VZCZCXYZ0000
RR RUEHWEB

DE RUEHGT #0440/01 0621443
ZNR UUUUU ZZH
R 031443Z MAR 06
FM AMEMBASSY GUATEMALA
TO RUEHC/SECSTATE WASHDC 9053
INFO RUEHMU/AMEMBASSY MANAGUA 1818
RUEHSJ/AMEMBASSY SAN JOSE 2044
RUEHDG/AMEMBASSY SANTO DOMINGO 0397
RUEHTG/AMEMBASSY TEGUCIGALPA 1986
RUEHME/AMEMBASSY MEXICO 3463
RUEHSN/AMEMBASSY SAN SALVADOR 2923
RUEHC/DEPT OF LABOR WASHDC

UNCLAS GUATEMALA 000440 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR USAID/LAC/RSD:BARRY MACDONALD, WHA/PPC:MIKE PUCCETTI, 
DRL/IL:PAT DEL VECCHIO 
 
LABOR FOR ILAB:JANE RICHARDS 
 
E.O. 12958: N/A 
TAGS: ELAB EAID ETRD GT
SUBJECT: GUATEMALA'S CAFTA LABOR PROJECT PROPOSALS 
 
REF: STATE 26123 
 
¶1. As requested reftel, below please find six proposals for 
labor projects in CAFTA-DR countries.  The proposals are not 
assigned to specific branches of the U.S. government as we 
hope the proposals will be discussed on their merits before 
any of them are linked to specific agencies or offices 
(although in a few instances we have named implementing 
partners that have particular expertise).  With one exception 
(Proposal Four), these proposals are ideas for programs that 
do not yet exist, as we understand this exercise to be an 
attempt to generate innovative proposals.  This does not, 
however, mean that we do not support the continuation and 
expansion of the CIMCAW and Cumple y Gana programs that 
currently are in operation in Central America.  Indeed, 
specific points such as the regional procurement fund and 
assistance to the Tripartite Commission ideas noted in 
Proposal Three might be appropriately addressed through these 
existing programs. 
 
¶2. Please note that estimated costs in sub-paragraph (d) are 
for Guatemala only, even though we would expect that some 
proposals would also be implemented in other participating 
countries. 
 
¶3. The information below is keyed to the reftel format: 
a. Brief Description and Justification 
b. How the Project Advances U.S. Policy Objectives 
c. Whether the Project is New or Related to Previous Work 
d. Estimated Cost (not included, as noted above) 
e. Degree of Local "Buy-in" 
f. Comment on Public Diplomacy Strategies 
 
Proposal One:  Strengthen the Labor Justice System 
--------------------------------------------- ----- 
a. Guatemala's labor justice system suffers from a heavy case 
backlog caused by insufficient resources and inefficient 
processes.  We recommend a project to increase the numbers of 
active Labor Courts and improve their services in all of the 
Central American countries that have similar issues. 
 
To increase the number of Labor Courts, we recommend a 
cooperative program with host governments.  Should the host 
governments agree to designate spaces (vacant or underutilized 
buildings) for new courts and create additional positions for 
Labor Court judges, we would agree to provide the courts with 
necessary equipment, including computers, communications, 
furniture, etc.  There are several information technology (IT) 
solutions available to track cases and streamline practices in 
Labor Courts.  In certain circumstances, the program could 
also fund construction of new courthouses. 
 
Such a program could improve judicial proceedings via a review 
of current proceedings, development of recommendations, and 
orientation training for new judges; a role that might be 
particularly relevant for the International Labor Organization 
(ILO).  As an example of needed reforms, Guatemala's Labor 
Code mandates an oral process, yet this is not practiced in 
any Labor Court.   Just developing the expertise to oralize 
the trials would be a giant step forward to enforcing 
Guatemala's Labor Code.  Improving Clerk of Court services 
would be another straightforward, yet very important step. 
 
If enacted, this proposal would greatly improve the 
judiciary's ability to enforce fundamental labor rights. 
Weaknesses in the Labor Courts' operations are specifically 
cited in the White Paper. 
 
b. This project would strengthen the rule of law and the 
ability for Guatemala to enjoy trade preferences with the 
United States with consequent economic development benefits, 
two points stressed in Embassy Guatemala's Mission Performance 
Plan. 
 
c. The USG has existing programs to promote oralization and 
other reforms of criminal court proceedings.  This expertise 
would be relevant to duplicate the process with the Labor 
Courts. 
 
d. $700,000. 
e. The President of the Guatemalan Supreme Court, herself a 
former Labor Court judge, cited these types of changes as her 
number one priority.  Guatemalan representatives from the 
Ministry of Labor, organized labor, human rights groups, and 
private sector employers associations have all expressed 
support for the concepts. 
 
f. Reforms to improve the rule of law are Guatemala's most 
critical issue and receive much attention.  Efforts to reform 
Labor Court proceedings and increase access to those services 
will offer continued opportunities for public diplomacy, as 
our engagement with the criminal courts has already 
demonstrated.  Furthermore, engagement with the ILO would 
promote our image as a multilateral partner. 
 
