one exception (Proposal Four),these proposals are ideas for programs that do not yet exist, as we understand this exercise to be an attempt to generate innovative proposals. This does not, however, mean that we do not support the continuation and expansion of the CIMCAW and Cumple y Gana programs that currently are in operation in Central America. Indeed, specific points such as the regional procurement fund and assistance to the Tripartite Commission ideas noted in Proposal Three might be appropriately addressed through these existing programs. ¶2. Please note that estimated costs in sub-paragraph (d) are for Guatemala only, even though we would expect that some proposals would also be implemented in other participating countries. ¶3. The information below is keyed to the reftel format: a. Brief Description and Justification b. How the Project Advances U.S. Policy Objectives c. Whether the Project is New or Related to Previous Work d. Estimated Cost (not included, as noted above) e. Degree of Local "Buy-in" f. Comment on Public Diplomacy Strategies Proposal One: Strengthen the Labor Justice System -------------- -------------- a. Guatemala's labor justice system suffers from a heavy case backlog caused by insufficient resources and inefficient processes. We recommend a project to increase the numbers of active Labor Courts and improve their services in all of the Central American countries that have similar issues. To increase the number of Labor Courts, we recommend a cooperative program with host governments. Should the host governments agree to designate spaces (vacant or underutilized buildings) for new courts and create additional positions for Labor Court judges, we would agree to provide the courts with necessary equipment, including computers, communications, furniture, etc. There are several information technology (IT) solutions available to track cases and streamline practices in Labor Courts. In certain circumstances, the program could also fund construction of new courthouses. Such a program could improve judicial proceedings via a review of current proceedings, development of recommendations, and orientation training for new judges; a role that might be particularly relevant for the International Labor Organization (ILO). As an example of needed reforms, Guatemala's Labor Code mandates an oral process, yet this is not practiced in any Labor Court. Just developing the expertise to oralize the trials would be a giant step forward to enforcing Guatemala's Labor Code. Improving Clerk of Court services would be another straightforward, yet very important step. If enacted, this proposal would greatly improve the judiciary's ability to enforce fundamental labor rights. Weaknesses in the Labor Courts' operations are specifically cited in the White Paper. b. This project would strengthen the rule of law and the ability for Guatemala to enjoy trade preferences with the United States with consequent economic development benefits, two points stressed in Embassy Guatemala's Mission Performance Plan. c. The USG has existing programs to promote oralization and other reforms of criminal court proceedings. This expertise would be relevant to duplicate the process with the Labor Courts. d. $700,000. e. The President of the Guatemalan Supreme Court, herself a former Labor Court judge, cited these types of changes as her number one priority. Guatemalan representatives from the Ministry of Labor, organized labor, human rights groups, and private sector employers associations have all expressed support for the concepts. f. Reforms to improve the rule of law are Guatemala's most critical issue and receive much attention. Efforts to reform Labor Court proceedings and increase access to those services will offer continued opportunities for public diplomacy, as our engagement with the criminal courts has already demonstrated. Furthermore, engagement with the ILO would promote our image as a multilateral partner. Proposal Two: Labor Rights through Civic Education -------------- -------------- a. There is a critical lack of basic civic education in Guatemala, particularly on labor rights. Traditional USG labor programs have been focused solely on employees in the formal sector, who represent only 25 percent of the workforce. Labor rights programs must also take into account the vast majority of the workforce who labor in the informal sector. We propose that the USG fund a project to engage the workforce on labor rights as civic education, promoting both the rights and responsibilities of workers, employers, and the government. By approaching this as a civic education issue, we could engage such organizations as the National Democratic Institute (NDI) and the International Republican Institute (IRI) who have unparalleled expertise. In Guatemala, we propose that NDI/IRI use the structures of the Human Rights Ombudsman (PDH) in this effort, although other nations may have other appropriate structures. PDH has 32 offices nationwide, offering coverage in every department (state),and a mandate to educate the public on their human rights. PDH recently approached us to request our assistance to improve their ability to address labor issues. In Guatemala, for example, we recommend that NDI/IRI develop a civic education training curriculum for PDH based on the Guatemalan labor code. NDI/IRI should develop such curricula in concert with domestic labor rights specialists. The curricula should be based on the rights and responsibilities defined in the labor code. As just one example, the vast majority of Guatemalan workers are unaware of the need to register their work contracts with the Ministry of Labor. In the event of a labor conflict, the Ministry's labor inspectors are powerless to enforce relevant provisions of the labor code without a registered contract. Following the establishment of such a program, workers could visit their local PDH office for counsel on labor affairs, rather than travel to the capital. In addition to the training, the project should equip the PDH offices with computers, communications equipment, and accurate copies of the labor code (please see Proposal 3, below, for further discussion of an accurate labor code). A workforce educated on labor rights is critical to strengthening the social dialogue and promoting a culture of compliance. This is an important capacity-building effort to promote fundamental labor rights and improve labor administration, as cited in the White Paper. b. This project would greatly enhance the respect for human rights and