GUATEMALAN COMPANIES VOLUNTARILY PARTICIPATE IN

UNCLAS GUATEMALA 000255

SIPDIS

SIPDIS

DEPT FOR DRL/ILCSR
DOL FOR CROMERO, PCHURCH, LBUFFO

E.O. 12958: N/A
TAGS: ELAB EIND ETRD PHUM ECON KJUS KDEM GT
SUBJECT: GUATEMALAN COMPANIES VOLUNTARILY PARTICIPATE IN
LABOR COMPLIANCE PROGRAM


1. On February 27, during its annual awards ceremony, the
Guatemalan Association of Exporters (AGEXPORT) and its
Apparel and Textile Industry Commission (VESTEX) publicly
recognized and certified 29 Guatemalan textile and apparel
companies that voluntarily participated in, and fulfilled the
requirements of, VESTEX's Code of Conduct Program.


2. In his introductory remarks, VESTEX Labor Commission
Director Marco Antonio Rosales commended the efforts of the
participants, highlighting the importance of compliance with
labor laws, especially in today's increasingly sophisticated
and competitive global market. He noted that voluntary
implementation of codes of conduct benefits not only
employees and employers but also promotes Guatemala's
competitiveness.


3. Embassy Labor Officer spoke at the ceremony, stressing the
importance of implementing labor compliance programs in the
textile and apparel industry as part of a global effort to
improve respect for labor rights and to ensure safe and
healthy working conditions. Laboff noted that corporate
social responsibility programs are increasingly viewed as a
competitive advantage and as an emerging industry norm as
more and more companies recognize their long-term costs and
benefits. Implementation of labor compliance programs can
reduce staff turnover, improve product quality, boost
productivity, attract new customers, and retain existing
customers. They can also help companies avoid penalties,
such as canceled orders, government fines, and litigation
costs.


4. Although the Guatemalan textile and apparel industry
declined in 2007 due to competitive pressures from China, in
2006, it employed 100,609 workers, representing 57 percent of
all workers in Guatemala's manufacturing sector and 9.8
percent of the country's total formal sector labor force.
Total production was valued at USD 1.5 billion, or 27 percent
of the value (USD 5.5 billion) of Guatemala's total
industrial production. According to VESTEX, the industry
remains among Guatemala's primary generators of formal
employment. In 2007, the industry accounted for 8 percent of
GDP, with USD 670 million in foreign revenues. Export of
apparel and textiles represented 22 percent of Guatemala's
total exports, and 40 percent of exports to the U.S. The
U.S. market alone represented 83.4 percent of apparel and
textile exports from Guatemala.


5. According to VESTEX labor consultant Mariana Contreras,
VESTEX labor compliance programs include a code of conduct
program, alternate conflict resolution, monitoring of
occupational health and safety standards, labor consultation,
and training on labor rights and related themes. Its code of
conduct program, based on ILO conventions, incorporates
prohibitions on discrimination, child labor, and forced
labor; promotion of freedom of association, equality, and
occupational health and safety; preservation of the
environment; and respect for employees' personal and physical
integrity.


6. In 2007, 53 companies, representing 39,481 employees,
voluntarily participated in VESTEX's self-financed Code of
Conduct Program with the aim of contributing to the
prevention of labor conflicts. This number represents a
significant increase from the 9 companies, representing 5,000
employees, that participated in 1996, the first year of the
program. This year, VESTEX will launch a new training
program, which will train 50,000 workers in the textile and
apparel industry on labor rights and obligations and VESTEX
Qapparel industry on labor rights and obligations and VESTEX
labor programs.
Derham