VZCZCXYZ0006
RR RUEHWEB

DE RUEHZP #0269/01 0541943
ZNR UUUUU ZZH
R 231943Z FEB 07
FM AMEMBASSY PANAMA
TO RUEHC/DEPT OF LABOR WASHDC
RUEHC/SECSTATE WASHDC 9871

UNCLAS PANAMA 000269 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT OF STATE FOR DRL/ILCSR (GABRIELLA RIGG) AND 
WHA/PPC (MIKE PUCCETTI) 
DEPARTMENT OF LABOR FOR DOL/ILAB (THERESA ESQUIBEL) 
 
E.O. 12958: N/A 
TAGS: ELAB OTRA PM
SUBJECT: PANAMA: LABOR INFORMATION FOR DOL'S FTA REPORTING 
REQUIREMENTS 
 
REF: STATE 7326 
 
¶1.  (U) Per reftel instructions, updated information on labor 
conditions in Panama follows.  Responses are listed by the 
order given in reftel. 
 
--------------- 
LEGAL FRAMEWORK 
--------------- 
 
¶2.  (U) We know of no further developments to implement the 
suggested changes made by the ILO Committee of Experts in 
¶2005.  According to the Panamanian Ministry of Labor 
(MITRADEL), the minimum number of members needed to form a 
union (40) was the result of a consensus that originated with 
Law 44 of 1995.  MITRADEL notes that employers had originally 
requested a minimum of 50 members.  MITRADEL also states that 
worker groups consider the suggested minimum number (20) 
would mean dispersing the unions.  MITRADEL maintains that 
any effort to change the current minimum number should come 
from the employers and workers who formed the consensus. 
 
¶3.  (U) The 2005 legislation to create a new Labor Security 
and Health Council continues to await action by the National 
Assembly.  According to MITRADEL, the legislation was 
proposed when the country was in the midst of the national 
social security reform debate, and it was not considered 
appropriate to introduce another element into the discussion. 
 Subsequent issues (including the late 2006 deaths of more 
than 50 Panamanians from contaminated GOP-produced medicines) 
have affected the national healthcare system, further 
postponing the progress of the legislation.  A new commission 
to oversee national health issues has been created to put 
forth proposals for broad reform of Panama's healthcare 
system.  MITRADEL believes that this commission may consider 
the Council legislation for further action. 
 
¶4.  (U) MITRADEL provided numerous files for Supreme Court 
cases regarding labor.  However, labor lawyers said that 
there had been no significant changes to labor law.  The most 
relevant case involves the October 2006 Supreme Court ruling 
that Article 75 of Law 8 of 1998 was unconstitutional.  This 
ruling held that the non-obligation of shipowners to sign 
collective agreements violated the right to join a union and 
the right to strike.  According to maritime law experts, this 
ruling protects the right to strike for workers at sea and on 
navigable waterways. 
 
--------------------------- 
ADMINISTRATION OF LABOR LAW 
--------------------------- 
 
¶5.  (U) Hourly minimum wage rates, as established by 
Executive Decree 7 in March 2006, are as follows: 
 
Economic Activity- Region 1, Region 2, Region 3 
 
-Agriculture, Farming, Hunting- 0.89, 0.89, 0.89 (small 
business), 0.94, 0.94, 0.94 (large business) 
-Fishing- 1.17, 1.17, 1.17 
-Mining- 1.37, 1.16, 1.16 
-Manufacturing industries- 1.27, 1.06, 0.93 (small business), 
1.36, 1.13, 1.03 (large business) 
-Baking, Breadmaking- 1.26, 1.06, 0.93 (small business), 
1.34, 1.13, 1.03 (large business) 
-Garment Manufacturing, Wood Manufacturing, Furnituremaking, 
Food Production-  1.26, 1.06, 0.93 (small business), 1.35, 
1.13, 1.03 (large business) 
-Electricity, Gas, Water- 1.38, 1.17, 1.05 
-Construction- 1.68, 1.48,    1.33 
-Wholesale and Commission Trade- 1.37, 1.12, 1.00 
-Retail and Hotel Trade- 1.29, 1.07, 0.93 (small business), 
1.37, 1.11, 1.00 (large business) 
-Restaurants- 1.27, 1.06, 0.93 (small business), 1.36, 1.11, 
0.99 (large business) 
-Transportation- 1.37, 1.16, 1.00 
-Transportation by Water, Air, and Activities Complementary 
to Water and Air Transportation- 1.39, 1.17, 1.02 
-Stores, Warehouses, Couriers- 1.37, 1.16, 1.00 
-Telecommunications and Network Maintenance- 1.38, 1.17, 1.02 
-Financial intermediaries- 1.38, 1.35, 1.34 
-Savings and Credit Cooperatives- 1.37, 1.34, 1.34 
-Real Estate Activities- 1.38, 1.35, 1.34 
-Renting, Leasing Activities- 1.37, 1.34, 1.33 
-Business Activities- 1.39, 1.36, 1.35 
-Community, Social, and Personal Services- 1.35, 1.13, 0.99 
-Discotheques, Amusement Parks, Casinos- 1.36, 1.14, 0.99 
 
-Monthly minimum wage for domestic service is $119 for 
Panama, Colon, and San Miguelito, and $106 for the rest of 
the country. 
 
