VZCZCXYZ0002
RR RUEHWEB

DE RUEHGT #0823/01 1201800
ZNR UUUUU ZZH
R 301800Z APR 07
FM AMEMBASSY GUATEMALA
TO RUEHC/SECSTATE WASHDC 2551
INFO RUEHC/DEPT OF LABOR WASHDC
RUEHME/AMEMBASSY MEXICO 4190
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS GUATEMALA 000823 
 
SIPDIS 
 
SIPDIS 
 
DOL FOR JRICHARDS 
DEPT FOR USTR LABOR FOR AROSENBERG AND 
USTR ENVIRONMENT AND NATURAL RESOURCES MBURR 
DEPT ALSO FOR USAID/LAC/RSD FOR DJESSEE AND JGARRISON, 
WHA/PPC MPUCCETTI, WHA/EPSC JBANDO, DRL/IL GRIGG, AND 
OES/ENV FOR RKASTENBERG AND BWING 
 
E.O. 12958:N/A 
TAGS: EAID ELAB ETRD SENV GT
SUBJECT: GUATEMALA?S INPUT ON FY07 LABOR AND 
ENVIRONMENT TRADE CAPACITY-BUILDING PROJECTS 
 
REF: STATE 37718 
 
¶1. Summary:  Per reftel request, post submits the 
following proposals for trade-related labor and 
environment projects for FY07 CAFTA-DR trade capacity- 
building funds.  Post input is keyed to reftel para 7. 
End summary. 
 
¶2. As requested reftel, this cable outlines post 
priorities for CAFTA-DR labor and environment 
activities for FY07.  The concepts and proposals 
described below build upon priorities set forth in the 
White Paper, the Environment Cooperation Agreement 
(ECA), the ECA Work Plan, recommendations from the 
March 21-24 meeting of ECA environmental points of 
contact in El Salvador, and input from the April 13 
meeting of CAFTA-DR Vice Ministers of labor at the IDB 
in Washington.  The suggestions are intended for use 
in identifying and prioritizing projects that will 
support long-term viability of improved labor and 
environmental standards in the region, and in guiding 
the design and development of those projects. 
 
¶3. Our recommendations build upon work initiated with 
FY05-FY06 CAFTA-DR funding and identify areas where 
logical follow-on activities should take place, 
including needs from specific USG agencies that will 
be presenting their proposals under separate cover for 
funding to complement these activities.  Total funding 
request for environmental cooperation priorities in 
FY07 is $4.11 million.  Total funding request for 
labor capacity building and compliance is $2.32 
million.  Please note that this estimate for labor 
activities is for Guatemala only, although we 
anticipate that some proposals would also be 
implemented regionally in other participating 
countries. 
 
¶4. In the area of labor, post recommends continued 
focus on projects and programs that aim to: 
-- strengthen the labor ministries by 
professionalizing labor inspectorates and by 
partnering with local organizations to increase the 
efficiency of processing of complaints within the 
ministries; 
-- strengthen the effectiveness of the judicial system 
to enforce existing labor laws; 
-- eliminate gender and other types of discrimination 
in the workplace; 
-- enhance benchmarking and verification procedures; 
and 
-- support the development of a culture of compliance 
with labor laws through public outreach and civic 
education. 
 
¶5. In the area of the environment, post recommends 
prioritizing activities that: 
-- strengthen institutional capacity to improve 
implementation and enforcement of environmental laws; 
-- enhance biodiversity and conservation; 
-- promote market-based conservation, including 
sustainable tourism and sustainable agricultural and 
forest products; 
-- improve private sector environmental performance; 
and 
-- address specific CAFTA-DR obligations that promote 
public participation and effective enforcement of 
environmental laws. 
 
These suggested activities represent a consensus view 
between the USG and GOG of key projects necessary to 
help meet the obligations set forth in Chapter 17 of 
the CAFTA-DR Agreement. 
 
¶6.  The information below is keyed to reftel format: 
a. Specific objective(s), element, and sub-element, 
and anticipated funding level 
b. Brief description and expected outcomes of the 
project 
c. Pipeline and mortgage data if continuation of on- 
going project, and description of implementing 
mechanism 
d. Linkage between the proposed project and the White 
 
Paper or the Work Plan for implementing the 
Environmental Cooperation Agreement 
e. Local ?buy-in? 
f. Host government?s view of how projects underway are 
meeting the initial recommendations of the White Paper 
g. Public diplomacy/public outreach strategies 
 
LABOR ACTIVITIES 
---------------- 
 
Proposal 1:  Strengthening Labor Inspectorates to 
Improve Implementation and Enforcement of Labor Laws 
 
a. Specific Objective:  governing justly and 
democratically 
 
Program Area 2:  Good Governance 
Program Element 2.2:  Public Sector Executive Function 
Program Sub-element 2.2.3:  Civil Service and Public 
Administration 
Funding Level:  $1,000,000 
 
b. Labor Inspectorates throughout the region suffer 
from institutional weakness; Guatemala is no 
exception.  In Guatemala, the Labor Inspectorate 
General oversees the enforcement of labor laws, 
administrative procedures, and sanctions.  Under the 
Labor Code, the Labor Inspectorate has initial 
jurisdiction over labor law violations and established 
procedures for processing complaints, making initial 
determinations, and mediating conflicts.  Labor 
inspectors may conduct random and complaint-driven 
workplace inspections to ensure compliance with 
regulations concerning the prohibition of child labor, 
maternity protections, workplace health and safety, 
and payment of wages.  The Labor Inspectorate is also 
authorized to intervene and assist in the resolution 
of labor disputes by offering conciliation services in 
collective bargaining matters. 
 