Proposal Two:  Labor Rights through Civic Education 
--------------------------------------------- ------ 
a. There is a critical lack of basic civic education in 
Guatemala, particularly on labor rights.  Traditional USG 
labor programs have been focused solely on employees in the 
formal sector, who represent only 25 percent of the workforce. 
Labor rights programs must also take into account the vast 
majority of the workforce who labor in the informal sector. 
We propose that the USG fund a project to engage the workforce 
on labor rights as civic education, promoting both the rights 
and responsibilities of workers, employers, and the 
government. 
 
By approaching this as a civic education issue, we could 
engage such organizations as the National Democratic Institute 
(NDI) and the International Republican Institute (IRI) who 
have unparalleled expertise.  In Guatemala, we propose that 
NDI/IRI use the structures of the Human Rights Ombudsman (PDH) 
in this effort, although other nations may have other 
appropriate structures. 
 
PDH has 32 offices nationwide, offering coverage in every 
department (state), and a mandate to educate the public on 
their human rights.  PDH recently approached us to request our 
assistance to improve their ability to address labor issues. 
In Guatemala, for example, we recommend that NDI/IRI develop a 
civic education training curriculum for PDH based on the 
Guatemalan labor code.  NDI/IRI should develop such curricula 
in concert with domestic labor rights specialists.  The 
curricula should be based on the rights and responsibilities 
defined in the labor code. 
 
As just one example, the vast majority of Guatemalan workers 
are unaware of the need to register their work contracts with 
the Ministry of Labor.  In the event of a labor conflict, the 
Ministry's labor inspectors are powerless to enforce relevant 
provisions of the labor code without a registered contract. 
 
Following the establishment of such a program, workers could 
visit their local PDH office for counsel on labor affairs, 
rather than travel to the capital.  In addition to the 
training, the project should equip the PDH offices with 
computers, communications equipment, and accurate copies of 
the labor code (please see Proposal 3, below, for further 
discussion of an accurate labor code). 
 
A workforce educated on labor rights is critical to 
strengthening the social dialogue and promoting a culture of 
compliance.  This is an important capacity-building effort to 
promote fundamental labor rights and improve labor 
administration, as cited in the White Paper. 
 
b. This project would greatly enhance the respect for human 
rights and the ability for Guatemala to enjoy trade 
preferences with the United States, two points stressed in 
Embassy Guatemala's Mission Performance Plan. 
 
c. While the USG has previous engagement with PDH, the attempt 
to engage all Guatemalan workers regarding labor rights and 
responsibilities is entirely new. 
 
d. $900,000. 
 
e. PDH has specifically requested USG assistance to develop 
ways to promote labor rights.  Guatemalan representatives from 
the Ministry of Labor, organized labor, indigenous rights 
groups, human rights groups, and private sector employers 
associations have all expressed support for the concept. 
 
f. Public diplomacy strategies in Guatemala already look to 
engagement with indigenous and rural populations.  This effort 
allows us to put USG action at the forefront of dialogue with 
the Guatemalan people and provides a formal USG link to PDH 
offices nationwide. 
 
Proposal Three:  Strengthening Labor Inspectorates & Labor Law 
--------------------------------------------- ----------------- 
a. Labor Inspectorates around the region suffer from 
institutional weakness, yet are the basic enforcement arm of 
the Labor Codes.  Improvements are necessary in regards to 
both personnel and assets, as well as the status of the 
inspectorates as governmental institutions. 
 
Regarding personnel, we suggest a program to strengthen the 
administrative careers of labor inspectors.  We envisage a two- 
year training program for labor inspectors that would cover 
basic tradecraft, the Labor Code, and management and mediation 
techniques.  In the first year, we recommend two one-week 
basic level classes on these topics, spaced six months apart. 
In the Guatemalan example, the 200 inspectors would be split 
into 20 groups of 10, so the Ministry would never be down more 
than five percent of its Inspectorate.  After all 20 groups 
had taken the first week-long course in turn, they would take 
the second week-long course in turn, which would include 
refresher training plus the ability to review the 
applicability of the first week to the six months of on-the- 
job experience in the interim. 
 
