Focus: Free Trade and Precarity in Peru

Abstract

INTERNATIONAL union rights Page 6 Volume 23 Issue 1 2016 The OTLA has issued recommendations to the Government of Peru with a view to ensuring compliance with the obligations contained United States-Peru Trade Promotion Agreement after the complaint was raised against Guatemala under the Dominican Republic-Central America FTA (CAFTA-DR), the US finally escalated the dispute to arbitration in September 2014. During that time, some 70 labour organisers in Guatemala were reported killed, but no mention was made of the systematic use of violence against trade unionists in the US’ submissions to the arbitral panel. A hearing took place in June 2015, but the disputing parties remain embroiled in trying to decipher what it means to ‘fail to effectively enforce labor laws… in a manner affecting trade or investment between the Parties’ – treaty text that is reproduced in both CAFTADR and the PTPA. Any decision in the dispute will still be years in the making. Booming trade, busting unions The PTPA entered into force in 2009. In the first five years of the agreement, revenue from non-traditional export (NTE) sectors from Peru to the US increased by 80 percent, and total export revenue from Peru to the US increased by 26 percent. As a result, the demand for labour in the NTE sectors has also grown. NTE sectors include textiles and apparel, agricultural and fishery products, jewellery , wood and paper, and non-metallic minerals. According to the OTLA’s report, the plight of workers in Peru’s NTE sectors has not been much improved by the export boom. Following the allegations of union-busting in the NTE sectors submitted in July 2015, the OTLA conducted a review of the claims between September 2015 and March 2016, entailing consultations with stakeholders (including the government of Peru, the submitters and other workers’ organisations) and a fact-finding mission to Peru. Under Peruvian law, both the government and employers must refrain from ‘any acts likely to constrain, restrict or impair, in any way, the right of workers to unionize; and intervening in any way in the establishment, administration, or maintenance of trade union organizations.’ Further legal instruments were enacted in 2007, in order to clarify that any use of short-term contracts to limit freedom of association is unlawful and deemed a ‘very serious offense’, with violations subject to hefty fines. In NTE sectors, the use of short-term contracts is governed by Decree Law 22342, the Law Promoting Non-Traditional Exports, which provides that – subject to certain exceptions – employers may hire workers on short-term contracts and that such contracts may be renewed as many times as is necessary. In all other sectors, the use of consecutive short-term contracts is limited to five years. The OTLA report found that ‘employers often do not renew the short-term contracts of workers who O n 18 March 2016, the US Department of Labor’s Office of Trade and Labor Affairs (OTLA) published its public response1 to a complaint filed under the United States-Peru Trade Promotion Agreement (PTPA) by the International Labour Rights Forum (ILRF), Perú Equidad, and seven Peruvian workers’ organisations . Under Article 17.2.1 of the PTPA, each party to the agreement is obliged to ‘adopt and maintain in its statutes and regulations, and practices thereunder, the following rights, as stated in the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-Up (1998): (a) freedom of association.’ Article 17.3.1(a) further states that a party ‘shall not fail to effectively enforce its labor laws, including those it adopts or maintains in accordance with Article 17.2.1, through a sustained or recurring course of action or inaction, in a manner affecting trade or investment between the Parties, after the date of entry into force of this Agreement.’ The complaint – filed on 23 July 2015 – alleged that ‘by permitting the unlimited consecutive renewal of short-term contracts under the law that governs employment contracts in the nontraditional export (NTE) sectors, the Government of Peru has failed to meet its PTPA commitment to adopt and maintain in its statutes and regulations , and practices thereunder, the right of freedom of association and the effective...