In an effort to expand its reach outside the capital, 
the Ministry of Labor decentralized its operations by 
establishing seven regional offices throughout the 
country.  Currently, Guatemala has less than 300 labor 
inspectors nationwide.  Employers and employees have 
voiced reservations concerning the Inspectorate?s 
professional capability, objectivity, and credibility. 
 
Given the Labor Inspectorate?s key role in the 
enforcement of labor laws and imposition of sanctions, 
it is essential to professionalize its labor 
inspectors and to raise the status of the 
Inspectorate, including its regional offices, as a 
governmental institution.  Post recommends a two-year 
training program for labor inspectors that would 
include basic tradecraft, legal principles, the Labor 
Code, ILO Conventions, mediation and conciliation 
techniques, leadership, and on-the-job training.  An 
optional third year would be university-based. 
Completion of each element of the training program 
would be a prerequisite for career advancement and a 
basis for performance review. 
 
Post also recommends a program to continue 
modernization and expansion of the Labor Inspectorate 
through electronic case management, strategic 
planning, and enhanced communications among its 
offices.  We suggest the establishment of a regional 
procurement fund for vehicles, IT equipment, mobile 
inspection units, and other necessary resources.  We 
also recommend reprinting and distributing copies of 
the up-to-date Labor Code to all labor inspectors, the 
Human Rights Ombudsman?s Office, labor advocates, the 
private sector, and academia to ensure that they have 
access to accurate and current information.  Although 
the Labor Code, along with frequently asked questions 
and answers, are available on a USG-funded website, 
disseminating hard copies of an accurate and current 
Labor Code to labor inspectors and labor advocates 
would help promote proper administration of justice in 
labor conflicts. 
 
While all Guatemalan government institutions are 
 
under-funded, the Ministry of Labor is traditionally 
one of the least supported.  Post recommends that 
technical assistance be provided to identify possible 
revenue sources, such as customs, export licensing 
fees, for the Ministry.  Technical assistance should 
also be provided to the Tripartite Commission to draft 
reform legislation. 
 
We also suggest raising the profile of the Labor 
Inspectorate by increasing the salary and number of 
labor inspectors and number of inspections; 
transferring and decentralizing the functions of the 
Prosecutor?s Office for the Defense of the Worker to 
the Inspectorate?s seven regional offices; and 
strengthening mediation and conciliation services 
through training workshops and courses in conflict 
resolution and negotiation, including workshops in 
coordination with the Judicial Branch?s School of 
Judicial Studies. 
 
c. Various USG projects have conducted training for 
labor inspectors, but there have been few efforts to 
systematize such training or create a series of 
specific incentives for career advancement.  Some IT 
support has been provided to the Guatemalan Labor 
Inspectorate in the past, but much more is needed to 
improve enforcement. 
 
d. The White Paper specifically cites the failure of 
Guatemala?s Labor Inspectorate to properly carry out 
its mandate, and the need for Labor Code reform.  The 
project will support enhanced trade through 
improvement in labor law enforcement, which in turn 
could help improve public perception of Guatemala?s 
business climate and increase direct foreign 
investment. 
 
e. Representatives of the Ministry of Labor, business 
associations, organized labor, and relevant NGOs have 
all expressed support for this concept.  Organized 
labor leaders have told us that technical support in 
drafting legislation is their greatest need. 
 
f. Projects already underway are meeting the initial 
recommendations of the White Paper but more assistance 
is needed in this critical area. 
 
g. As one of the few donors in the area of labor 
rights, the USG is highly visible and the GOG 
appreciative of our engagement.  This project will 
offer many opportunities for public diplomacy and 
outreach as we continue to engage with government 
officials to strengthen institutional capacity. 
 
Proposal 2:  Strengthening the Labor Court System to 
Enforce Existing Labor Laws 
 
a. Specific Objective:  governing justly and 
democratically 
 
Program Area 1:  Rule of Law and Human Rights 
Program Element 1.3:  Justice System 
Program Sub-element 1.3.2:  Operations of Institutions 
and Actors; 1.3.4:  Access to Justice 
Funding Level:  $700,000 
 
b. Guatemala?s labor court system suffers from a heavy 
case backlog due to insufficient resources and 
inefficient processing.  Guatemala has 28 labor courts 
(seven in Guatemala City and 21 located around the 
country) and nine civil courts that address labor 
issues as part of their jurisdiction.  Resolution of 
cases can take years, disadvantaging the workers who 
filed the complaints.  Although the labor courts 
usually rule in favor of the workers who seek redress, 
employers are known to appeal and re-appeal judicial 
decisions or to reincorporate as a different entity, 
often prolonging proceedings for years.  In addition, 
employers often do not comply with labor court 
decisions and are not always sanctioned for non- 
compliance. 
 
