Identifier
Created
Classification
Origin
07BUENOSAIRES914
2007-05-11 13:24:00
CONFIDENTIAL
Embassy Buenos Aires
Cable title:  

LABOR MINISTER ON RESTARTING DIALOGUE WITH FMCS,

Tags:  PRES PGOV ELAB AR 
pdf how-to read a cable
VZCZCXYZ0000
OO RUEHWEB

DE RUEHBU #0914/01 1311324
ZNY CCCCC ZZH
O 111324Z MAY 07
FM AMEMBASSY BUENOS AIRES
TO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RUEHC/DEPT OF LABOR WASHINGTON DC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 8100
INFO RUEHGT/AMEMBASSY GUATEMALA IMMEDIATE 0232
RUEHVL/AMEMBASSY VILNIUS IMMEDIATE 0067
C O N F I D E N T I A L BUENOS AIRES 000914 

SIPDIS

SIPDIS

WHA/BSC FOR BLAKENEY
WHA/EPSC FOR MESA AND SCHWARTZ
DRL FOR MITTLEHAUSER
DOL FOR PAULA CHURCH
G/TIP FOR FLECK AND BRASNEHAN
LABOR PLEASE PASS TO FMCS EILEEN HOFFMAN
COMMERCE FOR WALTER BASTIAN
GUATEMALA FOR ALEX FEATHERSTON
VILNIUS FOR THOMAS KELLY

E.O. 12958: DECL: 05/09/2017
TAGS: PRES PGOV ELAB AR
SUBJECT: LABOR MINISTER ON RESTARTING DIALOGUE WITH FMCS,
SANTA CRUZ STRIKES, AND A FUTURE UNDER CRISTINA

REF: A. BUENOS AIRES 276


B. BUENOS AIRES 906

C. BUENOS AIRES 793

Classified By: AMBASSADOR E. ANTHONY WAYNE FOR REASONS 1.4 (B) AND (D)

C O N F I D E N T I A L BUENOS AIRES 000914

SIPDIS

SIPDIS

WHA/BSC FOR BLAKENEY
WHA/EPSC FOR MESA AND SCHWARTZ
DRL FOR MITTLEHAUSER
DOL FOR PAULA CHURCH
G/TIP FOR FLECK AND BRASNEHAN
LABOR PLEASE PASS TO FMCS EILEEN HOFFMAN
COMMERCE FOR WALTER BASTIAN
GUATEMALA FOR ALEX FEATHERSTON
VILNIUS FOR THOMAS KELLY

E.O. 12958: DECL: 05/09/2017
TAGS: PRES PGOV ELAB AR
SUBJECT: LABOR MINISTER ON RESTARTING DIALOGUE WITH FMCS,
SANTA CRUZ STRIKES, AND A FUTURE UNDER CRISTINA

REF: A. BUENOS AIRES 276


B. BUENOS AIRES 906

C. BUENOS AIRES 793

Classified By: AMBASSADOR E. ANTHONY WAYNE FOR REASONS 1.4 (B) AND (D)


1. (C) Summary. On May 2, the Ambassador met with Labor
Minister Carlos Tomada and discussed ways to restart a
bilateral dialogue on labor mediation and enhance cooperation
on corporate social responsibility. The Minister offered
some critical remarks on management of the current strikes in
Santa Cruz province. He also talked about Argentina's
economic future under a Cristina Fernandez de Kirchner
administration. Finally, the Minister discussed GOA efforts
to raise public awareness of the problem of child and forced
labor. End Summary.

