Nicaraguan President Vetoes New Labor Code Provisions

From Weekly News Update on the Americas, no.261, 29 January 1995

In the week of Jan. 16, Nicaraguan president Violeta Barrios de Chamorro informed the National Assembly that she was vetoing 49 of 415 articles of the new Labor Code recently passed by the Assembly. [Diario Las Americas 1/21/95 from AFP; Nicaragua Network (DC) Hotline 1/24/95] The president said the offending articles do not correspond to the reality of the country. [DLA 1/21/95 from AFP]

But according to Nicaraguan daily El Nuevo Diario, Chamorro was responding to pressure from the rightwing business council COSEP, which claimed the labor provisions would scare away private and foreign investment. COSEP leaders were in an all-afternoon meeting with the president and her top advisers on the day she vetoed the articles.

A leader of the Sandinista-affiliated National Workers Front (FNT) union federation said the veto fit the demands of Nicaragua's structural adjustment agreement with the International Monetary Fund (IMF). In order to get more loans in 1994, the Chamorro government agreed to provide what the IMF calls a "flexible" labor market--one with no guaranteed job security for workers. The Chamorro government also signed a letter of agreement with the World Bank in 1994 promising a labor code that would allow for easy dismissal of workers. These external demands--requiring changes in labor law that violate previously-signed International Labor Organization (ILO) accords- -are themselves a violation of the World Bank's internal rules. [Nicaragua Network Hotline 1/24/95]