This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 05 GUATEMALA 001813 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR WHA/PPC:CHARLOTTE ROE 
USTR FOR VIONDETTE LOPEZ AND BUD CLATANOFF 
USDOL FOR ILAB: ROBERT WHOLEY 
 
E.O. 12958: N/A 
TAGS: ELAB ETRD PHUM PGOV GT
SUBJECT: SECOND LABOR WORKING GROUP:  LIMITED PROGRESS 
 
REF: A. GUATEMALA 971 
     ¶B. GUATEMALA 1313 
     ¶C. STATE 186063 
 
¶1.  (SBU) Summary:  The Ambassador attended the second 
bilateral working group meeting on labor issues with the GOG 
on July 10 and emphasized the need for concrete progress 
prior to submission of a CAFTA to the U.S. Congress.  He 
reiterated USG concern about impunity for violence against 
union leaders, the need to streamline the labor justice 
system, and the importance of enforcing court rulings to 
reinstate workers illegally fired for unionizing activities. 
The GOG reported some progress from the Executive branch 
protecting labor rights, especially in the maquila sector. 
The report of the Special Prosecutor for Crimes Against Trade 
Unionists was disappointing for lack of progress, while 
prospects for expedited reform to the labor justice system 
are not great.  The Ambassador noted international concern, 
including from AFL-CIO President John Sweeny, over the 
imprisonment of Guatemalan labor leader Rigoberto Duenas in 
the Social Security Institute (IGSS) corruption scandal. 
Recognizing that there are few quick fixes to labor rights 
enforcement, we have begun stressing these labor themes to 
opposition candidates in the upcoming elections.  End Summary. 
 
Background 
---------- 
 
¶2.  (U) The bilateral labor working group was formed at the 
GOG's suggestion during a visit by USTR and DOS labor 
officials in March (Ref A).  The first working group meeting 
took place on May 13 (Ref B) and was attended by the GOG, 
Embassy, USTR and USDOL officials.  To maintain momentum on 
outstanding labor issues, the Ambassador requested that the 
MFA convoke the second working group meeting, which took 
place on July 10.  Though initially a response to GSP 
petition review, this meeting coincided with USG "Track Two" 
demarche (Ref C) to encourage improvement in labor rights 
enforcement prior to submission of an eventual CAFTA 
agreement to Congress. 
 
¶3.  (U) GOG participants included 24 GOG officials from the 
Labor Ministry, Economy Ministry, Foreign Ministry, Tax 
Authority, FONTIERRAS, Social Security Institute, Attorney 
General's Office, Supreme Court and Judiciary, Congress, and 
the Solicitor General's Office.  Labor Minister Moreira led 
the GOG side, and explained that, to broaden its range, the 
GOG,s "Multi-institutional Work Committee for Labor 
Relations in Guatemala" had expanded its membership since the 
last bilateral meeting to include the Social Security 
Institute (IGSS), the Fund for Land (FONTIERRAS), the tax 
authority (SAT), and the land dispute resolution body 
(CONTIERRA).  From the GOG, speakers included MFA Director 
General of Bilateral Affairs Jose Arturo Rodriguez, Minister 
of Labor Victor Moreira, Supreme Court Magistrate Otto 
Marroquin,  Labor Court Magistrate Beatriz de Leon de 
Barreda, and Special Prosecutor for Crimes Against 
Journalists and Trade Unionists, Antonio Cortez Sis.  The 
Ambassador was accompanied by LabAtt. 
 
The Ambassdor,s Pitch 
--------------------- 
 
¶4.  (SBU) The Ambassador thanked the group for the 
opportunity to exchange views and shared his perception after 
a recent trip to Washington that concerns about labor rights 
form the greatest challenge to a CAFTA and will be central to 
US Congressional review of a possible CAFTA.  In response to 
a call for comment on labor aspects of CAFTA, several US NGOs 
(WOLA and US/LEAP) and the AFL-CIO had submitted extensive 
commentaries critical of labor rights protections throughout 
the region, which reveal negative perceptions of the issue in 
the U.S. (he provided copies of the three submissions to USTR 
to the group).  The Ambassador told the group that the USG 
had instructed all its embassies in Central America to pursue 
bilateral consultations such as this one to emphasize the 
need for concrete advances to protect labor rights in the 
region, and a senior-level group would be sending the same 
message to Central American ambassadors in Washington.  The 
Ambassador reiterated the USG,s main concerns about labor 
rights protections in Guatemala, emphasizing the damage to 
Guatemala,s international reputation caused by murders of 
labor leaders and impunity;  delays in the labor justice 
system; and the need to enforce labor court sentences 
reinstalling workers illegally fired for unionizing 
activities. 
 