Post recommends a project to increase the number of 
 
labor courts, as well as civil courts that handle 
labor cases, and to streamline services to ensure 
greater public access to the labor justice system and 
prompt attention to labor conflicts.  Under a 
cooperative arrangement between the host government 
and USG, the government could provide vacant or 
underutilized space for new courts and create 
positions for new Labor Court judges, while the USG 
could provide the necessary equipment, 
telecommunications, and training.  The program could 
also fund construction of new courthouses or 
rehabilitation of existing structures, as needed. 
With regard to services, improving Clerk of Court 
services, creating a database to track cases and using 
information technology to streamline existing 
practices, and training judges to conduct an oral 
proceeding, which is mandated by the Guatemalan Labor 
Code but not practiced in the Labor Courts, would help 
expedite case processing. 
 
This project would strengthen the rule of law by 
improving the judiciary?s ability to enforce 
fundamental labor rights and providing workers with 
better access to the labor court system and services. 
This project would build on an ILO project, funded 
with FY05 CAFTA-DR appropriations, that is 
implementing a comprehensive, regional training 
program for judicial personnel on national labor laws, 
application of international labor standards, and case 
preparation and management.  Progress would be 
measured by year-end case statistics, including number 
of cases processed and investigated and number of 
fines imposed and collected. 
 
c. The USG has existing programs to promote 
oralization of court proceedings and other judicial 
reforms.  Those programs could be used to develop a 
program for the labor court system. 
 
d. The White Paper stresses the need to strengthen the 
judicial system to improve enforcement of labor laws. 
This project will support enhanced trade through 
investment in labor courts, judges and other 
personnel, and equipment; enhancement of operation of 
labor courts; and establishment of comprehensive labor 
standards training initiatives for judges, 
prosecutors, government officials and others involved 
in the administration of labor law. 
 
e. Representatives from the Ministry of Labor, 
organized labor, human rights groups, and private 
sector business associations have all expressed 
support for the concept. 
 
f. Implementation of a project to strengthen 
institutional capacity of the Ministry of Labor, 
approved for FY05 funding, has been delayed, while 
additional USG funds were allocated to the regional 
Cumple y Gana project. 
 
g. Lack of respect for the law is a persistent, 
critical problem affecting all sectors of society and 
a widely discussed issue in Guatemala.  Efforts to 
reform the Labor Court system and to improve access 
and services will provide opportunities for public 
diplomacy and outreach, as already demonstrated by our 
efforts to help improve Guatemala?s criminal court 
system, and promote bilateral relations. 
 
Proposal 3:  Eliminating Gender and Other Types of 
Discrimination 
 
a. Specific Objective:  governing justly and 
democratically 
 
Program Area 1:  Rule of Law and Human Rights 
Program Element 1.4:  Human Rights 
Program Sub-element 1.4.2:  Human Rights Systems and 
Policies 
Funding Level:  $120,000 
 
b. The Guatemalan Constitution guarantees equality of 
opportunity for men and women, providing for equal pay 
 
for equal work under equal conditions, efficiency, and 
seniority.  The Guatemalan Labor Code prohibits 
discrimination based on gender, but the ILO has drawn 
attention to the fact that it is not mentioned in 
Article 14, which prohibits discrimination based on 
race, religion, political creed, and economic status 
only.  For over a decade the ILO has requested that 
the government amend Article 14 of the Labor Code to 
bring it into conformity with ILO Convention 111 on 
Discrimination in Employment and Occupation.  In 
addition Guatemalan law does not prohibit sexual 
harassment, which is common in the workplace and among 
maquila workers and domestic workers. 
 
In practice, many women face job discrimination, 
receiving lower pay than men.  Pregnancy 
discrimination within the maquila sector, primarily in 
the re-hiring process, is not uncommon.  In some 
instances, women are required to answer questions 
about their pregnancy status on job applications and 
in interviews, and some even have to undergo physical 
examinations as a condition of employment.  A local 
NGO documented cases in which applicants had to sign 
documents that they would not have any more children 
as a condition of employment. 
 
Post suggests the following activities to address the 
problem of gender and other forms of discrimination in 
the workplace: 
 
-- effecting legislative reform, through consultations 
in the Tripartite forum and an area expert to lobby 
Congress, of all relevant sections of the Labor Code 
to include reference to gender and other forms of 
discrimination; 
-- enhancing the capacity of labor inspectors to 
detect, investigate, and prevent gender and other 
forms of discrimination, including discrimination 
against pregnant women, through legal instruction, 
workshops, public materials, messages through mass 
media, and instructive, guided visits to work sites; 
-- creating a monitoring system to detect, 
investigate, and prevent labor conflicts, such as 
disagreement over payment of wages, in the 
agricultural sector, particularly affecting indigenous 
populations.  This would require strengthening of the 
capacity of the Labor Ministry?s regional offices 
located in the interior of the country, as well as 
dissemination of information on labor rights in the 
various Mayan languages; 
-- strengthening the National Wage Commission by 
increasing the capacity of the members, conducting 
studies regarding the wage rate, etc. 
 
c. FY05-FY06 funds supported regional work in the 
textile and apparel industries, which hire a large 
proportion of female employees, as well as other 
sectors to reach a broad range of companies in the 
CAFTA-DR region to promote understanding of gender and 
other forms of discrimination and adherence to labor 
standards. 
 
d. The White Paper cited gender and other forms of 
discrimination as an area for improvement.  This 
project will support enhanced trade by focusing on 
women?s workplace issues and promoting elimination of 
employment discrimination and illegal practices, such 
as pregnancy testing. 
 
e. Representative of the Ministry of Labor, organized 
labor, and human rights groups all expressed support 
for this concept. 
 
f. While projects already underway are addressing this 
problem, more support is needed to reach a greater 
number of employers and employees. 
 
g. The overwhelming majority of maquila workers in 
Guatemala are women.  USG support to eliminate gender 
and other forms of discrimination in the maquila 
sector, one of Guatemala?s largest industry sectors, 
will provide many opportunities for public diplomacy 
and outreach. 
 
