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RUEHKP/AMCONSUL KARACHI 9092
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RUEKJCS/SECDEF WASHINGTON DC

UNCLAS SECTION 01 OF 03 ISLAMABAD 000831 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ELAB ETRD PGOV SOCI PHUM PK
SUBJECT: MINISTRY OF LABOR AND PAKISTAN WORKERS FEDERATION DISCUSS 
LABOR STANDARDS, INSPECTIONS AND ROZS 
 
¶1. (SBU) Summary:  In separate meetings with EconOffs, Ministry of 
Labor officials and organized labor representatives discussed the 
current state of Government of Pakistan (GOP) labor initiatives. 
All of our interlocutors stressed the need to increase human 
resource development and technical training.  Ministry officials 
admitted that while the GOP was not up to the task of nation-wide 
skills training, secondary school programs and industry-led 
initiatives were a "second-best option."   Caretaker Minister of 
Labor told EconOffs that the GOP had no plans to restart nation-wide 
labor inspections, which had been limited by provincial governments 
since 2003.  The Ministry of Labor was supportive of the 
establishment of Reconstruction Opportunity Zones (ROZs) and 
expressed interest in working with the Embassy to ensure that labor 
rights were well-protected in any GOP ROZ implementing legislation. 
End Summary. 
 
¶2. (SBU) EconOffs met with Caretaker Minister of Labor Nisar Ghuman 
on February 11 and Ministry of Labor Policy Planning Cell Chairman 
Dr. Sabur Ghayur on February 15.  Economic and Commercial Affairs 
Counselor met with Pakistan Workers Federation (PWF) Secretary 
General Khursheed Ahmad in Lahore on February 13.  Further details 
of that meeting to be reported Septel. 
 
Vocational Training and Human Resources Development 
--------------------------------------------- ----- 
 
¶3. (SBU) According to Ministry of Labor Policy Planning Cell 
Chairman Dr. Sabur Ghayur, the Ministry is simplifying Pakistan's 74 
separate pieces of labor legislation, incorporating them into five 
broad pieces of legislation.  This process has been underway since 
the passage of the 2002 Labor Policy.  The first of these bills, 
aimed at codifying core labor rights, will be sent to the National 
Assembly following Cabinet approval.  Dr. Ghayur did not mention a 
timeline for the bill's submission.  Merging fourteen separate labor 
codes into one, the bill guarantees basic worker rights of 
association, union formation and collective bargaining and extends 
these provisions and protections to the informal sector.  The 
Ministry also plans to revise occupational safety guidelines, social 
safety nets, labor migration policy and human resource development. 
 
 
¶4. (SBU) Dr. Ghayur emphasized that human resource development will 
focus on training and capacity building.  He admitted, however, that 
the Ministry of Labor does not fully understand Pakistan's skills 
needs, information he described as critical to tackling the 
country's dearth of skilled labor.  Only 300,000 of Pakistan's 
thirty million workers are classified as highly skilled.  Describing 
the Ministry's previous human resources development initiatives as 
"disjointed and uncoordinated," Ghayur emphasized industry-led 
vocational training as a possible solution.  He admitted that the 
GOP does not have the resources to provide vocational training for 
every industry and region in Pakistan, describing the "second-best 
option" as targeted and sector-specific vocational training programs 
in secondary schools, an untapped resource that should be better 
utilized. 
 
¶5. (SBU) Caretaker Minister of Labor Nisar Ghuman, an American 
citizen, former polo player-turned-soldier and the self-described 
leading horse-equipment manufacturer in Pakistan, remarked that he 
was devoting all of his time as Minister to improving Pakistan's 
technical training capacity.  Ghuman believes that on-the-job 
training would be more beneficial than general vocational training 
provided by government-run centers.  The Ministry has identified 
twelve sectors requiring better trained workers and plans to use tax 
incentives and direct cash transfers to promote private sector-led 
training initiatives.  Advocating skills training over basic 
literacy, Minister Ghuman plans to submit a full report to President 
Musharraf before leaving office. 
 
Labor Inspections 
----------------- 
 
¶6. (SBU) Since 2003, labor inspections have been heavily regulated 
in Punjab, Sindh and the Northwest Frontier Province (NWFP). 
Inspection teams must request permission from provincial chief labor 
inspectors prior to visiting factories.  (Comment:  Punjab's Chief 
Labor Inspector declined a meeting with Economic Counselor during a 
recent trip to Lahore.  End comment.)  Local businesses are informed 
in advance of impending inspections, limiting the effectiveness of 
labor condition monitoring.  According to Iftikhar Javed, Senior 
Research Officer in the Ministry of Labor, the GOP has not received 
inspection reports from the three provinces since the regulations 
 
ISLAMABAD 00000831  002 OF 003 
 
 
were put into effect in 2003.  While GOP information on the current 
state of labor inspections in Pakistan is incomplete, data from 
previous years indicates that inspections are on the decline, 
particularly in the Punjab. 
 
