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Viewing cable 06LIMA4547, CONGRESS LABOR COMMITTEE BULLISH ON LABOR LAW

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Reference ID Created Released Classification Origin
06LIMA4547 2006-12-01 22:01 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Lima
VZCZCXYZ0026
PP RUEHWEB

DE RUEHPE #4547/01 3352201
ZNR UUUUU ZZH
P 012201Z DEC 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC PRIORITY 3165
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 4142
RUEHBU/AMEMBASSY BUENOS AIRES PRIORITY 2694
RUEHCV/AMEMBASSY CARACAS PRIORITY 9981
RUEHLP/AMEMBASSY LA PAZ DEC 3875
RUEHMN/AMEMBASSY MONTEVIDEO PRIORITY 9044
RUEHQT/AMEMBASSY QUITO PRIORITY 0857
RUEHSG/AMEMBASSY SANTIAGO PRIORITY 0981
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 4337
RHMFIUU/CDR USSOUTHCOM MIAMI FL PRIORITY
RUEHC/DEPT OF LABOR WASHINGTON DC PRIORITY
UNCLAS LIMA 004547 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB ETRD PE PGOV
SUBJECT: CONGRESS LABOR COMMITTEE BULLISH ON LABOR LAW 
 
 1. (SBU) Summary: UPP congressman Aldo Estrada, president of 
the congressional committee on labor, told poloffs November 
21 that revisions to the proposed General Labor Law should be 
completed and passed to the plenary by December 22--where it 
could be approved early in next year's session.  He noted 
that 66 articles remained under discussion, most dealing with 
the thorny topics of arbitrary dismissal, salaries, 
subcontracting, and collective bargaining rights.  He said 
the labor bill enjoyed broad support across party lines, and 
he suggested securing passage of the Peru Trade Promotion Act 
(PTPA) had motivated his committee to move quickly. 
Observers familiar with the process consider Estrada's 
schedule optimistic and his portrayal of inter-party harmony 
overstated, but believe some kind of labor legislation, even 
without the enthusiastic support of organized labor or 
business, likely by early next year.  End Summary. 
 
----------------------------------- 
The Future of the General Labor Law 
----------------------------------- 
 
2. (U) Poloffs met November 21 with congressman Aldo Estrada, 
president of congress's labor committee and head of the Union 
for Peru (UPP) congressional bloc and congressman Luis 
Negreiros Criado, representative of the ruling APRA party and 
member of the labor committee.  Both were bullish about the 
committee's prospects for approving the labor bill by 
December 22, and both predicted passage in the congressional 
plenary by late February or early March.  A simple majority 
is needed for approval in both the committee and the congress. 
 
3. (SBU) Estrada said his committee had reached agreement on 
365 out of 431 articles, and substantive disagreements 
existed on only 15 of the remaining 66 articles.  The 15 
articles cover a variety of topics; the most important are 
arbitrary dismissal, salaries, subcontracting, and collective 
bargaining rights.  Estrada said protections against 
arbitrary dismissal had been strengthened, making it 
impossible, for example, to dismiss workers because of race 
or pregnancy, but allowing employers to fire workers for 
cause, such as showing up to work drunk.  Negreiros said the 
bill reduced but did not eliminate subcontracting, a 
compromise designed to please labor, which had sought an 
outright ban, and to placate business, which had sought to 
leave existing laws unchanged.  Estrada expected the final 
version of the labor bill would ease restrictions on union 
organizing and better define the parameters for sector-wide 
collective bargaining, although details were still being 
worked out. 
 
4. (SBU) Both Estrada and Negreiros said all of Peru's major 
parties agree on the need to consolidate the tangle of labor 
legislation into a general labor law, and said there were no 
significant partisan differences with respect to that law. 
(Comment: Observers disagree.  See below.  End Comment.) 
They added that labor and business groups recognized that 
substantial progress had been made, and were willing to give 
congress space to work out the remaining details, given that 
agreement exists on the great majority of articles, both 
inside and outside the congress. 
 
5. (SBU) Both Estrada and Negreiros hinted that their 
committee's work on the General Labor Law was motivated in 
part to facilitate passage of the PTPA in the U.S. Congress, 
and suggested that the speed with which the Peruvian Congress 
completes its work on the bill could hinge on the U.S. 
Congress's approach to the PTPA.  In this connection, Estrada 
noted that the debate over creating some type of labor bill 
had been going on for more than five years, and the concrete 
prospects of a new law only began to take shape after PTPA 
became a possibility.  Both emphasized that a free trade 
agreement with the United States would encourage continued 
democratic consolidation in Peru, rebut the economic model 
offered by Hugo Chavez, and show the United States remains 
engaged in the Andean region. 
 
------------------- 
An Ambitious Agenda 
------------------- 
 
6.  (SBU) Labor union representatives caution that Estrada 
has set an ambitious agenda and point out that progress on 
the labor bill stopped completely in August when the congress 
asked the National Labor Commission to broker discussions 
between labor and business groups.  No major party has been 
willing to take the lead in securing passage of the law, and 
labor reps suspect that once the bill reaches the plenary, 
Fujimoristas and the National Unity party will oppose it. 
 
7. (SBU) For their part, business groups are concerned with 
articles in the General Labor Law that would limit the ways 
in which employers can hire workers.  The private sector has 
pointed out that Peruvian workers already enjoy some of the 
strongest legal protections in Latin America, and additional 
legislation could harm job creation and reduce Peru's ability 
to compete in international markets.  Business groups also 
worry that the GOP may be tempted to make labor protections 
even stronger--and reduce flexibility in hiring and 
firing--in order to please U.S. congressional critics. 
 
8.  (SBU) Comment: Estrada may be overly optimistic about how 
quickly his committee can complete its work and about the 
breadth of support the labor bill enjoys, but even labor 
groups expect some kind of law will be passed early next 
year.  Labor rights are a hotly contested topic in Peruvian 
politics, and the GOP deserves credit for moving forward with 
a labor bill that had languished for years and for fostering 
compromises that make passage more likely now than ever 
before.  The General Labor Law may be imperfect, but it 
represents a significant step forward in consolidating and 
updating existing legislation.  End Comment. 
STRUBLE