VZCZCXYZ0016
RR RUEHWEB

DE RUEHSN #0892/01 1292301
ZNR UUUUU ZZH
R 092301Z MAY 07
FM AMEMBASSY SAN SALVADOR
TO RUEHC/SECSTATE WASHDC 6220
RUEHGT/AMEMBASSY GUATEMALA 4889
RUEHMU/AMEMBASSY MANAGUA 2207
RUEHSJ/AMEMBASSY SAN JOSE 3660
RUEHDG/AMEMBASSY SANTO DOMINGO 0694
RUEHTG/AMEMBASSY TEGUCIGALPA 0833

UNCLAS SAN SALVADOR 000892 
 
SIPDIS 
 
SIPDIS 
 
FOR: JANE RICHARDS, DEPT. OF LABOR, DAVID JESSEE, USAID/LAC/RSD, 
AARON ROSENBERG, USTR LABOR, MIKE PUCCETTI, WHA/PPC, AND GABRIELLA 
RIGG, DRL/IL 
 
E.O. 12958 N/A 
TAGS: EAID ELAB ETRD SENV ES CAFTA
SUBJECT:  REGIONAL PROJECT RECOMMENDATIONS FOR USE OF FY 2007 
CAFTA-DR LABOR FUNDS. 
 
REF: SECSTATE 0037718 
 
REGIONAL PRIORITIES FOR LABOR PROJECTS THAT SUPPORT 
CAFTA-DR IMPLEMENTATION 
¶1. Summary: As requested in reftel, the USAID Central America 
Regional Program based in El Salvador (E-CAM), in close consultation 
with posts in region, is providing recommended regional priorities 
for CAFTA-DR labor activities for FY 2007.  The proposals described 
here build upon priorities identified in the White Paper, in the 
Labor Justice Assessment of the CAFTA-DR Countries, and extensive 
consultations throughout the region.  The proposals presented here 
also build upon work underway with FY 2005 and FY 2006 funds.  As 
requested in reftel, multi-year funding requirements are included 
where appropriate.  Proposed activities are: 
 
-- Region-wide training and technical assistance to public 
defenders and human rights ombudsmen:  $1 million in 
FY07, $1 million in FY08 
-- Region-wide grants to promote civil society engagement 
with the judiciary: $1 million in FY07, $500,000 in FY08 
-- Region-wide study and NGO grants to reduce gender, racial and 
other forms of discrimination in the judicial   system: $1 million 
in FY07, $500,000 in FY08 
-- Region-wide reduction in unfair labor practices associated with 
migrant workers: $1.5 million in FY07, $500,000 in FY08 
-- Region-wide alliances to improve company-based initiatives to 
increase labor and environmental standards:  $2.5 million in FY07, 
$5 million in FY08, $2.5 million in FY09 
-- Region-wide training interest-based bargaining techniques: 
$500,000 in FY07 
-- All of these initiatives can be started quickly by using USAID 
contracts and grants already in place. 
 
End Summary. 
 
¶2.  Post has engaged in an ongoing consultative process on key labor 
trade capacity needs in El Salvador and the region for FY 2007 and 
beyond.  This process consisted of consultations with governments, 
regional integration institutions, the private sector, and a broad 
range of civil society organizations to identify priority needs. 
Post participates in the semi-annual meetings of the Council of 
Labor Ministers in Central America, and due to Post's management of 
many of the labor programs funded with FY05 and FY06 CAFTA-DR labor 
trade capacity building funds, Post maintains a strong working 
relationship with the labor ministries, courts, business and labor 
groups, and other concerned parties in El Salvador and the region. 
In addition, Post continues to rely on the White Paper as the 
foundational document expressing the priority labor needs in the 
region, and the USAID Labor Justice Assessment of the CAFTA-DR 
Countries as a prime source for elaborating approaches to address 
the region's greatest needs. 
 
¶3. The proposals presented here reflect priorities of the Central 
American governments on key regional projects necessary to help them 
meet CAFTA-DR labor provisions.  More detailed description of the 
project proposals follow: 
 
¶4. Proposal 1: Training and technical assistance to public defense 
and legal assistance providers. 
WHITE PAPER PRIORITY AREA:  Administration of Labor Justice 
 
A) OBJECTIVE/ELEMENT/SUB-ELEMENT AND FUNDING: 
Economic Growth 
¶6. Private Sector Competitiveness 
6.1 Business Enabling Environment 
6.1.2 Business and organizations 
 
$1 million of FY07 funds is requested for this activity, and an 
additional $1 million will be needed in FY08. 
 
