Background Briefing

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Developments Since September 2004

Ecuador’s Inadequate Executive Decree on Subcontracting

In our September 2004 ATPA petition, we analyzed a draft executive decree on subcontracting under consideration in Ecuador to address the use of subcontractors to impede workers’ freedom of association.  We specifically recommended that Ecuador:

  • allow subcontracted workers to organize and bargain collectively with the person or company for whose benefit work is realized if that person or company, in practice, has the economic power to dictate, directly or indirectly, the workers’ terms and conditions of employment;

  • limit the percentage of subcontracted workers in any workplace to a maximum of 20 percent of the total number of workers;

  • limit the use of third-party contractors to those providing workers to perform temporary or complementary services and those operating independently and autonomously, with their own capital and personnel, to perform specific, discrete jobs; and

  • codify the following provisions of the draft executive decree on third-party contractors:

  • article 3, to provide that if third-party contractors violate laws or regulations governing their operations, their subcontracted workers shall be legally considered direct employees of the main company;

  • article 11, to establish that subcontracted workers must receive the same salaries and benefits and enjoy the same employment conditions as employees at the same level hired directly by the main company; and

  • article 21, to ban third-party contractors from having business partners, associates, managers, legal representatives, or administrators who also hold such positions with the main employer or who have only one client. 

    However, the executive decree on subcontracting issued on October 5, 2004, is significantly weaker than previous drafts.  Of the three draft articles described above—articles 3, 11, and 21—only article 21 appears in the final version.  Although the decree establishes a limit on the percentage of subcontracted workers in any workplace, the limit is 75 percent of the total workforce, rather than the 20 percent we had recommended.  The decree includes none of our other recommendations and does nothing to address the other violations of workers' right to organize that we have identified and that infringe ATPA and ATPDEA eligibility criteria. 

    In addition, the decree contains a loophole by which individuals acting as subcontractors in the agricultural sector may be exempt from many of its provisions.  As Human Rights Watch documented in our 2002 report, Tainted Harvest: Child Labor and Obstacles to Organizing on Ecuador’s Banana Plantations, the use of individual subcontractors and their hired work teams is common in Ecuador’s banana sector, creating a serious obstacle to workers’ right to freedom of association.  By exempting these individual subcontractors from many executive decree provisions, Ecuador further reduces an already weak decree’s potential for positive impact on workers’ human rights. 

    As a result of these serious shortcomings, the executive decree will likely fail to end the widespread use of subcontracting as a means of undermining workers’ right to freedom of association in Ecuador even if it is fully enforced.  In addition, implementation of the decree is off to a rocky start.  The president has extended for a second time the deadline by which, according to the decree, all subcontractors covered by its terms were to have registered with the Labor Ministry.  The initial deadline was December 31, 2004, but this was later extended to July 31, 2005, and then recently extended again to October 31, 2005.  By the end of July 2005, reportedly only about four hundred of the estimated thousands of subcontractors in Ecuador had registered.

    Child Labor Inspectors: Inadequate Funding, Training, and Infrastructure

    Between September 2004 and March 2005, Ecuador selected additional child labor inspectors to reach at least the full complement required by law—twenty-two.4  Since March 2005, however, the number of inspectors has dropped to fourteen, eight shy of the mandatory minimum. 

    While Human Rights Watch is encouraged that, in contrast to March 2005, the current child labor inspectors have labor contracts and are receiving monthly salaries, we are troubled by reports that they still do not have sufficient funds for operating expenses, still lack basic infrastructural and logistical support, have inadequate offices and few computers, and lack other basic supplies, including vehicles for reaching inspection sites.  For example, those inspectors in banana-producing provinces frequently rely on transportation provided by banana plantation owners to reach the plantations to conduct inspections.  In addition, lack of training for the newly hired inspectors remains a serious concern.  Inspectors hired in late 2004 and early 2005 received far less training than their counterparts hired earlier.  These newer child labor inspectors reportedly only received two days of training, as compared to the roughly seven-and-a-half days received by inspectors hired in 2004 and the three months for those hired in 2003.  Worse still, the two child labor inspectors hired in the later months of 2005 reportedly have received little to no training at all.  Human Rights Watch believes that it will be very difficult for the child labor inspectors to carry out their duties if they are not given adequate infrastructure, logistical support, and training.

     

    Furthermore, although child labor inspections are being conducted, the Ministry of Labor reportedly lacks the resources to fully and properly process their results, a responsibility currently being fulfilled, in part, by the International Labor Organization.  And while inspections have revealed numerous infractions of Ecuador’s child labor laws, few fines have been imposed on violating employers. 

    In addition, according to a leading children’s rights advocate, just over half of the approximately U.S.$300,000 allocated in the Ministry of Labor’s FY 2005 budget for its child labor related activities and programs has been spent.  Similarly, official government budget figures show that none of the additional U.S.$300,000 allocated to the Ministry of Social Welfare for similar purposes has been spent.  Human Rights Watch is troubled that even the limited funding designated to address the problem of child labor in Ecuador is not being fully utilized for these ends.  



    [4] Ibid., art. 151(f).


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