VZCZCXYZ0006
PP RUEHWEB

DE RUEHQT #0335/01 0401416
ZNR UUUUU ZZH
P 091416Z FEB 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC PRIORITY 6290
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 6423
RUEHCV/AMEMBASSY CARACAS PRIORITY 2355
RUEHLP/AMEMBASSY LA PAZ FEB 0402
RUEHPE/AMEMBASSY LIMA PRIORITY 1393
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 1850
RUEHC/DEPT OF LABOR WASHDC PRIORITY

UNCLAS QUITO 000335 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA/AND, WHA/PPC, AND EB; USDOL FOR ILAB:C. 
ROMERO; USTR FOR L. KARESH AND V. LOPEZ 
 
E.O. 12958: N/A 
TAGS: ELAB PGOV PINR EC
SUBJECT: MINISTER OF LABOR SEEKS REFORM THROUGH CONSTITUENT 
ASSEMBLY 
 
 
¶1. (SBU)  Summary:  In a cordial initial meeting with the 
Ambassador on February 13, Minister of Labor and Employment 
Antonio Gagliardo said the Correa administration was 
committed to labor reform in or after the proposed national 
constituent assembly, versus the Congress.  The Ambassador 
encouraged the GOE to pursue balanced reform to close gaps in 
worker protections while enhancing Ecuadorian competitiveness 
and economic growth.  The Minister pledged to involve both 
management and organized labor in dialogue and expressed hope 
that reforms acceptable to both would be possible.  His 
priorities include continued improvements in combating child 
labor and restricting abuses of worker rights by 
subcontractors.  Gagliardo expressed appreciation for ongoing 
USG labor-related assistance described by the Ambassador. 
End Summary. 
 
¶2. (U)  Gagliardo was joined by Vice Minister for Work and 
Employment Tito Palma Caicedo and Chief of Operations Carmen 
Perria; the Ambassador was accompanied by LabOff (notetaker). 
 
 
Labor Cooperation to Continue 
----------------------------- 
 
¶3.  (SBU) The Minister opened the discussion by expressing 
hope that the Ministry's excellent relations with the Embassy 
would continue.  The Ambassador reciprocated the sentiment, 
expressing USG interest in balanced labor reforms to 
strengthen worker rights protections and enhance Ecuador's 
competitiveness and economic growth.  The Ambassador 
described for the minister various labor-related programs 
supported by the USG (over $10 million over five years) and 
provided the Minister a summary of our activities.  The 
Minister expressed GOE appreciation for continuing USG 
support, which was sorely needed by a government with limited 
resources. 
 
Assembly First, Then Labor Reform 
--------------------------------- 
 
¶4.  (SBU) The Ambassador told the minister that with USG 
support, an ILO consultant had drafted reforms in 2006 to the 
labor code which were not introduced to Congress by the 
Palacio government.  She asked what the new government 
planned to do to pursue reform.  Gagliardo responded that the 
Government considered implementing its proposed national 
constituent assembly to rewrite the constitution to be its 
top priority.  Labor reform could be addressed in the new 
constitution itself, or perhaps through a labor code revision 
afterwards.  He planned to engage in dialogue with both labor 
and management in the National Labor Council to develop a 
list of shared objectives for the Assembly to pursue.  The 
Ambassador encouraged tripartite dialogue and compromise as 
essential to progress. 
 
GOE Priorities: Subcontracting and Child Labor 
--------------------------------------------- - 
 
¶5.  (SBU)  Asked what reforms he hoped would come out of the 
Assembly, Gagliardo said the government's top priorities 
include limiting the practice of subcontracting.  This 
practice is often abused to avoid paying benefits mandated to 
permanent employees, including profit-sharing; it also 
permits employers to fire workers at will, undermining labor 
stability.  Gagliardo gave specific examples of firms that 
hire one permanent employee and subcontract the rest, 
blatantly attempting to circumvent the labor code.  Gagliardo 
agreed with the Ambassador that in certain cases hiring 
third-party workers is necessary and useful.  Until new labor 
reforms are effected, Gagliardo said, his top priority would 
be to enforce current labor laws restricting subcontracting. 
 
¶6. (SBU)  Minister Gagliardo said that combating child labor, 
"a critical social problem," was another top priority for his 
ministry.  He expressed confidence in his ministry child 
labor team, saying he had charged them to make progress 
addressing the problem, and again expressed appreciation for 
past and continuing USG support in this area.  He 
passionately argued that more emphasis needs to be placed on 
urban child labor as a means to get kids "off of the city 
streets." 
 
Bio Notes 
--------- 
 
¶7.  (SBU)  Gagliardo comes to his current position with more 
governmental experience than most of his cabinet colleagues. 
He represented Guayas province in the Congress (for the 
Democratic Left party), serving as vice president of the 
Congressional Commission for Labor and Employment, and also 
served briefly from 1991-1992 as Minister of Social Welfare 
in the administration of President Rodrigo Borja.  Gagliardo 
was a public critic of a free trade agreement with the United 
States, and is reputed to be a social acquaintance of 
Venezuelan President Chavez.  In this meeting, he evinced no 
ill will toward the United States.  Rather, Gagliardo seemed 
to relish the opportunity to discuss a range of aspects of 
life in Ecuador (including the importance of improving the 
tourism sector) with the Ambassador. 
 
Comment 
------- 
 
¶8.  (SBU)  Gagliardo seemed genuinely interested in ongoing 
dialogue with the Embassy on labor issues, and we are 
encouraged my his commitment to pursue dialogue with both 
management and labor.  Nevertheless, Gagliardo was vague 
about what specific reforms he would pursue, beyond 
subcontracting reforms which Correa promised during the 
presidential campaign.  His intention to focus on enforcing 
existing labor laws pending any new reforms conveyed a 
judiciousness lacking in his impatient president and some of 
his fellow cabinet members.  Over time, we hope to encourage 
Gagliardo to broaden his reform agenda to address the worker 
rights gaps identified by the ILO.  His marching orders are 
clearly to hold off on seeking reform until after the 
Constitutional Assembly is established.  Our labor contacts 
share the view that prospects are limited for labor reforms 
in this Congress, where key labor committee posts are 
controlled by conservatives.  However, by choosing to go 
around Congress, labor reform becomes dependent on a 
successful outcome of the Assembly process, which under the 
most optimistic scenarios would not culminate until 2008, at 
the earliest. 
JEWELL