the ability for Guatemala to enjoy trade preferences with the United States, two points stressed in Embassy Guatemala's Mission Performance Plan. c. While the USG has previous engagement with PDH, the attempt to engage all Guatemalan workers regarding labor rights and responsibilities is entirely new. d. $900,000. e. PDH has specifically requested USG assistance to develop ways to promote labor rights. Guatemalan representatives from the Ministry of Labor, organized labor, indigenous rights groups, human rights groups, and private sector employers associations have all expressed support for the concept. f. Public diplomacy strategies in Guatemala already look to engagement with indigenous and rural populations. This effort allows us to put USG action at the forefront of dialogue with the Guatemalan people and provides a formal USG link to PDH offices nationwide. Proposal Three: Strengthening Labor Inspectorates & Labor Law -------------- -------------- a. Labor Inspectorates around the region suffer from institutional weakness, yet are the basic enforcement arm of the Labor Codes. Improvements are necessary in regards to both personnel and assets, as well as the status of the inspectorates as governmental institutions. Regarding personnel, we suggest a program to strengthen the administrative careers of labor inspectors. We envisage a two- year training program for labor inspectors that would cover basic tradecraft, the Labor Code, and management and mediation techniques. In the first year, we recommend two one-week basic level classes on these topics, spaced six months apart. In the Guatemalan example, the 200 inspectors would be split into 20 groups of 10, so the Ministry would never be down more than five percent of its Inspectorate. After all 20 groups had taken the first week-long course in turn, they would take the second week-long course in turn, which would include refresher training plus the ability to review the applicability of the first week to the six months of on-the- job experience in the interim. During the second year of the program, the basic course would continue for new intake and a more advanced course (including leadership, legal principles, ILO conventions, etc.) would be available for selected basic-course graduates who demonstrate both interest and aptitude. A potential third year would be linked to university training (please see Proposal Six below). Each step would be a prerequisite for promotion and career advancement. This project would also provide a basis for performance review of inspectors. (Note: We do not see the three years as immediately sequential for the average inspector. The very first group would do the second year immediately following the first, as the first year is only a matter of weeks spaced over an entire year and many inspectors have extensive experience. The advanced classes, and in particular the third year, would be mid-career experiences for identified future senior leaders. End note.) Regarding assets, we recommend a program to continue the modernization of labor ministries. IT solutions would be sourced to improve case management, strategic planning, and communications between ministries in capitals and their satellite offices around their respective countries. For physical assets, we recommend the creation of a regional procurement fund for vehicles, IT equipment, etc. We understand that every donor recipient always asks for vehicles, but in some cases -- like this one -- the needs are real. Mobile inspection units, ten passenger vans, and motorcycles all are important tools to get inspectors where they need to be. One critical asset needed by inspectors is an accurate Labor Code. In Guatemala, no government official has an accurate copy of the Labor Code. Legislative reforms, executive decrees, and judicial orders over the last 58 years have created a situation in which compliance with the Labor Code is little more than a guessing game. A local law firm dedicated a year of pro bono effort to reconcile these factors and recently completed an annotated accurate version of the Labor Code. While they have made it available on a USG-funded website, we recommend acquiring reprinting rights to distribute thousands of copies for use by the Labor Inspectorate, PDH, labor advocates, private sector, and academics. Furthermore, the methodology to develop the annotated code may be useful in other countries. Regarding the status of the Labor Inspectorate as a governmental institution, we recommend that technical assistance be provided to identify revenue sources for the Ministries of Labor. While all Guatemalan government entities are underfunded, the Ministry of Labor is traditionally one of the least-supported. The assistance should work with host governments to establish such revenue streams, via an earmark. Possible sources could be customs' excises, export licensing fees, or other sources appropriate to each governmental system. We caution that fines for Labor Code violations not be used in such a way to avoid the misperception that inspectors are merely "fund-raising" when doing their jobs. This project should also include technical assistance for local Tripartite Commissions, particularly in the area of legislative drafting, in order to reform the laws upon which the judicial systems are based. Organized labor, in particular, cannot afford the legal advice to draft legislative proposals and cannot depend on pro bono services continuously. The failure of Guatemala's Labor Inspectorate to carry out its mandate properly is specifically cited in the White Paper, as is the need for Labor Code reform. b. The proper operation of labor inspectorates is a key policy interest of the United States. This project would greatly strengthen the rule of law and the ability for Guatemala to enjoy trade preferences with the United States with consequent economic development benefits, two points stressed in Embassy Guatemala's Mission Performance Plan. c. Various USG projects have undertaken training activities with labor inspectors, but no effort has been made to systematize such training or develop a career path for them. Creating a set of incentives for career advancement is entirely new. Some IT support has been provided to the Guatemalan Labor Inspectorate in the past, but much more is needed. d. $1,000,000. e. The leadership of Guatemala's Ministry of Labor, employers associations, organized labor, and relevant NGOs have all expressed support for the concepts. Organized labor told us that technical support in drafting