 
Project 4:  Promoting a Culture of Compliance with 
Labor Laws 
 
a. Specific Objectives:  governing justly and 
democratically 
 
Program Area 4:  Civil Society 
Program Element 4.1:  Civic Participation 
Program Sub-element 4.1.4:  Civic Participation and 
Democratic Culture; 4.1.5 Democratic Trade Unions 
Funding Level:  $500,000 
 
b. Communication and coordination among key 
stakeholders are crucial for promoting a culture of 
compliance with labor laws.  A facilitated dialogue 
through a tripartite approach, with representatives of 
government, business, and organized labor, has been an 
effective mechanism for education, creative problem 
solving, and consensus building on the best way to 
move forward to achieve improved labor standards and 
conditions, along with increased competitiveness and 
economic development. 
 
Essential elements of the approach include in-depth 
stakeholder assessments, skilled design and 
facilitation, mechanisms for on-going follow-up and 
discussion, broad participation, including the USG, 
international organizations, NGOs, and relevant 
international investors and business leaders.  Another 
essential element is the establishment of control 
mechanisms, such as collaborative steering committees, 
to build trust and mutual reliance among local 
stakeholders.  These committees would be led by local 
actors, but would include the participation of 
international actors to counter local power 
disparities and ensure long-term viability. 
 
In addition to the tripartite approach, engagement 
with the private sector, particularly the involvement 
of U.S. name brands, has reaped successes in improving 
labor rights in Guatemala.  Brands have made it clear 
to both organized labor and private sector apparel 
producers in Guatemala that internationally respected 
labor standards are as important as pricing and 
quality. 
 
This project would expand the national dialogue on 
labor rights and labor conditions through the 
tripartite approach, and establish a central point of 
contact to develop and monitor projects and activities 
in accordance with the recommendations of the White 
Paper and Labor Chapter of CAFTA-DR.  It would also 
aim to improve the level of public awareness, 
especially among employers and workers, regarding 
their rights, international norms, and local laws, 
through workshops, seminars, and mass media. 
 
A large-scale, multi-stakeholder effort should build 
on the experiences and activities of the Partnership 
to Eliminate Sweatshops (PESP), Global Fairness 
Initiative (GFI), Fair Labor Association (FLA), Cumply 
y Gana, and the Continuous Improvement for Central 
American Workers (CIMCAW) project.  The effort should 
include participation of the Labor Ministry, organized 
labor, private sector manufacturers, local and 
international NGOs, and international brands to 
address non-compliance with labor laws. 
 
This public/private partnership would not replace or 
replicate the role of the Labor Inspectorate as 
enforcer of the Labor Code, but would complement it by 
promoting workplace diagnostic tools and voluntary 
codes of conduct.  It would also promote information 
sharing among brands, including a clearinghouse of 
inspection reports and results available to other 
brands, labor leaders, and interested parties. 
Information sharing would create greater transparency, 
and thus improve compliance with labor laws. 
 
Another component of promoting a culture of compliance 
would be building the capacity of workers? 
organizations and unions to effectively ensure that 
 
workers rights are protected, workers interests are 
represented, and workers share in the economic and 
human rights benefits of the CAFTA and its labor 
provisions.  This project could focus on working with 
workers? organizations and labor unions to promote, 
achieve, and maintain a culture of compliance and 
enforcement of internationally recognized core labor 
standards. 
 
Programs in three core areas are critical to meeting 
these objectives: 
 
-- Programs to develop a new generation and cadre of 
labor rights advocates who are well versed in labor 
law, international conventions, CAFTA provisions, and 
other corporate and international instruments that can 
be utilized to improve the enforcement of labor laws 
and compliance with international labor standards. 
This cadre would include young people studying law who 
would in turn serve as resources to labor 
organizations and unions to educate elected leaders, 
shop-level stewards, and general workers on these 
subjects.  The idea would be not just to impart 
knowledge but to build the skills and competencies at 
all levels of the labor movement to be able to utilize 
the knowledge to effect change and a culture of 
compliance. 
 
-- Programs that educate workers and shop stewards on 
workers? rights, international conventions, corporate 
policies and codes of conduct related to labor 
practices, as well as build and maintain democratic, 
representative, transparent, independent, and 
autonomous worker organizations. 
 
-- Programs that strengthen labor organizations and 
build their institutional capacities to become 
effective labor relations practitioners (with 
employers, industry associations, corporate clients, 
governmental and state authorities, and international 
bodies), advocates for fair and balanced economic, 
social, and labor policies, and active and informed 
participants in the economic and political development 
envisioned under CAFTA.  It is insufficient to simply 
educate workers and workers? organizations and unions 
and to build democratic and transparent workers? 
organizations and unions.  There need to be programs 
to support legitimate workers? organizations and labor 
unions to defend their rights and pursue their legal 
cases related to violations and grievances, and to 
organize and collectively represent workers. 
 
