Wednesday, June 20, 2012

Honduras - CAFTA-DR Labor Petition Filed against Government of Honduras

U.S. Office of Trade and Labor Affairs accepts CAFTA-DR Chapter 16 labor petition filed against the Government of Honduras

By Tequila J. Brooks, Washington DC

On May 14, 2012, the Office of Trade and Labor Affairs (OTLA) accepted a petition filed by the AFL-CIO, 7 major Honduran labor federations, 18 Honduran local unions and the Centro de Derechos de Mujeres (Center for Women's Rights or CDM) alleging that the Government of Honduras has failed to effectively enforce its labor laws and is in breach of its CAFTA-DR obligation to enact labor laws that comply with ILO standards.  This is the third petition filed under Chapter 16 labor provisions of the CAFTA-DR since the agreement came into force in 2004.  On December 22, 2011, Father Christopher Hartley, a Catholic missionary, filed a petition alleging that the Government of the Dominican Republic is failing to comply with its CAFTA-DR obligations to protect the labor rights of migrant Haitian workers in Dominican sugar cane fields.  The OTLA accepted that petition on February 22, 2012 and it is currently under review.  The first CAFTA-DR Chapter 16 labor petition, filed against the Government of Guatemala in May 2008, was referred to arbitration by the U.S. Trade Representative in August 2011.  The arbitration panel has been established but the arbitrators have not yet been selected.  On April 30, 2012, the Fair Labor Association and major corporations American Eagle Outfitters, Inc., Adidas Group, Gap, Inc., Liz Claiborne, Nike Inc., Under Armour, PVH Corp., and VF Corporation sent a letter to the President of Guatemala urging his administration to resolve issues raised in the CAFTA-DR complaint and better protect Guatemalan workers' freedom of association and right to organize trade unions.

Unlike petitions filed under the NAFTA labor side agreement which tend to focus on working conditions and ineffective labor law enforcement with regard to a single factory or small handful of plants in one industry in the same state or region, the Honduran CAFTA-DR petition contains an extensive catalog of workplace violations and ineffective labor law enforcement in 19 workplaces in four major industries related to export - garment manufacturing, auto parts manufacturing, agriculture and ports administration.  While each industrial sector is characterized by unique challenges, common themes tie all of the cases together.  In addition, the petition highlights a number of threats and violent acts made against trade unionists in Honduras since the 2009 coup, including no fewer than 11 murders of trade unionists in the 2009-2011 period.  Among the victims were young female teachers and social security workers like 29-year-old Honduran Social Security Institute Workers' Union member Vanessa Zepeda, whose body was thrown from a moving car in February 2010 and Juana Bustillo, President of the Honduran Social Security Institute Workers' Union, who was shot and killed by gunmen while going home from a union meeting in the Honduran capital San Pedro Sula on September 17, 2010.

Seven of the cases discussed in the petition arose in the export manufacturing sector, most of these in garment factories.  Workplace conditions in Honduran garment factories are similar to those the world over, including excessive overtime hours, failure to pay overtime wages and gender discrimination including sexual harassment, pregnancy testing and termination in the case of pregnancy.  Gender discrimination in Honduran garment factories is systematized by a minimum wage scale that sets minimum wages in the garment industry that are significantly lower than those set for other industries in Honduras.  The cases in the petition, however, focus on workers' efforts to organize workplace unions and achieve trade union recognition from Honduran authorities.  In each of the cases outlined in the petition, workers organized a trade union committee and were fired by factory management once they achieved recognition from the Honduran labor ministry.  In at least one factory, Petralex, workers elected a half dozen 6-member union leadership committees in a period lasting over a year.  Each time the factory fired the members of the trade union leadership committee, the workers elected a new committee.  These terminations occurred before, during and after the recognition process, resulting in violations of Honduran labor laws that require trade union leaders and members' organizing activities be protected.  When Honduran labor inspectors attempted to investigate labor law violations in the factories, company security guards refused entry to them.  Petitioners argue that while workplace inspections were attempted, enforcement was ultimately ineffective as the Ministry of Labor of Honduras did not utilize police to facilitate the entry of inspectors and did not fine or otherwise penalize factory owners for violating labor laws and failing to comply with workplace inspection requirements.  When labor inspectors submitted reports of labor law violations to Ministry of Labor officials, these reports were rarely if ever acted upon.  Petitioners also argue that the Ministry of Labor facilitated the registration of an unlawful management-dominated worker organization in the case of Hanesbrands, which implemented a region-wide human resources policy of organizing company-led employee organizations referred to as "collective pacts" to avert the establishment of independent worker organizations in its plants and threatened employees with termination if they did not join - practices which are illegal under Honduran labor law.  

