Investor wants exemption from hiring moratorium

The Korean investor who wants to put up in the CNMI a factory for military products wants to bring in up to 300 alien workers and has requested Gov. Juan N. Babauta for an exemption from the nonresidents hiring moratorium.

Dong-In Entech Corp., Ltd. has at least five other factories mostly in the Philippines. Babauta said he would look into Dong-In’s request for a moratorium exemption.

The governor’s legal counsel, Steven M. Newman, echoed Babauta’s supportive stance for the potential multi-million dollar investment, but said that the exemptions should be in compliance with existing laws.

“We’ll do everything possible to accommodate their request for assistance as allowed by CNMI law,” Newman said. “We think this is a good corporation, but we want them to work closely with the Commerce Department and us and make profitable business.”

Existing laws allow for exemption from the hiring moratorium for major new developments and critical services. The law requires an applicant for major new development exemption to include financial records in its request.

Among the conditions that need to be met to qualify for this exemption is that the employment of a nonresident worker will be on the premises of a new development or expansion of an existing development. If the undertaking is on Saipan, the employer must have invested at least $5 million; if the development is on Tinian or Rota, the investment must be at least $250,000.

To qualify for critical services exemption, the law states that “only those positions that are professional in nature to be filled by individuals with extensive training either in traditional educational institutions or technical training certification course plus applicable on-the-job experience in the field shall be considered.”

This exemption cannot be granted for unskilled or semi-skilled positions, and requires the employer to satisfy required documentation.

Newman said that, although he believes the company is not categorized as a garment firm, he would look into precedents and ask the Attorney General’s Office for its opinion on the issue. The CNMI has a standing policy not to allow new garment companies on the islands.

Dong-In wants to put up a factory to manufacture CamelBak products, a leading name in outdoor gear products, including military backpacks and hydration systems.

Babauta had expressed support for the investor’s plan, saying it would possibly exceed the threshold investment amount for the company to qualify for a qualifying certificate.

The Investment Incentive Act of 2000 encourages economic development in the CNMI by offering tax breaks to businesses that engage in or implement a desirable project or business activity.

Eligible businesses under the law may apply and receive a qualifying certificate executed by the governor, as recommended by the Commonwealth Development Authority. The QC will allow an investor to benefit from certain tax rebates or abatements.

Babauta also assured Dong-In that it could enter into contracts with the U.S. Defense Department and that it could benefit from economic incentives provided by federal law, particularly from the so-called “Berry Amendment.”

The amendment provides economic incentives to production facilities that are based in the nation’s states, territories or possessions. The governor also cited the provision contained in Section 105 of the Covenant, which generally confirms the applicability of federal legislation to the Northern Marianas.