B) DESCRIPTION AND OUTCOMES: 
The purpose of this activity is to strengthen the capacity of public 
institutions that provide free legal counsel and facilitate access 
to justice for the poor and  disenfranchised.  A key finding of the 
USAID Labor Justice Assessment of the CAFTA-DR Countries was the 
need to strengthen the Public Defender's Office, finding that these 
functions were not well equipped to guarantee workers effective 
legal representation before the judicial process.  More attorneys 
need to be assigned to this function and training should be 
conducted in labor law, judicial procedures, and oral processes. 
The institutions with primary responsibility for the public defender 
function vary by country.  The Regional Assessment identified public 
defender units in the Labor Ministries of Honduras and Nicaragua to 
be in particular need of support.  In El Salvador, the Procuraduria 
 
General de la Republica is a strong, independent institution well 
respected for its integrity and professionalism, although its 
capacity specifically in labor cases is not well developed. The 
Human Rights Ombudsman in Guatemala has proposed utilizing its ample 
regional network to counsel workers on their rights and how to enter 
the judicial system with legitimate complaints.  Legal aid offices 
can also serve as a screen, identifying and developing legitimate 
claims, while counseling workers on other means to redress 
grievances such as mediation when cases lack legal basis, thereby 
easing the burden on the judicial system. 
 
Expected Results: 
-- Increased capacity in the public defenders offices and other 
legal assistance bodies to represent clients on labor cases and 
provide support for alternative dispute resolution as appropriate 
-- Increased access to justice outside capital cities and in the 
informal economy 
-- Reduced burden on the judiciary 
 
Specific Activities: 
¶1. Provide labor law training to public defenders and other public 
legal assistance offices.  These organizations are key for enabling 
disadvantaged clients who lack information on how to enter a claim 
in the judicial system and lack the resources to secure private 
legal counsel.  Effective training is needed to build lasting 
capacity in labor law and procedures. Support will also examine 
legal/regulatory barriers to effective alternative dispute 
resolution, and possible remedies, where public defenders and legal 
assistance offices are position to provide these services. 
 
¶2. Improve operations especially outside capital cities.  In 
addition to legal training, assistance will support staff training 
on best management practices such as: developing procedure manuals, 
case management, staff personnel qualifications, oversight 
mechanisms, how the unit functions, quality registries, 
record-keeping, utilization of statistics and indicators for 
planning, follow-up and evaluation.  The goal will be to provide 
sustainable access to justice to a broader segment of the 
population. 
 
Illustrative indicators 
-- Number of cases of disadvantaged groups assisted by 
public defenders and legal assistance organizations 
-- Number of staff trained 
-- Pre- and post-test scores to evaluate competency of public 
defenders and legal assistance staff in labor law and procedures 
-- Progress on institutional strengthening milestones 
 
Relationship to FY2005 - FY2006 CAFTA-DR Funding 
Previous year's funding has been provided to USAID and USDOL/ILO for 
the Administration of Labor Justice, including labor rights training 
and conciliation.  The focus of these projects is on electronic 
management systems, raising personnel standards, streamlining 
judicial procedures, and providing training on international labor 
rights.  Support for public defenders and legal assistance will 
complement these judicial strengthening efforts by improving the 
quality of cases presented to the courts and increasing access to 
justice. 
 
C) PIPELINE/MORTGAGE AND IMPLEMENTATION MECHANISM: 
No funds have been expended on assisting public defenders and other 
legal assistance offices.  A simple amendment to the contract could 
expedite support to these entities, avoiding the delays of a new 
procurement. 
 
D) LINKAGE TO THE WHITE PAPER AND TRADE: 
The White Paper establishes the priority of establishing 
comprehensive labor standards training for government officials 
involved in labor law administration, which would include public 
defenders and other legal assistance bodies.  To the extent that 
these bodies would be supported for alternative dispute resolution, 
this too would reflect a White Paper Priority.  The project supports 
enhanced trade by contributing to improved labor conditions, a key 
element of the region's competitiveness, and a requirement under 
CAFTA-DR. 
 
E) LOCAL BUY-IN: 
The USAID Labor Justice Assessment consulted a variety of 
stakeholders throughout the CAFTA-DR countries in identifying an 
interest in supporting public defenders and legal assistance 
offices.  USG field staff in the Dominican Republic, El Salvador, 
Guatemala, and Honduras similarly have found interest in this area 
among key host government stakeholders, and further interviews could 
vet the idea in Nicaragua and Costa Rica as well. 
 
