Garment sector, gov’t must ally •Saipan will become a ‘ghost town’ if clothing industry closes

A top executive of the leading U.S. apparel company Liz Claiborne Inc. yesterday issued stern warning to CNMI officials against Saipan becoming a “ghost town” when it risks losing a competitive edge in the multi-billion dollar global clothing trade.

Unless they form a strong partnership with the garment sector to deal with serious problems, the local industry will lose out to other countries competing for the huge domestic market in the mainland, according to Paul R. Charron, chairman and chief executive officer of the New Jersey-based firm.

“You should be bold and courageous in confronting the very serious threat to your economy,” he told local lawmakers in a meeting at the House chamber.

“(Saipan) could be a ghost town if the government and the industry do not work collectively for the good interest of the people here,” Charron added.

The garment sector, whose gross income reached nearly $1 billion last year, has provided steady revenues for the CNMI government in recent months on the heels of the prolonged recession in Asia, the island’s main tourism market.

But efforts by federal government to take over labor and immigration standards in the CNMI and growing scrutiny on Saipan garment business are threatening the continued growth of the sector, according to industry leaders.

While hailing ongoing reforms undertaken by the sector, Charron assured Liz Claiborne will continue doing business on Saipan because of the high quality and craftsmanship of their apparel products as well as the attractive price they offer.

“It’s good business here for us to remain under the right circumstances,” he explained.

Charron cautioned, however, on the effect of increasing labor cost, such as raising the minimum wage here, which he admitted should be decided by local leaders based on their economic plan.

“If the (CNMI) minimum wage will go up, it begins to price (the garment industry) out of the competitive global economy,” he told the meeting attended by members of the House of Representatives and the Senate.
Independent monitoring

The Liz Claiborne official also prodded island leaders to support an independent monitoring scheme that will police garment manufacturers and help improve further the working and living conditions for factory workers on the island.

Charron stressed the urgency of the action in light of the recent lawsuits lodged against Saipan garment manufacturers, U.S. buyers and retailers, saying that although the allegations of “sweatshop conditions” are outdated, they may impact on the business.

“The (CNMI) garment industry can be a leader in reforms,” he explained, “if we take action now, we can be an example to the rest of the world and remove the cloud hanging over Saipan.”
Liz Claiborne, whose annual gross income tops $2.6 billion with over 100 million apparel items in stock each year, transacts roughly 10 percent of its business on Saipan, its second largest source of garment products next to China.

With some 270 factories in 38 countries manufacturing Liz Claiborne fashion apparel and accessories, the company has adhered to a code of conduct that ensures their merchandise are produced under highly approved conditions by their contractors.

According to Charron, Saipan factories have made strides in the past few years, particularly those they have had business with, but lamented some manufacturers who are violating safety standards as well as local and federal laws.

He urged local authorities to take a leadership role in weeding out violators, describing the situation between good and rotten apples. “If you don’t remove that bad apple, you will spoil the whole barrel,” Charron explained.

While the code of conduct recently implemented by the Saipan Garment Manufacturers Association is a step towards cleaning up the industry, Charron pointed out that the independent monitoring will give some “teeth” to the measure.

Human rights group and other local groups can assist in policing the sector, according to the Liz Claiborne executive. “By inviting human rights activists into the factories, manufacturers will prove that there is nothing to hide.”

The scheme is one of the policies imposed by the company to its suppliers, which include fair treatment of workers, compliance with local laws and adherence to the code of conduct.

The proposal on independent monitoring, which has been put in place in some countries, was also one of the crucial issues discussed during the Saipan visit of company officials over the weekend.

At least six garment manufacturing firms, such as the United International, Tan Holdings, LG Express, Unomoda, Tap Fashion and SAE, have agreed “in principle” to the plan, according to a garment leader.

But Charron maintained this measure, coupled with legislation from the island government, is “a very powerful combination that can properly address” allegations of workers’ abuses leveled against the garment industry.

“A partnership between the government and the industry is proactive, not reactive. Saipan should be out there in the forefront,” he said.