VZCZCXRO1958
RR RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG RUEHNL RUEHQU
RUEHRD RUEHRS RUEHTM RUEHVC
DE RUEHME #3513/01 3331929
ZNR UUUUU ZZH
R 281929Z NOV 08
FM AMEMBASSY MEXICO
TO RUEHMD/AMEMBASSY MADRID 0499
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEHC/SECSTATE WASHDC 4143
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RUEHBS/USEU BRUSSELS
RHEHAAA/NSC WASHINGTON DC

UNCLAS SECTION 01 OF 03 MEXICO 003513 
 
SIPDIS 
 
DEPT FOR DRL/AWH AND ILSCRO AND WHA/MEX, USDOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV PHUM PINR SOCI MX
SUBJECT: SPANISH TELCOM APPEARS TO SUSPEND CODE OF CONDUCT 
IN MEXICO 
 
¶1.  SUMMARY: The largest single a call center operation in 
Mexico is a subsidiary of the Spanish telecommunication 
company Telefonica. The Spanish companyQ,s Mexican 
subsidiary, Q&Atento MexicoQ8, employs over 18,000 workers 
located in 15 call centers.  Telefonica corporate literature 
prominently highlights its worker friendly policies as 
detailed in its Code of Conduct and embodied in the 
agreements it has signed with Union Network International and 
two Spanish trade union confederations. The stated aim of 
these agreements is to establish an international framework 
to regulate the companyQ,s operations in other countries. 
Its Code of Conduct notwithstanding, there is credible 
information that TelefonicaQ,s subsidiary, Atento, is engaged 
in a systematic effort to violate basic labor rights to its 
Mexican employees. These violations include such things as 
the denial of the right to freedom of association, workplace 
discrimination and flagrant breaches of local labor laws. 
Moreover, the Atento Mexico workers claim a dubious 
collective bargaining agreement has been imposed on them 
without their consent.  This agreement is being administered, 
with tacit GOM concurrence, by a fugitive from justice. 
AtentoQ,s alleged abuses have been reported to GOM labor 
authorities but thus far no action has been taken.  Given the 
variance between TelefonicaQ,s Code of Conduct and the 
plausible reports of its employment practices in Mexico it 
may be appropriate to raise these matters with the companyQ,s 
parent office in Spain.  END SUMMARY. 
 
 
BACKGROUND 
---------- 
 
¶2.  Most unionized telephone or telecommunications workers in 
Mexico belong to the Telephone Workers Union of the Mexican 
Republic (STRM).  The few telephone workers or 
telecommunications unions who do not belong to the STRM 
nevertheless look to it for advice and support.  According to 
a report done by the STRM there are more than 215,000 call 
center workstations in Mexico located in 21,000 companies, 
which have created over 305,000 jobs.  These figures 
represent 30 percent of the workstations in Latin America. 
The annual rate of growth of this business in Mexico is 21 
percent, a rate higher than the rest of Latin America (14.5 
percent), and much higher than the global average of 4 
percent. 
 
¶3.  In Mexico the largest single call center company is 
Q&Atento MexicoQ8.  Atento is a privately-held corporation 
that is a subsidiary of the Spanish telecommunications 
company, Telef"nica. Atento (of which Atento Mexico is only a 
part) operates in more than ten countries with a labor force 
of more than 100,000 workers.  AtentoQ,s second largest 
operation is in Mexico where the company employs 18,000 
workers.  Its largest operation is in Brazil with 60,000 
workers. 
 
TELEFONICA HIGHLIGHTS ITS CODE OF CONDUCT 
----------------------------------------- 
 
¶4.  TelefonicaQ,s 2007 Corporate Responsibility Report goes 
into great detail about the companyQ,s Code of Conduct.  One 
of the main points stressed in that report is how, to date, 
Telefonica has trained some 36,000 people throughout its 
global operations on the principles of its Code of Conduct. 
Moreover, the Report stresses that Telefonica runs various 
initiatives to clarify its policies on responsible 
advertising, child protection, data protection, environmental 
management and (of most significance in Mexico) compliance 
with ethical standards.  The companyQ,s Code of Conduct is 
based on a 2000 agreement signed with Union Network 
International and two Spanish trade union confederations, the 
General Union of Workers and the Worker Commissions. 
 
¶5.  The preamble to the Spanish companyQ,s Code of Conduct 
specifically states that its principles would be applied Q&to 
maintain trade union and workers rights in all Telef"nica 
activities world wideQ8.  Among the principles enumerated in 
the Code of Conduct are such things as equal pay for equal 
work, a guarantee of freedom of association, a right to 
collective bargaining, the right to organize without fear of 
reprisals and a guarantee of minimum wages and benefits 
consistent with national legislation or agreements. 
 
MEXICO 00003513  002 OF 003 
 
 
 
ATENTO APPARENTLY INGORES RIGHT TO ORGANIZE 
------------------------------------------- 
 
¶6.  Telefonica is clearly a profitable enterprise and its 
written corporate Code of Conduct is admirable.  However, 
according to the above mentioned STRM report and several 
workers who spoke directly with Mission MexicoQ,s Labor 
Counselor, TelefonicaQ,s local subsidiary, Atento Mexico is 
not implementing a labor policy consistent with the Spanish 
companyQ,s stated claims and written Code of Conduct.  In 
fact, the available information suggests that Atento is doing 
everything possible to ignore its parent companyQ,s Code of 
Conduct. 
 