Post envisions that for such programs and efforts to 
be effectively implemented and for the labor 
organizations and union structures to be built, 
rebuilt, and/or modernized to the point where they 
become effective and sustainable, labor rights, labor 
relations, and labor compliance entities will require 
sustained support and resources for a period of 
approximately 5 years. 
 
Progress in promoting a culture of compliance would be 
measured against ILO?s benchmark index. 
 
c. The extent of the public/private partnership is 
new, but it is related to previous USG-funded efforts 
of PESP, GFI, FLA, and CIMCAW.  The tripartite 
approach would be a continuation of an on-going 
project, while systemic development of a new 
generation of labor leaders and advocates and capacity 
building of workers? organizations and unions would be 
a new project. 
 
d. The White Paper cites lack of a culture of 
compliance with labor laws as a key area for 
improvement.  This project would support enhanced 
trade by promoting public awareness of labor rights; 
strengthening the tripartite commission; and 
developing benchmarks to measure and assess progress 
in improving the implementation of national labor laws 
consistent with internationally recognized labor 
standards. 
 
e. Representatives from the Ministry of Labor, 
Congress, organized labor, human rights groups, U.S. 
brands, and private sector employer associations have 
expressed support for this project. 
 
f. DOL-funded Cumply y Gana project has been effective 
in addressing the initial recommendations of the White 
Paper.  The government has not been able to evaluate 
ILO?s benchmarking project as it only just recently 
started. 
 
g. Multi-stakeholder activities, especially including 
U.S. name brands, receive much publicity in Guatemala. 
This project would offer ample opportunities to press 
USG interests to a broad range of actors and to 
address the public to promote greater compliance with 
labor laws. 
 
ENVIRONMENTAL ACTIVITIES 
------------------------ 
 
Project 1:  Institutional Strengthening for Effective 
Implementation and Enforcement of Environmental Laws 
 
a. Specific Objective 4:  Economic Growth 
 
Program Area 4.8:  Environment 
Program Element 4.8.1:  Natural Resources and 
Biodiversity 
Program Sub-element 4.8.1.1:  Natural Resources Policy 
and Governance 
Funding Level:  $2.545 million 
 
b. Purpose:  This activity will strengthen the ability 
of Guatemala to develop and implement sound 
environmental regulations and effectively enforce 
existing environmental legislation.  This also meets a 
priority identified by the ECA work plan and the 
CAFTA-DR agreement. 
 
While the challenge of meeting obligations under 
CAFTA-DR falls primarily on the national signatory 
governments, a regional approach is also being 
proposed to harmonize legislation to reduce trade 
barriers brought about by different standards and 
systems. 
 
Existing institutions responsible for effective 
enforcement are weak for several reasons.  The lack of 
human and financial resources, as well as authority to 
enforce laws, has resulted in low credibility and 
visibility of these institutions.  The proposed 
projects will address these issues through encouraging 
the development of human capital and increased 
capacity to enforce existing and new regulations. 
Follow-on activities in FY08, FY09, and FY10 will 
contribute to the strengthening of these institutions. 
 
Description: 
 
-- Improve and harmonize laws, regulations, norms and 
environmental procedures ($350,000) 
 
-- Draft a regulation for fixed point sources 
emission standards. 
-- Elaborate a solid waste management and 
disposal law. 
-- Elaborate policy, regulations and strategies 
for mining and environmental guidelines. 
-- Review and revise the regulations for the 
electricity sector (Law on Incentives for 
Renewable Energy and Energy Efficiency). 
-- Prepare regulations on procedures for 
voluntary environmental compliance agreements. 
-- Review, update and disseminate the Bio-safety 
Law. 
      -- Develop regulations for non-ionic radiation. 
-- Implement system of performance bonds and 
environmental insurance. 
-- Develop rules and procedures for payments for 
environmental services. 
-- Standardize forestry management procedures 
among the pertinent institutions. 
 
 
Expected Results:  These activities will help the GOG 
develop the needed legal framework to fill existing 
legal and enforcement gaps.  Work will focus on 
priority sectors identified by the GOG. 
 
-- Improve Environmental Law Enforcement ($580,000) 
 
-- Train personnel in charge of the effective 
application of environmental regulations 
(administrative, civil and penal) and in carrying 
out environmental audits in different sectors. 
-- Promote the adoption and use of environmental 
monitoring, inspection and evaluation instruments, 
and procedures and protocols by the Ministry of 
Environment and other entities in charge of 
environmental compliance, including mechanisms to 
ensure that a proper chain of custody is maintained 
in collecting environmental evidence. 
-- Develop a national strategy for compliance with 
environmental legislation in priority sectors. 
-- Procure monitoring equipment for national 
agencies charged with overseeing environmental 
compliance with a focus on water. 
-- Strengthen the government?s capacity to undertake 
integrated watershed management and implement 
regulations regarding residual water discharge and 
re-use, and sediment deposition.  Develop and 
distribute manuals on water resource management in 
Spanish and Mayan languages ($80,000). 
 
Expected Results:  This activity will institutionalize 
a training program to strengthen the capacity of 
enforcement authorities to effectively prosecute 
environmental crimes. 
 
