MINISTRY OF LABOR AND PAKISTAN WORKERS FEDERATION DISCUSS

UNCLAS SECTION 01 OF 03 ISLAMABAD 000831 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ELAB ETRD PGOV SOCI PHUM PK SUBJECT: MINISTRY OF LABOR AND PAKISTAN WORKERS FEDERATION DISCUSS LABOR STANDARDS, INSPECTIONS AND ROZS ¶1. (SBU) Summary: In separate meetings with EconOffs, Ministry of Labor officials and organized labor representatives discussed the current state of Government of Pakistan (GOP) labor initiatives. All of our interlocutors stressed the need to increase human resource development and technical training. Ministry officials admitted that while the GOP was not up to the task of nation-wide skills training, secondary school programs and industry-led initiatives were a "second-best option." Caretaker Minister of Labor told EconOffs that the GOP had no plans to restart nation-wide labor inspections, which had been limited by provincial governments since 2003. The Ministry of Labor was supportive of the establishment of Reconstruction Opportunity Zones (ROZs) and expressed interest in working with the Embassy to ensure that labor rights were well-protected in any GOP ROZ implementing legislation. End Summary. ¶2. (SBU) EconOffs met with Caretaker Minister of Labor Nisar Ghuman on February 11 and Ministry of Labor Policy Planning Cell Chairman Dr. Sabur Ghayur on February 15. Economic and Commercial Affairs Counselor met with Pakistan Workers Federation (PWF) Secretary General Khursheed Ahmad in Lahore on February 13. Further details of that meeting to be reported Septel. Vocational Training and Human Resources Development -------------- -------------- ¶3. (SBU) According to Ministry of Labor Policy Planning Cell Chairman Dr. Sabur Ghayur, the Ministry is simplifying Pakistan's 74 separate pieces of labor legislation, incorporating them into five broad pieces of legislation. This process has been underway since the passage of the 2002 Labor Policy. The first of these bills, aimed at codifying core labor rights, will be sent to the National Assembly following Cabinet approval. Dr. Ghayur did not mention a timeline for the bill's submission. Merging fourteen separate labor codes into one, the bill guarantees basic worker rights of association, union formation and collective bargaining and extends these provisions and protections to the informal sector. The Ministry also plans to revise occupational safety guidelines, social safety nets, labor migration policy and human resource development. ¶4. (SBU) Dr. Ghayur emphasized that human resource development will focus on training and capacity building. He admitted, however, that the Ministry of Labor does not fully understand Pakistan's skills needs, information he described as critical to tackling the country's dearth of skilled labor. Only 300,000 of Pakistan's thirty million workers are classified as highly skilled. Describing the Ministry's previous human resources development initiatives as "disjointed and uncoordinated," Ghayur emphasized industry-led vocational training as a possible solution. He admitted that the GOP does not have the resources to provide vocational training for every industry and region in Pakistan, describing the "second-best option" as targeted and sector-specific vocational training programs in secondary schools, an untapped resource that should be better utilized. ¶5. (SBU) Caretaker Minister of Labor Nisar Ghuman, an American citizen, former polo player-turned-soldier and the self-described leading horse-equipment manufacturer in Pakistan, remarked that he was devoting all of his time as Minister to improving Pakistan's technical training capacity. Ghuman believes that on-the-job training would be more beneficial than general vocational training provided by government-run centers. The Ministry has identified twelve sectors requiring better trained workers and plans to use tax incentives and direct cash transfers to promote private sector-led training initiatives. Advocating skills training over basic literacy, Minister Ghuman plans to submit a full report to President Musharraf before leaving office. Labor Inspections -------------- ¶6. (SBU) Since 2003, labor inspections have been heavily regulated in Punjab, Sindh and the Northwest Frontier Province (NWFP). Inspection teams must request permission from provincial chief labor inspectors prior to visiting factories. (Comment: Punjab's Chief Labor Inspector declined a meeting with Economic Counselor during a recent trip to Lahore. End comment.) Local businesses are informed in advance of impending inspections, limiting the effectiveness of labor condition monitoring. According to Iftikhar Javed, Senior Research Officer in the Ministry of Labor, the GOP has not received inspection reports from the three