International Labour Conference

Provisional Record 22 101st Session, Geneva, May–June 2012

Special sitting Tuesday, 12 June 2012, 11.35 a.m. President: Mr Alburquerque de Castro

cial dialogue and we sincerely hope that this will ADDRESS BY HIS EXCELLENCY MR RICARDO continue in . MARTINELLI BERROCAL, PRESIDENT OF THE As you know, Mr President, the ILO believes REPUBLIC OF PANAMA strongly that tripartism and social dialogue are the cornerstones of social peace and economic stability. Original Spanish: The PRESIDENT We are also aware of the efforts that your Gov- The International Labour Conference is honoured ernment is making to combat child labour, and of to receive the visit of His Excellency Mr Ricardo the priority you have been giving to job creation for Martinelli Berrocal, President of the Republic of young people. Panama. I now give the floor to the Secretary- We welcome the agreements with the indigenous General of the Conference, Mr Somavia, to wel- communities on mining and hydroelectricity and come and introduce our guest of honour. encourage the Government to ratify the Indigenous Original Spanish: The SECRETARY-GENERAL OF THE and Tribal Peoples Convention, 1989 (No. 169), so CONFERENCE that it might move forward on the basis of this Con- Mr Ricardo Martinelli Berrocal, President of the vention. Republic of Panama, it is an honour to have you At a time when the world is engaged in polarized here with us, at this house of tripartism, at a time discussions on ways to solve the crisis and to estab- when your country is experiencing one of the most lish a growth model that is more sustainable, I am dynamic and long periods of growth in its history. pleased to note that your Government and the ILO The report published this week by the ILO and the agree on the same principles. Economic Commission for and the I would like to quote you, Mr President. You have Caribbean (ECLAC) shows that Panama is one of said that “we need to develop policies which en- the five countries in Latin America and the Carib- courage decent and well-paid work to ensure the bean which grew the most in 2011 – more than economic recovery of our countries. Austerity alone 10 per cent – and where there was the largest cut in cannot solve the malaise in the developed countries. urban unemployment. Extending the benefits of We require policies that meet the needs of individu- growth is a challenge, and one in which we should als and homes that make up the States.” like to support the Government. We could not agree more with these words. We Your experience as an entrepreneur has made it are convinced that the way to attain economies and possible for you to see first-hand the central role societies that are more prosperous, fair and sustain- that labour plays in the development of peoples and able, must necessarily be accompanied by decent society. work. Your years of work in social security brought you It is an honour, Mr President, to have you here into contact with the challenges that need to con- with us in this House. Your country has the distinc- fronted to ensure that a country has a sound system tion of having access to the two largest oceans on of social protection. the planet. At the beginning of the year, we heard the good Original Spanish: PRESIDENT news that your Government, the National Council I would now call upon our guest of honour, of Organized Workers (CONATU), the National Mr Martinelli, President of the Republic of Panama, Confederation of United Independent Unions to come to the podium to make his statement to the (CONUSI), and the National Council of Private En- Conference. terprise had started to establish priorities for a na- tional decent work programme. Original Spanish: Mr MARTINELLI BERROCAL (President of They also signed a tripartite agreement to the Republic of Panama) strengthen freedom of association and collective I should like to thank the ILO Director-General, bargaining in Panama. We hope that this will bear Mr Juan Somavia, and the International Labour Or- significant fruit, as this is vital for job creation, and ganization itself for inviting me here to speak at this we should also be very happy to assist you in this 101st Session of the International Labour Confer- area. ence. It is a great honour for me, for my Govern- This is a very important step forward because it ment and especially for tripartism in the Republic of has laid the basis for making further progress in so- Panama to accept this invitation. I should like to congratulate Mr Raphael Al- burquerque de Castro, who is President of this ses-

