VZCZCXYZ0021
PP RUEHWEB

DE RUEHMU #0700/01 0751721
ZNY CCCCC ZZH
P 161721Z MAR 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 9483
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

C O N F I D E N T I A L MANAGUA 000700 
 
SIPDIS 
 
SIPDIS 
 
WHA/CEN FOR SCHIFFER 
 
E.O. 12958: DECL: 03/14/2017 
TAGS: ECON ELAB KDEM PGOV PINR NU
SUBJECT: NICARAGUA: AMBASSADOR CALLS ON MINISTER OF LABOR 
 
Classified By: Ambassador Paul Trivelli for reason 1.4(b) 
 
¶1.  (SBU) SUMMARY:  In a March 14 meeting with the 
Ambassador, Nicaraguan Minister of Labor Jeanette Chavez 
Gomez admitted that the Ministry faces some complex problems. 
 While in favor of increasing the minimum wage, she 
emphasized the need for a cautious, balanced approach to 
adjusting the minimum wage scales to meet the needs of 
workers without jeopardizing private sector interests.  She 
is actively engaged with her Central American counterparts to 
establish a regional labor resource center in an effort to 
calibrate labor standards and address regional labor issues. 
The Minister denied widespread reports of politically 
motivated firings within the various ministries, claiming 
that only 300-400 employees -- in "positions of confidence" 
or whose contracts had expired -- had been dismissed, and 
claimed that 120,000 had been dismissed under the three 
previous administrations.  The Minister agreed that 
trafficking in persons is an important issue and is actively 
engaged with El Salvador to sign a bi-lateral labor agreement 
that would enable the government to more effectively address 
the matter.  END SUMMARY 
 
Introduction 
- - - - - - - 
 
¶2.  (U) On March 14, the Ambassador sat down with the new 
Minister of Labor, Jeanette Chavez Gomez, to discuss CAFTA 
funding for labor-related projects, reforms to the minimum 
wage and Consumer Price Index (CPI), anti-trafficking 
efforts, and respect for the Civil Service law among other 
issues.  The Minister, clearly pleased to receive the 
Ambassador, eagerly engaged him in discussion of a broad 
range of labor-related topics and displayed a solid working 
knowledge of each issue.  She openly acknowledged the 
challenges ahead, but displayed a positive attitude and seems 
to be taking a very proactive approach. 
 
¶3.  (SBU) Minister Chavez began the meeting by commenting 
that her Ministry is small, but it faces tough, complicated 
issues, such as minimum wage reform, that impact the whole 
nation.  She remarked that it is very important to strike the 
right balance between economic growth and stability and 
ensuring just wages for the Nicaraguan people.  Cognizant of 
the difficulty of achieving this balance, the Minister said 
the GON is carefully analyzing the situation. 
 
CAFTA Support for Labor Programs 
- - - - - - - - - - - - - - - - - 
 
¶4.  (SBU) The Ambassador mentioned that the USG, through 
CAFTA-DR, is providing over US$ 20 million in regional 
funding this year to help strengthen and modernize labor 
ministries, improve labor standards and labor law 
enforcement, and increase the knowledge base and 
professionalization of organized labor institutions.  The 
Minister remarked that she is familiar with and impressed by 
the work of a key regional partner in US-funded labor 
projects -- Cumple y Gana -- and expressed her appreciation 
for the US' efforts to improve the labor situation.  Minister 
Chavez mentioned that efforts are underway to create a 
consolidated Central American labor resource center with the 
goal of studying and improving regional labor standards.  The 
center would also serve as a resource center for workers. 
 
¶5.  (SBU) On the theme of trafficking in persons (TIP), the 
Ambassador mentioned that the Ministry may be interested in 
an upcoming TIP workshop in El Salvador.  The Minister 
responded that Nicaragua has a well-developed bi-lateral 
labor agreement with Costa Rica that defines workers' rights 
and the legal procedures for dealing with labor issues.  She 
expressed interest in creating a similar accord with El 
Salvador, in part, to control trafficking in persons which 
she believes is facilitated by the large movement of migrant 
labor. 
 
