Senate skips moratorium on garment licenses • Committee, SGMA reach consensus not to amend law

The moratorium on new licenses and the attrition scheme put in place by the government on the garment manufacturing industry will not be lifted under the Senate’s amendment to the Omnibus Labor and Business Reform bill.

This was the consensus reached between the Senate Committee on Resources, Economic, Development and Programs and Saipan Garment Manufacturers Association at the continuation of their meeting yesterday.

Senate Floor Leader Pete P. Reyes, who also chairs the committee, said they agreed to keep the ban on issuance of new license or sale of existing permit for garment factories on Saipan.

They also decided to leave intact the attrition system in which the license of one garment firm that shuts down will no longer be transferred to another owner.

But the workers from that company going out of business can be absorbed by other factories as long as they do not exceed the 15,727 cap placed on the number of nonresidents employed in the sector.

This is the flexibility that SGMA has sought from the Senate panel in its review of the Omnibus proposal or HB 12-39 which is expected to be revamped amid concerns from the Tenorio administration and members of the Legislature.

“The consensus and the way it looks right now is that that possibility can happen,” Mr. Reyes told reporters in an interview after the morning meeting.

Richard A. Pierce, acting SGMA chair, corroborated the Senate’s position, saying that it is the only way acceptable to the government to maximize revenues generated from garment industry.

He also disclosed that the group has asked the committee to amend Public Law 11-123 that denies issuance of certificate of origin for any shipment of apparel to the mainland manufactured by garment factory found violating the Nonresident Workers Act or the Commonwealth Minimum Wage Act.

The provisions of that law are not enforceable at present, according to Mr. Pierce, and that changes need to be made to ensure that law enforcers will properly implement its intent.

The REDP committee focused yesterday’s discussion on the proposals that would affect the garment sector. Aside from SGMA and other business leaders, government officials led by Labor and Immigration Sec. Mark Zachares also attended the meeting which resumed again later in the afternoon.

Mr. Reyes said the committee will come up with a report as soon as the deliberation and the meetings it has been conducting with the private sector and the administration are finished.

“We are advancing. We are making very significant progress,” he said, referring to the status of the review.

The Senate is optimistic of reaching a compromise agreement on the bill offered by House Speaker Benigno R. Fitial. Passed by the lower house in March, the key economic measure has drawn wide support from the business community due to its impact on the efforts to boost the stagnant economy.

But Gov. Pedro P. Tenorio and members of the Senate have expressed concern that the legislation could court yet another federal scrutiny as it seeks to repeal laws enacted over the past two years as part of labor and immigration reforms.

HB 12-39 will repeal such laws as the labor moratorium, the three-year stay limit, the garment attrition scheme, the $100,000 cash deposit imposed on foreign investments and the fair resident workers compensation law.