UNITED STEETWORKERS UNION HIGHLIGHTS CONTINUING

UNCLAS SECTION 01 OF 04 MEXICO 001191

SIPDIS

DEPT FOR DRL/AWH AND ILSCR, WHA/MEX, USDOL FOR ILAB

E.O. 12958: N/A
TAGS: ELAB ECON AFL CIO PGOV SOCI PINR MX
SUBJECT: UNITED STEETWORKERS UNION HIGHLIGHTS CONTINUING
DISPUTE BETWEEN GOM, MINING INDUSTRY AND THE NATIONAL
MINERS, UNION

REF: 07 MEXICO 1925


1. SUMMARY: Secretary Clinton,s recent visit to Mexico
prompted the US president of the United Steelworkers Union
(USW) to write to her on behalf of Mexico,s National Miners
Union (SNTMMSRM). The letter, which received extensive media
coverage, highlighted various aspects of the long running
dispute between Mexico,s mining industry, the SNTMMSRM and
the current and previous GOM administrations. At roughly the
same time a number of pending court cases involving the GOM
and the SNTMMSRM were tentatively decided. The net results
of these court decisions effectively insured that the two
sides would continue their ongoing dispute for the
foreseeable future. Some of the questions involved in the
larger dispute with the Miners, Union on one side and a de
facto alliance between the mining industry and the GOM on the
other involve such issues as the right of workers to
organize, to freely choose their representatives and the
right to bargain collectively vs. the GOM,s efforts to end
alleged union corruption and to support the rights of
individual workers who disagree with the union,s leadership.
END SUMMARY.


Background
--------------


2. A long running dispute between two leaders within
Mexico,s National Union of Miners and Metalworkers
(SNTMMSRM) was further complicated in 2006 when the
administration of then President Vicente Fox became involved.
The leaders in question were Napoleon Gomez Urrutia; the
then officially recognized head of the union, and Elias
Morales Hernandez, a long-time union official. The struggle
between them began in 2002 when both ran to become SNTMMSRM
Secretary General, the union,s top elected executive
position. Ultimately Gomez won and became the leader of the
SNTMMSRM. Morales never accepted his defeat and argued that
Gomez was ineligible to serve as union leader since
(allegedly) he had never actually worked as a miner; a
minimum requirement for office outlined in the SNTMMSRN
statues.


3. Four years into his term as the legal head of the
SNTMMSRN, Gomez was ousted from his position by Morales and
his supporters on the union,s internal affairs unit (CVJ)
with the concurrence of the then Fox administration,s Labor
Secretariat (STPS). The basis for Gomez, removal was an
allegation that he embezzled USD 55 million in union trust
funds. The allegation was based on a document of
questionable validity from the CVJ requesting that the GOM
remove Gomez from office because of his fraudulent
activities. The GOM took no action to validate the
accusations against Gomez. Instead, the Fox government,s
STPS withdrew its recognition of Gomez as the head of the
SNTMMSRN, filed various criminal charges against him and
unilaterally declared Morales the new union Secretary
General. The GOM also finally accepted Morales, claim that
Gomez never met the qualifications for elected union office
since he never actually worked as a miner.


4. In response to these GOM actions, Gomez fled to Canada
where he continually proclaims his innocence. Initially
Gomez provided little in the way of a convincing accounting
of what happened to the USD 55 million which was last seen in
one of the Mexican branches of a Canadian bank. Gomez,
removal as the leader of the miners, union generated
considerable interest and controversy in labor circles both
within Mexico and internationally. Most, although certainly
not all, of the union,s rank and file continued to support
Gomez. Many of Mexico,s established unions also came out in
his support. Internationally, the United Steelworkers unions
(USW) in the US and Canada strongly supported Gomez. The USW
even filed a submission on the SNTMMSRN's behalf under the
terms of the North American Agreement on Labor Cooperation
(NAALC),a side agreement to NAFTA. Unfortunately for the
SNTMMSRN, the submission was declined.