22/1 sion of the Conference and Vice-President of our try. That is why I have been proposing changes in sister nation, the Dominican Republic, to which we Panama of a kind that are unprecedented in the his- are linked by friendship, cooperation and affection. tory of the country. One of the greatest supporters of the ILO has been These changes have required a fundamental shift honoured by being given the presidency of this ses- in the economic and social policies to which we sion of the Conference. We extend our greetings to have been accustomed. Many economic groups the Officers of the Conference and to the represen- were reluctant to pay taxes and there are still some tatives of governments, workers and employers, as which resent having to pay. well as conveying greetings to them from the Gov- The statistics on growth show that the National ernment of Panama. Strategic Plan which we have been implementing is The Government of Panama also welcomes the beneficial for the people of Panama. This prosperity election of Mr Guy Ryder as the new ILO Director- places the responsibility on us to bridge the eco- General. Mr Ryder, the tripartite representatives of nomic and social divide between rich and poor. Ac- Panama wish you every success in tackling the chal- cordingly, we have managed to attract investment as lenges of a world gripped by an economic and fi- the means of creating decent work without cutting nancial crisis which has an impact on the Interna- labour costs. In 201,1 foreign direct investment to- tional Labour Organization in many ways. You can talled more than 3 billion dollars. count on the support of Panama in fulfilling your My administration has ratified free trade agree- mandate. ments which were on hold for many years. We have We would also extend warm greetings to the re- opened avenues to the biggest markets in the world, spective spokespersons of the Workers and Em- those of the United States, Asia and Europe, and ployers, Mr Luc Cortebeeck and Mr Daniel Funes this opening allows the involvement of new eco- de Rioja. We would also extend a fraternal greeting nomic players. During the negotiations for the free from the Government of Panama to the distin- trade agreements, we managed to gain preferential guished delegates representing the governments, access to the international markets. At the same workers and employers and express our gratitude to time, our strategic position has been strengthened you for having allowed us to address this 101st Ses- because we are now seeing an increase in invest- sion of the Conference. ment and in the provision of services. Panama has historic ties with the ILO. After Our economy is based on services, maritime ac- 16 years as an independent republic, we became one tivity, the logistical sector and all the sectors related of the founding member States of the ILO in 1919. to the and our geographical position. Today we continue to work according to the princi- This accounts for 14 per cent of GDP. Thanks to ple established in the ILO Constitution, that univer- our geographical position and infrastructure mod- sal and lasting peace can be established only if it is ernization, the provision of logistical services and based upon social justice. We uphold the principles transport via the Canal have made us one of the of the Declaration of Philadelphia, that freedom of world leaders in maritime transport. expression and of association are essential, that Panama will be what Singapore is to Asia, what poverty anywhere constitutes a danger to prosperity Hong Kong is to China, what New York is to finan- everywhere and hence we have to confront it to- cial services, what Switzerland means in terms of gether with unrelenting vigour. We recognize the international organizations and what Dubai signifies ILO Declaration on Social Justice for a Fair Global- for the Middle East. For these reasons, the expan- ization and the Decent Work Agenda as fair and sion of the Canal will enable us to strengthen our relevant. role in international trade and create new opportuni- We support the promotion of employment, skills ties for business. development, sustainable enterprises and economic For the first time in the country’s history, the “big growth, as well as expanding social security and three” risk rating agencies have raised Panama’s worker protection and promoting social dialogue status to investment grade. We have come off all the and tripartism. blacklists, grey lists, dark lists which we used to be We are facing a global crisis and a crisis in glob- on because of our status as a tax haven, signing alization. This obliges us to adopt protective meas- double taxation treaties with over a dozen OECD ures and implement economic policies that stimu- countries. Finally, I am proud to announce that late growth and social development. through the Crisol de Razas [melting pot of the The Economic and Social Commission for Latin races] programme, the benefits of economic pros- America and the Caribbean (ECLAC) indicates that perity have also been felt by 25,000 migrant work- during the first half of 2011 a large part of the re- ers in Panama, who have now been given official gion announced positive results owing to a favour- status in relation to migration and employment. able external context. However, in the second half In responding to Mr Somavia’s invitation, I would of the year volatility and uncertainty complicated like to share with you what we have achieved in the global situation. Nevertheless, Panama still re- Panama during my term of office. The Global Com- corded growth of over 10.6 per cent in 2011, the petitiveness Report 2011–12 produced by the World highest growth in the region. We showed ourselves Economic Forum indicates that Panama has the to be a dynamic economy in creating new jobs and second highest level of productivity and competi- better conditions of work and the open unemploy- tiveness in Latin America and the Caribbean, after ment rate fell from 6.7 to 4.5 per cent in the same Chile, and that it is 49th in the world rankings. year. The Government Strategic Plan 2010–14 sets out However, there are still many macroeconomic the economic and social strategy and financial and policy challenges, including inflation and the threat public investment plans for the next five years. We of a slowdown caused by the external situation, par- have managed to reduce poverty from 36 to 26 per ticularly here in the eurozone. cent in only three years. The Strategic Plan also sets As President of Panama, I am an optimist and I out the objectives agreed upon in the context of na- am working for the social development of my coun- tional dialogue. It also challenges the management

