NicaNotes: Benefits for Workers in Nicaragua’s Free Trade Zones: An Interview with Pedro Ortega

By Jorge Capelan

[Jorge Capelán is a Latin American journalist and political analyst who has worked for many years in Nicaragua. He appears weekly on news analysis programs and writes for several online news outlets.] 

Union leader Pedro Ortega said that free trade zone jobs lost to the hurricanes and COVID-19 have been recovered and 7,000 jobs added. Photo: Free Trade Zone Corporation

Free Trade Zones (FTZs) play a very important role in Nicaragua’s struggle against poverty.  As distinct from most countries in the world, where FTZs are synonymous with terrible working conditions, no trade union organization, and very high levels of exploitation, in Nicaragua they are seen as sources of well-paid and secure jobs. In addition, they contribute hundreds of thousands of indirect jobs to the family, community, cooperative and associative economy that employs the majority of the population.

Nicaragua is a country that invests in free public health and education as rights for the entire population and also guarantees other basic services at affordable prices. The social and productive stability of the country encourages FTZ companies to establish themselves in Nicaragua through agreements with the State and the unions, rather than being in a perennial state of war that affects their businesses. Given that the country produces almost all basic foodstuffs for its population, the people, despite rather low salaries, receive much more for their income than the working class in the rest of the region.

In July 2021, after two and a half years marked by the 2018 failed coup attempt, followed in 2020 by the terrible hurricanes Eta and Iota, and the pandemic, the total number of workers in the FTZs has returned to levels similar to those of 2017 when Nicaragua led Latin America in the economic growth tables.

Currently, the outlook is for a marked improvement as the global economy recovers from the pandemic. With forecasts hovering around 7% this year and 5% or more in 2022, Nicaragua is predicted to return to the path of economy growth.

Pedro Ortega speaks in 2000 at a Nicaragua Network meeting in Washington, DC. His translator is now retired Nicanet National Co-Coordinator Katherine Hoyt.

In an interview, Pedro Ortega, leader of the José Benito Escobar Sandinista Workers’ Central (CST), commented, “I believe that the FTZ sector has an enormous significance in the country’s economy. The sector currently employs 127,000 workers; by the end of 2021 this is expected to rise to more than 130,000. We are recovering jobs lost due to Covid19-related factory closures when the brands were not sending work orders to the factories here in Nicaragua.”

“Among the nearly 13,000 direct jobs expected to be generated in the coming months, 2,000 are in cigar factories, 1,000 in call centers, 2,000 in new plants under construction in the department of Chinandega, and 3,500 in car parts factories. The export predictions for the FTZs this year are around US$2.9 billion,” Ortega added.

“In Nicaragua, since the government of Comandante Daniel Ortega took power (in 2007), the FTZ sector has constantly consolidated and developed,” says Ortega, recalling the history of conflicts that the working class long had with the FTZ companies.

He went on to say, “These companies began to establish themselves in the country as a result of the 1990 electoral defeat [of the Sandinistas] and the oligarchy’s attempts to impose a neoliberal regime on the country until 2006. In the FTZs, with the neoliberal governments, the rights of the workers were violated because businessmen made and unmade the laws of Nicaragua, and those governments never cared about workers’ rights.”

“When Comandante Daniel Ortega came to power, we held a meeting with him a month before his inauguration. He listened to the workers, especially when we told him that the government should pay full attention to the FTZ sector because of the violation of the social rights of the workers due to the physical maltreatment on the part of the foreign officials of these companies,” the union leader explained.

“In fact, with the government of Comandante Daniel, we proposed a social dialogue. Subsequently, we worked with the foreign companies. The Ministry of Labor also worked to ensure the dignity of both women and men working in these companies. Through the training of employers and workers together, I believe that the Ministry of Labor also contributed to respectful labor relations, as well as the programs of the International Labor Organization (ILO) through a project called “Better Work,” which contributed to consolidating social dialogue,” Ortega stated.

