Business groups back labor reforms

The Saipan Chamber of Commerce, the Hotel Association of Northern Mariana Islands and the Saipan Garment Manufacturers Association yesterday threw their strong support for the proposed Omnibus Labor and Business Reform Act of 2000.

House Speaker Ben Fitial introduced House Bill 12-039 primarily to allow economic growth in the CNMI and create a business-friendly environment.

Saying businesses are in favor of the removal of protectionist restrictions on businesses, Chamber president Lynn Knight said the proposal will help open the doors to investment which the island economy badly needs at this time.

The Chamber also welcomes the removal of the three-year limit for alien workers which only adds to the cost of doing business in the CNMI and does not serve its purpose of creating jobs for local people.

Creating a healthy business climate in the CNMI will result in providing a profitable environment for businesses which in turn will offer opportunity for good-paying jobs for the people as well as generate tax revenue to fund essential government services, according to Ms. Knight.

While the Chamber appreciates the effort of elected leaders to fast track a legislation that will help improve the CNMI economy, Ms. Knight recommended a careful study of HB 12-39 to ensure the long-term interests of the community.

The three business groups have been experiencing difficulty complying with the Fair Compensation Act or Public Law 11-74 which could result in costly litigation for businesses and possible discrimination lawsuits.

“There are far better ways to compensate fairly all workers through non-discriminatory practice, as well as through local market enhancement legislation as HB 12-039 would begin,” said SGMA executive director Richard Pierce.

The organizations have spent hours trying to figure out how to comply with the law since compensation and benefits vary widely in various industries from small to large businesses so much so that it is impossible to come up with one formula to calculate the value of the benefits.

“As is, the Fair Compensation Act is unenforceable and that makes it a bad law,” said Ms. Knight.

Ron Sablan, president of HANMI, said the moratorium law has been specially problematic for hotels as it has forced the industry to rely on workers who either lack the necessary skills or on-island transfers from other hotels.

“Oftentimes, this second group of employees has been released from their previous positions because they are not the most productive workers,” Mr. Sablan said in a letter addressed to the chairman of the Committee on Commerce and Tourism. HANMI’s comment was read by the David Wiseman, legal counsel of the association, during the hearing.

Since workers are given 45 days to find new employment after their old contract expires, their original employer in the meantime is left in the cold since they are unable to hire a replacement which tends to create an increasingly inferior labor pool that is unable to deliver the high level of service demanded by tourists.

“We feel that the local government can control immigration through less restrictive means other than an all-out moratorium,” said Ms. Knight.

The $100,000 cash deposit requirement for foreign investors has been too restrictive and has virtually dried up new investment. “Our economy would be better served with more multiplying benefits if the money could be put to work and invested in businesses,” she added.

HANMI has warned that the three-year limit on the stay of nonresident workers would witness a mass exodus of the industry’s best employees. Hotels are 365-day-year employers with wide variety of jobs to fill and each require diverse skills — from housekeepers to gardeners, waiters and waitresses to power plant technicians.

At the same time, the hotel industry believes that an employer should reward, not punish loyal service.

The CNMI’s hotel industry declined 30 percent, the hardest hit among the businesses as a result of Asia’s financial crisis. This has led many hotels to cut room rates in order to attract guests but left them with lower revenues.

If the hotels were able to utilize the labor pool within the industry, it would help reduce the number of alien workers needed by as much as 10 to 20 percent.

Mr. Sablan cited the annual Red Cross 200 Club dinner as an example where a large number of employees is needed. Allowing the cross utilization of staff would stop the hosting hotel from employing so many banquet staff that is on reserve for large functions.

HB 12-039 seeks the lifting of cap on the number of garment companies in the CNMI but garment manufacturers on the island said they would rather want the freedom to move workers to other factories by about two to three months to help out other companies and later on be allowed to return to their original employer.