SGMA refutes OIA report

The Saipan Garment Manufacturers Association , during a special presentation to federal and CNMI 902 members on Jan. 19, refuted numerous portions of the Office of Insular Affairs’ 1998 Fourth Annual Report on Federal-CNMI Initiative on Labor, Immigration and Law Enforcement in the Commonwealth of the Northern Mariana Islands.

SGMA Chairman James C. Lin and SGMA Executive Director Richard A. Pierce, before US 902 Representative Ed Cohen and both 902 teams, dismissed specific sections of OIA’s Report concerning the garment industry in the CNMI, as inaccurate and as a misrepresentation of the ttue intent of the special trade practice under general headnote 3(a).

OIA contended in the report that the special tariff treatment was a “trade loophole”, and that the application of headnote 3(a) in the Saipan garment industry was inconsistent with the purpose of the provision.

Pierce stated that these OIA contentions were improper. The “trade loophole” suggested, was in fact a proper use of the tools provided to build light industry in the CNMI. With minimum wage and immigration laws in the CNMI, and with the value added provision for tariff free export into the US, where ” if garments manufactured in the CNMI meet the value added requirements ofthe special tariff treatment provision known as general headnote 3(a), favorable treatment is provided to enhance local employment, create revenue funding and profits. This is just good business brought about by the 1983 Foreign Investment Act and negotiated trade agreements.”

Pierce further added that the garment industry had furfilled headnote 3(a)’s goals and objectives by (1) providing jobs in the private sector, (2) creating a private sector tax base and, (3) lessening CNMI dependency on federal funding sources. OIA’s report stated that these goals and objectives had not been achieved.

OIA’s assertion that American taxpayers have lost $200 million in tariff fees as a result of the CNMI’s trade loophole was dismissed by Pierce as simply twisted logic on the part of OIA.

“The fact of the matter is that these manufacturers would never have set up their operations here if it weren’t for the economic incentives provided by both the U.S. and the CNMI.

Headnote 3(a) has not been revoked, although as early as 1985 in a Saipan Chamber of Commerce meeting, OIA’s Richard Montoya stated that the Saipan garment industry was soon to be put to death .”

The Fourth Annual Report, prepared by OIA’s Allen Stayman further indicated that the garment industry didn’t provide much revenue.

SGMA stated that the user’s fee paid in 1998 represented almost 20% of total collected CNMI revenue, and that the garment industry, and its surrounding business partners, represents almost 50% of all economic activity in the CNMI.

SGMA gets serious
with Code implementation

The Saipan Garment Manufacturers Association concluded the first round of training under its SGMA Code of Conduct this past Friday at the Hyatt Regency Hotel.
120 people participated in the 3 days of sessions aimed at the eventual full implementation of SGMA’s newly adopted Code. Nearly 100 factory managers and representatives, brands representatives, Business for Social Responsibility presenters and trainers and 4 U.S. Labor Wage & Hour and OSHA specialists, conducted sessions for SGMA Code of Conduct theory and practice, occupational safety practices and law, and wage and hour computation and law.

A special closed door session was conducted by US Labor Wage and OSHA officers and administrators for those faclory persunnel wanting confidential consultation. Federal and CNMI 902 representatives attended these sessions, also.

U.S. Labor and Federal 902 representative Dan Sweeney and Frank Strasheim, OSHA Regional Administrator, congratulated and supported SGMA on their effort to train factories to implement and maintain their Code of Conduct.

SGMA Executive Director Richard A. Pierce congratulated all those attending and taking the second step toward total compliance. ” The first step was when we admitted and accepted our problems. Steps 3,4 and 5 will come with the faith in this process.”

SGMA Chairman James C. Lin offered incentive for the most compliant factories by promising to send 2 factory individuals, all expenses paid, to the Business for Social Responsibility -Annual Conference in San Francisco this coming November.