22/2 and coordination capacity of the various levels of economic competitiveness. Fifth, to strengthen the the Government, with a view to achieving goals in internal market by creating a secure and transparent the areas of economic growth, poverty reduction environment that boosts confidence among produc- and improved distribution of wealth. ers and investors and reduces unemployment. The Strategic Plan has been submitted to public These objectives are being achieved without dis- scrutiny, as required by law, with a view to ensuring carding macro-fiscal stability. Our fiscal deficit, transparency in our plans and programmes and en- approved by the Government, is 2.9 per cent of the hancing all decision-making and follow-up mecha- budget. nisms that exist in Panamanian society. It is about The Government has a number of tools to pro- transparency and accountability on the part of the mote growth in key sectors. The first is infrastruc- Government in the handling of public affairs. ture. This involves construction in order to connect The Strategic Plan is in line with the Global Jobs key points, building roads and highways and other Pact, which has received full support from the development structures. We have built three airports Heads of State and Government, Vice-Presidents, and are expanding Tocumen international airport to Ministers of Labour, and leaders of employers’ and turn it into the biggest in Latin America by 2014. workers’ organizations from all regions who par- We are building roads to provide access to areas of ticipated in the ILO Summit on the Global Jobs Cri- agricultural production. We are expanding irrigation sis in 2009. systems and developing the cold chain and storage Panama’s Strategic Plan, following the same di- facilities. rection as the Global Jobs Pact, has created decent Apart from investment in jobs as part of the Pa- work and increased employment for women and nama Canal expansion project, amounting to men, giving support to businesses, particularly 5.6 billion dollars, Panama will need to make long- small, medium-sized and micro-enterprises. term infrastructure investments totalling some In short, I can say that the Strategic Plan has 9.6 billion dollars. This amount represents about achieved a number of goals. First, it has facilitated 70 per cent of planned investments, which amount the integration of young people in the job market by to 13.5 billion dollars in these five years. creating more jobs for youth. Second, it has enabled The above does not include investments by state an increase of between 15 and 18 per cent in the enterprises, such as the Panama Canal Authority, minimum wage in more than 20 categories, ranging the Highways Entity, which is spending 1.1 billion from domestic service to industrial agriculture. It dollars on highways, the Electricity Supply Author- can be seen that in three years the minimum wage ity, which is implementing a project for intercon- has gone up by almost 50 per cent. Third, it protects nections with Colombia, and other state enterprises individuals and families, especially the most vul- which have their own resources for the generation nerable, by strengthening social protection systems of revenue outside the government budget. to ensure the sustainability of income and subsis- On top of this, we have adopted Act No. 41 con- tence levels and safeguarding pensions. Fourth, it cerning multinational companies, resulting in the increases employability, training workers while in- creation of thousands of jobs for a large number of vesting public funds and promoting foreign invest- enterprises which have decided to establish them- ment. selves in Panama with a view to supplying Latin In our consistency with the Global Jobs Pact, we American markets. Procter & Gamble alone has are promoting vocational and technical training and more than 1,000 workers, with operations covering the development of entrepreneurial skills, especially the whole of Latin America. Already nearly for unemployed young people. 80 companies have decided to settle in Panama, and One of the components of the Government Strate- our enthusiasm grows as each new multinational gic Plan is the development and implementation of arrives because they invest major resources in trade, a national Internet network, the “Internet for All” in the real estate market and in the whole of Pa- project. Our broadband policy includes the objec- nama. tive of ensuring equality of opportunity and bridg- Our country’s social programmes have seen total ing the digital and technological divide in the coun- investment of 3.8 billion dollars. Projects include try. The project will cover some 2.8 million Pana- the construction of schools, hospitals, social hous- manians, almost 84 per cent of the 3.4 million popu- ing, aqueducts and sewerage systems, new prisons lation. Since March 2012 the network has had and the metro system in . The remain- 1,005 points of access in 33 centres of population. ing 5.8 billion dollars of infrastructure investment Connection speed is 1 Mbps, and the majority of are for economic programmes such as nationwide users are students (49 per cent) and professional irrigation systems and the tourism plan being devel- workers (23 per cent). oped in strategic locations. Finally, we are implementing the Mi Primer Em- In summary, this social strategy is based on two pleo programme, which has provided thousands of key components: the development of human capital, young Panamanians with a decent first job. and social inclusion and integration. The public in- We are keeping the promise that we made to the vestment plan involves the development of trans- people of Panama, that together we can change the port, education, culture, health, administration and country. general services, labour and social welfare, agricul- The Government Strategic Plan has a number of ture, justice and civilian protection, housing, indus- objectives. First, to promote opportunity for the try and trade, tourism, energy and the environment. most disadvantaged regions and sections of society. Altogether, this constitutes the figure of 13.5 billion Second, to improve the distribution of wealth and dollars mentioned earlier. reduce poverty. Third, to strengthens government President, at the start of this speech I referred to institutions and links with the private sector in order the historic ties which link Panama with the ILO. I to develop growth, maximize efficiency and pro- would like to emphasize South–South cooperation, mote social inclusion. Fourth, to ensure simple and which produces benefits for all Members of the fair distribution of the tax burden while maintaining ILO, and the labour information and analysis sys-