 
F) STATUS OF PROGRESS TO DATE: 
No assistance has been provided to public defenders and legal 
assistance organizations in area of labor law to date. 
 
G) PUBLIC DIPLOMACY: 
Activities described represent a high profile partnership between 
the U.S. Government and the governments of the region in modernizing 
and strengthening their capacity-building systems in labor law and 
administration, giving the Ministries of Labor the tools to improve 
access to labor justice and increase compliance with the law.  They 
demonstrate that government commitments made during the CAFTA-DR 
process to improve labor conditions are serious.  These activities, 
therefore, will boost U.S. credibility in the region significantly. 
 
¶5.  Proposal 2: Grants to promote civil society engagement with the 
judiciary. 
WHITE PAPER PRIORITY AREA:  Administration of Labor Justice 
 
A) OBJECTIVE/ELEMENT/SUB-ELEMENT AND FUNDING: 
Economic Growth 
¶6. Private Sector Competitiveness 
6.1 Business Enabling Environment 
6.1.2 Business and organizations 
 
$1 million of FY07 funds and an additional $500,000 in FY08. 
 
B) DESCRIPTION AND OUTCOMES: 
The purpose of this activity is to engage civil society in labor 
justice strengthening efforts, ensuring that activities respond to 
public concerns, and building public confidence in the judiciary. 
Existing efforts to strengthen the administration of labor justice 
have dedicated resources primarily to assist government 
organizations.  A key feature of the USAID Strengthening Labor 
Justice activity is to create Implementation Advisory Panels, 
drawing together input from a broad range of stakeholders to define 
needs and priorities, and monitor progress.  With additional grant 
support, a broad range of civil society organizations, including bar 
associations, labor and business organizations, independent judicial 
monitoring NGOs, universities, think tanks, advocacy groups for 
women and other disadvantaged groups, human rights groups, and other 
organizations could be supported to develop proposals for 
strengthening the administration of labor justice, monitor progress, 
and make information on judicial performance publicly available.  In 
selected cases, grants also would support training and capacity 
building activities for the labor judiciary and/or the broader legal 
community related to labor law and procedures. 
 
Expected Results: 
-- Increased transparency and accountability in the labor judiciary 
-- Increased public knowledge of and confidence in the labor 
judiciary 
 
Specific Activities: 
¶1. Develop policy proposals for strengthening labor justice.  Civil 
society organizations can provide independent policy expertise, as 
well as channeling grievances into constructive policy proposals 
from a broad spectrum of users of judiciary services.  Grant support 
would strengthen civil society's ability to articulate proposals 
based on sound legal and policy analysis, surveys, focus groups, and 
other methodologies. 
 
¶2. Monitor and publicize judicial performance.  Civil society 
organizations will be trained to review case statistics and 
judgments, track institutional reforms in the labor justice system, 
collect and channel complaints, and publicize results. 
 
¶3. Implement training and capacity building.  A variety of 
professional and educational organizations will be supported to 
train legal practitioners in labor law and procedures.  Grant 
support to sustainable institutions would be a valuable complement 
to existing technical assistance efforts, and would help increase 
scale rapidly and efficiently. 
 
Illustrative indicators 
-- Number of sound policy proposals proposed by civil society groups 
adopted 
-- Public understanding and evaluation of judicial performance, as 
measured by surveys 
-- Number of labor law practitioners trained 
 
Relationship to FY2005 - FY2006 CAFTA-DR Funding 
Previous year's funding has been provided to USAID and USDOL/ILO for 
the Administration of Labor Justice, including labor rights training 
 
and conciliation.  The focus of these projects is on electronic 
management systems, raising personnel standards, streamlining 
judicial procedures, and providing training on international labor 
rights.  These efforts focus primarily on the courts and do not 
include funding to support civil society organizations to play a 
more active role in policy development, monitoring and evaluation, 
and capacity building. 
 
C) PIPELINE/MORTGAGE AND IMPLEMENTATION MECHANISM: 
Efforts by USAID and USDOL/ILO to strengthen labor justice, launched 
in the past couple of months, do not now have funding for NGO 
support.  Nevertheless, now that these mechanisms are up and 
running, a simple amendment to the contract could add grant support 
to NGOs.  Alternatively, bilateral Missions may want to manage this 
directly.  Either approach could rapidly disburse funds to civil 
society organizations. 
 
