House partially lifts hiring moratorium on garment workers

The House of Representatives promptly approved yesterday a measure that aims to partially lift the moratorium on the hiring of garment factory workers.

Introduced by Rep. Oscar M. Babauta yesterday, House Bill 14-282 received 12 “yes” votes, a “no” vote from Rep. Heinz Hofschneider, and one abstention from Rep. Joseph Deleon Guerrero.

The bill allows the garment industry to hire more workers, specifically cutters, sewers, trimmers, and pressers, to increase productivity and be able to compete globally in view of the worldwide trade quota elimination by Jan. 1, 2005.

Currently, the apparel industry is imposed a cap of 15,727 nonresident workers.

The bill allows the industry to increase its workforce “not more than 50 percent above the 15,727 alien workers.”

It also provides that each licensed garment manufacturer can hire additional workers no more than 50 percent of its quota.

Babauta, in the bill, cited that the policy reform is most needed in view of the upcoming lifting of quotas, which puts great pressure on the local industry’s competitiveness.

The bill noted that the CNMI garment industry “is beginning to shrink” and “the primary reason for this is due to the CNMI’s inflexible, restrictive, and extremely bureaucratic nonresident workers policy.”

The hiring moratorium imposed by Public 11-6 and subsequent major amendments under Public 12-11 “have suffocated the ability of the garment industry to respond to the ever increasing global competition.”

The bill further cited recent studies indicating that once quotas are eliminated, exports from China and other countries could account for as much as 85 percent of the U.S. market, resulting in the loss of some 630,000 U.S. jobs and closure of over 1,300 domestic textile factories.

It is anticipated that after December 2004, the U.S. would only source textiles and apparels from 15 countries (down from about 125 at present) including China and four other Asian countries.

The bill said that unless the CNMI identifies viable and practical alternatives, there is a compelling reason to revisit existing investment and related policies, including labor policies, and make them less restrictive so that businesses can ably compete in the market.

Yesterday’s House session was attended by representatives from the business community including Saipan Chamber of Commerce president Alex Sablan, Duty Free Shoppers president Marian Aldan-Pierce, and Tan Holdings Corp. executive Eloy Inos.