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RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/DEPT OF LABOR WASHDC

C O N F I D E N T I A L SECTION 01 OF 03 AMMAN 000434 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS TO USTR SAUMS, ROSENBERG, KARESH 
STATE PASS TO DOL JAMES RUDE 
 
E.O. 12958: DECL: 01/31/2017 
TAGS: ELAB ETRD GTIP KTEX BG JO
SUBJECT: GOJ COMMITED TO RESOLVING LABOR PROBLEM; 
STAKEHOLDERS LOOKING FOR MORE 
 
Classified By: Ambassador David Hale for reasons 1.4 (b) and (d). 
 
¶1. (SBU) SUMMARY: GoJ officials continue to pledge their 
commitment to resolving labor issues in Jordan.  In response 
to Ambassador's warnings that congressional and U.S. investor 
concern is deepening, the labor minister highlighted positive 
steps taken to date and plans for the coming months, 
particularly improved labor inspections and prosecutions. 
Investor contacts have expressed frustration with the GoJ's 
lack of responsiveness to business concerns as well as a lack 
of capacity to fully address labor market challenges in 
Jordan.  Worker group representatives believe that the GoJ is 
not doing enough for workers who attempt to unionize.  END 
SUMMARY. 
 
Minister Continues to Pledge Reform 
----------------------------------- 
 
¶2. (SBU) On January 25, Minister of Labor Basem Salem 
acknowledged to the Ambassador that labor problems persist in 
the QIZs and that he plans to re-double efforts to fix them. 
With a strong team now in place (including one international 
advisor and two monitors funded by USAID), Salem believes he 
can better tackle the challenges of capacity building in the 
inspectorate, more aggressively prosecuting labor violators, 
and passing the new labor law in Parliament. 
 
¶3. (SBU) In response to Ambassador's warning highlighting the 
interest of the U.S. Congress, buyer groups, and the AFL/CIO 
in the issue, Salem highlighted some of the strong actions 
taken to date including the closing of six factories and the 
re-location and regularization of approximately 1400 workers 
from closed factories, and over 3,700 fines placed on 
factories for labor violations in 2006.  Citing the 
Minister's demonstrated commitment to transparency, 
Ambassador emphasized the need for more public communication 
of the problem at hand and the pro-active steps being taken. 
The Minister concurred and said, "we are the first to 
criticize ourselves."  Asked what the future includes, the 
Minister listed his top priorities as passage of a new labor 
law in this session of Parliament, encouraging a more 
pro-active approach to prosecution of labor violators, 
restoring credibility to the Golden List by tightening 
criteria, and doing a better job of differentiating between 
GoJ treatment of large-volume producing factories who treat 
workers fairly and smaller players who do not.  NOTE: Quick 
analysis of a recent MoL report shows that large-volume 
factories do not treat workers better and may even be among 
the most serious violators.  END NOTE. 
 
¶4. (SBU) On the labor law, the Minister said the draft he is 
about to submit to Parliament will, he believes, "fly like 
hotcakes."  While the new law will have provisions to allow 
migrant workers to join exsisting unions, Salem admitted to 
the lack of a provision for freedom of association that would 
allow the formation of new unions.  NOTE: Currently there are 
17 unions in the General Federation of Jordanian Trade 
Unions.  END NOTE.  Such a provision, he argued, would have 
large political implications for the country and "would never 
pass Parliament."  Salem also indicated that he had talked to 
the Speaker of Parliament about the importance of the 
legislation and was promised the bill as currently drafted 
would receive priority when submitted in the coming weeks. 
 
¶5. (SBU) Responding to Ambassador's frustration that Post has 
been unsuccessful in getting GoJ to share details on the 
extent of prosecutions of labor violators and the 
implications for Jordan's TIP designation, the Minister said 
that the new Minister of Justice, ex-Minister of Industry and 
Trade Sharif Zu'bi, is focused on obtaining this information. 
 NOTE: GoJ contacts have said there are as many as 30 ongoing 
cases in the courts, but have not been able to provide 
details.  Poloff continues to engage contacts at the Foreign 
and Interior Ministries.  END NOTE.  Based on the 
 
AMMAN 00000434  002 OF 003 
 
 
recommendations of an international advisor, Salem also plans 
to have his legal office take a more pro-active approach in 
prosecuting labor violations. 
 
