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On Eve of Trade Talks, Labor Abuses Detailed in New Report
Published on Friday, December 5, 2003 by
On Eve of Trade Talks, Labor Abuses Detailed in New Report
by Jim Lobe

WASHINGTON -- On the eve of a critical round of trade talks between the United States and five Central American countries, a major U.S. human rights group has found that workers' rights in El Salvador, the region's second largest country, are systematically abused by businesses there.

In a 110-page report released here Thursday, New York-based Human Rights Watch (HRW) charged that the Salvadoran government largely ignores--and in some cases even facilitates--the abuses, and urged that that labor rights provisions to be included in the proposed U.S.-Central America Free Trade Agreement (CAFTA) must be strengthened to be credible.

"Employers in El Salvador know that if they violate workers' rights, there is little or no consequence and the government might even help them carry out these abuses," said Carol Pier, the report's main author. "CAFTA must include strong tools to prevent this, but the current proposal falls far short."

The report, based in part on an 18-day fact-finding mission to the cities of San Salvador and Santa Ana earlier this year, is certain to be cited by foes of any CAFTA agreement that comes before Congress next year. The Bush administration hopes to conclude an agreement at next week's meeting of trade ministers from the U.S., Guatemala, El Salvador, Nicaragua, Honduras, and Costa Rica, planned for Washington, D.C.

CAFTA is designed to give Central American countries similar trade and investment preferences to those extended to Mexico under the North American Free Trade Agreement (NAFTA) and to Chile under the bilateral trade accord that was approved by Congress earlier this year.

While specific details of the proposed CAFTA have not been released, the administration has rejected demands by environmental activists and labor unions that it exclude countries whose laws do not incorporate core labor rights, including the right to organize, or that do not enforce those rights.

Instead, U.S. Trade Representative Robert Zoellick has insisted that Washington will not go beyond the sanctions included in the Chile agreement, which provides that nominal fines may be levied against a country if it fails to enforce its own labor and environmental laws in a "sustained or recurring" manner, whether or not those laws meet minimum international standards.

With such weak enforcement provisions, activists have sworn to defeat the accord, and Democrats in Congress, who are more likely to oppose a trade pact in a presidential election year anyway, are already lining up behind them.

Most analysts here believe the administration faces an uphill fight if it tries to get a package through Congress before next year's elections. Not only are Democrats likely to be more unified than usual, but a number of Republicans from states or districts heavily tied to local textile manufacturers are certain to oppose it.

The administration will try to make it more attractive by wrapping up a free trade deal with the Dominican Republic, which has strong support among some key Democrats, and attaching it to CAFTA before submitting the whole package to Congress by next April. But Jim Berger, editor of the "Washington Trade Daily" newsletter, thinks it's unlikely to pass before next November's election. "The lines are clearly drawn; the Democrats are really going to fight it," he said.

Their position is certain to be strengthened by the HRW report, entitled "Deliberate Indifference: El Salvador's Failure to Protect Workers' Rights."

The report details specific cases in El Salvador's private and public sectors, both in manufacturing and service industries, that demonstrate a consistent pattern of abuse by employers, including delaying salary payments, failing to pay overtime, the denial of mandatory bonuses and vacation payments, and even the pocketing of workers' social security contributions, which prevents them from receiving free health care.

The most pervasive abuse, according to the report, is the effective denial by employers of the right of workers to organize a union, despite the fact that freedom of association is guaranteed under the country's basic laws.

Employers routinely fire union members and leaders, suspend union activists, pressure workers to renounce their membership in unions, and deny union "troublemakers." As a result only about five percent of El Salvador's workforce is organized.

If workers seek redress under the law, they face a very difficult fight. Businesses, for example, are not required to hire back illegally fired union activists; they may, and mostly do, opt to pay a nominal fine.

"Employers have come to see labor rights standards as optional, treating violations as something that can be cured, if need be, with these small payments, a cost of doing business," according to the report. "For workers, the result is a chill on union activity, heightened job insecurity, and, at times, loss of access to affordable health care and other benefits to which they are legally entitled."

Moreover, employers may also legally discriminate against trade unionists in hiring and suspension decisions, while the Ministry of Labor not only strictly enforces what the International Labor Organizations has called "excessive formalities" in registering unions, but "regularly ignores employer's anti-union conduct designed to thwart organizing drives."

Even if the Ministry were favorably disposed toward seriously enforcing worker rights, according to the report, it lacks the resources to do so. Of a workforce of roughly 2.6 million people, the government employs only 37 labor inspectors, according to the report.

Even these few often fail to follow legally mandated inspection procedures, according to HRW. Often, they carry out inspections without talking to workers; they fail to fine employers found to be engaging in abusive practices; and sometimes refuse to rule on issues within their mandate.

Legal procedures also represent a major challenge for enforcing worker rights. Delays and other procedural obstacles often frustrate efforts to seek relief in El Salvador's labor courts, and the law fails to provide protections for workers who are willing to testify to abuses committed against their fellow-workers.

Even if a court hands down a judgment against a business, there is no guarantee it will be enforced, the report notes. Under Salvadoran law, for example, cases cannot go forward if defendants cannot be found to be served with legal process. In a number of cases cited by the report, employers have simply closed their factories and left the country, leaving unpaid workers with no way to obtain compensation.

"Limited resources are a problem, but what you have in El Salvador is a serious lack of political will to protect workers' rights," according to Pier. "What we need here is a fundamental change in the government's attitude toward labor rights."

In recent years, Washington has increased its own aid to labor and other government ministries in Central America precisely to enhance their enforcement powers, but these have shown little results, according to the report. "More funding only helps if there's a desire to enforce the law," Pier noted.

The report also found that in several cases the companies involved were contractors for major U.S. apparel retailers, such as Wal-Mart, Kmart, and JC Penney. U.S. companies buy approximately two-thirds of El Salvador's manufacturing exports.

In other cases, it found abuses to have taken place in the context of the privatization of public services in which public-sector workers find themselves employed by private businesses that are more hostile to organized labor.

The Human Rights Watch report called for CAFTA to not only require enforcement of local labor laws, but also to ensure that those laws include core labor rights, with a phase-in mechanism to prevent countries from receiving full CAFTA benefits until they take steps to achieve those goals.



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