Bill allowing unlimited hiring of alien workers on Rota passed

Amid plans by a Korean investor to put up in the Commonwealth a factory manufacturing military products, the Senate yesterday passed a bill that seeks to authorize the governor to allow the unlimited hiring of nonresident workers on Rota.

Senate Bill 14-63 provides, however, that licensed businesses must invest at least $1 million in either a major new development or the expansion of an existing development on Rota, so they could seek exemption from the moratorium on hiring nonresident workers.

Introduced by Sen. Diego Songao, the bill also seeks to allow the Department of Finance to issue and subsequently renew up to two business licenses to Rota companies manufacturing “backpacks, fanny packs and flexible liquid container packs without regard to the materials comprising the packs.”

Songao said Rota has been unable to provide investment and massive employment opportunities on the island, resulting in unemployment and underemployment of residents.

“If [Rota] is to enhance its tax base, Rota needs substantial business establishments, properly capitalized, to ensure that its residents have access to long-term employment and investment opportunities,” he said.

The bill’s passage comes after Korean firm Dong-In Entech Corp. Ltd. expressed interest to put up a factory manufacturing CamelBack, a leading name in outdoor gear products, including military backpacks and hydration systems.

The company wants to bring in up to 300 nonresident workers and had asked Gov. Juan N. Babauta for an exemption from the nonresidents hiring moratorium.

Earlier, 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.

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-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.

Babauta had expressed support for the investment plan, saying that the venture 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 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,” which provides economic incentives to production facilities that are based in the nation’s states, territories or possessions.