VZCZCXYZ0000
OO RUEHWEB

DE RUEHBU #0914/01 1311324
ZNY CCCCC ZZH
O 111324Z MAY 07
FM AMEMBASSY BUENOS AIRES
TO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RUEHC/DEPT OF LABOR WASHINGTON DC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 8100
INFO RUEHGT/AMEMBASSY GUATEMALA IMMEDIATE 0232
RUEHVL/AMEMBASSY VILNIUS IMMEDIATE 0067

C O N F I D E N T I A L BUENOS AIRES 000914 
 
SIPDIS 
 
SIPDIS 
 
WHA/BSC FOR BLAKENEY 
WHA/EPSC FOR MESA AND SCHWARTZ 
DRL FOR MITTLEHAUSER 
DOL FOR PAULA CHURCH 
G/TIP FOR FLECK AND BRASNEHAN 
LABOR PLEASE PASS TO FMCS EILEEN HOFFMAN 
COMMERCE FOR WALTER BASTIAN 
GUATEMALA FOR ALEX FEATHERSTON 
VILNIUS FOR THOMAS KELLY 
 
E.O. 12958: DECL: 05/09/2017 
TAGS: PRES PGOV ELAB AR
SUBJECT: LABOR MINISTER ON RESTARTING DIALOGUE WITH FMCS, 
SANTA CRUZ STRIKES, AND A FUTURE UNDER CRISTINA 
 
REF: A. BUENOS AIRES 276 
 
     ¶B. BUENOS AIRES 906 
     ¶C. BUENOS AIRES 793 
 
Classified By: AMBASSADOR E. ANTHONY WAYNE FOR REASONS 1.4 (B) AND (D) 
 
¶1. (C)  Summary.  On May 2, the Ambassador met with Labor 
Minister Carlos Tomada and discussed ways to restart a 
bilateral dialogue on labor mediation and enhance cooperation 
on corporate social responsibility.  The Minister offered 
some critical remarks on management of the current strikes in 
Santa Cruz province.  He also talked about Argentina's 
economic future under a Cristina Fernandez de Kirchner 
administration.  Finally, the Minister discussed GOA efforts 
to raise public awareness of the problem of child and forced 
labor.  End Summary. 
 
--------------------------------------------- --- 
Restarting Bilateral Dialogue on Labor Mediation 
--------------------------------------------- --- 
 
¶2.  (C)  On May 2, Ambassador met with Minister of Labor 
Carlos Tomada, senior advisors Antonio Estevez, Norberto 
Ciravino, Nidya Neer, and ILO Country Representative Analia 
Pieyrua.  DCM and Poloff accompanied the Ambassador. 
Minister Tomada began the meeting by informing the Ambassador 
of his interest in restarting a bilateral dialogue with the 
U.S. Federal Mediation and Conciliation Service that began in 
the late 1990s and early 2000s with funding from the U.S. 
Department of Labor.  He noted that he and many others in his 
Ministry had benefited from the dialogue which later became 
known as the "West Virginia Group", after a visit to an FMCS 
center in the state.  Thanks to this dialogue, Tomada 
explained that Argentina implemented a measure that requires 
individuals to resolve their labor grievances through 
reconciliation.  He is now interested in adopting measures 
that would make mediation obligatory for resolving collective 
grievances.  The Ambassador noted that the Labor Department 
no longer had funding for these kinds of programs, but that 
the Embassy would explore whether digital video conferences 
with FMCS might be feasible.  Tomada stated that this would 
be appreciated. 
 
------------------------------- 
Corporate Social Responsibility 
------------------------------- 
 
¶3.  (C)  Minister Tomada also requested U.S. Embassy 
assistance in approaching the U.S. business community, 
including AMCHAM, to participate in the GOA's campaign to 
increase the ranks of formal workers throughout the supply 
chain.  He stated that Argentina's definition of corporate 
social responsibility is linked to dignified labor, adding 
that "Quality work needs quality labor working under quality 
conditions."  He indicated that 70 of Argentina's largest 
companies are already participating in the initiative.  In 
addition, his Ministry held a roundtable on youth employment 
with various Argentine companies who have dedicated 
themselves to generating jobs for young workers that gives on 
the job training.  Tomada stated that he had met with AMCHAM 
to see whether U.S. companies would be interested in 
participating in these initiatives, but implied that he did 
not get much traction.  He asked whether the U.S. Embassy 
could help encourage U.S. companies to participate in these 
efforts.  The Ambassador noted that U.S. companies are 
interested in promoting an image of strong corporate 
citizenship.  He suggested approaching the AMCHAM to organize 
breakfasts with U.S. companies to discuss the initiatives. 
The Ambassador also offered to host roundtables to generate 
interest.  Tomada welcomed and thanked the Ambassador for 
both suggestions. 
 
--------------------------------------------- --------- 
Santa Cruz Strikes--Micromanaging from the Casa Rosada 
--------------------------------------------- --------- 
 
¶4.  (C)  When asked for an update on the ongoing public 
sector strikes in Santa Cruz, Tomada jokingly stated "ask me 
next week".  (Note: Unfortunately, strikes have only gotten 
 
worse.) Tomada explained that the Labor Ministry does not 
normally intervene in provincial public sector negotiations, 
but Santa Cruz is an exception given that it is President 
Kirchner's home province.  Tomada stated that Kirchner 
personally requested that Tomada resolve the dispute and that 
the President generally uses his inner circle to continue 
controlling Santa Cruz from Buenos Aires.  (Note:  Throughout 
the meeting, the Minister had to excuse himself to take 
periodic phone calls with updates on negotiations with the 
unions.) 
 
