The U.S. Department of Labor’s Office of Trade and Labor Affairs (OTLA) has issued a report on the 2010 SINAUT-SUNAT submission under the U.S.-Peru Free Trade Agreement (FTA) that represents the resolution of the first case under the so-called “May 10” agreement—an agreement that raised the bar for labor obligations in U.S. FTAs. The U.S.-Peru FTA was the first to require parties to “adopt and maintain in its statutes and regulations, and practices thereunder,” the rights stated in the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-Up, including the right of collective bargaining.

This case, brought by SINAUT, a union representing employees in the government of Peru’s tax and tariff administration, was the first to test the effectiveness of the new labor template. In its submission, the union’s primary allegation was that its employer failed to engage in collective bargaining or participate in arbitration pursuant to Peru’s Collective Bargaining Law.

The AFL-CIO is pleased that the spotlight that the SINAUT’s submission shone on the government of Peru’s practices not only prompted it to clarify its Collective Bargaining Law so that workers can better exercise their right to collective bargaining but also brought the administration to the table to arbitrate one of the union’s two claims. These are positive outcomes. 

However, the AFL-CIO is concerned that important aspects of SINAUT’s submission remain unresolved. Although SINAUT received a favorable ruling in its arbitration, rather than comply, the government of Peru appealed. The appeal may take up to two years or more to resolve. In the meantime, the economic aspects of the arbitral judgment are on hold, subject to a legal “stay.” On SINAUT’s second claim, arbitration has yet to begin—primarily because a Special Council within Peru’s Ministry of Labor has failed to comply with the law requiring it to name an arbitral panel president within 10 days. The AFL-CIO encourages the government of Peru to name an arbitral president for this panel immediately—­­and to abandon its appeal on the first arbitration so that the workers can receive the pay increases they have earned.

We applaud the hard work undertaken by OTLA to fully and fairly investigate this case and for its work to ensure that the Peru better meets its obligations to its workers. However, given the unresolved issues and the possibility that the workers in question will not have their rights vindicated, the decision to foreclose formal consultations may have been made prematurely.  We hope, despite issuance of the report, that OTLA will continue to monitor these cases and will urge the government of Peru to pursue a path toward a just resolution for Peruvian workers. 

Read more about labor rights in Peru here.