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Viewing cable 06LIMA1099, PERU LABOR LEADERS ON LOURDES/HUMALA, FTA, LABOR,S

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Reference ID Created Released Classification Origin
06LIMA1099 2006-03-21 18:16 2011-08-25 00:00 UNCLASSIFIED Embassy Lima
VZCZCXYZ0000
RR RUEHWEB

DE RUEHPE #1099/01 0801816
ZNR UUUUU ZZH
R 211816Z MAR 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 9302
INFO RUEHBO/AMEMBASSY BOGOTA 3133
RUEHBR/AMEMBASSY BRASILIA 6587
RUEHCV/AMEMBASSY CARACAS 9189
RUEHGT/AMEMBASSY GUATEMALA 0967
RUEHLP/AMEMBASSY LA PAZ MAR QUITO 0139
RUEHSG/AMEMBASSY SANTIAGO 0306
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUEAIIA/CIA WASHDC
UNCLAS LIMA 001099 
 
SIPDIS 
 
SIPDIS 
 
GUATEMALA FOR HR OFFICER TROY FITRELL 
STATE PASS TO USDOL FOR MARK MITTELHOUSER, LAURA BUFFO, 
TINA MCCARTER 
DRL FOR GABRIELLA RIGG 
 
E.O. 12958: N/A 
TAGS: ELAB EINV PGOV PHUM PINS PE
SUBJECT: PERU LABOR LEADERS ON LOURDES/HUMALA, FTA, LABOR,S 
WOES 
 
REF: A. LIMA 658 
 
     B. 05 LIMA 5192 
     C. 05 LIMA 3778 
     D. 04 LIMA 405 
 
-------- 
Summary: 
-------- 
1.  Peruvian labor leaders reject both candidates Lourdes 
Flores Nano and Ollanta Humala as too extreme, a situation 
that could create an opportunity for APRA candidate Alan 
Garcia were he to take up the cause of the proposed General 
Labor Law (Ref C).  A labor rep from Arequipa described her 
region as solid for Humala.  Along with concerns over the 
election, labor leaders are anxious about the FTA, 
technological change, and divisions within their own 
movement.  While Peru,s labor movement is undertaking 
efforts to organize the informal sector and agricultural 
workers in booming agro-export enterprises, big labor has a 
long way to go if it is to recover even a portion of its 
former place in Peru,s economic and social life.  End 
Summary. 
 
2.  Peruvian labor leaders from a variety of union 
federations gathered at the DCM,s residence to discuss 
presidential politics, the FTA and the challenges facing 
their sector on 2/9 in the third annual Embassy event for 
labor leaders (Ref D), which included the participation of 
the POL and ECON Sections and Junior Officers from the 
Consular Section.  Members of three of Peru,s top four labor 
federations attended, including representatives of the 
General Confederation of Peruvian Workers (CGTP, 
left-oriented, 1.5-2 million members); the Confederation of 
Peruvian Workers (pro-APRA, 300,000 members); and the Unified 
Central of Workers of Peru (CUT Peru, social democratic, 
50,000 members).  Representatives from a variety of 
industries were present, including those from the ports, 
government employees, educators, telephone company employees, 
oil workers, and administrators in the state social security 
sector.  In addition, both AFL-CIO Solidarity Center Head 
Oscar Muro and the President of  Peru,s National Agrarian 
Confederation also attended. 
 
--------------------------------------------- --- 
Politics: Fear of Extremes/Opportunity for APRA? 
--------------------------------------------- --- 
 
3.  Labor leaders in general did not endorse any of the major 
candidates.  They did voice strong negative opinions, 
however.  When asked which candidate would be the worst for 
organized labor, they responded: Lourdes Flores Nano, the 
most conservative candidate running.  Lourdes, party of 
origin, the Popular Christian Party (PPC), has had historic 
conflicts with the labor movement and many labor leaders 
consider the PPC,s founder and former Lima Mayor, Luis 
Bedoya Reyes, to be anti-labor.  (Labor leaders recall an 
incident in the early 1980s when the PPC allegedly assisted 
the management of the Chromotex textile company in a 
confrontation with workers that left 5 dead.) Labor leaders 
also consider Lourdes, choice of first Vice President, 
Arthur Woodman, a businessman with close ties to the Romero 
group, Peru's largest conglomerate, to be an indication of 
her inclination to favor business over labor. 
 