Minimum Wage Reforms 
- - - - - - - - - - - 
 
¶6.  (SBU) The Minister is a strong proponent of reforming the 
minimum wage based on an "adjusted" CPI.  Because the current 
CPI does not including housing, she stressed, it is not 
accurate.  However, she pointed out, the tricky part is 
determining how much to increase the minimum wage for a given 
uptick in the CPI.  She emphasized the need for "equilibrium" 
between workers' rights and macro-economic impact, and stated 
that there is on-going discussion to determine how much 
additional currency - via wage increases - could be injected 
into the economy without creating inflation and how much the 
business sector can absorb without damaging competitiveness. 
She acknowledged that the government must proceed with 
caution when considering wage reforms because, as a major 
employer in the economy, any upward movement in wages could 
have a significant fiscal impact. 
 
Civil Service Firings 
- - - - - - - - - - - 
 
¶7.  (C) The Ambassador commented that the topic of 
unjustified firings has received a great deal of press 
attention lately and solicited the Minister's opinion. 
Minister Chavez responded that the news reports are wrong, 
and insisted that no more than 300-400 people had been 
dismissed amongst the various ministries, most of whom were 
people in "positions of confidence" or contract employees 
whose contracts were not renewed.  As an example, she cited 
that the Ministry of Labor has dismissed only three people, 
all of whom worked in the Minister's office in "positions of 
confidence."  She conceded that there may be some isolated 
incidents of unfair firings, but nothing orchestrated or 
widespread.  In contrast, she claimed that some 120,000 
government employees had been fired under the previous three 
administrations, beginning in 1990 until the end of 2006. 
(COMMENT:  Given that the government work force is estimated 
to be 60,000, such a claim is not credible as it would imply 
that the entire government work force has been fired twice in 
the past 16 years.  Separately, members of the political 
opposition in the National Assembly claim that Law 476 -- the 
Career Civil Service law -- does not authorize the dismissal 
of people in "positions of confidence" and that such 
dismissals are illegal.  Instead, such workers are to be 
reassigned.  In addition, Foreign Minister Samuel Santos 
earlier mentioned to us that the new administration would not 
change more than 200 positions.  END COMMENT). 
 
¶8.  (SBU) In response to the Ambassador's question about her 
relationship with the National Assembly, Minister Chavez 
characterized it as "good", but that the deputies are asking 
her to take action against the dismissal of civil servants. 
She told the Ambassador that, technically, the Treasury is 
responsible for handling labor appeals, but that the Appeals 
Commission written into the 2003 Career Civil Service law has 
never been formed.  She stressed that the Ministry of Labor's 
mandate is labor inspection and that it would be a conflict 
of interest if such a Commission were part of the Ministry of 
Labor. 
 
Lobster Fisherman 
- - - - - - - - - 
 
¶9.  (U) The Ambassador touched briefly on the subject of the 
working conditions of lobster divers on the Atlantic Coast, 
an occupation known to be very hazardous due to poor 
equipment and training and the lack of enforcement of health 
and safety regulations by the government.  Minister Chavez 
characterized the situation as "serious, serious" and stated 
that "people have a long history of not obeying the laws." 
She promised that the government will "work hard on this," 
but admitted that there are too few inspectors and that they 
lack sufficient technical knowledge of the profession. 
Minister Chavez believes that an inter-ministerial approach 
involving, for example, the Ministries of Health and the 
Family, will be required to address this problem. 
 
¶10.  (SBU) Finally, the Ambassador asked that the Ministry of 
Labor consider how it might help resolve an on-going labor 
dispute involving a US-owned shrimping business on the 
Atlantic Coast in which the workers illegally went on strike. 
 The Minister stated that she was aware of the case and is 
actively "looking for solutions." 
 
Biography: Jeanette Chavez Gomez 
- - - - - - - - - - - - - - - - 
 
¶11.  (U) Doctor Jeanette Chavez Gomez was born in Chinandega 
and obtained a law degree from UNAN in the 1970s.  She holds 
a Masters degree in Public Law from the University of 
Barcelona.  Dr. Chavez has been tied to the FSLN since she 
was a student leader.  During the 1980s she worked at the 
Ministry of Agriculture (MIDINRA), the Ministry of Economy, 
and was the General Manager of an industrial supplies 
company.  Along with Ruth Selma Herrera, Dr. Chavez is the 
founder of the Consumer Defense Network.  She is also the 
former President of the Chinandega Lawyers and Notaries' 
Association. 
TRIVELLI