New takeover bid

In its continuing attempt to control CNMI’s labor and immigration functions, President Clinton’s special representative to the 902 talks has offered a new package of proposals that would apply US laws on immigration, minimum wage and customs in the Northern Marianas.

In a letter to Lt. Gov. Jesus R. Sablan, Edward B. Cohen outlined steps Washington could implement if the federal government assumes jurisdiction of the immigration and minimum wage policies of the Commonwealth.

Cohen said the proposal drafted for Clinton was presented to the local government to solicit their input before it is submitted to the US Congress.

There was no immediate reaction from the Tenorio administration.

While the new proposal eases restriction on the use of “Made in USA” labels, seeks gradual increase in minimum wage and allows selective hiring of guest workers, it is expected to be opposed by CNMI officials, who have vowed in the past to fight any form of legislation because of its disastrous impact on the island economy.

The battle for control has a been a wedge in the CNMI-US relations at a time when the Commonwealth is reaching out internationally, including the US, its main financial backer, for help to revive its ailing economy.

Clinton has been pushing to extend federal immigration and minimum wage to the Northern Marianas because of discontent on the handling of such policies by local officials.

To be called the Northern Mariana Islands Labor and Immigration Reform Act, the draft proposal, patterned after a legislation put forward by Sen. Frank Murkowski, reflects significant differences from other pending bills regarding implementation of trade, immigration and labor reforms.

Gradual increase in minimum wage

Under the draft, which according to Cohen has yet to be approved by Clinton, local minimum wage will be adjusted higher 30 days after the proposal is approved by the US Congress.

This means local minimum wage, currently pegged at $3.05, will be increased 60 cents to $3.65, and will be raised 30 cents annually every January 1 until it reaches the prevailing minimum wage in the US.

While this provision seeks an increase in local minimum wage, it attempts to cushion the impact of such plan on businessmen compared to Sen. Kennedy’s bill now pending in Congress that calls for the immediate implementation of the federal minimum wage law. Another bill, authored by Rep. George Miller, proposes an initial increase of 50 cents in the local wage and the same amount every six months until it reaches the mainland level. Murkowski’s proposal in the past did not include provision on the minimum wage.

The CNMI has created its own minimum wage review committee, but is unlikely to recommend any increase at this time when business profits are shrinking due to economic slump.

Use of guest workers

The draft proposal, Cohen said, will allow CNMI to tap temporary foreign workers if US citizens and lawfully admissible nationals from the freely associated states are unavailable to fill the manpower demand in labor intensive industry such as construction.

In order to avoid potential disruption in the hotel industry, which requires skilled worker, Cohen is proposing a five-year extension depending on the need of hotel operators.

Due to lack of local labor pool, the Northern Marianas has relied heavily on guest workers, who comprised almost 90 percent of the jobs in the private sector.

Their growth over the years has worried federal officials because of a host of problems associated with their presence.

Tariff and labeling provisions

Cohen wrote to Sablan that a new approach on trade reforms would allow garment manufacturers in the islands maintain duty-free privilege as well as avoid prohibition on the use of “Made in USA “labels in locally-made apparel.

Based on the original proposal of the White House, garment owners are facing denial of such privileges should garment factories fail to comply with the 50 percent employment requirement and phase in period over three years.

The new concept offers the following alternatives to garment manufacturers to be able to enjoy the Headnote 3(a) provisions of the Covenant:

• If a garment factory could meet original requirements, phase-in period will be extended to six years, with phasing in to start at 25 percent and 5 percent increase annually, and

• If a factory fails to meet the minimum requirements, the employer could pay worker an additional 50 cents per hour and another 50 cents as contribution to the fund to be administered by the Commonwealth. Such fund will be used for the repatriation of workers abandoned by their garment industry employers.

Such approach, according to Cohen is “more lenient” and keeps factories unable to meet employment requirements stay in business while helping garment workers.

According to Cohen, he is also suggesting to criminalize actions that may occur in the United States, including the Northern Marianas, that lead to illegal transshipment to the mainland.

“The importation of unlabled, mislabeled, or improperly manifested goods would be prohibited and subject to sanction,” Cohen said.

He added that draft also includes provision that seeks to empower the US Customs Service with explicit authority to investigate such action.