House OKs labor and business reform bill

The House of Representatives yesterday passed on first reading the comprehensive labor and business reform measure, paving the way for legislators to repeal laws they said stunt CNMI’s growth amid the economic crisis confronting the island.

House Bill 12-39, offered by Speaker Benigno R. Fitial, cleared 12-4, with Representatives Diego T. Benavente, Jesus T. Attao, Tomas B. Pangelinan and Stanley T. Torres voting against it.

The measure was amended extensively by the House Commerce and Tourism Committee which, while endorsing Mr. Fitial’s proposal, recommended the changes in response to the comments from large business organizations on the island.

Some key provisions of the bill will seek repeal of existing laws passed by the 11th Legislature, such as the moratorium on hiring of nonresident workers as well as the three-year limit imposed on their stay in the CNMI.

Another provision will order garment manufacturing firms to hire 30 percent of its managerial and supervisory positions from the local labor pool who are U.S. citizens — a stringent requirement that carries harsh penalties for any violation.

House Floor Leader Oscar M. Babauta, a member of the panel that reviewed the legislation, said this clause is intended to provide jobs in the private sector for government employees who will be affected by a streamlining being eyed by the Legislature.

While ensuring job opportunities for islanders, HB 12-39 will also provide leeway to the employment of nonresidents by allowing them to work in certain categories that are set aside for locals.

In addition, Public Law 11-74 that grants fair compensation for resident workers will be eliminated because it has proven to be “unworkable,” according to a report drawn up by the House committee.

Changes to existing laws, on the other hand, will focus on reducing to five days the 45-day reprieve given to guest workers with expired contract before being expelled from the CNMI, as well as removing the attrition provision on the law that set the cap on nonresidents employed in the garment industry.

The proposal will also eliminate the $100,000 cash security deposit imposed on foreign investments, and reduce the minimum investment in aquaculture and hydrophonic farming from $2 million to $200,000.

In opposing the measure, Mr. Benavente, however, stressed the need for further review to refine provisions that he said could lead to “uncontrolled growth.”

He cited as examples the move to take out a minimum capital requirement for new investors and the lifting of the hiring ban on nonresident workers.

“We have to put these control measures in the book,” he told the one-hour session, noting that absence of such laws could further damage future of the Commonwealth and its local people.

“I support the idea of providing flexibility… but the people, they don’t want development at their expense,” added Mr. Benavente.

“We believe that this comprehensive measure will benefit our people, and provide reasonable regulation over the use on nonresident labor,” said the Commerce and Tourism committee in its report.

The bill, now under review pending public comments, could be amended during its second reading in the House, but the version passed yesterday can no longer be altered.