-Region 1 includes Panama, Colon, and San Miguelito.  Region 
2 includes Chitre, Las Tablas, Aguadulce, Nata, Penonome, 
Santiago, Baru, Bugaba, David, Changuinola, Capira, Chepo, 
Arraijan, La Chorrera, and Taboga.  Region 3 is all other 
parts of the country.  Small businesses are those with ten or 
fewer employees. 
 
-The highest hourly minimum wage rates are given in the 
construction sector, while the lowest hourly minimum wage 
rates are given in the agriculture and farming sectors. 
 
¶6.  (U) MITRADEL did not provide information on average 
hourly wages.  However, based on press reports, the average 
monthly minimum wage rate is now $285, an increase of 8 
percent over the 2003 rate of $263. 
 
¶7.  (U) Executive Decree 13, dated April 28, 2006, 
established for the first time a minimum wage for public 
sector employees.  These rates will go into effect July 1, 
¶2007.  Average monthly salaries, according to the Comptroller 
General, were: 
 
Year: Total/Central Government/Autonomous and 
Semiautonomous/Municipal 
 
-2003: 640.33/507.90/867.72/360.19 
-2004: 646.35/508.64/881.87/361.26 
-2005: 664.94/520.74/924.90/352.60 
 
¶8.  (U) MITRADEL currently has 67 labor inspectors at the 
national level.  MITRADEL carried out 8,398 labor inspections 
in 2005 and 10,463 labor inspections in 2006. 
 
¶9.  (U) According to MITRADEL, it does not carry out labor 
inspections on Panamanian-flagged carriers.  Maritime 
inspections are carried out by the Panama Maritime Authority. 
 
¶10.  (U) MITRADEL did not provide a specific answer on the 
status of the maritime labor courts, answering that labor 
tribunals fall under the judicial branch.  Labor lawyers say 
that there are two maritime courts in existence, but these 
lawyers believe these courts do not handle labor cases. 
 
¶11.  (U) According to MITRADEL's Conciliation and Decision 
Boards, in 2006 2,668 lawsuits were filed and 1,599 hearings 
were held, with 623 sentences in favor of workers and 504 in 
favor of employers.  A total of 472 cases were reconciled 
outside of court. 
 
¶12.  (U) MITRADEL said that the judicial system on labor 
issues falls under the judicial branch.  The Directorate 
General of Labor and the Conciliation and Decisions Boards in 
MITRADEL reported no complaints on delays in the judicial 
system.  Labor lawyers reported delays in the judicial system 
have improved but are still running from 3-6 months. 
According to the labor lawyers, MITRADEL has improved 
alternate dispute resolution training and hired additional 
personnel, and this has helped to decrease delays. 
 
¶13.  (U) MITRADEL's Department of Socioeconomic Integration 
of Persons with Disabilities develops promotion and awareness 
activities on a national level.  The Department holds 
interviews, meetings, plenary sessions, talks, training, and 
other informational activities aimed at the private sector, 
national authorities, organizations and other government 
entities to promote progress toward the hiring of persons 
with disabilities. 
 
¶14.  (U) In 2005, MITRADEL registered two new unions and no 
new federations or confederations.  In 2006, MITRADEL 
registered two new unions and one new confederation. 
Currently, there are 677 unions, 62 federations, and 11 
confederations registered with MITRADEL. 
 
---------------------- 
FREEDOM OF ASSOCIATION 
---------------------- 
 
¶15.  (U) Reliable statistics on the number and percent of the 
country's workforce that is member to a union do not exist. 
The government does not maintain such records.  MITRADEL 
estimates that the number of people employed in private 
business, as of March 2006, is 534,219, of which 14 percent 
are affiliated to union organizations.  Union representatives 
 
put the percentage at about 10 percent.  Other estimates 
range from 8 to 12 percent. 
 
¶16.  (U) According to MITRADEL, there were two unions in the 
EPZs that were registered.  However, these unions are now 
inactive because the companies where the unions were located 
have ceased operations. 
 
¶17.  (U) Statistics on the number of employees who are 
members of employee associations do not exist.  MITRADEL does 
not register associations of employees. 
 
¶18.  (U) In 2005, some 14 strikes were declared, and one was 
actually carried out.  In 2006, some 25 strikes were 
declared, and three were carried out.  Workers carried out 
strikes because they and the employers could not reach 
agreement on specific points in the submitted List of 
Petitions.  Twenty workers participated in the 2005 strike, 
which lasted four days, and 395 workers participated in the 
2006 strikes, which lasted nine days. 
 
