CHILE'S CONGRESS: PRIORITIES AND HOPES FOR U.S.

UNCLAS SANTIAGO 000612

SENSITIVE
SIPDIS

STATE FOR G/TIP--FLECK, PM/RSAT--DANIELEWSKI, PM/SNA--RYAN
LABOR FOR ILAB--GAY AND MCCARTER
PENTAGON FOR LENIHAN

E.O. 12958: N/A
TAGS: PGOV PHUM KTIA KTIP ELAB CI
SUBJECT: CHILE'S CONGRESS: PRIORITIES AND HOPES FOR U.S.
PARTNERSHIP

REF: A) Santiago 515
B) Santiago 126


1. (SBU) Summary. The new leaders of both houses of Chile's
Congress are interested in strengthening ties with the U.S., and
hope to visit Washington in September and re-invigorate the moribund
U.S.-Chile Senate Caucus. Electoral reform; transparency and
anti-bribery legislation required for OECD accession; intellectual
property rights; and fiscal stimulus packages are all issues of
importance to the U.S. during this legislative session. Poloffs
have lobbied on behalf of legislation to outlaw labor trafficking,
which continues its slow progress through the legislature. Chile
has officially joined the International Criminal Court. A potential
SOFA remains stuck in the executive branch with no progress likely
this year. End Summary.


Congress Hopes for Partnership with U.S.
--------------


2. (U) Chile's new congressional leaders -- Senate President Jovino
Novoa and Chamber of Deputies President Rodrigo Alvarez, both from
the center-right Independent Democratic Union (UDI) -- want to
nurture closer ties to the U.S. Novoa's Chief of Staff, Nicolas
Figari, approached Poloff recently asking for advice about
re-starting the U.S.-Chile Senate Caucus, which was founded in 2005
but has had no activity since its founding. This year Novoa hopes
to visit the Vatican in November as part of President Bachelet's
delegation as well as China and the U.S. -- he hopes the U.S. will
be his first trip. Alvarez is also interested in greater
partnership with the U.S. Congress, including joining a potential
new U.S.-Chile Congressional Caucus (to encompass and expand the old
U.S.-Chile Senate Caucus) as well as making a possible trip to the
U.S.


3. (U) Poloffs are working with Figari and U.S. Senate Foreign
Relations Committee staffer (and Chilean-American) Carl Meacham to
define possible focal topics for a new congressional partnership.
Labor and environment cooperation -- both chapters in the U.S.-Chile
Free Trade Agreement and the subject of a forthcoming General
Accountability Office report -- may be the focus of the proposed
cooperation. Poloffs and cabinet chiefs discussed possibilities for
a Washington visit, focusing on the possibility of a September visit
by a bicameral and multi-party delegation led by Novoa and Alvarez.
(Note: Congressional staffers for both leaders emphasized that any
potential trip would be short and work-focused. Between accusations
of government inefficiency, small-scale corruption, and recent
television coverage of lazy parliamentarians, they want to ensure
that any trip is seen as a productive meeting of bilateral leaders,
not a boondoggle. End Note.) Poloffs are also working with Meacham
to identify potential U.S. members of a renewed and expanded
caucus.

Legislative Agenda: OECD Accession, Voting Reform, IPR
-------------- --------------


4. (SBU) Members of Congress, congressional staffers, and think
tank analysts have described the following pieces of draft
legislation as on the agenda for the current legislative year, all
of which are important to U.S. policy goals:

--OECD Accession: Chile must pass three laws -- on bank secrecy,
transparency, and corruption -- in order to join the OECD. Bachelet
prominently called for Congressional support for this pending
legislation in her May 21 State of the Union-style address (Ref A).
Senator Andres Chadwick (UDI),chair of the Senate's Human Rights
Committee and a member of the Constitutional Committee, noted
Chileans find the OECD's standards for allowing tax authorities to
have access to bank information to be "unusual." The main issue at
stake in the proposed corruption law, according to Chadwick, is
giving Chile the right to prosecute expatriate Chileans who attempt
to bribe officials overseas. Members of the center-right National
Renewal party (RN) say they are against legislation reforming bank
secrecy. However, presidential candidate Sebastian Pinera (RN) has

asked members of Congress to support this bill.

--Electoral Reform: The Congress has approved legislation which
would transition Chile from an electoral system where voter
registration is voluntary but all registered voters are required to
vote. Under the new system, voters would be automatically
registered upon turning 18 but could choose whether or not to cast a
ballot (Ref B). The proposed law would also extend voting rights to
expatriate Chileans, provided that they prove some type of
continuing link with Chile. Although voting reform has been a
perpetual demand from the center-left governing Concertacion
coalition, the Bachelet administration's enthusiasm for immediate
reform has waned somewhat as polls show that opposition presidential
candidate Sebastian Pinera enjoys strong support among unregistered
voters. Analysts tell us that the government has quietly stopped
pushing to implement electoral reform in time for the December
presidential and parliamentary elections, and is now hoping for
reforms to take place in time for the next major election.

