LABOR MINISTRY PRIORITIZES TRIPARTITE DIALOGUE AND

UNCLAS QUITO 001275

SIPDIS

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

E.O. 12958: N/A
TAGS: ELAB PGOV EC
SUBJECT: LABOR MINISTRY PRIORITIZES TRIPARTITE DIALOGUE AND
COMBATING CHILD LABOR



1. (U) Summary: Minister of Labor Galo Chiriboga and Vice
Minister of Labor Jose Serrano outlined the four main goals
of the Ministry of Labor (MOL): combating child labor,
tripartite dialogue, modernization of the MOL, and combating
employment discrimination. President Palacio recently signed
a decree to make child labor inspectors permanent employees
of the MOL beginning June this year. Chiriboga claimed that
fruitful dialogue in the tripartite National Labor Council
recently resulted in consensus on the bulk of draft
subcontracting law. He hoped the same positive atmosphere
would prevail during discussions of a wholesale labor code
reform. The Ministry expects to receive a first draft of the
new labor code from ILO expert Enrique Marin in mid-July and
hopes the law will be approved by Congress by December. The
subcontracting law is still stuck in Congress over
disagreements over the scope of the law. Should those
differences be resolved, prospects for deeper labor reforms
will improve. End Summary.

Combating Child Labor A Top Priority
--------------


2. (U) Chiriboga told us in a May 18 meeting that President
Palacio had signed a decree in late April creating budget
line items to make child labor inspectors permanent employees
of the MOL beginning in June 2006. Currently, the MOL
employs 21 inspectors. However, Chiriboga said there are now
line items for 35 employees in the child labor division to
include 25 inspectors, 5 administrative staff, and five
technical staff. The MOL is also carrying out a child labor
awareness campaign with radio spots and will begin television
spots in June using members of Ecuador's World Cup-qualified
national soccer team, Olympian Jefferson Perez, and local
rock group "Rockola Bacalao." The MOL has also implemented a
program to eliminate child labor in the public markets in the
city of Manta.


3. (U) According to the MOL's child labor division, in March
of this year the MOL stepped up inspections in construction
and bricklaying. During January and February no child labor
inspections were carried out because the inspectors were
being trained in new inspection procedures and forms.
Chiriboga has institutionalized the inter-agency child labor
council (CONEPTI) which now has its own offices and a
technical secretary. The Secretary of CONEPTI, Lenin
Herrera, told press that inspections have allowed CONEPTI to
identify sectors with the highest rates of child labor.


4. (U) Chiriboga said the Ministry is formulating a list of
prohibited work for children and some other definitions
related to the child code. A law passed in March harmonized
the child code and the labor code by setting the minimum age
for legal work at 15 and imposing higher fines for child
labor violations.

New Labor Code To Be Discussed in Tripartite Forum
-------------- --------------


5. (U) Serrano said the MOL has worked hard to strengthen
tripartite (business-labor-government) dialogue in the
National Labor Council, with its greatest achievement so far
being the near-consensus reached on the subcontracting law.
Business and labor ultimately agreed on all but two key
articles in the bill. Serrano said he expected the law to be
voted on in Congress in the next 15 days. Serrano said the
MOL was satisfied with the law and hoped for its passage.
The one point holding up the subcontracting law in the
Congress is the article which describes the permissible scope
for the use of subcontracting by employers. The Council did
not reach agreement on the maximum percentage of workers that
can be subcontracted, with workers wanting the maximum set at
40 percent, and business wanting it set at 60 percent. He
thought a compromise could be reached.


6. (U) Serrano said that, provided the subcontracting law
passes, the National Labor Council would become the main
forum to discuss labor code reforms for Ecuador. Serrano
said he was expecting ILO expert Enrique Marin to deliver a
first draft of a new labor code to the National Labor Council
by July 15. Chiriboga said the labor code would likely

require two months of discussion and negotiation in the
National Labor Council before being submitted to Congress.
Ideally, the law would pass Congress by December. He hoped
the ILO could play a facilitating role crafting consensus in
the National Labor Council. Serrano requested USAID
assistance to conduct workshops about the new labor code for
the National Labor Council and funds to hire experts to
advise business and labor. The toughest issues to reach
consensus on, according to Serrano, would be: profit
sharing, company retirement, collective bargaining, the 30
person minimum to form a union, hourly work, and, if still
pending, subcontracting. Serrano also asked for USAID's
assistance to implement the new labor code, once approved.

Modernization a Top Priority
--------------


7. (U) According to Chiriboga, the MOL has worked hard, with
assistance from USAID, to modernize its labor inspections
procedures. Chiriboga believes that an efficient computer
system could help catch labor irregularities and make the
inspections system more efficient. The MOL is also working
with the ILO on a project to systematize the information
gathered in inspections. Chiriboga said the MOL had been
working to update its website and make it more useful.

Combating Discrimination in Hiring
--------------


8. (U) Chiriboga told us the MOL will launch a program to
increase youth employment with the ILO in July. In order to
improve job prospects for youth, Chiriboga said the Ministry
had recently signed an agreement with 50 universities to
create a job bank to match students with job market needs.
Other priorities have been eliminating discrimination in
hiring of women, indigenous, Afro-Ecuadorians, and persons
with disabilities. Chiriboga is also promoting a law to
prevent discrimination against those with HIV/AIDS and
promote prevention of the disease. The MOL is drafting
regulations for a new law to increase the hiring of persons
with disabilities.

Comment
--------------


9. (SBU) Chiriboga is committed to improving the Ministry
and worker rights and has taken significant steps forward on
combating child labor and promoting tripartite dialogue. The
institutional strengthening Chiriboga is promoting will help
in the implementation of any new labor laws. Labor code
reform will be significantly more contentious than the
subcontracting law and it is likely discussions of the labor
code in the tripartite council would extend beyond two
months. Without a signed FTA it is unlikely Chiriboga has
the political strength to lobby the Congress for the new
labor code. While business had understood the need for labor
reform in order to gain passage of a U.S.-Ecuador FTA, the
elimination of the prospect for an FTA probably dooms
prospects for comprehensive labor reform.
JEWELL