-- Compliance promotion, auditing, and environmental 
management systems (EMS) ($225,000) 
 
-- Develop and implement a registration and 
certification system for environmental service 
providers. 
-- Develop guides and operating manuals to improve 
EMS. 
-- Promote the adoption of EMS and voluntary 
agreements by the private sector to improve 
environmental compliance. 
-- Produce radio spots to increase awareness and 
understanding of integrated watershed use and 
management and water regulations. 
 
Expected Results:  EMS was identified as a priority 
for all CAFTA-DR countries at the March 2007 meeting 
in El Salvador.  USAID will ensure that environmental 
auditors are trained and registered, and that the 
standards are uniform throughout the region.  The 
activity will also result in better public awareness 
of state-of-the-art EMS. 
 
-- Strengthen Environmental Impact Assessment (EIA) 
Review and the evaluation process for permitting 
decisions ($245,000) 
 
-- Training for municipal personnel in environmental 
management. 
-- Develop capacity in application of best 
management practices, environmental guidelines, and 
mitigation measures for ministries involved in 
economic development. 
-- Develop and disseminate technical environmental 
guidelines for EIAs among the private sector and 
local governments. 
 
Expected Result:  Increased capacity for local and 
national personnel to evaluate environmental impacts, 
develop and implement mitigation measures, and monitor 
effectiveness of these measures. 
 
-- Strengthen the capacity to manage hazardous 
materials ($75,000) 
 
-- Develop a manual of procedures and technical 
guidelines for the handling of chemicals and 
 
hazardous materials. 
-- Train customs agents in the handling and 
management of hazardous materials. 
-- Explore options for the creation of a national 
information system of tracking chemicals and 
hazardous materials. 
-- Begin to develop a database to register importers 
and exporters of chemicals and hazardous materials. 
 
Expected Results:  In FY2007, officials responsible 
for the monitoring and management of hazardous 
materials will be better equipped to work across 
boundaries with their counterparts and protect the 
environment from mishandling of these materials. 
 
-- Pollution Release and Transfer Registry (PRTR) 
($50,000) 
 
Expected Result:  Increase utilization of release 
information to evaluate cumulative effects of 
pollution and trans-boundary impacts. 
 
-- Establish an inventory and atmospheric emissions 
model ($20,000) 
 
Expected Result:  Increased utilization of monitoring 
stations in Guatemala, and an air quality index 
approach for air quality forecasting applied 
regionally. 
 
-- Support for CAFTA-DR environmental unit to receive 
inputs from civil society on trade and environmental 
issues.  ($200,000) 
 
-- Strengthen the CAFTA-DR environment unit and help 
establish administrative links between offices of 
trade and environment (MINECO, MEM, MPS, MARN, MAGA, 
CONAP) and the secretariat for environmental matters 
installed under SIECA. 
-- Public outreach and education on the environment 
provisions of CAFTA-DR, the Environment Secretariat, 
and the ECA. 
-- Finalize and implement an operational manual for 
the receipt and investigation of public 
environmental complaints submitted to the 
environmental unit of MARN. 
-- Design and implement a tracking system for 
citizen complaints and design a mechanism to 
allocate funds to pay for environmental damages, 
including penalties. 
 
Expected Result:  Build national capacity to respond 
to citizen complaints. 
 
-- Develop and enhance NGO participation in 
environmental matters and trade ($50,000) 
 
-- Develop and implement procedures for public 
participation in environmental matters. 
 
Expected result:  Increased participation by civil 
society in environmental decision-making. 
 
-- University Environmental Partnerships ($350,000) 
 
-- Establish an official link between academic and 
environmental sectors (public and private) through 
university partnerships. 
 
Expected result:  Environmental science, engineering, 
and law curricula are strengthened at leading 
universities in Guatemala. 
 
-- Strengthen the capacity for analysis and equipment 
in environmental laboratories. ($400,000) 
 
-- Strengthen the equipment in and capacity for 
mobile environmental laboratories to accurately 
monitor environmental quality and make the 
information available on SIAM. 
-- Support analytical laboratories in obtaining ISO 
17025 certification. 
 
Expected Result:  Enhanced ability for environmental 
auditors to provide much needed monitoring services to 
the private and public sectors in accordance with 
international standards of performance. 
 
c. Pipeline/Mortgage data:  FY06 $250,000 pipeline for 
policy-related work through ABT Associates from FY2006 
funds.  Expect continued work through this mechanism 
and a regionally focused mechanism for policy 
harmonization. 
 
d. Linkage to ECA/enhanced trade:  The projects 
address the core obligations set out in Articles 17.1, 
17.2, and 17.3 of CAFTA-DR, and the countries? top 
priority in the ECA work plan:  strengthening each 
Party?s environmental management systems, including 
strengthening institutional and legal frameworks.  In 
their communications to the State Department, CAFTA-DR 
environment ministries specifically requested 
assistance in improving environmental regulations, 
rules, and procedures. 
 
e. Local buy-in:  All of these project proposals were 
vetted through the Environment and Economy Ministers, 
in charge of implementing Chapter 17 of CAFTA-DR. 
Additionally, local authorities involved in receiving 
this assistance stand ready to implement these 
projects. 
 