D) LINKAGE TO THE WHITE PAPER AND TRADE: 
The White Paper establishes the administration of labor justice and 
a culture of compliance, including training stakeholders and 
strengthening tripartite councils, as priorities.  The proposed 
activity would link these, using civil society input to guide and 
monitor labor justice efforts, and expanding public education beyond 
tripartite bodies to academic institutions, good governance NGOs, 
advocacy groups for women, minorities, and other disadvantaged 
groups, and other civil society actors.  Enhanced trade is suported 
by contributing to improved labor conditios, a key element of the 
region's competitiveness and a CAFTA-DR requirement 
 
E) LOCAL BUY-IN: 
ivil society organizations have played an active rle in judicial 
reform efforts over at least the pst decade in Central America, and 
many of the sae organizations could play an active and useful roe 
in new labor justice initiatives.  The USG hasbeen contacted by a 
variety of civil society organizations interested in participating 
in labor justice efforts. 
 
F) STATUS OF PROGRESS TO DATE: 
The Supreme Court Presidents of the regional have all embraced the 
objectives of the USG-supported effort to strengthen labor justice 
in the region.  Civil society groups are being consulted in 
stakeholder meetings related to these activities, but no grant 
assistance has been provided to date. 
 
G) PUBLIC DIPLOMACY: 
U.S. Government support to civil society organizations to engage 
with the judiciary is likely to attract substantial attention.  The 
activity would complement the high profile effort to collaborate 
with the labor ministries and the judiciary to improve the 
administration of labor justice.  The activity would highlight ways 
that government and civil society can work together to improve 
working conditions, competitiveness, and fairness and transparency 
in the adjudication of labor disputes. 
 
¶6.  Proposal 3: Reducing Gender and other forms of discrimination in 
the administration of justice. 
WHITE PAPER PRIORITY AREA: Gender and Discrimination 
 
A) OBJECTIVE/ELEMENT/SUB-ELEMENT AND FUNDING: 
Economic Growth 
¶6. Private Sector Competitiveness 
6.1 Business Enabling Environment 
6.1.2 Business and organizations 
 
$1 million of FY07 funds and $500,000 in FY08. 
 
B) DESCRIPTION AND OUTCOMES: 
The purpose of this activity is to improve the handling by the 
judicial sector of cases involving discrimination based on gender, 
age, race, physical impairment, and other forms of discrimination. 
 
Numerous studies have identified discrimination as a salient issue 
in the workplace.  Reports of gender discrimination in hiring and 
promotions, sexual harassment, a hostile workplace for indigenous 
and migrant workers, and other forms of discrimination in the 
workplace are, unfortunately, quite common.  While the Labor 
Ministries must improve inspections and provide culturally sensitive 
approaches to receive complaints, the judicial branch also has a 
role to play.  Assistance will be provided to complete a full review 
of the obstacles facing the judicial sector complaints of responding 
to gender and other forms of discrimination, and assist in 
implementing necessary steps for improvement. 
 
Expected Results: 
 
-- Increased access to justice for workers facing gender and other 
forms of discrimination 
 
Specific Activities: 
¶1. Provide labor law training and institutional support to legal 
assistance organizations that support women and other disadvantaged 
groups.  As illustrated by the NGO Maria Elena Cuadra in Nicaragua, 
Court-annexed legal assistance and mediation services can increase 
access to justice for women, and a similar approach holds the 
promise of similarly assisting other disadvantaged populations, 
while serving particular client needs (counseling, accessibility, 
translation for indigenous languages, etc.).  Grants and technical 
assistance would develop the capability of existing institutions to 
serve this role around the region, and educate the courts on their 
function. 
 
¶2. Gender/discrimination audit of the Courts.  The implementer will 
conduct an audit of court processes, facilities, and other aspects 
of the labor justice process that impact women, disabled persons, 
indigenous groups, and other disadvantaged populations, provide 
recommendations, and provide technical assistance to the Courts for 
improvements.  Sensitization training for judges, public defenders, 
and other labor justice operators will support this effort. 
 
Illustrative indicators 
-- Number of labor cases disaggregated by gender 
-- Number of judicial staff trained in issues related to gender and 
other forms of discrimination 
-- Pre- and post-test scores to evaluate competency of judicial 
operators in laws and procedures relevant for gender/discrimination 
 
-- Progress on institutional strengthening milestones among legal 
assistance organizations and the courts. 
 
Relationship to FY2005 - FY2006 CAFTA-DR Funding 
Previous years' funding has been provided to USDOL to expand public 
awareness and sensitization to gender discrimination issues, and to 
USAID and State/DRL to support private alliances in textiles and 
other sectors, but these efforts did not target the judicial branch 
or court-annexed legal assistance and mediation.  FY2005 - FY2006 
funding to USAID and USDOL/ILO for the Administration of Labor 
Justice, supports training on fundamental labor rights, including 
gender/discrimination, but additional funds are required to identify 
and overcome the procedural barriers that limit access to justice 
for women and other disadvantaged groups. 
 
