VZCZCXYZ0009
PP RUEHWEB

DE RUEHTG #0431/01 0652026
ZNR UUUUU ZZH
P 062026Z MAR 06
FM AMEMBASSY TEGUCIGALPA
TO RUEHC/SECSTATE WASHDC PRIORITY 1304
RUEHC/DEPT OF LABOR WASHDC PRIORITY
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS TEGUCIGALPA 000431 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/PPC PUCCETTI, DRL/IL DEL VECCHIO, AND WHA/CEN 
STATE FOR OES/ENV JACKSON, OES/PCI SPERLING, AND WHA/EPSC 
STATE PASS USAID FOR LAC/RSD: BARRY MACDONALD 
DEPT. OF LABOR FOR ILAB: JANE RICHARDS 
 
E.O. 12958: N/A 
TAGS: ELAB ETRD SENV EAID ECON PGOV HO
SUBJECT: Proposal to Improve the Agribusiness Workplace in 
Honduras 
 
Reftel: SECSTATE 26123 
 
¶1. Summary: As per the referenced cable, Congress 
appropriated $40 million ($20 million in ESF and $20 million 
in DA) in FY 2006 for trade capacity building in CAFTA-DR 
countries to be used in the areas of labor and the 
environment.  This proposal is the second of three 
USAID/Honduras responses to the request for input and ideas 
for projects that meet the labor and environment trade 
capacity building priorities in Honduras.  End Summary. 
 
¶2. Justification: Improved labor productivity is critical 
for enhancing the competitiveness of the Honduran 
agricultural sector.  The lack of adequate education on 
environmental regulations such as the proper use and 
handling of agricultural inputs (e.g. pesticides, 
fertilizer, equipment) and the lack of knowledge of labor 
law and regulations have created an increasing need to 
foster more effective employee/employer relationships in the 
workplace to address these problem areas and enable 
companies to remain competitive in local and international 
markets. 
 
Further, relationships between employer and employee in the 
export-led agribusiness sector are becoming more and more 
important as companies realize that labor productivity is 
closely tied to business competitiveness.  It has been 
widely recognized that a more harmonious labor/management 
relationship is an essential aspect of competitiveness in a 
more open economy.  Hence, U.S. companies that produce 
agricultural goods for export in CAFTA-DR countries must 
recognize the growing global demand for better working 
conditions in order to enhance competitiveness, boost 
product quality, gain market access, expand market share, 
and attract foreign investment.  Most importantly, firms 
must take the necessary steps to ensure that their bottom 
line is not threatened by poor labor practices that may 
undermine their base of customer support or efficiency of 
their workforce. 
 
¶3. Description: The project aims to build and expand on 
existing work in the textile sector to foster partnerships 
among U.S. agribusiness companies, their commercial partners 
in the region, unions, employer's organizations, and NGOs 
that monitor labor/management relations to promote self 
enforcement and voluntary compliance with international 
labor standards and national labor laws.  These partnerships 
will promote dialogue, education, and at the same time will 
implement a conflict resolution process through joint worker- 
manager training to increase the understanding of labor 
rights and obligations in the workplace.  This will also 
equip managers with labor management skills and tools that 
can be integrated into the company's management system. 
This project will complement USAID's trade capacity building 
activities with rural producers to support expansion and 
diversification into nontraditional value-added, 
agricultural products. 
 
¶4. The expected outcomes are the following: 
- mechanisms to enforce proper use and handling of 
pesticides and equipment used in agricultural activities 
established; 
- understanding and compliance of environmental codes to 
protect the human and animal life improved, 
- better understanding of worker benefits in a highly 
seasonal activity expanded, 
- better understanding by management and workers of the link 
between productivity and competitiveness, 
- workplace labor laws and standards infringement diagnostic 
and action plans developed, 
- workplace codes of conduct and safety developed, 
- management systems for compliance developed, 
- conflict resolution mechanisms in the workplace designed, 
and 
- overall compliance with international labor standards and 
national labor laws improved. 
 
¶5. USAID's Global Development Alliance is the general 
umbrella under which the partnership would be developed. The 
cost-sharing formula used is a minimum of a 1:1 match 
between U.S. agribusiness private sector companies and 
USAID. 
 
¶6. Advancing U.S. Policy Objectives: The proposed alliance 
structure will help promote not only voluntary compliance 
with labor standards by CAFTA-DR firms, but also will assist 
 
their U.S. partners in demonstrating that their products are 
produced under labor conditions that meet international and 
national standards. 
 
¶7. New or Related to Previous Work: At least one GDA 
alliance of this nature has been implemented, initially 
focused on the textile industry in Guatemala as a pilot 
program (Continuous Improvement in the Central American 
Workplace - CIMCAW) and then subsequently in Central America 
(Honduras, El Salvador, Nicaragua, Costa Rica and Dominican 
Republic), and involved U.S. private businesses as partners 
(Gap and Timberland). This activity will complement other 
proposed activities like "Strengthening Trade Unions' 
Effective Role with CAFTA and improving the culture of labor 
law compliance" in order to introduce and enforce a culture 
of labor law and safety compliance into the business 
environment. 
 
¶8. Estimated Cost:  We are hereby requesting $1 million in 
USG financing and expect to receive at least $1 million in 
private financing. All alliances will be built with the 
involvement of local private partners, including private 
businesses, think tanks, and other non-governmental 
organizations as required. 
 
¶9. Public Diplomacy Strategies:  The agricultural sector is 
a priority for the current GOH administration, and the 
Honduran government is placing greater attention on labor 
issues that might arise in the context of CAFTA-DR.  The new 
Zelaya administration has ratified its interest in fostering 
agribusiness development in Honduras to create employment 
and increase agricultural product exports.  The agricultural 
sector also plays an important role in the achievement of 
the GOH poverty reduction goals as more than 50 percent of 
the Honduran households are related to the sector.  Further, 
46 percent of the Honduran population lives in rural areas, 
where the poverty index is approximately 76 percent. 
 
Ford