MOL Takes the Lead 
------------------ 
 
¶5.  (SBU) MFA Director General of Bilateral Affairs Jose 
Arturo Rodriguez turned the meeting over to Labor Minister 
Moreira, who described his ministry's efforts to protect 
labor rights.  He listed seven reforms to the Labor Code 
pending in Congress: 
 
a)  Elimination of child labor and the worst forms of labor 
for children; reduction of the work day for children, 
sanctions and fines for violations; 
 
b)  Changing the reference to domestic work to "work in 
private homes;" training in labor rights for these workers; 
and their incorporation into the Social Security system; 
 
c)  Prohibition of sexual harassment and confinement ("acoso 
y hostigamiento sexuales"); procedures to prevent it; and 
making it grounds for dismissal; 
 
d)  Universal severance: severance based on time served (one 
month salary for each year worked) for workers who quit or 
leave voluntarily by mutual agreement;  option for 
reinstallation in cases of unjustified firing; 
 
e)  Procedural code reforms:  strengthening oral procedures; 
shortening the hearing process; eliminating recourse to 
complaints over procedures; reducing the hearing process to 
one non-appealable hearing; embargo of assets of legal 
representatives and partners and associates of accused 
companies; requiring a deposit in cash or guarantee 
sufficient to cover the cost of the demand to lift the 
embargo on assets; obligatory authorization of precautionary 
measures, even before the complaint is heard, or at any time 
during the process; court costs in cases where the complaint 
is for unpaid non-renounceable benefits owed to the worker; 
first oral hearing within two months of presentation of the 
complaint;  (Note:  Moreira argued that by cutting short the 
complaint process the reforms improve efficiency and also 
give employers an incentive to resolve cases out of court. 
Moving precautionary measures to seize employer assets to the 
beginning of the process will also encourage employers to 
settle justified demands without going to court, further 
clearing the clogged labor justice system.  End Note.) 
 
f)  Creation of the Institute for Public Sector Worker 
Recreation independent of the Labor Ministry (it is currently 
a part of the Ministry); 
 
g)  Creating a fund to administer scholarships for Guatemalan 
workers funded by fees from employers of foreign workers 
($1,282/foreigner/year). 
 
¶6.  (SBU) The Ambassador congratulated the Minister for the 
reforms, especially the reforms to the labor procedural code, 
which address one of the USG,s main concerns on labor. 
Asked about their status in Congress, Congressional Deputy 
Julio Contreras (FRG) said that the reforms had their first 
reading May 9 and are pending a recommendation of the Labor 
Commission.  That recommendation will be favorable, he said, 
and the reforms will pass to the plenary.  Contreras said he 
was authorized by President of Congress Rios Montt to say the 
FRG has the votes to approve the reforms in August.  He added 
that the FRG will allow amendments in an attempt to achieve 
consensus on the reforms with opposition parties.  Asked by 
the Ambassador if he thought there was any prospect of 
support from the opposition, Contreras said he thinks some 
support will be possible. 
 
¶7.  (SBU) Moreira also described the following MOL actions 
since the first meeting of the bilateral labor working group: 
 
-- He announced the GOG's withdrawal of Article 5 of 
Government Accord 60-2002, (announced in February 2002), 
which (reportedly under IMF guidelines) prohibited public 
sector salary increases in collective bargaining agreements 
(Note:  This provision, protested by public sector unions, 
was ruled unconstitutional by the Constitutional Court.  End 
Note.) 
 
-- Institutional Reforms:  modification of the Ministry's 
internal regulations and strategic planning processes (a 
strategic plan has been finalized), and restructuring, 
including reclassification of positions and salaries to be 
negotiated with the Ministry's union, and new structures to 
address child labor, the implementation of ILO Convention 169 
on the rights of the indigenous and the handicapped.  He said 
new labor inspectors will be hired by January 2004, raising 
the number of inspectors from 833 to 1300 (130 will be 
dedicated to thematic areas mentioned above).  He said the 
Ministry's budget will increase from $7.2 million in 2003 to 
$17.7 million for 2004, and, for the worker recreation fund, 
from $1 million to $2.1 million.  (Comment:  These budget 
increases must be approved by Congress, and could be modified 
by the next government.  End Comment.) 
 