legislation is their number one need. f. As one of the few donors involved in labor rights, the USG receives good publicity from engagement. Our on-going involvement with a corps of public officials will offer many opportunities for public diplomacy. Proposal Four: Child Labor -------------- a. The large size of the informal sectors in the region exacerbates the problem of child labor. For two years CARE, CRS, and DAI have jointly managed a pilot project in the region to address the worst forms of child labor and to establish incentives to keep children in school in rural communities. In Guatemala, the project has been exceptionally successful, so we recommend that the contract be extended to double the number of communities addressed. b. Combating child labor is a key foreign policy issue for the United States. This project would greatly strengthen Guatemala's efforts to adhere to core labor standards and the ability for Guatemala to enjoy trade preferences with the United States with consequent economic development benefits, two points stressed in Embassy Guatemala's Mission Performance Plan. c. This is the extension of an initial pilot program. d. $300,000. e. Guatemalan representatives from the Ministry of Labor, Congress, organized labor, human rights groups, and private sector employers associations have all expressed support for this project. f. Child labor is an issue that receives extensive media attention in Central America and the United States. Our continued support for this project will offer extensive opportunities for public diplomacy. Proposal Five: Public/Private Stakeholder Compliance -------------- -------------- a. The successes in labor rights in Guatemala have all been tied to engagement with the private sector, and particularly the involvement of U.S. brands. We recommend a multi- stakeholder approach to augment the activities focused on governments and organized labor. Brands have made it clear to both organized labor and private sector apparel producers in Guatemala that internationally-respected labor standards are of an importance equal with pricing and quality. We recommend that a large-scale effort build on the experiences of the Partnership to Eliminate Sweatshops (PESP), the activities of the Global Fairness Initiative (GFI) and the Fair Labor Association (FLA),and the Continuous Improvement for Central American Workers (CIMCAW) project. We envisage that labor ministries, organized labor, private sector producers, local and international NGOs, and international brands would participate to address non-compliance with labor laws. This effort would not act as a replacement for effective Labor Inspectorates. Instead, it would be designed to complement the Labor Inspectorates' rightful role as the enforcement arm of the Labor Code. This public/private partnership would demonstrate the link between competitiveness and compliance and promote workplace diagnostic plans and voluntary codes of conduct. It would also promote information sharing amongst brands, including a clearinghouse of relevant inspection information available to other brands, labor activists, and other interested parties. The transparency in the system would allow for more clear emphasis on compliance issues. b. This project would both improve adherence to core labor standards in Central America and aid U.S. brands in their efforts to source goods produced under those conditions. The effort would aid U.S. and Central American economic development and also the strengthening of labor rights; three noted points in Embassy Guatemala's Mission Performance Plan. c. The extent of the project is new, but it is related to previous USG-funded efforts PESP, GFI, FLA, and CIMCAW. d. $500,000. e. Guatemalan representatives from the Ministry of Labor, Congress, organized labor, human rights groups, U.S. brands, and private sector employers associations have expressed support for this project. f. Multi-stakeholder activities receive much publicity. This activity would offer many opportunities for USG employees to address a broad public directly and the opportunity to press USG interests privately to important actors. Proposal Six: Labor Law Curriculum Development -------------- -- a. The lack of understanding of labor law by workers, management, inspectors, judges, and activists is exacerbated by the absence of any established curriculum in Guatemala's educational institutions. We recommend the development of a university-level curriculum regarding labor law that could be incorporated not only into law and human rights programs, but also into business schools. This could also represent a third year of training in the Labor Inspectorate career development program discussed in Proposal Three. Individual units of the curriculum, such as legislative drafting, negotiation, and mediation, could be used for targeted training for organized labor representatives, activists, Ministry of Labor officials, and even the judiciary. The program would focus on strengthening the educational and training institutions that support labor law, including both universities and national bodies that train court personnel. The curriculum would also be beneficial to the ad hoc training efforts by international donors, such as the ILO. In the long term, this project is designed to inculcate a generation of business, legal, labor, and judicial leaders with an understanding of labor rights and strategies to obtain them. In the short-term, the project would provide targeted training to actors who need it and deepen the understanding of both process and theory of labor rights enforcement. b. An advanced understanding of labor rights will improve the executive and judicial enforcement of labor law, allow Central American countries to adhere to core labor standards, and continue access to U.S. trade benefits; all points stressed in our Mission Performance Plan. c. This project would be entirely new. d. $900,000. e. Guatemalan representatives from the Ministry of Labor, organized labor, human rights groups, and private sector employers associations have expressed support for this project. The chief umbrella organization of private sector employers told us that this project was the organization's highest priority, in order to develop a generation of labor leaders with whom businesses could have fruitful negotiations. f. The development of such a curriculum would allow for extended contact with rising leaders while at the university level, whether they are destined for careers related to labor rights or not. DERHAM