BELARUS NOT DOING WHAT IS NEEDED TO PREVENT GSP

C O N F I D E N T I A L SECTION 01 OF 03 MINSK 001188 SIPDIS SIPDIS DEPT FOR DRL/IL BOB HAGEN E.O. 12958: DECL: 11/13/2016 TAGS: ELAB PGOV ECON PREL PHUM BO SUBJECT: BELARUS NOT DOING WHAT IS NEEDED TO PREVENT GSP SUSPENSION REF: A. 05 MINSK 1074 ¶B. MINSK 1019 Classified By: Ambassador Karen Stewart for reason 1.4 (d). Summary -------------- ¶1. (C) On October 12, the European Commission (EC) postponed its decision to suspend the General System of Preferences (GSP) for Belarus, giving Belarus more time to implement the International Labor Organization's (ILO) 12 recommendations to improve labor rights (ref A). According to some estimates, suspension of the GSP would cost Belarus approximately USD 500 million per year in trade revenue. The GOB sent a high-level delegation to the ILO headquarters in Geneva to demonstrate Belarus' commitment to improving labor rights, but according to local ILO representatives, the delegation's weak arguments only showed the GOB's lack of commitment to meet the recommendations. Trade union activists also view Lukashenko's decree to ease registration requirements and his concept for a new trade union law as empty promises designed to stall the GSP decision rather than to fulfill the ILO recommendations. However, the reasons behind the postponement most likely lie within the bureaucracy of the EC. End summary. EC Postpones GSP Decision, Gives GOB "One Last Chance" -------------- -------------- ¶2. (SBU) On October 12, the European Commission (EC) postponed its decision to exclude Belarus from the EU's General System of Preferences (GSP) until after the International Labor Organization (ILO) in Geneva reviewed the labor rights situation in Belarus, which is scheduled for November 15-17. According to the EC, the official reason for postponing the GSP vote was to give Belarus "ample time to reach a compromise with the ILO." However, according to ILO sources, the true reason for the postponement was internal disputes between EU countries over previous trade issues (see para 9). When the EC first began proceedings to exclude Belarus from the GSP in 2005, GOB officials shrugged off the threats, claiming the loss would not affect the economy. However, as the EC vote approached, Belarus' lobbying efforts to stave off the GSP suspension increased. ¶3. (C) Economists and trade union leaders estimate that the GSP suspension would cost Belarus approximately USD 500 million a year in trade revenue, significantly impacting the country's lumber, textile, and metal works industries. However, independent trade union activists, political analysts, and government economists during an October 27 breakfast with Pol/Econ Chief and Poloffs noted that the GOB was more concerned with the political fallout following the GSP suspension. According to the participants, the GOB fears that once GSP is lifted, some EU member states may be motivated to implement bilateral economic sanctions against Belarus. Given increasing economic pressure from Russia (ref B),Belarus is deeply concerned about economic isolation from the EU. GOB Delegation Delivers Weak Arguments to the ILO -------------- -------------- ¶4. (C) On October 19, a high-level Belarusian delegation headed by deputy PM Andrey Kobyakov and Deputy Head of the Presidential Administration Nataliya Petkevich arrived in Geneva to convince the ILO that Belarus was implementing the ILO's 12 recommendations to improve labor rights. The delegation included deputy minister of labor Elena Kolos, economic advisor for the Council of Ministers Aleksandr Rumak, deputy director of the Minsk Automobile Plant (MAZ) Edvard Podolyak, and Minister of Justice Viktor Golovanov. (Note: Golovanov and Petkevich are both on the U.S. and EU visa bans. End note.) ¶5. (C) The outcome of the Belarusian delegation trip was not mentioned in the state media nor would GOB officials comment on the issues discussed. Moscow-based ILO representative Sten Petersen (strictly protect) October 27 told Poloffs that the Belarusian delegation made several pleas to the ILO to not support the EC suspension of the GSP, but offered no compromise in return. According to Petersen's sources, the Belarusian arguments were weak, unsubstantiated, and at times completely false. MINSK 00001188 002 OF 003 GOB Makes Empty Promises? -------------- ¶6. (C) On October 9, Lukashenko signed a decree that softened registration procedures for trade unions and agreed to a "concept" of a draft law that would allow unions to exist without a legal address and