Dr. Hale (Medications and Mothers' Milk) says that pethidine (demerol in the US) can be a problem for neonates. He reports a study (Wittels, B. Scott DT, Siatra,RS. Exogenous opioids in human breast milk and acute neonatal neurobehavior: a preliminary study. Anesthesiology 1990; 73(5):864-869): "Wittels studies clearly indicate that infants from mothers treated with meperidine (PCA post-cesarian) were neurobehaviorally depressed after three days. Infants from similar groups treated with morphine were not affected." He also reports "poor suckling reflex" in babies who are getting meperidine via breastmilk which is very interesting in your case. He suggests morphine, fentanyl, or hydrocone as an alternative.
The protocol in our local hospital is the same one you describe.
Have you seen/read the book Impact of Birthing Practices on Breastfeeding by Mary Kroeger? Interestingly, I just grabbed this book off my shelf and it literally fell open to this statement: "Bumgarder's recent study confirms the type of problems listed at the beginning of this chapter: healthy, full term newborns that attempt to breastfeed but cannot feed normally. Although the authors did not report the number of babies exposed to forceps, vacuum extraction, or induction, they conclude 'labor epidural anesthesia had a negatvie impact on breastfeeding in the first 24 hours of life, even though it did not inhibit the percentage of breastfeeding attemps in the first hour.' Whether the inability to latch is because of the medications, mechanical forces, or a combination of factors, is still unknown, the problem is very real." There's a lot of info in this particular chapter about "assuring adequate hydration and caloric support" as being critical to not only establishing but continuing to support breastfeeding during these early hours.
What happens directly after vaginal births at your hospital? Are babies and mothers left together, undisturbed? Are babies dried off or bathed immediately? Are routine procedures such as weighing, measuring, footprinting, full newborn exam, vit K, and bood tests held off until the 2nd hour? Are mothers and babies separated after cesareans or are they left together in recovery? do moms breastfeed in recovery?