¶5.  (C)  Tomada opined that the strikers in Santa Cruz have 
legitimate grievances and pointed out that although salaries 
in Santa Cruz are higher than the national average, so is 
their cost of living.  But he called  Kirchner a tough 
negotiator.  He also said part of the problem is that the 
President has insisted on managing this province (and the 
strikes) from Buenos Aires, leaving only fourth-rank 
officials nominally in charge of the province.  (Note: 
Teachers in Santa Cruz have been on strike for approximately 
eight weeks, demanding an increase in their base pay, which 
currently stands at 170 pesos or USD 55.  Teachers take home 
salary, however, can reach as high as 2000 pesos or USD 650, 
once education level, position, experience, and length of 
employment are factored in.  However, retirement benefits are 
calculated as a percentage of base salary and, for this 
reason, teachers are demanding an increase in base salary. 
The strike enjoys widespread support.  At present, the GOA 
has offered to increase base pay by 500 pesos or USD 160, 
which would be offset by a decrease in extra pay received for 
education level, position, experience, and length of 
employment.  Violence on May 8-9 led to the resignation of 
Santa Cruz Governor Carlos Sanchez and the installation of 
another hand-picked by Kirchner.  See Ref B for more details.) 
 
----------------- 
Wage Negotiations 
----------------- 
 
¶6.  (C)  Tomada characterized the return to Argentina's 
traditional practice of conducting simultaneous wage 
negotiations with all sectors of the economy a "big mistake" 
as it tends to overly politicize labor negotiations. 
Ideally, each province and economic sector should negotiate 
the most that they can get for that province or sector, he 
stated.  The problem is that unions in different provinces 
and sectors demand the same concessions that other unions in 
other provinces and sectors are able to negotiate. 
Unfortunately, different provinces and sectors have different 
capacities to pay, Tomada concluded. 
 
¶7.  (C)  Tomada also noted that the public sector workers 
union (Union Personal de la Nacion- UPCN) has already 
accepted a 16.5% increase in salary.  When the Ambassador 
asked about the inflationary impact of wage increases, Tomada 
replied that there has been a four percentage point increase 
in productivity and that the economy still has the capacity 
to absorb the increases without increasing inflation.  He 
asserted that the increase is actually less than 16.5% 
annualized, because the pay raise takes place in smaller 
increments over the course of the year.  Although the strikes 
in Santa Cruz are contentious, "it's a piece of cake" 
compared to the social and political upheaval during the 
2001-02 crisis, he quipped. 
 
--------------------------------------------- -------- 
Argentina's Economic Situation:  Time for a new Model 
--------------------------------------------- -------- 
 
¶8.  (C)  Turning to a discussion of Argentina's economic 
situation, Tomada acknowledged that "it is time for a new 
model" and perhaps, even a new Labor Minister now that the 
economy has stabilized.  The economic liberalization policies 
of the 1990s culminated in the 2001-02 economic crisis, which 
significantly decreased the purchasing power and consumption 
of the lower class, he explained.  With the economic 
recovery, demand has increased and Argentina needs to 
increase investment to sustain growth.  Tomada cautioned, 
however, that there remains a large segment of the population 
 
that is economically marginalized, a phenomenon new to a 
historically middle class Argentine work force.  The 
government cannot wait for the economy to gradually improve 
the lot of its working class and poor, e argued, adding that 
waiting would raise governability issues that could threaten 
the political, economic, and social order.  Argentina is not 
like Brazil or other countries in Latin America that have 
reached a certain socio-political equilibrium with poverty, 
he asserted. 
 
¶9.  (C)  When it comes to economics, the Kirchner 
administration has placed a premium on increased employment 
and inclusion, Tomada continued.  Ambassador noted that 
economic policies need to deliver results, but at the same 
time, Argentina now needs to plan for its future and increase 
investment.  In order to do that, the Ambassador asserted, 
Argentina will need to regain public and global confidence. 
Tomada agreed, and opined that under a Cristina Fernandez de 
Kirchner administration, "Argentina's dialogue with the U.S. 
and other foreign countries will improve."  Several times he 
referred to Argentina's next president as female, signalling 
his belief that Mrs. Kirchner will be the candidate in 
October. 
 
--- 
TIP 
--- 
 
¶10.  (C)  The Ambassador turned the discussion to human 
trafficking (TIP) and the need to pass a federal law.  Tomada 
lamented that TIP has become a problem in Argentina.  To 
combat this, the Labor Ministry has conducted a series of 
public awareness campaigns against forced labor and child 
labor.  Analia Pineyrua, International Labor Organization 
Country Representative, noted that the ILO had funded a 
survey on child labor trends in Argentina which discovered 
that child labor was a concern in the province of Mendoza, 
where child labor is currently used in the agricultural 
sector.  Both Pineyrua and Tomada noted that detecting forced 
labor is very difficult, and stressed the need for training 
among labor inspectors to identify potential victims of 
forced labor. 
 
------- 
Comment 
------- 
 
¶11.  (C)  Minister Tomada is a former USG International 
Visitor grantee, and seemed earnest in his request for 
greater USG-Argentina dialogue and cooperation on labor 
issues.  At one point, he noted that although there is 
"occasional noise" in the US-Argentina relationship, the 
overall agenda is positive and there is great potential for 
enhanced bilateral cooperation, particularly on the labor 
front.  The Minister's and Pineyrua's comments on the need 
for greater TIP training among labor inspectors is a need 
that the International Organization for Migration identified 
in its recent submission of a proposal for G/TIP funding for 
Argentina (ref C).  End Comment. 
WAYNE