-- Efforts to Address Labor Relations Problems in the Banana 
Sector:  including creation of inter-governmental and 
tripartite committees to discuss structural problems in the 
industry;  defining options for worker-owned cooperatives, as 
provided by Chiquita in Panama, with participation of 
CONTIERRA and FONTIERRAS (the Minister said he would visit 
Panama soon to discuss this program with workers and the 
GOP); advances in collective bargaining negotiations on the 
El Real and El Atlantico plantations, facilitated by a team 
of five new inspectors to supplement existing coverage; and a 
compromise reached through MOL mediation between workers and 
employers in the Bobos district of Morales, Izabal to avoid 
the use of roadblocks in labor conflicts. 
 
-- Efforts in the Maquila Sector:  the MOL has put into 
practice procedures with the Ministry of Economy to denounce 
employers which have failed to comply with labor rights 
obligations, to begin legal procedures and eventual 
withdrawal of tax privileges (30 cases are now pending in the 
Economy Ministry); the first such case processed was against 
Choi Shin/Cimatextiles, which is near resolution (SepTel); a 
sub-commission of this inter-institutional group is meeting 
with employers (VESTEX) and NGOs (FLA, COVERCO) and worker 
representatives to develop responses to problems in the 
sector.  Moreira asserted that its selection of Choi 
Shin/Cimatextiles as the test case was not an effort to 
threaten the only existing unions in the sector, nor was it 
selected for its foreign ownership.  Rather, it was chosen 
because of the strong international attention generated by 
violence at the plants in July 2001, and the management's 
lack of compliance with MOL decisions on worker petitions. 
The list of 30 other companies includes many Guatemalan-owned 
firms. 
 
--  The introduction of a 24-hour module on labor rights in 
the second and third grades of secondary school.  The 
Ministry hopes to expand this education effort in future to 
lower grades and to the university level with ILO support. 
 
Little Progress on Impunity 
--------------------------- 
 
¶8.  (SBU) Special Prosecutor for Crimes Against Journalists 
and Trade Unionists Antonio Cortez Sis reported that his 
office now consists of himself, two agents and two support 
staff.  He expects one more agent to be assigned soon.  He 
highlighted the following "progress" in several murder cases 
and submitted a list of 100 cases of violence or threats 
against trade unionists received since the Special 
Prosecutor's office opened in July 2001, 46 of which have 
been closed as a result the complaint being dropped; other 
cases were transferred to other offices, leaving a total of 
42 cases under investigation. 
 
-- Carlos Francisco Guzman Lanuza ) Secretary General of the 
Union of Municipal Workers of Nueva Concepcion, Escuintla; 
murdered November 27, 2002.  Status:  An ex-municipal council 
member has been arrested for this and other murders.  The 
case has been transferred to Special Prosecutor for 
Corruption for prosecution. 
 
-- Baudilio Amado Cermeno Ramirez ) Light and Power Union; 
murdered December 21, 2001.  The Attorney General's Office 
filed a motion contesting the dismissal of the case against 
his live-in lover by the 6th first instance court. 
 
-- Oswaldo Monzon Lima ) General Secretary of the Union of 
Gas Truckers; murdered June 23, 2000.  Status:  His son did 
not show up for a scheduled meeting with prosecutors on July 
7, 2003, despite his offer of witness protection. 
 
-- Baldomero de Jesus Ramirez ) General Secretary of the 
Union of Municipal Workers of Santa Lucia Cotzumalguapa; 
murdered June 22, 1999.  Status:  Meeting planned with the 
Municipal Union of Santa Lucia Cotzumalguapa for 7/15/03 to 
evaluate the request for legal process against Mayor Cesar 
Augusto Duarte Soto as presumed intellectual author of the 
murder. 
 
-- El Arco plantation case ) head wound from machete 
delivered to Marcos Alvarez Tzoc on January 17, 2003.  The 
prosecutors are appealing the judge's decision to fine the 
owner of the plantation, Julio Enrique de Jesus Salazar 
Pivaral, $641 for the crime, arguing for jail time.  (Note: 
LabAtt told Cortez that Amnesty International reports more 
recent threats of violence by the owner against workers. 
Cortez was aware of the new threats.  End Note.) 
 
-- Two SITRABI Witnesses ) subject to death threats 
(presumably from the notorious Mendoza brothers of Morales, 
Izabal, who committed the crime against the SITRABI union and 
paid fines in lieu of jail time).  The two witnesses were 
paroled into the U.S. in 2002 for their protection.  The 
prosecutor wants to send someone to interview them, but has 
not made contact. 
 