“Nicaragua has been recognized by the ILO for this type of social dialogue with the FTZ sector. For us, this dialogue has led the country to greater development and more stability for workers. Through social dialogue and tripartite agreements [companies, trade unions and the State] we have eradicated some bad employment practices and we could say that there are already respectful labor relations in which the trade unions represented in the company are taken into account and defend the interests of the workers,” he added.

The FTZs are an example of the Sandinista government’s support for a comprehensive and dialogue-based approach. For example, in relation to the failed coup launched by the oligarchy and sectors of the recalcitrant right in 2018, Ortega was clear in stating that “here the workers in the different FTZ companies did not stop working despite the fact that they had to go through road blocks that became death traps.  Many women were touched and sexually harassed by people who, when they were not drunk, were taking drugs.”

“The working class of this FTZ sector also rejected these individuals. Proof of this is that in a textile company in Masatepe the workers themselves organized to obstruct criminal groups who wanted to stop the company [from functioning].  The workers wanted to work and, effectively, the coup leaders were removed with brooms and balls of string. After this action by the workers, in the other FTZ companies in the country no company stopped despite the situation and the chaos that occurred,” Ortega explained.

He went on to say, “Only during the year of the failed coup were there delays and some factories were fined for not meeting deadlines for different brands from the United States, but the workers were always producing.”

Regarding the effect of hurricanes Eta and Iota, Ortega explained that this sector was not hit because the factories in the FTZ industrial parks, especially in the Pacific, were located in higher areas. In some places there were attendance problems because the houses of some workers were flooded by the constant rain, but this did not affect any industrial plant on the Pacific. “However, in Kukra Hill, [on the Caribbean Coast] where there is an African palm  FTZ, there were problems with the rivers and also some African palm plants were blown over and there were delays in production, but there were no economic losses in this sector,” he stated.

To confront the Covid-19 pandemic, the government, the unions and the companies approved a biosafety protocol that has guaranteed stability for the brands to continue sending orders to the country since the 127,000workers are protected.

Ortega says that due to the hurricanes and the Covid emergency some 9,500 jobs were lost and exports decreased by almost 20%, but to date, in September 2021, all the lost jobs have been recovered and around 7,000 additional jobs have been generated. Exports, up to July of this year, increased by 45% compared to the same month last year.

Regarding the future of the FTZs, Ortega says that it is encouraging that, “in spite of the political situation that the government of the United States has created against the people of Nicaragua, the dialogue that exists between the FTZ investors, the workers and the government has made it possible for us to work together for better social gains for the workers”.


Nicaragua Withdraws from OAS
Instructed by President Daniel Ortega and the pronouncements from the different branches of the Nicaraguan government, the Ministry of Foreign Affairs on November 19th presented notification of Nicaragua’s formal decision to denounce the Charter of the Organization of American States (OAS) and begin the process of definitive withdrawal of the country from the organization. In his speech, Foreign Minister Denis Moncada stated that “Nicaragua promotes and defends respect for the principles that govern International Law, compliance with the United Nations Charter, its principles and purposes that seek respect for sovereign equality among States, non-interference in internal affairs, abstaining from the use of force, the threat of the use of force and the imposition of unilateral, illegal and coercive measures, principles that the OAS is obliged to comply with, but irresponsibly ignores, transgressing its own Charter”.

Within 48 hours of the closing of the polls, the OAS had set out its criticisms of the Nicaraguan elections. It demanded the annulment of the elections and the holding of new ones, disregarding international and OAS rules that require respect for the sovereignty of nations. Yet its report contained no evidence of problems on Election Day itself that would substantiate its objections. Nevertheless, local and international media were quick to endorse the accusations that widespread fraud had taken place.