-------------- ---
Restarting Bilateral Dialogue on Labor Mediation
-------------- ---


2. (C) On May 2, Ambassador met with Minister of Labor
Carlos Tomada, senior advisors Antonio Estevez, Norberto
Ciravino, Nidya Neer, and ILO Country Representative Analia
Pieyrua. DCM and Poloff accompanied the Ambassador.
Minister Tomada began the meeting by informing the Ambassador
of his interest in restarting a bilateral dialogue with the
U.S. Federal Mediation and Conciliation Service that began in
the late 1990s and early 2000s with funding from the U.S.
Department of Labor. He noted that he and many others in his
Ministry had benefited from the dialogue which later became
known as the "West Virginia Group", after a visit to an FMCS
center in the state. Thanks to this dialogue, Tomada
explained that Argentina implemented a measure that requires
individuals to resolve their labor grievances through
reconciliation. He is now interested in adopting measures
that would make mediation obligatory for resolving collective
grievances. The Ambassador noted that the Labor Department
no longer had funding for these kinds of programs, but that

the Embassy would explore whether digital video conferences
with FMCS might be feasible. Tomada stated that this would
be appreciated.

--------------
Corporate Social Responsibility
--------------


3. (C) Minister Tomada also requested U.S. Embassy
assistance in approaching the U.S. business community,
including AMCHAM, to participate in the GOA's campaign to
increase the ranks of formal workers throughout the supply
chain. He stated that Argentina's definition of corporate
social responsibility is linked to dignified labor, adding
that "Quality work needs quality labor working under quality
conditions." He indicated that 70 of Argentina's largest
companies are already participating in the initiative. In
addition, his Ministry held a roundtable on youth employment
with various Argentine companies who have dedicated
themselves to generating jobs for young workers that gives on
the job training. Tomada stated that he had met with AMCHAM
to see whether U.S. companies would be interested in
participating in these initiatives, but implied that he did
not get much traction. He asked whether the U.S. Embassy
could help encourage U.S. companies to participate in these
efforts. The Ambassador noted that U.S. companies are
interested in promoting an image of strong corporate
citizenship. He suggested approaching the AMCHAM to organize
breakfasts with U.S. companies to discuss the initiatives.
The Ambassador also offered to host roundtables to generate
interest. Tomada welcomed and thanked the Ambassador for
both suggestions.

-------------- --------------
Santa Cruz Strikes--Micromanaging from the Casa Rosada
-------------- --------------


4. (C) When asked for an update on the ongoing public
sector strikes in Santa Cruz, Tomada jokingly stated "ask me
next week". (Note: Unfortunately, strikes have only gotten

worse.) Tomada explained that the Labor Ministry does not
normally intervene in provincial public sector negotiations,
but Santa Cruz is an exception given that it is President
Kirchner's home province. Tomada stated that Kirchner
personally requested that Tomada resolve the dispute and that
the President generally uses his inner circle to continue
controlling Santa Cruz from Buenos Aires. (Note: Throughout
the meeting, the Minister had to excuse himself to take
periodic phone calls with updates on negotiations with the
unions.)


5. (C) Tomada opined that the strikers in Santa Cruz have
legitimate grievances and pointed out that although salaries
in Santa Cruz are higher than the national average, so is
their cost of living. But he called Kirchner a tough
negotiator. He also said part of the problem is that the
President has insisted on managing this province (and the
strikes) from Buenos Aires, leaving only fourth-rank
officials nominally in charge of the province. (Note:
Teachers in Santa Cruz have been on strike for approximately
eight weeks, demanding an increase in their base pay, which
currently stands at 170 pesos or USD 55. Teachers take home
salary, however, can reach as high as 2000 pesos or USD 650,
once education level, position, experience, and length of
employment are factored in. However, retirement benefits are
calculated as a percentage of base salary and, for this
reason, teachers are demanding an increase in base salary.
The strike enjoys widespread support. At present, the GOA
has offered to increase base pay by 500 pesos or USD 160,
which would be offset by a decrease in extra pay received for
education level, position, experience, and length of
employment. Violence on May 8-9 led to the resignation of
Santa Cruz Governor Carlos Sanchez and the installation of
another hand-picked by Kirchner. See Ref B for more details.)