¶9.  (SBU) In response to this underwhelming progress report, 
the Ambassador emphasized the resonance in the U.S. of cases 
of murdered labor leaders.  The strongest argument against 
Guatemala heard in Washington is that labor leaders are being 
killed and nobody is being prosecuted.  He asked Cortez if 
there is any way the USG can help him get results.  Cortez 
responded that he recently took stock of his office's efforts 
and is not satisfied with progress made to date.  He assured 
the Ambassador that his office "has the will to advance." 
 
Judiciary 
--------- 
 
¶10.  (SBU) Supreme Court Magistrate Otto Marroquin and Labor 
Court justice Beatriz de Leon de Barreda described efforts by 
the judiciary to expand labor court coverage and train 
justice workers and judges in labor issues.  To improve 
coverage the judiciary has created 22 labor courts, one in 
each departmental capital, and permitted justices of the 
peace in five other municipalities to hear labor disputes, 
bringing the total number of labor courts nationwide to 38. 
It has also trained labor judges in conciliation and 
arbitration of labor disputes.  In addition, there are seven 
labor courts in the capital; one in Coatepeque, which is not 
a provincial capital but is in an area with many labor 
disputes (coffee plantations); three appeals courts in the 
capital and one appeals court in the interior.  This is still 
not enough to meet demand, Marroquin admitted, but funds to 
expand coverage are limited. 
 
¶11.  (SBU) On another front, the UNDP has funded a study of 
the penal code and pilot reforms in the capital and 
Escuintla, but lacks funding to expand the project.  A 
seminar for judges on ILO conventions was recently held.  In 
addition, the Labor Justice Sub-Commission of the National 
Commission to Strengthen the Justice System, founded by the 
Peace Accords, held a seminar July 3-4 to analyze the need 
for reforms to the labor procedural code.  A report on the 
seminar is being drafted. 
 
¶12.  (SBU) Marroquin agreed with the Ambassador that the 
issue of non-compliance with judicial sentences is a problem. 
 Non-compliance should cause the judge to initiate a penal 
case against the violator, but many times this does not 
happen.  In some cases, severance pay to illegally fired 
employees can cause economic hardship on the employer.  The 
case of Salama Horticulture, cited in the AFL-CIO's pending 
GSP petition against Guatemala, is pending in the 
Constitutional Court, where 52 illegally-fired workers have 
appealed an injunction won by the company blocking 
reinstatement. 
 
¶13.  (SBU) More generally, the judiciary has developed a 
Modernization Plan which includes emphasis on creation of a 
judicial civil service, training of judges and magistrates, 
including in labor issues, and new disciplinary procedures 
for all judicial sector workers.  Computers are being 
distributed to courts around the country.  Meanwhile, the 
judiciary is negotiating a new collective bargaining 
agreement with its employees, the first since 1991. 
 
Rigoberto Duenas, Imprisonment 
------------------------------ 
 
¶14.  (SBU) Before closing the meeting, the Ambassador raised 
the case of the imprisonment of prominent union leader 
Rigoberto Duenas for his alleged role in the corruption 
scandal surrounding the National Social Security Institute 
(IGSS), where he served as the worker representative on the 
IGSS governing board.  The Ambassador noted that he had 
received 10 letters from the U.S. about Duenas, 
imprisonment, pending a hearing on July 17, including a copy 
of a letter from AFL-CIO President John Sweeny to President 
Portillo requesting a speedy adjudication of the case and 
adequate protection for Duenas in prison.  Cortez responded 
that he had met with union representatives after Duenas was 
jailed, and said responsibility for the case now lies with 
the courts. 
 
Comment 
------- 
 
¶15.  (SBU) The GOG deserves credit for its willingness to 
explore new ways to protect labor rights, but its performance 
in some areas leaves much to be desired.  The new Special 
Prosecutor's report was particularly disappointing.  While he 
may be distracted by a recent wave of attacks and threats 
against journalists and short on staff resources, we will 
look for ways to provide material support for labor 
investigations.  Labor justice is another area where 
prospects for rapid change seem dim.  The prospects for 
passage of legislative reforms to shorten the judicial 
process pending in Congress are complicated by the FRG's 
ever-narrowing margin and other priorities.  Nevertheless, 
the Labor Justice Sub-commission is doing good work building 
consensus on that issue.  We have recently expanded our labor 
lobbying efforts on the same themes to include labor advisors 
the business group CACIF and to the GANA coalition, the main 
opposition challenger to the FRG in the presidential 
elections, since quick fixes are few and any steps taken by a 
lame-duck administration will need to be expanded by the next 
government, which will take office in January, 2004. 
HAMILTON