VZCZCXYZ0006
PP RUEHWEB

DE RUEHAC #0517/01 2291425
ZNR UUUUU ZZH
P 171425Z AUG 09
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC PRIORITY 8062
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEAWJA/DEPARTMENT OF JUSTICE WASHDC
RUEHC/DEPT OF LABOR WASHDC

UNCLAS ASUNCION 000517 
 
SENSITIVE 
SIPDIS 
 
PASS TO RACHEL RIGBY AT DEPARTMENT OF LABOR, STATE FOR 
DRL/ILCSR MMITTELHAUSER, G/TIP SSTEINER AND WHA/BSC 
MDASCHBACH 
 
E.O. 12958: N/A 
TAGS: EIND ELAB ETRD PGOV PHUM SOCI KTIP PA
SUBJECT: PARAGUAY'S LABOR UNIONS' UNMET HOPES 
 
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SUMMARY 
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¶1.  (SBU) Paraguay's unionized labor is fractured and 
represents only eleven percent of the total labor force. 
Labor unions have undertaken structural reforms (organizing 
campesino groups); however, they have had limited success 
organizing workers and improving labor conditions. President 
Fernando Lugo has included labor unions in his government and 
union leaders support Lugo but are skeptical of his 
government's ability to improve labor conditions. Union 
leaders' support for Lugo remains strong, but unmet 
expectations will likely erode the existing goodwill. END 
SUMMARY. 
 
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PARAGUAY'S LABOR SECTOR 
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¶2.  (SBU) Paraguay's unionized labor is fractured and 
represents only eleven percent of the total labor force. 
Paraguay's General Directorate for Statistics, Surveys, and 
Censuses (DGEEC) reported in 2008 that Paraguay had a total 
labor force of 2,981,126 workers and approximately 317,000 
Paraguayan workers belong to one of the roughly 350 organized 
labor unions. (NOTE:  General Worker's Confederation (CGT) 
President Sonia Leguizamon told PolOff that unionized labor 
figures are rough estimates because some workers are 
represented by more than one union and records are out of 
date. END NOTE.) Labor unions represent workers in Paraguay's 
formal economy, including the public, industrial, and service 
sectors. Although the public sector has several large 
syndicates, most are small and represent workers in 
individual organizations, sectors, or geographical regions. 
 
¶3.  (U) The DGEEC report indicated that 5.7 percent of 
Paraguayan workers were unemployed and 26.5 percent 
under-employed. Many more workers are underpaid or unpaid, 
and few receive benefits such as pensions, sick leave, and 
medical insurance. Although the mandatory national minimum 
wage is approximately USD 265 per month, the government 
estimated that 50 percent of government workers and 48 
percent of private-sector workers earn less than the minimum 
wage. Many workers face hazardous or unhealthy working 
conditions. Women are paid less than men and have a higher 
unemployment rate. Paraguay's labor force is young, with more 
than half of all workers under the age of 30. 
 
¶4.  (U) The 1993 Labor Code codifies Paraguay's labor laws. 
It allows private and public sector workers (excluding police 
and military personnel) to form and join unions; permits 
labor unions to conduct legitimate activities without 
government interference; and contains provisions that protect 
fundamental worker rights. The Labor Code provides for the 
right to strike, bans binding arbitration, prohibits 
retribution against union organizers and strikers, and allows 
collective bargaining. The Labor Code does not provide 
provisions for unregistered campesino movements. The revised 
Paraguayan Penal Code, which went into effect on July 16, 
2009, incorporates the Labor Code in its entirety. 
 
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LABOR UNIONS, AGENDAS 
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¶5.  (SBU) Paraguay's labor unions have had limited success 
organizing workers and improving labor conditions. However, 
they are working to organize campesinos into legally 
registered syndicates and establish a coordinator to manage 
their diverse political agendas. National Workers, Central 
(CNT) representatives Narciso Castillo and Rodolfo Romero 
told EmbOffs that the union began a program to unionize 
campesinos and organize several small campesino groups into 
labor syndicates. Unitary Workers Central (CUT) President 
Jorge Alvarenga told EmbOffs that CNT, CUT, Authentic Unitary 
Workers Central (CUT-A), and Paraguayan Workers Confederation 
(CPT) established a council to coordinate their political 
agendas with leadership rotating between the four unions. 
Alvarenga noted that General Workers Confederation (CGT) 
opted not to join the coordinating council and that the Trade 
Union Confederation of Workers of Paraguay (CESITP) would be 
excluded as an illegitimate union. 
 
