NICARAGUA: AMBASSADOR CALLS ON MINISTER OF LABOR

C O N F I D E N T I A L MANAGUA 000700

SIPDIS

SIPDIS

WHA/CEN FOR SCHIFFER

E.O. 12958: DECL: 03/14/2017
TAGS: ECON ELAB KDEM PGOV PINR NU
SUBJECT: NICARAGUA: AMBASSADOR CALLS ON MINISTER OF LABOR

Classified By: Ambassador Paul Trivelli for reason 1.4(b)


1. (SBU) SUMMARY: In a March 14 meeting with the
Ambassador, Nicaraguan Minister of Labor Jeanette Chavez
Gomez admitted that the Ministry faces some complex problems.
While in favor of increasing the minimum wage, she
emphasized the need for a cautious, balanced approach to
adjusting the minimum wage scales to meet the needs of
workers without jeopardizing private sector interests. She
is actively engaged with her Central American counterparts to
establish a regional labor resource center in an effort to
calibrate labor standards and address regional labor issues.
The Minister denied widespread reports of politically
motivated firings within the various ministries, claiming
that only 300-400 employees -- in "positions of confidence"
or whose contracts had expired -- had been dismissed, and
claimed that 120,000 had been dismissed under the three
previous administrations. The Minister agreed that
trafficking in persons is an important issue and is actively
engaged with El Salvador to sign a bi-lateral labor agreement
that would enable the government to more effectively address
the matter. END SUMMARY

Introduction
- - - - - - -


2. (U) On March 14, the Ambassador sat down with the new
Minister of Labor, Jeanette Chavez Gomez, to discuss CAFTA
funding for labor-related projects, reforms to the minimum
wage and Consumer Price Index (CPI),anti-trafficking
efforts, and respect for the Civil Service law among other
issues. The Minister, clearly pleased to receive the
Ambassador, eagerly engaged him in discussion of a broad
range of labor-related topics and displayed a solid working
knowledge of each issue. She openly acknowledged the
challenges ahead, but displayed a positive attitude and seems
to be taking a very proactive approach.


3. (SBU) Minister Chavez began the meeting by commenting
that her Ministry is small, but it faces tough, complicated
issues, such as minimum wage reform, that impact the whole
nation. She remarked that it is very important to strike the
right balance between economic growth and stability and
ensuring just wages for the Nicaraguan people. Cognizant of
the difficulty of achieving this balance, the Minister said
the GON is carefully analyzing the situation.

CAFTA Support for Labor Programs
- - - - - - - - - - - - - - - - -


4. (SBU) The Ambassador mentioned that the USG, through
CAFTA-DR, is providing over US$ 20 million in regional
funding this year to help strengthen and modernize labor
ministries, improve labor standards and labor law
enforcement, and increase the knowledge base and
professionalization of organized labor institutions. The
Minister remarked that she is familiar with and impressed by
the work of a key regional partner in US-funded labor
projects -- Cumple y Gana -- and expressed her appreciation
for the US' efforts to improve the labor situation. Minister
Chavez mentioned that efforts are underway to create a
consolidated Central American labor resource center with the
goal of studying and improving regional labor standards. The
center would also serve as a resource center for workers.


5. (SBU) On the theme of trafficking in persons (TIP),the
Ambassador mentioned that the Ministry may be interested in
an upcoming TIP workshop in El Salvador. The Minister
responded that Nicaragua has a well-developed bi-lateral
labor agreement with Costa Rica that defines workers' rights
and the legal procedures for dealing with labor issues. She
expressed interest in creating a similar accord with El
Salvador, in part, to control trafficking in persons which
she believes is facilitated by the large movement of migrant
labor.

