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

UNCLAS SECTION 01 OF 04 GUATEMALA 000673 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR WHA/CEN AND WHA/PPC AND DRL/IL 
USDOL FOR ILAB: ROBERT WHOLEY 
USTR FOR A/USTR CLATANOFF 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV PHUM GT
SUBJECT: LABOR UPDATE #2-2003 
 
REF: A. GUATEMALA 537 
     ¶B. GUATEMALA 571 
     ¶C. GUATEMALA 555 
     ¶D. GUATEMALA 511 
     ¶E. GUATEMALA 414 
     ¶F. GUATEMALA 221 
     ¶G. GUATEMALA 191 
 
¶1.  (SBU) Summary: The following is an update of significant 
recent developments in the labor sector.  Topics include: 
 
-- Teachers Back in School 
 
-- Ambassador Raises GSP with GOG 
 
-- Ambassador Flags Labor Rights in AmCham Speech 
 
-- MOL Coordinating GOG Response to GSP 
 
-- GOG CAFTA Team Meeting with Unions/Employers 
 
-- GOG Announces Aid to Campesinos 
 
-- Labor Snippets (Pepsi, Failing Banks, Employment) 
 
 
Teachers Back in School, Brother of Teacher Union Murdered 
--------------------------------------------- --------------- 
 
¶2.  (U) Teachers returned to class on March 12 after 51 days 
of work stoppage (Ref A).  An accord was reached on March 11 
and signed on March 12 by the National Teachers Assembly 
(ANM) with the GOG after 11 negotiating sessions mediated by 
Archbishop Quezada Toruno.  The accord includes the 
following: a wage increase of Q150 ($19.23/month); 
participation by teachers in 2004 education budget planning; 
a commitment by the teachers to work an extra hour per day to 
make up for time lost during the strike (which the labor and 
appeals courts declared illegal); an increase of annual 
working hours from 900 to 1000; 22,000 new scholarships for 
students to defray costs; and creation of a joint committee 
to discuss the issues of pay for February and disciplinary 
sanctions against strikers. 
 
¶3.  (U) President of Congress Efrain Rios Montt publicly 
declared that funds for the wage increase would come from the 
existing education budget, and backed off an earlier pledge 
by President Portillo and Rios Montt to apply the raise (then 
at only Q100) to all public and private employees. 
Meanwhile, teachers celebrated and students returned to 
class.  If implemented, the raise would cost the ministry 
Q163 million ($21 million), and brings teachers salaries to a 
new range, depending on experience, of Q2,032-4,446 
($260-570)/month.  As the strike wore on, President Portillo 
had threatened to expand the National Program of 
Self-Management for Educational Development (PRONADE), which 
provides resources to communities which wish to organize and 
participate in the management of a new local school, and 
currently serves 3,648 schools (which operated during the 
strike) and 310,000 students.  Teachers in PRONADE schools 
are contracted annually and do not receive benefits. 
 
¶4.  (SBU) In a meeting with the Ambassador on March 12, 
Education Minister Mario Torres was upbeat about the accord 
with the teachers, calling it a "win-win" situation.  Torres 
downplayed the seriousness of the strike action, saying 
teachers are "prone to strike in the final year of an 
administration," and that the GOG had successfully averted a 
strike through negotiations in the previous years of the 
Portillo Administration.  Torres estimated that only 20,000 
of the 80,000 public school teachers ever participated in the 
demonstrations at any one time.  (Comment:  The timing of 
this strike cost Torres the chance to run for Congress in 
November.  To do so, he was required by election law to 
resign his executive branch position in January, six months 
before the beginning of the campaign period.  End Comment.) 
 
¶5.  (SBU) Torres said that the GOG is not willing to pay the 
strikers for the lost month of February.  The GOG is also 
firm about firing 10,000 of the strikers.  The minister said 
that in response to the strike, the ministry will publicize 
the fact that GOG spending on education goes well beyond the 
education ministry budget figure (e.g. school-building under 
the Social Funds Institute) and is equivalent to nearly 4% of 
GDP.  Teacher-training will continue but classes will be held 
on Saturdays instead of during the school week.  The joint 
committee to discuss unresolved issues will meet daily and an 
agreement will be signed only after all issues are 
negotiated.  Torres said that President Portillo will issue a 
Governmental decree instituting a gradual decentralization 
strategy to put school management (including hiring) in the 
hands of parents.  (The President did so on March 13.) 
 