During the second year of the program, the basic course would 
continue for new intake and a more advanced course (including 
leadership, legal principles, ILO conventions, etc.) would be 
available for selected basic-course graduates who demonstrate 
both interest and aptitude.  A potential third year would be 
linked to university training (please see Proposal Six below). 
Each step would be a prerequisite for promotion and career 
advancement.  This project would also provide a basis for 
performance review of inspectors.  (Note:  We do not see the 
three years as immediately sequential for the average 
inspector.  The very first group would do the second year 
immediately following the first, as the first year is only a 
matter of weeks spaced over an entire year and many inspectors 
have extensive experience.  The advanced classes, and in 
particular the third year, would be mid-career experiences for 
identified future senior leaders.  End note.) 
 
Regarding assets, we recommend a program to continue the 
modernization of labor ministries.  IT solutions would be 
sourced to improve case management, strategic planning, and 
communications between ministries in capitals and their 
satellite offices around their respective countries.  For 
physical assets, we recommend the creation of a regional 
procurement fund for vehicles, IT equipment, etc.  We 
understand that every donor recipient always asks for 
vehicles, but in some cases -- like this one -- the needs are 
real.  Mobile inspection units, ten passenger vans, and 
motorcycles all are important tools to get inspectors where 
they need to be. 
 
One critical asset needed by inspectors is an accurate Labor 
Code.  In Guatemala, no government official has an accurate 
copy of the Labor Code.  Legislative reforms, executive 
decrees, and judicial orders over the last 58 years have 
created a situation in which compliance with the Labor Code is 
little more than a guessing game.  A local law firm dedicated 
a year of pro bono effort to reconcile these factors and 
recently completed an annotated accurate version of the Labor 
Code.  While they have made it available on a USG-funded 
website, we recommend acquiring reprinting rights to 
distribute thousands of copies for use by the Labor 
Inspectorate, PDH, labor advocates, private sector, and 
academics.  Furthermore, the methodology to develop the 
annotated code may be useful in other countries. 
 
Regarding the status of the Labor Inspectorate as a 
governmental institution, we recommend that technical 
assistance be provided to identify revenue sources for the 
Ministries of Labor.  While all Guatemalan government entities 
are underfunded, the Ministry of Labor is traditionally one of 
the least-supported.  The assistance should work with host 
governments to establish such revenue streams, via an earmark. 
Possible sources could be customs' excises, export licensing 
fees, or other sources appropriate to each governmental 
system.  We caution that fines for Labor Code violations not 
be used in such a way to avoid the misperception that 
inspectors are merely "fund-raising" when doing their jobs. 
 
This project should also include technical assistance for 
local Tripartite Commissions, particularly in the area of 
legislative drafting, in order to reform the laws upon which 
the judicial systems are based.  Organized labor, in 
particular, cannot afford the legal advice to draft 
legislative proposals and cannot depend on pro bono services 
continuously. 
 
The failure of Guatemala's Labor Inspectorate to carry out its 
mandate properly is specifically cited in the White Paper, as 
is the need for Labor Code reform. 
 
b. The proper operation of labor inspectorates is a key policy 
interest of the United States.  This project would greatly 
strengthen the rule of law and the ability for Guatemala to 
enjoy trade preferences with the United States with consequent 
economic development benefits, two points stressed in Embassy 
Guatemala's Mission Performance Plan. 
 
c. Various USG projects have undertaken training activities 
with labor inspectors, but no effort has been made to 
systematize such training or develop a career path for them. 
Creating a set of incentives for career advancement is 
entirely new.  Some IT support has been provided to the 
Guatemalan Labor Inspectorate in the past, but much more is 
needed. 
 
d. $1,000,000. 
 
e. The leadership of Guatemala's Ministry of Labor, employers 
associations, organized labor, and relevant NGOs have all 
expressed support for the concepts.  Organized labor told us 
that technical support in drafting legislation is their number 
one need. 
 
f. As one of the few donors involved in labor rights, the USG 
receives good publicity from engagement.  Our on-going 
involvement with a corps of public officials will offer many 
opportunities for public diplomacy. 
 
Proposal Four:  Child Labor 
--------------------------- 
a. The large size of the informal sectors in the region 
exacerbates the problem of child labor.  For two years CARE, 
CRS, and DAI have jointly managed a pilot project in the 
region to address the worst forms of child labor and to 
establish incentives to keep children in school in rural 
communities.  In Guatemala, the project has been exceptionally 
successful, so we recommend that the contract be extended to 
double the number of communities addressed. 
 
b. Combating child labor is a key foreign policy issue for the 
United States. This project would greatly strengthen 
Guatemala's efforts to adhere to core labor standards and the 
ability for Guatemala to enjoy trade preferences with the 
United States with consequent economic development benefits, 
two points stressed in Embassy Guatemala's Mission Performance 
Plan. 
 
c. This is the extension of an initial pilot program. 
 
d. $300,000. 
 
e. Guatemalan representatives from the Ministry of Labor, 
Congress, organized labor, human rights groups, and private 
sector employers associations have all expressed support for 
this project. 
 
f. Child labor is an issue that receives extensive media 
attention in Central America and the United States.  Our 
continued support for this project will offer extensive 
opportunities for public diplomacy. 
 