Minimum Wage Reforms
- - - - - - - - - - -


6. (SBU) The Minister is a strong proponent of reforming the
minimum wage based on an "adjusted" CPI. Because the current
CPI does not including housing, she stressed, it is not
accurate. However, she pointed out, the tricky part is
determining how much to increase the minimum wage for a given
uptick in the CPI. She emphasized the need for "equilibrium"
between workers' rights and macro-economic impact, and stated
that there is on-going discussion to determine how much
additional currency - via wage increases - could be injected
into the economy without creating inflation and how much the
business sector can absorb without damaging competitiveness.
She acknowledged that the government must proceed with
caution when considering wage reforms because, as a major
employer in the economy, any upward movement in wages could
have a significant fiscal impact.

Civil Service Firings
- - - - - - - - - - -


7. (C) The Ambassador commented that the topic of
unjustified firings has received a great deal of press
attention lately and solicited the Minister's opinion.
Minister Chavez responded that the news reports are wrong,
and insisted that no more than 300-400 people had been
dismissed amongst the various ministries, most of whom were
people in "positions of confidence" or contract employees
whose contracts were not renewed. As an example, she cited
that the Ministry of Labor has dismissed only three people,
all of whom worked in the Minister's office in "positions of
confidence." She conceded that there may be some isolated
incidents of unfair firings, but nothing orchestrated or
widespread. In contrast, she claimed that some 120,000
government employees had been fired under the previous three
administrations, beginning in 1990 until the end of 2006.
(COMMENT: Given that the government work force is estimated
to be 60,000, such a claim is not credible as it would imply
that the entire government work force has been fired twice in
the past 16 years. Separately, members of the political
opposition in the National Assembly claim that Law 476 -- the
Career Civil Service law -- does not authorize the dismissal
of people in "positions of confidence" and that such
dismissals are illegal. Instead, such workers are to be
reassigned. In addition, Foreign Minister Samuel Santos
earlier mentioned to us that the new administration would not
change more than 200 positions. END COMMENT).


8. (SBU) In response to the Ambassador's question about her
relationship with the National Assembly, Minister Chavez
characterized it as "good", but that the deputies are asking
her to take action against the dismissal of civil servants.
She told the Ambassador that, technically, the Treasury is
responsible for handling labor appeals, but that the Appeals
Commission written into the 2003 Career Civil Service law has
never been formed. She stressed that the Ministry of Labor's
mandate is labor inspection and that it would be a conflict
of interest if such a Commission were part of the Ministry of
Labor.

Lobster Fisherman
- - - - - - - - -


9. (U) The Ambassador touched briefly on the subject of the
working conditions of lobster divers on the Atlantic Coast,
an occupation known to be very hazardous due to poor
equipment and training and the lack of enforcement of health
and safety regulations by the government. Minister Chavez
characterized the situation as "serious, serious" and stated
that "people have a long history of not obeying the laws."
She promised that the government will "work hard on this,"
but admitted that there are too few inspectors and that they
lack sufficient technical knowledge of the profession.
Minister Chavez believes that an inter-ministerial approach
involving, for example, the Ministries of Health and the
Family, will be required to address this problem.


10. (SBU) Finally, the Ambassador asked that the Ministry of
Labor consider how it might help resolve an on-going labor
dispute involving a US-owned shrimping business on the
Atlantic Coast in which the workers illegally went on strike.
The Minister stated that she was aware of the case and is
actively "looking for solutions."

Biography: Jeanette Chavez Gomez
- - - - - - - - - - - - - - - -


11. (U) Doctor Jeanette Chavez Gomez was born in Chinandega
and obtained a law degree from UNAN in the 1970s. She holds
a Masters degree in Public Law from the University of
Barcelona. Dr. Chavez has been tied to the FSLN since she
was a student leader. During the 1980s she worked at the
Ministry of Agriculture (MIDINRA),the Ministry of Economy,
and was the General Manager of an industrial supplies
company. Along with Ruth Selma Herrera, Dr. Chavez is the
founder of the Consumer Defense Network. She is also the
former President of the Chinandega Lawyers and Notaries'
Association.
TRIVELLI