Most of the agricultural sector cases discussed in the petition relate to the production of food products, primarily bananas and melons, for U.S. and global markets, as well as ornamental plants.  One notable exception is the case of Fundación Hondureña de Investigación Agrícola (Honduran Foundation for Agricultural Research or FHIA), a private-public partnership supported by government and private sector businesses.  Despite finding numerous violations of Honduran labor law in the manner in which the FHIA suppressed FHIA workers' efforts to organize a union, the maximum fine levied against the organization by Honduran authorities was about $527 U.S.  Petitioners point to the low fine as an inadequate enforcement measure that shows the Government of Honduras has not enacted labor laws that comply with ILO standards as required by Chapter 16 of the CAFTA-DR.

Issues encountered in Honduran agriculture include payment by the tub of produce harvested at rates that do not meet minimum wage and overtime wage requirements, unsafe working conditions and long hours.   In one of the cases raised by petitioners, workers were being paid less than 2/3 of the minimum wage, which is 136 lempiras (a little over $7.00 US) a day, and were fined 80 lempiras ($4.00 US) if they missed a day of work.  After two years of worker complaints, a labor inspector conducted an inspection of the plant and issued a citation for lack of individual work contracts, lack of internal work rules approved by the Ministry of Labor, inadequate payroll records and minimum wage violations.  Petitioners allege that the Ministry of Labor never followed up on or enforced the citation through fines or other sanctions.  In another of the cases raised by petitioners, workers attempted to reorganize a union that existed at a banana plantation before it was destroyed by Hurricane Gamma after the plantation was taken over by new owners.  The new owners terminated the workers involved.  While the workers successfully filed complaints about the plantation's actions and obtained reinstatement orders, the employer complied only in part - rehiring a small fraction of the terminated employees, requiring workers to sign no-union pledges in violation of Honduran labor law and telling the workers that "troublemakers" would be excluded.  Petitioners cite reports issued by the U.S. Department of Labor to highlight the endemic problem of child labor in melon and coffee harvesting in Honduras.

The final set of cases raised by petitioners relate to declining working conditions in Honduras' main port, the Port of Puerto Cortès.  In recent years, wages for port workers have been reduced by 2/3, primarily through the termination of full-time employees and utilization of temporary agencies and short-term contracts.  Temporary port workers are now paid by the container, resulting in wages far below those set by Honduran law for non-agricultural workers.  Thus, enforcement of minimum wage laws has become an issue in an industry that once paid workers a wage that allowed them to afford a middle-class life.  Health and safety conditions have deteriorated along with wages.  Petitioners point to more accidents due to cost-cutting measures taken by sub-contractors in the provision of safety equipment and due to worker fatigue as a result of long hours.  According to the petition, port workers frequently work 12-hour shifts and sometimes work 24-36 hour shifts.  When port workers submit complaints to Honduran labor authorities about wage-and-hour and other workplace violations, their complaints are dismissed as being without proof, as port workers are not consistently provided with wage stubs.

Finally, petitioners argue that Honduras has failed to comply with its CAFTA-DR Chapter 16 obligation to enact labor laws in accordance with ILO standards.  In particular, petitioners point to a Honduran law requiring 6 months advance notice of a work stoppage in the public sector (a provision which may be applied to port workers in privatized companies) as well as a government decree issued on November 5, 2010 entitled "National Plan for Employment by Hours."  This decree, enacted in the wake of the economic crisis that began in September 2008, is a 3-year plan ostensibly designed to encourage the hiring of more workers through short-term and contract positions.  Petitioners argue that in practice, the decree weakens labor protections and is being utilized by employers to weaken unions and degrade working conditions in violation of Honduran law and ILO standards, as the right of temporary workers to organize unions is not guaranteed by Honduran law and the decree’s purpose of using temporary and short-term contracts to attract international investment conflicts with the CAFTA-DR Article 16.2.2 commitment that member states will not lower labor standards to attract foreign investment.

The Honduran CAFTA-DR petition highlights the challenge of raising living and working standards in an era of free trade.  USAID and USDOL have spent tens of millions of dollars in aid to Honduras and other Central American nations each year since the CAFTA-DR went into effect.  Much of this aid is geared toward improving the capacity of the Honduran Ministry of Labor to implement labor laws and erradicate longstanding problems like child labor in agriculture.  The experiment of the CAFTA-DR Chapter 16 labor provision is to determine whether the threat of trade sanctions will have an impact on labor law enforcement in Honduras and the rest of Central America.  These early test cases will also help determine whether intervention by USDOL through the investigatory and country-to-country dialogue processes can address regional issues such as the decline of labor standards in Central American ports as well as development of regional human resources strategies by private companies that conflict with ILO standards and labor laws of CAFTA-DR member states.

Under federal guidelines, the OTLA’s report should be completed within 180 days - around the middle of November 2012 - unless the OTLA determines that an extension is required.