¶7.  The roots of Atento MexicoQ,s apparent deviation from 
TelefonicaQ,s Code of Conduct can be found in a contract it 
signed with a Q&protectionQ8 union.  Protection unions in 
Mexico are labor organizations that exist only on paper who 
enter into collective bargaining agreements without either 
the knowledge or consent of the workers they purport to 
represent.  In AtentoQ,s case the company entered into a 
collective bargaining agreement with a union known as the 
Progressive Trade Union of Workers of Communications and 
Transport of Mexico (SPTCTRM). 
 
¶8.  According to the STRM, none of the more than 100 workers 
interviewed for its report were aware that they were 
represented by SPTCTRM or covered by a union contract.  The 
workers have never received a copy of their contract, nor has 
any worker ever seen a union representative in the workplace. 
 Workers attempting to organize against the SPTCTRM obtained 
a copy of their contract when STRM downloaded it from the 
website of the GOMQ,s Secretariat of Labor (STPS).  The 
contract has subsequently been removed from the STPSQ, 
website.  (Comment: The SPTCTRM is controlled by Ramon 
Salvador Gamez Martinez.  Gamez Martinez has a long history 
of using violence to break independent union organizing 
campaigns and is currently a fugitive from justice fleeing 
charges of child molestation.  A union contact unrelated to 
the STRM confirmed for Labor Counselor that Gamez Martinez 
fled Mexican law enforcement authorities when a police raid 
of his office discovered video tapes of his illegal 
activities with minors.) 
 
¶9.  Reportedly, the Atento contract with SPTCTRM barely meets 
the minimum worker protections required by Mexican law, and 
in some cases puts the worker at a clear disadvantage in 
relation to the company.  The contractQ,s apparent purpose is 
to prevent workers from exercising their right to freedom of 
association in violation of ILO Convention 98, Article 2, 
which prohibits acts designed to promote the establishment of 
workers' organizations under the domination of employers. 
The SPTCTRM contract also violates Article 2 of Telef"nicaQ,s 
Code of Conduct which affirms the companyQ,s recognition that 
Q&all workers will enjoy the right to form and join unions.Q8 
 
¶10.  Article 2 of TelefonicaQ,s Code of Conduct 
notwithstanding AtentoQ,s actions in Mexico is not limited to 
signing a dubious collective bargaining.  It also allegedly 
engages in a campaign of harassment and intimidation against 
workers attempting to exercise their right to organize.  At 
least 40 Atento workers have been fired for organizing 
activities and then harassed by a private security firm when 
they filed lawsuits against the company seeking reinstatement 
in their jobs. Several of the fired workers report being 
called at home and threatened by persons who identified 
themselves as company representatives. 
 
MINIUMUM WAGE, EQUAL PAY FOR EQUAL WORK? 
---------------------------------------- 
 
¶11.  Atento uses two strategies to avoid complying with 
Mexican law with respect to wages.  The first strategy 
involves basing wages on commission -- the amount a worker 
earns depends on the number of sales that he/she completes in 
a week.  This system eliminates access to other benefits such 
as a productivity bonus. The second strategy involves 
arbitrarily reducing the salary rate. This is done by 
deducting social security benefits based on a putative salary 
of between 750 and 900 pesos (USD 75-90) per month, well 
below what even its questionable collective bargaining 
 
MEXICO 00003513  003 OF 003 
 
 
agreement with SPTCTRM establishes.  As a result of these 
practices, Atento workers take home only between 2000 and 
3500 pesos (USD 200-350) per month, well below the 4,500 peso 
minimum established in the collective bargaining agreement. 
If one assumes that the contract with SPTCTRM is valid then 
the legal minimum wage for Atento workers under that accord 
would be the rate established by that agreement. 
 
¶12.  In addition to the above infractions Atento also uses 
forms of recruitment that violate the Telefonica Code of 
Conduct policy of equal pay for equal work.  Atento does this 
by subcontracting to personnel recruitment using three 
additional but different names:  Atento SA de C.V., Atento 
Servicios S.A. de S.V., and Atento Mexicana.  Although the 
work done by employees of each of these companies is the same 
their salaries vary significantly depending on who their 
Q&employerQ8 is.  The Atento workers who spoke with Labor 
Counselor indicated that it was not unusual to have employees 
doing the same job at workstations right next to each other 
but with each earning vastly different salaries. 
Interestingly, according to these workers, AtentoQ,s solution 
to this situation was to fire the higher paid workers as soon 
as legally possible and then hire new staff to replace them 
at a lower wage. 
 
COMMENT 
------- 
 
¶13.   The information presented to Mission Labor Counselor by 
STRM and the fired Atento Mexico workers appears credible. 
Consequently, it may be appropriate to follow-up in some way 
by highlighting the variance between TelefonicaQ,s Code of 
Conduct and the plausible reports of AtentoQ,s employment 
practices in Mexico with the companyQ,s parent office in 
Spain. 
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 / 
GARZA