¶19.  (U) According to the Supreme Court ruling mentioned 
above in paragraph 4, workers at sea do have the right to 
strike.  Maritime labor lawyers did not know of specific 
documents given to workers informing them of their right to 
strike.  Because the ruling happened late in 2006, the labor 
lawyers think that the unions were delayed in informing the 
workers of this ruling, but will do so.  They knew of no 
maritime labor strikes. 
 
------------------------------------------ 
RIGHT TO ORGANIZE AND BARGAIN COLLECTIVELY 
------------------------------------------ 
 
¶20.  (U) According to MITRADEL, 73 collective bargaining 
agreements were signed in 2006, the same number as in 2005. 
These agreements were from the private sector.  There were no 
collective agreements in the EPZs.  There was one agreement 
in 2006 in the call centers; there were none in 2005.  There 
were none in the Canal area. 
 
¶21.  (U) As mentioned above, reliable statistics are not 
available, but estimates range from 8 to 12 percent on the 
number of workers covered by an active union.  Currently, the 
two EPZ unions are no longer active. 
 
¶22.  (U) In 2005, MITRADEL provided mediation assistance in 
122 cases, 25 of which resulted in a collective bargaining 
agreement.  MITRADEL provided mediation assistance in 115 
cases in 2006, 24 of which resulted in a collective 
bargaining agreement. 
 
¶23.  (U) In 2005, there were 16 direct agreements between 
employers and a non-union group of employees.  In 2006, there 
were 24 such agreements. 
 
¶24.  (U) Law 9, Article 136 of 1994 grants public 
administrative career employees the right to "integrate to 
associations to promote and dignify the public employee."  It 
also prohibits the "favoring, hindering, or influencing in 
any way, the affiliation or non-affiliation of public 
employee associations." 
 
¶25.  (U) According to MITRADEL, such forms of anti-union 
discrimination do not exist in Panama "at a significant 
level."  Labor union leaders and lawyers say that they do not 
doubt that some such discrimination may occur, but they know 
of no particular cases. 
 
----------------------------------------- 
PROHIBITION OF FORCED OR COMPULSORY LABOR 
----------------------------------------- 
 
¶26.  (U) There have been no credible reports of forced labor 
in Panama.  Trafficking in persons continues to follow the 
patterns cited in the 2005 Human Rights Report and the 2006 
Trafficking in Persons Report.  Reliable statistics for 
trafficking do not exist; however, for 2006, as of December, 
the Sex Crimes Unit of the Judicial Technical Police 
investigated 5 cases of sexual trafficking, mostly involving 
Colombian women, 24 cases of child pornography, 21 cases of 
procurement for commercial sexual activities, 4 cases of sex 
tourism, and 8 cases of child molestation.  In January 2007, 
Panama had its first trafficking in persons conviction. 
ILO-IPEC has sponsored a number of awareness and capacity 
building activities in Panama in 2006, including media 
campaigns and the inclusion of anti-trafficking programs in 
some public schools. 
 
 
--------------------------------------------- 
ELIMINATION OF THE WORST FORMS OF CHILD LABOR 
--------------------------------------------- 
 
¶27.  (U) Reliable statistics on child labor continue to be 
scarce.  According to a 2005 study by the Comptroller 
General's office, 10.5 percent of children ages 10-17 years 
were employed in 2004 and 11.6 percent were employed in 2005. 
 In the same population group, 9.6 percent of non-indigenous 
children were employed in 2004, compared with 19.8 percent of 
indigenous.  In 2005, 9,9 percent of non-indigenous and 27.6 
percent of indigenous children were employed.  From these 
numbers, the study indicated that 47.6 percent were employed 
in a family setting, 27.8 percent were formal employees, and 
24.5 percent were self employed.  In 2006, MITRADEL performed 
369 inspections of businesses in Panama City to ensure 
compliance with child labor regulations, plus 139 inspections 
in the interior of the country.  The GOP, along with the ILO 
and the non-governmental organization Casa Esperanza funded 
an anti-child labor awareness campaign.  Casa Esperanza 
operated 56 centers throughout the country to reduce child 
labor, and through the DESTINO project operated 41 
educational centers for children and youth. 
 
----------------------------- 
ACCEPTABLE CONDITIONS OF WORK 
----------------------------- 
 
¶28.  (U) From September 2005 to August 2006, MITRADEL 
registered 89 workplace accidents, 9 fatal accidents, 30 
incapacitating accidents, and 6 cases of workplace-related 
illnesses.  The majority of accidents were in the 
construction industry, according to MITRADEL. 
 
¶29.  (U) According to labor union leaders and lawyers, denial 
of worker rights to indigenous people can happen in the cases 
of migrant agricultural workers, who do not work under formal 
contracts.  They said that they do not know of cases of 
denial of worker rights to indigenous people outside of such 
circumstances. 
 
Eaton