--Intellectual Property Rights Legislation: Chadwick indicated that
a proposed landmark copyright law is advancing through the Congress,
but is more complex than legislators initially believed,
particularly in the area of fair use and author's rights. Many
interests are opposed to the law, Chadwick noted.

-- Further Modernization of Capital Markets: The GOC has proposed
legislation that calls for corporate governance regulations that
meet international standards. The reforms would promote liquidity,
increase capital market depth, and better integrate Chile into
international markets.


5. (SBU) Any legislative action on these items will likely need to
be completed by September, as Congress will begin to focus on
passing the budget in October. In early- to mid-November, Congress
is likely to recess so members can campaign in advance of the
December 13 elections.

Labor Trafficking Law: Making Slow Progress
--------------


6. (SBU) A law drafted and introduced by Deputy Maria Antonietta
Saa (PPD) in 2002 is making slow progress in the Chilean congress.
Deputy Saa, who described herself as the "congressional conscience"
on women's and children's rights, told Poloffs that she consulted
widely with civil society in drafting the law, which passed the
Chamber in April 2007, and is pending in the Senate. According to
Saa and Chadwick, the law has progressed slowly because it was
written and introduced by a member of Congress rather than the
executive branch. (Note: The majority of legislation is proposed
by the executive branch, and spending bills must originate there.
End Note.)


7. (SBU) Although members of Congress agreed that Chile had
generally thought of TIP as largely related to sexual exploitation
and prostitution, Saa noted the GOC was now feeling international
pressure to tackle labor trafficking. She noted that the UN Human
Rights Council's Universal Periodic Review Working Group had urged
Jose Antonio Viera-Gallo, Minister Secretary-General of the
Presidency, to ensure passage of the law during a meeting in Geneva
in May. Chadwick noted the head of Chile's National Women's Service
(SERNAM) also supported the legislation and assured Poloffs that
this support would speed the legislation's progress through
Congress.


8. (SBU) Senator Chadwick told Poloffs that the Human Rights
Committee had finished reviewing the legislation and would pass it
to the Constitutional Committee. Chadwick was confident the
Constitutional Committee would approve the legislation within weeks,
after which final approval could be secured in the Senate within 60
days and in the House in even less time. He noted that there was no
opposition to the bill.


9. (SBU) Saa was less optimistic, noting that "hundreds" of draft
laws were awaiting review by the Constitutional Committee, including

many other laws she had drafted. Poloffs met briefly with
Constitutional Committee chair Jose Antonio Gomez (PRSD),who was
familiar with the legislation but unaware that it would soon reach
his committee for approval. Poloffs explained the importance of the
bill, but Gomez noted there were often substantial legal weaknesses
in bills that reached his committee, and seemed to imply that
approval could take considerably longer than Chadwick believed.

Status of Forces Agreement
--------------


10. (SBU) Congressional staffers told Poloffs a proposed Status of
Forces Agreement (SOFA) remained stuck at the Ministries of Foreign
Affairs and Defense. Given other legislative priorities and
electoral year politics, they felt it was unrealistic to hope for
substantial progress on SOFA passage this year.

International Criminal Court
--------------


11. (U) On June 29 Chile acceded to the ICC. Chile's accession
took place after the Chamber of Deputies passed implementing
legislation by a wide margin. FM Fernandez recently announced Chile
may present a candidate to serve as a judge on the court.


12. (U) Before June, Chile had been the only Latin American country
not to join the ICC. Accession to the Treaty of Rome had strong
support. Some leading socialist Senators recently said such a move
was a "strong debt that Chile had towards the human rights and
international law communities." Some government officials publicly
suggested that Chile's accession to the ICC would help its pending
border dispute case at the Hague, though most insist the two issues
are unrelated.



13. (SBU) COMMENT: Chile's Congress has just a few months left
before becoming consumed with passing a budget and full-time
campaigning. President Bachelet has already accomplished much of
her broad social agenda, and is now trying to wrap up loose ends
including OECD accession and fiscal stimulus measures. Deputy Saa
and Senator Chadwick welcomed Post's interest in the labor
trafficking law. Saa promised to re-invigorate her efforts to push
the legislation through Congress. Post will continue to track key
legislative initiatives, determine where Embassy expressions of
interest and support can be beneficial, and nudge as appropriate.
END COMMENT.