¶6.  (U) The 51-day teachers strike reportedly cost the lives 
of four teachers; three in traffic accidents during marches 
or mobilizations, one of suicide.  Carlos Fuentes, brother of 
Moises Fuentes, one of the principal strike leaders, was 
reportedly murdered by unknown assassins in Mazatenango 
province sometime during the week of March 4.  Fuentes told 
press on March 8 that he was not sure whether his brother's 
murder had any connection to his participation in the strike. 
 As of March 12, the case had not been transferred to the 
Special Prosecutor for Crimes Against Unionists. 
Ambassador Raises GSP with GOG 
------------------------------ 
 
¶7.  (SBU) On March 11, Ambassador Hamilton raised the need 
for more vigorous investigation of unresolved crimes against 
labor leaders with Attorney General de Leon and Minister of 
Government Reyes Calderon.  The Ambassador warned that 
languishing investigations of violent crimes against labor 
leaders will come under increasing scrutiny as a decision on 
GSP petitions looms in mid-April.  The GOG must start 
focusing on specific cases and arresting and prosecuting 
those responsible.  The Ambassador cited the three most 
recent murder cases (of Carlos Francisco Guzman Lanuza, on 
November 27, 2002; Baudilio Cermeno Ramirez, on December 21, 
2001; and Oswaldo Monzon Lima, in June 2000).  Both ministers 
promised to work together (the National Civil Police are 
responsible for early stages of an investigation, and the 
Special Prosecutor for Crimes Against Unionists for the 
latter, including warrants for arrests) to make progress on 
cases in the short run.  De Leon said he would activate the 
Public Ministry's Special Prosecutor's office to resolve 
these cases. 
 
¶8.  (SBU) RefTels B-G report on the Ambassador's meetings 
with President Portillo on February 25, with Labor Minister 
Victor Moreira on March 3, the Attorney General on January 23 
and February 28, and Economy Minister Ramirez on January 21. 
In each meeting, the Ambassador raised USG concern over labor 
rights and the need for the GOG to make additional efforts to 
respond to GSP petition cases and concerns.  The Ambassador 
will discuss the petitions with AFL-CIO and International 
Labor Rights Fund representatives on March 24. 
 
Ambassador Cites Importance of Labor Rights in AmCham Speech 
--------------------------------------------- -------- 
 
¶9.  (U) The Ambassador used the occasion of a public speech 
before the Guatemala-American Chamber of Commerce on the 
challenges and opportunities facing Guatemala to highlight 
the importance of labor rights in the context of negotiations 
on a U.S.-Central Amercia Free Trade Agreement.  Earlier 
remarks to the press by the Ambassador after he met with 
Labor Minister Moreira on March 3 were reported the next day 
in prominent daily "Prensa Libre" under the headline "He 
Brings Petition for Labor Improvements."  Though the reporter 
misquoted the Ambassador saying "Guatemala continues to 
violate the right to association" (this conclusion should 
have been ascribed to the GSP petitions).  However, the 
article accurately stated USG concerns about violence against 
union leaders and labor rights and gave background 
information about pending GSP petitions against Guatemala. 
 
MOL Coordinating GOG Response to GSP 
------------------------------------ 
 
¶10.  (U) In an interview televised on March 5, Labor Minister 
Moreira stated that the USG is concerned about progress on 
the cases included in GSP petitions.  He said the Labor 
Ministry is seeking the cooperation of the Public Ministry 
and the judiciary to prepare an official response to the GSP 
petitions by the end of April.  (LabAtt subsequently urged 
the ministry to complete its report sooner, in time for the 
April 15 interagency review of GSP petitions.)  An officer of 
the Supreme Court later called LabAtt asking for Spanish text 
of the GSP petitions, which the MOL later provided. 
 
GOG CAFTA Team Meeting with Labor Sector 
---------------------------------------- 
 
¶11.  (SBU) On the trade front, GOG CAFTA negotiator Salomon 
Cohen invited labor sector representatives (from unions and 
employer organizations) to a discussion with negotiators on 
March 12.  This is the second such forum since CAFTA talks 
began, and is sponsored by AID's regional trade capacity 
program.  Labor Vice Minister Antonio Monzon is currently 
leading the GOG CAFTA team on labor issues, and attended the 
session with Cohen.  (Note: Luis Fernandez, lawyer for DYMEL 
Corp., has resigned as GOG CAFTA negotiator for labor issues. 
 End Note.)  Homero Fuentes, Guatemala's foremost (pro-union) 
labor expert, told LabAtt that the session was hampered by 
low union attendance and a preoccupation with particular 
union interests.  Fuentes said the Danish Aid Council and 
Friedrich Ebert Foundation will attempt to bring the key 
labor federations together to focus on the CAFTA negotiation 
in coming months.  A conference of Central American unions 
(ORIT) will meet in Guatemala the week of March 24 to share 
views on the CAFTA negotiations. 
 
