House passes labor and business reform bill

After a week of delay, the House of Representatives finally cleared the comprehensive labor and business reform legislation following inclusion of some provisions sought by private sector groups, according to Floor Leader Oscar M. Babauta.

House Bill 12-39 or the Omnibus Labor and Business Reform Act received 12 votes during a session held last Saturday on Rota, where some members of the 18-seat chamber were not present.

The House Committee on Commerce and Tourism added new amendment to the bill before its final voting. Offered by Speaker Benigno R. Fitial, it was revised during the initial deliberation by the panel.

A major fresh provision recently approved by the committee included repeal of a recent law denying certificate of origin issued by the Division of Customs on apparel products for export to the U.S. mainland made under violation of both local and federal labor laws, said Mr. Babauta.

This is on top of proposed repeal of other laws perceived as anti-business, such the moratorium on the hiring of nonresident workers and the three-year limit imposed on their stay in the CNMI as well as the $100,000 cash deposit requirement on new investments.

Likewise, the lower house addressed the concerns of the Hotel Association of the NMI and the Contractors Association by inserting their request to tap temporary workers — a scheme similar to that granted by the government to the garment industry.

To further clarify a provision on the 30 percent mandatory requirement for garment factories in terms of its employment of locals in their workforce, Mr. Babauta said the bill explicitly defined that those in the supervisory position are U.S. citizen employees earning at least $18,000 in annual gross income, while managerial those receiving $30,000 and above.

The legislation, introduced last month and described as priority by the House leadership, now heads to the Senate for action. “I hope they act on it as soon as possible,” Mr. Babauta said. “It’s a very important bill in our efforts to revitalize the CNMI economy.”

Delayed due to the request of HANMI and the contractor’s group, the measure is part of the lawmakers’ economic agenda in the wake of the continuous business slump in the Commonwealth.

Aside from those key provisions approved this weekend, the proposal will also repeal the fair wage act providing local workers same benefits granted to nonresident workers as well as ease some provisions on the garment cap, while creating job opportunities for U.S. citizens in the Commonwealth.

Opponents of the bill primarily wanted safety net to protect the island from potential abuse which they feared would occur in the absence of these safeguards, like minimum investment capital requirement and the ban on guest workers.

The CNMI has been battered by economic difficulties since late 1997 as a fallout of the currency crisis in Asia, its main source of tourists and investors.

But while most Asian countries have recovered in recent months, the CNMI has yet to regain its economic foothold which analysts have blamed on reform measures implemented over the last two years and viewed by the private sector as anti-business.