International law expert Manuel Espinoza said that he considered it a historic day for Nicaragua adding, “The Latin American countries can’t expel the United States from the organization but we can leave them with their enforcers.” Sandinista National Assembly Deputy José Figueroa said that this decision to withdraw from the OAS will not affect the relationship between Nicaragua and other governments, multilateral organizations or international financial institutions. The withdrawal process will take two years. (Nicaragua News, Nov. 19, 2021; COHA web page, Nov. 16, 2021; Informe Pastrán, Nov. 19, 2021)

Nicaragua with Trade Surplus in DR-CAFTA
The United States Department of Commerce presented a Statistical Analysis of the Free Trade Agreement between the Dominican Republic, Central America, and the United States (DR-CAFTA) on Nov. 18. The report stated that Nicaraguan exports to the United States totaled US$3.4 billion between January and September 2021 and imports were US$1.5 billion, representing a US$1.9 billion favorable trade balance. Nicaragua is the only signatory country of the treaty to register a trade surplus with the United States. (Nicaragua News, Nov. 19, 2021)

Advances in Vaccination against COVID-19
The Nicaragua Ministry of Health reported that since the beginning of the COVID-19 National Voluntary Vaccination Program, 3,613,517 doses of vaccines have been administered to people over two years of age. The Director of the Expanded Immunization Program, Jazmina Umaña explained that “72,426 pregnant, breastfeeding, and postpartum women have been immunized with the Pfizer-BioNTech vaccine; 766,252 children between the ages of 2 and 17 with the Soberana and Abdala vaccines; 699,357 between the ages of 18 and 29 with Sputnik Light and the Oxford/AstraZeneca vaccines and 1,822,570 people over 30 years with Oxford/AstraZeneca, Covishield and Sputnik V vaccines.” To date, 56.42% of the Nicaragua population has received at least one dose of the vaccine, Dr. Umaña said. (Nicaragua News, Nov. 18, 2021)

More Support for Fight against Climate Change
The National Assembly approved a US$108 million loan agreement with the Central American Bank for Economic Integration (CABEI) and the United Nations Green Climate Fund, in support of the Nicaragua Bioclimate Project known as “Integrated Climate Action to Reduce Deforestation and Strengthen Resilience in the Indio Maíz and Bosawás Biosphere Reserves.” The Bioclimate Project seeks to mitigate the effects of climate change by containing deforestation and forest degradation, conserving biodiversity, and promoting sustainable production systems. (Nicaragua News, Nov. 18, 2021)

Guaranteeing support for Nicaragua’s Small Businesses
Yesterday, the Nicaragua Rural Credit and Savings Regional Bank R.L. and the Central American Bank for Economic Integration (CABEI), announced the approval of a credit line contract for US$100,000 in support of the economic reactivation of 15 small, medium, and micro-businesses in the agriculture sector of Chontales department affected by the COVID-19 pandemic. Implemented by CABEI since September 2020, this credit line is part of the Program for Financial Support and Technical Assistance for Small, Medium, and Micro-businesses (MSME’s) in Nicaragua affected by the Covid-19 health crisis. (Nicaragua News, Nov. 19, 2021)

Greater Use of Renewable Energy
The Nicaragua National Center for Electricity Dispatch reported that 74.02% of electricity generated in the country between November 1st and 20th this year came from renewable sources: 14.40% geothermal; 13.33% wind; 12.28% hydroelectric; 12.20% biomass; 0.47% solar and 21.34% regional renewable energy imports. (Nicaragua News, Nov. 23, 2021)

Early Warning Project Presents Volcanic Risk Maps
The Early Warning Capacity Building Project implemented by the Taiwan Technical Mission in conjunction with the Nicaraguan Institute for Territorial Studies (INETER), officially submitted its volcanic disaster risk map to the representatives of the municipalities of El Viejo, Chichigalpa, Quezalguaque, León, Posoltega, Telica, Corinto and Puerto Morazán. This map reflects the most relevant and important data such as evacuation routes and shelters, in order to strengthen the capacities of risk management and immediate response, in the different communities surrounding the Telica and San Cristobal volcanoes. (Informe Pastran, Nov. 19, 2021)