Calderon Administration Tries a Different Tact
-------------- -

MEXICO 00001191 002 OF 004




5. Shortly after taking office in December 2006, President
Felipe Calderon,s government moved quickly to solve the
SNTMMSRN leadership dispute. According to a senior STSP
official, the Calderon government believed the Fox
administration needlessly took sides in an internal union
matter and wanted to find a way to reinstate Gomez as the
leader of the Miners, Union. This was ultimately
accomplished via a labor court ruling which determined that
Gomez had been improperly removed from office. The same
court ordered that Gomez be reinstated as SNTMMSRN Secretary
General for the remainder of his original elected term of
office.


GOM and Union Clash Once Again
--------------


6. In retrospect it now appears that the Calderon government
had hoped Gomez would serve out his terms and then quietly
step down or at least avoid confrontation. Instead the
SNTMMSRN continually pushed for wage settlements in excess of
GOM recommendations and which surpassed salary increases
accepted by other unions. The SNTMMSRN also associated
itself with Mexico,s main opposition party and repeatedly
took public stances opposing GOM initiatives. By mid-2007,
in the face of what it probably viewed as SNTMMSRN
intransigence, the Calderon government renewed the
embezzlement charges against Gomez first filed by the Fox
administration and then vigorously pressed Canada to
extradite him to face criminal charges in Mexico. Thus far
the Canadian government has declined to accept the GOM,s
arguments that Gomez, handling of the trust rises to the
level of criminal activity and consequently has refused to
order his extradition.


7. Once the Calderon government renewed the criminal charges
against Gomez, it and the SNTMMSRN initiated a series of
court cases against each other. Many of these cases dealt in
one way or other with the allegedly embezzled USD 55 million.
At issue was the GOM position that the funds belonged to the
workers and not to the union. The SNTMMSRN argued that the
funds were given to the union to administer for the workers
as determined by the organization,s duly elected leadership.
Over the following months the union presented information in
the courts which purported to provide an accounting of trust
fund disbursements.


8. In May 2008 Gomez,s term of office ended and, despite
self-imposed exile in Canada, he ran for and won reelection
as union Secretary General. This reelection notwithstanding,
the GOM argued that he was ineligible to hold union office
since he had never worked as a miner as required by SNTMMSRN
statues. On the basis of these statues the GOM refused to
grant official recognition to Gomez. Without official
recognition Gomez cannot be legally ratified as SNTMMSRN
leader. Gomez subsequently sued the GOM to have his
reelection legally recognized.


USW Renews Its Supports for the Miners, Union
--------------


9. Internationally the GOM,s actions were viewed as
harassment and the USW and the International Metalworkers
Federation both began a letter writing campaign on behalf of
the SNTMMSRN. The majority of these letters were written to
President Calderon but the most recent one was addressed by
the USW to Secretary Hillary Clinton. The letter was sent by
USW president Leo W. Gerard and timed to coincide with the
Secretary,s visit to Mexico.


10. The USW letter accused both the Fox and Calderon
administrations of a sustained three year &attack8 on the
SNTMMSRN and urged the Secretary to reject Mexico,s
anti-worker policies and repudiate the GOM,s assaults on
Gomez. Some of the accusations against the GOM were as
follows:

- The USW decried the Fox administration,s actions
removing Gomez from office and the Calderon administration,s

MEXICO 00001191 003 OF 004


refusal to recognize his reelection;

- It condemned the GOM,s repeated filling of criminal
charges against Gomez for embezzlement despite the fact that
the courts have repeatedly ruled in the union leader,s
favor;

- Rejected the GOM,s support for the mining industry,s
efforts to replace the SNTMMSRN with company friendly unions
in at least eight locations;

- Disparaged the GOM,s actions to declare SNTMMSRN
strikes illegal only to have the courts rule against these
government declarations again and again.