C) PIPELINE/MORTGAGE AND IMPLEMENTATION MECHANISM: 
No funds have been expended on gender/discrimination in the courts. 
A simple amendment to the contract could expedite support to these 
entities, avoiding the delays of a new procurement. 
 
D) LINKAGE TO THE WHITE PAPER AND TRADE: 
The White Paper establishes the priority of combating discrimination 
based on gender and other forms of discrimination, and also 
improving the administration of justice.  The project supports 
improved labor conditions, a key element of the region's 
competitiveness, and a requirement under CAFTA-DR. 
 
E) LOCAL BUY-IN: 
The USAID Labor Justice Assessment consulted a variety of 
stakeholders throughout the CAFTA-DR countries in identifying an 
interest in supporting public defenders and legal assistance 
offices.  Judicial actors in all six CAFTA-DR countries are already 
committed to improving tax administration of justice, including 
efforts to combat a gender and discrimination along with other areas 
of work. Organizations in the region supporting gender issues have 
been consulted and expressed interest in this effort. 
 
F) STATUS OF PROGRESS TO DATE: 
No assistance efforts have addressed gender and discrimination 
issues in the judiciary to date. 
 
G) PUBLIC DIPLOMACY: 
Activities described represent a high profile partnership between 
the U.S. Government and the governments of the region in 
strengthening the judiciary, with a particular focus on protecting 
the rights of women and other disadvantaged groups.  They 
demonstrate that government commitments made during the CAFTA-DR 
process to improve labor conditions are serious. 
 
¶7.  Proposal 4: Region-wide reduction in unfair labor practices 
associated with migrant workers. 
WHITE PAPER PRIORITY AREA:  Gender and Discrimination 
 
A) OBJECTIVE/ELEMENT/SUB-ELEMENT AND FUNDING: 
Economic Growth 
¶6. Private Sector Competitiveness 
6.1 Business Enabling Environment 
6.1.2 Business and organizations 
 
$1.5 million of FY07 funds and an additional $500,000 in FY08. 
 
B) DESCRIPTION AND OUTCOMES: 
The purpose of this activity is to strengthen the management of 
migrant workers and protect them against unfair practices. 
Worldwide, migration trends are tremendous, with 192 million people 
living outside of their place of birth, about three percent of the 
world's population.  Much of this migration is unauthorized--about 
15 percent of migrant workers.  This climate has contributed to the 
opening up of a lucrative market for the smuggling and trafficking 
of migrant workers. Women and children are especially victimized; 
many are trafficked into conditions of slave labor and/or forced 
prostitution. Application of human and labor rights norms to 
non-citizens is often inadequate in many countries, particularly as 
regards irregular migrants who have no authorization to enter or 
remain in the country. 
 
In the case of Central America and the Caribbean, there are three 
major forces currently linked to regional migratory issues that are 
influencing the future development of the region: 1) regional 
integration; 2) CAFTA-DR with the United States; and 3) increasing 
use of the region as a bridge for irregular migration towards North 
America. 
 
These forces present a challenge to all the Central American 
governments. At present the countries have organized a collaborative 
effort under the Sistema de Integracion Centroamericana (SICA), with 
the International Organization for Migration (IOM) serving as a 
technical secretariat. Additionally, the countries of the region are 
bound by the Integration Initiative and depend on the Comision de 
Directores de Migracion (OCAM) to coordinate resources-technology, 
funding and personnel-but efforts by the OCAM are limited and 
results are often ineffectual due to a meager allocation of 
funding. 
 
Activities should be developed to reinforce regional efforts to 
strengthen the management of migrant worker processes to capture 
their movements across the countries of the region while putting in 
place procedures that can guarantee protection of their labor 
rights, health benefits and access to labor justice. The program 
would seek to involve and coordinate closely with the Ministerio de 
Gobernacion, Ministerio de Trabajo y Prevision Social, Ministerio 
Publico y la Corte Suprema de Justicia. 
 
Expected Results: 
-- Improved control over migration flows and migrant workforce 
regularized (i.e. documented, with legal work permits) 
-- Increased access to justice for migrant workers 
 
Specific Activities: 
¶1. Strengthen Migration Offices and initiatives by host country 
governments to regularize the migrant workforce and protect their 
rights.  Technical assistance will be provided to set up information 
systems to capture, manage and follow-up the movements of the 
migrant workforce.  Activities will promote registration of workers 
and follow-up for the movement of persons and exchange of 
information among the government institutions (customs, migration, 
Labor Ministry, police and justice). 
 