provinces since the regulations ISLAMABAD 00000831 002 OF 003 were put into effect in 2003. While GOP information on the current state of labor inspections in Pakistan is incomplete, data from previous years indicates that inspections are on the decline, particularly in the Punjab. ¶7. (SBU) Pakistan Workers Federation (PWF) Secretary General Khursheed Ahmad, who has been Secretary General since 1972 and currently sits on the International Labor Organization (ILO) Governing Board, was critical of the Sindh and Punjab provincial government decisions to suspend surprise labor inspections. Inspections with advance notice, he commented, simply do not have the same effect. Ahmad was not optimistic that this decision would be changed any time soon. Ahmad did, however, share his POSITIVE impressions of corporate social responsibility programs underway in the export sector. Following Nike's 2006 decision to halt soccer ball production in Pakistan due to child labor concerns, greater dialog has emerged on how best to ensure core labor standards. ¶8. (SBU) Ministry of Labor Policy Planning Cell Chairman Dr. Sabur Ghayur opined that the suspension of national labor inspections violates both Pakistan's constitution and ILO core labor conventions, to which Pakistan is party. Dr. Ghayur reported that the GOP previously approved a Federal Labor Inspections Policy, in collaboration with workers and employers. The policy, reportedly in the implementation phase, would create a federal labor inspectorate that could supersede provincial labor departments. Caretaker Minister Ghuman, on the other hand, told EconOffs that the Ministry currently has no plans to resume nationwide labor inspections. Ghuman placed the blame squarely on "corrupt" labor inspectors, reporting first-hand that prior to 2003, inspectors visited factories monthly to pick up bribes instead of monitoring labor conditions. The Caretaker Minister further lamented that talent was wasted in Pakistan due to the fact that "corruption always accompanies GOP activity." RECONSTRUCTION OPPORTUNITY ZONES (ROZS) -------------- ¶9. (SBU) Describing ROZs as a "window of opportunity" with respect to the promulgation of nation-wide fair labor practices, Policy Planning Cell Chairman Dr. Ghayur hoped that ROZ labor standards would have a spill-over effect on other regions and industries in Pakistan. It is critical, he continued, that ROZ implementing agreements contain provisions for the long-term development of Pakistan's organized labor capacity. Ghayur commented that the labor movement was not very active in the Northwest Frontier Province. Trade union and labor inspection capacity would have to be increased to ensure that fair labor practices were adopted and implemented in the province's ROZs. ¶10. (SBU) Ghayur does not support private sector-led labor monitoring mechanisms, such as the Sialkot-based child labor monitoring organization IMAC, as a model that should be replicated in ROZs. Declaring them "non-viable and expensive," Ghayur wants labor groups and management representatives included in a government-sponsored inspections regime. U.S. market access, he continued, was a large enough carrot to bring both labor and management in agreement about labor standards and independent inspections. Pakistan Workers' Federation (PWF) Secretary General Khursheed Ahmad also reacted positively to discussions about labor conditions in ROZs, promising to publicize and support the initiatives once legislation is introduced. COMMENT -------------- ¶11. (SBU) Comment: Dr. Ghayur was candid in his admission that the Ministry of Labor is not up to the task to provide employment training to all of Pakistan's workers. Even more telling was the difference in opinion between Ghayur and the Caretaker Minister regarding the resumption of nation-wide labor inspections. While it is likely that labor standards in the ROZs will be higher than in the rest of Pakistan due to U.S. legislative requirements, ROZs will focus the spotlight on labor conditions in Pakistan, particularly the lack of nationwide enforcement. In terms of both labor condition monitoring and human resources development, the private sector is in many ways in a better position than the GOP to affect meaningful change. ¶12. (SBU) Comment Continued: Upcoming discussions on ROZ implementation provide the USG with the opportunity to better engage labor leaders, provincial and federal government authorities, and the private sector to highlight improved labor standards and enforcement. The USG could use this opportunity, and in particular ISLAMABAD 00000831 003 OF 003 the market access potential of the ROZs, to provide a model for future strengthening of core rights and enforcement throughout Pakistan. End Comment. PATTERSON