The CAFTA-DR countries have indicated their interest 
in strengthening their capacities to manage hazardous 
substances and materials and with respect to risk 
assessment, risk management, and risk communication in 
the ECA Work Plan.  Individual countries have also 
indicated interest with their participation in the 
ongoing training program for safe pesticide use. 
 
f. Policy-related work through ABT Associates with 
FY06 funds is ongoing. 
 
g. Public diplomacy/outreach strategies for project: 
Public consultations will be woven into every phase of 
this activity, providing ample opportunity to engage 
the Central American public and increase their 
appreciation of the U.S. Government?s commitment to 
assist the region in improving its environmental laws 
and regulations and their implementation as a key 
component of a well-governed trading partner.  The 
project will also promote the results of the new laws 
and regulations together with organizations and 
companies that participated in the consultative 
process. 
 
Project 2:  Enhancing Biodiversity and Conservation 
 
a. Specific Objective 4:  Economic Growth 
 
Program Area 4.8:  Environment 
Program Element 4.8.1:  Natural Resources and 
Biodiversity 
Program Sub-element 4.8.1.3:  Biodiversity Policy and 
Governance 
Funding Level:  $590,000 
 
b. Purpose:  This activity will help countries comply 
with multilateral environmental agreements (MEAs) as a 
requirement under Chapter 17 of CAFTA-DR.  The 
authorities in charge of complying with and reporting 
on MEAs have been historically weak, and monitoring 
systems are not in place to support the reporting 
requirements under the MEAs. 
 
This activity also addresses the threat to biological 
diversity from invasive specie introductions as a 
result of increased trade across borders and within 
regions.  It is critical that this threat is addressed 
in the early stages of CAFTA-DR to ensure that 
irreversible environmental damage does not occur. 
 
Description: 
 
-- Improve protection and conservation of fauna and 
flora listed under CITES ($430,000) 
 
 
-- Design and create a wildlife rescue center. 
-- Officially designate ports of entry and exit for 
CITES. 
-- Build capacity among customs agents in taxonomic 
identification of CITES species. 
-- Strengthen the capacity of scientific authorities 
to conduct studies of species of flora and fauna 
under CITES and to document their results. 
-- Create a biodiversity conservation incentive fund 
to help promote incentives for biodiversity 
projects. 
-- Build capacity and public knowledge regarding the 
application of CITES. 
-- Develop and implement a strategy to control 
illegal logging and trafficking in wildlife from 
protected areas. 
 
Expected Result:  Intra-governmental mechanisms in 
place for effective enforcement of CITES. 
 
-- Improve fishing regulations and implementation to 
reduce incidental catch of sea turtles and other non- 
target species. ($100,000) 
 
-- Purchase equipment and train officials in its 
proper use to reduce incidental in-take of marine 
turtles in the fishing industry. 
 
Expected Result:  Reduced incidental catch of sea 
turtles due to fishing. 
 
-- Identify trends in invasive aquatic species related 
to trade and develop measures for reducing this threat 
($60,000) 
 
-- Develop and implement contingency plans to 
control exotic species in protected areas. 
-- Develop and implement a contingency plan for 
eutrophication impacts on aquatic systems. 
 
Expected result:  Reduced threat from aquatic invasive 
species in key watersheds and wetlands. 
 
c. Pipeline/Mortgage data:  FY2006 $200,000 support 
for CCAD Cooperative Agreement to implement regionally 
focused activities.  Expect to continue this 
mechanism. 
 
d. Linkage to ECA/enhanced trade:  The activities 
support key Central American priorities expressed in 
several sections of the ECA work program.  For 
example, they support section 1.1.3 (capacity of 
authorities in charge of natural resource protection); 
1.1.8 (private sector ability to comply with 
environmental legislation); 1.2 (public 
participation); 3.1 (compliance with voluntary 
standards; mechanisms that facilitate voluntary action 
to protect the environment); and 3.3 (capacity of the 
region to produce and trade in environmental goods and 
services).  The export of shrimp to the U.S. depends 
on compliance with U.S. requirements for turtle-safe 
shrimping. 
 
e. Local buy-in:  The project is a top priority for 
the region per ECA Work Program Section 1.1.3. 
?Strengthening the capacity of authorities in charge 
of environmental protection, natural resource 
protection, and pollution control and prevention.? 
All project activities have been proposed in 
consultation with host governments, NGOs, and local 
partners. 
 
f. Under a FY06-funded CCAD Cooperative Agreement, 
regionally focused activities are ongoing. 
 
g.  Public diplomacy/outreach strategies:  Focus on 
public participation, improving environmental 
decision-making and strengthening of civil society, 
promotes respect and attention to critical wildlife 
and habitat destruction. This would sensitize 
residents to the long-term loss versus the short-term 
gain. 
 
 
Proposal 3:  Promoting Market-based Conservation 
 
a. Specific Objective 4:  Economic Growth 
 
Program Element 4.8.1:  Natural Resources and 
Biodiversity 
Program Sub-element 4.8.1.2:  Sustainable Natural 
Resources Management and Production 
Funding level:  $325,000 
 
b. Purpose:  The activity supports the strong 
connection between adequate incomes and conservation. 
When incomes are generated by natural resource values, 
those values are more likely to be conserved for 
future generations.  Recognizing the potential for 
tourism and non-traditional natural products, this 
activity will lead to expanded market incentives for 
improved natural resource management. 
 
Description: 
 
-- Develop sustainable tourism and alternative income 
sources. ($75,000) 
 
-- Develop and disseminate materials to promote best 
practices in infrastructure, service and 
documentation focused on community-based tourism. 
-- Increase the application of clean production 
mechanisms in the tourism sector. 
 