22/3 tem for Latin America and the Caribbean (SIALC), 93,500 computers were given to the latter, in the established in Panama in the mid-1990s. This sys- second stage. The provision of computers will con- tem is operating thanks to the extraordinary contri- tinue until the figure of 900,000 is reached, so that bution of the national Government and the technical all schoolchildren registered at national level will cooperation resources of the ILO Regional Office, have a computer. which maintains collaboration with the Ministry of The “Internet for All” project has enabled greater Labour in the development of its labour information access to the Internet for all the country’s citizens. systems. The databases are used for special research Investment in human capital and the development undertaken by the ILO constituents on various is- thereof is taking place in the areas of greatest im- sues relating to the world of work. Finally, they en- pact for income generation and improvements in the able action to be taken in the context of the Millen- quality of labour. We are taking up the challenge to nium Development Goals, particularly goal 1b, create a skilled and more competitive workforce as which is to achieve full and productive employment required by the employment market. For this reason and decent work for all, including women and we have given the National Educational Institute the young people. resources it needs to train Panamanians in the occu- The ILO, with its International Programme on the pations where there is a deficit. We have put the Elimination of Child Labour (IPEC), has been as- focus on excellence and have succeeded in achiev- sisting my country in the formulation, coordination ing it in the services sector. and implementation of the National Plan for the Panama respects the fundamental rights at work, Prevention and Elimination of Child Labour and the namely freedom of association and the right to or- Protection of Young Workers. It has also been ganize, effective recognition of the right to collec- working with us on our programmes against the tive bargaining, the elimination of all forms of trafficking and sexual and commercial exploitation forced or compulsory labour, the effective elimina- of persons. tion of child labour and the elimination of discrimi- ILO cooperation and technical assistance through nation in employment and occupation. Good gov- IPEC has contributed to building countries’ capacity ernance is an essential prerequisite for achieving to fulfil their commitments vis-à-vis the ILO. It also social and economic progress and for the implemen- contributes towards the regional objectives estab- tation of policies, programmes and activities by the lished in the Decent Work Agenda concerning the state administration. Reinforcing the state of law elimination of the worst forms of child labour, ena- and fighting corruption strengthen the participation bling the formulation and promotion of plans, pro- of the social partners and the balance of powers, grammes and actions to eliminate child labour and which are key factors for successful public policies. protect young workers. The use of social dialogue and collective bargain- We have established a road map to make Panama ing mechanisms is very important when it comes to a country which will be free of child labour in all its formulating policies geared to the priorities of each forms. We will eradicate child labour undertaken by country, especially at times of great tension. For boys and girls under the age of 14. We will elimi- these reasons, the Government of Panama has iden- nate the worst forms of child labour involving tified social dialogue as providing an opportunity to young persons under 18, and we will protect the achieve balanced solutions based on sustainability welfare and rights of young people between 14 and and responsibility. Tripartism in Panama has 18 years of age. We will eliminate the worst forms reached a level of maturity in the quest for coopera- of child labour by 2015 and child labour altogether tion between the Government, employers and work- by 2020. ers through the regulation of labour issues with a Under the Government Strategic Plan the Execu- view to lasting social peace in the country. tive has reinforced the ”Opportunities Network Pro- Tripartism and social dialogue have been gramme” and has added initiatives such as the “uni- strengthened by the cooperation agreement between versal bursary” initiative, which includes school the Ministry of Labour and the Labour Foundation assistance in the form of school bags, equipment concerning the strengthening of tripartite social dia- and books free of charge plus a voucher of 20 dol- logue in Panama, which was signed on 16 January lars per month for all pupils under a certain income 2012. The parties to this agreement have undertaken in public and private schools throughout the coun- to pool their efforts to strengthen social and labour try. This constitutes an important contribution to policies for the benefit of the productive sectors in family support and poverty reduction. A total of the country. We recognize that we have a difficult 800,000 students are benefiting directly from this path ahead of us but we are committed to following policy, without any political interference as was the it, using all the tools provided by social dialogue, so case in the past when scholarships were awarded in that we will achieve the objectives that we have set exchange for political support. ourselves for the common good of society as a In addition, free school meals and high-energy whole. biscuits are provided. The goal is to ensure that I would like to take this opportunity to extend a children and adolescents in Panama go to school warm invitation to you to get to know Panama, to and avoid involvement in child labour. The univer- come and see the changes in a country which has a sal bursary scheme has reduced the school dropout constantly growing economy, is open to investment rate and in just one year has produced an increase of and has legal certainty and clear rules. It is a coun- 12 per cent in the total number of children attending try which is changing and embarking on massive school in Panama. projects and works which we will complete during Taking account of the competitiveness of our hu- our term of office. man resources, we have also introduced changes to The organization of urban transport, including the the curriculum in schools throughout the country. metro system, will provide a better quality of life We have reinforced our education strategy by first for hundreds of thousands of Panamanians, who giving 45,000 computers to teachers, so that they spend four hours a day in buses getting to work, could be the ones to teach the children when which is equivalent to ten years of working life. We