enter into collective agreements with employers and authorities. Petersen criticized the decree and concept as empty gestures, noting the difficulties independent trade unions still face in registering local chapters and the secrecy of the concept of a draft law, which was not even in the form of a bill. According to Petersen's sources in Geneva, the GOB delegation presented these two developments to the ILO as proof that Belarus was fulfilling ILO recommendations. However, the ILO discovered that several points even within the concept actually violated ILO standards. ¶7. (C) The delegation also indicated that the GOB wouLd reinstate union activist Oleg Dolbik, an air traffic controller and union leader fired in 2004 after testifying before the 2004 ILO commission about labor rights abuses in Belarus. Petersen admitted that offering Dmlbik his job back would be a step in the right direction, but not enough to justifiably prevent the suspension of GSP. A bolder move, inQPetersen's opinion, would be to offer all union and political activists their jobs back. (Note: In a separate meeting with Poloff on October 31, ILO-Belarus representative Nataliya Varishagina confirmed that the GOB approached Dolbik, but the Belarusian mfficials suggested to Dolbik that he would have to meet "certain conditions" (i.e., abandon his union activity) before getting his job back. To date, Dolbik is qtill working as a chauffer. End note.) ILO Does Not Buy GOB Story -------------- ¶8. (C) According to Petersen, the ILO is all too familiar with Belarus' tactics to believe that the GOB is implementing the recommendations. Lukashenko has had almost two years to improve labor rights and has made little progress. Petersen expressed relief that Belarus finally sent a delegation of real decision makers from Lukashenko's close circle and not powerless bureaucrats. However, Petersen reiterated that the delegation's weak arguments proved Belarus was not generally interested in improving the labor situation. Local ILO representative Varishagina in a separate meeting agreed, noting that during the delegation visit to Geneva, the GOB continued to deny registration to union chapters in Borisov, Bobruisk, and the Minsk MAZ factory. Will the EC Act? -------------- ¶9. (C) The October 12 postponement on the GSP vote was the EC's second failure to make a decision on Belarus. In September, the EC was certain a decision for the suspension would be reached, although there existed opposition from Belarus' neighboring countries. However, Italy, angered by non-related EC decisions on the shoe trade, voted against the suspension of GSP in retaliation. After the October 12 postponement, reliable Embassy sources characterized the move as a "face-saving" measure for the EC, which feared it did not have enough votes for the suspension. ¶10. (C) The big talk and no action on the part of the EC exacerbated doubts by many on Minsk that the EC would suspend the GSP. During the breakfast, political analyst Valeriy Karbolevich said economics were the only lever of pressure in the EC's arsenal, so the EC was still debating whether to use it. Petersen agreed that the GSP was the EC's only weapon and that its delay in phe vote made the EC look weak. However, he noted that Germany's latest decision to support the GSP suspension (Germany abstained from the September vote) and the unlikelihood that Italy would repeat its September decision would give the EC enough votes to suspend the GSP. Comment -------------- ¶11. (C) Not all independent trade union activists support the suspension of the GSP for Belarus, fearing that ordinary Belarusians would suffer the most. However, many union MINSK 00001188 003 OF 003 activists agree that the GOB has no intentions of improving labor rights. In recent meetings with local union leaders, Poloffs have heard that authorities continue to fire union and political activists, deny them full wages and benefits, and/or prevent them from carrying out their activities. ¶12. (C) The ILO is well-informed of the situation on the ground; enough so to separate the truth from the lies in GOB arguments. The high-level delegation to Geneva, the decree to ease trade union registration, and the "concept" on union rights are seen largely as last-ditch efforts to prevent or postpone the EC's decision and not a genuine effort to improve labor rights in Belarus. However, the EC's hesitation to suspend the GSP in the first vote has likely given the GOB confidence that European internal disagreements will continue to stall adverse action. Stewart