VZCZCXYZ0019
OO RUEHWEB

DE RUEHQT #1275/01 1441847
ZNR UUUUU ZZH
O 241847Z MAY 06
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4391
INFO RUEHC/DEPT OF LABOR WASHDC PRIORITY
RUEHBO/AMEMBASSY BOGOTA 5631
RUEHCV/AMEMBASSY CARACAS 1751
RUEHLP/AMEMBASSY LA PAZ MAY LIMA 0600
RUEHGL/AMCONSUL GUAYAQUIL 0499
RUEHGV/USMISSION GENEVA 0334

UNCLAS QUITO 001275 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA/AND, WHA/PPC, EB, AND DRL/IL. USDOL FOR CARLOS 
ROMERO. GENEVA FOR JOHN CHAMBERLIN. PLEASE PASS USTR FOR V. 
LOPEZ, L.KARESH, AND B. HARMON. 
 
E.O. 12958: N/A 
TAGS: ELAB PGOV EC
SUBJECT: LABOR MINISTRY PRIORITIZES TRIPARTITE DIALOGUE AND 
COMBATING CHILD LABOR 
 
 
¶1.  (U) Summary:  Minister of Labor Galo Chiriboga and Vice 
Minister of Labor Jose Serrano outlined the four main goals 
of the Ministry of Labor (MOL):  combating child labor, 
tripartite dialogue, modernization of the MOL, and combating 
employment discrimination.  President Palacio recently signed 
a decree to make child labor inspectors permanent employees 
of the MOL beginning June this year.  Chiriboga claimed that 
fruitful dialogue in the tripartite National Labor Council 
recently resulted in consensus on the bulk of draft 
subcontracting law.  He hoped the same positive atmosphere 
would prevail during discussions of a wholesale labor code 
reform.  The Ministry expects to receive a first draft of the 
new labor code from ILO expert Enrique Marin in mid-July and 
hopes the law will be approved by Congress by December.  The 
subcontracting law is still stuck in Congress over 
disagreements over the scope of the law.  Should those 
differences be resolved, prospects for deeper labor reforms 
will improve.  End Summary. 
 
Combating Child Labor A Top Priority 
------------------------------------ 
 
¶2.  (U) Chiriboga told us in a May 18 meeting that President 
Palacio had signed a decree in late April creating budget 
line items to make child labor inspectors permanent employees 
of the MOL beginning in June 2006.  Currently, the MOL 
employs 21 inspectors.  However, Chiriboga said there are now 
line items for 35 employees in the child labor division to 
include 25 inspectors, 5 administrative staff, and five 
technical staff.  The MOL is also carrying out a child labor 
awareness campaign with radio spots and will begin television 
spots in June using members of Ecuador's World Cup-qualified 
national soccer team, Olympian Jefferson Perez, and local 
rock group "Rockola Bacalao."  The MOL has also implemented a 
program to eliminate child labor in the public markets in the 
city of Manta. 
 
¶3.  (U) According to the MOL's child labor division, in March 
of this year the MOL stepped up inspections in construction 
and bricklaying.  During January and February no child labor 
inspections were carried out because the inspectors were 
being trained in new inspection procedures and forms. 
Chiriboga has institutionalized the inter-agency child labor 
council (CONEPTI) which now has its own offices and a 
technical secretary.  The Secretary of CONEPTI, Lenin 
Herrera, told press that inspections have allowed CONEPTI to 
identify sectors with the highest rates of child labor. 
 
¶4.  (U) Chiriboga said the Ministry is formulating a list of 
prohibited work for children and some other definitions 
related to the child code.  A law passed in March harmonized 
the child code and the labor code by setting the minimum age 
for legal work at 15 and imposing higher fines for child 
labor violations. 
 
New Labor Code To Be Discussed in Tripartite Forum 
--------------------------------------------- ----- 
 
¶5.  (U) Serrano said the MOL has worked hard to strengthen 
tripartite (business-labor-government) dialogue in the 
National Labor Council, with its greatest achievement so far 
being the near-consensus reached on the subcontracting law. 
Business and labor ultimately agreed on all but two key 
articles in the bill.  Serrano said he expected the law to be 
voted on in Congress in the next 15 days.  Serrano said the 
MOL was satisfied with the law and hoped for its passage. 
The one point holding up the subcontracting law in the 
Congress is the article which describes the permissible scope 
for the use of subcontracting by employers.  The Council did 
not reach agreement on the maximum percentage of workers that 
can be subcontracted, with workers wanting the maximum set at 
40 percent, and business wanting it set at 60 percent.  He 
thought a compromise could be reached. 
 
¶6.  (U) Serrano said that, provided the subcontracting law 
passes, the National Labor Council would become the main 
forum to discuss labor code reforms for Ecuador.  Serrano 
said he was expecting ILO expert Enrique Marin to deliver a 
first draft of a new labor code to the National Labor Council 
by July 15.  Chiriboga said the labor code would likely 
 
require two months of discussion and negotiation in the 
National Labor Council before being submitted to Congress. 
Ideally, the law would pass Congress by December.  He hoped 
the ILO could play a facilitating role crafting consensus in 
the National Labor Council.  Serrano requested USAID 
assistance to conduct workshops about the new labor code for 
the National Labor Council and funds to hire experts to 
advise business and labor.  The toughest issues to reach 
consensus on, according to Serrano, would be:  profit 
sharing, company retirement, collective bargaining, the 30 
person minimum to form a union, hourly work, and, if still 
pending, subcontracting.  Serrano also asked for USAID's 
assistance to implement the new labor code, once approved. 
 
Modernization a Top Priority 
---------------------------- 
 
¶7.  (U) According to Chiriboga, the MOL has worked hard, with 
assistance from USAID, to modernize its labor inspections 
procedures.  Chiriboga believes that an efficient computer 
system could help catch labor irregularities and make the 
inspections system more efficient.  The MOL is also working 
with the ILO on a project to systematize the information 
gathered in inspections.  Chiriboga said the MOL had been 
working to update its website and make it more useful. 
 
Combating Discrimination in Hiring 
----------------------------------- 
 
¶8.  (U) Chiriboga told us the MOL will launch a program to 
increase youth employment with the ILO in July.  In order to 
improve job prospects for youth, Chiriboga said the Ministry 
had recently signed an agreement with 50 universities to 
create a job bank to match students with job market needs. 
Other priorities have been eliminating discrimination in 
hiring of women, indigenous, Afro-Ecuadorians, and persons 
with disabilities.  Chiriboga is also promoting a law to 
prevent discrimination against those with HIV/AIDS and 
promote prevention of the disease.  The MOL is drafting 
regulations for a new law to increase the hiring of persons 
with disabilities. 
 
Comment 
------- 
 
¶9.  (SBU) Chiriboga is committed to improving the Ministry 
and worker rights and has taken significant steps forward on 
combating child labor and promoting tripartite dialogue.  The 
institutional strengthening Chiriboga is promoting will help 
in the implementation of any new labor laws.  Labor code 
reform will be significantly more contentious than the 
subcontracting law and it is likely discussions of the labor 
code in the tripartite council would extend beyond two 
months.  Without a signed FTA it is unlikely Chiriboga has 
the political strength to lobby the Congress for the new 
labor code.  While business had understood the need for labor 
reform in order to gain passage of a U.S.-Ecuador FTA, the 
elimination of the prospect for an FTA probably dooms 
prospects for comprehensive labor reform. 
JEWELL