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SEA LEVEL CANAL STUDY
In preliminary discussions between our two governments, the U.S. has informed Panama that we were "favorably disposed" to participate in a feasibility study with Panama and Japan. The U.S. and Panama have a Treaty obligation to carry out jointly a sea level canal feasibility study by the year 2000. Both we and the Panamanians have expressed the view that a tripartite study with Japan would meet this Treaty obligation. Following a visit to Japan by President Royo in late March, a Japanese-Panamanian communique was issued expressing interest in early "multilateral" consultations.
OTHER ISSUES
There are also about 35 other bilateral agreements pending formal approval of the Coordinating Committee. Some of these agreements are complete and in effect, requiring only ratification by the Committee. Others are in draft form and are undergoing legal review within the Commission. Approximately 15 of these agreements are still in the negotiation stage. The problem regarding taxation of contractors was discussed previously.
Question. Mr. Secretary, I understand that you have just returned from the first meeting of the binational Board of the Commission. There were several issues regarding the functioning of the Board, such as the quorum question and the Code of Conduct, that were to be dealt with in regulations or bylaws. Did the Commission discuss these matters, and are you optimistic as to their resolution?
Answer. Yes, Senator, the Board discussed the matters to which you refer in great detail. I would say that the Board focused harmoniously on its responsibilities for the smooth and efficient operation of the Canal while implementing the provisions of the Treaty between the two nations. In order to accomplish this, it was necessary to adopt regulations for the internal operation of the Board. The Board-adopted regulations included the requirement for a quorum, which will consist of a minimum of five Board members of which a majority of those present are nationals of the United States.
As regards the Code of Conduct, after some discussion, it was decided that more work was needed on the Code and it will be an agenda item at the July meeting.
QUESTIONS SUBMITTED BY SENATOR CARL LEVIN, ANSWERS SUPPLIED BY DENNIS
P. MCAULIFFE, ADMINISTRATOR, PANAMA CANAL COMMISSION
WAGE RULES IN TRANSFERRED ACTIVITIES
Senator LEVIN. What have the Panamanians done regarding wage levels for the functions they have taken over from the old Company/Government?
Mr. MCAULIFFE. The Government of Panama has maintained the same pay and classification systems which existed in the Panama Canal Company on September 30, 1979. Specifically, the systems consist of wage categories and grade levels determined by the nature and difficulty of work; pay steps within grade levels; and a minimum wage of $2.90 per hour.
The systems apply to all employees of the activities assumed by Panama. Future pay adjustments will be determined by the Government of Panama.
AMERICAN BUSINESSES AND NON-PROFIT ENTITIES
Senator LEVIN. Mr. McAuliffe, the recent GAO analysis of treaty implementation pointed up several unresolved issues regarding the regulation of American businesses and nonprofit organizations in what was the Canal Zone. Could you give us a little background on this problem? How many such businesses and organizations are there? What difficulties are they encountering? What progress are we making in solving these problems?
Mr. MCAULIFFE. Prior to October 1, 1979, there were approximately 130 commercial and 305 non-profit activities authorized to operate from sites in the former Canal Zone. The commercial activities are directly related to the operation of the waterway, and include petroleum companies, shipping agents, tank branch offices, and professionals, such as attorneys and dentists. Some small-scale concessionaires, such as beauty, barber, and shoe repair shops, also operate in Commission housing areas. The non-profit activities include religious, welfare, fraternal, and