¶2. Develp Migrant Labor Special Services Offices throughou the 
region to provide temporary work visas and linkages to the private 
sector.   Technical assistance will be provided to set up special 
training and capacity building courses on migratory issues and labor 
rights for officials and border personnel.  Assistance will be 
provided to set up annex offices for migrant workers to be 
interviewed and tested on competencies by potential employers. 
Information materials will be developed and distributed to migrant 
workers to promote awareness of their rights and responsibilities. 
 
¶3. Assist Migration Directors to strengthen and exchange migration 
statistics in the region.  Technical assistance will be provided to 
build a statistical foundation necessary to promote the 
harmonization of migration laws, registrations, labor laws, tracking 
of labor competencies and training on registration of migrant 
workers through the Labor Ministries. 
 
Illustrative indicators 
-- Number of countries with functioning information systems on 
 
migration 
-- Number of Migrant Labor Special Services Offices established 
-- Qualitative assessment of migration statistics and regional 
exchange of information 
-- Number of migration officials trained 
 
Relationship to FY2005 - FY2006 CAFTA-DR Funding 
Previous years' funding has not targeted discrimination against 
migrant workers or addressed the regularization of migration flows 
within the region. 
 
C) PIPELINE/MORTGAGE AND IMPLEMENTATION MECHANISM: 
No previous activities funding have addressed this issues.  A new 
cooperative agreement would be needed to support the regional 
initiative under SICA. 
 
D) LINKAGE TO THE WHITE PAPER AND TRADE: 
The White Paper establishes the priority of combating discrimination 
based on gender and other forms of discrimination, including support 
to the Labor Ministries to combat exploitation of migrant workers 
 
E) LOCAL BUY-IN: 
In addition to buy-in indicated in the White Paper, the SICA 
technical secretariat for the regional migration initiative has been 
consulted on the proposed activity and enthusiastically supports 
it. 
 
F) STATUS OF PROGRESS TO DATE: 
Previous activities have not targeted migration. 
 
G) PUBLIC DIPLOMACY: 
Activities proposed represent a high profile partnership between the 
U.S. Government and the governments of the region in protecting the 
rights of migrant workers.  A key U.S. concern in the region is the 
management of the flows of migrant workers, and the activity will 
demonstrate U.S. commitment to strengthening regional and national 
institutions to address the issue constructively. 
 
¶8.  Proposal 5: Alliances for improving labor and environmental 
standards. 
WHITE PAPER PRIORITY AREA:  Promoting a Culture of Compliance 
 
A) OBJECTIVE/ELEMENT/SUB-ELEMENT AND FUNDING: 
Economic Growth 
2  Trade and Investment 
2.1  Trade and Investment Enabling Environment 
2.1.4  Support for International Standards 
 
and 
 
5  Agriculture 
5.1  Agriculture enabling environment 
5.1.3  Agriculture market standards and regulations 
 
$2.5 million of FY07 funds, $5 million in FY08, and $2.5 million in 
FY09. 
 
B) DESCRIPTION AND OUTCOMES: 
The purpose of this activity is to support a variety of 
multi-stakeholder alliances to expand the use of voluntary 
standards, codes of conduct, and other private sector initiatives 
and public-private partnerships to raise labor and environmental 
standards as an element of the region's competitiveness. 
 
In the modern marketplace, consumers in the developed world are 
increasingly interested in ensuring that ethical practices are 
followed in producing the goods they consume.  Simultaneously, there 
is a growing business literature on competitiveness that indicates 
that companies that follow best practices in labor and environmental 
policies are more productive and more efficient.  In the Central 
American context, the "carrot" of sales contracts from multinational 
companies is often more powerful than the "stick" of administrative 
enforcement in encouraging local producers and sub-contractors to 
improve labor and environmental practices.  In addition there is an 
opportunity to combine work on labor/environmental standards with 
training on quality standards to enhance the ability of local 
producers to improve competitiveness and reap the benefits of 
increase trade opportunities under CAFTA-DR. 
 
