VZCZCXYZ0000
RR RUEHWEB

DE RUEHGT #0255 0600105
ZNR UUUUU ZZH
R 290105Z FEB 08
FM AMEMBASSY GUATEMALA
TO RUEHC/SECSTATE WASHDC 4878
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC

UNCLAS GUATEMALA 000255 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR DRL/ILCSR 
DOL FOR CROMERO, PCHURCH, LBUFFO 
 
E.O. 12958: N/A 
TAGS: ELAB EIND ETRD PHUM ECON KJUS KDEM GT
SUBJECT: GUATEMALAN COMPANIES VOLUNTARILY PARTICIPATE IN 
LABOR COMPLIANCE PROGRAM 
 
¶1. On February 27, during its annual awards ceremony, the 
Guatemalan Association of Exporters (AGEXPORT) and its 
Apparel and Textile Industry Commission (VESTEX) publicly 
recognized and certified 29 Guatemalan textile and apparel 
companies that voluntarily participated in, and fulfilled the 
requirements of, VESTEX's Code of Conduct Program. 
 
¶2. In his introductory remarks, VESTEX Labor Commission 
Director Marco Antonio Rosales commended the efforts of the 
participants, highlighting the importance of compliance with 
labor laws, especially in today's increasingly sophisticated 
and competitive global market.  He noted that voluntary 
implementation of codes of conduct benefits not only 
employees and employers but also promotes Guatemala's 
competitiveness. 
 
¶3. Embassy Labor Officer spoke at the ceremony, stressing the 
importance of implementing labor compliance programs in the 
textile and apparel industry as part of a global effort to 
improve respect for labor rights and to ensure safe and 
healthy working conditions.  Laboff noted that corporate 
social responsibility programs are increasingly viewed as a 
competitive advantage and as an emerging industry norm as 
more and more companies recognize their long-term costs and 
benefits.  Implementation of labor compliance programs can 
reduce staff turnover, improve product quality, boost 
productivity, attract new customers, and retain existing 
customers.  They can also help companies avoid penalties, 
such as canceled orders, government fines, and litigation 
costs. 
 
¶4. Although the Guatemalan textile and apparel industry 
declined in 2007 due to competitive pressures from China, in 
2006, it employed 100,609 workers, representing 57 percent of 
all workers in Guatemala's manufacturing sector and 9.8 
percent of the country's total formal sector labor force. 
Total production was valued at USD 1.5 billion, or 27 percent 
of the value (USD 5.5 billion) of Guatemala's total 
industrial production.  According to VESTEX, the industry 
remains among Guatemala's primary generators of formal 
employment.  In 2007, the industry accounted for 8 percent of 
GDP, with USD 670 million in foreign revenues.  Export of 
apparel and textiles represented 22 percent of Guatemala's 
total exports, and 40 percent of exports to the U.S.  The 
U.S. market alone represented 83.4 percent of apparel and 
textile exports from Guatemala. 
 
¶5. According to VESTEX labor consultant Mariana Contreras, 
VESTEX labor compliance programs include a code of conduct 
program, alternate conflict resolution, monitoring of 
occupational health and safety standards, labor consultation, 
and training on labor rights and related themes.  Its code of 
conduct program, based on ILO conventions, incorporates 
prohibitions on discrimination, child labor, and forced 
labor; promotion of freedom of association, equality, and 
occupational health and safety; preservation of the 
environment; and respect for employees' personal and physical 
integrity. 
 
¶6. In 2007, 53 companies, representing 39,481 employees, 
voluntarily participated in VESTEX's self-financed Code of 
Conduct Program with the aim of contributing to the 
prevention of labor conflicts.  This number represents a 
significant increase from the 9 companies, representing 5,000 
employees, that participated in 1996, the first year of the 
program.  This year, VESTEX will launch a new training 
program, which will train 50,000 workers in the textile and 
apparel industry on labor rights and obligations and VESTEX 
Qapparel industry on labor rights and obligations and VESTEX 
labor programs. 
Derham