--------------
Wage Negotiations
--------------


6. (C) Tomada characterized the return to Argentina's
traditional practice of conducting simultaneous wage
negotiations with all sectors of the economy a "big mistake"
as it tends to overly politicize labor negotiations.
Ideally, each province and economic sector should negotiate
the most that they can get for that province or sector, he
stated. The problem is that unions in different provinces
and sectors demand the same concessions that other unions in
other provinces and sectors are able to negotiate.
Unfortunately, different provinces and sectors have different
capacities to pay, Tomada concluded.


7. (C) Tomada also noted that the public sector workers
union (Union Personal de la Nacion- UPCN) has already
accepted a 16.5% increase in salary. When the Ambassador
asked about the inflationary impact of wage increases, Tomada
replied that there has been a four percentage point increase
in productivity and that the economy still has the capacity
to absorb the increases without increasing inflation. He
asserted that the increase is actually less than 16.5%
annualized, because the pay raise takes place in smaller
increments over the course of the year. Although the strikes
in Santa Cruz are contentious, "it's a piece of cake"
compared to the social and political upheaval during the
2001-02 crisis, he quipped.

-------------- --------------
Argentina's Economic Situation: Time for a new Model
-------------- --------------


8. (C) Turning to a discussion of Argentina's economic
situation, Tomada acknowledged that "it is time for a new
model" and perhaps, even a new Labor Minister now that the
economy has stabilized. The economic liberalization policies
of the 1990s culminated in the 2001-02 economic crisis, which
significantly decreased the purchasing power and consumption
of the lower class, he explained. With the economic
recovery, demand has increased and Argentina needs to
increase investment to sustain growth. Tomada cautioned,
however, that there remains a large segment of the population

that is economically marginalized, a phenomenon new to a
historically middle class Argentine work force. The
government cannot wait for the economy to gradually improve
the lot of its working class and poor, e argued, adding that
waiting would raise governability issues that could threaten
the political, economic, and social order. Argentina is not
like Brazil or other countries in Latin America that have
reached a certain socio-political equilibrium with poverty,
he asserted.


9. (C) When it comes to economics, the Kirchner
administration has placed a premium on increased employment
and inclusion, Tomada continued. Ambassador noted that
economic policies need to deliver results, but at the same
time, Argentina now needs to plan for its future and increase
investment. In order to do that, the Ambassador asserted,
Argentina will need to regain public and global confidence.
Tomada agreed, and opined that under a Cristina Fernandez de
Kirchner administration, "Argentina's dialogue with the U.S.
and other foreign countries will improve." Several times he
referred to Argentina's next president as female, signalling
his belief that Mrs. Kirchner will be the candidate in
October.

---
TIP
---


10. (C) The Ambassador turned the discussion to human
trafficking (TIP) and the need to pass a federal law. Tomada
lamented that TIP has become a problem in Argentina. To
combat this, the Labor Ministry has conducted a series of
public awareness campaigns against forced labor and child
labor. Analia Pineyrua, International Labor Organization
Country Representative, noted that the ILO had funded a
survey on child labor trends in Argentina which discovered
that child labor was a concern in the province of Mendoza,
where child labor is currently used in the agricultural
sector. Both Pineyrua and Tomada noted that detecting forced
labor is very difficult, and stressed the need for training
among labor inspectors to identify potential victims of
forced labor.

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


11. (C) Minister Tomada is a former USG International
Visitor grantee, and seemed earnest in his request for
greater USG-Argentina dialogue and cooperation on labor
issues. At one point, he noted that although there is
"occasional noise" in the US-Argentina relationship, the
overall agenda is positive and there is great potential for
enhanced bilateral cooperation, particularly on the labor
front. The Minister's and Pineyrua's comments on the need
for greater TIP training among labor inspectors is a need
that the International Organization for Migration identified
in its recent submission of a proposal for G/TIP funding for
Argentina (ref C). End Comment.
WAYNE