¶12.  (SBU) CACIF Labor Commission Chief Carlos Arias 
requested an urgent meeting of the Commission with EconCouns 
and LabAtt on March 12 to discuss what he perceived as 
Cohen's intention to "railroad through" an ill-considered 
plan to establish duplicative forums among the GOG, labor and 
employer representatives to discuss four labor themes as part 
of the CAFTA labor talks:  1) child labor, 2) occupational 
health and safety, 3) freedom of association, and 4) 
discrimination.  EconCouns said that Cohen had told him that 
his efforts were part of an outreach strategy to labor, not 
an attempt to put specific labor issues onto the CAFTA 
negotiating table.  LabAtt and EconCouns encouraged CACIF to 
work with the GOG CAFTA negotiating team to address 
perceptions of Guatemala's weakness protecting fundamental 
labor rights.  Any CAFTA agreement must include a binding 
labor clause.  The Chile agreement reportedly includes an 
innovative mechanism to sanction labor rights violators. 
LabAtt noted that Guatemala still has much work to do to 
comply with its ILO commitments.  Arias said CACIF would 
support an agreement which binds each member country to 
enforce its own labor laws and international conventions it 
is party to, and would also support a mechanism to punish 
violators rather than sanctioning sectors or countries 
wholesale, as under GSP. 
 
GOG Announces Aid to Campesinos 
------------------------------- 
 
¶13.  (U) On February 10 and March 3, campesino groups blocked 
highways and marched to demand relief for effects of the 
coffee crisis, and in support of the teachers' strike.  On 
March 10, President Portillo promised Q100 million ($12.8 
million) in response to demands from the Agrarian Platform, 
the ad-hoc umbrella organization of campesino groups which 
has been in dialogue with the GOG since last year.  Campesino 
demands include food aid to 50,000 families; additional 
resources for FONTIERRAS, the government land bank, to 
purchase land for the landless; a subsidy and program to rent 
land to campesinos; an end to efforts to dislodge squatters; 
publication of the names of plantations with labor problems; 
and support to small and medium-sized coffee producers. 
 
¶15.  (U) In February, the Committee for Campesino Development 
(CODECA) reported results of a survey of 7,507 workers on 86 
coffee, sugar, rubber, ranch and banana plantations showing 
that only 13% of these workers received the legally-mandated 
minimum wage ($4.00/day) or more.  The lowest-paid twenty 
percent of the workers received less than $2.50/day.  Coffee 
and sugar producers complained in February of the lack of 
workers in Guatemala, who are increasingly seeking better 
wages across the border in Mexico.  (In Mexico, a worker is 
paid up to $5 for 100 pounds of coffee beans picked, while in 
Guatemala the rate is closer to $2.50.)  In addition to 
increased emigration, press reported that many coffee pickers 
stayed home this harvest season falsely expecting payment for 
their services as members of the civil self defense patrols 
during the 36-year internal conflict.  Coffee sector 
employment declined from 655,267 in the 1999/2000 harvest to 
588,332 in 2000/2001, and was only 463,859 this year. 
 
Labor Snippets 
-------------- 
 
¶16.  (U) FESTRAS, the sectoral union for beverage workers, 
has appealed for international solidarity in support of its 
efforts to compel collective bargaining at Pepsi's local 
bottler, Mariposa.  Unlike at Coke's bottler, which is 90% 
unionized and recently reached a new collective bargaining 
agreement with its union, Mariposa's rate of unionization is 
less than 5%.  The labor code requires 25% union membership 
to compel collective bargaining.  FESTRAS argued (and lost in 
court) that the 25% membership requirement should not apply 
in companies which had entered into previous collective 
bargaining agreements.  It also believes that Mariposa fired 
100 workers in 2002 to rid itself of unionized workers. 
Mariposa management denied this allegation and told LabAtt 
that the reduction was due to closure of a line of production 
(of mostly non-unionized workers) due to efficiencies in its 
plastic bottling line.  Mariposa executives refuse to meet 
with FESTRAS (but have met with Mariposa's own (weak) union) 
and believe a conspiracy exists to discredit Mariposa 
supported by Coke and the local beer monopoly, which is 
resisting Mariposa's diversification into beer production. 
¶17.  (U) Employment Figures:  Newly-released survey data from 
the National Institute of Statistics from May-June 2002 shows 
that of the population aged 10 and above (8,089,785), 59% are 
employed, 10% are unemployed, and 9.1% are under-employed. 
 
¶18.  (U) Failing Banks and Labor Strife:  Reynaldo Gonzalez, 
Secretary General of the Bank Workers Union (FESEBS) and 
 
SIPDIS 
leaders of union of workers of the National Mortgage Bank 
told LabAtt on March 11 that despite reinstallation orders 
from the courts, bank management has refused to reinstate two 
illegally-fired workers.  Bank lawyers are fighting similar 
legal petitions for 150 others who were illegally fired, 
according to the union.  Union members believe the illegal 
firings under the guise of streamlining (CHN is absorbing 
other failing banks) are intended to reduce union membership. 
 This case is one of those highlighted in the AFL-CIO GSP 
petition. 
HAMILTON