4.  A number of labor leaders also expressed strong 
objections to Ollanta Humala, whom they described as "another 
Velasco," a reference to the leftist general who ruled Peru 
from 1968-1973.  Labor leaders related how Velasco tried to 
form his own unions, undercutting them.  Moreover, Ollanta 
has snubbed the left, including CGTP General Secretary Juan 
Jose Gorritti, who is the First Vice Presidential candidate 
for the leftist "Broad Front" (Ref B).  For representatives 
from the social democratically inclined CUT Peru or from the 
APRA-aligned CTP, Velasco is not a figure to admire. 
 
5.  AFL-CIO Solidarity Center Director Oscar Muro observed 
that labor leaders, fear of Lourdes and Ollanta could open 
 
an opportunity for Alan Garcia, particularly if the latter 
came out strongly in favor of a draft General Labor Law, an 
issue important to Peruvian labor leaders, that is now in 
Congress (Ref C).  Muro felt that Valentin Paniagua was 
actually the best candidate for organized labor, but that his 
campaign has never taken off. 
 
6.  Garcia pitched a pro-labor message recently when he spoke 
at the CGTP's Sixth Annual Conference on Labor in Lima on 
2/21.  He accused National Unity (UN) candidate Lourdes 
Flores of representing "more of the same" in terms of labor 
issues.  If elected president, Garcia promised to restore 
what he said were lost labor rights, beginning with giving 
workers the right to move from private pension systems back 
into the public one. 
 
------------------------------ 
Arequipa Said Solid for Humala 
------------------------------ 
 
7.  One labor leader broke with the general pattern of 
rejecting the two leading candidates on the right and left. 
Reyna Isabel Concha, National Women,s Secretary for the 
National Federation of Educational Administration Workers 
(FENTASE; associated with the CGTP; 25,000 members), said 
that she strongly supported Ollanta Humala.  Concha, who 
hales from Arequipa, asserted &all of Arequipa is for 
Humala.8  She added that most of the people she knew had 
favorable opinions of both Evo Morales and Hugo Chavez. 
 
8.  Concha,s main issue was support for education.  She 
lamented that the two major problems facing her school are 
inadequate nutrition for students and lack of supplies. 
Students often arrive at school too tired from hunger to 
learn, and the school library cannot afford to purchase books 
that cost more than three dollars.  Many students, Concha 
continued, also do not see the point in studying, since very 
little of what is taught is relevant to the job market.  In 
this connection, she noted the short supply of computers for 
classrooms.  Concha conceded that economic growth had 
benefited Arequipa, but said that she still did not like 
Toledo.  For her, a vote for Humala was the best vehicle for 
her frustrations. 
 
9.  Comment: Concha was one of the most personable and 
popular of the participants in Embassy,s labor event.  Her 
observations about Arequipa track with other sources that 
report that area strong for Humala, a key part of his  "solid 
south," a pro-Ollanta Humala base area that also includes 
Tacna and Puno (Ref A).  Her support for the radical, 
anti-system candidate well represents why a portion of the 
electorate has taken to him.  Ollanta Humala is a vehicle for 
the dissatisfactions of many aggrieved groups, in this case a 
frustrated school worker, a person who likely hears about 
positive macroeconomic growth numbers but has yet to see 
those reflected in her daily life or those of the students 
with whom she works.  End Comment. 
 
--------------------------------------------- - 
Same Sector, Same Federation, Different Unions 
--------------------------------------------- - 
 
10.  Concha,s union represents educational workers who are 
not teachers, including librarians, labor directors, 
teacher,s aides, guards, and other support staff.  The 
powerful SUTEP teachers union represents teachers.  Another 
educational administrator present at the event from a similar 
union, Fanny Grau, expressed frustration that SUTEP has had 
more success in winning raises for teachers than the 
administrators unions do for school support staff, who earn 
an average of USD 160/month.  While the two educational 
administrators unions and SUTEP are members of the CGTP, they 
do not apparently coordinate activities.  When asked about 
this seemingly excessive division of unions (one for 
teachers, two separate unions for educational support staff 
-- one in the north, one in the south -- all of them members 
of the same federation), AFL-CIO rep Oscar Muro lamented that 
 
the labor movement has become too fragmented for its own 
good, the result of differences between leaders and excessive 
regionalism. 
 
-------------------------- 
Continued Anxiety Over FTA 
-------------------------- 
 
11.  Representatives from the pro-APRA CTP, Elias Grijalba 
and Eleodoro Sedano, expressed regret that the Embassy had 
concluded its cycle of FTA outreach events.  In general, 
Peruvian labor leaders have been pleased with the gatherings 
Embassy put together to explain the FTA, even if they did not 
agree with their content.  (Note: With the FTA negotiations 
concluded and a presidential campaign underway, Embassy is 
gauging how best to promote the FTA at this juncture.  End 
Note.) 
 