A broad range of established and nascent private sector initiatives 
on labor/environmental standards already exist.  The USG has 
supported initiatives on labor standards in the textile/apparel 
sector, agriculture, timber, and sustainable tourism.  A potential 
new driver of reform is the interest of large supermarkets in 
 
promoting improved labor/environmental standards.  Wal-Mart is 
launching a major overhaul of their supplier chain and product mix 
to emphasize labor/environmental standards, and Whole Foods has 
established a new company standard that will drive their purchasing 
that combines quality with labor/environmental criteria.  A purely 
illustrative list of organizations and alliances that promote 
voluntary standards on social and environmental criteria includes: 
Continuous Improvement in the Central American Workplace, the 
Ethical Trade Initiative, Fair Labor Organization, Fair-trade, 
Forestry Stewardship Council, Institute for Agriculture and Trade 
Policy, International Federation of Agricultural Movements 
(organics), Marine Aquarium Council, Marine Stewardship Council, 
Rainforest Alliance, Social Accountability International, and the 
Sustainable Food Lab.  To date, the USG has supported only a small 
subset of these efforts, in a piecemeal fashion.  Given the priority 
attached to improving labor and environmental standards in the 
region, there is considerable scope for supporting a broad range of 
initiatives to scale up quickly. 
 
In addition to raising labor standards through purely 
private/voluntary activities, private sector alliances also can 
provide a constructive influence on government enforcement of 
labor/environmental standards.  In Cambodia for example, the results 
of public sector labor inspections are published on the web, so that 
multinationals can review the performance of their current or 
potential suppliers to inform their purchasing decisions.  In the 
USAID-supported Continuous Improvement in the Central American 
Workplace (CIMCAW), government labor inspectors and private sector 
compliance officers share techniques for identifying and remedying 
violations of workplace standards. 
 
Expected Results: 
-- At least ten alliances and/or certifying organizations supported 
to promote improved labor/environmental standards in all or part of 
the CAFTA-DR region 
-- Recognized private/voluntary labor and environmental standards 
expand to cover at least 100,000 additional workers and 400,000 
additional hectares over 3 years. 
-- Leverage financial resources from the private sector matches US 
Government contributions at a 1 to 1 ratio or better. 
 
Specific Activities: 
¶1. Support to alliances and certifying organizations streamlined and 
expanded.  Public-private partnership experts will ramp up project 
design, conclude agreements, and administer funds to alliances and 
certifying organizations, monitoring closely to ensure 
accountability for results.  The implementer will collaborate 
closely with US Government officials to support effective guidance 
and supervision, and the US Government at the regional and/or 
country level will retain responsibility for approving all funding 
allocations. 
 
¶2. Observance of requirements and best practices in labor standards 
and environmental protection expanded.  Information dissemination 
and outreach will be supported to attract multinational and local 
businesses to private/voluntary process improvement activities and 
certification regimes, across multiple business sectors.  Technical 
assistance and training will assist local companies to implement 
best practices to improve labor and environmental conditions. 
Support to alliances and certifying organizations will enable them 
to reach the critical mass necessary for both financial 
sustainability and meaningful impact. 
 
¶3. Partnerships between host country governments and the private 
sector established to raise labor and environmental standards.  As 
multinational investors and buyers increasingly require compliance 
with labor/environmental standards, host country governments will be 
encouraged to improve competitiveness through provision of services, 
resources, regulatory changes and other forms of support to improve 
labor and environment conditions. 
 
Illustrative indicators 
-- Number of alliances/certifying organizations supported 
-- Workers covered by recognized private/voluntary standards 
-- Hectares covered by recognized private/voluntary standards 
-- Private sector leverage for alliances 
-- Sustainability of certifying operations 
-- Number of significant partnerships between the private sector and 
host country governments on labor/environmental standards 
 
Relationship to FY2005 - FY2006 CAFTA-DR Funding 
Previous years' funding has been provided to USAID and State/DRL to 
expand work in textiles and other sectors to promote understanding 
of the link between productivity and competitiveness, international 
 
labor standards and national laws, workplace codes of conduct, and 
workplace-level conflict resolution mechanisms.  The proposed 
activity would expand the effort to a broader array of industries, 
combining labor and environmental standards, and establishing a 
flexible and efficient management mechanism for supporting diverse 
private sector initiatives. 
 
C) PIPELINE/MORTGAGE AND IMPLEMENTATION MECHANISM: 
FY06 funding of $2 million was obligated for ongoing work and 
implementation has begun; FY07 funds would find new alliances. 
 
D) LINKAGE TO THE WHITE PAPER/WORK PLAN FOR IMPLEMENTING THE 
ENVIRONMENTAL COOPERATION AGREEMENT AND TRADE: 
The White Paper establishes the priority of establishing a strong 
culture of compliance, in part through training workers and managers 
on labor rights.  The Work Plan for Implementing the Environmental 
Cooperation Agreement prioritizes market-based conservation, 
including support for sustainable agriculture, forestry, tourism, 
and alternative livelihoods. 
 
