Cuba’s new foreign investment law violates a string of international agreements on fair labor practices and could lead to legal demands in the future, according to a report made public Friday by an emeritus professor at the University of Florida.
The law also does not allow for international arbitration of disputes, and denies Cuban citizens the right to invest in their own country, said Jose Alvarez, considered one of the top experts on the island’s sugar industry.
Alvarez wrote the 14-page report for the Foundation for Human Rights in Cuba because the new law represents the continued exploitation of the island’s labor force, said FHRC Executive Director Pedro Rodriguez.
The professor said the foreign investment law approved by the country’s parliament earlier this year violates at least seven international labor agreements and declarations approved by the United Nations and the International Labor Organization.
“A democratic Cuba cannot ignore than a notorious and public felony has been committed,” Alvarez told a conference at the FHRC’s Miami office. “In the future they will be overwhelmed with legal demands for the exploitation of workers.”
The new law is designed to attract new capital that will help ruler Raúl Castro’s efforts to move the economy away from its Soviet model of central government controls. The communist government is considered to be the least investor-friendly in the region.
Cuba currently has only about 200 joint ventures between the government and foreign business interests, down from more than 400 in 2002. The government so far has not allowed large single-owner foreign investments on the island.
Minister of External Commerce Rodrigo Malmierca has said the country needs $2.5 billion in new foreign investments each year just to generate moderate economic growth.
Cuba has not reported its foreign investment total for several years, Alvarez said.
Alvarez said Cuba’s hopes to attract increased foreign investments rest on the new law, a labor code updated earlier this year and a business development zone in the port of Mariel west of Havana. Brazil is investing a reported $800 million in the Mariel project.
Mariel is “a white elephant,” he said. And the Cuban workers employed there may well be able to generate more revenues for the government than the actual foreign investments in the project.
Companies operating in the port will have to hire and pay salaries through government-controlled labor agencies. Cuba has only one labor union, the state-controlled Confenrence of Cuban Workers, which has never approved a strike.
The agencies in turn will pay workers 80 percent of the salaries paid by the companies in hard currency — but at a steep discount. While one convertible Cuban peso, known as a CUC, equals 25 regular pesos, Mariel workers will get only 10 pesos per CUC.
Alvarez said the new investment law, compared to the existing regulations, offer “timid concession concerning capital” but retains “an unchanged total disregard for the needs of domestic workers.”