The Courts Decide ) It,s A Tie
--------------


11. In the weeks since Secretary Clinton,s March 23-24
visit, the Mexican courts have ruled on many of cases the
SNTMMSRN and the GOM have filed against each other. The
initial round in this legal battle went to Gomez and his
supporters in the Miners, Union. The competent courts
authorized an injunction against prosecution for Gomez over
his handling of the USD 55 million dollars in union trust
fund. Gomez, lawyers immediately issued a press statement
claiming that the rulings removed the basis for the criminal
charges against Gomez and any foundation the GOM had for the
extradition request made to Canadian authorities. Dissidents
within the union, whom the GOM says it is representing, claim
funds were to be given to individual workers affected by
privatization and not to be handled as the union saw fit.
The GOM plans to re-file the case on that basis.


12. The second round went to the GOM. When the STPS refused
to recognize Gomez, reelection as union leader this past May
he filed a court suit to force the GOM to recognize his
electoral victory. In this matter the courts ruled that
there is no credible evidence to indicate that Gomez ever
worked as a miner as required by SNTMMSRN statute for holding
elected union office. On that basis the courts ruled that
the GOM was fully justified in denying him legal recognition
as the head of the Miners, union. The question of Gomez,
eligibility to serve in an elected union position has been
pending since 2002. The GOM clearly won this round but
Gomez,s lawyers have already indicated they planned to
appeal this case.


13. Of the other remaining court cases the union and GOM
have filed against each other one of the most significant
involves the legality of a strike by some 1200 workers at the
Cananea mine in the western Mexican coastal state of Sonora.
This strike is more than two years olds and the GOM and
mining industry jointly filed suit to have the strike
declared illegal. On March 29 a labor court ruled that the
strike was indeed illegal and that the mine owners were free
to fire any employee who did not immediately return to work.
This labor court decision was widely reported in the media as
a serious blow to Gomez and the SNTMMSRN and it surely would
have been had it been allowed to stand. However, the union
appealed the decision and during the week of April 13 won its
case in court. The mining industry and the GOM will almost
certainly re-file it case to have the Cananea strike declared
illegal. This particular case appears to be a tie.

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


14. For now the long running struggle between the SNTMMSRN,
the GOM and mining industry appears to be deadlocked. The
three major court cases cite above that currently define the
conflict have effectively resulted in a stalemate. In
reviewing this matter it appear that many of the points
raised by the USW have some validity up to a point. There is
no doubt that both the Fox and the Calderon administration
have had their differences with the SNTMMSRN. In some cases
it appears the GOM acted improperly to resolve these
differences in its favor. For example, the Fox
administration,s action to remove Gomez as union leader was
highly questionable. Subsequent information tends to

MEXICO 00001191 004 OF 004


indicate that Gomez acted within his authority to handle the
USD 55 million in trust funds as he saw fit. That said, the
GOM,s position that it was defending the rights of dissident
workers within the union unhappy with how the trust funds
were being used, is a valid point.


15. Mexican law is unclear on whether the union or an
individual worker can ultimately decide on how organization
resources are used. Mexican legal precedent would argue in
favor of the union. However, experience has shown that many
unions are indifferent to the wishes of individual members so
the GOM could justifiably argue a need to police the actions
of corrupt unions. In looking at whether the GOM could
legally deny recognition of Gomez reelection both sides have
compelling points to make. Gomez and his supports can argue
that workers have the right to choose their representatives.
The GOM can legitimately claim that the union must uphold its
own statutes. In this case, the statutes say that persons
seeking elected union office must have actually worked as a
miner. Serious questions have been raised about Gomez,s
claim regarding his eligibility for office; many of which
have not been credibly resolved. In short, neither side in
this dispute can reliably claim to have acted correctly one
hundred percent of the time. This lack of earnestness by all
sides surely means that the disputes between them will
continue to be played out in the Mexican courts for some time
to come.

Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North American
Partnership Blog at http://www.intelink.gov/communities/state/nap /
BASSETT