Definitive Report - Report No 254, March 1988

Case No 1411 (Ecuador) - Complaint date: 12-JUN-87 - Closed

1. 40. In a letter dated 12 June l987 the World Confederation of Labour (WCL) presented a complaint of violations of trade union rights in Ecuador.
2. 41. The Government replied to the allegations of the complainant organisation in a letter of 21 October l987.
3. 42. Ecuador has ratified the Freedom of Association and Protection of the Right to Organise Convention, l948 (No. 87) and the Right to Organise and Collective Bargaining Convention, l949 (No. 98).

A. The complainant's allegations

1. 43. In its complaint, the WCL explains that, at the request of its affiliate, the "Central Ecuatoriana de Organizaciones Clasistas" (CEDOC), it makes the following allegations: that on 29 May l987 the Government issued Executive Decree No. 2947 authorising the placing of private social development agencies under trusteeship - an operation known as intervenciones; and that, in virtue of the said Decree, on 1 June l987, the Ministry of Social Welfare and Advancement instituted a trusteeship over the Ecuadorian Institute for Social Training (INEFOS), a private body attached to CEDOC, which had been engaged in the training of trade union officers for over 20 years.
2. 44. The WCL adds in the same letter that the Minister of Social Welfare, in Circular No. 186 of 1 July l987, informed INEFOS that Dr. Oliver Orellano Rosales had been appointed administrator and that its official documents and accounts must be sent to him and to several auditors: this had prevented INEFOS from operating normally.
3. 45. The WCL also states that according to Ecuadorian television the Minister of Social Welfare had hurriedly made accusations against INEFOS, on the basis of fragmentary documentation which it had obtained from that organisation; the Ministry had sought thereby to arouse real hostility against INEFOS for clearly political and pro-governmental purposes and with the object of securing the withdrawal of its legal personality and the confiscation of its property.

B. The Government's reply

1. 46. In its letter of 21 October l987, the Government states that it was acting in virtue of its power to regulate public order and safety in relation to a civil - not a trade union - body which was suspected of committing reprehensible acts.
2. 47. The Government explains at length that the body placed under trusteeship is an association subject to the provisions of the Civil Code (sections 584, 586, 588, 590, 593 and 596) and that, in accordance therewith, corporations and foundations, as civil associations, are responsible for any frauds, peculations and embezzlements attributable to their representatives.
3. 48. Accordingly, the Government continues, in May 1987 the President of the Republic issued Decree No. 2947, according to which the authority which had granted legal personality to a non-profit making association, could appoint an administrator who would check whether the said association was devoting itself fully to the purposes for which it had been established. This was a general measure, prompted by the well-founded suspicion that several of the bodies in question had been dishonestly managed or that their officers were committed to the service of foreign interests which might well be contrary to those of Ecuador.
4. 49. The Government also states that, in virtue of Decree No. 2947, the Minister of Social Welfare instructed an administrator to take charge of INEFOS after several improper acts had been discovered. In addition, it appends to its reply copies of several communications signed by the director of INEFOS, dated February, March and April l987, which - in the Government's opinion - prove considerably that there had been cases of embezzlement and misuse of the Association's funds for the benefit of an unrelated organisation, namely a political party calling itself "People's Democracy". According to the Government, this evidence sufficed to bring the representatives of the relevant association before a court of law.
5. 50. The Government also appends other communications signed by the director of INEFOS, including one dated 10 April l987, addressed to the President of CEDOC and asking him to make representations to the Latin-American Central of Workers (CLAT) so that the latter would request a certain "Konrad Adenauer Foundation" not to reduce the subsidy in German marks sent by it to INEFOS, and other similar documents.
6. 51. The Government maintains that the above documents demonstrate the links existing between the CLAT, the WCL and the Konrad Adenauer Foundation, and that they are indications of foreign intervention in the internal affairs of Ecuador. It adds that the administrator's report into the accounts of the "non-profit making" corporation reveals assets of 640,000 German marks and US$253,694 - coming from foreign sources - for the two-year period l985-86; that 50 per cent of those resources were paid to CEDOC without documentary justification; that some money was paid on various pretexts to finance political campaigns; and lastly that the director of INEFOS had acquired for himself a big insurance policy out of funds which ought to have been deposited to the credit of INEFOS.
7. 52. In conclusion, the Government states that in virtue of Ecuadorian law the association in question ought to be dissolved on formal and on substantial grounds and that the Government has sent a diplomatic note to the Federal Republic of Germany protesting against foreign interference in Ecuadorian affairs; the note reminds the Federal Republic that the German foundations, which concluded contracts with the Ecuadorian Government in l974, l979, l983 and 1985, with a view to the economic, social, cultural and technical development of Ecuador in both the public and the private sectors, remain subject, on the territory of Ecuador, to Ecuadorian law; for that reason the foundations have been asked to send accounts for verification by Ecuadorian agencies.

C. The Committee's conclusions

1. 53. The complaint involves allegations of government interference in the running of a private social development association, whose function is the training of trade union officers, this organisation being attached to a trade union confederation. The versions put forward by the complainant organisation and the Government on the matter are contradictory. According to the complainant, the association was unjustly placed under trusteeship and it was wrongly accused, on the basis of fragmentary documentation, of improper management. According to the Government, on the other hand, the said association, not being a trade union organisation but a non-profit making body subject to civil law, was indeed taken over by the authorities because it was suspected of irregularities in management, abuse of social property and diversion of subsidies coming from foreign foundations, particularly one in the Federal Republic of Germany, for the benefit of a political party.
2. 54. In the Committee's view, it is generally recognised that when accounts are being audited, the auditors should have the appropriate professional qualifications and be independent persons, a judicial inquiry into the internal management of an occupational organisation such as to guarantee impartial and objective procedures is of special importance in the case of the management of trade union property and finances.
3. 55. In the present case, the Committee points out that the Government disputes the trade union character of the association under trusteeship. The Committee observes further that the investigations made by the administrator show that part of the funds of INEFOS have been used to finance the propaganda activities of a political party.
4. 56. Since financing of the above kind goes beyond the parameters of normal trade union activity, the Committee considers that it should be left to the judicial authorities of the country to give a ruling on this matter.

The Committee's recommendations

1. 57. In the light of its foregoing conclusions, the Committee invites the Governing Body to decide that the case does not call for further examination.