¶7. (SBU) Pakistan Workers Federation (PWF) Secretary General 
Khursheed Ahmad, who has been Secretary General since 1972 and 
currently sits on the International Labor Organization (ILO) 
Governing Board, was critical of the Sindh and Punjab provincial 
government decisions to suspend surprise labor inspections. 
Inspections with advance notice, he commented, simply do not have 
the same effect.  Ahmad was not optimistic that this decision would 
be changed any time soon.  Ahmad did, however, share his positive 
impressions of corporate social responsibility programs underway in 
the export sector.  Following Nike's 2006 decision to halt soccer 
ball production in Pakistan due to child labor concerns, greater 
dialog has emerged on how best to ensure core labor standards. 
 
¶8. (SBU) Ministry of Labor Policy Planning Cell Chairman Dr. Sabur 
Ghayur opined that the suspension of national labor inspections 
violates both Pakistan's constitution and ILO core labor 
conventions, to which Pakistan is party.  Dr. Ghayur reported that 
the GOP previously approved a Federal Labor Inspections Policy, in 
collaboration with workers and employers.  The policy, reportedly in 
the implementation phase, would create a federal labor inspectorate 
that could supersede provincial labor departments.  Caretaker 
Minister Ghuman, on the other hand, told EconOffs that the Ministry 
currently has no plans to resume nationwide labor inspections. 
Ghuman placed the blame squarely on "corrupt" labor inspectors, 
reporting first-hand that prior to 2003, inspectors visited 
factories monthly to pick up bribes instead of monitoring labor 
conditions.  The Caretaker Minister further lamented that talent was 
wasted in Pakistan due to the fact that "corruption always 
accompanies GOP activity." 
 
RECONSTRUCTION OPPORTUNITY ZONES (ROZS) 
--------------------------------------- 
¶9.  (SBU) Describing ROZs as a "window of opportunity" with respect 
to the promulgation of nation-wide fair labor practices, Policy 
Planning Cell Chairman Dr. Ghayur hoped that ROZ labor standards 
would have a spill-over effect on other regions and industries in 
Pakistan.  It is critical, he continued, that ROZ implementing 
agreements contain provisions for the long-term development of 
Pakistan's organized labor capacity.  Ghayur commented that the 
labor movement was not very active in the Northwest Frontier 
Province.  Trade union and labor inspection capacity would have to 
be increased to ensure that fair labor practices were adopted and 
implemented in the province's ROZs. 
¶10. (SBU) Ghayur does not support private sector-led labor 
monitoring mechanisms, such as the Sialkot-based child labor 
monitoring organization IMAC, as a model that should be replicated 
in ROZs.  Declaring them "non-viable and expensive," Ghayur wants 
labor groups and management representatives included in a 
government-sponsored inspections regime.  U.S. market access, he 
continued, was a large enough carrot to bring both labor and 
management in agreement about labor standards and independent 
inspections.  Pakistan Workers' Federation (PWF) Secretary General 
Khursheed Ahmad also reacted positively to discussions about labor 
conditions in ROZs, promising to publicize and support the 
initiatives once legislation is introduced. 
 
COMMENT 
------- 
 
¶11. (SBU) Comment: Dr. Ghayur was candid in his admission that the 
Ministry of Labor is not up to the task to provide employment 
training to all of Pakistan's workers.  Even more telling was the 
difference in opinion between Ghayur and the Caretaker Minister 
regarding the resumption of nation-wide labor inspections.  While it 
is likely that labor standards in the ROZs will be higher than in 
the rest of Pakistan due to U.S. legislative requirements, ROZs will 
focus the spotlight on labor conditions in Pakistan, particularly 
the lack of nationwide enforcement.  In terms of both labor 
condition monitoring and human resources development, the private 
sector is in many ways in a better position than the GOP to affect 
meaningful change. 
 
¶12. (SBU) Comment Continued: Upcoming discussions on ROZ 
implementation provide the USG with the opportunity to better engage 
labor leaders, provincial and federal government authorities, and 
the private sector to highlight improved labor standards and 
enforcement.  The USG could use this opportunity, and in particular 
 
ISLAMABAD 00000831  003 OF 003 
 
 
the market access potential of the ROZs, to provide a model for 
future strengthening of core rights and enforcement throughout 
Pakistan.  End Comment. 
 
PATTERSON