12.  Marcelino Juan Bustamente Lopez from Ancash, 
representing the National Agrarian Confederation, expressed 
fears as to small farmers ability to compete in a post-FTA 
environment.  Bustamante himself is a small farmer, who 
raises corn on only 5 hectares.  He claimed that his 
grandfather had owned 100 hectares, which had become divided 
down over the generations, a common problem in rural areas 
where small farmers have large families and limited 
landholdings. 
 
13.  Comment: While Peruvian labor leaders worried about the 
FTA, all seemed to accept it as a likely fact of life and 
none mentioned the possibility of a referendum, something 
that some in the left/labor sectors have advocated publicly. 
During Embassy outreach activities, labor leaders have 
expressed interest in programs to build up the Ministry of 
Labor's inspection capacity, an investment that could make an 
FTA more palatable to this nervous sector.  End Comment. 
 
--------------------------------------------- --------- 
Big Labor,s Woes: Technology, Outsourcing, More Splits 
--------------------------------------------- --------- 
 
14.  Secretary General for the Telephone Workers Union 
(Sindicato de Telefonica, CGTP), Luis Lopez Chau described 
how privatization and technological change had altered labor 
relations in his industry.  The state Peruvian Telephone 
Company was privatized in 1994 when it was sold off to the 
Spanish firm, Telefonica.  Since that time, the union,s 
numbers have fallen from 12,000 to 3,000 due to automation 
and outsourcing. 
 
15.  At the same time, Oscar Muro estimated that the 
telephone company,s total work force has actually increased 
to 18,000.  These workers are hired by a number of companies, 
since Telefonica outsources many of the tasks associated with 
telecommunications (line maintenance and repair, 
installation, etc.) and these companies, in turn, sometimes 
hire temporary workers to complete needed tasks.  Adding to 
labor,s troubles, the remaining 3,000 union workers in 
Telefonica are now represented by two organizations: Lopez 
Chau,s CGTP-affiliated group and another associated with the 
CUT.  (Note: Peruvians report that telephone service has 
improved dramatically with privatization, greatly reducing 
waiting times for acquiring private phones and giving 
customers far better connections.  End Note.) 
 
16.  Luis Caceres Cervantes of the Union of Social Security 
Workers (in the public sector) told a similar story, stating 
that his union had gone from 25,000 members in the 
pre-Fujimori era to 12,000 today.  (Note: Other sources in 
the labor movement have told us that the social security 
sector had functioned as a patronage machine prior to 
Fujimori-era changes.  End Note.) 
 
17.  Jose Pingo of the Petroleum Workers Union (FETRAPEP ) 
ISP of Piura, independent) regretted that his union could not 
do more for workers than simply ask for wage increases.  He 
stated that the average petroleum worker in Iquitos labors 
 
for 14 days straight, 12 hours per day and then has ten days 
off.  For this the employee earns about USD 600 per month. 
(Note: This is a sum considerably higher than the monthly 
minimum wage of USD 145.  End Note.) 
 
--------------------------------------------- - 
Attempts to Organize the Informals, Ag Workers 
--------------------------------------------- - 
 
18.  CUT President Julio Bazan spoke of his union,s attempt 
to organize the informal sector.  Small businesses, he says, 
have collective needs (credit, licensing, security) that 
unions could help them address.  One problem with   CUT,s 
efforts in this area so far, however, is the fact that 
newly-organized informal sector members do not pay union 
dues, forcing the existing worker base to subsidize outreach. 
 CGTP General Secretary Juan Jose Gorritti recently told 
Poloff his federation is attempting to organize agricultural 
workers in the booming agro-export complexes for asparagus in 
Ica.  Gorritti claimed that the agricultural workers needed a 
union because their wages are low.  He conceded, however, 
that union building among them was an uphill struggle. 
 
-------- 
Comment: 
-------- 
 
19.  Peruvian organized labor suffers from many woes, some 
external, brought on by globalization and economic change, 
some internal, the product of division in its own ranks. 
Labor leaders, rejection of extremes (and Humala,s 
rejection of the labor-left) could make them targets of 
opportunity for Alan Garcia.  While labor membership has 
shrunk to only 5 percent of the work force, the major labor 
confederations can still mobilize large demonstrations and 
could provide foot soldiers for a candidate willing to 
support the new draft labor law, now in Congress.  Longer 
term, labor leaders need to minimize division in their own 
ranks and to reach out to new population groups -- in the 
informal and in the growing agro-export sectors -- if their 
organizations are to recuperate even a measure of their 
former weight in Peru,s economy and society. 
STRUBLE