22/4 will put an end to this situation, once the metro is invaluable support of Panama, without which it built in Panama City and the metro-bus system is would not have been able to operate. This system is established. now an essential tool for the implementation of the In addition, the Panama Canal extension project Decent Work Agenda for the Hemisphere 2006–15, and other public works are creating thousands of and for the publication of the Labour Overview – a decent jobs which will improve the quality of life of statistical study which is essential reading for all the whole Panamanian people. We are proud to re- countries in the American region and is eagerly port to the international community on this prolif- awaited every year. eration of projects and we are proud to be Panama- In recent years, the Conference has been honoured nian. by visits from senior Panamanian figures. From this Original Spanish: The PRESIDENT very rostrum, the Conference has heard govern- ment, workers’ and employers’ representatives from Thank you very much for your words, Mr Presi- Panama express the conviction that social dialogue dent. At the ILO, we note with a great deal of satis- and democratic participation are the most reliable faction that the major project of the expansion of means of achieving social peace as the best guaran- the Panama Canal is being carried out in accordance tee of governance. with the principles of decent work. Mr President, on behalf of my fellow Officers of Your country, Mr President, has a long-standing the Conference and of all the delegates, I would like tradition of cooperation with the ILO at a regional once again to convey to you our profound gratitude level. Since its inception 17 years ago, as you said, for having honoured us with your visit. the ILO Latin America and Caribbean Labour In- formation System (QUIPUSTAT) has enjoyed the (The Conference adjourned at 12.10 p.m.)

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CONTENTS

Page Special sitting

Address by His Excellency Mr Ricardo Martinelli Berrocal, President of the Republic of Panama ...... 1

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No. 22 – Monday, 18 June 2012