Expected result:  Improved environmental management in 
the tourism sector. 
 
-- Facilitate marketing of sustainably managed 
agricultural and forestry products. ($250,000) 
 
-- Increase the number of hectares of sustainably 
managed forest by 220 hectares. 
-- Promote the export of environmentally friendly 
goods and services through new niche markets. 
 
Expected result:  Increased income in the agriculture 
and forestry sector based on sound environmental 
management. 
 
c. Pipeline/Mortgage data:  $200,000 FY06 funds in 
pipeline for forestry enterprises through Rainforest 
Alliance, $175,000 for tourism activities through 
Counterpart International.  Expect to continue with 
these mechanisms. 
 
d. Linkage to ECA/enhanced trade:  This activity 
specifically addresses Section 3.2.2 of the ECA work 
plan which calls for assistance to ?[p]romote 
alternative livelihoods based on sustainable resource 
use for communities within and near protected areas.? 
It also addresses ECA Work Plan Section 1.3.3 ?Develop 
programs and projects to provide economic instruments 
to protect wildlife at the regional and national 
levels,? and Section 3.3.3 ?Promote and implement 
market schemes for environmental services.?  This 
proposal was also shared with, and endorsed by, CCAD. 
 
e. Local buy-in:  These activities and the mechanism 
for implementation were developed in cooperation with 
DR-CAFTA focal points, and are based on GOG priorities 
for economic development under the regular USAID 
assistance program. 
 
f.  FY06-funded projects through Rainforest Alliance 
and Counterpart International are ongoing. 
 
g. Public diplomacy/outreach strategies:  The 
activities described here represent some of the most 
visible and valued USG investments in the region. 
They comprise an array of economic growth activities 
that promote conservation, while simultaneously using 
local economic development to conserve biodiversity. 
Moreover, by working directly with communities around 
protected areas, USAID can positively influence the 
livelihoods of thousands of individuals and 
demonstrate that free-trade agreements, environmental 
 
progress, and income growth for the poor are not 
incompatible. 
 
Project 4:  Improving Private Sector Environmental 
Performance 
 
a. Specific Objective 4:  Economic Growth 
 
Program Element 4.8.1:  Natural Resources and 
Biodiversity 
Program Sub-element 4.8.1.2:  Sustainable Natural 
Resources Management and Production 
Funding Level:  $650,000 
 
b. Purpose:  This activity will improve the private 
sector?s environmental performance and competitiveness 
by providing services and incentives for adopting 
clean production technologies in their production 
processes.  USAID will spearhead public/private 
partnerships to leverage private sector resources for 
cleaner production innovations. 
 
Description: 
 
-- Promote the competitiveness and compliance of 
industries employing clean production practices 
($400,000) 
 
-- Publicize the Policy for Cleaner Production. 
-- Institutional strengthening (administrative, 
technical, operational) for the Clean Production 
Center of Guatemala. 
-- Develop technical guidelines for voluntary 
agreements in clean production. 
-- Promote public-private partnerships and voluntary 
agreements to improve environmental compliance and 
promote cleaner production and energy efficiency. 
 
-- Mobilize financing for clean production and clean 
energy initiatives and support for these practices 
($225,000) 
 
-- Establish networks and associations between CAFTA- 
DR companies and U.S. companies to promote compliance 
with environmental laws and practices ($25,000) 
 
Expected results:  Net reduction in energy consumption 
and expenditures.  Net reduction in waste water 
generation and improved solid waste management through 
the more efficient use of inputs.  Civil society 
better informed about the economic values of clean 
production. 
 
c. Pipeline/Mortgage data:  These activities will 
likely be implemented through Cooperative Agreement 
with CCAD. 
 
d. Linkage to ECA/enhanced trade:  This activity 
directly supports one of the top priorities of the ECA 
work plan set out in Section 1.1.9 ?Strengthen the 
private sector?s ability to comply with environmental 
legislation and promote . . . [the] application of 
best practices and cleaner production.?  It also 
addresses Section 4 ?Promote cleaner production 
schemes in productive processes and export products 
and services within the region.? 
 
e. Local buy-in:  Ministries of Environment and 
Economy have consulted with private sector firms on 
how to develop voluntary incentives for cleaner 
production and energy efficiency.  The private sector 
has expressed interest in support these initiatives. 
Key sectors will be identified by public/private 
consultations.  Additionally, this is a regionally 
based policy, and Guatemala is ready to submit terms 
of reference and work plans for the Clean Production 
Center. 
 
f.  This is a new project that will build on ongoing 
projects. 
 
g. Public diplomacy/outreach strategies:  In addition 
to addressing core objectives of the CAFTA-DR work 
 
program, mobilizing financing for energy efficiency 
and renewable energy projects supports the priorities 
identified in the NSC-led Western Hemisphere Energy 
Near-Term Action Plan by improving energy production, 
diversifying fuels, and improving energy efficiency. 
More broadly, this effort can be a key example during 
the 2005-2007 Energy Cycle of the UN Commission on 
Sustainable Development, underscoring the USG?s 
commitment to delivering results and to mobilizing 
private sector financing for delivery of modern energy 
services.  The project will work with E+Co to ensure 
that successful clean energy initiatives financed with 
U.S. support are fully publicized.  U.S. Embassy 
Public Affairs Section will be involved in developing 
an outreach and press strategy for the project. 
 
DERHAM