Proposal Five:  Public/Private Stakeholder Compliance 
--------------------------------------------- -------- 
a. The successes in labor rights in Guatemala have all been 
tied to engagement with the private sector, and particularly 
the involvement of U.S. brands.  We recommend a multi- 
stakeholder approach to augment the activities focused on 
governments and organized labor.  Brands have made it clear to 
both organized labor and private sector apparel producers in 
Guatemala that internationally-respected labor standards are 
of an importance equal with pricing and quality. 
 
We recommend that a large-scale effort build on the 
experiences of the Partnership to Eliminate Sweatshops (PESP), 
the activities of the Global Fairness Initiative (GFI) and the 
Fair Labor Association (FLA), and the Continuous Improvement 
for Central American Workers (CIMCAW) project.  We envisage 
that labor ministries, organized labor, private sector 
producers, local and international NGOs, and international 
brands would participate to address non-compliance with labor 
laws. 
 
This effort would not act as a replacement for effective Labor 
Inspectorates.  Instead, it would be designed to complement 
the Labor Inspectorates' rightful role as the enforcement arm 
of the Labor Code.  This public/private partnership would 
demonstrate the link between competitiveness and compliance 
and promote workplace diagnostic plans and voluntary codes of 
conduct.  It would also promote information sharing amongst 
brands, including a clearinghouse of relevant inspection 
information available to other brands, labor activists, and 
other interested parties.  The transparency in the system 
would allow for more clear emphasis on compliance issues. 
 
b. This project would both improve adherence to core labor 
standards in Central America and aid U.S. brands in their 
efforts to source goods produced under those conditions.  The 
effort would aid U.S. and Central American economic 
development and also the strengthening of labor rights; three 
noted points in Embassy Guatemala's Mission Performance Plan. 
 
c. The extent of the project is new, but it is related to 
previous USG-funded efforts PESP, GFI, FLA, and CIMCAW. 
 
d. $500,000. 
 
e. Guatemalan representatives from the Ministry of Labor, 
Congress, organized labor, human rights groups, U.S. brands, 
and private sector employers associations have expressed 
support for this project. 
 
f. Multi-stakeholder activities receive much publicity.  This 
activity would offer many opportunities for USG employees to 
address a broad public directly and the opportunity to press 
USG interests privately to important actors. 
 
Proposal Six:  Labor Law Curriculum Development 
--------------------------------------------- -- 
a. The lack of understanding of labor law by workers, 
management, inspectors, judges, and activists is exacerbated 
by the absence of any established curriculum in Guatemala's 
educational institutions.  We recommend the development of a 
university-level curriculum regarding labor law that could be 
incorporated not only into law and human rights programs, but 
also into business schools.  This could also represent a third 
year of training in the Labor Inspectorate career development 
program discussed in Proposal Three.  Individual units of the 
curriculum, such as legislative drafting, negotiation, and 
mediation, could be used for targeted training for organized 
labor representatives, activists, Ministry of Labor officials, 
and even the judiciary. 
 
The program would focus on strengthening the educational and 
training institutions that support labor law, including both 
universities and national bodies that train court personnel. 
The curriculum would also be beneficial to the ad hoc training 
efforts by international donors, such as the ILO. 
 
In the long term, this project is designed to inculcate a 
generation of business, legal, labor, and judicial leaders 
with an understanding of labor rights and strategies to obtain 
them.  In the short-term, the project would provide targeted 
training to actors who need it and deepen the understanding of 
both process and theory of labor rights enforcement. 
 
b. An advanced understanding of labor rights will improve the 
executive and judicial enforcement of labor law, allow Central 
American countries to adhere to core labor standards, and 
continue access to U.S. trade benefits; all points stressed in 
our Mission Performance Plan. 
 
c. This project would be entirely new. 
 
d. $900,000. 
 
e. Guatemalan representatives from the Ministry of Labor, 
organized labor, human rights groups, and private sector 
employers associations have expressed support for this 
project.  The chief umbrella organization of private sector 
employers told us that this project was the organization's 
highest priority, in order to develop a generation of labor 
leaders with whom businesses could have fruitful negotiations. 
 
f. The development of such a curriculum would allow for 
extended contact with rising leaders while at the university 
level, whether they are destined for careers related to labor 
rights or not. 
 
DERHAM