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Peru addressing labor concerns to pave way for FTA - Min

Dow Jones | 13 February 2007

Peru Addressing Labor Concerns To Pave Way For FTA - Min

By Rebecca Howard, Dow Jones Newswires

LIMA -(Dow Jones)- Peru is making a concerted effort to address labor concerns being raised by U.S. congressional Democrats in order to ensure approval of the U.S.-Peru free trade pact, Labor Minister Susana Pinilla said Tuesday.

Peru’s legislature approved the free-trade pact negotiated by the executive branch in mid-2006, but the deal hasn’t yet been approved by the U.S. Congress.

In January, Deputy U.S. Trade Representative John Veroneau said that Peru, Colombia and Panama had been notified of the aim to include revised language on labor rights in their respective trade pacts.

According to Pinilla, however, "the U.S. Congress does not demand that we have a new general labor law but that the law is upheld, that labor rights are respected in Peru."

At a press conference with foreign journalists, the government official said that much of the ministry’s effort has focused on shoring up the inspection system.

"How do we ensure that the law is fulfilled? With a very strong inspection system," she said.

Among other things, it has increased the number of labor inspectors visiting companies and granted the inspectors greater authority.

For example, she said, labor inspectors previously could be turned away at the door. Today, they can go to companies with a police escort.

While the U.S. Congress has not yet sent any specific observations, Pinilla said that most of them will likely focus on unionization.

For example, one observation may be that labor regulations allegedly do not punish employers for interfering in union organization, she said.

According to Pinilla, however, "the 1993 Constitution guarantees the right to unionization, the law on collective labor relations bars employers from interfering in the right to create unions. There is free unionization in Peru."

Another observation will likely focus on the fact that U.S. representatives consider judicial procedures to punish any acts against unionization to be slow ineffective.

She pointed out, however, that the criminal code punishes the use of threats or violence to coerce people into joining or not joining a union.

Regarding the length of judicial processes, she said that "efforts are being made to reform the judicial system" and denied that cases related to unionization take longer than others.

Finally, she said, a third observation apparently indicates that labor norms allow employers to introduce unilateral changes in collective agreements.

According to Pinilla, however, this is not the case.

"We have clarified that it is clearly explicit in the labor law that the employer can make nonsubstantial changes in the individual contract but not in the collective agreement. This has never been permitted," she said.

Pinilla herself is not directly involved in the negotiations at the present time.

She said that all the information is sent to Peru’s Ministry of Trade, the Foreign Ministry and the Peruvian Ambassador to the U.S.

However, she expects to shortly travel to the U.S., accompanied by union representatives and representatives from small and mid-sized companies, in order to present Peru’s case.

Pinilla denied that the free trade agreement is contingent on a new labor bill recently approved by a congressional commission that must now go before the full Congress.

According to Pinilla the current version of the bill will not likely be approved.

"I do not think it will be approved if it remains as it is now," she said.

She acknowledged that the U.S. is aware of the debate surrounding the law but reiterated that the free trade agreement does not hinge on its passage.

"Things are clear and established. It is not the case that there is no labor law in Peru and this is the kingdom of the jungle. There is a very clear law," she said.