The bill introduced by President Daniel Noboa, which is now being analyzed by the Economic Development Committee of the National Assembly, proposes a special labor regime for free zones, which stipulates that labor contracts must be considered temporary and can be renewed as many times as necessary and will not be subject to prohibition established by other labor regulations.

“This work regime is not considered job insecurity. All rights established by the Constitution and other applicable regulations are respected,” says Article 52.10. draft of the Organic Law on economic efficiency and employment.

What the law proposes in this regard causes concern among several members of the Commission for Economic Development who see the danger of regression and violation of labor rights.

This was announced on the afternoon of Monday, December 4, during a legislative committee session attended by Sonsoles García, Minister of Production, Foreign Trade, Investments and Fisheries.

After listening to the legislators, the minister revealed that the employment contract was a “recommendation” to them “from outside” and that it was requested to be reviewed by the Ministry of Labor before being sent to the Assembly. He predicted that if necessary, the issue could be removed from the bill.

“It is clear that it is an article that has been voted on, because at no point will we ask you to approve something that could be a retrogression of rights. That’s not even up for debate. And if you actually think that it is an article that must come out of the bill, then let it come out. We do not want to make this new investment spectrum regressive, on the contrary. What we want is that one day we can harmonize all the conditions with the other free zones (in the region), but we know what our work standards are and we will not respect them at the moment,” explained the head of the production portfolio.

At the Economic Development Commission, García explained the scope and benefits of the bill regarding the free zones chapter. He cited examples of how they work in other countries such as China, Colombia and the Dominican Republic.

The official explained that these spaces and the proposed conditions will attract foreign investment, as the previously created nine Special Economic Development Zones (ZEDEs) have not been successful due to limitations and regulatory deficiencies, among other aspects.

“We must have spaces to transform products and give them added value”, he commented and pointed out that an important advantage of free zones is that they will have customs guarantees, which will avoid bad practices and management.

He explained that the law creates free zones for one person (on special occasions), which apply to one user or several businesses (similar to an industrial park).

Activities that can be developed are commodity industries, service activities, trade and logistics.

He indicated that there are no minimum investment requirements in free zones, so that they can be adapted to companies of all sizes.

The tax regime for these premises will include the following incentives:

The minister noted that free zones that have commercial users who export 70 percent of their production and want to allocate 30 percent to the domestic market, those 30 percent will pay tax on foreign trade “like any other nationalization.”

The minimum duration of the free zones will be 30 years, which can be extended for the same period as needed.

Activities that are prohibited in these areas are:

Additionally, in the case of investment contracts, Minister García stated that new investments, in order to obtain tax incentives, will be approved provided that they increase employment opportunities; That is, they create new jobs, not replace existing ones.

He also said that within the framework of the new definition of investment, public projects will be considered, in the modality of public-private partnership.

The signing of investment contracts will no longer be conditional on the issuance of a report from the Ministry of Finance, “as long as the incentives do not exceed the total investment amount,” García pointed out.

The Committee for Economic Development will continue to receive more authorities and representatives of the private sector and civil society, as part of the analysis of the proposed law.

The initiative proposed by the Government, because it is urgent in economic matters, must be processed in the Assembly within 30 days from the time it arrived in the Parliament on November 27. That is, the Assembly must decide by the end of December whether to accept or reject the proposed law.