Continued Dissatisfaction Expressed by Business Interests 
--------------------------------------------- ------------ 
 
¶6. (SBU) In a January 25 business roundtable with QIZ 
investors and factory operators, econoff heard numerous 
complaints about the GoJ's inexperience and lack of capacity 
to deal with the labor issue, claiming this is unduly adding 
to the cost of doing business and meeting bureaucratic 
requirements.  As an example, many said the new GoJ policies 
are aimed at making it difficult for companies to hire guest 
workers in an attempt to get companies to hire more 
Jordanians but have only had the effect of making business 
more expensive and cumbersome.  Due to the scant Jordanian 
labor pool for the garment industry, machines go idle and 
owners spent a lot of their time pleading with the Ministry 
of Labor to issue a percentage of the visas for foreign 
workers that had been previously promised.  One buyer 
representative based in Amman indicated that the new minimum 
wage increase from 95 JD to 110 JD (about USD 160), effective 
January 1, would cost factories an additional 30 USD/worker 
per month and would do little to bring in additional 
Jordanian workers as Jordanian workers are already offered 
(and paid) wages above 110 JD/month to attract them to the 
garment industry.  Others noted that the GoJ is slow to 
refund bank guarantees, regularize transferred workers 
(costing factory owners new overstay fines), and approve work 
permits for previously hired foreign workers. 
 
¶7. (SBU) Asked what they would like to see changed, investors 
commented that they want the GoJ to take a long-term (three- 
to five-year) approach, and to apply policies more 
consistently to all factory operators.  Many factory 
operators claim uneasiness and a lack of clarity about the 
sector in Jordan has led buyers to drop orders.  As an 
example, they point to Jordan Dragon, one of the largest 
textile producers in the Al-Tajamaout QIZ, which plans to 
exit Jordan by the end of 2007 due to a decrease in orders. 
NOTE: Jordan Dragon is the fifth largest exporter in the 
QIZs, but Post sources indicate that is guilty of requiring 
excessive overtime and not paying correct wages.  END NOTE. 
They would like the GoJ to better communicate with the 
private sector and the public (i.e., media) the positive 
steps being taken to address labor problems. 
 
Despite Ministerial Assurances, Organizing Workers Remains 
Difficult 
--------------------------------------------- -------------- 
 
¶8. (C) On January 26, Shira Al-Qatarneh, a program officer 
with AFL-CIO/Solidarity Center told emboffs and poloff that 
"things are worsening" with regard to organizing workers. 
While acknowledging government support in the establishment 
of new union offices in the QIZs, Al-Qatarneh complained that 
both national Textile Union and Solidarity Center 
representatives feel their access to workers remains stifled. 
 According to Al-Qatarneh, workers have been threatened with 
physical abuse by factory supervisors if they discuss 
problems with outsiders.  Those workers who do come to local 
union offices are allegedly subsequently punished by factory 
owners and do not return to the union offices.  As a case in 
point, she highlighted a factory in which management 
terminated or deported the five Bangladeshis whom Solidarity 
Center had recruited for a ten-person worker committee.  As 
an added hindrance, Al-Qatarneh claims that local police now 
require that union organizers have MoL permission to enter 
factories.  To overcome these obstacles, Solidarity Center 
plans to take a narrower, grassroots approach by using union 
activists already inside five factories to recruit members 
for the committees. 
 
 
AMMAN 00000434  003 OF 003 
 
 
Can GoJ or Private-Sector can Rise to the Occasion? 
--------------------------------------------- ------ 
 
¶9. (C) COMMENT: While the Ministry of Labor continues to 
improve its handling of individual labor violations in 
Jordan's QIZs that are brought to its attention, systems are 
still not in place to remedy the pervasive abuses that 
continue.  The IFC/USAID Factories Inspection Project should 
help to rectify this within the next six months. 
Furthermore, a review of MoL action since the NLC Report was 
released in May 2006 shows that the Ministry continues to 
operate in an ad-hoc manner without analyzing the short and 
long term implications of its actions.  The GoJ should be 
commended for its openness about the labor violations in 
Jordan's QIZs and willingness to accept international 
assistance in fixing them.  Additionally, out-of-the-box 
solutions like worker re-location and a Golden List of 
factories are good ideas but need to be refined and improved. 
 
 
¶10. (C) Stakeholders continue to be frustrated by the lack of 
a clear GoJ strategy on dealing with labor issues and some of 
their unease stems from the government's failure to 
pro-actively open more channels of communication.  The 
Ministry's decision to hire a PR firm both in the US and 
Jordan to communicate its message is a welcome change.  A 
comprehensive message that highlights Jordan's determination 
(both within the government and the private sector) to root 
out the labor problem and at the same time keep good 
factories in Jordan needs to be driven home repeatedly, to 
different audiences, and in as many avenues of communication 
as possible.  While the GoJ has expressed its commitment to 
regulate better now that the full extent of the problem is 
understood, it remains to be seen how many of the high-volume 
factories are willing to reform and abide by international 
standards.  In a market where input costs remain high (e.g., 
fuel, water management, transportation), factory owners 
stubbornly employ the business practice of squeezing labor 
(i.e., violate Jordanian labor laws) as a way to save money 
and remain competitive. 
HALE