¶6.  (SBU) CNT's Castillo and Romero, CUT President Jorge 
Alvarenga, CUT-A President Bernardo Rojas, CGT President 
Sonia Leguizamon, and CPT President Geronimo Lopez told 
EmbOffs in June that their unions' common concerns are 
getting child workers off the streets; training and 
education; creating and sustaining jobs; ensuring adequate 
wages; protecting workers from discrimination and unfair 
labor practices; strengthening collective bargaining 
agreements with public institutions; improving relations 
between management and workers; working with the government 
and employers to foster better labor conditions; and working 
with the government to expand workers' social safety net. 
 
¶7.  (SBU) Union leaders offered different proposals for 
improving labor conditions. CGT supports the creation of a 
Labor Ministry separate from the current Ministry of Justice 
and Labor focused solely on labor concerns. CUT-A supports 
the creation of a Ministry of Social Security to coordinate 
workers' benefits. CUT co-authored with the Paraguayan 
Industrial Union a job creation proposal and submitted it for 
government consideration. CPT co-authored a study of the 
Paraguayan labor force with the assistance of the 
Inter-American Development Bank. (NOTE:  CUT's Alvarenga 
stated that the government ignored the proposal. END NOTE.) 
 
¶8.  (SBU) Labor unions also run their own programs. CUT-A 
works closely with Itaugua Ceramics S.A., an employee-owned 
ceramic enterprise, to run a factory that provides jobs to 
over 100 industrial workers. (NOTE: During a tour of the 
Itaugua Ceramics factory in April 2009, factory workers told 
EmbOffs that CUT-A was instrumental in saving the factory 
from closing down in 1999 and played a key role in helping 
the enterprise expand. END NOTE.) Both the CNT and CPT offer 
computer training and educational opportunities to Paraguayan 
workers. 
 
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POLITICS OF LABOR 
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¶9. (SBU) President Lugo included labor leaders in his 
government and increased the national minimum wage by five 
percent on April 30, 2009. Although many union leaders told 
EmbOffs in June that they are non-partisan and do not receive 
government funding, some occupy official positions in Lugo's 
government and have blurred the line between organized labor 
and the government. (NOTE: Although it is officially 
non-partisan, the CNT is the most favored union in the 
government. Former Secretary General Eduardo Ojeda is now on 
the board of directors of the Social Provision Institute 
(IPS); CNT,s Castillo works for the National Institute of 
the Indigenous (INDI). END NOTE.) 
 
¶10.  (SBU) Paraguay's union leaders expressed support for 
Lugo but are skeptical that his government can improve labor 
conditions. CUT's Alvarenga said that within the labor 
movement, Lugo is viewed as a friend, but the government is 
not. Although CUT's Alvarenga and other leaders affirmed that 
Minister of Justice and Labor (MJT) Humberto Blasco has good 
rapport with unions, dialogue has not been productive. CGT's 
Leguizamon explained that Lugo's government's ability to 
implement reform is impeded by cronyism. CNT's Castillo and 
CUT's Alvarenga claimed conditions for workers have worsened 
since Lugo took office, although the CNT expressed optimism 
that conditions could improve in the near-term. CUT-A's Rojas 
was skeptical about the government's ability to improve labor 
conditions. CNT's Castillo said Lugo will not be able to 
resolve two key labor issues -- social security for retiring 
workers and getting child workers off the streets. 
 
 
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COMMENT 
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¶11.  (SBU) Although some union leaders serve in Lugo's 
government and MJT Minister Blasco has maintained an open 
dialogue with the unions, union leaders are increasingly 
dissatisfied with the government's reform efforts. Union 
leaders' support for Lugo remains strong, but unmet 
expectations will likely erode the existing goodwill -- and 
if they continue, Lugo will be at risk of losing their 
support. END COMMENT. 
Ayalde