E) LOCAL BUY-IN: 
The USG has been approached by a number of private sector companies 
and alliances for partnership.  There is a large demonstrated 
interest for private sector-led initiatives to expand 
labor/environmental standards. 
 
F) STATUS OF PROGRESS TO DATE: 
State/DRL has not yet announced an award for its private sector 
alliance effort in textiles and other sectors.  USAID's private 
sector alliance on textile/apparel (CIMCAW) has recruited Wal-Mart 
as a new partner, expanded labor-management training across the 
region, and begun implementation of changes in the workplace. 
 
G) PUBLIC DIPLOMACY: 
USG support for alliances of high-profile multinationals together 
with a broad range of non-governmental organizations, including 
labor unions, and other partners to improve compliance with labor 
and environmental standards is likely to attract substantial public 
attention.  It puts the spotlight on corporate social responsibility 
and ways that government, business, and civil society can work 
together to improve working conditions and competitiveness. 
 
¶9.  Proposal 6: Interest-based bargaining techniques. 
WHITE PAPER PRIORITY AREA: Promoting a Culture of Compliance 
 
A) OBJECTIVE/ELEMENT/SUB-ELEMENT AND FUNDING: 
Economic Growth 
¶6. Private Sector Competitiveness 
6.1 Business Enabling Environment 
6.1.2 Business and organizations 
 
$500,000 of FY07 funds is requested. 
 
B) DESCRIPTION AND OUTCOMES: 
The purpose of this activity is to prevent and better manage 
collective conflicts, through specific training programs should be 
conducted for union and management representatives on interest-based 
bargaining techniques.  These trainings would be conducted on a 
regional basis, with joint participation in the courses to further 
foster collaboration.  Technical representatives from business 
associations and organized labor would be trained to further 
in-country efforts as a result of the regional training. 
Train-the-trainers efforts would center on the labor ministries, 
which generally have responsibility for mediating collective 
bargaining conflicts, but could also include other independent 
trainers at sustainable institutions. 
 
Expected Results: 
-- More constructive labor-management negotiations facilitated, 
reducing the number and severity of collective bargaining disputes 
 
Specific Activities: 
¶1. Regional/national training on Interest-Based Bargaining 
techniques.  Expert trainers will train management and labor 
representatives on both a regional and national basis.  Through 
interactive training and role-playing, participants will improve 
their ability to conduct collective bargaining negotiations. 
 
¶2. Train-the-trainers.  Facilitators will train Labor Ministry 
staff, business school professors, independent mediators, and other 
trainers on Interest-Based Bargaining techniques, to ensure capacity 
is maintained and expanded in the region. 
 
Illustrative indicators 
 
-- Number of representatives from unions and management trained 
-- Number of qualified trainers trained 
-- Qualitative assessment of collective bargaining sessions 
involving trained participants 
 
The proposed activity would add training on interest bargaining 
techniques to the skills taught through other USAID and State/DRL 
programs. 
 
C) PIPELINE/MORTGAGE AND IMPLEMENTATION MECHANISM: 
No prior funding has been obligated for this activity.  This 
training component would be added to an ongoing project. 
 
D) LINKAGE TO THE WHITE PAPER AND TRADE: 
The White Paper establishes the priority of establishing a strong 
culture of compliance, in part through training on labor rights for 
workers and employers.  Interest-based bargaining techniques will 
enable labor and management to come to agreements that protect 
fundamental rights, while easing negotiation on non-fundamental 
terms of collective agreements. 
 
E) LOCAL BUY-IN: 
The USAID Labor Justice Assessment of the CAFTA-DR Countries 
identified the importance of Interest-Based Bargaining techniques 
after interviews with a broad range of stakeholders across the 
region. 
 
F) STATUS OF PROGRESS TO DATE: 
No assistance efforts have supported training on Interest-based 
bargaining to date. 
 
G) PUBLIC DIPLOMACY: 
U.S. support for strengthening negotiation skills to resolve 
conflicts faster is likely to attract significant public attention. 
Use of collective bargaining as a mechanism to resolve disputes 
remains highly contentious in the region. 
 
¶10.  In sum, Post recommends approval of the $10 million in regional 
projects presented herein and an additional $7.5 million in FY08. 
We believe that continuously use of regional institutions and 
activities will lead to an across-the region discernable improvement 
in enforcement and compliance with labor standards. 
 
Glazer